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AZZ incorporated Announces Retirement of Dana Perry and Intends to Appoint Paul W. Fehlman as Next Chief Financial Officer
Mr. Perry to remain on the Board of Directors;
Will assist Mr. Fehlman with transition
PR Newswire AZZ incorporated
February 24, 2014 4:01 PM
FORT WORTH, Texas, Feb. 24, 2014 /PRNewswire/ -- AZZ incorporated (AZZ), a global provider of electrical products and services and a provider of galvanizing services, today announced that Mr. Dana Perry, senior vice president of finance, chief financial officer and secretary of AZZ, will retire effective May 31, 2014. Mr. Paul W. Fehlman has agreed to join the company and will transition into the company's roles of senior vice president of finance, chief financial officer and secretary of AZZ.
Paul Fehlman's background is well suited to AZZ's current and future business. He brings a strong track record of accomplishments with more than 20 years of senior level finance experience. He has served in a variety of positions, including treasury, financial planning and analysis, investor relations and operating financial roles during his career. He was most recently with Flowserve Corporation in Irving, Texas, serving as Vice President Finance for the Engineered Products Division, and also previously held roles as Vice President Treasurer and Vice President Financial Planning and Analysis and Investor Relations at Flowserve. Mr. Fehlman has extensive experience in international finance and operations serving similar industrial manufacturing and energy markets to those of AZZ. Mr. Fehlman holds a BS degree in Business Administration from California Polytechnic State University San Luis Obispo and an MBA from Cornell University's S.C. Johnson Graduate School of Management.
An AZZ employee for the past 39 years, Mr. Perry is a member of the Company's Board of Directors and will continue in that capacity for the foreseeable future. Mr. Perry will work closely with Mr. Fehlman to effect a seamless transition.
Tom Ferguson, president and chief executive officer of AZZ incorporated, commented, "I am pleased with the addition of Paul Fehlman to the team, as he brings a broad base of experience that will prove to be instrumental in growing our business both domestically and internationally. I am grateful to Dana Perry for his support as I have transitioned into the position as CEO of AZZ, and I know that he will be a great resource to Paul in sharing his broad experience and deep knowledge of AZZ's history and business operations in the upcoming months. Dana has been intimately involved in executing on the strategic plan that has positioned AZZ as one of the leaders in our industry. I am thankful and confident that Dana, as a member of our Board, will continue to provide our team with his advice and support as we move forward in the next step of our development."
AZZ incorporated is a global provider of specialty electrical equipment and highly engineered services to the power generation, transmission, distributions, and industrial markets as well as a leading provider of hot dip galvanizing services to the North American steel fabrication market.
Certain statements herein about our expectations of future events or results constitute forward-looking statements for purposes of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements by terminology such as, "may," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," "continue," or the negative of these terms or other comparable terminology. Such forward-looking statements are based on currently available competitive, financial and economic data and management's views and assumptions regarding future events. Such forward-looking statements are inherently uncertain, and investors must recognize that actual results may differ from those expressed or implied in the forward-looking statements. This release may contain forward-looking statements that involve risks and uncertainties including, but not limited to, changes in customer demand and response to products and services offered by AZZ, including demand by the power generation markets, electrical transmission and distribution markets, the industrial markets, and the hot dip galvanizing markets; prices and raw material cost, including zinc and natural gas which are used in the hot dip galvanizing process; changes in the economic conditions of the various markets that AZZ serves, foreign and domestic, customer request delays of shipments, acquisition opportunities, currency exchange rates, adequacy of financing, and availability of experienced management employees to implement AZZ's growth strategy. AZZ has provided additional information regarding risks associated with the business in AZZ's Annual Report on Form 10-K for the fiscal year ended February 28, 2013 and other filings with the SEC, available for viewing on AZZ's website at www.azz.com and on the SEC's website at www.sec.gov. You are urged to consider these factors carefully in evaluating the forward-looking statements herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by this cautionary statement. These statements are based on information as of the date hereof and AZZ assumes no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise.
Contact:
Tom Ferguson, Chief Executive Officer
Dana Perry, Chief Financial Officer
AZZ incorporated 817-810-0095
Internet: www.azz.com
Lytham Partners 602-889-9700
Joe Dorame or Robert Blum
Internet: www.lythampartners.com
7:33 am Martha Stewart beats by $0.10, beats on revs (MSO) : Reports Q4 (Dec) earnings of $0.12 per share, $0.10 better than the Capital IQ Consensus Estimate of $0.02; revenues fell 16.0% year/year to $47.4 mln vs the $45.4 mln consensus.
"As promised, we also took some aggressive and important steps in the last quarter of 2013 to align our cost structure with marketplace realities and more importantly to become nimbler, more efficient, generators of ideas, inspirations, content and product. We also promised to put to bed several pieces of notable and distracting litigation, and we did so." Mr. Dienst continued, "With some of the best, brightest and most passionate employees in our business lines -- all of whom have embraced our new way of chasing opportunities as One Company - we are very excited about the groundwork we will lay in 2014 for tapping our esteemed brand's fullest potential."
7:33 am Martha Stewart beats by $0.10, beats on revs (MSO) : Reports Q4 (Dec) earnings of $0.12 per share, $0.10 better than the Capital IQ Consensus Estimate of $0.02; revenues fell 16.0% year/year to $47.4 mln vs the $45.4 mln consensus.
"As promised, we also took some aggressive and important steps in the last quarter of 2013 to align our cost structure with marketplace realities and more importantly to become nimbler, more efficient, generators of ideas, inspirations, content and product. We also promised to put to bed several pieces of notable and distracting litigation, and we did so." Mr. Dienst continued, "With some of the best, brightest and most passionate employees in our business lines -- all of whom have embraced our new way of chasing opportunities as One Company - we are very excited about the groundwork we will lay in 2014 for tapping our esteemed brand's fullest potential."
Sappi results for 1st quarter in line with expectations.
PR Newswire Sappi Limited
February 5, 2014 1:18 AM
JOHANNESBURG, Feb. 5, 2014 /PRNewswire/ --
Financial summary for the quarter
Profit for the period US$18 million (Q1 2013 US$12 million)
EPS excluding special items 2 US cents (Q1 2013 3 US cents)
EBITDA excluding special items US$147 million (Q1 2013 US$159 million)
Net debt US$2,348 million (Q1 2013 US$2,095 million)
Commenting on the result, Sappi (JSE:SAP) Chief Executive Officer Ralph Boettger said:
"The group returned to positive earnings in the quarter with an EBITDA excluding special items of US$147 million, an operating profit excluding special items of US$60 million and a profit for the period of US$18 million.
(Logo: http://photos.prnewswire.com/prnh/20110728/MM43821LOGO)
"We continue to generate good returns in the Specialised Cellulose business and the dissolving wood pulp market experienced strong demand in an increasingly competitive market. Conditions are generally difficult in the global graphic paper markets, in line with our expectations in Europe and more challenging than anticipated in North America.
"The past year has reinforced the importance of our strategy to reposition Sappi for growth, higher margins, improved profitability, and with less reliance on graphic paper. The two major dissolving wood pulp conversion projects are both now contributing to earnings and profitability, whilst the paper businesses, although dealing with difficult market conditions, continue to generate cash that will enable us to reduce debt.
"Capital expenditure for the full year is expected to be less than US$300 million and, along with the expected improvement in profitability when compared to the prior year, should allow the group to reduce debt levels to approximately US$2 billion by the end of the fiscal year.
"Our outlook for the year continues to be one of improved profitability for the 2014 financial year when compared to 2013."
Quarter ended
Dec 2013
Restated*
Dec 2012
Restated*
Sept 2013
Key figures: (US$ million)
Sales
Operating profit (loss)
Special items – (gains) losses **
Operating profit excluding special items**
EBITDA excluding special items **
Profit (loss) for the period
Basic earnings (loss) per share (US cents)
Net debt**
Key ratios: (%)
Operating profit (loss) to sales
Operating profit excluding special items to sales
Operating profit excluding special items to capital employed (ROCE)
EBITDA excluding special items to sales
Return on average equity (ROE)**
Net debt to total capitalisation**
Net asset value per share (US cents)
1,499
70
(10)
60
147
18
3
2,348
4.7
4.0
7.0
9.8
6.4
67.7
215
1,475
67
3
70
159
12
2
2,095
4.5
4.8
7.9
10.8
3.2
58.1
290
1,530
(110)
177
67
155
(149)
(29)
2,214
(7.2)
4.4
7.7
10.1
(48.0)
65.9
219
* During the year, the group adopted IAS 19 (Revised) Employee Benefits. Refer to the group results for the accounting policy change.
** Refer to the published results for details on special items, the definition of the terms and the reconciliation of EBITDA excluding special items to profit/loss for the period.
The table above has not been audited or reviewed.
The quarter under review
The group has benefited from the strategic decision to invest in and grow the Specialised Cellulose business, with 286kt of dissolving wood pulp sold during the quarter (an increase of 63% over the equivalent quarter last year), generating US$74 million in EBITDA excluding special items at an EBITDA margin of 30%. We continue to benefit from our low cost position at each of our dissolving wood pulp mills and the weaker Rand/Dollar exchange rate during the quarter.
The South African business had another good quarter, benefiting from additional sales volumes in the Specialised Cellulose business from the Ngodwana Mill, the weaker Rand/Dollar exchange rate and a gradual improvement in the paper business. The European business returned to a small operating profit after three quarters of losses, with a reduction in fixed cost offsetting lower selling prices. The North American business experienced a difficult quarter, with volume and price declines in the paper segment as well as increased variable costs leading to a small operating loss.
NBSK paper pulp list prices, to which most of our dissolving wood pulp sales are linked, increased during the quarter, reaching its highest levels in two years. Due to the competitive nature of the market and weak viscose pricing, we expect increased pressure on our NBSK linked prices going forward.
Net debt of US$2,348 million is up, compared both to the prior quarter, US$2,214 million, and the equivalent quarter last year, US$2,095 million, as a result of the seasonal increase in cash utilisation, and the past year's capital expenditure respectively.
The strategic actions to reduce costs and improve our profitability enabled the European business to return to an operating profit this quarter. The paper market remains tough, with demand continuing to decline and pricing under pressure, particularly in a strong Euro/Dollar exchange rate environment. The Alfeld PM2 conversion to speciality paper has been completed with successful trial runs and customer quality acceptance.
The North American business experienced a challenging quarter, and the graphic paper business was particularly difficult with lower sales volumes and prices in very competitive markets. Domestic coated freesheet paper demand in North America declined some 5% compared to the prior year, and whilst our sales declined by less than this, the loss of volume and a decline in coated web pricing over the past year had a significant impact. Higher cost purchased fibre also impacted paper costs compared to the prior year.
Dissolving wood pulp production and sales volumes were close to full capacity with excellent quality. In optimising the global Specialised Cellulose business we have seen lower average pricing and higher logistics costs in our North American operation, resulting in lower average returns for the business in North America.
The Southern African Specialised Cellulose business continues to perform well, and this quarter included sales from the recently converted Ngodwana Mill for the first time. Average net selling prices for dissolving wood pulp were flat compared to the prior quarter, but significantly higher than for the equivalent quarter in the prior year due to higher NBSK reference prices as well as a weaker Rand/Dollar exchange rate. The South African paper business returned to profitability, aided by the weaker Rand/Dollar exchange rate. However, the local graphic paper market remains weak, with continued cost pressure and a competitive import market. The domestic packaging market, though seasonally weaker in this quarter, continues to see good demand levels and improved pricing.
There were no major special items for the quarter. The gain of US$10 million included a positive plantation fair value price adjustment of US$8 million and an asset impairment reversal of US$2 million. Finance costs of US$48 million were in line with the restated equivalent quarter last year. Earnings per share for the quarter was 3 US cents (including a gain of 1 US cent in respect of special items), compared to 2 US cents (including a charge of 1 US cent in respect of special items) in the equivalent quarter last year.
Outlook
Both the European and South African paper businesses returned to profitability during the quarter and we expect to see further improvement in the performance of these paper businesses. Plans are in place to return the North American paper business to previous profitability levels.
Paper markets are expected to remain challenging for the remainder of the year and we continue to focus on costs across all our regions, with each of them striving to ensure they are amongst the lowest cost producers in their respective markets.
Demand in the Specialised Cellulose business is expected to remain firm, but with continued pressure on pricing. Currency, particularly the Rand/Dollar exchange rate will continue to remain a factor in the overall profitability of this business.
The full results announcement is available at www.sappi.com
There will be a conference call to which investors are invited. Full details are available at www.sappi.com using the links Investor Info; Investor Calendar; 1Q14 Financial Results
Forward-looking statements
Certain statements in this release that are neither reported financial results nor other historical information, are forward-looking statements, including but not limited to statements that are predictions of or indicate future earnings, savings, synergies, events, trends, plans or objectives. The words "believe", "anticipate", "expect", "intend", "estimate", "plan", "assume", "positioned", "will", "may", "should", "risk" and other similar expressions, which are predictions of or indicate future events and future trends and which do not relate to historical matters, and may be used to identify forward-looking statements. You should not rely on forward-looking statements because they involve known and unknown risks, uncertainties and other factors which are in some cases beyond our control and may cause our actual results, performance or achievements to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements (and from past results, performance or achievements). Certain factors that may cause such differences include but are not limited to:
the highly cyclical nature of the pulp and paper industry (and the factors that contribute to such cyclicality, such as levels of demand, production capacity, production, input costs including raw material, energy and employee costs, and pricing);
the impact on our business of the global economic downturn;
unanticipated production disruptions (including as a result of planned or unexpected power outages);
changes in environmental, tax and other laws and regulations;
adverse changes in the markets for our products;
the emergence of new technologies and changes in consumer trends including increased preferences for digital media;
consequences of our leverage, including as a result of adverse changes in credit markets that affect our ability to raise capital when needed;
adverse changes in the political situation and economy in the countries in which we operate or the effect of governmental efforts to address present or future economic or social problems;
the impact of restructurings, investments, acquisitions, dispositions and other strategic initiatives (including related financing), any delays, unexpected costs or other problems experienced in connection with dispositions or with integrating acquisitions or implementing restructuring or strategic initiatives (including our announced dissolving wood pulp conversion projects), and achieving expected savings and synergies; and
currency fluctuations.
We undertake no obligation to publicly update or revise any of these forward-looking statements, whether to reflect new information or future events or circumstances or otherwise.
For further information
Andre F Oberholzer
Group Head Corporate Affairs
Sappi Limited
Tel +27 (0)11 407 8044
Mobile +27 (0)83 235 2973
Andre.oberholzer@sappi.com
Graeme Wild
Group Head Investor Relations and Sustainability
Sappi Limited
Tel +27 (0)11 407 8391
Mobile +27 (0)83 320 8624
Graeme.wild@sappi.com
Sappi Limited
PO Box 31560
Braamfontein
2017
South Africa
Tel +28 (0)11 407 8111
www.sappi.com
6:34 am Sanderson Farms beats by $0.40, beats on revs; extends stock repurchase program to Feb 2017 (SAFM) : Reports Q1 (Jan) earnings of $1.25 per share, $0.40 better than the Capital IQ Consensus Estimate of $0.85; revenues fell 1.8% year/year to $584.8 mln vs the $570.69 mln consensus.
The Company also announced that its Board of Directors has extended to February 24, 2017, its stock repurchase program approved February 16, 2012, to repurchase up to 1.0 million shares from time to time at prevailing prices in open market transactions or in negotiated purchases, subject to market conditions, share price and other considerations.
According to Sanderson, market prices for poultry products were mixed during the first quarter of fiscal 2014 compared with the same period of fiscal 2013. A simple average of the Georgia dock price for whole chickens was ~6.5 percent higher in the Company's first fiscal quarter compared with the same period in 2013, and currently stands near a record $1.0450 per pound.
"We expect market conditions in the retail grocery store market to remain strong as chicken will compete once again during 2014 with high priced beef and pork...while we benefited during the summer of 2013 from menu shifts toward chicken items, and away from relatively high priced beef at food service establishments, whether or not we get a similar benefit during 2014 is yet to be seen...While we expect lower grain prices for the fiscal year and we experienced lower feed costs during the first quarter, grain prices have moved higher during February as a result of USDA's lower than expected corn carryout estimate reported earlier this month."
Labor SMART, Inc. to Present at the National Investment Banking Association Conference on February 27
Marketwired Labor SMART, Inc.
February 24, 2014 8:10 AM
HIRAM, GA--(Marketwired - Feb 24, 2014) - Labor SMART, Inc. (OTCQB: LTNC) (the "Company"), an emerging provider of on-demand temporary staffing, today announced that President and CEO Ryan Schadel will present at the National Investment Banking Association ("NIBA") Conference on Thursday, February 27, at the Riverside Hotel, in Fort Lauderdale, Florida. The company's presentation will be posted on the company's website Thursday afternoon.
Labor SMART has positioned itself to take advantage of the growth in the just-in-time labor market by providing unprecedented levels of service and having local presence in 17 growing markets, in states that include Georgia, Tennessee, Indiana, Kentucky, Florida, Alabama, South Carolina, North Carolina, Missouri and Texas, with additional offices opening in multiple states in 2014. The company has seen its revenue more than double from 2012 to 2013 and has targeted similar growth for 2014.
The National Investment Banking Association (NIBA) is the only not-for-profit trade association of regional and independent brokerages, investment banking firms, and related capital market service providers. Since its inception, NIBA member firms have successfully completed some 1000+ equity offerings totaling approximately $10 billion in new capital for America's finest emerging growth companies. The member firms of NIBA represent more than 8800 registered representatives with an estimated $78 billion assets under management. More information is available at http://nibanet.org.
About Labor SMART, Inc.
Labor SMART, Inc. provides On-Demand temporary labor to a variety of industries. The Company's clients range from small businesses to Fortune 100 companies. Labor SMART was founded to provide reliable, dependable and flexible resources for on-demand personnel to small and large businesses in areas that include construction, manufacturing, hospitality, event-staffing, restoration, warehousing, retailing, disaster relief and cleanup, demolition and landscaping. Labor SMART believes it can make a positive each and every day for the benefit of its clients and temporary employees. The Company's mission is to be the provider of choice to its growing portfolio of customers with a service-focused approach that enables Labor SMART to be seen as a resource and partner to its clients.
Safe Harbor Statement
This release contains statements that constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements appear in a number of places in this release and include all statements that are not statements of historical fact regarding the intent, belief or current expectations of Labor SMART, Inc., its directors or its offices with respect to, among other things: (i) financing plans; (ii) trends affecting its financial condition or results of operations; (iii) growth strategy and operating strategy. The words "may," "would," "will," "expect," "estimate," "can," "believe," "potential," and similar expressions and variations thereof are intended to identify forward-looking statements. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are beyond Labor SMART, Inc.'s ability to control, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors. More information about the potential factors that could affect the business and financial results is and will be included in Labor SMART, Inc.'s filings with the U.S. Securities and Exchange Commission.
Contact:
Bev Jedynak
Martin E. Janis & Company, Inc.
312-943-1123
shareholderrelations@laborsmart.com
Sanderson Farms, Inc. Reports Results for First Quarter of Fiscal 2014
Company Extends Stock Repurchase Program
Business Wire Sanderson Farms, Inc.
1 hour ago
LAUREL, Miss.--(BUSINESS WIRE)--
Sanderson Farms, Inc. (SAFM) today reported results for the first quarter of fiscal 2014 ended January 31, 2014.
Net sales for the first quarter of fiscal 2014 were $584.9 million compared with $595.8 million for the same period a year ago. For the quarter, the Company reported net income of $28.9 million, or $1.25 per share, compared with a net loss of $6.9 million, or $0.31 per share, for the first quarter of fiscal 2013.
The Company also announced that its Board of Directors has extended to February 24, 2017, its stock repurchase program approved February 16, 2012, to repurchase up to 1.0 million shares from time to time at prevailing prices in open market transactions or in negotiated purchases, subject to market conditions, share price and other considerations.
"Our results for the first quarter of fiscal 2014 marked a solid start to the fiscal year,” said Joe F. Sanderson, Jr., chairman and chief executive officer of Sanderson Farms, Inc. “While poultry market prices were mixed compared to the same period a year ago, our grain costs were lower. Retail grocery store demand for chicken has remained steady. However, we continue to see weak food service demand, which remains under pressure as a result of macroeconomic conditions and was also affected by weather during our first fiscal quarter. Weather also affected our first quarter results as we were forced to close several of our plants during the last week of January due to ice and snow. While we expect lower grain prices for the fiscal year and we experienced lower feed costs during the first quarter, grain prices have moved higher during February as a result of USDA’s lower than expected corn carryout estimate reported earlier this month.”
According to Sanderson, market prices for poultry products were mixed during the first quarter of fiscal 2014 compared with the same period of fiscal 2013. A simple average of the Georgia dock price for whole chickens was approximately 6.5 percent higher in the Company's first fiscal quarter compared with the same period in 2013, and currently stands near a record $1.0450 per pound. Boneless breast meat prices during the quarter were approximately 4.3 percent lower than the prior-year period. The average market price for bulk leg quarters decreased approximately 15.6 percent for the quarter compared with the same period last year. Jumbo wing prices were lower by 40.7 percent compared with last year’s first fiscal quarter, down from the record high $1.92 per pound the week before the Super Bowl last year. The Company’s average feed cost per pound of poultry products processed decreased 25.1 percent compared with the first quarter of fiscal 2013, and prices paid for corn and soybean meal, the Company’s primary feed ingredients, decreased 38.8 percent and 12.8 percent, respectively, compared with the first quarter of fiscal 2013.
“We expect market conditions in the retail grocery store market to remain strong as chicken will compete once again during 2014 with high priced beef and pork,” Sanderson added. “While we benefited during the summer of 2013 from menu shifts toward chicken items, and away from relatively high priced beef at food service establishments, whether or not we get a similar benefit during 2014 is yet to be seen.”
“The record corn crop harvested in the United States last fall has taken pressure off the United States and world corn stocks to use ratio for 2014, but a lower than expected carryout of corn at the end of the 2014 crop year estimated by the USDA in February has caused market prices for both corn and soybean meal to move higher. Despite this increase in the grain market, had we priced all of our grain needs at current prices yesterday, our grain costs would be lower by $153 million during fiscal 2014 compared to fiscal 2013.
“While broiler egg sets have been higher than the previous year’s levels most every week since last August, the industry remains constrained by limited breeder stock supplies. As a result, we don’t expect a significant increase in domestic chicken production until the second half of calendar 2014 at the earliest. Healthy, fully employed and confident American consumers could easily absorb the additional chicken production indicated by higher broiler egg sets if we see further improvement in macroeconomic conditions.
“Construction continues on our new Palestine, Texas, complex, and we are looking forward to the opportunities the new facility will create. While weather has delayed construction to some extent, we remain on schedule to begin operations at the new facility during the first calendar quarter of 2015.”
Commenting on the stock repurchase program, Sanderson said, “As in the past, we plan to use our stock repurchase program in part to offset shares issued through our equity compensation plans. We believe this program represents a good use of corporate funds while minimizing potential dilution related to our equity compensation programs.”
Sanderson Farms will hold a conference call to discuss this press release today, February 25, 2014, at 10:00 a.m. Central, 11:00 a.m. Eastern. Investors will have the opportunity to listen to a live Internet broadcast of the conference call through the Company's Web site at www.sandersonfarms.com. To listen to the live call, please go to the Web site at least 15 minutes early to register, download, and install any necessary audio software. For those who cannot listen to the live broadcast, an Internet replay will be available shortly after the call and continue through March 10, 2014. Those who would like to participate in the call can do so by dialing 888-791-4321; confirmation code 1639505.
Sanderson Farms, Inc. is engaged in the production, processing, marketing and distribution of fresh and frozen chicken and further processed and partially cooked chicken products. Its shares trade on the NASDAQ Global Select Market under the symbol SAFM.
This press release includes forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements are based on a number of assumptions about future events and are subject to various risks, uncertainties and other factors that may cause actual results to differ materially from the views, beliefs, projections and estimates expressed in such statements. These risks, uncertainties and other factors include, but are not limited to those discussed under “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended October 31, 2013, and the following:
(1) Changes in the market price for the Company’s finished products and feed grains, both of which may fluctuate substantially and exhibit cyclical characteristics typically associated with commodity markets.
(2) Changes in economic and business conditions, monetary and fiscal policies or the amount of growth, stagnation or recession in the global or U.S. economies, either of which may affect the value of inventories, the collectability of accounts receivable or the financial integrity of customers, and the ability of the end user or consumer to afford protein.
(3) Changes in the political or economic climate, trade policies, laws and regulations or the domestic poultry industry of countries to which the Company or other companies in the poultry industry ship product, and other changes that might limit the Company’s or the industry’s access to foreign markets.
(4) Changes in laws, regulations, and other activities in government agencies and similar organizations applicable to the Company and the poultry industry and changes in laws, regulations and other activities in government agencies and similar organizations related to food safety.
(5) Various inventory risks due to changes in market conditions including, but not limited to, the risk that market values of live and processed poultry inventories might be lower than the cost of such inventories, requiring a downward adjustment to record the value of such inventories at the lower of cost or market as required by generally accepted accounting principles.
(6) Changes in and effects of competition, which is significant in all markets in which the Company competes, and the effectiveness of marketing and advertising programs. The Company competes with regional and national firms, some of which have greater financial and marketing resources than the Company.
(7) Changes in accounting policies and practices adopted voluntarily by the Company or required to be adopted by accounting principles generally accepted in the United States.
(8) Disease outbreaks affecting the production performance and/or marketability of the Company’s poultry products, or the contamination of its products.
(9) Changes in the availability and cost of labor and growers.
(10) The loss of any of the Company’s major customers.
(11) Inclement weather that could hurt Company flocks or otherwise adversely affect its operations, or changes in global weather patterns that could impact the supply of feed grains.
(12) Failure to respond to changing consumer preferences.
(13) Failure to successfully and efficiently start up and run a new plant or integrate any business the Company might acquire.
Readers are cautioned not to place undue reliance on forward-looking statements made by or on behalf of the Company. Each such statement speaks only as of the day it was made. The Company undertakes no obligation to update or to revise any forward-looking statements. The factors described above cannot be controlled by the Company. When used in this press release or in the related conference call, the words “believes”, “estimates”, “plans”, “expects”, “should”, “outlook”, and “anticipates” and similar expressions as they relate to the Company or its management are intended to identify forward-looking statements. Examples of forward-looking statements include statements of the Company’s belief about future earnings, grain prices, supply and demand factors, and other industry conditions.
SANDERSON FARMS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
Three Months Ended
January 31,
2014 2013
Net sales $ 584,883 $ 595,760
Cost and expenses:
Cost of sales 516,085 584,867
Selling, general and administrative 23,599 20,565
539,684 605,432
Operating income (loss) 45,199 (9,672 )
Other income (expense):
Interest income 12 3
Interest expense (911 ) (1,805 )
Other 16 171
(883 ) (1,631 )
Income (loss) before income taxes 44,316 (11,303 )
Income tax expense (benefit) 15,445 (4,360 )
Net income (loss) $ 28,871 $ (6,943 )
Earnings (loss) per share:
Basic $ 1.25 $ (0.31 )
Diluted $ 1.25 $ (0.31 )
Dividends per share $ 0.20 $ 0.17
SANDERSON FARMS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands)
January 31,
2014 October 31,
2013
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 58,822 $ 85,563
Accounts receivable, net 94,114 108,980
Inventories 209,169 205,855
Deferred income taxes 0 478
Prepaid expenses and other current assets 34,549 29,867
Total current assets 396,654 430,743
Property, plant and equipment 1,061,853 1,035,044
Less accumulated depreciation (559,130 ) (546,578 )
502,723 488,466
Other assets 5,164 5,436
Total assets $ 904,541 $ 924,645
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable $ 61,056 $ 81,418
Accrued expenses 31,960 58,271
Accrued income taxes 11,621 11,055
Deferred income taxes 197 0
Current maturities of long-term debt 10,799 10,799
Total current liabilities 115,633 161,543
Long-term debt, less current maturities 29,218 29,414
Claims payable 9,500 9,000
Deferred income taxes 53,365 53,089
Commitments and contingencies
Stockholders’ equity:
Common Stock 23,063 23,016
Paid-in capital 143,402 142,482
Retained earnings 530,360 506,101
Total stockholders’ equity 696,825 671,599
Total liabilities and stockholders’ equity $ 904,541 $ 924,645
SAFM-G
Contact:
Sanderson Farms, Inc.
Mike Cockrell, 601-649-4030
Treasurer & Chief Financial Officer
Martha Stewart Living Omnimedia Reports Fourth Quarter and Full Year 2013 Results
PR Newswire Martha Stewart Living Omnimedia, Inc.
2 minutes ago
NEW YORK, Feb. 25, 2014 /PRNewswire/ -- Martha Stewart Living Omnimedia, Inc. (MSO) today announced its results for the fourth quarter and full year ended December 31, 2013. The Company reported net income for the fourth quarter of $7.0 million and net loss for the full year of $(1.8) million.
"We ended the full year with a $54.5 million improvement in Operating Income from the prior year. In the fourth quarter just completed, growth in Merchandising was offset by anticipated lower revenues from Publishing which was expected due to the restructuring that took place in the prior year to reduce our print title count from four to two," said Dan Dienst, Chief Executive Officer. "As promised, we also took some aggressive and important steps in the last quarter of 2013 to align our cost structure with marketplace realities and more importantly to become nimbler, more efficient, generators of ideas, inspirations, content and product. We also promised to put to bed several pieces of notable and distracting litigation, and we did so." Mr. Dienst continued, "With some of the best, brightest and most passionate employees in our business lines – all of whom have embraced our new way of chasing opportunities as One Company - we are very excited about the groundwork we will lay in 2014 for tapping our esteemed brand's fullest potential."
Fourth Quarter 2013 Summary
Total revenues were $47.4 million in the fourth quarter of 2013, compared to $56.4 million in the fourth quarter of 2012 as the 2012 publishing restructuring resulted in lower revenues partially offset by growth in Merchandising.
Total operating income for the fourth quarter of 2013 was $5.9 million compared with $1.4 million in the prior-year period.
Basic and diluted net income per share was $0.12 for the fourth quarter of 2013, compared to $0.02 for the fourth quarter of 2012.
Full-Year 2013 Summary
Total revenues were $160.7 million in 2013, compared to $197.6 million in 2012.
Total operating loss for the full year 2013 was $(1.9) million compared to an operating loss of $(56.4) million in 2012. Included in 2012 results was a $(44.3) million non-cash impairment charge reflecting the write-down of goodwill related to the Company's publishing segment.
Net loss per share was $(0.03) for the full year 2013, compared to a net loss per share of $(0.83) in 2012.
Fourth Quarter 2013 Results by Segment
Three Months Ended December 31
(unaudited, in thousands)
2013
2012
REVENUES
Publishing
$
28,420
$
35,332
Merchandising
18,216
16,219
Broadcasting
769
4,812
Total Revenues
$
47, 405
$
56,363
OPERATING (LOSS) / INCOME
Publishing
$
(1,787)
$
(2,343)
Merchandising
13,640
11,330
Broadcasting
343
2,953
Corporate
(6,336)
(10,580)
Total Operating Income
$
5,860
$
1,360
Recent Business Highlights
MSLO continues to engage consumers via social media, demonstrated by almost 9 million fans and followers across all its platforms including 1 million fans on Facebook and almost 3 million followers on Twitter.
In December, Martha Stewart Living won Adweek's Hot List Award for Hottest Women's Magazine.
For the second year in a row, Martha Stewart Living was recognized by Apple as one of the best newsstand apps of the year.
After highly popular first and second seasons, the third season of Martha Stewart's Cooking School started airing on PBS this month and the third season of Martha Bakes is scheduled to air in April.
Unique visitors online and on mobile increased 13% in the fourth quarter over the prior year.
Total digital revenue for the full year 2013 grew 13% over the prior year period.
Publishing
Revenues in the fourth quarter of 2013 were $28.4 million, compared to $35.3 million in the prior year's fourth quarter. In the 2013 fourth quarter, MSLO published two issues of Martha Stewart Living, compared with three in the prior year period. The two published issues generated improved advertising sales compared with the same 2012 issues. Partially offsetting the decline in print revenue was an increase in digital revenue in the quarter.
Operating loss was $(1.8) million for the fourth quarter of 2013, compared to $(2.3) million in the prior year.
Merchandising
Revenues increased 12% to $18.2 million for the fourth quarter of 2013, as compared to $16.2 million in the prior year's fourth quarter, benefitting from royalty revenue recognition, new in 2013, from the Company's relationship with J.C. Penney.
Operating income was $13.6 million for the fourth quarter of 2013 as compared to $11.3 million in the fourth quarter of 2012.
Broadcasting
Revenue in the fourth quarter of 2013 was $0.8 million, compared to $4.8 million in the fourth quarter of 2012, primarily due to non-recurring items in the prior year related to our historical Broadcasting operations.
Operating income was $0.3 million for the fourth quarter of 2013 compared to operating income of $3.0 million in the fourth quarter of 2012.
Corporate
Corporate expenses were $(6.3) million in the fourth quarter of 2013 compared to $(10.6) million in the prior year's quarter, due to a reimbursement from our insurance carrier related to the Macy's litigation and lower executive compensation.
The Company will host a conference call with analysts and investors on February 25, 2014 at 8:30am EST that will be broadcast live over the Internet at www.marthastewart.com/ir, and an archived version will be available through March 11, 2014.
About Martha Stewart Living Omnimedia, Inc.
Martha Stewart Living Omnimedia, Inc. (MSLO) is a leading provider of original "how-to" information, inspiring and engaging consumers with unique lifestyle content and high-quality products. MSLO is organized into the following business segments: Publishing, Merchandising and Broadcasting. MSLO is listed on the New York Stock Exchange under the ticker symbol MSO.
Forward-Looking Statements
This press release may contain certain statements that we believe are, or may be considered to be, "forward-looking statements," as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be identified by the use of statements that include phrases such as we "may," "will," "should," "could," "expects," "intends," "plans," "anticipates," "believes," "estimates," "potential" or "continue" or other similar references to future periods or the negative of these terms.
Forward-looking statements are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and our actual results may differ materially from those contemplated by the forward-looking statements. Such forward-looking statements include: adverse reactions to publicity relating to Martha Stewart or Emeril Lagasse by consumers, advertisers and business partners; loss of the services of Ms. Stewart or Mr. Lagasse; continued management turnover; inability to successfully capitalize on digital, mobile and video initiatives, including establishing relationships with additional distribution partners; softening of or increased competition in the domestic advertising market; failure by the economy to sustain any meaningful recovery and other economic developments that limit consumers' discretionary spending or affect the value of our assets or access to credit or other funds; inability to expand merchandising and licensing programs or the loss or failure of existing programs, including as a result of litigation or disputes with merchandising segment partners; inability to grow our online presence; failure to successfully implement our cost savings initiatives; failure to protect our intellectual property; changes in media consumption behavior; increases in paper, postage, freight or printing costs; weakening in circulation, particularly in newsstand sales; operational or financial problems at any of our business partners; our inability to successfully and profitably develop or introduce new products; consolidation of our principal print business vendors, which may lead to increased prices and service delays; and failure to predict, respond to and influence trends in consumer taste and/or shifts in business strategies.
Certain of these and other factors are discussed in more detail in the Company's most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission, especially under the heading "Risk Factors," which may be accessed through the SEC's website at http://www.sec.gov/.
Martha Stewart Living Omnimedia, Inc.
Consolidated Statements of Operations
Three Months Ended December 31,
(unaudited, in thousands, except share and per share amounts)
REVENUES
2013
2012
Publishing
$ 28,420
$ 35,332
Merchandising
18,216
16,219
Broadcasting
769
4,812
Total revenues
47,405
56,363
Production, distribution and editorial
(16,789)
(24,470)
Selling and promotion
(12,685)
(14,499)
General and administrative
(8,489)
(11,512)
Depreciation and amortization
(818)
(979)
Restructuring charges
(2,764)
(3,543)
OPERATING INCOME
5,860
1,360
Interest income, net
222
294
Other expense, net
(97)
(150)
INCOME BEFORE INCOME TAXES
5,985
1,504
Income tax benefit / (provision)
991
(394)
NET INCOME
$ 6,976
$ 1,110
INCOME PER SHARE - BASIC AND DILUTED
Net income- Basic
$ 0.12
$ 0.02
Net income- Diluted
$ 0.12
$ 0.02
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic
57,630,635
67,330,288
Diluted
58,011,584
67,621,961
Martha Stewart Living Omnimedia, Inc.
Consolidated Statements of Operations
Twelve Months Ended December 31,
(unaudited, in thousands, except share and per share amounts)
REVENUES
2013
2012
Publishing
$ 96,493
$ 122,540
Merchandising
59,992
57,574
Broadcasting
4,190
17,513
Total revenues
160,675
197,627
Production, distribution and editorial
(73,121)
(103,347)
Selling and promotion
(45,033)
(52,453)
General and administrative
(39,945)
(45,148)
Depreciation and amortization
(3,758)
(4,007)
Restructuring charges
(3,439)
(4,811)
Goodwill impairment
—
(44,257)
Gain on sale of subscriber list, net
2,724
—
OPERATING LOSS
(1,897)
(56,396)
Interest income, net
792
1,202
Other (expense) / income, net
(583)
711
LOSS BEFORE INCOME TAXES
(1,688)
(54,483)
Income tax provision
(84)
(1,602)
NET LOSS
$ (1,772)
$ (56,085)
LOSS PER SHARE - BASIC AND DILUTED
Net loss
$ (0.03)
$ (0.83)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic and diluted
64,912,368
67,231,463
Martha Stewart Living Omnimedia, Inc.
Consolidated Balance Sheets
(in thousands, except share and per share amounts)
December 31,
2013
(unaudited)
December 31,
2012
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$ 21,884
$ 19,925
Short-term investments
19,268
29,182
Restricted cash and investments
5,072
—
Accounts receivable, net
39,694
38,073
Paper inventory
2,901
4,580
Deferred television production costs
228
434
Other current assets
3,648
3,335
Total current assets
92,695
95,529
PROPERTY AND EQUIPMENT, net
7,961
10,738
GOODWILL
850
850
OTHER INTANGIBLE ASSETS, net
45,200
45,203
OTHER NONCURRENT ASSETS
1,661
1,940
Total assets
$ 148,367
$ 154,260
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities
$ 12,464
$ 13,132
Accrued payroll and related costs
8,665
9,316
Current portion of deferred subscription revenue
7,632
13,168
Current portion of other deferred revenue
17,227
5,605
Total current liabilities
45,988
40,859
DEFERRED SUBSCRIPTION REVENUE
3,587
4,478
OTHER DEFERRED REVENUE
17,307
1,113
DEFERRED INCOME TAX LIABILITY
7,094
7,117
OTHER NONCURRENT LIABILITIES
3,916
4,815
Total liabilities
77,892
58,744
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Series A Preferred Stock, zero issued and outstanding in 2013,
1 share issued and outstanding in 2012
—
—
Class A Common Stock, $0.01 par value, 350,000,000 shares
authorized: 30,704,491 and 41,220,689 shares issues in 2013 and
2012, respectively; 30,645,091 and 41,161,289 shares outstanding
in 2013 and 2012, respectively
307
412
Class B Common Stock, $0.01 par value, 150,000,000 shares
authorized: 25,984,625 shares issued and outstanding in 2013 and
2012
260
260
Capital in excess of par value
342,213
340,586
Accumulated deficit
(271,051)
(244,529)
Accumulated other comprehensive loss
(479)
(438)
71,250
96,291
Less: Class A treasury stock - 59,400 shares at cost
(775)
(775)
Total shareholders' equity
70,475
95,516
Total liabilities and shareholders' equity
$ 148,367
$ 154,260
Psychemedics Corporation Announces 2013 Earnings Up 28% And Record Revenues
DECLARES 70th CONSECUTIVE QUARTERLY DIVIDEND
PR Newswire Psychemedics Corporation
February 10, 2014 12:03 PM
ACTON, Mass., Feb. 10, 2014 /PRNewswire/ -- Psychemedics Corporation (PMD) today announced fourth quarter and year-end financial results for the period ended December 31, 2013. The Company also announced a quarterly dividend of $0.15 per share payable to shareholders of record as of February 21, 2014 to be paid on March 7, 2014. This will be the Company's 70th consecutive quarterly dividend.
(Logo: http://photos.prnewswire.com/prnh/20111107/NE00639LOGO)
The Company's revenue for the year ended December 31, 2013 was $26.9 million versus $25.2 million for the twelve months ended December 31, 2012, an increase of 7%. Net income for the twelve months ended December 31, 2013 was $3.8 million or $0.72 per diluted share, versus $3.0 million or $0.57 per diluted share, for the comparable period last year, an increase of 28%.The Company's revenue for the quarter ended December 31, 2013 was $6.5 million versus $5.7 million for the quarter ended December 31, 2012, an increase of 15%. Net income for the quarter ended December 31, 2013 was $868 thousand or $0.16 per diluted share, versus $273 thousand or $0.05 per diluted share, for the comparable period last year, an increase of 218%.
Raymond C. Kubacki, Chairman and Chief Executive Officer, said,
"2013 was the second consecutive year of record revenues and the Company achieved substantial earnings growth of 28% over 2012. In addition, the Company expanded its product offering in 2013 by building on the technology advances in 2012 with the launch of a hair test for alcohol which looks back at the same 90 day period as our patented drug test. The Company also expanded product offerings through its new partnerships in the instant drug and alcohol testing arena.
"The extraordinary growth in earnings in the fourth quarter compared to 2012 was driven by several factors including an increase in revenues of 15% in 2013, higher than normal expenses in 2012 related to transition costs of new technologies which were implemented in 2012 and did not re-occur in 2013, and a benefit due to a change in the calculation of California income tax. The change in California income tax rate significantly lowered the Company's overall income tax rate. The total benefit was realized in the fourth quarter of 2013 and had a positive impact of approximately $0.05 per diluted share. Without this positive tax impact, our EPS would still have been up 18%.
"With regard to new business, in December 2013, the Company noted that the Brazilian Federal Government had announced new guidelines that will require professional drivers in the transportation industry to pass a hair drug test when obtaining or renewing their driver's license. The first testing is expected to begin on July 1, 2014. We are excited about competing for the hair testing business in Brazil. Psychemedics has a very strong partner in Psychemedics Brasil, a Brazilian-owned independent distributor who we have worked closely with for over 15 years helping a variety of Brazilian organizations work to achieve a drug free workplace. We look forward to continuing to work together on this new opportunity to positively impact public safety as it relates to the transportation industry.
"We are very excited about this opportunity and believe the potential volume from this Brazil opportunity could be very substantial. In order to service that potential volume, we need to make significant investments in plant, equipment and people. These investments must be made in the first half of 2014 to be ready for the July 1 start date. During this period, we will not have any revenues from this Brazil opportunity to offset these costs. Therefore, we would expect earnings in the first half of 2014 to be unfavorably impacted.
"The Company's balance sheet remains strong with approximately $4.0 million in cash and cash equivalents and no long-term debt. Our directors share our confidence in the future of Psychemedics and remain committed to rewarding shareholders and sharing the financial success of the Company with them as we grow. Therefore, we are pleased to declare our quarterly dividend of $0.15 per share. This dividend represents our 70th consecutive quarterly dividend."
Psychemedics Corporation is the world's largest provider of hair testing for the detection of drugs of abuse. The Company's patented process is used by thousands of U.S. and international clients, including over 10% of the Fortune 500 companies, for pre-employment and random drug testing. Major police departments, Federal Reserve Banks, schools, and other public entities also rely on our unique patented drug testing process. We strongly believe our drug testing method to be superior to any other product currently in use, including traditional urine testing and other hair testing methods.
The Psychemedics web site is www.psychemedics.com.
Cautionary Statement for purposes of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995: From time to time, information provided by Psychemedics may contain forward-looking information that involves risks and uncertainties. In particular, statements contained in this release that are not historical facts (including but not limited to statements concerning earnings, earnings per share, revenues, dividends, future business, growth opportunities, new accounts, customer base, market share, test volume, sales and marketing strategies, foreign drug testing laws and regulations, required investments in plant, equipment and people) may be "forward looking" statements. Actual results may differ from those stated in any forward-looking statements. Factors that may cause such differences include but are not limited to risks associated with the development of markets for new products and services offered, costs of capacity expansion, U.S. and foreign government regulation, including but not limited to FDA regulations, competition and general economic conditions and other factors disclosed in the Company's filings with the Securities and Exchange Commission.
