Elah Holdings Inc fka RELYQ (ELLH)

[Enterprising Investor]

Real Industry Reports Fiscal 2017 First Quarter Results (5/10/17)

Company to host conference call on May 11, 2017, at 12:00 p.m. ET

NEW YORK--(BUSINESS WIRE)--Real Industry, Inc. (NASDAQ:RELY) (“Real Industry” or the “Company”) today reported financial results for its fiscal first quarter ended March 31, 2017.

First Quarter 2017 Operating and Financial Highlights:

• Revenues increased to $337.1 million, compared to $309.4 million in the prior-year period and $304.4 million sequentially from the fiscal 2016 fourth quarter

• Net loss was $11.3 million, compared to a loss of $10.0 million in the prior-year period

• Segment Adjusted EBITDA was $12.3 million, down from $18.3 million in the prior-year period but up from $11.8 million sequentially from the fiscal 2016 fourth quarter

• Consolidated liquidity remains solid at $72.6 million of which $65.9 million relates to Real Alloy

Second Quarter 2017 Outlook:

• LME and aluminum alloy prices have continued to rise from fiscal 2017 first quarter prices

• Scrap flow in North America is showing signs of improvement over the first quarter

• Real Alloy North America (“RANA”) and Real Alloy Europe (“RAEU”) Segment Adjusted EBITDA each expected to be higher than first quarter

Management Commentary

Mr. Kyle Ross, President and Chief Executive Officer of Real Industry, stated, “We continued to make progress on Real Industry’s long-term strategy of executing M&A opportunities that will diversify our cash flows and create a sustainably profitable enterprise, with a focused effort on leveraging our unique tax assets. We are also continuing efforts to strengthen Real Alloy’s operations in advance of favorable trends in the marketplace. We are pleased that the positive turn in aluminum pricing and scrap spreads that improved throughout the first quarter in North America has continued into the early part of the second quarter and expect Segment Adjusted EBITDA in both of our segments to be further improved into the upcoming quarter.”

First Quarter 2017 Consolidated Financial Results

Real Industry reported revenues of $337.1 million in the first quarter of 2017, which was driven by Real Alloy’s aggregate 291,800 metric tonnes invoiced. This compares to $309.4 million in revenues on an aggregate 292,200 metric tonnes invoiced in the first quarter of 2016. Real Industry reported a net loss of $11.3 million and a net loss available to common stockholders of $12.2 million in the quarter ended March 31, 2017, or a loss of $0.43 per basic and diluted share.

During the period, RANA reported revenues of $225.6 million on 196,600 tonnes invoiced. The mix between buy/sell and tolling arrangements was 56% and 44%, respectively. Compared to the prior-year period, total volume remained relatively flat, but revenues were higher by 12% driven primarily by an 8% shift in mix from tolling to buy/sell volume, which contributes substantially more revenue per tonne than tolling arrangements as the metal value is included in sales. The Beck Alloys acquisition contributed 10,200 metric tonnes of invoiced sales volume, and the investment in Beck Trading, while not contributing to Segment Adjusted EBITDA, contributed $1.1 million in income during the first quarter of 2017. Compared to the prior sequential quarter, revenues were 9% higher, similarly driven by increased buy/sell volumes due to commercial sales efforts and the contribution of a full quarter of Beck Alloys’ results.

RAEU reported revenues of $111.5 million on 95,200 tonnes invoiced in the first quarter. The mix between buy/sell and tolling arrangements was 47% and 53%, respectively. As with RANA, total volume was relatively flat when compared to the prior-year period, but revenues increased by 3%. Compared to the prior sequential quarter, revenues were higher by 15% driven largely by a 13% increase in volume following the normal seasonality of the fourth quarter in Europe.

In the aggregate, Real Alloy generated Segment Adjusted EBITDA of $12.3 million in the first quarter of 2017, compared to $18.3 million in the prior-year period, and $11.8 million sequentially from the fourth quarter of 2016. The year-over-year decrease was a result of RANA’s Segment Adjusted EBITDA of $6.3 million in the first quarter, which compares to $13.2 million in the prior-year period. Segment Adjusted EBITDA per tonne decreased from $67 to $32. Lower SG&A expenses and increased productivity results year over year did not offset the compressed margins as average selling prices of RANA’s most common alloys did not increase as quickly as the average cost of a typical bundle of scrap. RAEU’s Segment Adjusted EBITDA increased to $6.0 million in the first quarter, from $5.1 million in the prior-year period, as Segment Adjusted EBITDA per tonne increased from $53 to $63.

Real Alloy reduced its SG&A expenses by $0.9 million in the first quarter compared to the prior-year period. Capital expenditures for RANA decreased in the first quarter from the prior-year period as a number of plant improvements were completed in the fourth quarter of 2016 but increased year over year for RAEU due to the previously mentioned investment in the Norway facility.

Outside of the Company’s segments, corporate operating costs, which primarily represent SG&A expenses, were $3.2 million in the first quarter of 2017 and $3.3 million in the prior-year period. Of these expenses, $0.7 million was noncash shared-based compensation expense, compared to $0.5 million in the prior-year period. As of March 31, 2017, the Company had completed the transition of its accounting and other administrative support functions to Real Alloy’s Beachwood, Ohio headquarters and its investor communications and corporate office to its New York City office.

Balance Sheet and Liquidity

As of March 31, 2017, Real Industry’s cash and cash equivalents were $18.5 million, total debt was $380.2 million, and stockholders’ equity was $22.9 million. The Company’s total liquidity was $72.6 million as of March 31, 2017, of which $65.9 million relates to Real Alloy.

Conference Call and Webcast Information

The Company will host a conference call at 12:00 p.m. ET on Thursday, May 11, 2017, during which management will discuss the results of operations for the first quarter ended March 31, 2017, its outlook for the second quarter of 2017, and perspectives on the marketplace for M&A activities.


The dial-in numbers are:
[phone] (Toll-free U.S. & Canada)
[phone] (International)


Participants may also access the live call via webcast at http://realindustryinc.equisolvewebcast.com/q1-2017. The webcast will be archived and accessible for approximately 30 days. A replay will be available shortly after the call in the investor relations section of the Company’s website, www.realindustryinc.com, and will remain available for 90 days.

Real Industry is a holding company seeking to take significant ownership stakes in well-managed and sustainably profitable businesses concentrated primarily in the United States industrial and commercial marketplace as well as to support value-enhancing opportunities of its existing operations. Our business strategy also seeks to take advantage of Real Industry’s U.S. federal net operating loss tax carryforwards of $916 million. For more information about Real Industry, visit its corporate website at www.realindustryinc.com.

http://www.businesswire.com/news/home/20170510006607/en/Real-Industry-Reports-Fiscal-2017-Quarter-Results