Psychemedics Corporation
Balance Sheets
(UNAUDITED)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2013
2012
2013
2012
Revenues
$6,483,916
$5,658,184
$26,870,297
$25,223,534
Cost of revenues
2,832,154
2,892,745
11,476,263
10,971,886
Gross profit
3,651,762
2,765,439
15,394,034
14,251,648
Operating Expenses:
General & administrative
1,081,803
1,024,964
4,157,597
3,946,844
Marketing & selling
1,269,713
1,130,210
4,704,970
4,543,598
Research & development
267,091
146,487
825,102
825,518
Total Operating Expenses
2,618,607
2,301,661
9,687,669
9,315,960
Operating income
1,033,155
463,778
5,706,365
4,935,688
Other income
280
447
92,273
1,889
Net income before provision for income taxes
1,033,435
464,225
5,798,638
4,937,577
Provision for income taxes
165,496
191,612
1,993,428
1,957,948
Net income and comprehensive income
$867,939
$272,613
$3,805,210
$2,979,629
Basic net income per share
$0.16
$0.05
$0.72
$0.57
Diluted net income per share
$0.16
$0.05
$0.72
$0.57
Dividends declared per share
$0.15
$0.15
$0.60
$0.60
Weighted average common shares outstanding, basic
5,313,766
5,272,428
5,299,060
5,260,320
Weighted average common shares outstanding, diluted
5,342,509
5,291,370
5,315,463
5,272,542
Psychemedics Corporation
Statements of Income and Comprehensive Income
(UNAUDITED)
December 31,
December 31,
2013
2012
ASSETS
Current Assets:
Cash and cash equivalents
$3,970,512
$3,065,785
Accounts receivable, net of allowance for doubtful accounts
of $144,921 in 2013 and $121,583 in 2012
4,368,864
4,620,768
Prepaid expenses and other current assets
769,269
823,274
Income tax receivable
554,828
854,212
Deferred tax assets
292,795
209,877
Total Current Assets
9,956,268
9,573,916
Fixed Assets, net of accumulated amortization and depreciation
of $5,175,722 in 2013 and $4,395,605 in 2012
6,050,203
4,201,409
Other assets
543,345
345,293
Total Assets
$ 16,549,816
$ 14,120,618
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable
$510,550
$669,789
Accrued expenses
2,447,920
1,413,541
Total Current Liabilities
2,958,470
2,083,330
Deferred tax liabilities, long-term
1,314,221
814,619
Total Liabilities
4,272,691
2,897,949
Shareholders' Equity:
Preferred-stock, $0.005 par value, 872,521 shares authorized,
no shares issued or outstanding
--
--
Common stock, $0.005 par value; 50,000,000 shares authorized
5,981,896 shares issued in 2013 and 5,940,558 shares issued in 2012
29,910
29,703
Additional paid-in capital
28,888,712
28,460,764
Accumulated deficit
(6,559,708)
(7,186,009)
Less - Treasury stock, at cost, 668,130 shares in 2013 and 2012
(10,081,789)
(10,081,789)
Total Shareholders' Equity
12,277,125
11,222,669
Total Liabilities and Shareholders' Equity
$16,549,816
$14,120,618
Contact: Neil Lerner
Vice President of Finance
(978) 206-8220
Neill@psychemedics.com
Saleen Automotive Release Q3 Results, Reports Vehicle and Parts Sales of $1.1 million, an Increase of 77%
PR Newswire Saleen Automotive, Inc.
February 15, 2014 8:15 AM
CORONA, Calif., Feb. 15, 2014 /PRNewswire/ -- Saleen Automotive, Inc. (SLNN), (SLNN) (the "Company"), an American specialty manufacturer of performance vehicles, technical performance parts, lifestyle accessories and apparel, is pleased to provide the market with its third quarter key financial results for the three and nine months ended December 31, 2013. The full 10-Q filing is available on the SEC's website http://1.usa.gov/1cNCnmi.
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Key financial results of operations for the quarter ended December 31, 2013 are summarized herein:
Vehicle and parts revenue increased 77.1% to $1,076,153 for the quarter ended December 31, 2013, from $591,487 for the quarter ended December 31, 2012. For the quarter ended December 31, 2013, revenue decreased by $777,332 or 41.9% from the quarter ended December 31, 2012 due to the one-time design contract with a major movie studio of $1,245,985 realized in the quarter ended December 31, 2012;
Gross margin for vehicle and parts increased 306.0% to $302,686 for the quarter ended December 31, 2013 from $74,558 for the quarter ended December 31, 2012. For the quarter ended December 31, 2013, gross margin decreased $158,316 from the quarter ended December 31, 2012 due to the one-time design contract;
Operating expenses increased 111.1% to $1,571,745 for the quarter ended December 31, 2013 from $744,578 for the quarter ended December 31, 2012 with $446,610 of the increase related to our investment in research and development and sales and marketing expenses related to our expanded marketing efforts;
Net loss increased to $1,539,541 for the quarter ended December 31, 2013 from $321,171 for the quarter ended December 31, 2012;
Key financial results of operations for the nine months ended December 31, 2013 are summarized herein:
For the nine months ended December 31, 2013, revenue increased by $1,824,583 or 72.3% from the nine months ended December 31, 2012. Vehicle and parts revenue increased 179.5% to $3,570,722 for the nine months ended December, 2013 from $1,277,476 for the nine months ended December 31, 2012;
Gross margin for the nine months ended December 31, 2013 was $718,057, an increase of 18.1% from the nine months ended December 31, 2012. Gross margin for vehicle and parts increased 224.4% to $718,057 for the nine months ended December 31, 2013 from $221,335 for the nine months ended December 31, 2013;
Operating expenses increased 131.6% to $5,074,136 for the nine months ended December 31, 2013 from $2,190,481 for the nine months ended December 31, 2012 with $1,286,436 of the increase related to our investment in research and development and sales and marketing expenses related to our expanded marketing efforts;
Net loss increased to $5,117,754 for the nine months ended December 31, 2013 from $1,720,893 for the nine months ended December 31, 2012;
"We are pleased to release financials that demonstrate significant growth in our critical parts and vehicle sales category," stated Steve Saleen, CEO, Saleen Automotive. "While operating expenses increased significantly during this period, I am pleased with the concurrent increase in our ability to produce new and compelling vehicles. I truly believe this is a necessary expenditure and a catalyst to greater revenue diversity for Saleen."
The sales increase reflects an aggressive sales effort during the nine months ended December 31, 2013. The increase in operating expenses is largely attributable to or investment in research and development and expanded marketing efforts and the expansion of the Company's facilities to support the growth in sales, including a notable investment into the development of a proprietary electric car design.
Milestones from the period include:
Saleen Automotive Collaborates with Renowned Art Center College of Design for Revolutionary New Electric Vehicle
Saleen Automotive Announces Plans to Produce Saleen Tesla Model S Electric Sports Car
World Class Ad Agency Havas Edge to Represent Saleen Automotive in New National Campaign
Saleen Automotive Reports Strong Sales for 30th Anniversary Editions
Saleen Automotive Confirms Electric Car Project in Development
All the above events can be read by looking under the news feed for SLNN. Saleen uses the following outlets to provide updates from time to time to the public regarding its business and operations:
Facebook: https://www.facebook.com/Saleen
Company website: www.saleenautomotive.com.
About Saleen Automotive, Inc.
Saleen is an American specialty manufacturer of performance vehicles, technical performance parts, lifestyle accessories and apparel. Founder Steve Saleen has continually set the bar for automotive design and performance engineering in both street and racing applications. Saleen plans to utilize its existing strategic partnerships and dealer network to refine its design and engineering prowess, continue development of emerging automotive technologies, and expand its presence nationwide with a combination of automotive retail services, aftermarket parts and new vehicle sales to build significant long-term value. Learn more at www.saleenautomotive.com.
Information about Forward-Looking Statements
This release contains "forward-looking statements" that include information relating to future events and future financial and operating performance. The words "may," "would," "will," "expect," "estimate," "can," "believe," "potential" and similar expressions and variations thereof are intended to identify forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which that performance or those results will be achieved. Forward-looking statements are based on information available at the time they are made and/or management's good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause these differences include, but are not limited to: fluctuations in demand for Saleen Automotive's products, the introduction of new products, the Company's ability to maintain customer and strategic business relationships, the impact of competitive products and pricing, growth in targeted markets, the adequacy of the Company's liquidity and financial strength to support its growth, and other information that may be detailed from time-to-time in Saleen Automotive's filings with the United States Securities and Exchange Commission. Examples of such forward looking statements in this release include statements regarding growth in our parts and vehicle sales and increases in our ability to produce new products. For a more detailed description of the risk factors and uncertainties affecting Saleen Automotive, please refer to the Company's recent Securities and Exchange Commission filings, which are available at www.sec.gov. Saleen Automotive undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
PhotoMedex Signs Definitive Agreement to Acquire LCA-Vision for $5.37 per Share in Cash, or $106 Million
PR Newswire LCA-Vision, Inc.
February 13, 2014 4:10 PM
HORSHAM, Pa. and CINCINNATI, Feb. 13, 2014 /PRNewswire/ --
Combines a leading developer and marketer of skin health and wellness products to consumers and patients worldwide with a market-leading clinical service delivery platform utilizing direct-to-consumer customer acquisition model
Expected to bring recurring, reimbursed revenue from the XTRAC® Excimer Laser for treating psoriasis and vitiligo and dispensing of the Neova® product line to underutilized LasikPlus® infrastructure and professional staff
Expected to be accretive to PhotoMedex's cash EPS in 2014, excluding transaction-related items
Financing will be based on fully committed senior debt facility
Conference call to be held Friday, February 14 at 8:30 a.m. Eastern time
PhotoMedex, Inc. (NasdaqGS and TASE: PHMD) and LCA-Vision, Inc. (LCAV) today announced the signing of a definitive agreement pursuant to which PhotoMedex will acquire LCA-Vision for $5.37 per share in cash, or approximately $106.4 million. PhotoMedex is a global skin health company providing integrated disease management and aesthetic solutions to dermatologists, professional aestheticians and consumers. LCA-Vision Inc. is a leading provider of laser vision correction services under the LasikPlus brand.
This proposed transaction is subject to customary closing conditions, including LCA-Vision shareholder approval and regulatory approvals, and is subject to a 30-day "go shop" period. The Boards of Directors of both PhotoMedex and LCA-Vision have voted unanimously in favor of the transaction, which is expected to close in the second quarter of 2014. LCA-Vision's operations are expected to be accretive to PhotoMedex's cash EPS in 2014, excluding one-time, transaction-related items.
"The combination of these synergistic businesses holds potential for powerful financial leverage and profitable long-term growth by providing a platform to establish company-owned XTRAC Psoriasis and Vitiligo Centers of Excellence and clinical dispensing of Neova products in LasikPlus facilities," said Dr. Dolev Rafaeli, PhotoMedex Chief Executive Officer. "We have a tremendous opportunity to leverage the LasikPlus infrastructure and customer-centric staff, which are the best in the industry yet presently underutilized. LCA-Vision is without rival when it comes to managing a consumer medical procedure from initial patient inquiry to call center operations, through to converting the consultation to a surgical appointment and procedure. LASIK procedures, however, are typically performed only one or two days a week in a costly infrastructure while the other days are devoted to patient screening, pre-operative and post-operative care. LasikPlus centers and staff, who deal one-on-one with patients, are ideally suited for expanding procedures beyond LASIK to include XTRAC laser treatments for various dermatologic disorders such as psoriasis and vitiligo, as well as utilizing the patient interaction for additional clinical brand dispensing."
"At PhotoMedex we have a proven ability to generate dermatology patient traffic, and now we will have the national footprint to scale-up those efforts in an immediate and meaningful way while bringing recurring reimbursed patient revenue and economies of scale to LasikPlus centers. We expect this to be transformational to our XTRAC business," he added. "On average, psoriasis patients are treated with XTRAC twice per week for three to six weeks, twice a year and over the course of many years. In contrast, the current LCA-Vision model has virtually no repeat business and is mostly a private-pay procedure. We believe that with minor modification to the layout of the LasikPlus clinics, the professional and technical LASIK staffs will be able to offer dermatology patients the same high level of care and customer service with only modest staffing increases and incremental training."
Upon completion of this transaction, LCA-Vision will operate as a wholly owned subsidiary of PhotoMedex. There are no layoffs planned at LCA-Vision, and all 62 LasikPlus vision centers in the U.S., including 52 full-service LasikPlus fixed-site laser vision correction centers and 10 pre- and post-operative LasikPlus satellite centers, are expected to remain intact. PhotoMedex plans to build on the current LCA-Vision strategic expansion of service offering to bolster cataract and intraocular lens procedures, and to expand the optometrist referral network, all of which are currently underway. The addition of XTRAC and Neova offerings to each center will improve center-level economics and will allow PhotoMedex to strategically evaluate expansion of the clinic network.
"For several years it has been a priority for LCA-Vision to pursue diversification of our revenue stream while at the same time becoming less reliant on a procedure that is closely tied to consumer confidence and macroeconomic factors. This business combination with PhotoMedex represents a compelling, immediate solution to leverage our established system by offering fully reimbursed, laser-based medical procedures," said LCA-Vision Chief Executive Officer Michael J. Celebrezze. "The people of PhotoMedex are expert marketers for consumer health, wellness and beauty products with a proven ability to run efficient operations while supporting innovation. Combining our two companies provides for an exciting future for my LCA-Vision colleagues, while offering a compelling premium to LCA-Vision stockholders with the certainty of all-cash terms."
Transaction Terms and Pro Forma Financials
Under the terms of the agreement, LCA-Vision shareholders will receive $5.37 in cash for each share held, which represents a premium of 34% over the closing price of LCA-Vision common stock on February 12, 2014. PhotoMedex will fund this transaction through a new $85 million senior secured credit facility including a $10 million revolving credit facility and a $75 million four-year term loan, as well as through existing cash balances.
The merger agreement permits LCA-Vision to solicit alternative acquisition proposals from third parties through March 15, 2014, and LCA-Vision intends to do so with the assistance of its financial and legal advisors. LCA-Vision does not anticipate disclosing any developments with regard to this process unless the LCA-Vision Board of Directors makes an affirmative decision to proceed with an alternative acquisition proposal. There can be no assurance that this process will result in a superior alternative proposal. In addition, LCA-Vision may, subject to certain procedural limitations under the terms of the merger agreement, respond to unsolicited alternative acquisition proposals subsequent to March 15, 2014. If the merger agreement is terminated under certain circumstances relating to an alternative transaction, LCA-Vision will be required to pay a termination fee to PhotoMedex and to reimburse certain of its expenses.
On a pro forma basis, the combined company had revenue for the 12 months ended September 30, 2013 of approximately $308 million, gross profit of approximately $244 million, gross margin of approximately 79% and adjusted net income of approximately $36 million. The pro forma combined cash position as of September 30, 2013 was approximately $78 million.
"We expect this transaction to be accretive to our 2014 cash EPS, excluding one-time, transaction-related items. Also, we expect approximately $5 million in annualized cost-savings and efficiencies to be fully achieved as we enter 2015," said Dennis McGrath, PhotoMedex President and Chief Financial Officer.
Non-GAAP Measures
To supplement PhotoMedex's and LCA-Vision's consolidated financial statements presented in accordance with GAAP as filed with the SEC on Forms 10-K and 10-Q for the relevant periods, PhotoMedex and LCA-Vision are providing certain non-GAAP measures of financial performance.
Reference to these non-GAAP measures should be considered in addition to results prepared under current accounting standards, but are not a substitute for, nor superior to, GAAP results. These non-GAAP measures are provided to enhance investors' overall understanding of PhotoMedex's and LCA-Vision's current financial performance and to provide further information for comparative purposes.
Specifically, PhotoMedex and LCA-Vision believe the non-GAAP measures provide useful information to both management and investors by isolating certain expenses, gains and losses that may not be indicative of its core operating results and business outlook. In addition, PhotoMedex and LCA-Vision believe non-GAAP measures that exclude stock-based compensation expense and other non-cash or non-recurring expenses enhance the comparability of results against prior periods. The table below does not make acquisition-related adjustments. Reconciliation to the most directly comparable GAAP measure of all non-GAAP measures included in this press release is as follows:
12 months ended September 30, 2013
PHMD
LCAV
Combined
Net Income
$21,087
$(5,516)
$15,571
Adjustments to Net Income:
Depreciation/amortization
5,946
2,547
8,493
Interest
6
69
75
Income taxes
3,903
(319)
3,584
Stock-based compensation
5,173
1,486
6,659
Restructuring charges
1,334
1,334
Adjusted Net Income
$36,115
$(399)
$35,716
Leadership, Facilities and Brands
Following completion of the transaction, Dr. Dolev Rafaeli will continue to serve as CEO of PhotoMedex and Dennis McGrath will continue to serve as President and CFO. Michael Celebrezze, currently CEO of LCA-Vision, will serve as President and CEO of the LCA-Vision subsidiary.
As a result of this transaction, there will be no changes to the PhotoMedex Board of Directors, but the company intends to create a six-person Board of Directors to oversee the LCA-Vision subsidiary.
PhotoMedex headquarters will continue to be in Horsham, Pennsylvania, while LCA-Vision's headquarters and its call center will remain in Cincinnati. As a result of this transaction there will be no changes to any of the PhotoMedex, Radiancy or LCA-Vision brands, including LasikPlus.
Canaccord Genuity Inc. served as financial advisor to PhotoMedex on this transaction and Proskauer Rose LLP served as legal counsel. Cain Brothers & Company LLC served as financial advisor to LCA-Vision on this transaction and Taft Stettinius & Hollister LLP served as legal counsel.
Conference Call
PhotoMedex and LCA-Vision management will hold a conference call to discuss this announcement and answer questions Friday, February 14, 2014 beginning at 8:30 a.m. Eastern time. To participate in the conference call, dial toll-free 888- 329-8877 or International/toll 719-325-2469 (and enter confirmation code # 1856030). For the convenience of participants in Israel, a local/toll-free number (1-80-924-5906) has been set up (the confirmation code remains the same # 1856030). If you are unable to participate, a digital replay of the call will be available from Friday, February 14, 2014 at 11:30 a.m. Eastern time until Friday, February 28, 2014 at 11:30 a.m. Eastern time, by dialing toll-free 888-203-1112 or International/toll 719-457-0820 (participants in Israel may dial 1-80-924-6038) and using confirmation code #1856030. In addition, once you have accessed the conference call, you may also attend a live web conference to view the accompanying slides by accessing http://www.livemeeting.com/cc/vcc from your computer and entering your Name, Meeting ID: w1856030 and Entry Code: A185603 on the "Enter Meeting" page. Please note, to maximize your connection, please be sure to clear your temporary internet files/cache; disable your pop-up blockers, spyware, or anti-virus software during the session and close all other programs.
Slides to accompany the conference call will be posted to the Investor Relations section of www.photomedex.com and at http://www.lasikplus.com approximately 15 minutes before the start of the call.
The live broadcast of this conference call and slides will be available in the Investor Relations section of www.photomedex.com, and at www.streetevents.com. The online replay will be available shortly after the conclusion of the call.
About LCA-Vision Inc./LasikPlus
LCA-Vision Inc., a leading provider of laser vision correction services under the LasikPlus brand, operates 62 LasikPlus vision centers in the U.S., including 52 full-service LasikPlus® fixed-site laser vision correction centers and 10 pre- and post-operative LasikPlus satellite centers. LCA-Vision has performed more than 1.3 million procedures since FDA approval of photorefractive keratectomy (PRK) in late 1995.
About PhotoMedex
PhotoMedex is a global skin health company providing integrated disease management and aesthetic solutions to dermatologists, professional aestheticians and consumers. The company provides proprietary products and services that address skin diseases and conditions including psoriasis, vitiligo, acne, actinic keratosis (a precursor to certain types of skin cancer) and photo damage. Its experience in the physician market provides the platform to expand its skin health solutions to spa markets, as well as traditional retail, online and infomercial outlets for home-use products. As a result of its December 2011 merger with Radiancy Inc., PhotoMedex has added a range of home-use devices under the no!no!™ brand, for various indications including hair removal, acne treatment and skin rejuvenation. The company also offers a professional product line for acne clearance, skin tightening, psoriasis care and hair removal sold to physician clinics and spas.
Forward-Looking Statements
Some portions of this press release, particularly those describing PhotoMedex' and LCA-Vision's strategies, operating expense reductions and business plans will contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks, uncertainties and other factors. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including any statements of the plans, strategies and objectives of management for future operations; any statements regarding product development, product extensions, product integration or product marketing; any statements regarding continued compliance with government regulations, changing legislation or regulatory environments; any statements of expectation or belief and any statements of assumptions underlying any of the foregoing. These risks, uncertainties and other factors, including PhotoMedex's ability to consummate the announced acquisition of LCA-Vision, unexpected costs or unexpected liabilities that may arise from the announced acquisition, and PhotoMedex's failure to realize the anticipated benefits of the announced acquisition, and the general risks associated with the businesses of PhotoMedex and LCA-Vision described in the reports and other documents filed with the SEC, could cause actual results to differ materially from those referred to, implied or expressed in the forward-looking statements. PhotoMedex and LCA-Vision caution readers not to rely on these forward-looking statements. All forward-looking statements are based on information currently available to PhotoMedex and LCA-Vision and are qualified in their entirety by this cautionary statement. Each of PhotoMedex and LCA-Vision anticipates that subsequent events and developments will cause its views to change. The information contained in this press release speaks as of the date hereof and neither PhotoMedex nor LCA-Vision has or undertakes any obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.
Additional Information and Where to Find It
PhotoMedex, LCA-Vision and their respective directors and officers may be deemed to be participants in the solicitation of proxies for the special meeting of LCA-Vision stockholders to be held to approve the transactions described herein. In connection with the proposed acquisition, LCA-Vision will file with the Securities and Exchange Commission a Proxy Statement. The stockholders of LCA-Vision are advised to read, when available, the Proxy Statement and other documents filed with the Securities and Exchange Commission in connection with the solicitation of proxies for the special meetings because these documents will contain important information. The proxy statement will be mailed to stockholders of LCA-Vision as of the record date to be established for voting on the acquisition. The preliminary proxy statement and definitive proxy statement, once available, can be obtained, without charge, at the Securities and Exchange Commission's website at www.sec.gov. In addition, the proxy statement (when available) and such other documents may be obtained free of charge by directing a request to LCA-Vision Inc., 7840 Montgomery Road, Cincinnati, Ohio 45236, Attn: Corporate Secretary, or (513)792-9292.
Contacts:
LHA
Kim Sutton Golodetz
212-838-3777
Kgolodetz@lhai.com
Bruce Voss, 310-691-7100
Bvoss@lhai.com
@LHA_IR_PR
PhotoMedex, Inc.
Dennis McGrath, President and CFO
215-619-3287
info@photomedex.com
Carroll Shelby Cal Baseball Day at University of California, Berkeley Proves a Success, to Become Annual Tradition
Business Wire Carroll Shelby International
February 18, 2014 12:59 PM
GARDENA, Calif.--(BUSINESS WIRE)--
Carroll Shelby International (CSBI.PK), the parent company of Carroll Shelby Licensing and Shelby American, announced today that the first annual Carroll Shelby Cal Baseball, which was held on Saturday, Feb. 15, 2014, at Evans Diamond located on the campus of the University of California, Berkeley, was a success. It will become an annual event beginning in 2015.
“The Carroll Shelby Cal Baseball Day was a testament of the excitement that surrounds the Shelby brand,” said Ari Kopmar, executive vice president of consumer initiatives. “We successfully bridged America’s favorite performance car with America’s favorite past time in a way that’s never been done before. Not only was our reception strong among Shelby and Ford enthusiasts, but the support from the baseball fans and university students was tremendous. We’re excited about making the Carroll Shelby Cal Baseball Day an annual tradition.”
A special “Show and Shine” car exhibit was located outside the stadium and featured Shelby and Ford-powered cars owned by Team Shelby members and Ford enthusiasts from across northern California. Among the featured Ford Shelby Mustangs was Mark Lopez’s ’66 Shelby GT350, which has been owned by his family since they purchased it in 1967. It was originally sold by Shelby American to Competition Press, who then sold it to the Lopez family.
“I was a little apprehensive about hosting a Team Shelby event in conjunction with a college baseball game,” said Michael McGuirk, president of the California Team Shelby region. “However, Carroll Shelby Cal Baseball Day turned out to be a spectacular event that Shelby and baseball fans alike fully embraced. The Shelby and Ford ‘Show and Shine’ generated a lot of foot traffic and exposed the Shelby brand to a younger demographic. The support our Team Shelby chapter received from Carroll Shelby International was phenomenal.”
In addition to the “Show and Shine,” Carroll Shelby Cal Baseball Day was kick started with a special video presentation about Carroll Shelby and his contribution to American muscle car performance. Neil Cummings, co-CEO of Carroll Shelby International and a trustee for the Carroll Shelby Foundation, threw the opening pitch for the first double header game; Joe Conway, Co-CEO of Carroll Shelby International and CEO of Shelby American, threw the opening pitch for the second game. Shelby merchandise including apparel, die cast collectibles and remote control cars were used as prizes during the game. An animated race video featuring a Shelby Super Snake GT500, Shelby Daytona Coupe and Shelby Cobra was also created for the event and will be shown at games throughout the season.
Dates for the 2015 Carroll Shelby Cal Baseball Day are still being considered.
About Carroll Shelby Licensing
Auto manufacturer and entrepreneur Carroll Shelby is one of the most famous and successful high performance visionaries in the world. A pioneer for modern automotive licensing programs, he began licensing his name and designs for various products beginning in the 1960s. He founded Carroll Shelby Licensing Inc., which is the exclusive holder of trademarks and vehicle design rights for some of the most famous muscle cars and high-performance vehicles. CSL also holds trademark rights for Shelby-branded apparel, accessories and collectibles. For more information about the company or licensing opportunities, call (310) 914-1843, fax (310) 538-8189 or write CSL at 19021 S Figueroa St., Gardena, CA 90248, or visit carrollshelby.com, shelbylicensing.com or carrollshelbyinternational.com.
About Shelby American, Inc.
Shelby American manufactures and markets performance vehicles and related products. The company builds authentic continuation Cobras, including the 427 S/C, 289 FIA and 289 street car component vehicles. Shelby American offers the Shelby 1000, GT500 Super Snake, GT and GTS post-title packages for the 2005-2014 Ford Mustang, as well as the 2013-2014 Shelby Focus ST and 2012-2014 Ford Raptor. For more info, visit www.shelbyamerican.com.
Safe Harbor Statement
The statements contained in this press release that are not purely historical, including statements regarding the Company’s expectations, hopes, beliefs, intentions, or strategies regarding the future, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Actual results may differ materially from those expected because of various known and unknown risks and uncertainties, including, but not limited to, the continuing effects of the U.S. recession and global credit environment, other changes in general economic and industry conditions, the award or loss of significant client assignments, timing of contracts, recruiting and new business solicitation efforts, currency fluctuations, and other factors affecting the financial health of our clients. These and other risks are described in the Company’s most recent annual report on Form 10-K and subsequent reports filed with or furnished to the U.S. Securities and Exchange Commission. The forward-looking statements included in this press release are based on information available to the Company on the date hereof, and the Company assumes no obligation to update any such forward-looking statements.
Contact:
TimePiece PR & Marketing
Scott Black, 214-520-3430
SBlack@TPRM.com
TheStreet, Inc. to Announce Fiscal Fourth Quarter and Year End 2013 Financial Results on Thursday, February 27, 2014
PR Newswire TheStreet, Inc.
February 21, 2014 8:00 AM
NEW YORK, Feb. 21, 2014 /PRNewswire/ -- TheStreet, Inc. (TST), a leading digital financial media company, will announce its financial results for the fourth quarter and year ended December 31, 2013, after market close on Thursday, February 27, 2014. The Company will hold its quarterly conference call to discuss these results at 4:30 P.M. Eastern Standard Time.
To participate in the call, please dial 800-649-5127 (domestic) or 914-495-8549 (international). The conference code is 2948072. This call is being webcast and can be accessed on the Investor Relations section of TheStreet website at http://investor-relations.thestreet.com/events.cfm.
A replay of the webcast will be available approximately two hours after the conclusion of the call and remain available for approximately 90 calendar days.
About TheStreet
TheStreet, Inc. (www.t.st) is the leading independent digital financial media company providing business and financial news, investing ideas and analysis to personal and institutional investors worldwide. The Company's portfolio of business and personal finance brands includes: TheStreet, RealMoney, RealMoney Pro, Stockpickr, Action Alerts PLUS, Options Profits, MainStreet and Rate-Watch. To learn more, visit www.thestreet.com. The Deal, the Company's institutional business, provides intraday coverage of mergers and acquisitions and all other changes in corporate control. To learn more, visit www.thedeal.com.
Contacts:
John Ferrara
Chief Financial Officer
TheStreet, Inc.
212-321-5234
ir@thestreet.com
Erica Mannion
Investor Relations
Sapphire Investor Relations, LLC
415-471-2700
ir@thestreet.com
RLJ Entertainment Announces New Digital Fitness Channel Acacia TV
GlobeNewswire RLJ Entertainment, Inc.
February 19, 2014 11:00 AM
Following a record year for its first proprietary digital channel Acorn TV,
the company's second channel offers diverse slate of fitness content
with more than 70 workouts
Hosted by SparkPeople's Nicole Nichols,
Workouts include Shiva Rea, Exhale: Core Fusion,
R.I.P.P.E.D., Kathy Smith, Paul Katami,
celebrities Lisa Whelchel, Bethenny Frankel, Kenya Moore
and Olympians Kristi Yamaguchi and Marlen Esparza
SILVER SPRING, Md., Feb. 19, 2014 (GLOBE NEWSWIRE) -- Putting an end to exercise boredom with the ultimate in flexibility and variety, RLJ Entertainment (RLJE), founded by Robert L. Johnson, is excited to announce the launch of Acacia TV, its second proprietary digital channel. Available at AcaciaLifestyle.com/tv and through its new Roku channel, Acacia TV offers 75 workouts in a diverse range of disciplines, including yoga, strength training, dance, barre, Pilates, abs and core, pregnancy, low impact, therapeutic, cardio, tai chi and kettlebell, among many others. The channel is for all fitness levels, offering workouts from beginners through advanced. Since 2006, Acacia has been a leading producer of original and award-winning yoga, fitness and wellness DVD programming. Acacia features fun, results-oriented workouts with consistently high production values and expert, authentic instruction.
Acacia TV's workouts feature many of the top fitness instructors in the country including multiple workouts from the world's leading female yoga instructor Shiva Rea, the critically-acclaimed, best-selling Core Fusion DVD series from exhale spa's Fred DeVito and Elisabeth Halfpapp, a beginner's workout from the leading kettlebell master instructor Paul Katami, fitness icon Kathy Smith, celebrities like talk show host Bethenny Frankel, Real Housewives of Atlanta's Kenya Moore and Olympic gold medalist Kristi Yamaguchi;as well as Acacia's newest workouts, Power Boxing Workout with Olympian Marlen Esparza and R.I.P.P.E.D. Total Body Challenge, the first workout from the popular brand. The channel also features several workouts for exercisers over 50 with Ageless with Kathy Smith: Staying Strong and Total Body Turnaround, Keeping Fit in Your 50s, Arthritis Rx and Lisa Whelchel's Everyday Workout for the Everyday Woman.
SparkPeople.com's popular editor-in-chief and trainer, Nicole Nichols, hosts the channel and guides subscribers through some of the features and benefits of Acacia TV with several introductory videos. Nicole's first SparkPeople DVD workouts, 28-Day Boot Camp and Total Body Sculpting,are also included. SparkPeople.com is America's #1 online weight-loss and fitness community with more than 15 million members worldwide.
The channel also features several pre-set programs with introductions by Nicole, including a five-day dance plan with Bollywood, hip hop, Latin groove, Brazilian and belly dance; a seven-day lean & toned plan focused on ballet inspired barre workouts; and a seven-day beginners program with beginner's cardio, strength training, Pilates and Lisa Whelchel's Everyday Workout.
Miguel Penella, Chief Executive Officer of RLJ Entertainment, Inc., said, "After the record-setting year for the Acorn brand with Acorn TV, it was a natural choice for us to extend our successful fitness brand Acacia with Acacia TV. Exercisers are looking for more variety in their workouts and Acacia TV allows them to choose from several dozen workouts so they will never get bored working out again."
Available at its popular consumer website, www.AcaciaLifestyle.com, which also sells assorted gifts and apparel, Acacia TV streams more than 75 workouts. Consumers can easily try out the service with its 10-day free trial. After the trial, Acacia TV offers three different subscription options: monthly access ($6.99), 90-Day Burn ($14.99) or yearly subscription ($49.99). There are no commercials or popup ads on Acacia TV.
Acacia TV is accessible on the #1 streaming player, Roku, as well as computers, and through the browsers on iPhones and iPads. It is also available on many other portable devices. In the coming months, Acacia TV will be available on many more platforms.
Full access to Acacia TV is available to press upon request.
To watch Acacia TV via computers, iPhones, iPads, etc.: http://AcaciaLifestyle.com/tv
To add the Acacia TV channel on your Roku: https://owner.roku.com/add/acaciatv
RLJ Entertainment, Inc. (RLJE) is a premier independent owner, developer, licensee and distributor of entertainment content and programming in primarily North America, the United Kingdom and Australia with over 5,300 exclusive titles. RLJE is a leader in numerous genres via its owned and distributed brands such as Acorn (British TV), Image (feature films, stand-up comedy), One Village (urban), Acacia (fitness), Athena (documentaries) and Madacy (gift sets). These titles are distributed in multiple formats including broadcast television (including satellite and cable), theatrical and non-theatrical, DVD, Blu-Ray, digital download and digital streaming.
Via its relationship with Agatha Christie Limited, a company that RLJE owns 64% of, RLJE manages the intellectual property and publishing rights to some of the greatest works of mystery fiction, including stories of the iconic sleuths Miss Marple and Poirot. RLJE also owns all rights to the hit UK mystery series Foyle's War.
RLJE leverages its management experience to acquire, distribute and monetize existing and original content for its many distribution channels, including its branded digital subscription channels, Acorn TV and Acacia TV, and engages distinct audiences with programming that appeals directly to their unique viewing interests. Through its proprietary e-commerce web sites and print catalogs for the Acorn and Acacia brands, RLJE has direct contacts and billing relationships with millions of consumers.
Contact:
RLJ Entertainment,
Chad Campbell, 301.608.2115 *138,
ccampbell@rljentertainment.com
6:10 am Newell Rubbermaid to reaffirm FY14 guidance at the Consumer Analyst Group of New York (:CAGNY) conference (NWL) : Co reaffirms guidance for FY14 (Dec), sees EPS of $1.94-2.00, excluding non-recurring items, vs. $1.99 Capital IQ Consensus Estimate; sees FY14 (Dec) revs of (net sales +2-3% YoY) $5.81-5.86 bln vs. $5.85 bln Capital IQ Consensus Estimate.
Lithia Motors Reports Adjusted EPS of $0.98 for Fourth Quarter 2013 and $3.99 for Full Year 2013
Lithia Motors Declares $0.13 per Share Dividend for Fourth Quarter 2013
Marketwired Lithia Motors
February 19, 2014 7:29 AM
MEDFORD, OR--(Marketwired - Feb 19, 2014) - Lithia Motors, Inc. ( NYSE : LAD ) reported the highest fourth quarter adjusted net income in Company history and increased adjusted net income from continuing operations 33% for the fourth quarter 2013 over the prior year period.
2013 fourth quarter adjusted net income from continuing operations was $25.7 million, or $0.98 per diluted share. This compares to 2012 fourth quarter adjusted net income from continuing operations of $19.3 million, or $0.74 per diluted share.
Unadjusted net income from continuing operations for the fourth quarter of 2013 was $27.2 million, or $1.03 per diluted share, compared to $19.7 million or $0.76 per diluted share for 2012. As shown in the attached non-GAAP reconciliation tables, the 2013 fourth quarter adjusted income from continuing operations is reduced to exclude a benefit of $0.06 per share for a gain on a sale of land and a $0.05 per share net benefit from non-core tax attributes, offset by a non-core charge of $0.06 per share related to an adjustment to a legal reserve associated with a lawsuit filed in 2006 and settled in 2013. The 2012 fourth quarter adjusted results from continuing operations exclude a benefit of $0.02 per share for a non-core tax attribute.
Fourth quarter 2013 revenue from continuing operations increased $147.5 million, or 17%, to $1.0 billion from $877.4 million in the fourth quarter of 2012.
Fourth Quarter-over-Quarter Operating Highlights:
Total same store sales increased 11%
New vehicle same store sales increased 11%
Used vehicle retail same store sales increased 16%
Service, body and parts same store sales increased 8%
Adjusted SG&A expense as a percentage of gross profit decreased 200 basis points to 68.2%
For the full year of 2013, revenue from continuing operations increased 21% to $4.0 billion from $3.3 billion in 2012.
Full Year-over-Year Operating Highlights:
Total same store sales increased 15%
New vehicle same store sales increased 16%
Used vehicle retail same store sales increased 18%
Service, body and parts same store sales increased 7%
Adjusted SG&A expense as a percentage of gross profit decreased 220 basis points to 67.2%
"For the third consecutive quarter, we exceeded $1.0 billion in revenue," said Bryan DeBoer, President and CEO. "We also exceeded $4.0 billion in annual revenue for the first time in Company history. We grew same store revenue 15% in 2013, on top of total same store revenue increases of 23% in 2012, 22% in 2011 and 18% in 2010. We've been able to maintain cost discipline over the last four years of growth, resulting in expanding operating margin each year. Our store leaders continue to challenge their teams to improve store performance while earning customers for life. Significant opportunities remain to increase used car sales and to capture the coming wave of service work from greater vehicle sales volumes over the last few years."
For the full year of 2013, adjusted net income per diluted share from continuing operations increased 35% to $3.99 from $2.96 for the full year of 2012. Unadjusted, net income from continuing operations was $4.02 per diluted share for the full year of 2013, compared to $3.03 per diluted share for the full year of 2012.
Chris Holzshu, SVP and CFO, said, "We finished 2013 with full year adjusted SG&A expense as a percentage of gross profit of 67.2%. This is a record result for the company and is 220 basis points lower than our full year 2012 SG&A expense. For the full year, incremental throughput, or the percentage of additional same store gross profit dollars that we retain after deducting selling costs, was 51.4%. Our stores remain focused on maintaining incremental throughput above 50%, which can continue to lever our SG&A expense going forward."
Corporate Development
In October 2013, we acquired Stockton Nissan Kia in Stockton, California and Fresno Lincoln Volvo in Fresno, California. In November 2013, we acquired Lodi Toyota Scion in Lodi, California. In December 2013, we acquired Diablo Subaru of Walnut Creek, in Walnut Creek, California. The combined estimated annual revenues for these acquisitions is $150 million.
In February 2014, we acquired Island Honda in Kahului, Hawaii, and Stockton Volkswagen in Stockton, California. The combined estimated annual revenues for these acquisitions is $50 million
Bryan DeBoer, President and CEO, stated, "The pace of acquisitions accelerated in the fourth quarter of 2013 as we completed the purchase of four additional locations. For the full year 2013, we acquired seven stores and 2014 is off to a strong start with our first acquisition in the state of Hawaii and an additional store increasing our footprint in northern California. We believe the acquisition market remains active and anticipate 2014 will be a productive year for Lithia to grow our network of stores."
Balance Sheet Update
We ended the fourth quarter with $24 million in cash and $160 million in available credit on our credit facilities. Additionally, approximately $181 million of our operating real estate is currently unfinanced, which we estimate could provide up to an additional $136 million in available liquidity, for total liquidity of $320 million.
During the fourth quarter, we amended our syndicated credit facility, increasing the capacity by $200 million to $1.0 billion in total availability. The amendment increased the number of participants from 10 to 13, including six banks and seven captive finance companies. The amendment also reduced the interest rate and non-use fees on the facility, provided the ability to upsize the overall capacity to $1.25 billion and extended the maturity date to December 2018.
Dividend Payment
Lithia announced that the Board of Directors has approved a dividend of $0.13 per share related to fourth quarter 2013 financial results. Lithia will pay the dividend March 21, 2014 to shareholders of record on March 7, 2014.
Outlook for 2014
We project 2014 first quarter earnings of $0.92 to $0.94 per diluted share and full-year 2014 earnings of $4.30 to $4.40 per diluted share. These projections are based on the following annual assumptions about 2014 performance:
Total revenues of $4.5 to $4.6 billion
New vehicle same store sales increasing 8.0%
New vehicle gross margin of 6.4% to 6.6%
Used vehicle same store sales increasing 8.0%
Used vehicle gross margin of 14.5% to 14.7%
Service body and parts same store sales increasing 7.0%
Service body and parts gross margin of 48.2% to 48.4%
Finance and insurance gross profit of $1,125 per unit
Tax rate of 39.5%
Average diluted shares outstanding of 26.2 million
Capital expenditures of $84 million
These projections exclude the impact of future acquisitions, dispositions and non-core items. Actual results may be affected by items described in the Forward-Looking statements below.
Fourth Quarter Earnings Conference Call and Updated Presentation
The fourth quarter conference call may be accessed at 10:00 a.m. ET today by telephone at 877-407-8029. An updated presentation highlighting the fourth quarter results has been added to www.lithiainvestorrelations.com .
To listen live on our website or for replay, visit www.lithiainvestorrelations.com and click on webcasts.
About Lithia
Lithia Motors, Inc. is the ninth largest automotive retailer in the United States. Lithia sells 28 brands of new vehicles and all brands of used vehicles at 96 stores in 12 states. Lithia also arranges finance, warranty, and credit insurance contracts; and provides vehicle parts, maintenance, and repair services at all of its locations.
Sites
www.lithia.com
www.lithiainvestorrelations.com
www.lithiacareers.com
www.assuredservice.com
Lithia Motors on Facebook
http://www.facebook.com/LithiaMotors
Lithia Motors on Twitter
http://twitter.com/lithiamotors
Forward-Looking Statements
This press release includes "forward-looking statements" within the meaning of the "Safe-Harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward looking statements include statements regarding our goals, plans, projections and guidance regarding our financial position, results of operations, market position, pending and potential future acquisitions and business strategy, and often contain words such as "project," "outlook," "expect," "anticipate," "intend," "plan," "believe," "estimate," "may," "seek," "would," "should," "likely," "goal," "strategy," "future," "maintain" or "will" and similar references to future periods. Examples of forward-looking statements in this press release include, among others, statements we make regarding:
Expected operating results, such as improved store performance, maintaining incremental throughput above 50%, strategy for customer retention, growth and financial results and all projections set forth under the heading "Outlook for 2014";
Anticipated acquisitions in 2014 and
Anticipated availability of liquidity from our unfinanced operating real estate.
By their nature, forward-looking statements involve risks and uncertainties because they relate to events that depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance, and our actual results of operations, financial condition and liquidity and development of the industries in which we operate may differ materially from those made in or suggested by the forward-looking statements in this press release. The risks and uncertainties that could cause actual results to differ materially from estimated or projected results include, without limitation, future economic and financial conditions (both nationally and locally), changes in customer demand, our relationship with, and the financial and operational stability of, vehicle manufacturers and other suppliers, risks associated with our indebtedness (including available borrowing capacity, compliance with financial covenants and ability to refinance or repay indebtedness on favorable terms), government regulations, legislation and others set forth throughout Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations and in Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2012 and from time to time in our other filings with the SEC. We urge you to carefully consider this information and not place undue reliance on forward-looking statements. We undertake no duty to update our forward-looking statements, including our earnings outlook, which are made as of the date of this release.
Non-GAAP Financial Measures
This press release and the attached financial tables contain non-GAAP financial measures such as adjusted net income and diluted earnings per share from continuing operations, adjusted SG&A as a percentage of revenues and gross profit, adjusted operating margin, adjusted operating profit as a percentage of gross profit, and adjusted pre-tax margin. Non-GAAP measures do not have definitions under GAAP and may be defined differently by and not comparable to similarly titled measures used by other companies. As a result, we review any non-GAAP financial measures in connection with a review of the most directly comparable measures calculated in accordance with GAAP. We caution you not to place undue reliance on such non-GAAP measures, but also to consider them with the most directly comparable GAAP measures. We present cash flows from operations in the attached tables, adjusted to include the change in non-trade floor plan debt to improve the visibility of cash flows related to vehicle financing. As required by SEC rules, we have reconciled these measures to the most directly comparable GAAP measures in the attachments to this release. We believe the non-GAAP financial measures we present improve the transparency of our disclosures; provide a meaningful presentation of our results from core business operations, because they exclude items not related to core business operations and other non-cash items; and improve the period-to-period comparability of our results from core business operations. These presentations should not be considered an alternative to GAAP measures.
...
Lithia Motors, Inc.
Consolidated Statements of Operations (Unaudited)
(In thousands except per share data)
Three months ended %
December 31, Increase Increase
2013 2012 (Decrease) (Decrease)
Revenues:
New vehicle retail $ 589,535 $ 506,871 $ 82,664 16.3 %
Used vehicle retail 253,797 208,367 45,430 21.8
Used vehicle wholesale 37,642 35,768 1,874 5.2
Finance and insurance 35,994 29,244 6,750 23.1
Service, body and parts 100,797 89,665 11,132 12.4
Fleet and other 7,109 7,458 (349 ) (4.7 )
Total revenues 1,024,874 877,373 147,501 16.8
Cost of sales:
New vehicle retail 550,438 471,336 79,102 16.8
Used vehicle retail 218,446 179,186 39,260 21.9
Used vehicle wholesale 37,310 35,011 2,299 6.6
Service, body and parts 52,690 46,409 6,281 13.5
Fleet and other 6,697 7,071 (374 ) (5.3 )
Total cost of sales 865,581 739,013 126,568 17.1
Gross profit 159,293 138,360 20,933 15.1
SG&A expense 108,416 97,126 11,290 11.6
Depreciation and amortization 5,316 4,441 875 19.7
Income from operations 45,561 36,793 8,769 23.8
Floor plan interest expense (2,979 ) (3,490 ) (511 ) (14.6 )
Other interest expense (2,115 ) (2,239 ) (124 ) (5.5 )
Other income, net 773 754 19 2.4
Income from continuing operations before income taxes 41,240 31,818 9,422 29.6
Income tax expense (14,080 ) (12,154 ) 1,926 15.8
Income tax rate 34.1 % 38.2 %
Income from continuing operations $ 27,160 $ 19,664 $ 7,496 38.1 %
Income from discontinued operations, net of tax 212 169 43 26.2
Net income $ 27,372 $ 19,833 $ 7,539 38.0 %
Diluted net income per share:
Continuing operations $ 1.03 $ 0.76 $ 0.27 35.5 %
Discontinued operations 0.01 - 0.01 NM
Net income per share $ 1.04 $ 0.76 $ 0.28 36.8 %
Diluted shares outstanding 26,283 26,068 215 0.8 %
NM - not meaningful
Lithia Motors, Inc.
Key Performance Metrics (Unaudited)
Three months ended %
December 31, Increase Increase
2013 2012 (Decrease) (Decrease)
Gross margin
New vehicle retail 6.6 % 7.0 % (40) bps
Used vehicle retail 13.9 14.0 (10) bps
Used vehicle wholesale 0.9 2.1 (120) bps
Finance and insurance 100.0 100.0 - bps
Service, body and parts 47.7 48.2 (50) bps
Fleet and Other 5.8 5.2 60 bps
Gross profit margin 15.5 15.8 (30) bps
Unit sales
New vehicle retail 17,004 14,713 2,291 15.6 %
Used vehicle retail 13,830 11,943 1,887 15.8
Total retail units sold 30,834 26,656 4,178 15.7
Used vehicle wholesale 5,462 5,009 453 9.0
Average selling price
New vehicle retail $ 34,670 $ 34,451 $ 219 0.6 %
Used vehicle retail 18,351 17,447 904 5.2
Used vehicle wholesale 6,892 7,141 (249 ) (3.5 )
Average gross profit per unit
New vehicle retail $ 2,299 $ 2,415 $ (116 ) (4.8 )%
Used vehicle retail 2,556 2,443 113 4.6
Used vehicle wholesale 61 151 (90 ) (59.6 )
Finance and insurance 1,167 1,097 70 6.4
Total vehicle(1) 3,593 3,553 40 1.1
Revenue mix
New vehicle retail 57.5 % 57.8 %
Used vehicle retail 24.8 23.7
Used vehicle wholesale 3.7 4.1
Finance and insurance, net 3.5 3.3
Service, body and parts 9.8 10.2
Fleet and other 0.7 0.9
Adjusted As reported
Three months ended
December 31, Three months ended
December 31,
Other metrics 2013 2012 2013 2012
SG&A as a % of revenue 10.6 % 11.1 % 10.6 % 11.1 %
SG&A as a % of gross profit 68.2 70.2 68.1 70.2
Operating profit as a % of revenue 4.4 4.2 4.4 4.2
Operating profit as a % of gross profit 28.5 26.6 28.6 26.6
Pretax margin 4.0 3.6 4.0 3.6
Net profit margin 2.5 2.2 2.7 2.2
NM - not meaningful
(1) - includes the sales and gross profit related to new, used retail, used wholesale and finance and insurance and unit sales for new and used retail
Lithia Motors, Inc.
Same Store Operating Highlights (Unaudited)
Three months ended %
December 31, Increase Increase
2013 2012 (Decrease) (Decrease)
Revenues
New vehicle retail $ 562,622 $ 509,086 $ 53,536 10.5 %
Used vehicle retail 242,049 208,356 33,693 16.2
Used vehicle wholesale 36,462 35,731 731 2.0
Finance and insurance 34,289 29,271 5,018 17.1
Service, body and parts 96,659 89,619 7,040 7.9
Fleet and other 7,001 7,314 (313 ) (4.3 )
Total revenues $ 979,082 $ 879,377 $ 99,705 11.3
Gross profit
New vehicle retail $ 37,376 $ 35,420 $ 1,956 5.5 %
Used vehicle retail 33,761 29,196 4,565 15.6
Used vehicle wholesale 352 673 (321 ) (47.7 )
Finance and insurance 34,289 29,271 5,018 17.1
Service, body and parts 45,460 42,535 2,925 6.9
Fleet and other 304 243 61 25.1
Total gross profit $ 151,542 $ 137,338 $ 14,204 10.3
Gross margin
New vehicle retail 6.6 % 7.0 % (40) bps
Used vehicle retail 13.9 14.0 (10) bps
Used vehicle wholesale 1.0 1.9 (90) bps
Finance and insurance 100.0 100.0 - bps
Service, body and parts 47.0 47.5 (50) bps
Fleet and Other 4.3 3.3 100 bps
Gross profit margin 15.5 15.6 (10) bps
Unit sales
New vehicle retail 16,078 14,774 1,304 8.8 %
Used vehicle retail 13,137 11,941 1,196 10.0
Total retail units sold 29,215 26,715 2,500 9.4
Used vehicle wholesale 5,271 5,006 265 5.3
Average selling price
New vehicle retail $ 34,993 $ 34,458 $ 535 1.6 %
Used vehicle retail 18,425 17,449 976 5.6
Used vehicle wholesale 6,917 7,138 (221 ) (3.1 )
Average gross profit per unit
New vehicle retail $ 2,325 $ 2,397 $ (72 ) (3.0 )%
Used vehicle retail 2,570 2,445 125 5.1
Used vehicle wholesale 67 134 (67 ) (50.0 )
Finance and insurance 1,174 1,096 78 7.1
Total vehicle(1) 3,621 3,540 81 2.3
(1) - includes the sales and gross profit related to new, used retail, used wholesale and finance and insurance and unit sales for new and used retail
Lithia Motors, Inc.
Consolidated Statements of Operations (Unaudited)
(In thousands except per share data)
Twelve months ended %
December 31, Increase Increase
2013 2012 (Decrease) (Decrease)
Revenues:
New vehicle retail $ 2,256,598 $ 1,847,603 $ 408,995 22.1 %
Used vehicle retail 1,032,224 833,484 198,740 23.8
Used vehicle wholesale 158,235 139,237 18,998 13.6
Finance and insurance 139,007 112,234 26,773 23.9
Service, body and parts 383,483 347,703 35,780 10.3
Fleet and other 36,202 36,226 (24 ) (0.1 )
Total revenues 4,005,749 3,316,487 689,262 20.8
Cost of sales:
New vehicle retail 2,105,480 1,713,156 392,324 22.9
Used vehicle retail 881,366 711,763 169,603 23.8
Used vehicle wholesale 155,524 137,823 17,701 12.8
Service, body and parts 197,913 179,633 18,280 10.2
Fleet and other 34,513 34,812 (299 ) (0.9 )
Total cost of sales 3,374,796 2,777,187 597,609 21.5
Gross profit 630,953 539,300 91,653 17.0
Asset impairments - 115 (115 ) (100.0 )
SG&A expense 427,400 373,688 53,712 14.4
Depreciation and amortization 20,035 17,128 2,907 17.0
Income from operations 183,518 148,369 35,149 23.7
Floor plan interest expense (12,373 ) (12,816 ) (443 ) (3.5 )
Other interest expense (8,350 ) (9,621 ) (1,271 ) (13.2 )
Other income, net 2,993 2,525 468 18.5
Income from continuing operations before income taxes 165,788 128,457 37,331 29.1
Income tax expense (60,574 ) (49,062 ) 11,512 23.5
Income tax rate 36.5 % 38.2 %
Income from continuing operations $ 105,214 $ 79,395 $ 25,819 32.5 %
Income from discontinued operations, net of tax 786 967 (181 ) (18.7 )
Net income $ 106,000 $ 80,362 $ 25,638 31.9 %
Diluted net income per share:
Continuing operations $ 4.02 $ 3.03 $ 0.99 32.7 %
Discontinued operations 0.03 0.04 (0.01 ) (25.0 )
Net income per share $ 4.05 $ 3.07 $ 0.98 31.9 %
Diluted shares outstanding 26,191 26,170 21 0.1 %
...
Lithia Motors, Inc.
Key Performance Metrics (Unaudited)
Twelve months ended %
December 31, Increase Increase
2013 2012 (Decrease) (Decrease)
Gross margin
New vehicle retail 6.7 % 7.3 % (60) bps
Used vehicle retail 14.6 14.6 - bps
Used vehicle wholesale 1.7 1.0 70 bps
Finance and insurance 100.0 100.0 - bps
Service, body and parts 48.4 48.3 10 bps
Fleet and Other 4.7 3.9 80 bps
Gross profit margin 15.8 16.3 (50) bps
Unit sales
New vehicle retail 66,857 55,666 11,191 20.1 %
Used vehicle retail 57,061 47,965 9,096 19.0
Total retail units sold 123,918 103,631 20,287 19.6
Used vehicle wholesale 22,086 19,144 2,942 15.4
Average selling price
New vehicle retail $ 33,753 $ 33,191 $ 562 1.7 %
Used vehicle retail 18,090 17,377 713 4.1
Used vehicle wholesale 7,164 7,273 (109 ) (1.5 )
Average gross profit per unit
New vehicle retail $ 2,260 $ 2,415 $ (155 ) (6.4 )%
Used vehicle retail 2,644 2,538 106 4.2
Used vehicle wholesale 123 74 49 66.2
Finance and insurance 1,122 1,083 39 3.6
Total vehicle(1) 3,581 3,569 12 0.3
Revenue mix
New vehicle retail 56.3 % 55.7 %
Contact:
John North
VP Finance and Controller
(541) 618-5748
Rocky Gap Casino Resort Receives AAA 4 Diamond Award
Represents a Combination of the Overall Quality, Range of Facilities, and Level of Services Offered by the Property
Marketwired Rocky Gap Casino Resort
February 17, 2014 9:30 AM
CUMBERLAND, MD--(Marketwired - Feb 17, 2014) - Rocky Gap Casino Resort is pleased to announce that it has received the AAA® 4 Diamond® Award. AAA Diamond ratings for hotels represent a combination of the overall quality, range of facilities, and level of services offered by the property. Four Diamond hotels are known for being refined and stylish with a high degree of hospitality, service and attention to detail.
"It's a testament to our staff that we have been honored with this prestigious award," said Scott Just, General Manager, Rocky Gap Casino Resort. "We continually strive to make improvements to the property and respond to guests needs so Rocky Gap Casino Resort can maintain its status as a top vacation destination in the Mid-Atlantic region."
Ragina Cooper-Averella, Manager of Public and Government Affairs for AAA Mid-Atlantic, added, "AAA Four Diamond recipients and their staffs recognize the importance of customer satisfaction as they consistently deliver premier experiences, complete with superior personal service, first-class amenities, and impressive surroundings."
The resort is located in Rocky Gap State Park with miles of hiking trails, beaches and incredible mountain views. Over the past year the resort has had multiple upgrades including the addition of a casino featuring approximately 550 slot machines, 10 table games, a casino bar, and live Texas Hold'em poker with both Limit and No Limit stakes. Renovations were also made to the hotel rooms, lobby, restaurants, and the Jack Nicklaus Signature Golf Course. The property recently opened a new conference and event center featuring an executive boardroom, breakout meeting rooms, business center and flexible-use meeting space. In January, 2014, Bonkerz Comedy Club opened on the lower level of the resort.
Continuing a 78-year tradition, AAA's professionally trained inspectors use published guidelines to conduct unannounced hotel and restaurant evaluations, assigning approved establishments a rating of one to five AAA Diamonds. AAA rates more properties than any other rating entity. It is the only rating system that covers the U.S., Canada, Mexico and the Caribbean and the only rating system that conducts professional, on-site evaluations using published guidelines weighted by member priorities.
Reservations and Information
To make a hotel reservation, a Spa appointment, or for more information about Rocky Gap Casino Resort, please call 1(800)724-0828 or visit www.rockygapresort.com. Additionally, be sure to like Rocky Gap Casino Resort on Facebook at www.facebook.com/RockyGap and follow on Twitter at www.twitter.com/RockyGapCasino for information on the latest offers and promotions.
About Rocky Gap Casino Resort
Rocky Gap Casino Resort is located near Cumberland, Maryland in the heart of Allegany County. Rocky Gap Casino Resort is a AAA 4-Diamond Award® winning resort featuring a hotel, events and conference center, four restaurants, the only Jack Nicklaus Signature Golf Course in Maryland, a spa, indoor/outdoor pool, fitness center, pro shop, complimentary valet parking, individual parking, and several outdoor recreational activities. The casino features approximately 550 slot machines, 10 table games, three poker tables, and a casino bar. Rocky Gap Casino Resort is owned by Evitt's Resort, LLC, and is a subsidiary of Lakes Entertainment, Inc. (NASDAQ: LACO). More information is available at: www.rockygapresort.com.
Contact:
Media
Joshua Taustein
(952)475-5058
jtaustein@lakesentertainment.com
David Gutierrez
(952)475-5057
dgutierrez@lakesentertainment.com
DENTSPLY International Reports Fourth Quarter and Fiscal 2013 Results
Thomson Reuters ONE DENTSPLY International Inc.
1 minute ago
Fiscal 2013 adjusted earnings per diluted share grew 6% to $2.35
Fourth quarter 2013 adjusted earnings per diluted share grew 9% to $0.61
Operating cash flow for fiscal 2013 grew 13% to a record $418 million
York, PA - February 18, 2014 - DENTSPLY International Inc. ( XRAY ) today announced sales and earnings for the three months and year ended December 31, 2013.
Fourth Quarter Results
Net sales in the fourth quarter of 2013 of $753.7 million increased slightly from $753.3 million in the fourth quarter of 2012. Net sales, excluding precious metals content, of $713.7 million increased 1.5% from $703.5 million in the fourth quarter of 2012. This growth primarily reflects constant currency growth in the U.S. and Rest of World regions in the period, while European sales contracted slightly.
Net income attributable to DENTSPLY International for the fourth quarter of 2013 was $74.4 million, or $0.51 per diluted share, compared to $126.8 million, or $0.88 per diluted share in the fourth quarter of 2012. On an adjusted basis, excluding certain items, earnings increased to $0.61 per diluted share from $0.56 per diluted share in the fourth quarter of 2012. A reconciliation of the non-GAAP measure to earnings per share calculated on a GAAP basis is provided in the attached table.
Full Year Results
Net sales for the full year 2013 were $2.95 billion, an increase of 0.8% from the prior year. Net sales in 2013, excluding precious metal content, were $2.77 billion, a 2.1% increase over 2012, reflecting positive constant currency growth in each of DENTSPLY`s major geographic regions which include the United States, Europe, and Rest of World.
Net income attributable to DENTSPLY International for fiscal 2013 was $313.2 million, or $2.16 per diluted share, compared to $314.2 million, or $2.18 per diluted share for 2012. On an adjusted basis, excluding certain items, earnings of $2.35 per diluted share increased 6% from $2.22 per diluted share in 2012. A reconciliation of this non-GAAP measure to earnings per share on a GAAP basis is provided on the attached table.
Bret Wise, Chairman and Chief Executive Officer, stated "We continue to be pleased with the progress we have made in accelerating earnings growth over the past few quarters, as we realize benefits from our integration and cost savings activities. Looking ahead, we see opportunities to continue to drive market share growth across our global portfolio by leveraging our core strategies of innovation, clinical education and sales force effectiveness. We believe that global market conditions will improve slightly in 2014 and, accordingly, we are expecting adjusted earnings in the range of $2.45 to $2.55 per share, representing growth in the range of 4% to 9% for the year."
Additional Information
A conference call is scheduled to begin today at 8:30 a.m. (Eastern Time). Supplemental materials for reference during the call will be available for download in the investor relations section of DENTSPLY`s web site, at www.dentsply.com.
A live webcast will be accessible via a link in the investor relations section of DENTSPLY`s web site at www.dentsply.com under the heading Events and Presentations. In order to participate in the call, dial (877) 591-4953 for domestic calls, or (719) 325-4869 for international calls. The Conference ID # is 2189325. During the call, participants will be able to discuss fourth quarter and fiscal 2013 results with DENTSPLY`s Chairman and Chief Executive Officer, Mr. Bret Wise, President and Chief Financial Officer, Mr. Chris Clark, and Executive Vice President and Chief Operating Officer, Mr. Jim Mosch.
A rebroadcast of the conference call will be available online at the DENTSPLY web site. You may also access a dial-in replay for one week following the call at (888) 203-1112 (for domestic calls) or (719) 457-0820 (for international calls), Replay Passcode # 2189325.
DENTSPLY International Inc. is a leading manufacturer and distributor of dental and other consumable medical device products. The Company believes it is the world`s largest manufacturer of consumable dental products for the professional dental market. For over 110 years, DENTSPLY`s commitment to innovation and professional collaboration has enhanced its portfolio of branded consumables and small equipment. Headquartered in the United States, the Company has global operations with sales in more than 120 countries. Visit www.dentsply.com for more information about DENTSPLY and its products.
This press release contains forward-looking information (within the meaning of the Private Securities Litigation Reform Act of 1995) regarding future events or the future financial performance of the Company that involve substantial risks and uncertainties. Actual events or results may differ materially from those in the projections or other forward-looking information set forth herein as a result of certain risk factors. These risk factors include, without limitation; the continued strength of dental and medical markets, the timing, success and market reception for our new and existing products, uncertainty with respect to governmental actions with respect to dental and medical products, outcome of litigation and/or governmental enforcement actions, volatility in the capital markets or changes in our credit ratings, continued support of our products by influential dental and medical professionals, our ability to successfully integrate acquisitions, risks associated with foreign currency exchange rates, risks associated with our competitors` introduction of generic or private label products, our ability to accurately predict dealer and customer inventory levels, our ability to successfully realize the benefits of any cost reduction or restructuring efforts, our ability to obtain a supply of certain finished goods and raw materials from third parties and changes in the general economic environment that could affect the business. Changes in such assumptions or factors could produce significantly different results.
For additional information regarding the factors that may cause actual results to differ materially from these forward-looking statements, please refer to the Company`s most recent Form 10-K and its subsequent periodic reports on Forms 10-Q filed with the Securities and Exchange Commission.
Non-US GAAP Financial Measures
In addition to the results reported in accordance with US GAAP, the Company provides adjusted net income attributable to DENTSPLY International and adjusted earnings per diluted common share. The Company discloses adjusted net income attributable to DENTSPLY International to allow investors to evaluate the performance of the Company`s operations exclusive of certain items that impact the comparability of results from period to period and certain large non-cash charges related to purchased intangible assets. The Company believes that this information is helpful in understanding underlying operating trends and cash flow generation. The adjusted net income attributable to DENTSPLY International consists of net income attributable to DENTSPLY International adjusted to exclude the impact of the following:
(1) Acquisition related costs. These adjustments include costs related to integrating recently acquired businesses and specific costs related to the consummation of the acquisition process. These costs are irregular in timing and as such may not be indicative of past and future performance of the Company and are therefore excluded to allow investors to better understand underlying operating trends.
(2) Restructuring and other costs. These adjustments include both costs and income that are irregular in timing, amount and impact to the Company`s financial performance. As such, these items may not be indicative of past and future performance of the Company and are therefore excluded for the purpose of understanding underlying operating trends.
(3) Amortization of purchased intangible assets. This adjustment excludes the periodic amortization expense related to purchased intangible assets. Following a significant acquisition in 2011, the Company began recording large non-cash charges related to the values attributed to purchased intangible assets. These charges have been excluded from adjusted net income attributed to DENTSPLY International to allow investors to evaluate and understand operating trends excluding these large non-cash charges.
(4) Income related to credit risk and fair value adjustments. These adjustments include both the cost and income impacts of adjustments in certain assets and liabilities that are recorded through net income which are due solely to the changes in fair value and credit risk. These items can be variable and driven more by market conditions than the Company`s operating performance. As such, these items may not be indicative of past and future performance of the Company and therefore are excluded for comparability purposes.
(5) Certain fair value adjustments related to an unconsolidated affiliated company. This adjustment represents the fair value adjustment of the unconsolidated affiliated company`s convertible debt instrument held by the Company. The affiliate is accounted for under the equity method of accounting. The fair value adjustment is driven by open market pricing of the affiliate`s equity instruments, which has a high degree of variability and may not be indicative of the operating performance of the affiliate or the Company.
(6) Income tax related adjustments. These adjustments include both income tax expenses and income tax benefits that are representative of income tax adjustments mostly related to prior periods, as well as the final settlement of income tax audits. These adjustments are irregular in timing and amount and may significantly impact the Company`s operating performance. As such, these items may not be indicative of past and future performance of the Company and therefore are excluded for comparability purposes.
Adjusted earnings per diluted common share is calculated by dividing adjusted net income attributable to DENTSPLY International by diluted weighted-average common shares outstanding. Adjusted net income attributable to DENTSPLY International and adjusted earnings per diluted common share are considered measures not calculated in accordance with US GAAP, and therefore are non-US GAAP measures. These non-US GAAP measures may differ from other companies. Income tax related adjustments may include the impact to adjust the interim effective income tax rate to the expected annual effective tax rate. The non-US GAAP financial information should not be considered in isolation from, or as a substitute for, measures of financial performance prepared in accordance with US GAAP.
...
DENTSPLY INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Three Months Ended Year Ended
December 31, December 31,
2013 2012 2013 2012
Net sales $ 753,658 $ 753,288 $ 2,950,770 $ 2,928,429
Net sales, excluding precious metal content 713,669 703,473 2,771,728 2,714,698
Cost of products sold 355,819 361,235 1,373,358 1,372,042
Gross profit 397,839 392,053 1,577,412 1,556,387
% of Net sales 52.8 % 52.0 % 53.5 % 53.1 %
% of Net sales, excluding precious metal content 55.7 % 55.7 % 56.9 % 57.3 %
Selling, general and administrative expenses 292,127 287,992 1,144,890 1,148,731
Restructuring and other costs 8,291 6,854 13,356 25,717
Operating income 97,421 97,207 419,166 381,939
% of Net sales 12.9 % 12.9 % 14.2 % 13.0 %
% of Net sales, excluding precious metal content 13.7 % 13.8 % 15.1 % 14.1 %
Net interest and other expense 9,494 11,088 49,831 51,260
Income before income taxes 87,927 86,119 369,335 330,679
Provision for (benefit from) income taxes 12,552 (39,630 ) 52,150 8,920
Equity in net earnings (loss) of
unconsolidated affiliated company 656 2,178 976 (3,270 )
Net income 76,031 127,927 318,161 318,489
% of Net sales 10.1 % 17.0 % 10.8 % 10.9 %
% of Net sales, excluding precious metal content 10.7 % 18.2 % 11.5 % 11.7 %
Less: Net income attributable to noncontrolling interests 1,603 1,127 4,969 4,276
Net income attributable to DENTSPLY International $ 74,428 $ 126,800 $ 313,192 $ 314,213
% of Net sales 9.9 % 16.8 % 10.6 % 10.7 %
% of Net sales, excluding precious metal content 10.4 % 18.0 % 11.3 % 11.6 %
Earnings per common share:
Basic $ 0.52 $ 0.89 $ 2.20 $ 2.22
Dilutive $ 0.51 $ 0.88 $ 2.16 $ 2.18
Cash dividends declared per common share $ 0.0625 $ 0.0550 $ 0.2500 $ 0.2200
Weighted average common shares outstanding:
Basic 142,539 142,098 142,663 141,850
Dilutive 145,157 144,297 144,965 143,945
DENTSPLY INTERNATIONAL INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31, December 31,
2013 2012
Assets
Current Assets:
Cash and cash equivalents $ 74,954 $ 80,132
Accounts and notes receivable-trade, net 472,802 442,412
Inventories, net 438,559 402,940
Prepaid expenses and other current assets 157,487 185,612
Total Current Assets 1,143,802 1,111,096
Property, plant and equipment, net 637,172 614,705
Identifiable intangible assets, net 795,323 830,642
Goodwill, net 2,281,596 2,210,953
Other noncurrent assets, net 220,154 204,901
Total Assets $ 5,078,047 $ 4,972,297
Liabilities and Equity
Current liabilities $ 796,405 $ 927,780
Long-term debt 1,166,178 1,222,035
Deferred income taxes 238,394 232,641
Other noncurrent liabilities 299,096 340,398
Total Liabilities 2,500,073 2,722,854
Total DENTSPLY International Equity 2,535,053 2,208,698
Noncontrolling interests 42,921 40,745
Total Equity 2,577,974 2,249,443
Total Liabilities and Equity $ 5,078,047 $ 4,972,297
DENTSPLY INTERNATIONAL INC.
(In thousands)
Supplemental Summary Cash Flow Information:
Year Ended December 31, 2013 and 2012
Year Ended December 31,
2013 2012
Net Cash Provided by Operating Activities $ 417,846 $ 369,685
Net Cash Used in Investing Activities $ 260,231 $ 115,021
Net Cash Used in Financing Activities $ 161,685 $ 255,609
Depreciation $ 81,639 $ 79,456
Amortization $ 46,264 $ 49,743
Capital Expenditures $ 100,345 $ 92,072
Cash Dividends Paid $ 34,874 $ 31,425
DENTSPLY INTERNATIONAL INC.
(In thousands)
Operating Income Summary:
The following tables present the reconciliation of reported US GAAP operating income in total and on a percentage of net sales, excluding precious metal content, to the non-US GAAP financial measures.
Three Months Ended December 31, 2013
Operating Income (Loss) Percentage of Net Sales, Excluding Precious Metal Content
Operating Income $ 97,421 13.7 %
Amortization of Purchased Intangible Assets 11,569 1.6 %
Restructuring and Other Costs 9,296 1.3 %
Acquisition-Related Activities 4,336 0.6 %
Adjusted Non-US GAAP Operating Income $ 122,622 17.2 %
Three Months Ended December 31, 2012
Operating Income (Loss) Percentage of Net Sales, Excluding Precious Metal Content
Operating Income $ 97,207 13.8 %
Amortization of Purchased Intangible Assets 12,388 1.8 %
Restructuring and Other Costs 7,006 1.0 %
Acquisition-Related Activities 3,619 0.5 %
Orthodontic Business Continuity Costs (152 ) - %
Adjusted Non-US GAAP Operating Income $ 120,068 17.1 %
DENTSPLY INTERNATIONAL INC.
(In thousands)
Operating Income Summary:
The following tables present the reconciliation of reported US GAAP operating income in total and on a percentage of net sales, excluding precious metal content, to the non-US GAAP financial measures.
Year Ended December 31, 2013
Operating Income (Loss) Percentage of Net Sales, Excluding Precious Metal Content
Operating Income $ 419,166 15.1 %
Amortization of Purchased Intangible Assets 46,221 1.7 %
Restructuring and Other Costs 14,639 0.5 %
Acquisition-Related Activities 8,778 0.3 %
Adjusted Non-US GAAP Operating Income $ 488,804 17.6 %
Year Ended December 31, 2012
Operating Income (Loss) Percentage of Net Sales, Excluding Precious Metal Content
Operating Income $ 381,939 14.1 %
Amortization of Purchased Intangible Assets 49,745 1.8 %
Restructuring and Other Costs 27,103 1.0 %
Acquisition-Related Activities 14,164 0.6 %
Orthodontics Business Continuity Costs 920 - %
Adjusted Non-US GAAP Operating Income $ 473,871 17.5 %
DENTSPLY INTERNATIONAL INC.
(In thousands, except per share amounts)
Earnings Summary:
The following tables present the reconciliation of reported US GAAP net income attributable to DENTSPLY International and on a per common share basis to the non-US GAAP financial measures.
Three Months Ended December 31, 2013
Net Per Diluted
Income Common Share
Net Income Attributable to DENTSPLY International $ 74,428 $ 0.51
Amortization of Purchased Intangible Assets, Net of Tax 8,081 0.06
Restructuring and Other Costs, Net of Tax 5,259 0.04
Acquisition Related Activities, Net of Tax 3,048 0.02
Loss on Fair Value Adjustments related to an Unconsolidated Affiliated Company, Net of Tax 147 -
Credit Risk and Fair Value Adjustments to Outstanding Derivatives, Net of Tax (365 ) -
Income Tax-Related Adjustments (2,665 ) (0.02 )
Adjusted Non-US GAAP Net Income Attributable to DENTSPLY International $ 87,933 $ 0.61
Three Months Ended December 31, 2012
Net Per Diluted
Income Common Share
Net Income Attributable to DENTSPLY International $ 126,800 $ 0.88
Amortization of Purchased Intangible Assets, Net of Tax 8,466 0.06
Restructuring and Other Costs, Net of Tax 4,486 0.03
Acquisition Related Activities, Net of Tax 2,669 0.02
Orthodontics Business Continuity Costs, Net of Tax (93 ) -
Gain on Fair Value Adjustments related to an Unconsolidated Affiliated Company, Net of Tax (2,353 ) (0.02 )
Income Tax-Related Adjustments (58,617 ) (0.41 )
Adjusted Non-US GAAP Net Income Attributable to DENTSPLY International $ 81,358 $ 0.56
DENTSPLY INTERNATIONAL INC.
(In thousands, except per share amounts)
Earnings Summary:
The following tables present the reconciliation of reported US GAAP net income attributable to DENTSPLY International and on a per common share basis to the non-US GAAP financial measures.
Year Ended December 31, 2013
Net Per Diluted
Income Common Share
Net Income Attributable to DENTSPLY International $ 313,192 $ 2.16
Amortization of Purchased Intangible Assets, Net of Tax 32,309 0.22
Restructuring and Other Costs, Net of Tax 9,721 0.07
Acquisition Related Activities, Net of Tax 5,890 0.04
Credit Risk and Fair Value Adjustments to Outstanding Derivatives, Net of Tax 2,339 0.02
Gain on Fair Value Adjustments related to an Unconsolidated Affiliated Company, Net of Tax (1,200 ) (0.01 )
Income Tax-Related Adjustments (21,054 ) (0.15 )
Adjusted Non-US GAAP Net Income Attributable to DENTSPLY International $ 341,197 $ 2.35
Year Ended December 31, 2012
Net Per Diluted
Income Common Share
Net Income Attributable to DENTSPLY International $ 314,213 $ 2.18
Amortization of Purchased Intangible Assets, Net of Tax 33,612 0.23
Restructuring and Other Costs, Net of Tax 18,549 0.13
Acquisition Related Activities, Net of Tax 9,299 0.07
Loss on Fair Value Adjustments related to an Unconsolidated Affiliated Company, Net of Tax 2,927 0.02
Orthodontics Business Continuity Costs, Net of Tax 600 -
Income Tax-Related Adjustments (59,992 ) (0.41 )
Adjusted Non-US GAAP Net Income Attributable to DENTSPLY International $ 319,208 $ 2.22
DENTSPLY INTERNATIONAL INC.
(In thousands)
Operating Tax Rate Summary:
The following tables present the reconciliation of reported US GAAP effective tax rate as a percentage of income before income taxes to the non-US GAAP financial measure.
Three Months Ended December 31, 2013
Pre-tax Income Income Tax Benefit (Expense) Percentage of Pre-Tax Income
As Reported - US GAAP Operating Results $ 87,927 $ (12,552 ) 14.3 %
Amortization of Purchased Intangible Assets 11,569 (3,488 )
Restructuring and Other Costs 8,736 (3,477 )
Acquisition-Related Activities 4,336 (1,288 )
Loss on Fair Value Adjustments related to an Unconsolidated Affiliated Company 3 (1 )
Credit Risk and Fair Value Adjustments to Outstanding Derivatives (593 ) 228
Income Tax-Related Adjustments - (2,665 )
As Adjusted - Non-US GAAP Operating Results $ 111,978 $ (23,243 ) 20.8 %
Three Months Ended December 31, 2012
Pre-tax Income Income Tax Benefit (Expense) Percentage of Pre-Tax Income
As Reported - US GAAP Operating Results $ 86,119 $ 39,630 (46.0 %)
Amortization of Purchased Intangible Assets 12,388 (3,922 )
Restructuring and Other Costs 7,006 (2,520 )
Acquisition-Related Activities 3,619 (950 )
Gain on Fair Value Adjustments related to an Unconsolidated Affiliated Company (43 ) 13
Orthodontics Business Continuity Costs (152 ) 59
Income Tax-Related Adjustments - (58,817 )
As Adjusted - Non-US GAAP Operating Results $ 108,937 $ (26,507 ) 24.3 %
DENTSPLY INTERNATIONAL INC.
(In thousands)
Operating Tax Rate Summary:
The following tables present the reconciliation of reported US GAAP effective tax rate as a percentage of income before income taxes to the non-US GAAP financial measure.
Year Ended December 31, 2013
Pre-tax Income Income Tax Benefit (Expense) Percentage of Pre-Tax Income
As Reported - US GAAP Operating Results $ 369,335 $ (52,150 ) 14.1 %
Amortization of Purchased Intangible Assets 46,221 (13,912 )
Restructuring and Other Costs 14,079 (4,358 )
Acquisition-Related Activities 8,778 (2,888 )
Credit Risk and Fair Value Adjustments to Outstanding Derivatives 3,809 (1,470 )
Gain on Fair Value Adjustments related to an Unconsolidated Affiliated Company (17 ) 5
Income Tax-Related Adjustments - (21,054 )
As Adjusted - Non-US GAAP Operating Results $ 442,205 $ (95,827 ) 21.7 %
Year Ended December 31, 2012
Pre-tax Income Income Tax Benefit (Expense) Percentage of Pre-Tax Income
As Reported - US GAAP Operating Results $ 330,679 $ (8,920 ) 2.7 %
Amortization of Purchased Intangible Assets 49,745 (16,133 )
Restructuring and Other Costs 27,103 (8,554 )
Acquisition-Related Activities 14,164 (4,865 )
Orthodontics Business Continuity Costs 920 (320 )
Gain on Fair Value Adjustments related to an Unconsolidated Affiliated Company (272 ) 82
Income Tax-Related Adjustments - (60,192 )
As Adjusted - Non-US GAAP Operating Results $ 422,339 $ (98,902 ) 23.4 %
For further information contact:
Derek Leckow
Vice President
Investor Relations
(717) 849-7863
This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: DENTSPLY International Inc. via GlobeNewswire
HUG#1762651
Do you have any updates to post yet like a "Trial Date"? I know one Defendant's "Uncle" appears to have "Skipped"!
The "Dr's In"!
<eoM.
Newell Rubbermaid Announces Expansion and Extension of Stock Repurchase Program
GlobeNewswire Newell Rubbermaid
13 hours ago
ATLANTA, Feb. 13, 2014 (GLOBE NEWSWIRE) -- Newell Rubbermaid (NWL) announced today that its Board of Directors has approved an extension and expansion to the Company's on-going share repurchase program. Under the updated plan, effective immediately, Newell Rubbermaid is authorized to repurchase up to $300 million of its outstanding shares through the end of 2016. Included in the $300 million is approximately $43 million remaining to be repurchased under its previous $300 million share repurchase program, which was authorized in August 2011 and scheduled to expire in August 2014.
"Today's action reflects the Board's continued confidence in the company's Growth Game Plan and long term growth outlook," said Michael Polk, president and chief executive officer. "Our strong balance sheet and cash flow provide us with the flexibility to opportunistically repurchase shares while continuing to invest in our brands and other growth opportunities to drive value for our shareholders."
Under the program, the company's common shares may be purchased through a combination of a 10b5-1 automatic trading plan and discretionary purchases on the open market or in privately negotiated transactions. The amount and timing of any purchases will depend on a number of factors, including trading price, trading volume and general market conditions.
About Newell Rubbermaid
Newell Rubbermaid Inc., an S&P 500 company, is a global marketer of consumer and commercial products with 2013 sales of $5.7 billion and a strong portfolio of leading brands, including Sharpie(R), Paper Mate(R), Rubbermaid Commercial Products(R), Irwin(R), Lenox(R), Parker(R), Waterman(R), Rubbermaid(R), Levolor(R), Calphalon(R), Goody(R), Graco(R), Aprica(R) and Dymo(R). As part of the company's Growth Game Plan, Newell Rubbermaid is making sharper portfolio choices and investing in new marketing and innovation to accelerate performance.
This press release and additional information about Newell Rubbermaid are available on the company's Web site, www.newellrubbermaid.com.
Caution Concerning Forward-Looking Statements
Statements in this press release that are not historical in nature constitute forward-looking statements. These forward-looking statements relate to information or assumptions about the effects of sales, income/(loss), earnings per share, operating income, operating margin or gross margin improvements or declines, Project Renewal, capital and other expenditures, cash flow, dividends, restructuring and restructuring-related costs, costs and cost savings, inflation or deflation, particularly with respect to commodities such as oil and resin, debt ratings, and management's plans, projections and objectives for future operations and performance. These statements are accompanied by words such as "anticipate," "expect," "project," "will," "believe," "estimate" and similar expressions. Actual results could differ materially from those expressed or implied in the forward-looking statements. Important factors that could cause actual results to differ materially from those suggested by the forward-looking statements include, but are not limited to, our dependence on the strength of retail, commercial and industrial sectors of the economy in light of the continuation or escalation of the global economic slowdown or regional sovereign debt issues; currency fluctuations; competition with other manufacturers and distributors of consumer products; major retailers' strong bargaining power; changes in the prices of raw materials and sourced products and our ability to obtain raw materials and sourced products in a timely manner from suppliers; our ability to develop innovative new products and to develop, maintain and strengthen our end-user brands; product liability or regulatory actions; our ability to expeditiously close facilities and move operations while managing foreign regulations and other impediments; a failure of one of our key information technology systems or related controls; the potential inability to attract, retain and motivate key employees; future events that could adversely affect the value of our assets and require impairment charges; our ability to improve productivity and streamline operations; changes to our credit ratings; significant increases in the funding obligations related to our pension plans due to declining asset values, declining interest rates or otherwise; the imposition of tax liabilities greater than our provisions for such matters; the risks inherent in our foreign operations; our ability to consummate the transactions contemplated by the Accelerated Share Repurchase Plan; and those factors listed in the company's most recently filed Quarterly Report on Form 10-Q and Exhibit 99.1 thereto, filed with the Securities and Exchange Commission. Changes in such assumptions or factors could produce significantly different results. The information contained in this news release is as of the date indicated. The company assumes no obligation to update any forward-looking statements contained in this news release as a result of new information or future events or developments.
Contact:
Nancy O'Donnell
Vice President, Investor Relations
(770) 418-7723
David Doolittle
Vice President, Global Communications
(770) 418-7519
Rick's Cabaret International, Inc. Reports 1Q14 Results, Provides 2Q14 Update & Reaffirms Guidance
PR Newswire Rick's Cabaret International, Inc.
February 10, 2014 4:05 PM
HOUSTON, Feb. 10, 2014 /PRNewswire/ -- Rick's Cabaret International, Inc. (RICK) today announced results for the 2014 first quarter ended December 31, 2013, while also providing an update on sales growth experienced to date in the second fiscal quarter (ending March 31, 2014) and reaffirming previous guidance for Fiscal 2014.
(Logo: http://photos.prnewswire.com/prnh/20110418/MM85342LOGO)
"With the exception of the impact of unusually severe winter weather in mid-December in our important Texas markets, results are progressing according to plan with our gentlemen's clubs and restaurant/sports bars," said Eric Langan, President and CEO of Rick's Cabaret International.
"Revenues at our Rick's Cabaret and Vivid Cabaret New York clubs in New York City were excellent in January and early February, as we capitalized strategically and financially on the pro football championship game this year across the Hudson River in New Jersey.
"In addition, we continue to be engaged in a program to maximize the value of our extensive real estate, and overall we look forward to strong growth in Fiscal 2014."
First Quarter 2014 Summary
First quarter 2014 revenues of $29.4 million increased 8.4% from $27.1 million in the year ago period. First quarter 2014 results were negatively impacted by severe ice storms in mid-December in Texas, a state representing approximately 75% of the Company's units and generating approximately 50% of sales.
Rick's earned $2.4 million, or $0.25 per diluted share (on a GAAP basis), compared to $2.6 million, or $0.28 per diluted share, in the corresponding year ago period. The weather is estimated to have resulted in approximately $500,000 in lost sales of which approximately 80% would have contributed to operating profit.
First quarter 2014 results were also impacted by planned expenses associated with the development of five units (adult gentleman's clubs Vivid Cabaret in New York City and Rick's Cabaret in Odessa, TX, and Bombshells restaurant/sports bars in Webster, Beaumont and Austin, TX).
Despite the above factors, the cash generating power of Rick's remained strong. Adjusted EBITDA* for the first quarter of 2014 was $7.3 million, approximately level with the year ago period.
The Company had 41 units open during the first quarter of 2014, including nine open less than a year.
Second Quarter 2014 Update
Second quarter 2014 sales as of the end of last week were up strongly compared to the year ago period due to:
Opening of Vivid Cabaret New York in mid-January and a second Bombshells, in Webster, TX, in late January.
An overall beneficial effect from the February 2, 2014 professional football championship.
Continued seasoning of new adult clubs and restaurant/sports bars open less than a year.
"We had a terrific success due to The Big Game this year," said Mr. Langan. "It truly was a non-stop party at both the Vivid and Rick's clubs in New York. Based on this, we expect continued success when the Big East and NCAA Regionals college basketball championships come to New York City in March."
FY14 Guidance Reaffirmed
Rick's reaffirmed its fiscal 2014 guidance of approximately $130 million in revenue, $1.70 earnings per share non-GAAP, and $1.20 earnings per share GAAP, based on a continued strong performance company-wide from existing units over the balance of the year, plus contributions from new restaurant/sports bars already opened and those planned to open.
Plans for the balance of the fiscal year include the expected opening of a new adult club (Rick's Cabaret in Odessa) and three new Bombshells currently under development (Beaumont, Austin and South Houston).
Rick's expects to have a total of 10 sports bar/restaurants open or in development by year end calendar 2014, with a cluster in Texas and others possibly outside the state in select cities having significant tourist and convention traffic.
Rick's FY14 guidance does not assume the acquisition of any gentlemen's adult clubs, although they are factored in the Company's longer term multi-year target of 20-30% revenue growth.
Conference Call
A conference call to discuss Rick's results for the first quarter of 2014, outlook and related matters will be held today, February 10, 2014 at 4:30 PM Eastern Time.
Live Participant Dial In (Toll Free): 877-407-9210
Live Participant Dial In (International): 201-689-8049
Webcast URL: http://www.investorcalendar.com/IC/CEPage.asp?ID=172172
Meet Management
Eric Langan, President and CEO, invites investors for a "Due Diligence Ball" to meet, talk and tour one of the Company's major clubs, tonight in Manhattan.
When: Monday, February 10, 2014, 6:30 PM to 8:00 PM ET
Where: Rick's Cabaret New York, at 50 W. 33rd Street, between Fifth Avenue and Broadway
RSVP: With your contact information, to gary.fishman@anreder.com
*Explanation of Non-GAAP Financial Measures
In addition to our financial information presented in accordance with GAAP, management uses certain "non-GAAP financial measures" within the meaning of the SEC Regulation G, to clarify and enhance understanding of past performance and prospects for the future. Generally, a non-GAAP financial measure is a numerical measure of a company's operating performance, financial position or cash flows that excludes or includes amounts that are included in or excluded from the most directly comparable measure calculated and presented in accordance with GAAP. We monitor non-GAAP financial measures because it describes the operating performance of the company and helps management and investors gauge our ability to generate cash flow, excluding some recurring charges that are included in the most directly comparable measures calculated and presented in accordance with GAAP. Relative to each of the non-GAAP financial measures, we further set forth our rationale as follows:
Non-GAAP Operating Income and Non-GAAP Operating Margin. We exclude from GAAP operating income and GAAP operating margin amortization of intangibles, patron taxes, gains and losses from asset sales, stock-based compensation charges, litigation and other one-time legal settlements and acquisition costs. We believe that excluding these items assists investors in evaluating period-over-period changes in our operating income and operating margin without the impact of items that are not a result of our day-to-day business and operations.
Non-GAAP Net Income and Non-GAAP Net Income per Basic Share and per Diluted Share. We exclude from GAAP net income and GAAP net income per diluted share and per basic share amortization of intangibles, patron taxes, income tax expense, impairment charges, gains and losses from asset sales, stock-based compensation, litigation, loss from discontinued operations and other one-time legal settlements and acquisition costs, and include the Non-GAAP provision for income taxes, calculated as the tax effect at 35% effective tax rate of the pre-tax non-GAAP income before taxes less stock-based compensation, because we believe that excluding such measures helps management and investors better understand our operating activities.
Adjusted EBITDA. We exclude from GAAP net income depreciation expense, amortization of intangibles, income tax, interest expense, interest income, gains and losses from asset sales, acquisition costs, litigation and other one-time legal settlements and impairment charges because we believe that adjusting for such items helps management and investors better understand operating activities. Adjusted EBITDA provides a core operational performance measurement that compares results without the need to adjust for Federal, state and local taxes which have considerable variation between domestic jurisdictions. Also, we exclude interest cost in our calculation of Adjusted EBITDA. The results are, therefore, without consideration of financing alternatives of capital employed. We use Adjusted EBITDA as one guideline to assess our unleveraged performance return on our investments. Adjusted EBITDA is also the target benchmark for our acquisitions of nightclubs.
About Rick's Cabaret
With 43 units, Rick's Cabaret International, Inc. (RICK) is the leading hospitality company operating adult gentlemen's clubs and sports bar/restaurants in the US. Adult clubs in New York City, Los Angeles, Miami, Philadelphia, Charlotte, Dallas/Ft. Worth, Houston, Minneapolis, Indianapolis and other cities operate under brand names such as "Rick's Cabaret," "XTC," "Club Onyx," "Vivid Cabaret," "Jaguars" and "Tootsie's Cabaret." Sports bar/restaurants, which also feature live entertainment, operate under the brand names "Bombshells" and "Ricky Bobby Sports Saloon."
For More Information
Web: http://www.ricksinvestor.com
Twitter: https://twitter.com/rickscabaretinc
Facebook: https://www.facebook.com/rickscabaretintl
Forward-looking Statements
This press release may contain forward-looking statements that involve a number of risks and uncertainties that could cause the company's actual results to differ materially from those indicated in this press release, including the risks and uncertainties associated with operating and managing an adult business, the business climates in cities where it operates, the success or lack thereof in launching and building the company's businesses, risks and uncertainties related to the operational and financial results of our Web sites, conditions relevant to real estate transactions, and numerous other factors such as laws governing the operation of adult entertainment businesses, competition and dependence on key personnel. Rick's has no obligation to update or revise the forward-looking statements to reflect the occurrence of future events or circumstances.
RICK'S CABARET INTERNATIONAL, INC.
Consolidated Statements of Income
Three Months Ended
December 31,
(in thousands, except per share data)
2013
2012
(UNAUDITED)
Revenues:
Sales of alcoholic beverages
$
11,689
$
10,406
Sales of food and merchandise
3,423
2,578
Service revenues
12,730
12,655
Other
1,581
1,502
Total revenues
29,423
27,141
Operating expenses:
Cost of goods sold
3,747
3,386
Salaries and wages
6,577
6,038
Stock-based compensation
3
282
Other general and administrative:
Taxes and permits
4,416
4,221
Charge card fees
428
374
Rent
1,228
570
Legal and professional
908
641
Advertising and marketing
1,285
1,109
Depreciation and amortization
1,390
1,320
Insurance
799
499
Utilities
595
489
Other
2,431
2,278
Total operating expenses
23,807
21,207
Income from operations
5,616
5,934
Other income (expense):
Interest income and other
77
8
Interest expense
(2,012)
(1,643)
Gain on change in fair value of derivative instruments
-
(1)
Income from continuing operations before income taxes
3,681
4,298
Income taxes
1,323
1,584
Income from continuing operations
2,358
2,714
Loss from discontinued operations, net of income taxes
(1)
(14)
Net income
2,357
2,700
Less: (net income) loss attributable to noncontrolling interests
47
(53)
Net income attributable to Rick's Cabaret International, Inc.
$
2,404
$
2,647
Basic earnings (loss) per share attributable to Rick's shareholders:
Income from continuing operations
$
0.25
$
0.28
Loss from discontinued operations
(0.00)
(0.00)
Net income
$
0.25
$
0.28
Diluted earnings (loss) per share attributable to Rick's shareholders:
Income from continuing operations
$
0.25
$
0.28
Loss from discontinued operations
(0.00)
(0.00)
Net income
$
0.25
$
0.28
Weighted average number of common shares outstanding:
Basic
9,546
9,575
Diluted
9,855
9,833
RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES
Non-GAAP* measures for the quarters ended December 31, 2013 and 2012
(in thousands)
For the Quarter Ended
December 31,
2013
2012
Reconciliation of GAAP net income to
Adjusted EBITDA
GAAP net income attributable to Rick's shareholders
$ 2,404
$ 2,647
Income tax expense
1,323
1,584
Interest expense and income and gain on derivative
2,012
1,644
Litigation and other one-time settlements
120
-
Acquisition costs
-
55
Loss from discontinued operations
1
14
Depreciation and amortization
1,390
1,320
Adjusted EBITDA
$ 7,250
$ 7,264
Reconciliation of GAAP net income (loss) to
non-GAAP net income
GAAP net income attributable to Rick's shareholders
$ 2,404
$ 2,647
Patron tax
738
891
Amortization of intangibles
89
131
(Gain) loss on change in fair value of derivative instruments
-
1
Stock-based compensation
3
282
Litigation and other one-time settlements
120
-
Income tax expense
1,323
1,584
Acquisition costs
-
55
Loss from discontinued operations, net of income taxes
1
14
Non-GAAP provision for income taxes
(1,636)
(1,863)
Non-GAAP net income
$ 3,042
$ 3,742
RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES
Non-GAAP* measures for the quarters ended December 31, 2013 and 2012
(in thousands, except per share data)
For the Quarter Ended
December 31,
2013
2012
Reconciliation of GAAP diluted net income
per share to non-GAAP diluted net income per share
Fully diluted shares
9,855
9,833
GAAP net income attributable to Rick's shareholders
$ 0.25
$ 0.28
Patron tax
0.07
0.09
Amortization of intangibles
0.01
0.01
(Gain) loss on change in fair value of derivative instruments
-
0.00
Stock-based compensation
0.00
0.03
Litigation and other one-time settlements
0.01
-
Income tax expense
0.14
0.16
Acquisition costs
-
0.01
Loss from discontinued operations, net of income taxes
0.00
0.00
Non-GAAP provision for income taxes
(0.17)
(0.19)
Non-GAAP diluted net income per share
$ 0.31
$ 0.39
Reconciliation of GAAP operating income to
non-GAAP operating income
GAAP operating income
$ 5,616
$ 5,934
Patron tax
738
891
Amortization of intangibles
89
131
Stock-based compensation
3
282
Litigation and other one-time settlements
120
-
Acquisition costs
-
55
Non-GAAP operating income
$ 6,566
$ 7,293
Reconciliation of GAAP operating margin to
non-GAAP operating margin
GAAP operating income
19.1%
21.9%
Patron tax
2.5%
3.3%
Amortization of intangibles
0.3%
0.5%
Stock-based compensation
0.0%
1.0%
Litigation and other one-time settlements
0.4%
0.0%
Acquisition costs
0.0%
0.2%
Non-GAAP operating margin
22.3%
26.9%
RICK'S CABARET INTERNATIONAL, INC.
Reconciliation of GAAP Earnings Guidance To
Non-GAAP Earnings Guidance
Fiscal Year Ending September 30, 2014
Reconciliation of GAAP diluted net income
per share to non-GAAP diluted net income per share
Low
High
GAAP net income
$ 1.20
$ 1.51
Patron tax
0.33
0.33
Amortization of intangibles
0.04
0.04
Income tax expense
0.65
0.81
Acquisition costs
0.01
0.03
Loss from discontinued operations, net of income taxes
(0.01)
(0.02)
Non-GAAP provision for income taxes
(0.78)
(0.95)
Non-GAAP diluted net income per share
$ 1.44
$ 1.76
Vitesse Reports First Quarter Fiscal Year 2014 Results
Marketwired Vitesse Semiconductor
February 4, 2014 4:00 PM
CAMARILLO, CA--(Marketwired - Feb 4, 2014) - Vitesse Semiconductor Corporation (NASDAQ: VTSS)
Net revenues totaled $27.1 million including $2.2 million from intellectual property
Product gross margins improved 5.3% sequentially to 57.1%
New product revenue grew 81.5% year-to-year
Total indebtedness reduced with $13.7 million convertible debt repurchase
Vitesse Semiconductor Corporation (NASDAQ: VTSS), a leading provider of advanced IC solutions for Carrier and Enterprise networks, reported its financial results for the first quarter fiscal year 2014, ended December 31, 2013.
"We started strong in fiscal 2014, with net revenue of $27.1 million and exceeded our guidance for revenue, margins, and expenses," said Chris Gardner, CEO of Vitesse. "New products delivered $8.9 million in revenue and intellectual property revenues were $2.2 million. Total gross margin reached 60.6% due to overall product mix combined with cost improvements. Additionally, we amended the terms of our senior secured term loan and reduced our total debt by $13.7 million, providing flexibility for accelerating new product revenue growth and increasing stockholder value."
"We reiterate our financial goals for fiscal year 2014: to achieve non-GAAP operating profitability in the fiscal third quarter and to grow new product revenue to $55 million by year end."
"This quarter, we launched CEServices™, the industry's first field-proven, turnkey software solution for Carrier Ethernet service delivery. Already licensed by over 40 OEMs, CEServices fortifies our leading position in Ethernet-based ICs for 4G/LTE Mobile and Cloud Access for Carrier and Enterprise networks as well as creates access to adjacent markets, such as the Internet of Things."
First Quarter Fiscal Year 2014 Financial Results Summary
Total net revenue was $27.1 million, compared to $26.9 million in the fourth quarter of fiscal year 2013 and $25.7 million in the first quarter of fiscal year 2013.
Product revenue was $24.9 million, compared to $26.5 million in the fourth quarter of fiscal year 2013 and $23.9 million in the first quarter of fiscal year 2013.
The product lines contributed the following as a percentage of product revenue as compared to the fourth quarter of fiscal year 2013:
Carrier networking products: 52.1% versus 55.8%
Enterprise networking products: 47.3% versus 43.8%
Intellectual property revenue totaled $2.2 million, compared to $420,000 in the fourth quarter of fiscal year 2013 and $1.8 million in the first quarter of fiscal year 2013.
Product margins were 57.1%, compared to 51.8% in the fourth quarter of fiscal year 2013 and 54.1% in the first quarter of fiscal year 2013.
Operating expenses were $18.6 million, compared to $17.6 million in the fourth quarter of fiscal year 2013 and $18.6 million in the first quarter of fiscal year 2013.
Operating loss was $2.2 million, compared to operating loss of $3.5 million in the fourth quarter of fiscal year 2013 and operating loss of $3.8 million in the first quarter of fiscal year 2013.
Non-GAAP operating loss was $861,000, compared to non-GAAP operating loss of $2.3 million in the fourth quarter of fiscal year 2013 and non-GAAP operating loss of $2.6 million in the first quarter of fiscal year 2013.
Net loss was $5.4 million, or $0.09 per basic and fully diluted share. This compares to net loss of $5.8 million, or $0.10 per basic and fully diluted share, in the fourth quarter of fiscal year 2013, and net loss of $5.0 million, or $0.18 per basic and fully diluted share, in the first quarter of fiscal year 2013.
Non-GAAP net loss was $2.4 million, or $0.04 per basic and fully diluted share, compared to non-GAAP net loss of $4.6 million, or $0.08 per basic and fully diluted share, for the fourth quarter of fiscal year 2013, and non-GAAP net loss of $4.6 million, or $0.16 per basic and fully diluted share, in the first quarter of fiscal year 2013.
Balance Sheet Data at Dec. 31, 2013 as Compared to Sept. 30, 2013
On Nov. 5, 2013, Vitesse strengthened its long-term working capital by amending its senior secured loan agreement and reducing total indebtedness by repurchasing $13.7 million of convertible second lien debentures.
Cash balance was $48.4 million, compared to $68.9 million.
Accounts receivable was $11.4 million, compared to $9.8 million.
Inventory was $12.5 million, compared to $10.7 million.
Financial Outlook
For the second quarter of fiscal year 2014, ending March 31, 2014, Vitesse expects revenue to be in the range of $25.0 million to $27.5 million and product margins to be between 55% and 57%. GAAP operating expenses are expected to be between $18.5 million and $19.5 million.
February 4, 2014 Conference Call Information
A conference call is scheduled for today, February 4, 2014, at 1:30 p.m. Pacific Time / 4:30 p.m. Eastern Time to report financial results for the first quarter of fiscal year 2014.
To listen to the conference call via telephone, dial 888.430.8705 (U.S. toll-free) or 719.325.2215 (International) and provide the passcode 6663122. Participants should dial in at least 10 minutes prior to the start of the call. To listen via the Internet, the webcast can be accessed through the investor section of the Vitesse corporate web site at www.vitesse.com.
The playback of the conference call will be available approximately two hours after the call concludes and will be accessible on the Vitesse corporate web site or by calling 877.870.5176 (U.S. toll-free) or 858.384.5517 (International) and entering the passcode 6663122. The audio replay will be available for seven days.
About Vitesse
Vitesse (NASDAQ: VTSS) designs a diverse portfolio of high-performance semiconductor solutions for Carrier and Enterprise networks worldwide. Vitesse products enable the fastest-growing network infrastructure markets including Mobile Access/IP Edge, Cloud Computing, SMB/SME Enterprise and IoT Networking. Visit www.vitesse.com or follow us on Twitter @VitesseSemi.
Vitesse is a registered trademark and CEServices is a trademark of Vitesse Semiconductor Corporation in the United States and other jurisdictions. All other trademarks or registered trademarks mentioned herein are the property of their respective holders.
VTSS-F
Cautions Regarding Forward Looking Statements
All statements included or incorporated by reference in this release and the related conference call for analysts and investors, other than statements or characterizations of historical fact, are forward-looking statements that are based on our current expectations, estimates and projections about our business and industry, management's beliefs, and certain assumptions made by us, all of which are subject to change. Forward-looking statements can often be identified by words such as "anticipates," "believes," "estimates," "expects," "intends," "plans," "predicts," and similar terms, and variations or negatives of these words. Examples of forward-looking statements in this release include the Company's financial outlook for its second fiscal quarter, first half and full year of fiscal 2014, projected revenues from new products and anticipated revenue growth. Forward-looking statements are not guarantees of future performance and the Company's actual results may differ significantly from the results discussed in the forward-looking statements. Factors and uncertainties that could affect the Company's forward-looking statements include, among other things: identification of feasible new product initiatives, management of R&D efforts and the resulting successful development of new products and product platforms; acceptance by customers of the Company's products; reliance on key suppliers; rapid technological change in the industries in which the Company operates; and competitive factors, including pricing pressures and the introduction by others of new products with similar or better functionality than the Company's products. These and other risks are more fully described in the Company's filings with the Securities and Exchange Commission, including the Company's most recently filed Annual Report on Form 10-K and Quarterly Report on Form 10-Q, which should be read in conjunction herewith for a further discussion of important factors that could cause actual results to differ materially from those in the forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Non-GAAP Measures
A non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP measures are not in accordance with, nor are they a substitute for, GAAP measures. Other companies may use different non-GAAP measures and presentation of results.
We provide non-GAAP measures of non-GAAP operating expenses, non-GAAP income (loss) from operations and non-GAAP net income (loss) as a supplement to financial results based on GAAP operating expenses, GAAP income (loss) from operations and GAAP net income (loss). The Company believes that the additional non-GAAP measures are useful to investors for the purpose of financial analysis. We believe the presentation of non-GAAP measures provides investors with additional insight into underlying operating results and prospects for the future by excluding gains, losses and other charges that are considered by management to be outside of the Company's core operating results. Management uses these measures internally to evaluate the Company's in-period operating performance before taking into account these non-operating gains, losses and charges. In addition, the measures are used for planning and forecasting of the Company's performance in future periods.
In deriving non-GAAP operating expenses from GAAP operating expenses, we exclude stock-based compensation charges and amortization of intangible assets. In deriving non-GAAP income (loss) from operations from GAAP income (loss) from operations, we exclude stock-based compensation charges and amortization of intangible assets. In deriving non-GAAP net income (loss) from GAAP net income (loss), we further exclude loss on extinguishment of debt and gain on the embedded derivative. Stock-based compensation charges, amortization of intangible assets, loss on extinguishment of debt, and gain on the embedded derivative represent charges that recur in amounts unrelated to the Company's operations.
The non-GAAP financial measures we provide have certain limitations because they do not reflect all of the costs associated with the operation of our business as determined in accordance with GAAP. Non-GAAP operating expenses, Non-GAAP income (loss) from operations and Non-GAAP net income (loss) are in addition to, and are not a substitute for or superior to, operating expenses, income (loss) from operations and net income (loss), which are prepared in accordance with GAAP and may be different from non-GAAP measures used by other companies. A detailed reconciliation of the non-GAAP measures to the most directly comparable GAAP measure is set forth below. Investors are encouraged to review these reconciliations to appropriately incorporate the non-GAAP measures and the limitations of these measures into their analyses. For complete information on stock-based compensation, amortization of intangible assets, loss on extinguishment of debt, and the change in the fair value of our embedded derivatives, please see our Form 10-Q for the quarterly period ended December 31, 2013 and Form 10-K for the year ended September 30, 2013.
VITESSE SEMICONDUCTOR CORPORATION
UNAUDITED CONSOLIDATED BALANCE SHEETS
December 31, September 30,
2013 2013
(in thousands, except par value)
ASSETS
Current assets:
Cash $ 48,355 $ 68,863
Accounts receivable, net 11,406 9,807
Inventory, net 12,544 10,692
Prepaid expenses and other current assets 2,946 1,897
Total current assets 75,251 91,259
Property, plant and equipment, net 3,559 3,107
Other intangible assets, net 1,169 1,170
Other assets 3,372 3,425
$ 83,351 $ 98,961
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 9,449 $ 7,436
Accrued expenses and other current liabilities 11,422 12,245
Current portion of debt, net 31,694 -
Deferred revenue 2,728 2,215
Total current liabilities 55,293 21,896
Other long-term liabilities 374 407
Long-term debt, net 16,163 16,366
Convertible subordinated debt, net - 44,384
Total liabilities 71,830 83,053
Stockholders' equity:
Preferred stock, $0.01 par value: 10,000 shares authorized; no shares issued or outstanding
-
-
Common stock, $0.01 par value: 250,000 shares authorized; 57,829 and 57,545 shares outstanding at December 31, 2013 and September 30, 2013, respectively
578
575
Additional paid-in-capital 1,892,642 1,891,661
Accumulated deficit (1,881,699 ) (1,876,328 )
Total stockholders' equity 11,521 15,908
$ 83,351 $ 98,961
VITESSE SEMICONDUCTOR CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended December 31,
2013 2012
(in thousands, except per share data)
Net revenues:
Product revenues $ 24,863 $ 23,905
Intellectual property revenues 2,220 1,822
Net revenues 27,083 25,727
Costs and expenses:
Cost of product revenues 10,676 10,975
Engineering, research and development 10,679 10,504
Selling, general and administrative 7,854 7,970
Amortization of intangible assets 88 97
Costs and expenses 29,297 29,546
Loss from operations (2,214 ) (3,819 )
Other expense (income) :
Interest expense, net 1,704 1,970
Gain on compound embedded derivative - (803 )
Loss on extinguishment of debt 1,594 -
Other expense (income), net 61 (31 )
Other expense, net 3,359 1,136
Loss before income tax (benefit) provision (5,573 ) (4,955 )
Income tax provision (benefit) (202 ) 77
Net loss $ (5,371 ) $ (5,032 )
Net loss per common share - basic and diluted $ (0.09 ) $ (0.18 )
Weighted average common shares outstanding - basic and diluted 57,610 28,059
VITESSE SEMICONDUCTOR CORPORATION
UNAUDITED RECONCILIATION OF GAAP RESULTS TO NON-GAAP RESULTS
Three Months Ended
December 31, 2013 December 31, 2012 September 30, 2013
(in thousands, except per share data)
UNAUDITED RECONCILIATION OF GAAP NET LOSS TO NON-GAAP NET LOSS
GAAP net loss $ (5,371 ) $ (5,032 ) $ (5,765 )
Adjustments:
Stock-based compensation charges 1,265 1,143 1,091
Amortization of intangible assets 88 97 81
Gain on compound embedded derivative - (803 ) -
Loss on extinguishment of debt 1,594 - -
Total GAAP to non-GAAP adjustments 2,947 437 1,172
Non-GAAP net loss $ (2,424 ) $ (4,595 ) $ (4,593 )
Net loss per common share - basic and diluted:
GAAP net loss per common share $ (0.09 ) $ (0.18 ) $ (0.10 )
Adjustments 0.05 0.02 0.02
Non-GAAP net loss per common share $ (0.04 ) $ (0.16 ) $ (0.08 )
UNAUDITED RECONCILIATION OF GAAP LOSS FROM OPERATIONS TO NON-GAAP LOSS FROM OPERATIONS
GAAP loss from operations $ (2,214 ) $ (3,819 ) $ (3,492 )
Adjustments:
Stock-based compensation charges 1,265 1,143 1,091
Amortization of intangible assets 88 97 81
Total GAAP to non-GAAP adjustments 1,353 1,240 1,172
Non-GAAP loss from operations $ (861 ) $ (2,579 ) $ (2,320 )
UNAUDITED RECONCILIATION OF GAAP OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES
GAAP operating expenses:
Engineering, research and development $ 10,679 $ 10,504 $ 9,940
Selling, general and administrative 7,854 7,970 7,593
Amortization of intangible assets 88 97 81
Total GAAP operating expenses 18,621 18,571 17,614
Adjustments:
Stock-based compensation charges 1,081 989 939
Amortization of intangible assets 88 97 81
Total GAAP to non-GAAP adjustments 1,169 1,086 1,020
Non-GAAP operating expenses $ 17,452 $ 17,485 $ 16,594
Contact:
Company
Marty McDermut
Vitesse Semiconductor
www.vitesse.com
+1.805.388.3700
invest@vitesse.com
Agency
Becky Herrick
LHA
www.lhai.com
+1.415.433.3777
VTSS@lhai.com
The Clorox Company Reports Slight Sales Growth on Top of Strong Year-Ago Results; Updates Fiscal Year 2014 Outlook
Marketwired The Clorox Company
February 4, 2014 8:30 AM
OAKLAND, CA--(Marketwired - Feb 4, 2014) - The Clorox Company (NYSE: CLX) today reported about half a percentage point of net sales growth and 5 percent diluted net earnings per share (EPS) decline from continuing operations for its second quarter, which ended Dec. 31, 2013.
"I'm pleased we grew sales on top of 9 percent growth in the year-ago quarter. Excluding the impact of foreign currencies, sales for the quarter grew 2.3 percent," said Chairman and CEO Don Knauss. "I'm also pleased that our total demand-building plans, including product innovation and increased advertising, have positively impacted our results. Still, like many companies, we continue to face significant headwinds from foreign currency declines, sluggish category growth and increasing commodity costs. For the balance of the fiscal year, we remain focused on our plans to help mitigate these challenges, including executing our demand-building programs to improve our market shares and driving efficiencies throughout our operations to support our margins."
All results in this press release are reported on a continuing operations basis unless otherwise indicated. Some information in this release is reported on a non-GAAP basis. See "Non-GAAP Financial Information" below and the tables toward the end of this press release for more information and reconciliations of key second-quarter results to the most directly comparable financial measures calculated in accordance with generally accepted accounting principles in the U.S. (GAAP).
Fiscal Second-Quarter Results
Following is a summary of key second-quarter results. All comparisons are with the second quarter of fiscal year 2013, unless otherwise stated.
$0.88 diluted EPS (5% decrease)
1% volume increase
0.4% sales increase
In the second quarter, Clorox delivered earnings from continuing operations of $116 million, or 88 cents diluted EPS, compared to $123 million, or 93 cents diluted EPS, in the year-ago quarter. Current-quarter results reflect a comparison to the company's prior-year diluted EPS increase of 18 percent. Current-quarter results also reflect higher commodity costs, an increase in manufacturing and logistics costs, the impact of unfavorable foreign currency exchange rates and higher advertising and sales promotion expenses. In addition, a higher effective tax rate of 35.6 percent compared to 34.3 percent in the year-ago quarter resulted in a negative impact of 2 cents diluted EPS. These factors were partially offset by the benefits of strong cost savings and price increases, as well as higher volume.
In the second quarter, Clorox delivered 1 percent volume growth, primarily driven by gains in the company's Professional Products, Home Care and International businesses, partially offset by declines in the Charcoal and Brita businesses. Sales grew about half a percentage point, reflecting the benefit of price increases and higher volume, largely offset by the impact of unfavorable foreign currency exchange rates, as well as unfavorable mix. Excluding the impact of foreign currencies, sales grew 2.3 percent.
The company's current quarter gross margin was 41.9 percent, reflecting a decline of 60 basis points versus the year-ago quarter. In the current quarter, the benefits of strong cost savings and price increases were more than offset by higher commodity costs, as well as higher manufacturing and logistics costs largely due to inflation in international markets.
Year-to-date net cash provided by continuing operations was $212 million, compared with $325 million in the year-ago period. Contributing factors to the year-over-year change include higher tax payments of $67 million and the company's funding of liabilities under certain nonqualified deferred compensation plans of $26 million. The company anticipates first half fiscal year higher tax payments to be largely offset by lower tax payments over the balance of the fiscal year.
The company continues to anticipate free cash flow to be about 10 percent of sales for the fiscal year. The company defines free cash flow as net cash from operations less capital expenditures.
Key Segment Results
Following is a summary of key second-quarter results by reportable segment. All comparisons are with the second quarter of fiscal 2013, unless otherwise stated.
Cleaning
(Laundry, Home Care, Professional Products)
3% volume increase
2% sales increase
1% pretax earnings increase
Segment volume and sales grew on top of double-digit increases in the year-ago quarter, reflecting overall higher demand-building support as well as gains in the Professional Products and Home Care businesses. The Professional Products business delivered another quarter of double-digit volume growth supported by increased shipments across several brands. Home Care grew volume behind increased merchandising support for Clorox® disinfecting wipes. Laundry volume was flat largely driven by higher shipments of Clorox® bleach products behind increased merchandising support, partially offset by lower shipments of Green Works® laundry detergent due to category softness. Segment volume outpaced sales primarily due to the impact of unfavorable mix, partially offset by the benefit of price increases. Pretax earnings growth reflected continued margin expansion, supported by the benefit of cost savings from the company's year-ago conversion to concentrated bleach, and higher sales partially offset by higher commodity costs.
Household
(Bags and Wraps, Charcoal, Cat Litter)
1% volume decrease
1% sales decrease
27% pretax earnings decrease
Segment volume and sales declines were largely driven by lower volume and sales in Charcoal due to a comparison to double-digit increases in the year-ago period. For perspective, due to the seasonality of the Charcoal business, the second quarter typically represents approximately 10 percent of annual charcoal sales. Cat Litter grew volume behind increased merchandising support to offset heightened competitive activity. Volume in the Glad® business was essentially flat primarily from lower shipments of base trash offset by continued strength in OdorShield® products. The segment's pretax earnings decline of $15 million was largely due to higher commodity costs, as well as higher manufacturing and logistics costs, which more than offset the benefit of cost savings.
Lifestyle
(Dressings and Sauces, Water Filtration, Natural Personal Care)
1% volume decrease
Flat sales
1% pretax earnings decrease
Segment volume results were driven by declines in Water Filtration, primarily due to expanded distribution of competitive private-label filter products, partially offset by gains in the Food business from higher shipments of Hidden Valley® dry dips and salad dressings. Burt's Bees® volume was flat as the brand lapped the introduction of lip color innovation in the year-ago quarter. Sales outpaced volume due to the benefit of price increases and lower trade promotion spending. Pretax earnings declined primarily due to increased advertising and sales promotion spending for Burt's Bees lip care lines and product innovation.
International
(All countries outside of the U.S.)
2% volume increase
1% sales increase
20% pretax earnings growth
Segment volume growth reflected gains in Argentina, Canada and in the Middle East, partially offset by declines in Venezuela. Segment sales grew due to the benefit of price increases, favorable mix and higher volume, largely offset by unfavorable foreign currency exchange rates across multiple countries, including Argentina, Australia, Canada and Venezuela. Although segment sales increased 1 percent for the quarter, excluding the impact of 8 percentage points from foreign currency declines, segment sales grew about 9 percent. Volume outpaced segment sales due to foreign currency declines, partially offset by price increases and favorable mix. Pretax earnings growth reflects the benefits of price increases and cost savings, as well as a comparison to one-time costs associated with an IT systems implementation in Latin America in the year-ago quarter, which more than offset the impact of unfavorable foreign currency exchange rates and higher manufacturing and logistics costs from inflationary pressures.
Clorox Updates Fiscal Year 2014 Outlook
1%-2% sales growth
Flat to 25 basis points of EBIT margin expansion
$4.40-$4.55 diluted EPS range
"We've updated our outlook to reflect even more pressure from unfavorable foreign currency exchange rates, particularly in light of the significant devaluation of the Argentine peso that took place in January. In addition, our outlook reflects continued impact from sluggish category growth and higher commodity costs," said Chief Financial Officer Steve Robb. "We're committed to addressing these challenges through strong execution of our demand-building plans, which include delivering product innovation and higher trade promotion spending that will help grow our categories and support our brands, as well as strong cost savings across our operations."
Clorox now anticipates sales growth for fiscal 2014 to be in the range of 1 to 2 percent, reflecting a greater impact from unfavorable foreign currencies in Argentina and other countries, which are now expected to negatively affect fiscal year sales by more than 2 percentage points. This range reflects up to 3 percentage points of negative impact from foreign currency declines in the second half of the fiscal year. On a currency-neutral basis, the company's fiscal year sales outlook is about 3 to 4 percent growth.
Clorox continues to anticipate EBIT margin to be in the range of flat to up 25 basis points, driven by lower selling and administrative expense as a percentage of sales, partially offset by higher commodity costs, which are expected to negatively impact margins by more than 100 basis points, as well as continued inflation in some international markets. The company continues to anticipate offsetting these factors by delivering cost savings of about 150 basis points.
Clorox continues to anticipate an effective tax rate of about 34 percent for fiscal 2014.
Net of all these factors, Clorox now anticipates fiscal 2014 diluted EPS from continuing operations in the range of $4.40 to $4.55. This 5-cent reduction versus the previous outlook reflects the company's new foreign currency assumption primarily for Argentina.
Although potentially significant currency devaluations are likely to occur in Venezuela in the future, due to the unpredictability of the timing, form and amount, the company's outlook does not assume further currency devaluations in Venezuela beyond the February 2013 devaluation.
For More Detailed Financial Information
Visit the Investors: Financial Reporting: Financial Results section of the company's website at TheCloroxCompany.com for the following:
Supplemental volume and sales growth information
Supplemental gross margin driver information
Reconciliation of certain non-GAAP financial information, including earnings from continuing operations before interest and taxes (EBIT) and earnings from continuing operations before interest, taxes, depreciation and amortization (EBITDA)
Supplemental balance sheet and cash flow information and free cash flow reconciliation
Supplemental price-change information
Note: Percentage and basis-point changes noted in this press release are calculated based on rounded numbers. Supplemental materials are available in the Investors: Financial Reporting: Financial Results section of the company's website at TheCloroxCompany.com.
The Clorox Company
The Clorox Company is a leading multinational manufacturer and marketer of consumer and professional products with approximately 8,400 employees and fiscal year 2013 revenues of $5.6 billion. Clorox markets some of the most trusted and recognized brand names, including its namesake bleach and cleaning products, Clorox Healthcare™, HealthLink®, Aplicare® and Dispatch® products, Green Works® naturally derived products, Pine-Sol® cleaners, Poett® home care products, Fresh Step® cat litter, Glad® bags, wraps and containers, Kingsford® charcoal, Hidden Valley® and KC Masterpiece® dressings and sauces, Brita® water-filtration products, and Burt's Bees® and gud® natural personal care products. Nearly 90 percent of the company's brands hold the No. 1 or No. 2 market share positions in their categories. Clorox's commitment to corporate responsibility includes making a positive difference in its communities. In fiscal year 2013, The Clorox Company Foundation awarded about $4 million in cash grants, and Clorox made product donations valued at nearly $15 million. For more information, visit TheCloroxCompany.com.
Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such forward-looking statements involve risks and uncertainties. Except for historical information, matters discussed above, including statements about future volume, sales, costs, cost savings, earnings, cash flows, plans, objectives, expectations, growth, or profitability, are forward-looking statements based on management's estimates, assumptions and projections. Words such as "could," "may," "expects," "anticipates," "targets," "goals," "projects," "intends," "plans," "believes," "seeks," "estimates," and variations on such words, and similar expressions, are intended to identify such forward-looking statements. These forward-looking statements are only predictions, subject to risks and uncertainties, and actual results could differ materially from those discussed above. Important factors that could affect performance and cause results to differ materially from management's expectations are described in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Annual Report on Form 10-K for the fiscal year ended June 30, 2013, as updated from time to time in the company's SEC filings. These factors include, but are not limited to: worldwide, regional and local economic conditions and financial market volatility; risks related to international operations, including political instability, foreign currency exchange rate controls, fluctuations and devaluations, government-imposed price controls or other regulations, labor unrest and inflationary pressures, particularly in Venezuela, as well as Argentina and other challenging markets; risks related to the possibility of nationalization, expropriation of assets or other government action in foreign jurisdictions, especially in Venezuela; intense competition in the company's markets; volatility and increases in commodity costs such as resin, sodium hypochlorite and agricultural commodities and increases in energy or transportation costs; the ability of the company to drive sales growth, increase market share and grow its product categories, and achieve favorable product and geographic mix; dependence on key customers and risks related to customer ordering patterns; the ability of the company to implement and generate anticipated cost savings and efficiencies; costs resulting from government regulations; the ability of the company to successfully manage global political, legal, tax and regulatory risks, including changes in regulatory or administrative activity; the impact of product liability claims, labor claims and other legal proceedings, including in foreign jurisdictions and the company's litigation related to its discontinued operations in Brazil; the success of the company's business strategies; the ability of the company to develop and introduce commercially successful products; risks relating to acquisitions, new ventures and divestitures and associated costs; supply disruptions and other risks inherent in reliance on a limited base of suppliers; the company's ability to attract and retain key personnel; the company's ability to maintain its business reputation and the reputation of its brands; environmental matters including costs associated with the remediation of past contamination and the handling and/or transportation of hazardous substances; the impact of natural disasters, terrorism and other events beyond the company's control; the company's ability to maximize, assert and defend its intellectual property rights; any infringement by the company of third-party intellectual property rights; the effect of the company's indebtedness on its operations and financial results; changes to the company's credit rating; the sufficiency of the company's cash flow; the company's ability to maintain an effective system of internal controls; risks related to reliance on information technology systems, including potential security breaches or cyber attacks that result in the unauthorized disclosure of consumer, customer, employee or company information, or service interruptions; uncertainties relating to tax positions, tax disputes and changes in the company's tax rate; the potential for asset impairment charges, including intangible assets and goodwill; the accuracy of the company's estimates and assumptions on which its financial statement projections are based; and the company's ability to declare dividends or repurchase its stock in the future.
The company's forward-looking statements in this press release are based on management's current views and assumptions regarding future events and speak only as of their dates. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by the federal securities laws.
Non-GAAP Financial Information
This press release contains non-GAAP financial information relating to sales growth, EBIT margin and free cash flow. The company has included reconciliations of these non-GAAP financial measures to the most directly comparable financial measure calculated in accordance with GAAP. See the end of this press release for these reconciliations.
The company disclosed these non-GAAP financial measures to supplement its condensed consolidated financial statements presented in accordance with GAAP. These non-GAAP financial measures exclude certain items that are included in the company's results reported in accordance with GAAP, including income taxes, interest income, interest expense and foreign exchange impact. Management believes these non-GAAP financial measures provide useful additional information to investors about trends in the company's operations and are useful for period-over-period comparisons. Management uses free cash flow and free cash flow as a percent of sales to help assess the cash generation ability of the business and funds available for investing activities, such as acquisitions, investing in the business to drive growth, and financing activities, including debt payments, dividend payments and share repurchases. Free cash flow does not represent cash available only for discretionary expenditures, since the company has mandatory debt service requirements and other contractual and non-discretionary expenditures. These non-GAAP financial measures should not be considered in isolation or as a substitute for the comparable GAAP measures. In addition, these non-GAAP measures may not be the same as similar measures provided by other companies due to potential differences in methods of calculation and items being excluded. They should be read in connection with the company's condensed consolidated financial statements presented in accordance with GAAP.
For recent presentations made by company management and other investor materials, visit Investor Events.
Condensed Consolidated Statements of Earnings (Unaudited)
Dollars in millions, except per share amounts
Three Months Ended Six Months Ended
12/31/2013 12/31/2012 12/31/2013 12/31/2012
Net sales $ 1,330 $ 1,325 $ 2,694 $ 2,663
Cost of products sold 773 762 1,552 1,526
Gross profit 557 563 1,142 1,137
Selling and administrative expenses 200 204 398 399
Advertising costs 123 116 243 238
Research and development costs 31 31 62 61
Interest expense 26 33 52 66
Other income, net (4 ) (9 ) (2 ) (9 )
Earnings from continuing operations before income taxes 181 188 389 382
Income taxes on continuing operations 65 65 136 126
Earnings from continuing operations 116 123 253 256
Losses from discontinued operations, net of tax (1 ) - (2 ) -
Net earnings $ 115 $ 123 $ 251 $ 256
Net earnings (losses) per share
Basic
Continuing operations $ 0.90 $ 0.94 $ 1.95 $ 1.96
Discontinued operations (0.01 ) - (0.02 ) -
Basic net earnings per share $ 0.89 $ 0.94 $ 1.93 $ 1.96
Diluted
Continuing operations $ 0.88 $ 0.93 $ 1.92 $ 1.94
Discontinued operations (0.01 ) - (0.02 ) -
Diluted net earnings per share $ 0.87 $ 0.93 $ 1.90 $ 1.94
Weighted average shares outstanding (in thousands)
Basic 129,836 130,991 129,955 130,630
Diluted 132,278 132,444 132,276 132,120
Reportable Segment Information
(Unaudited)
Dollars in millions
Second Quarter Net Sales Earnings (Losses) from Continuing Operations Before Income Taxes
Three Months Ended Three Months Ended
12/31/13 12/31/12 % Change (1) 12/31/13 12/31/12 % Change (1)
Cleaning Segment $ 432 $ 425 2 % $ 101 $ 100 1 %
Household Segment 352 357 -1 % 41 56 -27 %
Lifestyle Segment 237 237 0 % 69 70 -1 %
International Segment 309 306 1 % 30 25 20 %
Corporate - - - (60 ) (63 ) -5 %
Total Company $ 1,330 $ 1,325 0 % $ 181 $ 188 -4 %
Year-to-Date Net Sales Earnings (Losses) from Continuing Operations Before Income Taxes
Six Months Ended Six Months Ended
12/31/13 12/31/12 % Change (1) 12/31/13 12/31/12 % Change (1)
Cleaning Segment $ 911 $ 897 2 % $ 232 $ 220 5 %
Household Segment 724 712 2 % 93 106 -12 %
Lifestyle Segment 455 445 2 % 122 126 -3 %
International Segment 604 609 -1 % 58 53 9 %
Corporate - - - (116 ) (123 ) -6 %
Total Company $ 2,694 $ 2,663 1 % $ 389 $ 382 2 %
(1) Percentages based on rounded numbers.
Condensed Consolidated Balance Sheets
Dollars in millions
12/31/2013 6/30/2013 12/31/2012
(Unaudited) (Unaudited)
ASSETS
Current assets
Cash and cash equivalents $ 341 $ 299 $ 445
Receivables, net 499 580 511
Inventories, net 466 394 444
Other current assets 194 147 152
Total current assets 1,500 1,420 1,552
Property, plant and equipment, net 992 1,021 1,051
Goodwill 1,100 1,105 1,119
Trademarks, net 552 553 556
Other intangible assets, net 67 74 79
Other assets 177 138 145
Total assets $ 4,388 $ 4,311 $ 4,502
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Notes and loans payable $ 342 $ 202 $ 5
Current maturities of long-term debt - - 500
Accounts payable 359 413 365
Accrued liabilities 480 490 493
Income taxes payable - 29 10
Total current liabilities 1,181 1,134 1,373
Long-term debt 2,170 2,170 2,169
Other liabilities 765 742 788
Deferred income taxes 116 119 116
Total liabilities 4,232 4,165 4,446
Stockholders' equity
Common stock 159 159 159
Additional paid-in capital 693 661 644
Retained earnings 1,623 1,561 1,430
Treasury shares (1,932 ) (1,868 ) (1,801 )
Accumulated other comprehensive net losses (387 ) (367 ) (376 )
Stockholders' equity 156 146 56
Total liabilities and stockholders' equity $ 4,388 $ 4,311 $ 4,502
The tables below present the reconciliation of non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with GAAP and other supplemental information. See "Non-GAAP Financial Information" above for further information regarding the company's use of non-GAAP financial measures.
Second-Quarter and Fiscal Year-to-Date Sales Growth Reconciliation
Q2 Fiscal 2014 Q2 Fiscal 2013 Q2 YTD Fiscal 2014 Q2 YTD
Fiscal 2013
Non-GAAP Sales Growth 2.3 % 7.1 % 3.0 % 4.3 %
Foreign exchange -1.9 -0.1 -1.8 -0.4
Acquisitions -- 1.5 -- 1.5
Total sales growth -- GAAP 0.4 % 8.5 % 1.2 % 5.4 %
Fiscal Year 2013 EBIT(1) Margin Reconciliation
FY
Fiscal
2013
Earnings from continuing operations before income taxes -- GAAP $ 853
Interest Income -3
Interest Expense 122
EBIT (1)-- non-GAAP $ 972
EBIT margin(2) -- non-GAAP 17.3 %
Net Sales $ 5,623
(1) EBIT represents earnings from continuing operations before interest and taxes.
(2) EBIT margin is the ratio of EBIT to net sales.
Fiscal Year 2013 Free Cash Flow Reconciliation
FY
Fiscal
2013
Net cash provided by continuing operations -- GAAP $ 777
Less: Capital expenditures 194
Free cash flow -- non-GAAP $ 583
Free cash flow as a percent of sales -- non-GAAP 10.4 %
Net sales $ 5,623
For Gross Margin Drivers, please refer to the Supplemental Information: Gross Margin Driver page in the Financial Results section of the company's website TheCloroxCompany.com.
LIONSGATE REPORTS THIRD QUARTER FISCAL 2014 REVENUE OF $839.9 MILLION, ADJUSTED EBITDA OF $154.1 MILLION AND ADJUSTED NET INCOME OF $96.4 MILLION OR $0.70 ADJUSTED BASIC EPS
Company Reports Third Quarter Free Cash Flow of $117.4 Million
Record Results Driven By The Hunger Games: Catching Fire Global Box Office Success, Strong International Theatrical Slate and Robust Filmed Entertainment Library Performance
PR Newswire Lionsgate
February 6, 2014 4:01 PM
SANTA MONICA, Calif. and VANCOUVER, Feb. 6, 2014 /PRNewswire/ -- Lionsgate (LGF) today reported record quarterly revenue of $839.9 million, record adjusted EBITDA of $154.1 million, net income of $88.8 million or $0.64 basic net income per share, adjusted net income of $96.4 million or $0.70 adjusted basic net income per share and free cash flow of $117.4 million for the third quarter of fiscal 2014 (fiscal quarter ended December 31, 2013).
(Logo: http://photos.prnewswire.com/prnh/20110919/LA70620LOGO)
"Our stellar results in the quarter were attributable to our operating performance, the favorable environment for content and the benefits from our strong balance sheet," said Lionsgate Chief Executive Officer Jon Feltheimer. "We will continue to invest in content and embrace innovative models for licensing that content to digital and traditional platforms alike in order to build on this performance and create additional long-term value for our shareholders."
Revenue of $839.9 million for the third quarter increased by 13% compared to $743.6 million in the prior year quarter, driven by the domestic and international box office performance of The Hunger Games: Catching Fire as well as contributions from domestic theatrical releases such as Ender's Game and A Madea Christmas and strong international performances from Red 2, Escape Plan and Now You See Me. The Hunger Games: Catching Fire has grossed $860 million at the worldwide box office, a 25% increase over the first Hunger Games film. The next two films in the franchise, The Hunger Games: Mockingjay Part 1 and The Hunger Games: Mockingjay Part 2 will be released worldwide on November 21, 2014 and November 20, 2015, respectively.
Adjusted EBITDA of $154.1 million in the quarter compared to adjusted EBITDA of $87.2 million in the prior year quarter.
Net income in the quarter was $88.8 million or $0.64 basic net income per share on 137.9 million weighted average number of common shares outstanding compared to $37.8 million or $0.28 basic net income per share on 135.0 million weighted average number of common shares outstanding during the prior year quarter.
Adjusted net income in the quarter of $96.4 million or $0.70 adjusted basic net income per share compared to adjusted net income of $61.4 million or $0.45 adjusted basic net income per share in the prior year quarter.
Adjusted net income in the quarter was driven by record margins, the global box office success of The Hunger Games: Catching Fire and the strong international theatrical slate discussed above as well as strong results from the Company's filmed entertainment library and lower interest expense.
The Company continues to strengthen its balance sheet and, as of today, has reduced corporate debt by $373 million since December 31, 2012. The principal amount outstanding on the Company's $800 million revolving credit facility was $194.1 million on December 31, 2013 and less than $70 million on February 6, 2014. Contractual cash-based interest expense in the third quarter was $11.5 million compared to $18.2 million in the prior year quarter.
During the quarter, the Company declared its first quarterly dividend of $0.05 per common share payable on February 7, 2014 to shareholders of record as of December 31, 2013.
Lionsgate's filmed entertainment backlog, or already contracted future revenue not yet recorded, increased to $1.2 billion at December 31, 2013.
The Company's filmed entertainment library had one of its best quarterly performances ever, generating $148.6 million in revenue, a 10% increase from $135.0 million in the prior year quarter.
Overall Motion Picture segment revenue for the quarter was $757.6 million, an increase of 12% from the prior year quarter due to the strong theatrical slate discussed above. Within the Motion Picture segment, theatrical revenue increased 44% to a quarterly record $277.6 million.
Lionsgate's home entertainment revenue from both motion pictures and television was $200.7 million for the quarter compared to $233.0 million for the prior year quarter as the three wide theatrical releases on home entertainment platforms in the quarter compared to a slate of six wide theatrical releases delivered to home entertainment platforms in the prior year quarter.
Television revenue included in the Motion Picture segment increased 7% to $105.8 million in the quarter, driven by titles such as The Twilight Saga: Breaking Dawn – Part 2, Warm Bodies, Sinister, Snitch and Temptation: Confessions of a Marriage Counselor.
International Motion Picture segment revenue (excluding Lionsgate U.K.) of $117.1 million in the quarter increased 31% from $89.5 million in the prior year quarter as The Hunger Games: Catching Fire led a strong slate that also included Red 2, Escape Plan and Now You See Me.
Lionsgate U.K. posted its best ever quarterly revenue of $55.9 million, a 53% increase from $36.6 million in the prior year quarter driven by the U.K. theatrical release of The Hunger Games: Catching Fire and the third-party title Olympus Has Fallen.
Revenue in the Television Production segment was $82.3 million in the quarter, a 17% increase from $70.1 million in the prior year quarter as domestic and international television posted gains that offset a decline in home entertainment revenue from television production. Episodes of Anger Management, Nashville and Orange is the New Black were among the shows delivered in the quarter.
Lionsgate senior management will hold its analyst and investor conference call to discuss its third quarter fiscal 2014 results at 9:00 A.M. ET/6:00 A.M. PT on Friday, February 7, 2014. Interested parties may participate live in the conference call by calling 1-800-230-1085 (612-332-0107 outside the U.S. and Canada). A full digital replay will be available from Friday, February 7 through Friday, February 14 by dialing 1-800-475-6701 (320-365-3844 outside the U.S. and Canada) and using access code 315777.
ABOUT LIONSGATE
Lionsgate is a leading global entertainment company with a strong and diversified presence in motion picture production and distribution, television programming and syndication, home entertainment, family entertainment, digital distribution, new channel platforms and international distribution and sales. Lionsgate currently has 34 television shows on 22 networks spanning its primetime production, distribution and syndication businesses, including such critically-acclaimed hits as the multiple Emmy Award-winning Mad Men and Nurse Jackie, the comedy Anger Management, the network series Nashville, the syndication success The Wendy Williams Show and the critically-acclaimed series Orange is the New Black.
Its feature film business has been fueled by such recent successes as the blockbuster first two installments of The Hunger Games franchise, The Hunger Games and The Hunger Games: Catching Fire, A Madea Christmas, Now You See Me, Kevin Hart: Let Me Explain, Warm Bodies, The Expendables 2, The Possession, Sinister, Roadside Attractions' Mud and Pantelion Films' breakout hit Instructions Not Included, the highest-grossing Spanish-language film ever released in the U.S.
Lionsgate's home entertainment business is an industry leader in box office-to-DVD and box office-to-VOD revenue conversion rate. Lionsgate handles a prestigious and prolific library of approximately 15,000 motion picture and television titles that is an important source of recurring revenue and serves as the foundation for the growth of the Company's core businesses. The Lionsgate and Summit brands remain synonymous with original, daring, quality entertainment in markets around the world.
For further information, please contact:
Peter D. Wilkes
310-255-3726
pwilkes@lionsgate.com
The matters discussed in this press release include forward-looking statements, including those regarding the performance of future fiscal years. Such statements are subject to a number of risks and uncertainties. Actual results in the future could differ materially and adversely from those described in the forward-looking statements as a result of various important factors, including the substantial investment of capital required to produce and market films and television series, increased costs for producing and marketing feature films and television series, budget overruns, limitations imposed by our credit facility and notes, unpredictability of the commercial success of our motion pictures and television programming, the cost of defending our intellectual property, difficulties in integrating acquired businesses, risks related to our acquisition strategy and integration of acquired businesses, the effects of disposition of businesses or assets, technological changes and other trends affecting the entertainment industry, and the risk factors as set forth in Lionsgate's Annual Report on Form 10-K, filed with the Securities and Exchange Commission (the "SEC") on May 30, 2013, as amended in Lionsgate's Quarterly Report on Form 10-Q filed with the SEC on February 6, 2014, which risk factors are incorporated herein by reference. The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances.
LIONS GATE ENTERTAINMENT CORP.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
December 31,
2013
March 31,
2013
(Amounts in thousands,
except share amounts)
ASSETS
Cash and cash equivalents
$
75,402
$
62,363
Restricted cash
40,443
10,664
Accounts receivable, net of reserves for returns and allowances of $74,276 (March 31, 2013 - $103,418) and provision for doubtful accounts of $6,262 (March 31, 2013 - $4,494)
839,304
787,150
Investment in films and television programs, net
1,303,422
1,244,075
Property and equipment, net
12,706
8,530
Equity method investments
176,607
169,450
Goodwill
323,328
323,328
Other assets
69,575
72,619
Deferred tax assets
69,773
82,690
Total assets
$
2,910,560
$
2,760,869
LIABILITIES
Senior revolving credit facility
$
194,119
$
338,474
Senior secured second-priority notes
225,000
432,277
July 2013 Term Loan
222,664
—
Accounts payable and accrued liabilities
305,094
313,620
Participations and residuals
448,416
409,763
Film obligations and production loans
573,949
569,019
Convertible senior subordinated notes
150,672
87,167
Deferred revenue
272,140
254,023
Total liabilities
2,392,054
2,404,343
Commitments and contingencies
SHAREHOLDERS' EQUITY
Common shares, no par value, 500,000,000 shares authorized, 137,997,761 shares issued (March 31, 2013 - 135,882,899 shares)
728,676
672,915
Accumulated deficit
(207,027)
(309,912)
Accumulated other comprehensive loss
(3,143)
(6,477)
Total shareholders' equity
518,506
356,526
Total liabilities and shareholders' equity
$
2,910,560
$
2,760,869
LIONS GATE ENTERTAINMENT CORP.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
Nine Months Ended
December 31,
December 31,
2013
2012
2013
2012
(Amounts in thousands, except per share amounts)
Revenues
$
839,939
$
743,645
$
1,908,396
$
1,922,433
Expenses:
Direct operating
397,513
402,334
965,756
971,382
Distribution and marketing
233,535
210,053
550,497
625,204
General and administration
65,577
46,900
186,120
143,274
Depreciation and amortization
1,530
2,020
4,766
6,240
Total expenses
698,155
661,307
1,707,139
1,746,100
Operating income
141,784
82,338
201,257
176,333
Other expenses (income):
Interest expense
Contractual cash based interest
11,484
18,166
39,682
59,802
Amortization of debt discount (premium) and
deferred financing costs
4,090
4,608
12,878
13,747
Total interest expense
15,574
22,774
52,560
73,549
Interest and other income
(1,771)
(1,079)
(4,750)
(3,058)
Loss on extinguishment of debt
—
14,652
36,653
23,811
Total other expenses, net
13,803
36,347
84,463
94,302
Income before equity interests and income taxes
127,981
45,991
116,794
82,031
Equity interests income (loss)
(1,321)
(3,512)
13,158
(1,902)
Income before income taxes
126,660
42,479
129,952
80,129
Income tax provision
37,897
4,649
27,067
10,970
Net income
$
88,763
$
37,830
$
102,885
$
69,159
Basic net income per common share
$
0.64
$
0.28
$
0.75
$
0.52
Diluted net income per common share
$
0.59
$
0.27
$
0.71
$
0.51
Weighted average number of common shares outstanding:
Basic
137,946
135,030
137,097
134,222
Diluted
155,137
149,807
154,197
136,735
Dividends declared per common share
$
0.05
$
—
$
0.05
$
—
LIONS GATE ENTERTAINMENT CORP.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended
Nine Months Ended
December 31,
December 31,
2013
2012
2013
2012
(Amounts in thousands)
Operating Activities:
Net income
$
88,763
$
37,830
$
102,885
$
69,159
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property and equipment
598
743
1,969
2,268
Amortization of intangible assets
932
1,277
2,797
3,972
Amortization of films and television programs
260,318
264,211
636,818
658,875
Amortization of debt discount (premium) and deferred financing costs
4,090
4,608
12,878
13,747
Non-cash share-based compensation
12,862
5,967
41,044
16,884
Dividend payment from equity method investee
—
—
9,849
—
Loss on extinguishment of debt
—
14,652
36,653
23,811
Equity interests (income) loss
1,321
3,512
(13,158)
1,902
Deferred income taxes
23,253
—
13,272
—
Changes in operating assets and liabilities:
Restricted cash
(32,308)
2,822
(29,754)
8,124
Accounts receivable, net
(141,656)
44,291
(46,376)
128,317
Investment in films and television programs
(354,647)
(280,755)
(692,943)
(703,875)
Other assets
7,501
(6,406)
(1,696)
(7,950)
Accounts payable and accrued liabilities
81,698
(41,140)
4,205
(38,991)
Participations and residuals
34,878
(11,568)
38,236
(12,583)
Film obligations
44,610
114
11,208
(13,706)
Deferred revenue
3,050
35,966
17,947
68,305
Net Cash Flows Provided By Operating Activities
35,263
76,124
145,834
218,259
Investing Activities:
Purchases of investments
—
(2,022)
—
(2,022)
Proceeds from the sale of investments
—
6,354
—
6,354
Proceeds from the sale of a portion of equity method investee
—
—
9,000
—
Investment in equity method investees
(13,500)
—
(17,250)
—
Dividends from equity method investee in excess of earnings
—
—
4,169
—
Repayment of loans receivable
1,275
—
4,275
4,274
Purchases of property and equipment
(2,721)
(1,110)
(6,116)
(2,086)
Net Cash Flows Provided By (Used In) Investing Activities
(14,946)
3,222
(5,922)
6,520
Financing Activities:
Senior revolving credit facility - borrowings, net of deferred financing costs of $15,198 for the nine months ended December 31, 2012
354,119
422,894
782,219
1,089,120
Senior revolving credit facility - repayments
(445,474)
(245,750)
(926,574)
(758,200)
Senior secured second-priority notes - consent fee
—
(3,270)
—
(3,270)
Senior secured second-priority notes - borrowings, net of deferred financing costs of $837 and $1,244 for the three and nine months ended December 31, 2013, respectively
(837)
—
223,756
—
Senior secured second-priority notes - repurchases and redemptions
—
—
(470,584)
—
July 2013 Term Loan - borrowings, net of deferred financing costs of $1,329 and $5,616 for the three and nine months ended December 31, 2013, respectively
(1,329)
—
216,884
—
Summit Term Loan - repayments
—
(299,160)
—
(484,664)
Convertible senior subordinated notes - borrowings
—
—
60,000
—
Convertible senior subordinated notes - repurchases
—
—
—
(7,639)
Production loans - borrowings
190,155
150,279
359,582
263,124
Production loans - repayments
(105,287)
(99,618)
(301,385)
(321,603)
Pennsylvania Regional Center credit facility - repayments
—
(500)
(65,000)
(500)
Change in restricted cash collateral associated with financing activities
—
(12,769)
—
(12,769)
Exercise of stock options
1,749
2,845
10,869
2,897
Tax withholding required on equity awards
(3,119)
(934)
(14,376)
(4,939)
Other financing obligations - repayments
—
—
—
(3,710)
Net Cash Flows Used In Financing Activities
(10,023)
(85,983)
(124,609)
(242,153)
Net Change In Cash And Cash Equivalents
10,294
(6,637)
15,303
(17,374)
Foreign Exchange Effects on Cash
(2,104)
426
(2,264)
1,264
Cash and Cash Equivalents - Beginning Of Period
67,212
54,399
62,363
64,298
Cash and Cash Equivalents - End Of Period
$
75,402
$
48,188
$
75,402
$
48,188
LIONS GATE ENTERTAINMENT CORP.
RECONCILIATION OF NET INCOME TO EBITDA AND EBITDA, AS ADJUSTED
Three Months Ended
Nine Months Ended
December 31,
December 31,
2013
2012
2013
2012
(Amounts in thousands)
Net income
$
88,763
$
37,830
$
102,885
$
69,159
Depreciation and amortization
1,530
2,020
4,766
6,240
Contractual cash based interest
11,484
18,166
39,682
59,802
Noncash interest expense
4,090
4,608
12,878
13,747
Interest and other income
(1,771)
(1,079)
(4,750)
(3,058)
Income tax provision
37,897
4,649
27,067
10,970
EBITDA
$
141,993
$
66,194
$
182,528
$
156,860
Loss on extinguishment of debt
—
14,652
36,653
23,811
Stock-based compensation (1)
12,064
8,997
52,199
25,645
Acquisition related charges
—
—
—
2,027
Non-risk prints and advertising expense
—
(2,596)
—
5,709
EBITDA, as adjusted
$
154,057
$
87,247
$
271,380
$
214,052
(1) The three months ended December 31, 2013 and 2012 include cash settled SARs benefit of $0.8 million and expense of $1.1 million, respectively.
The nine months ended December 31, 2013 and 2012 include cash settled SARs expense of $10.4 million and $2.3 million, respectively.
EBITDA is defined as earnings before interest, income tax provision or benefit, and depreciation and amortization. EBITDA is a non-GAAP financial measure.
EBITDA, as adjusted represents EBITDA as defined above adjusted for loss on extinguishment of debt, stock-based compensation, acquisition related charges and non-risk prints and advertising expense. Stock-based compensation represents compensation expenses associated with stock options, restricted share units and cash and equity settled stock appreciation rights ("SARs"). Acquisition related charges represent severance and transaction costs associated with the acquisition of Summit. Non-risk prints and advertising expense represents the amount of theatrical marketing expense for third party titles that the Company funded and expensed for which a third party provides a guarantee that such expense will be recouped from the performance of the film (i.e. there is no risk of loss to the company) net of an amount of the estimated amortization of participation expense that would have been recorded if such amount had not been expensed. The amount is subtracted from EBITDA in the three months ended December 31, 2012 because there was no non-risk prints and advertising expense incurred and the amount represents the estimated amortization of participation expense that would have been recorded if such prior period amounts had not been expensed. EBITDA, as adjusted is a non-GAAP financial measure.
Management believes EBITDA and EBITDA, as adjusted to be a meaningful indicator of our performance that provides useful information to investors regarding our financial condition and results of operations. Presentation of EBITDA and EBITDA, as adjusted is a non-GAAP financial measure commonly used in the entertainment industry and by financial analysts and others who follow the industry to measure operating performance. While management considers EBITDA and EBITDA, as adjusted to be an important measure of comparative operating performance, it should be considered in addition to, but not as a substitute for, net income and other measures of financial performance reported in accordance with Generally Accepted Accounting Principles. EBITDA and EBITDA, as adjusted do not reflect cash available to fund cash requirements. Not all companies calculate EBITDA and EBITDA, as adjusted in the same manner and the measure as presented may not be comparable to similarly-titled measures presented by other companies.
LIONS GATE ENTERTAINMENT CORP.
RECONCILIATION OF FREE CASH FLOW TO NET CASH
FLOWS PROVIDED BY OPERATING ACTIVITIES
Three Months Ended
Nine Months Ended
December 31,
December 31,
2013
2012
2013
2012
(Amounts in thousands)
Net Cash Flows Provided By Operating Activities
$
35,263
$
76,124
$
145,834
$
218,259
Purchases of property and equipment
(2,721)
(1,110)
(6,116)
(2,086)
Net borrowings under and (repayment) of production loans
84,868
50,661
58,197
(58,479)
Free Cash Flow, as defined
$
117,410
$
125,675
$
197,915
$
157,694
Free cash flow is defined as net cash flows provided by operating activities, less purchases of property and equipment, plus or minus the net increase or decrease in production loans. The adjustment for the production loans is made because the GAAP based cash flows from operations reflects a non-cash reduction of cash flows for the cost of films associated with production loans prior to the time the Company actually pays for the film. The Company believes that it is more meaningful to reflect the impact of the payment for these films in its free cash flow when the payments are actually made.
Free cash flow is a non-GAAP financial measure as defined in Regulation G promulgated by the Securities and Exchange Commission. This non-GAAP financial measure is in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with Generally Accepted Accounting Principles.
Management believes this non-GAAP measure provides useful information to investors regarding cash that our operating businesses generate whether classified as operating or financing activity (related to the production of our films) within our GAAP based statement of cash flows, before taking into account cash movements that are non-operational. Free cash flow is a non-GAAP financial measure commonly used in the entertainment industry and by financial analysts and others who follow the industry. Not all companies calculate free cash flow in the same manner and the measure as presented may not be comparable to similarly titled measures presented by other companies.
LIONS GATE ENTERTAINMENT CORP.
RECONCILIATION OF EBITDA TO FREE CASH FLOW
Three Months Ended
Nine Months Ended
December 31,
December 31,
2013
2012
2013
2012
(Amounts in thousands)
EBITDA
$
141,993
$
66,194
$
182,528
$
156,860
Plus: Amortization of film and television programs
260,318
264,211
636,818
658,875
Less: Cash paid for film and television programs (1)
(225,169)
(229,980)
(623,538)
(776,060)
Amortization of (cash paid for) film and television programs in excess of cash paid (amortization)
35,149
34,231
13,280
(117,185)
Plus: Non-cash stock-based compensation
12,862
5,967
41,044
16,884
Plus: Dividend payment from equity method investee
—
—
9,849
—
Plus: Equity interests (income) loss
1,321
3,512
(13,158)
1,902
Plus: Loss on extinguishment of debt
—
14,652
36,653
23,811
EBITDA adjusted for net investment in film and television programs, non-cash stock-based compensation, dividend payment from equity method investee, equity interests income (loss), and loss on extinguishment of debt
191,325
124,556
270,196
82,272
Changes in other operating assets and liabilities:
Restricted cash
(32,308)
2,822
(29,754)
8,124
Accounts receivable, net
(141,656)
44,291
(46,376)
128,317
Other assets
7,501
(6,406)
(1,696)
(7,950)
Accounts payable and accrued liabilities
81,698
(41,140)
4,205
(38,991)
Participations and residuals
34,878
(11,568)
38,236
(12,583)
Deferred revenue
3,050
35,966
17,947
68,305
(46,837)
23,965
(17,438)
145,222
Purchases of property and equipment
(2,721)
(1,110)
(6,116)
(2,086)
Interest, taxes and other (2)
(24,357)
(21,736)
(48,727)
(67,714)
Free Cash Flow, as defined
$
117,410
$
125,675
$
197,915
$
157,694
_________________________
(1) Cash paid for film and television programs is calculated using the following amounts as presented in our consolidated statement of cash flows:
Change in investment in film and television programs
$
(354,647)
$
(280,755)
$
(692,943)
$
(703,875)
Change in film obligations
44,610
114
11,208
(13,706)
Production loans - borrowings
190,155
150,279
359,582
263,124
Production loans - repayments
(105,287)
(99,618)
(301,385)
(321,603)
Total cash paid for film and television programs
$
(225,169)
$
(229,980)
$
(623,538)
$
(776,060)
_________________________
(2) Interest, taxes and other consists of the following:
Contractual cash based interest
$
(11,484)
$
(18,166)
$
(39,682)
$
(59,802)
Interest and other income
1,771
1,079
4,750
3,058
Current income tax benefit (provision)
(14,644)
(4,649)
(13,795)
(10,970)
Total interest, taxes and other
$
(24,357)
$
(21,736)
$
(48,727)
$
(67,714)
This reconciliation is provided to illustrate the difference between our EBITDA and free cash flow which are both separately reconciled to their corresponding GAAP metrics.
LIONS GATE ENTERTAINMENT CORP.
RECONCILIATION OF INCOME BEFORE INCOME TAXES, NET
INCOME, AND BASIC AND DILUTED EPS TO ADJUSTED INCOME BEFORE
INCOME TAXES, ADJUSTED NET INCOME, AND ADJUSTED BASIC AND DILUTED EPS
Three Months Ended December 31, 2013
(Amounts in thousands, except per share amounts)
Income before income taxes
Net income
Basic EPS*
Diluted EPS*
As reported
$
126,660
$
88,763
$
0.64
$
0.59
Stock-based compensation (1)
12,064
7,600
0.06
0.05
As adjusted for stock-based compensation
$
138,724
$
96,363
$
0.70
$
0.63
Three Months Ended December 31, 2012
(Amounts in thousands, except per share amounts)
Income before income taxes
Net income
Basic EPS*
Diluted EPS*
As reported
$
42,479
$
37,830
$
0.28
$
0.27
Stock-based compensation (1)
8,997
8,997
0.07
0.06
Loss on extinguishment of debt (2)
14,652
14,544
0.11
0.10
As adjusted for stock-based compensation and loss on extinguishment of debt
$
66,128
$
61,371
$
0.45
$
0.43
Nine Months Ended December 31, 2013
(Amounts in thousands, except per share amounts)
Income before income taxes
Net income
Basic EPS*
Diluted EPS*
As reported
$
129,952
$
102,885
$
0.75
$
0.71
Stock-based compensation (1)
52,199
32,885
0.24
0.21
Loss on extinguishment of debt (2)
36,653
23,091
0.17
0.15
Tax valuation allowance (3)
—
(12,030)
(0.09)
(0.08)
As adjusted for stock-based compensation, loss on extinguishment of debt, and valuation allowance
$
218,804
$
146,831
$
1.07
$
0.99
Nine Months Ended December 31, 2012
(Amounts in thousands, except per share amounts)
Income before income taxes
Net income
Basic EPS*
Diluted EPS*
As reported
$
80,129
$
69,159
$
0.52
$
0.51
Stock-based compensation (1)
25,645
25,645
0.19
0.17
Loss on extinguishment of debt (2)
23,811
23,811
0.18
0.16
As adjusted for stock-based compensation and loss on extinguishment of debt
$
129,585
$
118,615
$
0.88
$
0.85
_________________________
* Basic and Diluted EPS amounts may not add precisely due to rounding
Adjusted income before income taxes, adjusted net income and adjusted basic and diluted EPS are adjusted for the following items:
(1) Stock based compensation: Adjustments for stock-based compensation represents compensation expenses associated with stock options, restricted share units, cash and equity settled SARs. The adjustment to net income is net of the tax impact calculated using the statutory tax rate applicable to each adjustment.
(2) Loss on extinguishment of debt: This adjusts income before income taxes and net income to eliminate the loss on extinguishment of debt. The adjustment to net income is net of the tax impact calculated using the statutory tax rate applicable to each adjustment.
(3) Tax valuation allowance: This adjusts net income to eliminate the discrete tax benefit recognized for financial reporting purposes upon the reduction of the Company's valuation allowance on its net deferred tax assets in our Canadian tax jurisdiction that are expected to be realized in future tax returns.
Management believes that these non-GAAP measures provide useful information to investors regarding the Company's results as compared to historical periods. The Company uses these measures, among other measures, to evaluate the operating performance of the Company. The Company believes that the adjusted results provide relevant and useful information for investors because they clarify the Company's actual operating performance and allow investors to review our operating performance in the same way as our management. Since these measures are not calculated in accordance with generally accepted accounting principles, they should not be considered in isolation of, or as a substitute for income before income taxes, net income, basic and diluted EPS. Not all companies calculate adjusted income before income taxes, adjusted net income, and adjusted basic and diluted EPS in the same manner and the measures as presented may not be comparable to similarly titled measures presented by other companies.
National Vision to be Acquired by KKR
Business Wire KKR
February 7, 2014 9:01 AM
LAWRENCEVILLE, Ga.--(BUSINESS WIRE)--
National Vision, Inc. (NVI), the leading independent value retailer of eyeglasses and contact lenses, and leading global investment firm KKR today announced that a definitive agreement has been signed whereby KKR will acquire the company from Berkshire Partners, a Boston-based investment firm. Terms of the transaction were not disclosed.
NVI is the fastest growing independent optical retailer and is one of the few retailers that is focused exclusively on the value segment of the industry. The company operates over 750 low price vision centers across the United States, including America’s Best Contacts & Eyeglasses and Eyeglass World free-standing concepts and vision centers inside Walmart, Fred Meyer and on U.S. Military bases. NVI also sells its products direct to consumers through 25 consumer-facing websites, including www.aclens.com and www.discountcontactlenses.com.
“We have had an absolutely marvelous eight year relationship with Berkshire Partners and are so appreciative of all they have done to support our growth and help get us to where we are today,” said Reade Fahs, CEO of NVI. “The NVI team is anticipating and looking forward to a very similar sort of relationship with KKR.”
“NVI has a bright future ahead of it, and we are excited to partner with this proven management team on its next chapter of growth. Through its broad store base and leading e-commerce platform, the company is poised to benefit from the growth in this highly attractive value segment of the optical industry. As NVI continues to grow, we also look forward to supporting its important social mission,” Nate Taylor, Member of KKR, said.
NVI is dedicated to “serving the underserved” by providing eye health care and eyeglasses to those who otherwise would not have access to affordable vision improvement. NVI has been a strategic partner of VisionSpring, supporting its work to create sustainable business models to serve low-income individuals in El Salvador, India and Bangladesh. NVI also supports RestoringVision.org in its work to provide readers and sunglasses for distribution by American Mission goers abroad. In addition, NVI created and manages their own charity called Frames For The World that collects new eyeglass frames from manufacturers who have overstock and distributes the frames in bulk to clinics serving the poor in the developing world so they can bring sight to more people.
KKR is making the investment from its North American XI private equity fund. The acquisition, which is expected to close by the end of the first quarter, is subject to regulatory approvals and customary closing conditions. The management team of NVI is expected to remain a significant investor in the business.
Barclays acted as lead financial advisor to NVI, with Wells Fargo as co-advisor. Weil, Gotshal & Manges LLP acted as legal advisor to Berkshire Partners and NVI. Simpson Thacher & Bartlett LLP acted as legal advisor to KKR.
About National Vision
National Vision, Inc. (NVI) is the fourth largest optical retailer in the United States, operating over 750 retail locations in 43 states plus the District of Columbia and Puerto Rico. National Vision employs over 7,000 people and has several retail divisions including America's Best Contacts & Eyeglasses, Eyeglass World, Vision Centers inside select Wal-Mart, Vista Optical inside Fred Meyer and Optical Centers on select military bases.
About KKR
Founded in 1976 and led by Henry Kravis and George Roberts, KKR is a leading global investment firm with $94.3 billion in assets under management as of December 31, 2013. With offices around the world, KKR manages assets through a variety of investment funds and accounts covering multiple asset classes. KKR seeks to create value by bringing operational expertise to its portfolio companies and through active oversight and monitoring of its investments. KKR complements its investment expertise and strengthens interactions with fund investors through its client relationships and capital markets platform. KKR & Co. L.P. is publicly traded on the New York Stock Exchange (KKR) and “KKR”, as used in this release, includes its subsidiaries, their managed investment funds and accounts, and/or their affiliated investment vehicles, as appropriate. For additional information, please visit KKR’s website at www.kkr.com.
About Berkshire Partners
Berkshire Partners, the Boston-based investment firm, has invested in over 100 middle market companies since 1986 through eight private equity funds with aggregate capital commitments of $11 billion. Berkshire has developed specific industry experience in several areas including consumer products and retail, business services, industrial manufacturing, transportation and communications. Berkshire has a strong history of partnering with management teams to grow the companies in which it invests with the goal of consistently achieving superior investment returns. The firm is currently investing from Berkshire Fund VIII, a $4.5 billion fund raised in 2011. Berkshire seeks to invest $50 million to $500 million of equity capital in each portfolio company. For additional information, visit www.berkshirepartners.com.
Contact:
Media
For National Vision, Inc. media inquiries:
Pam Bisikirski, 770-822-4252
Pam.Bisikirski@nationalvision.com
or
For KKR media inquiries:
Kristi Huller, 212-750-8300
Kristi.Huller@kkr.com
or
For Berkshire Partners media inquiries:
Katie Bush, 617-227-0050
Kbush@berkshirepartners.com
KKR & Co. L.P. Announces Fourth Quarter and Full Year 2013 Results
Strong Investment Returns Drive Record Economic Net Income
GAAP net income (loss) attributable to KKR & Co. L.P. was $277.9 million and $691.2 million for the quarter and year ended December 31, 2013, respectively, up from $96.7 million and $560.8 million in the comparable periods of 2012.
Assets under management (“AUM”) totaled $94.3 billion as of December 31, 2013, up from $75.5 billion as of December 31, 2012. Fee paying assets under management (“FPAUM”) totaled $77.4 billion as of December 31, 2013, up from $60.8 billion as of December 31, 2012.
Total distributable earnings were $510.4 million for the quarter ended December 31, 2013, down from $546.3 million for the quarter ended December 31, 2012. Total distributable earnings were $1,455.9 million for the year December 31, 2013, up from $1,449.4 million in the comparable period of 2012.
Economic net income (“ENI”) was $789.6 million and $2,195.6 million for the quarter and year ended December 31, 2013, respectively, up from $347.7 million and $2,130.9 million in the comparable periods of 2012. Return on equity was 27.4% for the year ended December 31, 2013.
After-tax ENI was $1.08 and $2.99 per adjusted unit for the quarter and year ended December 31, 2013, respectively, up from $0.48 and $2.90 per adjusted unit in the comparable periods on 2012.
Fee related earnings (“FRE”) were $120.1 million and $412.3 million for the quarter and year ended December 31, 2013, respectively, up from $86.0 million and $319.8 million in the comparable periods of 2012.
Book value was $7.8 billion on a total reportable segment basis as of December 31, 2013 or $10.83 per adjusted unit.
KKR & Co. L.P. declares a fourth quarter distribution of $0.48 per common unit, bringing year-to-date distributions for 2013 to $1.40 per common unit, up from $1.22 per common unit for 2012.
KKR & Co. L.P. announced a transaction to acquire KKR Financial Holdings LLC (“KFN”).
Business Wire KKR & Co. L.P.
2 hours ago
NEW YORK--(BUSINESS WIRE)--
KKR & Co. L.P. (KKR) today reported its fourth quarter and full year 2013 results.
For the fourth quarter and year ended December 31, 2013, the carrying value of our private equity investment portfolio appreciated 8.4% and 20.2%, respectively.
AUM and FPAUM were $94.3 billion and $77.4 billion, respectively, as of December 31, 2013, both up from September 30, 2013.
We recently held our final close for our North America Fund XI L.P., Real Estate Partners Americas L.P., and Special Situations Fund L.P. Including general partner, employee and affiliate commitments, our North America Fund XI L.P. closed with $9.0 billion of commitments, Real Estate Partners Americas L.P. closed with $1.5 billion of commitments, and the Special Situations Fund L.P. closed with $2.0 billion of commitments.
On December 16, 2013, KKR announced the signing of a definitive merger agreement where KKR will acquire KFN through a stock-for-stock merger. KFN is a specialty finance company with a portfolio of assets spanning a complementary range of strategies, principally leveraged credit through ownership of subordinated and mezzanine notes across a number of CLOs; special situations; and Private Markets strategies including natural resources, commercial real estate and private equity. KFN is externally managed by KKR. The merger, which is subject to KFN shareholder approval, customary regulatory approvals and other customary closing conditions, is expected to close in the first half of 2014.
In the near term, we expect to close on the acquisition of Avoca Capital (Unlimited) and its affiliates (“Avoca”), a European credit investment manager. The addition of Avoca provides KKR with a leading presence in the European leveraged credit markets and will enable us to expand our credit platform to offer a full spectrum of credit opportunities globally for our fund investors. As of December 31, 2013, Avoca had $8.4 billion in assets under management, which are not included in either AUM or FPAUM.
“Our investment performance, cash flow generation, and balance sheet income translated into $1.5 billion in total distributable earnings, a 27% return on equity, and a distribution of $1.40 per unit for 2013, our highest annual distribution as a public company,” said Henry R. Kravis and George R. Roberts, Co-Chairmen and Co-Chief Executive Officers of KKR. “We continued to see progress across our capital raising, investment performance, monetization and strategic initiatives."
_______________________________________________________________________________________________________
Note: Certain financial measures, including FRE, ENI, after-tax ENI, ENI after taxes and equity-based charges, fee related EBITDA, book value, cash and short-term investments and adjusted units, are not presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). See Exhibits A and B for a reconciliation of such measures to financial results prepared in accordance with GAAP.
GAAP RESULTS
GAAP results for the quarter and year ended December 31, 2013 included net income attributable to KKR & Co. L.P. of $277.9 million and $691.2 million, respectively, and net income attributable to KKR & Co. L.P. per common unit of $0.89 and $2.30, respectively, on a diluted basis. For the quarter and year ended December 31, 2012, net income attributable to KKR & Co. L.P. was $96.7 million and $560.8 million, respectively, and net income attributable to KKR & Co. L.P. per common unit were $0.36 and $2.21, respectively, on a diluted basis. The increase quarter over quarter was primarily due to (i) an increase in management fees attributable to new capital raised; (ii) higher transaction fees; (iii) a higher level of total investment income; and (iv) an increase in KKR & Co. L.P.’s ownership percentage in the KKR business. The year over year increase was primarily due to (i) an increase in management fees attributable to new capital raised; (ii) higher transaction fees; (iii) the acquisition of Prisma; and (iv) an increase in KKR & Co. L.P.’s ownership percentage in the KKR business.
SEGMENT RESULTS
Private Markets
AUM was $61.2 billion as of December 31, 2013, an increase of $1.5 billion, or 2.5%, compared to AUM of $59.7 billion as of September 30, 2013. The increase was primarily attributable to appreciation in the fair value of our private equity portfolio and to a lesser extent new capital raised from fund investors. The increase was partially offset by distributions to the limited partners of our private equity funds arising from realizations.
FPAUM was $50.2 billion as of December 31, 2013, an increase of $0.3 billion, or 0.6%, compared to FPAUM of $49.9 billion as of September 30, 2013. The increase was primarily attributable to new capital raised from fund investors largely offset by distributions to the limited partners of our private equity funds arising from realizations.
FRE was $30.5 million for the quarter ended December 31, 2013, a decrease of $1.9 million, or 5.9%, compared to FRE of $32.4 million for the quarter ended December 31, 2012. The decrease was primarily driven by higher compensation expense due to additional headcount and higher other operating expenses. The decrease was partially offset by higher management fees resulting from new capital raised and higher transaction fees.
FRE was $158.3 million for the year ended December 31, 2013, an increase of $7.3 million, or 4.8%, compared to FRE of $151.0 million for the year ended December 31, 2012. The increase was primarily driven by higher management fees resulting from new capital raised and higher transaction fees. The increase was partially offset by higher compensation expense due to additional headcount and higher other operating expenses.
ENI was $368.6 million for the quarter ended December 31, 2013, an increase of $190.8 million, or 107.3%, compared to ENI of $177.8 million for the quarter ended December 31, 2012. The increase was primarily attributable to higher net carried interest resulting from a higher level of appreciation in our private equity portfolio.
ENI was $952.5 million for the year ended December 31, 2013, an increase of $120.8 million, or 14.5%, compared to ENI of $831.7 million for the year ended December 31, 2012. The increase was primarily attributable to higher net carried interest resulting from a lower level of management fee refunds and the increase in FRE discussed above.
Public Markets
AUM was $33.1 billion as of December 31, 2013, an increase of $2.6 billion, or 8.5%, compared to AUM of $30.5 billion as of September 30, 2013. FPAUM was $27.2 billion as of December 31, 2013, an increase of $3.5 billion, or 14.8%, compared to FPAUM of $23.7 billion as of September 30, 2013. For both AUM and FPAUM, the increases were primarily attributable to net new capital raised from fund investors.
FRE was $63.6 million for the quarter ended December 31, 2013, an increase of $34.2 million, or 116.3%, compared to FRE of $29.4 million for the quarter ended December 31, 2012. The increase was principally attributable to higher incentive fees earned and higher management fees related to new capital raised from fund investors. The increase was partially offset by higher operating expenses.
FRE was $155.4 million for the year ended December 31, 2013, an increase of $74.9 million, or 93.0%, compared to FRE of $80.5 million for the year ended December 31, 2012. The increase was primarily attributable to (i) higher management fees related to new capital raised from fund investors,(ii) the acquisition of Prisma and (iii) higher incentive fees earned. The increase was partially offset by higher operating expenses primarily related to one-time expenses incurred in connection with the launch of a closed-end fund in 2013.
ENI was $73.3 million for the quarter ended December 31, 2013, an increase of $35.9 million, or 96.0%, compared to ENI of $37.4 million for the quarter ended December 31, 2012. The increase was primarily driven by the increase in FRE discussed above.
ENI was $191.4 million for the year ended December 31, 2013, an increase of $88.5 million, or 86.0%, compared to ENI of $102.9 million for the year ended December 31, 2012. The increase was primarily driven by the increase in FRE discussed above and to a lesser extent higher net carried interest due to certain credit investment vehicles beginning to earn carry in 2013.
Capital Markets and Principal Activities
FRE was $26.0 million for the quarter ended December 31, 2013, an increase of $1.8 million, or 7.4%, compared to FRE of $24.2 million for the quarter ended December 31, 2012. FRE was $98.7 million for the year ended December 31, 2013, an increase of $10.4 million, or 11.8%, compared to FRE of $88.3 million for the year ended December 31, 2012. The increases in both comparable periods were primarily driven by a higher level of overall capital markets transaction activity, partially offset by higher compensation expense.
ENI was $347.8 million for the quarter ended December 31, 2013, an increase of $215.2 million, or 162.3%, compared to ENI of $132.6 million for the quarter ended December 31, 2012. The increase was primarily attributable to a higher level of investment income from our principal investments.
ENI was $1,051.7 million for the year ended December 31, 2013, a decrease of $144.5 million, or 12.1%, compared to ENI of $1,196.2 million for the year ended December 31, 2012. The decrease was primarily due to a lower level of investment income from our principal investments, partially offset by the increase in FRE discussed above. While the fair value of our principal investments increased during the year ended December 31, 2013, the level of appreciation was lower than in 2012.
CAPITAL AND LIQUIDITY
As of December 31, 2013, KKR had $2.2 billion of cash and short-term investments on a total reportable segment basis and $1.0 billion of outstanding debt obligations. KKR’s availability for borrowings was $750.0 million (which is reduced by an outstanding letter of credit), which does not include a $500.0 million revolving credit facility for use in its capital markets business that was undrawn as of December 31, 2013.
As of December 31, 2013, KKR’s portion of total uncalled commitments to its investment funds was $1.2 billion, consisting of the following (amounts in thousands):
Uncalled
Commitments
Private Markets
North America Fund XI $ 324,800
Energy Income and Growth Fund 227,500
Real Estate Partners Americas 123,200
European Fund III 121,500
Asian Fund II 72,400
2006 Fund 61,700
Infrastructure 19,900
Natural Resources 11,100
China Growth Fund 6,400
Asian Fund 3,700
E2 Investors (Annex Fund) 900
Co-Investment Vehicles 39,200
Total Private Markets Commitments 1,012,300
Public Markets
Special Situations Vehicles 125,900
Mezzanine Fund 21,200
Direct Lending Vehicles 12,600
Total Public Markets Commitments 159,700
Total Uncalled Commitments $ 1,172,000
DISTRIBUTION
A distribution of $0.48 per common unit has been declared, comprised of (i) $0.12 per common unit from after-tax FRE, (ii) $0.22 per common unit from realized cash carry, and (iii) $0.14 per common unit from net realized principal investment income. The distribution will be paid on March 4, 2014 to unitholders of record as of the close of business on February 18, 2014. Please refer to the distribution policy presented later in this release.
CONFERENCE CALL
A conference call to discuss KKR’s financial results will be held on Thursday, February 6, 2014 at 10:00 a.m. EST. The conference call may be accessed by dialing (877) 303-2917 (U.S. callers) or +1 (253) 237-1135 (non-U.S. callers); a pass code is not required. Additionally, the conference call will be broadcast live over the Internet and may be accessed through the Investors Center section of KKR’s website at http://ir.kkr.com/kkr_ir/kkr_events.cfm. A replay of the live broadcast will be available on KKR’s website or by dialing (855) 859-2056 (U.S. callers) or +1 (404) 537-3406 (non-U.S. callers), pass code 35363339 beginning approximately two hours after the broadcast.
From time to time, KKR may use its website as a channel of distribution of material company information. Financial and other important information regarding KKR is routinely posted and accessible on the Investor Center for KKR & Co. L.P. at http://ir.kkr.com/kkr_ir/kkr_events.cfm. In addition, you may automatically receive email alerts and other information about KKR by enrolling your email address at the “Email Alerts” area of the Investor Center on the website.
ABOUT KKR
Founded in 1976 and led by Henry Kravis and George Roberts, KKR is a leading global investment firm with $94.3 billion in assets under management as of December 31, 2013. With offices around the world, KKR manages assets through a variety of investment funds and accounts covering multiple asset classes. KKR seeks to create value by bringing operational expertise to its portfolio companies and through active oversight and monitoring of its investments. KKR complements its investment expertise and strengthens interactions with fund investors through its client relationships and capital markets platform. KKR & Co. L.P. is publicly traded on the New York Stock Exchange (KKR) and “KKR”, as used in this release, includes its subsidiaries, their managed investment funds and accounts, and/or their affiliated investment vehicles, as appropriate. For additional information, please visit KKR’s website at www.kkr.com.
FORWARD-LOOKING STATEMENTS
This release contains certain forward-looking statements. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. The forward-looking statements are based on KKR’s beliefs, assumptions and expectations of its future performance, taking into account all information currently available to it. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to KKR or are within its control. If a change occurs, KKR’s business, financial condition, liquidity and results of operations, including but not limited to AUM, FPAUM, FRE, total distributable earnings, ENI, after-tax ENI, ENI after taxes and equity-based charges, fee related EBITDA, committed dollars invested and syndicated capital, uncalled commitments, core interest expense, cash and short-term investments, net realized principal investment income and book value, may vary materially from those expressed in the forward-looking statements. The following factors, among others, could cause actual results to vary from the forward-looking statements: the general volatility of the capital markets; failure to realize the benefits of or changes in KKR’s business strategies including the ability to realize the anticipated synergies from acquisitions or strategic partnerships such as Prisma, Nephila, Avoca or KFN; availability, terms and deployment of capital; availability of qualified personnel and expense of recruiting and retaining such personnel; changes in the asset management industry, interest rates or the general economy; underperformance of KKR's investments and decreased ability to raise funds; and the degree and nature of KKR’s competition. KKR does not undertake any obligation to update any forward-looking statements to reflect circumstances or events that occur after the date on which such statements were made except as required by law. In addition, KKR’s business strategy is focused on the long term and financial results are subject to significant volatility. Additional information about factors affecting KKR is available in KKR & Co. L.P.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012, filed with the SEC on February 22, 2013, and other filings with the SEC, which are available at www.sec.gov.
KKR
CONSOLIDATED STATEMENTS OF OPERATIONS (GAAP BASIS - UNAUDITED)
(Amounts in thousands, except common unit and per common unit amounts)
Quarter Ended Year Ended
December 31, 2013 December 31, 2012 December 31, 2013 December 31, 2012
Revenues
Fees $ 224,902 $ 177,621 $ 762,546 $ 568,442
Expenses
Compensation and Benefits 405,687 261,454 1,266,592 1,280,854
Occupancy and Related Charges 15,684 14,569 61,720 58,205
General, Administrative and Other 158,920 82,249 438,826 259,729
Total Expenses 580,291 358,272 1,767,138 1,598,788
Investment Income (Loss)
Net Gains (Losses) from Investment Activities 3,227,327 874,507 7,826,082 7,871,673
Dividend Income 325,507 677,590 695,521 940,888
Interest Income 122,509 98,929 474,759 358,598
Interest Expense (26,923 ) (16,407 ) (99,616 ) (69,164 )
Total Investment Income (Loss) 3,648,420 1,634,619 8,896,746 9,101,995
Income (Loss) Before Taxes 3,293,031 1,453,968 7,892,154 8,071,649
Income Taxes 12,401 5,628 37,926 43,405
Net Income (Loss) 3,280,630 1,448,340 7,854,228 8,028,244
Net Income (Loss) Attributable to
Redeemable Noncontrolling Interests 36,263 16,412 62,255 34,963
Net Income (Loss) Attributable to
Noncontrolling Interests 2,966,454 1,335,200 7,100,747 7,432,445
Net Income (Loss) Attributable to KKR & Co. L.P. $ 277,913 $ 96,728 $ 691,226 $ 560,836
Distributions Declared per KKR & Co. L.P. Common Unit $ 0.48 $ 0.70 $ 1.40 $ 1.22
Net Income (Loss) Attributable to KKR & Co. L.P. Per Common Unit
Basic $ 0.96 $ 0.39 $ 2.51 $ 2.35
Diluted (a) $ 0.89 $ 0.36 $ 2.30 $ 2.21
Weighted Average Common Units Outstanding
Basic 288,045,501 249,303,558 274,910,628 238,503,257
Diluted (a) 312,340,336 268,192,128 300,254,090 254,093,160
(a) KKR Holdings L.P. units have been excluded from the calculation of diluted earnings per common unit given that the exchange of these units would proportionally increase KKR & Co. L.P.’s interests in KKR’s business and would have an anti-dilutive effect on earnings per common unit as a result of certain tax benefits KKR & Co. L.P. is assumed to receive upon the exchange.
KKR
STATEMENTS OF OPERATIONS AND OTHER SELECTED FINANCIAL INFORMATION
TOTAL REPORTABLE SEGMENTS (UNAUDITED)
(Amounts in thousands, except unit and per unit amounts)
Quarter Ended Year Ended
December 31, 2013 September 30, 2013 December 31, 2012 December 31, 2013 December 31, 2012
Fees
Management and incentive fees:
Management fees $ 175,246 $ 173,245 $ 144,355 $ 665,630 $ 529,107
Incentive fees 36,695 1,225 12,350 72,359 43,845
Management and incentive fees 211,941 174,470 156,705 737,989 572,952
Monitoring and transaction fees:
Monitoring fees 26,282 33,010 32,988 120,267 116,565
Transaction fees 104,475 129,127 76,840 336,686 240,108
Fee credits (47,014 ) (61,782 ) (37,991 ) (166,612 ) (105,730 )
Net monitoring and transaction fees 83,743 100,355 71,837 290,341 250,943
Total fees 295,684 274,825 228,542 1,028,330 823,895
Expenses
Compensation and benefits 95,945 92,229 76,001 343,772 272,811
Occupancy and related charges 14,264 15,674 13,763 56,327 55,068
Other operating expenses 65,342 60,884 52,799 215,883 176,205
Total expenses 175,551 168,787 142,563 615,982 504,084
Fee Related Earnings 120,133 106,038 85,979 412,348 319,811
Investment income (loss)
Realized carried interest 250,500 81,532 168,320 690,027 475,707
Unrealized carried interest 347,239 278,004 100,616 754,423 956,203
Gross carried interest 597,739 359,536 268,936 1,444,450 1,431,910
Less: allocation to KKR carry pool (241,397 ) (145,512 ) (107,514 ) (582,949 ) (581,206 )
Less: management fee refunds (a) (8,564 ) (7,767 ) (8,712 ) (30,282 ) (143,723 )
Net carried interest 347,778 206,257 152,710 831,219 706,981
Realized other investment income (loss) 250,856 102,766 366,878 657,139 866,776
Unrealized other investment income (loss) 72,825 200,706 (256,642 ) 301,262 244,346
Total other investment income (loss) 323,681 303,472 110,236 958,401 1,111,122
Total investment income (loss) 671,459 509,729 262,946 1,789,620 1,818,103
Income (Loss) before noncontrolling interests
in Income of consolidated entities 791,592 615,767 348,925 2,201,968 2,137,914
Income (Loss) attributable to
noncontrolling interests 1,943 2,020 1,245 6,387 7,043
Economic Net Income (Loss) $ 789,649 $ 613,747 $ 347,680 $ 2,195,581 $ 2,130,871
Provision for Income Taxes 16,048 11,950 10,632 61,601 102,420
Economic Net Income (Loss), After Taxes (b) $ 773,601 $ 601,797 $ 337,048 $ 2,133,980 $ 2,028,451
Economic Net Income (Loss), After Taxes per Adjusted Unit (b) $ 1.08 $ 0.84 $ 0.48 $ 2.99 $ 2.90
Assets Under Management $ 94,320,300 $ 90,169,200 $ 75,527,500 $ 94,320,300 $ 75,527,500
Fee Paying Assets Under Management $ 77,397,500 $ 73,611,900 $ 60,846,000 $ 77,397,500 $ 60,846,000
Committed Dollars Invested and Syndicated Capital $ 2,943,500 $ 2,848,700 $ 1,715,700 $ 8,506,000 $ 4,354,900
Uncalled Commitments $ 22,463,900 $ 22,718,400 $ 16,071,900 $ 22,463,900 $ 16,071,900
Other Information
Fee Related Earnings $ 120,133 $ 106,038 $ 85,979 $ 412,348 $ 319,811
Plus: depreciation and amortization 3,658 3,601 3,580 14,648 12,499
Fee Related EBITDA $ 123,791 $ 109,639 $ 89,559 $ 426,996 $ 332,310
Total Distributable Earnings (b) $ 510,351 $ 251,137 $ 546,290 $ 1,455,878 $ 1,449,396
GAAP interest expense $ 26,923 $ 25,056 $ 16,407 $ 99,616 $ 69,164
Less: interest expense related to debt obligations
from investment financing arrangements 9,919 8,841 7,014 33,954 31,050
Core Interest Expense (b) $ 17,004 $ 16,215 $ 9,393 $ 65,662 $ 38,114
Economic Net Income (Loss),
After Taxes and Equity-based Charges (b) $ 743,473 $ 570,570 $ 321,850 $ 2,019,271 $ 1,965,574
Return on Equity (c) 27.4 % 31.0 %
(a) As of December 31, 2013, there is no carried interest subject to management fee refunds, which may reduce carried interest in future periods.
(b) See definitions for economic net income (loss), after taxes, adjusted units, total distributable earnings, core interest expense and economic net income (loss), after taxes and equity-based charges under “Notes to Reportable Segments.”
(c) Return on equity measures the amount of net income generated as a percentage of capital invested in KKR’s business. Return on equity is calculated by dividing Economic Net Income (Loss), After Taxes and Equity-based Charges by the average book value during the period.
KKR
SUPPLEMENTAL STATEMENTS OF OPERATIONS AND OTHER SELECTED FINANCIAL INFORMATION (SAMPLE)
TOTAL REPORTABLE SEGMENTS (UNAUDITED)
(Amounts in thousands, except unit and per unit amounts)
Quarter Ended Year Ended
December 31, 2013 September 30, 2013 December 31, 2012 December 31, 2013 December 31, 2012
Segment Revenues
Fees $ 295,684 $ 274,825 $ 228,542 $ 1,028,330 $ 823,895
Gross Carried Interest - net of Management Fee Refunds 589,175 351,769 260,224 1,414,168 1,288,187
Investment Income (Loss) 323,681 303,472 110,236 958,401 1,111,122
Total Segment Revenues
1,208,540 930,066 599,002 3,400,899 3,223,204
Segment Expenses
Allocation to Carry Pool 241,397 145,512 107,514 582,949 581,206
Compensation and benefits 95,945 92,229 76,001 343,772 272,811
Equity-based Charges 30,128 31,227 15,198 114,709 62,877
Occupancy and Related Charges 14,264 15,674 13,763 56,327 55,068
Other Operating Expenses 65,342 60,884 52,799 215,883 176,205
Total Segment Expenses 447,076 345,526 265,275 1,313,640 1,148,167
Income (Loss) attributable to noncontrolling interests 1,943 2,020 1,245 6,387 7,043
Economic Net Income (Loss) After Equity-based Charges $ 759,521 $ 582,520 $ 332,482 $ 2,080,872 $ 2,067,994
Provision for Income Taxes 16,048 11,950 10,632 61,601 102,420
Economic Net Income (Loss),
After Taxes and Equity-based Charges $ 743,473 $ 570,570 $ 321,850 $ 2,019,271 $ 1,965,574
Economic Net Income (Loss),
After Taxes and Equity-based Charges Per Adjusted Unit $ 1.04 $ 0.80 $ 0.46 $ 2.82 $ 2.81
Weighted Average Adjusted Units (Fully Diluted Basis) 716,807,180 715,781,663 704,805,537 714,835,941 699,988,443
Return on Equity 27.4 % 31.0 %
KKR
STATEMENTS OF OPERATIONS AND OTHER SELECTED FINANCIAL INFORMATION
PRIVATE MARKETS SEGMENTS (UNAUDITED)
(Amounts in thousands)
Quarter Ended Year Ended
December 31, 2013 September 30, 2013 December 31, 2012 December 31, 2013 December 31, 2012
Fees
Management and incentive fees:
Management fees $ 118,781 $ 119,410 $ 104,804 $ 459,496 $ 423,921
Incentive fees - - - - -
Management and incentive fees 118,781 119,410 104,804 459,496 423,921
Monitoring and transaction fees:
Monitoring fees 26,282 33,010 32,988 120,267 116,565
Transaction fees 53,507 54,968 41,231 150,118 96,454
Fee credits (39,509 ) (46,597 ) (37,721 ) (136,662 ) (97,362 )
Net monitoring and transaction fees 40,280 41,381 36,498 133,723 115,657
Total fees 159,061 160,791 141,302 593,219 539,578
Expenses
Compensation and benefits 66,994 65,400 53,383 231,911 192,765
Occupancy and related charges 12,110 13,367 12,075 48,045 48,562
Other operating expenses 49,466 37,586 43,463 154,982 147,253
Total expenses 128,570 116,353 108,921 434,938 388,580
Fee Related Earnings 30,491 44,438 32,381 158,281 150,998
Investment income (loss)
Realized carried interest 250,500 81,532 168,320 690,027 475,707
Unrealized carried interest 330,113 263,982 86,976 692,085 917,048
Gross carried interest 580,613 345,514 255,296 1,382,112 1,392,755
Less: allocation to KKR carry pool (234,547 ) (139,903 ) (102,058 ) (558,014 ) (565,543 )
Less: management fee refunds (8,564 ) (7,767 ) (8,712 ) (30,282 ) (143,723 )
Net carried interest 337,502 197,844 144,526 793,816 683,489
Realized other investment income (loss) - - - - -
Unrealized other investment income (loss) 824 3,357 1,158 1,897 599
Total other investment income (loss) 824 3,357 1,158 1,897 599
Total investment income (loss) 338,326 201,201 145,684 795,713 684,088
Income (Loss) before noncontrolling interests
in Income of consolidated entities 368,817 245,639 178,065 953,994 835,086
Income (Loss) attributable to
noncontrolling interests 256 433 292 1,498 3,390
Economic Net Income (Loss) $ 368,561 $ 245,206 $ 177,773 $ 952,496 $ 831,696
Assets Under Management $ 61,242,900 $ 59,678,300 $ 49,127,600 $ 61,242,900 $ 49,127,600
Fee Paying Assets Under Management $ 50,156,300 $ 49,889,500 $ 41,173,000 $ 50,156,300 $ 41,173,000
Committed Dollars Invested $ 2,122,600 $ 1,805,800 $ 1,220,800 $ 5,840,900 $ 3,026,300
Uncalled Commitments $ 20,101,600 $ 21,103,800 $ 14,271,100 $ 20,101,600 $ 14,271,100
KKR
STATEMENTS OF OPERATIONS AND OTHER SELECTED FINANCIAL INFORMATION
PUBLIC MARKETS SEGMENTS (UNAUDITED)
(Amounts in thousands)
Quarter Ended Year Ended
December 31, 2013 September 30, 2013 December 31, 2012 December 31, 2013 December 31, 2012
Fees
Management and incentive fees:
Management fees $ 56,465 $ 53,835 $ 39,551 $ 206,134 $ 105,186
Incentive fees 36,695 1,225 12,350 72,359 43,845
Management and incentive fees
93,160 55,060 51,901 278,493 149,031
Monitoring and transaction fees:
Monitoring fees - - - - -
Transaction fees 9,431 20,534 1,974 40,314 14,495
Fee credits (7,505 ) (15,185 ) (270 ) (29,950 ) (8,368 )
Net monitoring and transaction fees 1,926 5,349 1,704 10,364 6,127
Total fees 95,086 60,409 53,605 288,857 155,158
Expenses
Compensation and benefits 17,082 18,606 16,097 77,378 50,705
Occupancy and related charges 1,800 1,906 1,479 6,863 5,606
Other operating expenses (a) 12,567 19,670 6,596 49,210 18,350
Total expenses 31,449 40,182 24,172 133,451 74,661
Fee Related Earnings (a) 63,637 20,227 29,433 155,406 80,497
Investment income (loss)
Realized carried interest - - - - -
Unrealized carried interest 17,126 14,022 13,640 62,338 39,155
Gross carried interest 17,126 14,022 13,640 62,338 39,155
Less: allocation to KKR carry pool (6,850 ) (5,609 ) (5,456 ) (24,935 ) (15,663 )
Less: management fee refunds - - - - -
Net carried interest 10,276 8,413 8,184 37,403 23,492
Realized other investment income (loss) - - - - -
Unrealized other investment income (loss) 36 (4 ) 30 116 20
Total other investment income (loss) 36 (4 ) 30 116 20
Total investment income (loss) 10,312 8,409 8,214 37,519 23,512
Income (Loss) before noncontrolling interests
in Income of consolidated entities 73,949 28,636 37,647 192,925 104,009
Income (Loss) attributable to
noncontrolling interests 625 202 292 1,560 1,079
Economic Net Income (Loss) $ 73,324 $ 28,434 $ 37,355 $ 191,365 $ 102,930
Assets Under Management $ 33,077,400 $ 30,490,900 $ 26,399,900 $ 33,077,400 $ 26,399,900
Fee Paying Assets Under Management $ 27,241,200 $ 23,722,400 $ 19,673,000 $ 27,241,200 $ 19,673,000
Committed Dollars Invested $ 690,900 $ 326,400 $ 226,400 $ 1,553,000 $ 784,800
Uncalled Commitments $ 2,362,300 $ 1,614,600 $ 1,800,800 $ 2,362,300 $ 1,800,800
Gross Dollars Invested $ 1,481,100 $ 1,498,000 $ 365,600 $ 4,213,300 $ 1,678,700
(a) For the quarter ended September 30, 2013 and for the year ended December 31, 2013, other operating expenses include $9.7 million of one-time expenses incurred in connection with the launch of a closed-end fund.
KKR
STATEMENTS OF OPERATIONS AND OTHER SELECTED FINANCIAL INFORMATION
CAPITAL MARKETS AND PRINCIPAL ACTIVITIES SEGMENTS (UNAUDITED)
(Amounts in thousands)
Quarter Ended Year Ended
December 31, 2013 September 30, 2013 December 31, 2012 December 31, 2013 December 31, 2012
Fees
Management and incentive fees:
Management fees $ - $ - $ - $ - $ -
Incentive fees - - - - -
Management and incentive fees - - - - -
Monitoring and transaction fees:
Monitoring fees - - - - -
Transaction fees 41,537 53,625 33,635 146,254 129,159
Fee credits - - - - -
Net monitoring and transaction fees 41,537 53,625 33,635 146,254 129,159
Total fees 41,537 53,625 33,635 146,254 129,159
Expenses
Compensation and benefits 11,869 8,223 6,521 34,483 29,341
Occupancy and related charges 354 401 209 1,419 900
Other operating expenses 3,309 3,628 2,740 11,691 10,602
Total expenses 15,532 12,252 9,470 47,593 40,843
Fee Related Earnings 26,005 41,373 24,165 98,661 88,316
Investment income (loss)
Realized carried interest - - - - -
Unrealized carried interest - - - - -
Gross carried interest - - - - -
Less: allocation to KKR carry pool - - - - -
Less: management fee refunds - - - - -
Net carried interest - - - - -
Realized other investment income (loss) 250,856 102,766 366,878 657,139 866,776
Unrealized other investment income (loss) 71,965 197,353 (257,830 ) 299,249 243,727
Total other investment income (loss) (a) 322,821 300,119 109,048 956,388 1,110,503
Total investment income (loss) 322,821 300,119 109,048 956,388 1,110,503
Income (Loss) before noncontrolling interests
in Income of consolidated entities 348,826 341,492 133,213 1,055,049 1,198,819
Income (Loss) attributable to
noncontrolling interests 1,062 1,385 661 3,329 2,574
Economic Net Income (Loss) $ 347,764 $ 340,107 $ 132,552 $ 1,051,720 $ 1,196,245
Syndicated Capital $ 130,000 $ 716,500 $ 268,500 $ 1,112,100 $ 543,800
(a) Amount is net of (i) interest expense and (ii) certain compensation and general and administrative expenses incurred in the generation of net realized principal investment income that is not included in “Compensation and benefits” and “Other operating expenses” above and on both page 6 and page 7.
...
KKR
BALANCE SHEETS
TOTAL REPORTABLE SEGMENTS (UNAUDITED)
(Amounts in thousands, except per unit amounts)
As of December 31, 2013
Capital
Markets and
Private Public Principal Total
Markets Markets Activities Reportable
Segment Segment Segment Segments
Cash and short-term investments $ 177,547 $ 19,571 $ 1,963,979 $ 2,161,097
Investments - - 4,980,265 (a) 4,980,265
Unrealized carry 1,116,996 62,342 - 1,179,338
Other assets 305,890 278,978 77,489 662,357
Total assets $ 1,600,433 $ 360,891 $ 7,021,733 $ 8,983,057
Debt obligations $ - $ - $ 1,000,000 $ 1,000,000
Other liabilities 77,374 18,622 53,200 149,196
Total liabilities 77,374 18,622 1,053,200 1,149,196
Noncontrolling interests 1,302 1,071 68,888 71,261
Book value $ 1,521,757 $ 341,198 $ 5,899,645 $ 7,762,600
Book value per adjusted unit $ 10.83
As of December 31, 2012
Capital
Markets and
Private Public Principal Total
Markets Markets Activities Reportable
Segment Segment Segment Segments
Cash and short-term investments $ 358,237 $ 28,690 $ 1,147,360 $ 1,534,287
Investments - - 4,758,157 4,758,157
Unrealized carry 730,292 24,939 - 755,231
Other assets 207,047 280,472 62,119 549,638
Total assets $ 1,295,576 $ 334,101 $ 5,967,636 $ 7,597,313
Debt obligations $ - $ - $ 500,000 $ 500,000
Other liabilities 78,724 16,433 24,275 119,432
Total liabilities 78,724 16,433 524,275 619,432
Noncontrolling interests 1,339 739 18,619 20,697
Book value $ 1,215,513 $ 316,929 $ 5,424,742 $ 6,957,184
Book value per adjusted unit $ 9.87
(a) See Capital Markets and Principal Activities segment schedule of investments that follows.
KKR
CAPITAL MARKETS AND PRINCIPAL ACTIVITIES SEGMENT SCHEDULE OF INVESTMENTS (UNAUDITED)
(Amounts in thousands, except percentage amounts)
As of December 31, 2013
Investment Cost Fair
Value
Fair Value as
a Percentage
of Investments
Co-investments in Portfolio Companies of
Private Equity Investment Vehicles $ 1,544,331 $ 2,130,058 42.8 %
Private Equity Investment Vehicles
KKR 2006 Fund L.P. 330,066 389,879 7.8 %
KKR European Fund III L.P. 244,292 312,279 6.3 %
KKR North America Fund XI L.P. 96,340 106,079 2.1 %
KKR Asian Fund L.P. 89,978 101,380 2.0 %
KKR European Fund II L.P. 39,013 43,052 0.9 %
KKR Millenium Fund L.P. 47,430 39,793 0.8 %
KKR E2 Investors, L.P. 14,209 27,707 0.6 %
Co-Investments 16,249 17,064 0.3 %
KKR China Growth Fund L.P. 3,452 4,303 0.1 %
KKR European Fund L.P. 47,664 4,273 0.1 %
KKR Asian Fund II L.P. 2,624 2,563 0.1 %
931,317 1,048,372 21.1 %
Private Equity Total 2,475,648 3,178,430 63.9 %
Real Assets
Energy Income and Growth 207,661 211,301 4.2 %
Real Estate Fund 79,363 108,487 2.2 %
Infrastructure Fund 36,778 38,420 0.8 %
Co-Investments 11,241 13,117 0.3 %
Natural Resources 12,842 8,147 0.2 %
Real Assets Total 347,885 379,472 7.7 %
Private Markets Total 2,823,533 3,557,902 71.6 %
Public Markets Investment Vehicles
Liquid Credit 187,262 198,784 4.0 %
Special Situations 125,795 138,881 2.8 %
Credit Relative Value 122,000 136,643 2.7 %
Long/Short Equities 100,000 121,098 2.4 %
Direct Lending 56,720 63,163 1.3 %
Mezzanine Fund 20,380 24,659 0.5 %
Public Markets Total 612,157 683,228 13.7 %
Other 715,477 739,135 14.7 %
Total Investments $ 4,151,167 $ 4,980,265 100.0 %
Significant Aggregate Investments: (a)
Alliance Boots GmbH $ 228,769 $ 640,717 12.9 %
HCA Inc. 70,117 287,324 5.8 %
First Data Corporation 327,211 265,062 5.3 %
626,097 1,193,103 24.0 %
Other investments 3,525,070 3,787,162 76.0 %
Total Investments $ 4,151,167 $ 4,980,265 100.0 %
(a) The significant aggregate investments include investments in portfolio companies with individual fair values of 5% or more of the Capital Markets and Principal Activities segment investments balance as of December 31, 2013. The fair value figures include the co-investment and the limited partner and/or general partner interests in the underlying portfolio company.
KKR
ASSETS UNDER MANAGEMENT* (UNAUDITED)
(Amounts in thousands)
Private
Markets
Segment
Public
Markets
Segment
Total
Reportable
Segments
Quarter Ended December 31, 2013
September 30, 2013 $ 59,678,300 $ 30,490,900 $ 90,169,200
New Capital Raised 1,294,100 2,523,800 3,817,900
Distributions (3,088,900 ) (735,100 ) (b) (3,824,000 )
Foreign Exchange 10,700 - 10,700
Change in Value 3,348,700 797,800 4,146,500
December 31, 2013 $ 61,242,900 $ 33,077,400 $ 94,320,300
Year Ended December 31, 2013
December 31, 2012 $ 49,127,600 $ 26,399,900 $ 75,527,500
New Capital Raised 13,613,100 7,580,400 21,193,500
Distributions (9,197,900 ) (2,687,600 ) (c) (11,885,500 )
Net Changes in Fee Base of Certain Funds (a) (272,300 ) - (272,300 )
Foreign Exchange 32,800 - 32,800
Change in Value 7,939,600 1,784,700 9,724,300
December 31, 2013 $ 61,242,900 $ 33,077,400 $ 94,320,300
KKR
FEE PAYING ASSETS UNDER MANAGEMENT* (UNAUDITED)
(Amounts in thousands)
Private
Markets
Segment
Public
Markets
Segment
Total
Reportable
Segments
Quarter Ended December 31, 2013
September 30, 2013 $ 49,889,500 $ 23,722,400 $ 73,611,900
New Capital Raised 1,469,800 3,473,700 4,943,500
Distributions (1,327,000 ) (591,100 ) (b) (1,918,100 )
Foreign Exchange 65,300 - 65,300
Change in Value 58,700 636,200 694,900
December 31, 2013 $ 50,156,300 $ 27,241,200 $ 77,397,500
Year Ended December 31, 2013
December 31, 2012 $ 41,173,000 $ 19,673,000 $ 60,846,000
New Capital Raised 13,200,600 7,927,500 21,128,100
Distributions (3,860,800 ) (1,875,900 ) (c) (5,736,700 )
Net Changes in Fee Base of Certain Funds (a) (654,700 ) - (654,700 )
Foreign Exchange 172,700 - 172,700
Change in Value 125,500 1,516,600 1,642,100
December 31, 2013 $ 50,156,300 $ 27,241,200 $ 77,397,500
* Exclude those assets managed by entities where KKR holds less than a 50% ownership interest.
(a) Represents the impact of certain funds entering the post-investment period.
(b) Includes $327.3 million of redemptions by fund investors.
(c) Includes $1,021.8 million of redemptions by fund investors.
KKR
INVESTMENT VEHICLE SUMMARY (a) (UNAUDITED)
As of December 31, 2013
(Amounts in millions, except percentages)
Investment Period Amount
Percentage
Committed
Commencement Uncalled by General Remaining Remaining Fair
Date End Date Commitment Commitments Partner Invested Realized Cost Value
Private Markets
Private Equity Funds
Asian Fund II 4/2013 4/2019 $ 5,825.0 $ 5,615.1 1.3% $ 209.9 $ - $ 209.9 $ 201.1
North America Fund XI 9/2012 9/2018 8,718.4 5,903.3 2.9% 2,815.1 3.9 2,815.1 3,079.3
China Growth Fund 11/2010 11/2016 1,010.0 674.5 1.0% 335.5 32.6 318.0 399.9
E2 Investors (Annex Fund) 8/2009 11/2013 209.5 13.6 4.5% 195.9 - 195.9 426.3
European Fund III 3/2008 3/2014 6,241.1 1,689.4 4.6% 4,551.7 653.5 4,194.4 5,660.0
Asian Fund 7/2007 4/2013 3,983.3 134.1 2.5% 3,849.2 1,693.6 2,979.1 5,128.3
2006 Fund 9/2006 9/2012 17,642.2 1,205.4 2.1% 16,436.8 11,719.7 9,770.5 15,094.9
European Fund II 11/2005 10/2008 5,750.8 - 2.1% 5,750.8 4,513.2 2,220.4 3,960.0
Millennium Fund 12/2002 12/2008 6,000.0 - 2.5% 6,000.0 10,119.1 1,837.9 3,181.2
European Fund 12/1999 12/2005 3,085.4 - 3.2% 3,085.4 8,720.0 - 51.6
Total Private Equity Funds 58,465.7 15,235.4 43,230.3 37,455.6 24,541.2 37,182.6
Co-Investment Vehicles Various Various 3,166.3 974.5 Various 2,191.8 2,418.8 1,583.3 2,044.3
Total Private Equity 61,632.0 16,209.9 45,422.1 39,874.4 26,124.5 39,226.9
Real Assets
Energy Income and Growth Fund 9/2013 9/2018 1,413.5 1,269.4 17.9% 144.1 6.1 137.6 140.7
Natural Resources Fund Various Various 876.1 303.1 Various 573.0 73.2 519.4 327.8
Global Energy Opportunities Various Various 861.0 716.6 Various 144.4 0.7 144.4 132.3
Infrastructure Fund Various Various 1,042.4 388.6 4.8% 653.8 24.3 653.8 710.3
Infrastructure Co-Investments Various Various 1,356.0 251.5 Various 1,104.5 226.8 1,104.5 1,319.5
Real Estate Partners Americas 5/2013 12/2016 1,229.1 962.5 16% 266.6 - 266.6 368.4
Real Assets 6,778.1 3,891.7 2,886.4 331.1 2,826.3 2,999.0
Private Markets Total 68,410.1 20,101.6 48,308.5 40,205.5 28,950.8 42,225.9
Public Markets
Special Situations Vehicles Various Various 3,519.1 1,703.7 Various 1,815.4 729.2 1,452.7 1,660.7
Mezzanine Fund 3/2010 8/2015 987.0 464.1 4.6% 522.9 146.6 464.9 545.3
Direct Lending Vehicles Various Various 748.8 194.5 Various 554.3 27.3 554.3 596.6
Public Markets Total 5,254.9 2,362.3 2,892.6 903.1 2,471.9 2,802.6
Grand Total $ 73,665.0 $ 22,463.9 $ 51,201.1 $ 41,108.6 $ 31,422.7 $ 45,028.5
(a) Reflects investment vehicles for which KKR has the ability to earn carried interest.
KKR
DISTRIBUTION CALCULATION (UNAUDITED)
(Amounts in thousands, except unit and per unit amounts)
Quarter Ended
Year Ended
December 31, 2013 September 30, 2013 December 31, 2012 December 31, 2013 December 31, 2012
Cash Revenues
Fees $ 295,684 $ 274,825 $ 228,542 $ 1,028,330 $ 823,895
Realized cash carry 250,500 81,532 168,320 690,027 475,707
Net realized principal investment income 250,856 102,766 366,878 657,139 866,776
Total Cash Revenue 797,040 459,123 763,740 2,375,496 2,166,378
Cash Expenses
Realized cash carry allocated to carry pool 100,200 32,613 67,328 276,011 190,283
Compensation and benefits 95,945 92,229 76,001 343,772 272,811
Occupancy and related charges 14,264 15,674 13,763 56,327 55,068
Other operating expenses 65,342 60,884 52,799 215,883 176,205
Total Cash Expenses 275,751 201,400 209,891 891,993 694,367
Cash income (loss) before noncontrolling interests and local taxes 521,289 257,723 553,849 1,483,503 1,472,011
Less: local income taxes (8,995 ) (4,566 ) (6,314 ) (21,238 ) (15,572 )
Less: noncontrolling interests (1,943 ) (2,020 ) (1,245 ) (6,387 ) (7,043 )
Total distributable earnings 510,351 251,137 546,290 1,455,878 1,449,396
Less: estimated current corporate income taxes (26,809 ) (30,140 ) (23,078 ) (98,814 ) (66,733 )
Distributable Earnings, net of taxes 483,542 220,997 523,212 1,357,064 1,382,663
Less: Undistributed net realized principal investment income (150,514 ) (61,660 ) (44,497 ) (394,285 ) (544,395 )
Distributed Earnings $ 333,028 $ 159,337 $ 478,715 $ 962,779 $ 838,268
Distribution per KKR & Co. L.P. common unit $ 0.48 $ 0.23 $ 0.70 $ 1.40 $ 1.22
Components of Distribution per KKR & Co. L.P. common unit
After-tax FRE $ 0.12 $ 0.10 $ 0.08 $ 0.42 $ 0.32
Realized Cash Carry $ 0.22 $ 0.07 $ 0.15 $ 0.60 $ 0.43
Distributed Net Realized Principal Investment Income $ 0.14 $ 0.06 $ 0.47 $ 0.38 $ 0.47
Adjusted Units (Reduced for Unvested Common Units) 692,512,345 689,795,274 685,916,967
Payout Ratio 68.9 % 72.1 % 91.5 % 70.9 % 60.6 %
DISTRIBUTION POLICY
KKR intends to make quarterly cash distributions in amounts that in the aggregate are expected to constitute substantially all of the cash earnings of its investment management business and 40% of the net cash income from realized principal investments, in each case in excess of amounts determined by KKR to be necessary or appropriate to provide for the conduct of its business, to make appropriate investments in its business and its investment funds and to comply with applicable law and any of its debt instruments or other obligations. For purposes of KKR’s distribution policy, its distributions are expected to consist of (i) FRE, (ii) carry distributions received from KKR’s investment funds which have not been allocated as part of its carry pool and (iii) a percentage of net realized principal investment income. This amount is expected to be reduced by (i) corporate and applicable local taxes, if any, (ii) non-controlling interests, and (iii) amounts determined by KKR to be necessary or appropriate for the conduct of its business and other matters as discussed above.
The declaration and payment of any distributions are subject to the discretion of the board of directors of the general partner of KKR & Co. L.P., which may change the distribution policy at any time, and the terms of its limited partnership agreement. There can be no assurance that distributions will be made as intended or at all or that unitholders will receive sufficient distributions to satisfy payment of their tax liabilities as limited partners of KKR & Co. L.P. When KKR & Co. L.P. receives distributions from the KKR Group Partnerships (the holding companies of the KKR business), KKR Holdings receives its pro rata share of such distributions from the KKR Group Partnerships.
KKR
Notes to Reportable Segments (Unaudited)
The segment key performance measures that follow are used by management in making operating and resource deployment decisions as well as assessing the overall performance of each of KKR’s reportable business segments. The reportable segments for KKR’s business are presented prior to giving effect to the allocation of income (loss) between KKR & Co. L.P. and KKR Holdings L.P. and as such represent the business in total. In addition, KKR’s reportable segments are presented without giving effect to the consolidation of the funds that KKR manages.
KKR discloses the following financial measures in this earnings release that are calculated and presented using methodologies other than in accordance with GAAP. We believe that providing these performance measures on a supplemental basis to our GAAP results is helpful to unitholders in assessing the overall performance of KKR’s businesses. These financial measures should not be considered as a substitute for similar financial measures calculated in accordance with GAAP. We caution readers that these non-GAAP financial measures may differ from the calculations of other investment managers, and as a result, may not be comparable to similar measures presented by other investment managers. Reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are included elsewhere within this earnings release.
Fee related earnings (“FRE”) is comprised of segment fees less segment expenses (other than certain compensation and general and administrative expenses incurred in the generation of net realized principal investment income). This measure is used by management as an alternative measurement of the operating earnings of KKR and its business segments before investment income. We believe this measure is useful to unitholders as it provides additional insight into the operating profitability of our fee generating management companies and capital markets businesses. The components of FRE on a segment basis differ from the equivalent GAAP amounts on a consolidated basis as a result of: (i) the inclusion of management fees earned from consolidated funds that were eliminated in consolidation; (ii) the exclusion of fees and expenses of certain consolidated entities; (iii) the exclusion of charges relating to the amortization of intangible assets; (iv) the exclusion of charges relating to carry pool allocations; (v) the exclusion of non-cash equity charges and other non-cash compensation charges borne by KKR Holdings or incurred under the KKR & Co. L.P. 2010 Equity Incentive Plan; (vi) the exclusion of certain reimbursable expenses; and (vii) the exclusion of certain non-recurring items.
Economic net income (loss) (“ENI”) is a measure of profitability for KKR’s reportable segments and is used by management as an alternative measurement of the operating and investment earnings of KKR and its business segments. We believe this measure is useful to unitholders as it provides additional insight into the overall profitability of KKR’s businesses inclusive of investment income and carried interest. ENI is comprised of: (i) FRE plus (ii) segment investment income (loss), which is reduced for carry pool allocations, management fee refunds, interest expense and certain compensation and general and administrative expenses incurred in the generation of net realized principal investment income; less (iii) certain economic interests in KKR’s segments held by third parties. ENI differs from net income (loss) on a GAAP basis as a result of: (i) the exclusion of the items referred to in FRE above; (ii) the exclusion of investment income (loss) relating to noncontrolling interests; and (iii) the exclusion of income taxes.
Net realized principal investment income refers to net cash income from (i) realized investment gains and losses excluding certain realized investment losses from principal investments during the second quarter of 2013 to the extent unrealized losses on these investments were recognized prior to the combination with KPE on October 1, 2009, (ii) dividend income and (iii) interest income net of interest expense less certain compensation and general and administrative expenses incurred in the generation of net realized principal investment income in each case generated by KKR’s principal investments held on or through KKR’s balance sheet in our Capital Markets and Principal Activities segment. This is a term to describe a portion of KKR’s quarterly distribution.
Total distributable earnings is the sum of (i) FRE, (ii) carry distributions received from KKR’s investment funds which have not been allocated as part of its carry pool and (iii) net realized principal investment income; less (i) applicable local income taxes, if any, and (ii) noncontrolling interests. We believe this measure is useful to unitholders as it provides a supplemental measure to assess performance, excluding the impact of mark-to-market gains (losses), and also assess amounts available for distribution to KKR unitholders. However, total distributable earnings is not a measure that calculates actual distributions under KKR’s current distribution policy.
Assets under management (“AUM”) represent the assets from which KKR is entitled to receive fees or a carried interest and general partner capital. We believe this measure is useful to unitholders as it provides additional insight into KKR’s capital raising activities and the overall activity in its investment funds and vehicles. KKR calculates the amount of AUM as of any date as the sum of: (i) the fair value of the investments of KKR’s investment funds plus uncalled capital commitments from these funds; (ii) the fair value of investments in KKR’s co-investment vehicles; (iii) the net asset value of certain of KKR's fixed income products; (iv) the value of outstanding structured finance vehicles; and (v) the fair value of other assets managed by KKR. KKR’s definition of AUM is not based on any definition of AUM that may be set forth in the agreements governing the investment funds, vehicles or accounts that it manages or calculated pursuant to any regulatory definitions.
Fee paying AUM (“FPAUM”) represents only those assets under management from which KKR receives fees. We believe this measure is useful to unitholders as it provides additional insight into the capital base upon which KKR earns management fees. This relates to KKR’s capital raising activities and the overall activity in its investment funds and vehicles, for only those funds and vehicles where KKR receives fees (i.e., excluding vehicles that receive only carried interest or general partner capital). FPAUM is the sum of all of the individual fee bases that are used to calculate KKR’s fees and differs from AUM in the following respects: (i) assets from which KKR does not receive a fee are excluded (i.e., assets with respect to which it receives only carried interest) and (ii) certain assets, primarily in its private equity funds, are reflected based on capital commitments and invested capital as opposed to fair value because fees are not impacted by changes in the fair value of underlying investments.
Committed dollars invested is the aggregate amount of capital commitments that have been invested by KKR’s investment funds and carry-yielding co-investment vehicles and is used as a measure of investment activity for KKR and its business segments during a given period. We believe this measure is useful to unitholders as it provides additional insight into KKR’s investment of committed capital. Such amounts include: (i) capital invested by fund investors and co-investors with respect to which KKR is entitled to a fee or carried interest and (ii) capital invested by KKR’s investment funds and vehicles.
Gross dollars invested is the aggregate amount of capital that has been invested by all of KAM’s investment vehicles in our private credit non-liquid strategies and is used as a measure of investment activity for KAM in a given period. We believe this measure is useful to unitholders as it provides additional insight into KAM’s investment of capital across its private credit non-liquid strategies for all the investment vehicles which it manages. Such amounts include: (i) capital invested by fund investors and co-investors with respect to which KAM is entitled to a fee or carried interest and (ii) internal and proprietary capital invested by KAM’s investment funds and vehicles.
Syndicated capital is generally the aggregate amount of capital in transactions originated by KKR investment funds and carry-yielding co-investment vehicles, which has been distributed to third parties in exchange for a fee. It does not include (i) capital invested in such transactions by KKR investment funds and carry-yielding co-investment vehicles, which is instead reported in committed dollars invested and (ii) debt capital that is arranged as part of the acquisition financing of transactions originated by KKR investment funds and vehicles. Syndicated capital is used as a measure of investment activity for KKR and its business segments during a given period, and we believe that this measure is useful to unitholders as it provides additional insight into levels of syndication activity in KKR’s Capital Markets and Principal Activities segment and across its investment platform.
Uncalled commitments are used as a measure of unfunded capital commitments that KKR’s investment funds and carry-paying co-investment vehicles have received from partners to contribute capital to fund future investments. We believe this measure is useful to unitholders as it provides additional insight into the amount of capital that is available to KKR’s investment funds and vehicles to make future investments.
Adjusted units are used as a measure of the total equity ownership of KKR that is held by KKR & Co. L.P. and KKR Holdings and represent the fully diluted unit count using the if-converted method. We believe this measure is useful to unitholders as it provides an indication of the total equity ownership of KKR as if all outstanding KKR Holdings units had been exchanged for common units of KKR & Co. L.P.
Core interest expense is used by management as an alternative measurement of interest expense incurred by KKR on a segment basis and excludes interest expense related to debt obligations from investment financing arrangements related to certain of KKR’s private equity funds, investment vehicles and principal investments. These financing arrangements are not direct obligations of the general partners of KKR’s private equity funds or its management companies. On a segment basis, interest expense is included in other investment income. We believe this measure is useful to unitholders as it provides an indication of the amount of interest expense borne by KKR excluding interest expense that is allocated to KKR’s investment funds and vehicles and other noncontrolling interest holders. Additionally, we believe this measure is useful for analyzing KKR’s ability to service its debt obligations.
Book value is a measure of the net assets of KKR’s reportable segments and is used by management primarily in assessing the unrealized value of KKR’s investment portfolio, including carried interest, as well as KKR’s overall liquidity position. We believe this measure is useful to unitholders as it provides additional insight into the assets and liabilities of KKR excluding the assets and liabilities that are allocated to noncontrolling interest holders. Book value differs from KKR & Co. L.P. Partners’ Capital on a GAAP basis primarily as a result of the exclusion of ownership interests attributable to KKR Holdings.
Fee related EBITDA is comprised of FRE before the impact of depreciation of fixed assets and amortization of intangible assets and is used by management as a measure of the cash earnings of KKR and its business segments before investment income. We believe this measure is useful to unitholders as it provides additional insight into the amount of cash earnings generated by KKR’s management companies and capital markets businesses.
Cash and short-term investments represent cash and liquid short-term investments in high-grade, short-duration cash management strategies used by KKR to generate additional yield on our excess liquidity and is used by management in evaluating KKR’s liquidity position. We believe this measure is useful to unitholders as it provides additional insight into KKR’s available liquidity. Cash and short-term investments differ from cash and cash equivalents on a GAAP basis as a result of the inclusion of liquid short-term investments in cash and short-term investments.
KKR
EXHIBIT A
RECONCILIATION OF NET INCOME (LOSS) ATTRIBUTABLE TO KKR & CO. L.P. PER COMMON UNIT (GAAP BASIS)
TO ENI AFTER TAXES PER ADJUSTED UNIT (UNAUDITED)
(Amounts in thousands, except common unit and per common unit amounts)
Quarter Ended
December 31, 2013 September 30, 2013 December 31, 2012
Net income (loss) attributable to KKR & Co. L.P. per common unit - Basic $ 0.96 $ 0.73 $ 0.39
Weighted Average Common Units Outstanding - Basic 288,045,501 282,148,802 249,303,558
Net income (loss) attributable to KKR & Co. L.P. 277,913 204,740 96,728
Plus: Net income (loss) attributable to noncontrolling
interests held by KKR Holdings L.P.
393,739 300,169 170,256
Plus: Non-cash equity based charges 60,331 85,215 70,170
Plus: Amortization of intangibles and other, net 45,265 15,979 4,898
Plus: Income taxes 12,401 7,644 5,628
Economic net income (loss) 789,649 613,747 347,680
Less: Equity-based charges associated with the KKR & Co. L.P. 2010 equity incentive plan 30,128 31,227 15,198
Economic net income (loss) after equity-based charges 759,521 582,520 332,482
Less: Provision for income taxes 16,048 11,950 10,632
Economic net income (loss) after taxes and equity-based charges 743,473 570,570 321,850
Plus: Equity-based charges associated with the KKR & Co. L.P. 2010 equity incentive plan 30,128 31,227 15,198
Economic net income (loss) after taxes 773,601 601,797 337,048
Weighted Average Adjusted Units 716,807,180 715,781,663 704,805,537
Economic net income (loss) after taxes per adjusted unit 1.08 0.84 0.48
Weighted Average Adjusted Units 716,807,180 715,781,663 704,805,537
Economic net income (loss) after taxes 773,601 601,797 337,048
Less: Equity-based charges associated with the KKR & Co. L.P. 2010 equity incentive plan 30,128 31,227 15,198
Economic net income (loss) after taxes and equity-based charges 743,473 570,570 321,850
Weighted Average Adjusted Units 716,807,180 715,781,663 704,805,537
Economic net income (loss) after taxes and equity-based charges per adjusted unit $ 1.04 $ 0.80 $ 0.46
Year Ended
December 31, 2013 December 31, 2012
Net income (loss) attributable to KKR & Co. L.P. per common unit - Basic $ 2.51 $ 2.35
Weighted Average Common Units Outstanding - Basic 274,910,628 238,503,257
Net income (loss) attributable to KKR & Co. L.P. 691,226 560,836
Plus: Net income (loss) attributable to noncontrolling
interests held by KKR Holdings L.P.
1,056,126 1,116,740
Plus: Non-cash equity based charges 307,514 400,207
Plus: Amortization of intangibles and other, net 102,789 9,683
Plus: Income taxes 37,926 43,405
Economic net income (loss) 2,195,581 2,130,871
Less: Equity-based charges associated with the KKR & Co. L.P. 2010 equity incentive plan 114,709 62,877
Economic net income (loss) after equity-based charges 2,080,872 2,067,994
Less: Provision for income taxes 61,601 102,420
Economic net income (loss) after taxes and equity-based charges 2,019,271 1,965,574
Plus: Equity-based charges associated with the KKR & Co. L.P. 2010 equity incentive plan 114,709 62,877
Economic net income (loss) after taxes 2,133,980 2,028,451
Weighted Average Adjusted Units 714,835,941 699,988,443
Economic net income (loss) after taxes per adjusted unit 2.99 2.90
Weighted Average Adjusted Units 714,835,941 699,988,443
Economic net income (loss) after taxes 2,133,980 2,028,451
Less: Equity-based charges associated with the KKR & Co. L.P. 2010 equity incentive plan 114,709 62,877
Economic net income (loss) after taxes and equity-based charges 2,019,271 1,965,574
Weighted Average Adjusted Units 714,835,941 699,988,443
Economic net income (loss) after taxes and equity-based charges per adjusted unit $ 2.82 $ 2.81
KKR
EXHIBIT A (CONTINUED)
RECONCILIATION OF NET INCOME (LOSS) ATTRIBUTABLE TO KKR & CO. L.P. (GAAP BASIS)
TO ECONOMIC NET INCOME (LOSS), FEE RELATED EARNINGS, FEE RELATED EBITDA, AND TOTAL DISTRIBUTABLE EARNINGS (UNAUDITED)
(Amounts in thousands)
Quarter Ended
December 31, 2013 September 30, 2013 December 31, 2012
Net income (loss) attributable to KKR & Co. L.P. $ 277,913 $ 204,740 $ 96,728
Plus: Net income (loss) attributable to noncontrolling
interests held by KKR Holdings L.P.
393,739 300,169 170,256
Plus: Non-cash equity based charges 60,331 85,215 70,170
Plus: Amortization of intangibles and other, net 45,265 15,979 4,898
Plus: Income taxes 12,401 7,644 5,628
Economic net income (loss) 789,649 613,747 347,680
Plus: Income attributable to segment noncontrolling interests 1,943 2,020 1,245
Less: Investment income (loss) 671,459 509,729 262,946
Fee related earnings 120,133 106,038 85,979
Plus: Depreciation and amortization 3,658 3,601 3,580
Fee related EBITDA $ 123,791 $ 109,639 $ 89,559
Less: Depreciation and amortization 3,658 3,601 3,580
Plus: Realized cash carry, net of realized cash carry allocated to carry pool 150,300 48,919 100,992
Plus: Net realized principal investment income 250,856 102,766 366,878
Less: Local income taxes and noncontrolling interests 10,938 6,586 7,559
Total distributable earnings $ 510,351 $ 251,137 $ 546,290
Year Ended
December 31, 2013 December 31, 2012
Net income (loss) attributable to KKR & Co. L.P. $ 691,226 $ 560,836
Plus: Net income (loss) attributable to noncontrolling
interests held by KKR Holdings L.P.
1,056,126 1,116,740
Plus: Non-cash equity based charges 307,514 400,207
Plus: Amortization of intangibles and other, net 102,789 9,683
Plus: Income taxes 37,926 43,405
Economic net income (loss) 2,195,581 2,130,871
Plus: Income attributable to segment noncontrolling interests 6,387 7,043
Less: Investment income (loss) 1,789,620 1,818,103
Fee related earnings 412,348 319,811
Plus: Depreciation and amortization 14,648 12,499
Fee related EBITDA $ 426,996 $ 332,310
Less: Depreciation and amortization 14,648 12,499
Plus: Realized cash carry, net of realized cash carry allocated to carry pool 414,016 285,424
Plus: Net realized principal investment income 657,139 866,776
Less: Local income taxes and noncontrolling interests 27,625 22,615
Total distributable earnings $ 1,455,878 $ 1,449,396
KKR
EXHIBIT A (CONTINUED)
RECONCILIATION OF KKR & CO. L.P. PARTNERS' CAPITAL (GAAP BASIS)
TO BOOK VALUE AND BOOK VALUE PER ADJUSTED UNIT (UNAUDITED)
(Amounts in thousands, except common unit and per common unit amounts)
As of As of
December 31, 2013 December 31, 2012
KKR & Co. L.P. partners’ capital $ 2,722,010 $ 2,004,359
Noncontrolling interests held by KKR Holdings L.P. 5,116,761 4,981,864
Equity impact of KKR Management Holdings Corp. and other (76,171 ) (29,039 )
Book value 7,762,600 6,957,184
Adjusted units 716,676,699 704,780,484
Book value per adjusted unit $ 10.83 $ 9.87
RECONCILIATION OF CASH AND CASH EQUIVALENTS (GAAP BASIS)
TO CASH AND SHORT-TERM INVESTMENTS (SEGMENT BASIS) (UNAUDITED)
(Amounts in thousands)
As of As of
December 31, 2013 December 31, 2012
Cash and cash equivalents $ 1,306,383 $ 1,230,464
Liquid short-term investments 854,714 303,823
Cash and short-term investments $ 2,161,097 $ 1,534,287
KKR
EXHIBIT B
RECONCILIATION OF WEIGHTED AVERAGE GAAP COMMON UNITS OUTSTANDING TO WEIGHTED AVERAGE ADJUSTED UNITS (UNAUDITED)
The following table provides a reconciliation of KKR's Weighted Average GAAP Common Units Outstanding to Weighted Average Adjusted Units.
Quarter Ended
December 31, 2013 September 30, 2013 December 31, 2012
Weighted Average GAAP Common Units Outstanding - Basic 288,045,501 282,148,802 249,303,558
Weighted Average Unvested Common Units(a) 24,294,835 25,986,389 18,888,570
Weighted Average GAAP Common Units Outstanding - Diluted 312,340,336 308,135,191 268,192,128
Adjustments:
Weighted Average KKR Holdings Units(b) 404,466,844 407,646,472 436,613,409
Weighted Average Adjusted Units 716,807,180 715,781,663 704,805,537
Year Ended
December 31, 2013 December 31, 2012
Weighted Average GAAP Common Units Outstanding - Basic 274,910,628 238,503,257
Weighted Average Unvested Common Units(a) 25,343,462 15,589,903
Weighted Average GAAP Common Units Outstanding - Diluted 300,254,090 254,093,160
Adjustments:
Weighted Average KKR Holdings Units(b) 414,581,851 445,895,283
Weighted Average Adjusted Units 714,835,941 699,988,443
RECONCILIATION OF GAAP COMMON UNITS OUTSTANDING TO ADJUSTED UNITS (UNAUDITED)
The following table provides a reconciliation of KKR's GAAP Common Units Outstanding to Adjusted Units.
As of As of
December 31, 2013 December 31, 2012
GAAP Common Units Outstanding - Basic 288,143,327 253,363,691
Unvested Common Units(a) 24,164,354 18,863,517
GAAP Common Units Outstanding - Diluted 312,307,681 272,227,208
Adjustments:
KKR Holdings Units(b) 404,369,018 432,553,276
Adjusted Units 716,676,699 704,780,484
(a) Represents equity awards granted under the KKR & Co. L.P. 2010 Equity Incentive Plan. The issuance of common units of KKR & Co. L.P. pursuant to awards under its equity incentive plan dilutes KKR common unitholders and KKR Holdings pro rata in accordance with their respective percentage interests in the KKR business.
(b) Common units that may be issued by KKR & Co. L.P. upon exchange of units in KKR Holdings L.P. for KKR common units.
Contact:
Investor Relations:
Kohlberg Kravis Roberts & Co. L.P.
Craig Larson
+1-877-610-4910 (U.S.) / +1-212-230-9410
investor-relations@kkr.com
or
Media:
Kohlberg Kravis Roberts & Co. L.P.
Kristi Huller
+1-212-750-8300
media@kkr.com
DENTSPLY International Reports Record Third Quarter 2013 Results
Thomson Reuters ONE DENTSPLY International Inc.
October 29, 2013 7:02 AM
Third quarter adjusted earnings per diluted share increased 12% to $0.57 compared to $0.51
Adjusted operating margin expanded 60 basis points to 17.9% from 17.3% in the prior year third quarter
Operating cash flow improved by 31% to $126 million for the third quarter and grew 28% to $258 million through nine months
York, PA - October 29, 2013 - DENTSPLY International Inc. (XRAY) today announced record sales and earnings for the three months ended September 30, 2013.
Net sales in the third quarter of 2013 grew 1.2% to $704.0 million compared to $695.7 million in the third quarter of 2012. Excluding precious metals content, net sales in the third quarter of 2013 of $669.4 million grew 3.4% from $647.1 million in the third quarter of 2012. Constant currency net sales growth, excluding precious metals content, in the third quarter was 2.7%, reflecting strong internal growth in the U.S. and Rest of World geographic regions and continued slightly positive internal growth in Europe.
Net income attributable to DENTSPLY International for the third quarter of 2013 was $79.9 million, or $0.55 per diluted share, compared to $53.4 million, or $0.37 per diluted share in the third quarter of 2012. On an adjusted basis, excluding certain items, earnings grew 12% to $0.57 per diluted share for the third quarter of 2013 from $0.51 in the same period in 2012. A reconciliation of the US GAAP measure to earnings per share calculated on a non-US GAAP basis is provided in the attached table.
DENTSPLY`s Chairman and Chief Executive Officer Bret Wise commented, "DENTSPLY made solid progress in the third quarter, achieving growth in each major geographic region and in each of our principal product categories. This growth, combined with strong improvement in adjusted operating margins and lower interest costs, drove record earnings for the third quarter. Market conditions are generally consistent with what we had anticipated earlier in the year, and thus we are maintaining our expectations for fiscal 2013 adjusted earnings per diluted share in the range of $2.33 to $2.38."
Additional Information
A conference call is scheduled to begin today at 8:30 a.m. (Eastern Time). Supplemental materials for reference during the call will be available for download in the investor relations section of DENTSPLY`s web site, at www.dentsply.com.
A live webcast will be accessible via a link on DENTSPLY`s web site at www.dentsply.com. In order to participate in the call, dial (877) 874-1588 for domestic calls, or (719) 325-4772 for international calls. The Conference ID # is 7195173. At that time, you will be able to discuss third quarter 2013 results with DENTSPLY`s Chairman and Chief Executive Officer, Bret Wise, President and Chief Financial Officer, Chris Clark, and Executive Vice President and Chief Operating Officer, Jim Mosch.
A rebroadcast of the conference call will be available online at the DENTSPLY web site. You may also access a dial-in replay for one week following the call at (888) 203-1112 (for domestic calls) or (719) 457-0820 (for international calls), Replay Passcode # 7195173
DENTSPLY International Inc. is a leading manufacturer and distributor of dental and other consumable medical device products. The Company believes it is the world`s largest manufacturer of consumable dental products for the professional dental market. For over 110 years, DENTSPLY`s commitment to innovation and professional collaboration has enhanced its portfolio of branded consumables and small equipment. Headquartered in the United States, the Company has global operations with sales in more than 120 countries. Visit www.dentsply.com for more information about DENTSPLY and its products.
This press release contains forward-looking information (within the meaning of the Private Securities Litigation Reform Act of 1995) regarding future events or the future financial performance of the Company that involve substantial risks and uncertainties. Actual events or results may differ materially from those in the projections or other forward-looking information set forth herein as a result of certain risk factors. These risk factors include, without limitation; the continued strength of dental and medical markets, the timing, success and market reception for our new and existing products, uncertainty with respect to governmental actions with respect to dental and medical products, outcome of litigation and/or governmental enforcement actions, volatility in the capital markets or changes in our credit ratings, continued support of our products by influential dental and medical professionals, our ability to successfully integrate acquisitions, risks associated with foreign currency exchange rates, risks associated with our competitors` introduction of generic or private label products, our ability to accurately predict dealer and customer inventory levels, our ability to successfully realize the benefits of any cost reduction or restructuring efforts, our ability to obtain a supply of certain finished goods and raw materials from third parties and changes in the general economic environment that could affect the business. Changes in such assumptions or factors could produce significantly different results.
For additional information regarding the factors that may cause actual results to differ materially from these forward-looking statements, please refer to the Company`s most recent Form 10-K and its subsequent periodic reports on Forms 10-Q filed with the Securities and Exchange Commission.
Non-US GAAP Financial Measures
In addition to the results reported in accordance with US GAAP, the Company provides adjusted net income attributable to DENTSPLY International and adjusted earnings per diluted common share. The Company discloses adjusted net income attributable to DENTSPLY International to allow investors to evaluate the performance of the Company`s operations exclusive of certain items that impact the comparability of results from period to period and certain large non-cash charges related to purchased intangible assets. The Company believes that this information is helpful in understanding underlying operating trends and cash flow generation. The adjusted net income attributable to DENTSPLY International consists of net income attributable to DENTSPLY International adjusted to exclude the impact of the following:
(1) Acquisition related costs. These adjustments include costs related to integrating recently acquired businesses and specific costs related to the consummation of the acquisition process. These costs are irregular in timing and as such may not be indicative of past and future performance of the Company and are therefore excluded to allow investors to better understand underlying operating trends.
(2) Restructuring and other costs, including legal settlements. These adjustments include both costs and income that are irregular in timing, amount and impact to the Company`s financial performance. As such, these items may not be indicative of past and future performance of the Company and are therefore excluded for the purpose of understanding underlying operating trends.
(3) Amortization of purchased intangible assets. This adjustment excludes the periodic amortization expense related to purchased intangible assets. Following a significant acquisition in 2011, the Company began recording large non-cash charges related to the values attributed to purchased intangible assets. These charges have been excluded from adjusted net income attributed to DENTSPLY International to allow investors to evaluate and understand operating trends excluding these large non-cash charges.
(4) Income related to credit risk and fair value adjustments. These adjustments include both the cost and income impacts of adjustments in certain assets and liabilities that are recorded through net income which are due solely to the changes in fair value and credit risk. These items can be variable and driven more by market conditions than the Company`s operating performance. As such, these items may not be indicative of past and future performance of the Company and therefore are excluded for comparability purposes.
(5) Certain fair value adjustments related to an unconsolidated affiliated company. This adjustment represents the fair value adjustment of the unconsolidated affiliated company`s convertible debt instrument held by the Company. The affiliate is accounted for under the equity method of accounting. The fair value adjustment is driven by open market pricing of the affiliate`s equity instruments, which has a high degree of variability and may not be indicative of the operating performance of the affiliate or the Company.
(6) Income tax related adjustments. These adjustments include both income tax expenses and income tax benefits that are representative of income tax adjustments mostly related to prior periods, as well as the final settlement of income tax audits. These adjustments are irregular in timing and amount and may significantly impact the Company`s operating performance. As such, these items may not be indicative of past and future performance of the Company and therefore are excluded for comparability purposes.
Adjusted earnings per diluted common share is calculated by dividing adjusted net income attributable to DENTSPLY International by diluted weighted-average common shares outstanding. Adjusted net income attributable to DENTSPLY International and adjusted earnings per diluted common share are considered measures not calculated in accordance with US GAAP, and therefore are non-US GAAP measures. These non-US GAAP measures may differ from other companies. Income tax related adjustments may include the impact to adjust the interim effective income tax rate to the expected annual effective tax rate. The non-US GAAP financial information should not be considered in isolation from, or as a substitute for, measures of financial performance prepared in accordance with US GAAP.
DENTSPLY INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
2013 2012 2013 2012
Net sales $ 704,018 $ 695,734 $ 2,197,112 $ 2,175,141
Net sales, excluding precious metal content 669,425 647,120 2,058,029 2,011,225
Cost of products sold 327,601 331,619 1,017,539 1,010,807
Gross profit 376,417 364,115 1,179,573 1,164,334
% of Net sales 53.5 % 52.3 % 53.7 % 53.5 %
% of Net sales, excluding precious metal content 56.2 % 56.3 % 57.3 % 57.9 %
Selling, general and administrative expenses 269,165 260,352 852,763 860,740
Restructuring and other costs 2,231 15,097 5,065 18,862
Operating income 105,021 88,666 321,745 284,732
% of Net sales 14.9 % 12.7 % 14.6 % 13.1 %
% of Net sales, excluding precious metal content 15.7 % 13.7 % 15.6 % 14.2 %
Net interest and other expense 10,885 12,885 40,337 40,173
Income before income taxes 94,136 75,781 281,408 244,559
Provision for income taxes 13,187 18,960 39,599 48,550
Equity in net (loss) earnings of
unconsolidated affiliated company (83 ) (2,529 ) 320 (5,448 )
Net income 80,866 54,292 242,129 190,561
% of Net sales 11.5 % 7.8 % 11.0 % 8.8 %
% of Net sales, excluding precious metal content 12.1 % 8.4 % 11.8 % 9.5 %
Less: Net income attributable to noncontrolling interests 1,015 928 3,366 3,148
Net income attributable to DENTSPLY International $ 79,851 $ 53,364 $ 238,763 $ 187,413
% of Net sales 11.3 % 7.7 % 10.9 % 8.6 %
% of Net sales, excluding precious metal content 11.9 % 8.2 % 11.6 % 9.3 %
Earnings per common share:
Basic $ 0.56 $ 0.38 $ 1.67 $ 1.32
Dilutive $ 0.55 $ 0.37 $ 1.65 $ 1.30
Cash dividends declared per common share $ 0.0625 $ 0.0550 $ 0.1875 $ 0.1650
Weighted average common shares outstanding:
Basic 142,421 141,843 142,705 141,767
Dilutive 144,698 143,884 144,952 143,885
DENTSPLY INTERNATIONAL INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
September 30, December 31,
2013 2012
Assets
Current Assets:
Cash and cash equivalents $ 50,658 $ 80,132
Accounts and notes receivable-trade, net 502,370 442,412
Inventories, net 448,277 402,940
Prepaid expenses and other current assets 151,840 185,612
Total Current Assets 1,153,145 1,111,096
Property, plant and equipment, net 628,509 614,705
Identifiable intangible assets, net 800,470 830,642
Goodwill, net 2,218,136 2,210,953
Other noncurrent assets, net 209,719 204,901
Total Assets $ 5,009,979 $ 4,972,297
Liabilities and Equity
Current liabilities $ 777,561 $ 927,780
Long-term debt 1,164,794 1,222,035
Deferred income taxes 226,668 232,641
Other noncurrent liabilities 361,938 340,398
Total Liabilities 2,530,961 2,722,854
Total DENTSPLY International Equity 2,438,441 2,208,698
Noncontrolling interests 40,577 40,745
Total Equity 2,479,018 2,249,443
Total Liabilities and Equity $ 5,009,979 $ 4,972,297
DENTSPLY INTERNATIONAL INC.
(In thousands)
Supplemental Summary Cash Flow Information:
Nine Months Ended September 30, 2013 and 2012
Nine Months Ended September 30,
2013 2012
Net Cash Provided by Operating Activities $ 258,266 $ 202,065
Net Cash Used in Investing Activities $ 161,891 $ 80,300
Net Cash Used in Financing Activities $ 124,650 $ 145,585
Depreciation $ 61,545 $ 59,509
Amortization $ 34,700 $ 37,289
Capital Expenditures $ 73,500 $ 64,859
Cash Dividends Paid $ 25,895 $ 23,561
DENTSPLY INTERNATIONAL INC.
(In thousands)
Operating Income Summary:
The following tables present the reconciliation of reported US GAAP operating income in total and on a percentage of net sales, excluding precious metal content, to the non-US GAAP financial measures.
Three Months Ended September 30, 2013
Operating Income (Loss) Percentage of Net Sales, Excluding Precious Metal Content
Operating Income $ 105,021 15.7 %
Amortization of Purchased Intangible Assets 11,237 1.7 %
Restructuring and Other Costs, including Legal Settlements 2,285 0.3 %
Acquisition-Related Activities 1,173 0.2 %
Adjusted Non-US GAAP Operating Income $ 119,716 17.9 %
Three Months Ended September 30, 2012
Operating Income (Loss) Percentage of Net Sales, Excluding Precious Metal Content
Operating Income $ 88,666 13.7 %
Restructuring and Other Costs 15,457 2.4 %
Amortization of Purchased Intangible Assets 9,313 1.4 %
Orthodontic Business Continuity Costs 110 - %
Acquisition-Related Activities (1,893 ) (0.2 )%
Adjusted Non-US GAAP Operating Income $ 111,653 17.3 %
DENTSPLY INTERNATIONAL INC.
(In thousands)
Operating Income Summary:
The following tables present the reconciliation of reported US GAAP operating income in total and on a percentage of net sales, excluding precious metal content, to the non-US GAAP financial measures.
Nine Months Ended September 30, 2013
Operating Income (Loss) Percentage of Net Sales, Excluding Precious Metal Content
Operating Income $ 321,745 15.6 %
Amortization of Purchased Intangible Assets 34,652 1.7 %
Restructuring and Other Costs, including Legal Settlements 5,343 0.3 %
Acquisition-Related Activities 4,442 0.2 %
Adjusted Non-US GAAP Operating Income $ 366,182 17.8 %
Nine Months Ended September 30, 2012
Operating Income (Loss) Percentage of Net Sales, Excluding Precious Metal Content
Operating Income $ 284,732 14.2 %
Amortization of Purchased Intangible Assets 37,359 1.9 %
Restructuring and Other Costs 20,097 1.0 %
Acquisition-Related Activities 10,544 0.5 %
Orthodontics Business Continuity Costs 1,071 - %
Adjusted Non-US GAAP Operating Income $ 353,803 17.6 %
DENTSPLY INTERNATIONAL INC.
(In thousands, except per share amounts)
Earnings Summary:
The following tables present the reconciliation of reported US GAAP net income attributable to DENTSPLY International and on a per common share basis to the non-US GAAP financial measures.
Three Months Ended September 30, 2013
Net Per Diluted
Income Common Share
Net Income Attributable to DENTSPLY International $ 79,851 $ 0.55
Amortization of Purchased Intangible Assets, Net of Tax 7,851 0.06
Restructuring and Other Costs, including Legal Settlements, Net of Tax 1,961 0.01
Acquisition Related Activities, Net of Tax 744 0.01
Credit Risk and Fair Value Adjustments to Outstanding Derivatives, Net of Tax (488 ) -
Gain on Fair Value Adjustments related to an Unconsolidated Affiliated Company, Net of Tax (829 ) (0.01 )
Income Tax-Related Adjustments (6,882 ) (0.05 )
Adjusted Non-US GAAP Net Income Attributable to DENTSPLY International $ 82,208 $ 0.57
Three Months Ended September 30, 2012
Net Per Diluted
Income Common Share
Net Income Attributable to DENTSPLY International $ 53,364 $ 0.37
Restructuring and Other Costs, Net of Tax 10,909 0.08
Amortization of Purchased Intangible Assets, Net of Tax 5,159 0.04
Income Tax-Related Adjustments 4,039 0.03
Loss on Fair Value Adjustments related to an Unconsolidated Affiliated Company, Net of Tax 1,687 0.01
Orthodontics Business Continuity Costs, Net of Tax 70 -
Acquisition Related Activities, Net of Tax (1,161 ) (0.01 )
Rounding - (0.01 )
Adjusted Non-US GAAP Net Income Attributable to DENTSPLY International $ 74,067 $ 0.51
DENTSPLY INTERNATIONAL INC.
(In thousands, except per share amounts)
Earnings Summary:
The following tables present the reconciliation of reported US GAAP net income attributable to DENTSPLY International and on a per common share basis to the non-US GAAP financial measures.
Nine Months Ended September 30, 2013
Net Per Diluted
Income Common Share
Net Income Attributable to DENTSPLY International $ 238,763 $ 1.65
Amortization of Purchased Intangible Assets, Net of Tax 24,229 0.17
Restructuring and Other Costs, including Legal Settlements, Net of Tax 4,462 0.03
Acquisition Related Activities, Net of Tax 2,843 0.02
Credit Risk and Fair Value Adjustments to Outstanding Derivatives, Net of Tax 2,702 0.02
Gain on Fair Value Adjustments related to an Unconsolidated Affiliated Company, Net of Tax (1,347 ) (0.01 )
Income Tax-Related Adjustments (18,388 ) (0.13 )
Adjusted Non-US GAAP Net Income Attributable to DENTSPLY International $ 253,264 $ 1.75
Nine Months Ended September 30, 2012
Net Per Diluted
Income Common Share
Net Income Attributable to DENTSPLY International $ 187,413 $ 1.30
Amortization of Purchased Intangible Assets, Net of Tax 25,148 0.17
Restructuring and Other Costs, Net of Tax 14,063 0.10
Acquisition Related Activities, Net of Tax 6,630 0.05
Loss on Fair Value Adjustments related to an Unconsolidated Affiliated Company, Net of Tax 5,280 0.04
Orthodontics Business Continuity Costs, Net of Tax 692 -
Income Tax-Related Adjustments (1,375 ) (0.01 )
Adjusted Non-US GAAP Net Income Attributable to DENTSPLY International $ 237,851 $ 1.65
DENTSPLY INTERNATIONAL INC.
(In thousands)
Operating Tax Rate Summary:
The following tables present the reconciliation of reported US GAAP effective tax rate as a percentage of income before income taxes to the non-US GAAP financial measure.
Three Months Ended September 30, 2013
Pre-tax Income Income Tax Benefit (Expense) Percentage of Pre-Tax Income
As Reported - US GAAP Operating Results $ 94,136 $ (13,187 ) 14.0 %
Amortization of Purchased Intangible Assets 11,237 (3,386 )
Restructuring and Other Costs, including Legal Settlements 2,285 (324 )
Acquisition-Related Activities 1,173 (429 )
Gain on Fair Value Adjustments related to an Unconsolidated Affiliated Company (8 ) 2
Credit Risk and Fair Value Adjustments to Outstanding Derivatives (794 ) 306
Income Tax-Related Adjustments - (6,882 )
As Adjusted - Non-US GAAP Operating Results $ 108,029 $ (23,900 ) 22.1 %
Three Months Ended September 30, 2012
Pre-tax Income Income Tax Benefit (Expense) Percentage of Pre-Tax Income
As Reported - US GAAP Operating Results $ 75,781 $ (18,960 ) 25.0 %
Restructuring and Other Costs 15,458 (4,549 )
Amortization of Purchased Intangible Assets 9,313 (4,154 )
Orthodontics Business Continuity Costs 110 (40 )
Gain on Fair Value Adjustments related to an Unconsolidated Affiliated Company (407 ) 123
Acquisition-Related Activities (1,893 ) 732
Income Tax-Related Adjustments - 4,039
As Adjusted - Non-US GAAP Operating Results $ 98,362 $ (22,809 ) 23.2 %
DENTSPLY INTERNATIONAL INC.
(In thousands)
Operating Tax Rate Summary:
The following tables present the reconciliation of reported US GAAP effective tax rate as a percentage of income before income taxes to the non-US GAAP financial measure.
Nine Months Ended September 30, 2013
Pre-tax Income Income Tax Benefit (Expense) Percentage of Pre-Tax Income
As Reported - US GAAP Operating Results $ 281,408 $ (39,599 ) 14.1 %
Amortization of Purchased Intangible Assets 34,652 (10,423 )
Restructuring and Other Costs, including Legal Settlements 5,343 (881 )
Acquisition-Related Activities 4,442 (1,599 )
Credit Risk and Fair Value Adjustments to Outstanding Derivatives 4,401 (1,699 )
Gain on Fair Value Adjustments related to an Unconsolidated Affiliated Company (20 ) 6
Income Tax-Related Adjustments - (18,388 )
As Adjusted - Non-US GAAP Operating Results $ 330,226 $ (72,583 ) 22.0 %
Nine Months Ended September 30, 2012
Pre-tax Income Income Tax Benefit (Expense) Percentage of Pre-Tax Income
As Reported - US GAAP Operating Results $ 244,559 $ (48,550 ) 19.9 %
Amortization of Purchased Intangible Assets 37,359 (12,211 )
Restructuring and Other Costs 20,098 (6,035 )
Acquisition-Related Activities 10,544 (3,914 )
Orthodontics Business Continuity Costs 1,071 (379 )
Loss on Fair Value Adjustments related to an Unconsolidated Affiliated Company (229 ) 69
Income Tax-Related Adjustments - (1,375 )
As Adjusted - Non-US GAAP Operating Results $ 313,402 $ (72,395 ) 23.1 %
For further information contact:
Derek Leckow
Vice President
Investor Relations
(717) 849-7863
This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients.
The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and other applicable laws; and
(ii) they are solely responsible for the content, accuracy and originality of the
information contained therein.
SIFCO Industries, Inc. (“SIFCO”) Announces First Quarter Fiscal 2014 Financial Results
Business Wire SIFCO Industries, Inc.
8 hours ago
CLEVELAND--(BUSINESS WIRE)--
SIFCO Industries, Inc. (NYSE MKT: SIF) today announced financial results for its first quarter fiscal year 2014, which ended December 31, 2013.
First Quarter
Net sales from continuing operations in first quarter fiscal 2014 decreased 2.9% to $26.7 million, compared to $27.4 million in first quarter fiscal 2013.
Income from continuing operations before income tax provision in first quarter fiscal 2014 was $1.6 million compared with $1.9 million in first quarter fiscal 2013.
Net income from continuing operations for first quarter fiscal 2014 was $1.2 million, or $0.21 per diluted share, compared with net income of $1.2 million, or $0.22 per diluted share, in first quarter fiscal 2013.
CEO Michael S. Lipscomb stated, "SIFCO’s year-over-year sales for its continuing businesses show strong aerospace component sales and weaker energy component sales during the quarter. We foresee strong aerospace sales volume and recovering energy markets as our customers introduce new products. Overall, SIFCO is well positioned for the remaining quarters in fiscal 2014.”
Forward-Looking Language
Certain statements contained in this press release are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements relating to financial results and plans for future business development activities, and are thus prospective. Such forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Potential risks and uncertainties include, but are not limited to, economic conditions, competition and other uncertainties detailed from time to time in the Company's Securities and Exchange Commission filings.
The Company's Form 10-K for the year ended September 30, 2013 can be accessed through its website: www.sifco.com, or on the Securities and Exchange Commission's website: www.sec.gov.
The Company is engaged in the production and sale of a variety of metal working services and products produced primarily to the specific design requirements of its customers. The services include forging, heat-treating, coating welding, machining and selective plating. The products include forged components (both conventional and precision), machined forged parts, other machined metal components as well as turbine engine component repairs. The Company’s operations were conducted in three business segments during fiscal 2013: (i) SIFCO Forged Components, continuing into fiscal 2014; (ii) Turbine Component Services and Repair ("Repair Group"), discontinued in fiscal 2013; and (iii) Applied Surface Concepts ("ASC"), divested in fiscal 2013. Due to the divestiture and discontinuation of the two segments in fiscal 2013, management will evaluate the Company as a single reporting segment in the Aerospace and Energy ("A&E") industries.
First Quarter Ended December 31
(Amounts in thousands, except per share data)
Three Months Ended
December 31,
2013 2012
Net sales
$
26,652
$
27,445
Cost of goods sold 21,082 21,583
Gross margin 5,570 5,862
Selling, general and administrative expenses 3,459 3,539
Amortization of intangible assets 545 559
(Gain) on disposal of operating assets (2 ) (125 )
Operating income 1,568 1,889
Interest income (4 ) (5 )
Interest expense 85 106
Foreign currency exchange loss, net 5 7
Other income, net (108 ) (77 )
Income from continuing operations before income tax provision 1,590 1,858
Income tax provision 436 681
Income from continuing operations
1,154 1,177
Income (loss) from discontinued operations, net of tax (207 ) 2,238
Net income
$
947
$
3,415
Income per share from continuing operations
Basic $ 0.22 $ 0.22
Diluted $ 0.21 $ 0.22
Income (loss) per share from discontinued operations, net of tax
Basic ($0.04 ) $ 0.42
Diluted ($0.04 ) $ 0.41
Net income per share
Basic $ 0.18 $ 0.64
Diluted $ 0.17 $ 0.63
Weighted-average number of common shares (basic) 5,378 5,340
Weighted-average number of common shares (diluted) 5,408 5,385
Contact:
SIFCO Industries, Inc.
Catherine M. Kramer, 216-881-8600
www.sifco.com
KKR Finalizes Strategic Investment in WMI Holdings Corp.
PR Newswire WMI Holdings Corp.
16 hours ago
SEATTLE, Jan. 31, 2014 /PRNewswire/ -- WMI Holdings Corp. (WMIH) ("WMI" or the "Company") today announced that KKR Management Holdings L.P. and KKR Fund Holdings L.P., subsidiaries of KKR & Co. L.P. (together with its affiliates, "KKR"), have finalized a strategic investment in the Company.
Michael Willingham, Chairman of the Company said, "We believe the investment in our Company by KKR will enhance value for all shareholders of WMI Holdings. KKR has a history of investing across a wide range of asset classes and we look forward to working with the KKR team as we execute on our acquisition strategy."
Tagar Olson, Member and Head of KKR's Financial Services team stated, "We are pleased to finalize this investment and look forward to working with the Company as it continues to grow and diversify its platform. As a long-term aligned capital partner to the Company, we believe that KKR is well-positioned to help build shareholder value."
On January 30, 2014, KKR (i) purchased approximately $11 million face amount of convertible preferred stock of the Company convertible into shares of common stock of the Company for a conversion price of $1.10 per share, and (ii) committed to purchase up to $150 million aggregate principal amount of subordinated 7.5% PIK notes, which may be issued in one or more tranches over a three year period, each with a seven year term from the date of initial issuance (the "Subordinated Notes"), subject to certain terms and conditions. Substantially all of the proceeds from the Subordinated Notes, if and when issued, would be used by the Company to fund future acquisitions. In connection with the commitment, KKR has received five-year warrants to purchase approximately 61.4 million shares of the Company's common stock, 30.7 million of which has an exercise price of $1.32 per share and 30.7 million of which has an exercise price of $1.43 per share. KKR also has the right for three years to participate up to 50% in equity offerings up to an aggregate of $1 billion by the Company subject to certain limitations, including a cap on ownership by KKR of 42.5% of the Company's common equity.
Blackstone Advisory Partners L.P. acted as financial advisor to the Company in connection with the transaction. Akin Gump Strauss Hauer & Feld LLP and Lane Powell PC are counsel to the Company. Simpson Thacher & Bartlett LLP is counsel to KKR.
About WMI Holdings
WMI Holdings Corp., formerly Washington Mutual, Inc., consists primarily of WM Mortgage Reinsurance Company, Inc. ("WMMRC"), a wholly-owned subsidiary of the Company that is domiciled in Hawaii. The Company's primary business is a legacy reinsurance business that is currently operated in runoff mode by WMMRC.
About KKR
Founded in 1976 and led by Henry Kravis and George Roberts, KKR is a leading global investment firm with $90.2 billion in assets under management as of September 30, 2013. With offices around the world, KKR manages assets through a variety of investment funds and accounts covering multiple asset classes. KKR seeks to create value by bringing operational expertise to its portfolio companies and through active oversight and monitoring of its investments. KKR complements its investment expertise and strengthens interactions with fund investors through its client relationships and capital markets platform. KKR & Co. L.P. is publicly traded on the New York Stock Exchange (KKR) and "KKR", as used in this release, includes its subsidiaries, their managed investment funds and accounts, and/or their affiliated investment vehicles, as appropriate.
Cautionary Statement Regarding Forward-Looking Statements
This press release includes forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact included in this report that address activities, events, conditions or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements. Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business and these statements are not guarantees of future performance. These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements may include the words "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," "strategy," "future," "opportunity," "may," "should," "will," "would," "will be," "will continue," "will likely result," and similar expressions. Such forward-looking statements involve risks and uncertainties that may cause actual events, results or performance to differ materially from those indicated by such statements. These risks are identified and discussed in the Company's Form 10-K for the year ended December 31, 2012 under Risk Factors in Part I, Item 1A. These risk factors will be important to consider in determining future results and should be reviewed in their entirety. These forward-looking statements are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that the events, results or trends identified in these forward-looking statements will occur or be achieved. Forward-looking statements speak only as of the date they are made, and we do not undertake to update any forward-looking statement, except as required by law. Readers should carefully review the statements set forth in the reports, which the Company has filed or will file from time to time with the Securities and Exchange Commission.
WisdomTree Announces Fourth Quarter and Year End 2013 Results
GlobeNewswire WisdomTree Investments, Inc.
2 hours ago
Record net income more than triples from year ago quarter and for the year
Diluted EPS $0.12 for the quarter and $0.37 for the year
Record revenues up 83% from year ago quarter and 76% for the year
$2.3 billion net inflows in quarter and record $14.3 billion for the year
NEW YORK, Jan. 31, 2014 (GLOBE NEWSWIRE) -- WisdomTree Investments, Inc. (WETF), an exchange-traded fund ("ETF") sponsor and asset manager, today reported net income of $16.5 million for the fourth quarter of 2013, or $0.12 per share on a fully diluted basis. This compares to $5.3 million in the fourth quarter of 2012 and $15.0 million in the third quarter of 2013. For the full year, net income was $51.5 million, or $0.37 per share on a fully diluted basis. This compares to $11.0 million in 2012.
WisdomTree CEO and President Jonathan Steinberg commented, "2013 was a year of transformational growth, stellar operating performance and record financial results for WisdomTree. Powered by $14.3 billion in net inflows, our revenues are up 76% for the year, and with the growth of our business we are demonstrating the scale, efficiency and earnings power of our operating model."
Mr. Steinberg continued, "We also continued to invest in our business to position WisdomTree for future growth. During the course of the year we bolstered our product set in important categories like domestic equities, domestic fixed income and currency hedged equities. In total, 15 new products launched in 2013 provide investment solutions for a strengthening U.S. dollar, as well as rising interest rates."
Mr. Steinberg concluded, "We also made important strides at the business level, including the announcement last quarter of a new fund administration and custody services relationship with State Street Bank and Trust Company, a global leader with the infrastructure to support our growth. Today, we announced expansion plans for the European ETF market. As we continue into 2014 with strong momentum, I am excited about the significant opportunities for WisdomTree's expansion and development."
Summary Operating and Financial Highlights
Three Months Ended Change From
Dec. 31, Sep. 30, Dec. 31, Sep. 30, Dec. 31,
Operating Highlights ($, in billions): 2013 2013 2012 2013 2012
ETF AUM $34.9 $31.4 $18.3 11.3% 90.8%
ETF net inflows $2.3 $1.2 $1.1 99.0% 117.9%
Average ETF AUM $33.1 $30.5 $17.1 8.6% 93.9%
Average ETF advisory fee 0.51% 0.51% 0.54% -- (0.03)
Market share of industry inflows 3.9% 2.2% 1.9% +1.7 +2.0
Financial Highlights ($, in millions, except per share amounts):
Total revenues $43.2 $39.6 $23.6 8.9% 83.1%
Net income $16.5 $15.0 $5.3 10.1% 213.6%
Diluted earnings per share $0.12 $0.11 $0.04 $0.01 $0.08
Gross margin1 (non-GAAP) 78% 77% 68% +.10 +10.0
Pre-tax margin 38% 38% 22% -- +16.0
Year Ended
Dec. 31, Dec. 31,
Operating Highlights ($, in billions): 2013 2012 Change
ETF AUM $34.9 $18.3 90.8%
ETF net inflows $14.3 $4.7 202.7%
Average ETF AUM $28.5 $15.6 83.1%
Average ETF advisory fee 0.52% 0.54% (0.02)
Market share of industry inflows 8.0% 2.6% +5.4
Financial Highlights ($, in millions, except per share amounts):
Total revenues $149.5 $84.8 76.3%
Net income $51.5 $11.0 367.2%
Diluted earnings per share $0.37 $0.08 $0.29
Gross margin1 (non-GAAP) 76% 66% +10.0
Pre-tax margin 34% 17% +17.0
[1] Gross margin is defined as total revenues less fund management and administration expenses and third-party sharing arrangements.
Recent Business Developments
On November 4, 2013 WisdomTree announced the Chilean pension regulator approved the sale of three additional WisdomTree ETFs in Chile
On November 7, 2013, WisdomTree announced the launch of the WisdomTree Korea Hedged Equity Fund (DXKW)
On December 4, 2013, WisdomTree announced the WisdomTree SmallCap Dividend Fund (DES) surpassed $1 billion in assets
On December 18, 2013, WisdomTree announced the launch of the WisdomTree Bloomberg U.S. Dollar Bullish Fund (USDU)
On December 18, 2013, WisdomTree announced the launch of the WisdomTree Japan Interest Rate Strategy Fund (JGBB)
On December 18, 2013, WisdomTree announced the launch of Rising Rates Bond ETFs based on leading Fixed Income benchmarks: WisdomTree Barclays U.S. Aggregate Bond Zero Duration Fund (AGZD), WisdomTree Barclays U.S. Aggregate Bond Negative Duration Fund (AGND), WisdomTree BofA Merrill Lynch High Yield Bond Zero Duration Fund (HYZD), WisdomTree BofA Merrill Lynch High Yield Bond Negative Duration Fund (HYND)
On January 31, 2014, WisdomTree announced the launch of a platform for European ETF operations through a majority investment in Boost ETP, expected to close in the first half of 2014
Assets Under Management, Net Inflows and Market Share
ETF assets under management ("AUM") were $34.9 billion at December 31, 2013, up 90.8% from $18.3 billion at December 31, 2012, and up 11.3% from $31.4 billion at September 30, 2013. Net inflows for the fourth quarter of 2013 were $2.3 billion as compared to $1.1 billion in the fourth quarter of 2012 and $1.2 billion in the third quarter of 2013. For the year, net inflows were $14.3 billion as compared to $4.7 billion in 2012. WisdomTree's market share of industry net inflows was 3.9% in the fourth quarter of 2013 as compared to 1.9% in the fourth quarter of 2012 and 2.2% in the third quarter of 2013. For the full year, WisdomTree's market share was 8.0% as compared to 2.6% in 2012.
Performance
In evaluating the performance of our Equity, Fixed Income and Alternatives ETFs against actively managed and index based mutual funds and ETFs, 85% of the $33.9 billion invested in our ETFs and 56% (28 of 50) of our ETFs outperformed their comparable Morningstar average since inception as of December 31, 2013.
For more information about WisdomTree ETFs including standardized performance, please click here or visit www.wisdomtree.com.
Fourth Quarter Financial Discussion
Revenues
Total revenues increased 83.1% to a record $43.2 million as compared to the fourth quarter of 2012 and 8.9% compared to the third quarter of 2013 primarily due to higher average AUM as a result of positive net inflows into our ETFs and market appreciation. Our average advisory fee earned was 0.51% as compared to 0.54% for the fourth quarter of 2012 and 0.51% in the third quarter of 2013 due to the majority of our inflows going to our Japan hedged equity ETF (DXJ), which has an expense ratio of 0.48%.
Margins
Our gross margin, which is our total revenues less fund management and administration expenses and third party sharing arrangements, was 78% in the fourth quarter of 2013 as compared to 68% in the fourth quarter of 2012 and 77% in the third quarter of 2013.
Our pre-tax margin was 38% in the third and fourth quarters of 2013 as compared to 22% in the fourth quarter of 2012.
Expenses
Total expenses increased 45.7% to $26.7 million from $18.3 million in the fourth quarter of 2012. Included in the prior year quarter was $0.2 million of net costs related to patent litigation and offering costs. Total expenses increased 8.2% from $24.7 million in the third quarter of 2013.
Compensation and benefits expense increased 56.3% to $9.6 million compared to the fourth quarter of 2012. This increase was primarily due to higher accrued incentive compensation due to our record level of net inflows in 2013 and higher headcount related expenses to support our growth.
Compensation and benefits expense was essentially unchanged from the third quarter of 2013 as higher accrued incentive compensation was partly offset by lower stock based compensation.
Our headcount at the end of 2013 was 87 compared to 70 at the end of 2012 and 84 at the end of the third quarter of 2013.
Fund management and administration expenses increased 41.1% to $9.0 million compared to the fourth quarter of 2012. At the end of 2012, we ended our joint venture with BNY Mellon. As a result, we began to record certain operating costs related to our currency and fixed income ETFs, which were previously recognized by BNY Mellon as part of the joint venture. This resulted in approximately $0.5 million in higher costs this quarter, while eliminating the expense of the third-party sharing arrangement. Higher average AUM resulted in a $1.9 million increase in variable fees charged by our third party service providers associated with AUM.
Fund management and administration expenses increased 1.8% compared to the third quarter of 2013 primarily due to higher average AUM as well as costs associated with new ETFs.
We have 61 ETFs at the end of the year compared to 46 at the end of 2012 and 53 at the end of the third quarter of 2013.
Marketing and advertising expenses increased to $2.1 million representing an increase of 31.8% from the fourth quarter of last year and 5.6% from the third quarter of 2013 primarily due to higher levels of advertising related activities to support our growth.
Sales and business development expenses increased to $1.8 million representing an increase of 75.5% from the fourth quarter of last year and 41.6% from the third quarter of 2013 primarily due to higher levels of spending for sales related initiatives.
Professional and consulting fees increased to $0.9 million representing an increase of 18.8% from the fourth quarter of last year and 72.7% from the third quarter of 2013 primarily due advisory costs associated with our transaction to acquire a majority stake in Boost ETP.
Occupancy, communication and equipment expense increased to $1.1 million in the fourth quarter of 2013 representing a 196.2% increase from the fourth quarter of last year and 51.2% from the third quarter of 2013 primarily due to costs for new office space which we began to occupy in January 2014.
Third-party sharing arrangements expense decreased 65.0% to $0.5 million compared to the fourth quarter of 2012 due to the end of our joint venture with BNY Mellon discussed above.
Third-party sharing arrangements expense increased 21.7% compared to the third quarter of 2013 due to higher inflow levels by our marketing agent in Latin America.
Other expenses increased 87.8% to $1.4 million compared to the fourth quarter of 2012 and increased 23.5% compared to the third quarter of 2013 primarily due to higher general and administrative expenses.
Balance Sheet
As of December 31, 2013, WisdomTree had total assets of $141.8 million which consisted primarily of cash and cash equivalents of $104.3 million and investments of $11.7 million. There were approximately 130.4 million shares of common stock outstanding as of December 31, 2013. Fully diluted weighted average shares outstanding were approximately 140.0 million for the fourth quarter and full year.
Net Operating Loss
The Company's pretax net operating loss carryforward (NOL) was $136.5 million at December 31, 2012. The Company estimates its NOL has increased to approximately $143.0 million as of December 31, 2013. The increase was primarily due to the tax benefit the Company receives when its employees exercise options or vest in restricted stock. The Company will discuss the treatment of its NOL further on its earnings call.
Conference Call
WisdomTree will discuss its results and operational highlights during a conference call on Friday, January 31, 2014 at 9:00 a.m. ET. The call-in number will be (877) 303-7209. Anyone outside the U.S. or Canada should call (970) 315-0420. The slides used during the presentation will be available at http://ir.wisdomtree.com. For those unable to join the conference call at the scheduled time, an audio replay will be available on http://ir.wisdomtree.com.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains forward-looking statements that are based on our management's beliefs and assumptions and on information currently available to our management. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to future events or our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expects," "intends," "plans," "anticipates," "believes," "estimates," "predicts," "potential," "continue" or the negative of these terms or other comparable terminology. These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond our control and which could materially affect results. Factors that may cause actual results to differ materially from current expectations include, among other things, the risks described below. If one or more of these or other risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance. You should read this press release completely and with the understanding that our actual future results may be materially different from any future results expressed or implied by these forward-looking statements.
In particular, forward-looking statements in this press release may include statements about:
anticipated trends, conditions and investor sentiment in the global markets;
anticipated levels of inflows into and outflows out of our exchange-traded funds;
our ability to deliver favorable rates of return to investors;
our ability to develop new products and services;
our ability to maintain current vendors or find new vendors to provide services to us at favorable costs;
competition in our business; and
the effect of laws and regulations that apply to our business.
Our business is subject to many risks and uncertainties, including without limitation:
We have only a limited operating history and, as a result, recent historical growth may not provide an accurate representation of the growth we may experience in the future, which may make it difficult to evaluate our future prospects.
Challenging market conditions associated with declining prices of securities can adversely affect our business by reducing the market value of the assets we manage or causing WisdomTree ETF shareholders to sell their fund shares and trigger redemptions.
Fluctuations in the amount and mix of our AUM may negatively impact revenue and operating margin.
Most of our assets under management are held in ETFs that invest in foreign securities and we therefore have substantial exposure to foreign market conditions and are subject to currency exchange rate risks.
We derive a substantial portion of our revenue from products invested in emerging markets and are exposed to the market-specific political and economic risks as well as general investor sentiment regarding future growth of those markets.
We derive a substantial amount of our revenue from products invested in securities of Japanese companies and are exposed to the market-specific political and economic risks as well as general investor sentiment regarding future growth of those markets and currency fluctuations between the Japanese Yen and the U.S. Dollar.
We derive a majority of our revenue from a limited number of products--in particular one fund, WisdomTree Japan Hedged Equity Fund, that accounted for more than one third of our ETF AUM--and, as a result, our operating results are particularly exposed to the performance of those funds, investor sentiment toward the strategies pursued by those funds and our ability to maintain the assets under management of those funds.
The WisdomTree ETFs have a limited track record, and poor investment performance could cause our revenue to decline.
We depend on other third parties to provide many critical services to operate our business and the WisdomTree ETFs. The failure of key vendors to adequately provide such services could materially affect our operating business and harm WisdomTree ETF shareholders.
Other factors, such as general economic conditions, including currency exchange rate fluctuations, also may have an effect on the results of our operations. For a more complete description of the risks noted above and other risks that could cause our actual results to differ from our current expectations, please see the section entitled "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2012 and Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2013.
The forward-looking statements in this press release represent our views as of the date of this press release. We anticipate that subsequent events and developments may cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. Therefore, these forward-looking statements do not represent our views as of any date other than the date of this press release.
About WisdomTree
WisdomTree Investments, Inc. is a New York-based exchange-traded fund ("ETF") sponsor and asset manager. WisdomTree currently offers 61 ETFs across Equities, Fixed Income, Currency Income and Alternatives asset classes. WisdomTree also licenses its indexes to third parties for proprietary products and promotes the use of WisdomTree ETFs in 401(k) plans. WisdomTree currently has approximately $33.7 billion in ETF assets under management. For more information, please visit www.wisdomtree.com.
WisdomTree(R) is the marketing name for WisdomTree Investments, Inc. and its wholly owned subsidiary WisdomTree Asset Management, Inc. WisdomTree Asset Management, Inc. is a registered investment advisor and is the investment advisor to the WisdomTree Trust and the WisdomTree ETFs. The WisdomTree Trust is a registered open-end investment company. Each WisdomTree ETF is a series of the WisdomTree Trust.
WISDOMTREE INVESTMENTS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
Three Months Ended % Change From Year Ended
Dec. 31, Sept. 30, Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31, %
2013 2013 2012 2013 2012 2013 2012 Change
(Audited)
Revenues
ETF advisory fees $ 42,903 $ 39,437 $ 23,379 8.8% 83.5% $ 148,594 $ 84,024 76.8%
Other income 263 193 195 36.3% 34.9% 874 774 12.9%
Total revenues 43,166 39,630 23,574 8.9% 83.1% 149,468 84,798 76.3%
Expenses
Compensation and benefits 9,633 9,648 6,165 -0.2% 56.3% 36,210 23,233 55.9%
Fund management and administration 8,953 8,794 6,343 1.8% 41.1% 35,076 23,020 52.4%
Marketing and advertising 2,145 2,031 1,627 5.6% 31.8% 8,309 5,363 54.9%
Sales and business development 1,848 1,305 1,053 41.6% 75.5% 6,474 3,586 80.5%
Professional and consulting fees 936 542 788 72.7% 18.8% 2,748 4,603 -40.3%
Occupancy, communication and equipment 1,093 723 369 51.2% 196.2% 2,784 1,419 96.2%
Depreciation and amortization 190 84 82 126.2% 131.7% 439 307 43.0%
Third party sharing arrangements 455 374 1,300 21.7% -65.0% 1,368 5,468 -75.0%
Other 1,437 1,164 765 23.5% 87.8% 4,523 2,976 52.0%
ETF shareholder proxy -- -- -- -- -- -- 3,264 --
Patant litigation, net -- -- (524) -- -- -- 176 --
Offering costs -- -- 353 -- -- -- 353 --
Total expenses 26,690 24,665 18,321 8.2% 45.7% 97,931 73,768 32.8%
Income before provision for income taxes 16,476 14,965 5,253 10.1% 213.6% 51,537 11,030 367.2%
Provision for income taxes -- -- -- -- -- -- -- --
Net income $ 16,476 $ 14,965 $ 5,253 10.1% 213.6% $ 51,537 $ 11,030 367.2%
Net income per share - basic $ 0.13 $ 0.12 $ 0.04
$ 0.41 $ 0.09
Net income per share - diluted $ 0.12 $ 0.11 $ 0.04
$ 0.37 $ 0.08
Weighted average common shares - basic 128,851 126,509 124,202
126,651 122,138
Weighted average common shares - diluted 140,065 140,097 138,417
139,797 137,968
WISDOMTREE INVESTMENTS, INC.
NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands)
(Unaudited)
Three Months Ended Year Ended
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2013 2013 2012 2013 2012
Revenues
ETF advisory fees $ 42,903 $ 39,437 $ 23,379 $ 148,594 $ 84,024
Other income 263 193 195 874 774
Total revenues 43,166 39,630 23,574 149,468 84,798
Operating expenses
Compensation and benefits 9,633 9,648 6,165 36,210 23,233
Fund management and administration 8,953 8,794 6,343 35,076 23,020
Marketing and advertising 2,145 2,031 1,627 8,309 5,363
Sales and business development 1,848 1,305 1,053 6,474 3,586
Professional and consulting fees 936 542 788 2,748 4,603
Occupancy, communication and equipment 1,093 723 369 2,784 1,419
Depreciation and amortization 190 84 82 439 307
Third party sharing arrangements 455 374 1,300 1,368 5,468
Other 1,437 1,164 765 4,523 2,976
Total proforma operating expenses 26,690 24,665 18,492 97,931 69,975
Proforma operating income 16,476 14,965 5,082 51,537 14,823
ETF shareholder proxy -- -- -- -- 3,264
Patant litigation, net -- -- (524) -- 176
Offering costs -- -- 353 -- 353
Income before provision for income taxes 16,476 14,965 5,253 51,537 11,030
Provision for income taxes -- -- -- -- --
Net income $ 16,476 $ 14,965 $ 5,253 $ 51,537 $ 11,030
WISDOMTREE INVESTMENTS, INC.
CONSOLIDATED BALANCE SHEET
(in thousands, except per share amount)
December 31, December 31,
2013 2012
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 104,316 $ 41,246
Accounts receivable 18,100 9,348
Other current assets 1,320 1,273
Total current assets 123,736 51,867
Fixed assets, net 6,252 480
Investments 11,748 11,036
Other noncurrent assets 55 42
Total assets $ 141,791 $ 63,425
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Current liabilities:
Fund management and administration payable $ 10,394 $ 6,924
Compensation and benefits payable 14,278 2,156
Accounts payable and other liabilities 4,384 3,272
Total current liabilities 29,056 12,352
Other noncurrent liabilities 3,706 13
Total liabilities 32,762 12,365
STOCKHOLDERS' EQUITY
Common stock, par value $0.01; 250,000 shares authorized:
issued: 132,247 and 126,554 1,322 1,265
outstanding: 130,350 and 125,272
Additional paid-in capital 184,201 177,826
Accumulated deficit (76,494) (128,031)
Total stockholders' equity 109,029 51,060
Total liabilities and stockholders' equity $ 141,791 $ 63,425
WISDOMTREE INVESTMENTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Twelve Months Ended
December 31, December 31,
2013 2012
(Unaudited)
Cash flows from operating activities
Net income $ 51,537 $ 11,030
Non-cash items included in net income:
Depreciation and amortization 439 307
Stock-based compensation 6,459 7,437
Deferred rent 706 (140)
Accretion to interest income and other 116 194
Changes in operating assets and liabilities:
Accounts receivable (5,529) (3,723)
Other assets (70) 337
Fund management and administration payable 3,470 (3,111)
Compensation and benefits payable 12,122 (2,012)
Accounts payable and other liabilities 875 915
Net cash provided by operating activities 70,125 11,234
Cash flows from investing activities
Purchase of fixed assets (6,211) (190)
Purchase of investments (3,597) (10,004)
Proceeds from the redemption of investments 2,781 7,836
Net cash used in investing activities (7,027) (2,358)
Cash flows from financing activities
Net proceeds from sale of common stock -- 4,329
Shares repurchased (1,614) (2,261)
Proceeds from exercise of stock options 1,586 4,672
Net cash (used in)/provided by financing activities (28) 6,740
Net increase in cash and cash equivalents 63,070 15,616
Cash and cash equivalents - beginning of period 41,246 25,630
Cash and cash equivalents - end of period $ 104,316 $ 41,246
Supplemental disclosure of cash flow information
Cash paid for income taxes $ 38 $ 33
Non-cash investing and financing activities:
Cashless exercise of stock options $ 267 $ --
WisdomTree Investments, Inc.
Key Operating Statistics (Unaudited)
Three Months Ended For the Year Ended
December 31, September 30, December 31, December 31, December 31,
2013 2013 2012 2013 2012
Total ETFs (in millions)
Beginning of period assets 31,352 28,975 16,783 18,286 12,182
Inflows/(outflows) 2,308 1,160 1,059 14,323 4,732
Market appreciation/(depreciation) 1,224 1,217 444 2,275 1,372
End of period assets 34,884 31,352 18,286 34,884 18,286
Average assets during the period 33,091 30,473 17,068 28,472 15,554
ETF Industry and Market Share (in billions)
ETF industry net inflows 58.6 53.7 55.4 179.9 185.4
WisdomTree market share of industry inflows 3.9% 2.2% 1.9% 8.0% 2.6%
International Hedged Equity ETFs (in millions)
Beginning of period assets 11,481 10,270 569 1,258 418
Inflows/(outflows) 1,243 752 588 10,441 757
Market appreciation/(depreciation) 624 459 101 1,649 83
End of period assets 13,348 11,481 1,258 13,348 1,258
Average assets during the period 11,848 11,175 662 8,770 600
Emerging Markets Equity ETFs (in millions)
Beginning of period assets 7,703 7,172 6,542 7,332 3,613
Inflows/(outflows) (246) 286 515 865 3,111
Market appreciation/(depreciation) (9) 245 275 (749) 608
End of period assets 7,448 7,703 7,332 7,448 7,332
Average assets during the period 7,891 7,289 6,767 7,762 5,715
US Equity ETFs (in millions)
Beginning of period assets 6,271 5,777 4,640 4,371 3,429
Inflows/(outflows) 367 273 (205) 1,477 610
Market appreciation/(depreciation) 543 221 (64) 1,333 332
End of period assets 7,181 6,271 4,371 7,181 4,371
Average assets during the period 6,771 6,214 4,522 5,819 4,252
International Developed Equity ETFs (in millions)
Beginning of period assets 3,150 2,633 2,327 2,474 1,989
Inflows/(outflows) 565 205 32 967 243
Market appreciation/(depreciation) 149 312 115 423 242
End of period assets 3,864 3,150 2,474 3,864 2,474
Average assets during the period 3,490 2,888 2,360 2,959 2,254
Fixed Income ETFs (in millions)
Beginning of period assets 2,095 2,437 1,904 2,118 1,506
Inflows/(outflows) (144) (320) 190 121 491
Market appreciation/(depreciation) (45) (22) 24 (333) 121
End of period assets 1,906 2,095 2,118 1,906 2,118
Average assets during the period 2,008 2,246 1,990 2,352 1,770
Currency ETFs (in millions)
Beginning of period assets 502 547 654 611 950
Inflows/(outflows) 515 (48) (37) 418 (351)
Market appreciation/(depreciation) (38) 3 (6) (50) 12
End of period assets 979 502 611 979 611
Average assets during the period 933 515 632 673 772
Alternative Strategy ETFs (in millions)
Beginning of period assets 150 139 147 122 277
Inflows/(outflows) 8 12 (24) 34 (129)
Market appreciation/(depreciation) -- (1) (1) 2 (26)
End of period assets 158 150 122 158 122
Average assets during the period 150 146 135 137 191
Average ETF assets during the period
International hedged equity ETFs 36% 37% 4% 31% 4%
Emerging markets equity ETFs 24% 24% 39% 27% 37%
US equity ETFs 20% 20% 26% 20% 27%
International developed equity ETFs 11% 9% 14% 11% 15%
Fixed income ETFs 6% 7% 12% 8% 11%
Currency ETFs 3% 2% 4% 2% 5%
Alternative strategy ETFs 0% 1% 1% 1% 1%
Total 100% 100% 100% 100% 100%
Average ETF advisory fee during the period
Alternative strategy ETFs 0.94% 0.94% 0.94% 0.94% 0.95%
Emerging markets equity ETFs 0.66% 0.66% 0.67% 0.66% 0.67%
International developed equity ETFs 0.56% 0.56% 0.56% 0.56% 0.56%
Fixed income ETFs 0.55% 0.55% 0.55% 0.55% 0.55%
International hedged equity ETFs 0.49% 0.49% 0.49% 0.49% 0.49%
Currency ETFs 0.48% 0.50% 0.50% 0.49% 0.50%
US equity ETFs 0.35% 0.35% 0.35% 0.35% 0.35%
Blended total 0.51% 0.51% 0.54% 0.52% 0.54%
Number of ETFs - end of the period
International developed equity ETFs 16 16 16 16 16
US equity ETFs 13 13 11 13 11
Fixed income ETFs 11 6 5 11 5
Emerging markets equity ETFs 7 7 5 7 5
International hedged equity ETFs 6 4 2 6 2
Currency ETFs 6 5 5 6 5
Alternative strategy ETFs 2 2 2 2 2
Total 61 53 46 61 46
Headcount 87 84 70 87 70
Note: Previously issued statistics may be restated due to trade adjustments
Source: Investment Company Institute, Bloomberg, WisdomTree
Non-GAAP Financial Measurements
In an effort to provide additional information regarding our results as determined by GAAP, we also disclose certain non-GAAP information which we believe provides useful and meaningful information. The non-GAAP financial measurements included in this release include proforma operating income, proforma operating expenses, proforma pre-tax operating margin, gross margin and gross margin percentage. Our management reviews these non-GAAP financial measurements when evaluating our financial performance and results of operations; therefore, we believe it is useful to provide information with respect to these non-GAAP measurements so as to share this perspective of management. Non-GAAP measurements do not have any standardized meaning, do not replace nor are superior to GAAP financial measurements and are unlikely to be comparable to similar measures presented by other companies. These non-GAAP financial measurements should be considered in the context with our GAAP results. We have disclosed our results excluding certain non-operating items including (1) our patent litigation with Research Affiliates LLC; (2) expenses for the WisdomTree ETF shareholder proxy solicitation; and (3) advisory and other related fees associated with the secondary offering of our common stock in November 2012. Management excludes these items when measuring our financial performance as they are not directly related to our core business of being an ETF sponsor and asset manager. We disclose gross margin as a non-GAAP financial measurement to allow investors to analyze our revenues less the direct costs paid to third parties attributable to those revenues.
WISDOMTREE INVESTMENTS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
GAAP to NON-GAAP RECONCILIATION
(in thousands)
(Unaudited)
Three Months Ended For the Year Ended
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2013 2013 2012 2013 2012
GAAP total expenses $ 26,690 $ 24,665 $ 18,321 $ 97,931 $ 73,768
ETF shareholder proxy -- -- -- -- (3,264)
Patent litigation, net -- -- 524 -- (176)
Offering costs -- -- (353) -- (353)
Proforma operating expenses $ 26,690 $ 24,665 $ 18,492 $ 97,931 $ 69,975
GAAP net income $ 16,476 $ 14,965 $ 5,253 $ 51,537 $ 11,030
ETF shareholder proxy -- -- -- -- 3,264
Patent litigation, net -- -- (524) -- 176
Offering costs -- -- 353 -- 353
Proforma operating income $ 16,476 $ 14,965 $ 5,082 $ 51,537 $ 14,823
GAAP net income $ 16,476 $ 14,965 $ 5,253 $ 51,537 $ 11,030
Divide GAAP total revenue 43,166 39,630 23,574 149,468 84,798
GAAP pre-tax margin 38.2% 37.8% 22.3% 34.5% 13.0%
Proforma operating income $ 16,476 $ 14,965 $ 5,082 $ 51,537 $ 14,823
Divide GAAP total revenue 43,166 39,630 23,574 149,468 84,798
Proforma operating margin 38.2% 37.8% 21.6% 34.5% 17.5%
GAAP total revenue $ 43,166 $ 39,630 $ 23,574 $ 149,468 $ 84,798
Fund management and administration (8,953) (8,794) (6,343) (35,076) (23,020)
Third party sharing arrangements (455) (374) (1,300) (1,368) (5,468)
Gross margin $ 33,758 $ 30,462 $ 15,931 $ 113,024 $ 56,310
Gross margin percentage 78.2% 76.9% 67.6% 75.6% 66.4%
Contact:
WisdomTree Investments, Inc.
Stuart Bell / Jessica Zaloom
+1.917.267.3702 / +1.917.267.3735
sbell@wisdomtree.com / jzaloom@wisdomtree.com
below consensus) (NWL) : Reports Q4 (Dec) earnings of $0.47 per share, $0.01 better than the Capital IQ Consensus Estimate of $0.46; revenues rose 3.0% year/year to $1.49 bln vs the $1.48 bln consensus.
Core sales, which exclude the impact of changes in foreign currency, grew 4.4 percent. Normalized operating margin of 12.2 percent consistent with the prior year period. Reported operating margin increased 20 basis points. Gross margin was 37.4 percent. Positive pricing and productivity were offset by input cost inflation and less favorable mix due largely to very strong sales growth in Baby & Parenting.
Co issues guidance for FY14, sees EPS of $1.94-2.00 vs. $2.00 Capital IQ Consensus Estimate; core sales +3-4%.
Newell Rubbermaid Announces Strong Fourth Quarter Results
GlobeNewswire Newell Rubbermaid
2 hours ago
Core Sales Growth of 4.4% and Normalized EPS of $0.47, up +9.3%
Reported Sales Growth of 2.9% and Reported EPS of $0.41, up +17.1%
ATLANTA, Jan. 31, 2014 (GLOBE NEWSWIRE) -- Newell Rubbermaid ( NWL ) today announced its fourth quarter 2013 financial results.
"We achieved a strong set of fourth quarter 2013 results, including the best quarterly core sales growth rate in years," Michael Polk, President and Chief Executive Officer, commented. "Our core sales grew 4.4 percent with broad based increases across all four regions and four of our five operating segments: Baby & Parenting, Commercial Products, Tools, and Writing. Our strong topline growth was driven by innovation, new distribution, and increased advertising that was fueled by overhead reductions related to Project Renewal. The topline growth, combined with solid operating margins, drove normalized EPS growth of more than nine percent to $0.47.
"2013 was a year of great progress for Newell Rubbermaid," continued Polk. "We transformed our company's structure from a holding company of nine individual global business units to an operating company where our five business segments leverage a set of strong functional capabilities organized and led across Newell Rubbermaid as a whole. This new operating model has realigned resources from structural overhead to investment in our brands and key capabilities: marketing and insight, design, customer development and our new global supply chain.
"As we press forward in 2014, we will drive our new operating model to speed while continuing to invest in our brands, our capabilities and our people. We remain clear that there is more work to do and there continues to be much more opportunity in front of us as we transform Newell Rubbermaid into a larger, faster growing, more profitable, and more global company."
Fourth Quarter Executive Summary
Net sales were $1.49 billion, a 2.9 percent increase versus prior year results.
Core sales, which exclude the impact of changes in foreign currency, grew 4.4 percent.
Normalized operating margin of 12.2 percent consistent with the prior year period. Reported operating margin increased 20 basis points.
Normalized diluted earnings per share were $0.47, an increase of 9.3 percent versus the prior year period. Reported diluted earnings per share were $0.41, an increase of 17.1 percent versus the prior year period.
Operating cash flow was $304.2 million versus $261.3 million in the prior year period.
The company paid dividends of $42.0 million and purchased 9.4 million shares of common stock under the $350 million accelerated share repurchase program announced in October. The number of shares ultimately purchased under the program will be determined by a formula tied to the volume-weighted average share price of the company's stock during the term of the program, expected to be completed no later than April 2014.
The company provided initial guidance for 2014 core sales growth of 3 to 4 percent, operating margin improvement of up to 40 basis points, normalized EPS of $1.94 to $2.00 and operating cash flow of $600 to $650 million.
Fourth Quarter 2013 Operating Results
Net sales in the fourth quarter were $1.49 billion, compared with $1.45 billion in the prior year. Core sales, which exclude 150 basis points of negative foreign currency impact, grew 4.4 percent.
Gross margin was 37.4 percent. Positive pricing and productivity were offset by input cost inflation and less favorable mix due largely to very strong sales growth in Baby & Parenting.
Normalized operating margin was 12.2 percent, compared with 12.2 percent in the prior year period. Significant overhead savings related to Project Renewal were reinvested into advertising and promotion with advertising investment up over 80 percent versus the prior year.
Fourth quarter reported operating margin was 10.7 percent compared with 10.5 percent in the prior year. Reported operating income was $159.2 million versus $152.4 million.
Normalized operating income was $182.0 million compared with $176.3 million in the prior year period. Fourth quarter 2013 normalized operating income excludes restructuring and restructuring-related costs of $22.8 million, while 2012 normalized operating income excludes $23.9 million of restructuring and restructuring-related costs.
The reported tax rate for the quarter was 18.2 percent compared with 22.9 percent in the prior year. The normalized tax rate was 19.4 percent compared with 20.5 percent in the prior year.
Reported net income was $117.3 million, compared with $101.9 million in the prior year. Reported diluted earnings per share of $0.41 increased 17.1 percent versus the prior year's $0.35 per diluted share. The increase was largely due to improved operating results, reduced share count, the absence of a 2012 loss on an extinguishment of debt and a lower tax rate.
Normalized net income was $134.1 million, compared with $126.6 million in the prior year. Normalized diluted earnings per share of $0.47 increased 9.3 percent versus the prior year's $0.43, primarily due to the improved operating results, reduced share count and a lower tax rate.
For the fourth quarter 2013, normalized diluted earnings per share exclude $0.06 per diluted share for restructuring and restructuring-related costs associated with Project Renewal. For the fourth quarter 2012, normalized diluted earnings per share exclude $0.06 per diluted share for restructuring and restructuring-related costs associated with Project Renewal and the European Transformation Plan, $0.01 per diluted share due to a loss on the extinguishment of debt and $0.01 per diluted share related to non-recurring tax charges resulting from incremental tax contingencies. (A reconciliation to "normalized" results is included below.)
The company generated $304.2 million in operating cash flow during the fourth quarter compared with $261.3 million last year. Capital expenditures were $52.5 million compared with $47.0 million in the prior year.
A reconciliation of the fourth quarter 2013 and 2012 results is as follows:
Q4 2013 Q4 2012
Diluted earnings per share (as reported)
$0.41
$0.35
Restructuring and restructuring-related costs
0.06
0.06
Income tax items
--
0.01
Loss on extinguishment of debt
--
0.01
Normalized EPS
$0.47
$0.43
Fourth Quarter 2013 Operating Segment Results
Writing net sales for the fourth quarter were $433.0 million, a 0.5 percent improvement compared to prior year. Core sales increased 2.1 percent, attributable to favorable pricing and strong volume growth in Latin America. Operating income was $94.3 million, or 21.8 percent of sales, compared with $79.2 million, or 18.4 percent of sales, in the prior year. The improvement in operating margin was largely driven by strong productivity and favorable pricing in Latin America, partially offset by increased advertising and promotion expense.
Home Solutions net sales were $423.9 million, a 1.9 percent decline compared to prior year. Core sales declined 1.2 percent, as distribution gains at Calphalon(R) and Goody(R) were more than offset by a decline in Rubbermaid Consumer sales attributable to the timing of Black Friday shipments and increased customer programming costs. Normalized operating income was $58.0 million, or 13.7 percent of sales, compared with $62.7 million, or 14.5 percent of sales, in the prior year. The decrease in operating margin was driven by input cost inflation and increased customer programming costs, partially offset by productivity and overhead reductions.
Tools net sales were $220.7 million, a 5.3 percent increase compared to prior year. Core sales increased 8.1 percent driven by new distribution and strong innovation in Latin America. Operating income in the Tools segment was $19.0 million, or 8.6 percent of sales, compared with $23.8 million, or 11.4 percent of sales, in the prior year. Although a sequential improvement versus third quarter results, the decrease in operating margin was driven by increased investment in selling systems in Latin America and Asia Pacific, partially offset by strengthened productivity and lower customer programming investment in North America.
Commercial Products net sales were $202.9 million, a 7.6 percent improvement compared to prior year. Core sales increased 8.2 percent largely as a result of share gains in North America and distribution gains in Latin America. Operating income was $15.5 million, or 7.6 percent of sales, compared with $22.0 million, or 11.7 percent of sales, in the prior year. The decrease in operating margin was driven by input cost inflation and significant increases in advertising and promotion support of the new Rubbermaid Commercial Products Executive Series launch in North America, partially offset by positive price realization.
Baby & Parenting net sales were $209.3 million, a 12.4 percent increase compared to prior year. Core sales increased 15.0 percent, driven by strong innovation at more premium price points, strengthened distribution and strong merchandising. Operating income was $19.6 million, or 9.4 percent of sales, compared with $12.8 million, or 6.9 percent of sales, in the prior year. The increase in operating margin was due to fixed cost leverage associated with strong growth, and positive price realization partially offset by increased inflation.
Full Year 2013 Results
Net sales for the twelve months ended December 31, 2013 increased 2.0 percent to $5.69 billion, compared with $5.58 billion in the prior year. Core sales, which exclude the impact of foreign currency, increased 3.2 percent.
Core sales grew in every segment as follows: 0.1 percent in Writing, 2.9 percent in Home Solutions, 3.4 percent in Tools, 3.9 percent in Commercial Products and 10.2 percent in Baby & Parenting. Reported sales growth (decline) by segment was as follows: (1.0) percent in Writing, 2.5 percent in Home Solutions, 1.5 percent in Tools, 3.4 percent in Commercial Products and 7.2 percent in Baby & Parenting.
Reported and normalized gross margins were 38.3 percent. Productivity and pricing helped mitigate input cost inflation and less favorable mix related largely to very strong growth on Baby & Parenting.
Reported operating margin declined 60 basis points to 10.9 percent due to higher restructuring costs related to Project Renewal.
Normalized operating margin was 13.3 percent, an increase of 30 basis points compared with 13.0 percent in the prior year. The margin increase was driven by a reduction of overheads related to Project Renewal, partially offset by increased advertising and promotion investment.
Normalized earnings were $1.83 per diluted share compared with $1.67 per diluted share in the prior year. 2013 normalized diluted earnings per share exclude $0.40 per diluted share for restructuring and restructuring-related costs associated with Project Renewal, $0.02 per diluted share resulting from the currency devaluation in Venezuela, $0.03 per diluted share of income tax benefits attributable to the resolution of tax contingencies and a net gain from discontinued operations of $0.19 per diluted share. 2012 normalized diluted earnings per share exclude $0.23 per diluted share for restructuring and restructuring-related costs, $0.08 per diluted share associated with certain non-recurring tax charges resulting from incremental tax contingencies and the expiration of various statutes of limitation, $0.02 per diluted share due to a loss on extinguishments of debt, as well as a net gain from discontinued operations of $0.03 per diluted share. (A reconciliation to "normalized" results is included below.)
Net income, as reported, was $474.6 million, or $1.63 per diluted share. This compares with $401.3 million, or $1.37 per diluted share, in the prior year.
Normalized net income was $534.9 million, compared with $490.6 million in the prior year. Normalized diluted earnings per share increased 9.6 percent to $1.83 versus $1.67 in the prior year, due to strengthened operating results, lower interest expense and a lower tax rate.
The company generated $605.2 million in operating cash flow during 2013 compared with $618.5 million in the prior year. An incremental voluntary pension contribution of $50 million in 2013 was largely offset by improved performance and improved working capital. Capital expenditures were $138.2 million compared with $177.2 million in the prior year.
A reconciliation of the full year 2013 and 2012 results is as follows:
FY 2013 FY 2012
Diluted earnings per share (as reported)
$1.63
$1.37
Restructuring and restructuring-related costs
0.40
0.23
Currency devaluation - Venezuela
0.02
--
Income tax items
(0.03)
0.08
Loss on extinguishments of debt
--
0.02
Income from discontinued operations
(0.19)
(0.03)
Normalized EPS
$1.83
$1.67
2014 Outlook
Newell Rubbermaid announced its full year 2014 guidance as follows:
Core sales growth of 3 to 4 percent;
Normalized operating margin improvement of up to 40 basis points;
Normalized EPS of $1.94 to $2.00; and
Operating cash flow between $600 and $650 million.
The company expects foreign exchange to have a negative impact on net sales of about 100 basis points.
2014 normalized EPS guidance excludes between $100 and $120 million of Project Renewal restructuring and restructuring-related costs. (A reconciliation of expected reported results to "normalized" results is included below.)
The company is on track to realize cumulative annualized cost savings of $270 to $325 million by the second quarter of 2015 related to Project Renewal. The majority of these savings will be reinvested in the business to strengthen brand building and selling capabilities and accelerate growth.
Operating cash flow guidance assumes $100 to $120 million in restructuring and restructuring-related cash payments. Capital expenditures are projected at $150 to $175 million.
A reconciliation of the 2014 earnings outlook is as follows:
FY 2014
Diluted earnings per share $1.61 to $1.67
Restructuring and restructuring-related costs $0.29 to $0.37
Normalized EPS $1.94 to $2.00
Conference Call
The company's fourth quarter 2013 earnings conference call will be held today, January 31, 2014, at 9:00 a.m. ET. A link to the webcast is provided under Events & Presentations in the Investor Relations section of Newell Rubbermaid's Web site at www.newellrubbermaid.com . The webcast will be available for replay. A supporting slide presentation will be made available in the Investor Relations section on the company's Web site under Quarterly Earnings.
Non-GAAP Financial Measures
This release contains non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission and includes a reconciliation of these non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with GAAP.
The company uses certain financial measures that are included in this press release and the additional financial information both in explaining its results to stockholders and the investment community and in its internal evaluation and management of its businesses. The company's management believes that these measures - including those that are "non-GAAP financial measures" - and the information they provide are useful to investors since these measures (a) permit investors to view the company's performance using the same tools that management uses to evaluate the company's past performance, reportable business segments and prospects for future performance and (b) determine certain elements of management's incentive compensation.
The company's management believes that core sales, as reflected in the Currency Analysis, is useful to investors because it demonstrates the effect of foreign currency on reported sales. The effect of foreign currency on reported sales is determined by applying a fixed exchange rate, calculated as the 12-month average in 2012, to the current and prior year local currency sales amounts, with the difference in these two amounts being the change in core sales and the difference between the change in as reported sales and the change in core sales reported as the currency impact. The company's management believes that "normalized" gross margin, "normalized" SG&A expense, "normalized" operating income and "normalized" tax rates are useful because they provide investors with a meaningful perspective on the current underlying performance of the company's core ongoing operations. The company's management believes that "normalized" earnings per share, which excludes restructuring and restructuring-related charges and one-time events such as losses related to the extinguishments of debt, tax benefits and charges, impairment charges, discontinued operations and certain other items, is useful to investors because it permits investors to better understand year-over-year changes in underlying operating performance. The company also uses both core sales and normalized earnings per share as two of the three performance criteria in its management cash bonus plan.
The company determines the tax effect of the items excluded from normalized diluted earnings per share by applying the estimated effective rate for the applicable jurisdiction in which the pre-tax items were incurred, and for which realization of the resulting tax benefit, if any, is expected.
While the company believes that these non-GAAP financial measures are useful in evaluating the company's performance, this information should be considered as supplemental in nature and not as a substitute for or superior to the related financial information prepared in accordance with GAAP. Additionally, these non-GAAP financial measures may differ from similar measures presented by other companies.
About Newell Rubbermaid
Newell Rubbermaid Inc., an S&P 500 company, is a global marketer of consumer and commercial products with 2013 sales of $5.7 billion and a strong portfolio of leading brands, including Sharpie(R), Paper Mate(R), Rubbermaid Commercial Products(R), Irwin(R), Lenox(R), Parker(R), Waterman(R), Rubbermaid(R), Levolor(R), Calphalon(R), Goody(R), Graco(R), Aprica(R) and Dymo(R). As part of the company's Growth Game Plan, Newell Rubbermaid is making sharper portfolio choices and investing in new marketing and innovation to accelerate performance.
This press release and additional information about Newell Rubbermaid are available on the company's Web site, www.newellrubbermaid.com .
Caution Concerning Forward-Looking Statements
Statements in this press release that are not historical in nature constitute forward-looking statements. These forward-looking statements relate to information or assumptions about the effects of sales, income/(loss), earnings per share, operating income, operating margin or gross margin improvements or declines, Project Renewal, capital and other expenditures, cash flow, dividends, restructuring and restructuring-related costs, costs and cost savings, inflation or deflation, particularly with respect to commodities such as oil and resin, debt ratings, and management's plans, projections and objectives for future operations and performance. These statements are accompanied by words such as "anticipate," "expect," "project," "will," "believe," "estimate" and similar expressions. Actual results could differ materially from those expressed or implied in the forward-looking statements. Important factors that could cause actual results to differ materially from those suggested by the forward-looking statements include, but are not limited to, our dependence on the strength of retail, commercial and industrial sectors of the economy in light of the continuation or escalation of the global economic slowdown or regional sovereign debt issues; currency fluctuations; competition with other manufacturers and distributors of consumer products; major retailers' strong bargaining power; changes in the prices of raw materials and sourced products and our ability to obtain raw materials and sourced products in a timely manner from suppliers; our ability to develop innovative new products and to develop, maintain and strengthen our end-user brands; product liability or regulatory actions; our ability to expeditiously close facilities and move operations while managing foreign regulations and other impediments; a failure of one of our key information technology systems or related controls; the potential inability to attract, retain and motivate key employees; future events that could adversely affect the value of our assets and require impairment charges; our ability to improve productivity and streamline operations; changes to our credit ratings; significant increases in the funding obligations related to our pension plans due to declining asset values, declining interest rates or otherwise; the imposition of tax liabilities greater than our provisions for such matters; the risks inherent in our foreign operations; our ability to consummate the transactions contemplated by the Accelerated Share Repurchase Plan; and those factors listed in the company's most recently filed Quarterly Report on Form 10-Q and Exhibit 99.1 thereto, filed with the Securities and Exchange Commission. Changes in such assumptions or factors could produce significantly different results. The information contained in this news release is as of the date indicated. The company assumes no obligation to update any forward-looking statements contained in this news release as a result of new information or future events or developments.
Newell Rubbermaid Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in millions, except per share data)
Three Months Ended December 31,
YOY
2013 2012 % Change
Net sales $ 1,489.8 $ 1,447.2 2.9%
Cost of products sold 932.8 910.8
GROSS MARGIN 557.0 536.4 3.8%
% of sales 37.4% 37.1%
Selling, general & administrative expenses 384.4 365.5 5.2%
% of sales 25.8% 25.3%
Restructuring costs 13.4 18.5
OPERATING INCOME 159.2 152.4 4.5%
% of sales 10.7% 10.5%
Nonoperating expenses:
Interest expense, net 15.0 17.4
Loss on extinguishment of debt -- 4.1
Other expense (income), net 0.6 (0.3)
15.6 21.2 (26.4)%
INCOME BEFORE INCOME TAXES 143.6 131.2 9.5%
% of sales 9.6% 9.1%
Income taxes 26.2 30.0 (12.7)%
Effective rate 18.2% 22.9%
NET INCOME FROM CONTINUING OPERATIONS 117.4 101.2 16.0%
% of sales 7.9% 7.0%
(Loss) income from discontinued operations, net of tax (0.1) 0.7
NET INCOME $ 117.3 $ 101.9 15.1%
7.9% 7.0%
EARNINGS PER SHARE:
Basic
Income from continuing operations $ 0.41 $ 0.35
(Loss) income from discontinued operations $ -- $ --
Net income $ 0.41 $ 0.35
Diluted
Income from continuing operations $ 0.41 $ 0.35
(Loss) income from discontinued operations $ -- $ --
Net income $ 0.41 $ 0.35
AVERAGE SHARES OUTSTANDING:
Basic 283.4 290.0
Diluted 286.7 293.1
Newell Rubbermaid Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in millions, except per share data)
Twelve Months Ended December 31,
YOY
2013 2012 % Change
Net sales $ 5,692.5 $ 5,579.9 2.0%
Cost of products sold 3,514.3 3,443.8
GROSS MARGIN 2,178.2 2,136.1 2.0%
% of sales 38.3% 38.3%
Selling, general & administrative expenses 1,446.1 1,443.2 0.2%
% of sales 25.4% 25.9%
Restructuring costs 111.1 52.9
OPERATING INCOME 621.0 640.0 (3.0)%
% of sales 10.9% 11.5%
Nonoperating expenses:
Interest expense, net 60.3 76.1
Loss on extinguishments of debt -- 10.9
Other expense (income), net 18.5 (1.3)
78.8 85.7 (8.1)%
INCOME BEFORE INCOME TAXES 542.2 554.3 (2.2)%
% of sales 9.5% 9.9%
Income taxes 122.1 162.3 (24.8)%
Effective rate 22.5% 29.3%
NET INCOME FROM CONTINUING OPERATIONS 420.1 392.0 7.2%
% of sales 7.4% 7.0%
Income from discontinued operations, net of tax 54.5 9.3
NET INCOME $ 474.6 $ 401.3 18.3%
8.3% 7.2%
EARNINGS PER SHARE:
Basic
Income from continuing operations $ 1.46 $ 1.35
Income from discontinued operations $ 0.19 $ 0.03
Net income $ 1.64 $ 1.38
Diluted
Income from continuing operations $ 1.44 $ 1.34
Income from discontinued operations $ 0.19 $ 0.03
Net income $ 1.63 $ 1.37
AVERAGE SHARES OUTSTANDING:
Basic 288.6 291.2
Diluted 291.8 293.6
Newell Rubbermaid Inc.
RECONCILIATION OF GAAP AND NON-GAAP INFORMATION
CERTAIN LINE ITEMS
(in millions, except per share data)
Three Months Ended December 31, 2013
GAAP Measure Restructuring and
Non-GAAP Measure
restructuring-related Discontinued
Percentage
Reported costs (1) operations (2) Normalized* of Sales
Selling, general & administrative expenses $ 384.4 $ (9.4) $ -- $ 375.0 25.2%
Operating income $ 159.2 $ 22.8 $ -- $ 182.0 12.2%
Income before income taxes $ 143.6 $ 22.8 $ -- $ 166.4
Income taxes (3) $ 26.2 $ 6.1 $ -- $ 32.3
Net income from continuing operations $ 117.4 $ 16.7 $ -- $ 134.1
Net income $ 117.3 $ 16.7 $ 0.1 $ 134.1
Diluted earnings per share** $ 0.41 $ 0.06 $ -- $ 0.47
Three Months Ended December 31, 2012
GAAP Measure Restructuring and
Loss on Non-GAAP Measure
restructuring-related Discontinued Non-recurring extinguishment
Percentage
Reported costs (1) operations (2) tax items (4) of debt (5) Normalized* of Sales
Cost of products sold $ 910.8 $ (2.6) $ -- $ -- $ -- $ 908.2 62.8%
Gross margin $ 536.4 $ 2.6 $ -- $ -- $ -- $ 539.0 37.2%
Selling, general & administrative expenses $ 365.5 $ (2.8) $ -- $ -- $ -- $ 362.7 25.1%
Operating income $ 152.4 $ 23.9 $ -- $ -- $ -- $ 176.3 12.2%
Nonoperating expenses $ 21.2 $ -- $ -- $ -- $ (4.1) $ 17.1
Income before income taxes $ 131.2 $ 23.9 $ -- $ -- $ 4.1 $ 159.2
Income taxes (3) $ 30.0 $ 5.0 $ -- $ (3.9) $ 1.5 $ 32.6
Net income from continuing operations $ 101.2 $ 18.9 $ -- $ 3.9 $ 2.6 $ 126.6
Net income $ 101.9 $ 18.9 $ (0.7) $ 3.9 $ 2.6 $ 126.6
Diluted earnings per share** $ 0.35 $ 0.06 $ -- $ 0.01 $ 0.01 $ 0.43
* Normalized results are financial measures that are not in accordance with GAAP and exclude the above normalized adjustments. See below for a discussion of each of these adjustments.
**Totals may not add due to rounding.
(1) Restructuring and restructuring-related charges during the three months ended December 31, 2013 include $9.4 million of organizational change implementation and restructuring-related costs and $13.4 million of restructuring costs incurred in connection with Project Renewal. Restructuring and restructuring-related charges during the three months ended December 31, 2012 include $5.4 million of restructuring-related costs and $18.5 million of restructuring costs incurred in connection with the European Transformation Plan and Project Renewal.
(2) During the three months ended December 31, 2013, the Company recognized a net loss of $1.1 million in discontinued operations relating to the operations of the Hardware and Teach businesses and a $1.0 million gain related to the sale of the Hardware business. During the three months ended December 31, 2012, the Company recognized net income of $0.7 million in discontinued operations relating to the operations of the Hardware and Teach businesses.
(3) The Company determined the tax effect of the items excluded from normalized results by applying the estimated effective rate for the applicable jurisdiction in which the pre-tax items were incurred, and for which realization of the resulting tax benefit, if any, is expected.
(4) During the three months ended December 31, 2012, the Company incurred $3.9 million of non-recurring income tax charges resulting from tax contingencies and the expiration of various statutes of limitation.
(5) Loss on extinguishment of debt of $4.1 million during the three months ended December 31, 2012 was incurred in connection with the early retirement of the April 2013 Senior Notes.
Newell Rubbermaid Inc.
RECONCILIATION OF GAAP AND NON-GAAP INFORMATION
CERTAIN LINE ITEMS
(in millions, except per share data)
Twelve Months Ended December 31, 2013
GAAP Measure Restructuring Charge resulting from
Non-GAAP Measure
and restructuring-- the devaluation of the Non-recurring Discontinued
Percentage
Reported
related costs (1) Venezuelan Bolivar (2)
tax items (3)
operations (4)
Normalized*
of Sales
Cost of products sold $ 3,514.3 $ (1.1) $ -- $ -- $ -- $ 3,513.2 61.7%
Gross margin $ 2,178.2 $ 1.1 $ -- $ -- $ -- $ 2,179.3 38.3%
Selling, general & administrative expenses $ 1,446.1 $ (23.8) $ -- $ -- $ -- $ 1,422.3 25.0%
Operating income $ 621.0 $ 136.0 $ -- $ -- $ -- $ 757.0 13.3%
Nonoperating expenses $ 78.8 $ -- $ (11.1) $ -- $ -- $ 67.7
Income before income taxes $ 542.2 $ 136.0 $ 11.1 $ -- $ -- $ 689.3
Income taxes (5) $ 122.1 $ 20.3 $ 4.1 $ 7.9 $ -- $ 154.4
Net income from continuing operations $ 420.1 $ 115.7 $ 7.0 $ (7.9) $ -- $ 534.9
Net income $ 474.6 $ 115.7 $ 7.0 $ (7.9) $ (54.5) $ 534.9
Diluted earnings per share** $ 1.63 $ 0.40 $ 0.02 $ (0.03) $ (0.19) $ 1.83
Twelve Months Ended December 31, 2012
GAAP Measure Restructuring
Loss on Non-GAAP Measure
and restructuring-- Non-recurring Discontinued extinguishments
Percentage
Reported related costs (1) tax items (3) operations (4) of debt (6) Normalized* of Sales
Cost of products sold $ 3,443.8 $ (2.6) $ -- $ -- $ -- $ 3,441.2 61.7%
Gross margin $ 2,136.1 $ 2.6 $ -- $ -- $ -- $ 2,138.7 38.3%
Selling, general & administrative expenses $ 1,443.2 $ (31.9) $ -- $ -- $ -- $ 1,411.3 25.3%
Operating income $ 640.0 $ 87.4 $ -- $ -- $ -- $ 727.4 13.0%
Nonoperating expenses $ 85.7 $ -- $ -- $ -- $ (10.9) $ 74.8
Income before income taxes $ 554.3 $ 87.4 $ -- $ -- $ 10.9 $ 652.6
Income taxes (5) $ 162.3 $ 18.8 $ (23.1) $ -- $ 4.0 $ 162.0
Net income from continuing operations $ 392.0 $ 68.6 $ 23.1 $ -- $ 6.9 $ 490.6
Net income $ 401.3 $ 68.6 $ 23.1 $ (9.3) $ 6.9 $ 490.6
Diluted earnings per share** $ 1.37 $ 0.23 $ 0.08 $ (0.03) $ 0.02 $ 1.67
* Normalized results are financial measures that are not in accordance with GAAP and exclude the above normalized adjustments. See below for a discussion of each of these adjustments.
**Totals may not add due to rounding.
(1) Restructuring and restructuring-related charges during the twelve months ended December 31, 2013 include $24.9 million of organizational change implementation and restructuring-related costs and $111.1 million of restructuring costs incurred in connection with Project Renewal. Restructuring and restructuring-related charges during the twelve months ended December 31, 2012 include $34.5 million of restructuring-related costs and $52.9 million of restructuring costs incurred in connection with the European Transformation Plan and Project Renewal.
(2) During the twelve months ended December 31, 2013, the Company recognized a foreign exchange loss of $11.1 million resulting from the devaluation of the Venezuelan Bolivar, which under hyperinflationary accounting is recorded in the Statement of Operations.
(3) During the twelve months ended December 31, 2013, the Company recognized a non-recurring tax benefit of $7.9 million resulting from the resolution of various income tax contingencies and the expiration of various statutes of limitation. During the twelve months ended December 31, 2012, the Company incurred $23.1 million of non-recurring tax charges resulting from incremental tax contingencies and the expiration of various statutes of limitation.
(4) During the twelve months ended December 31, 2013, the Company recognized a net loss of $4.4 million in discontinued operations relating to the operations of the Hardware and Teach businesses and a $58.9 million net gain, including impairments, relating to the sale of the Hardware and Teach businesses. During the twelve months ended December 31, 2012, the Company recognized net income of $7.6 million in discontinued operations relating to the operations of the Hardware and Teach businesses and a $1.7 million gain primarily related to the sale of the hand torch and solder business.
(5) The Company determined the tax effect of the items excluded from normalized results by applying the estimated effective rate for the applicable jurisdiction in which the pre-tax items were incurred, and for which realization of the resulting tax benefit, if any, is expected.
(6) Loss on extinguishments of debt of $10.9 million during the twelve months ended December 31, 2012 primarily represents the costs associated with the early retirement of the junior convertible subordinated securities underlying the quarterly income preferred securities (QUIPS) and the April 2013 Senior Notes.
Newell Rubbermaid Inc.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in millions)
December 31, December 31,
Assets: 2013 2012
Cash and cash equivalents $ 226.3 $ 183.8
Accounts receivable, net 1,105.1 1,112.4
Inventories, net 684.4 696.4
Deferred income taxes 139.1 135.8
Prepaid expenses and other 140.7 142.7
Total Current Assets 2,295.6 2,271.1
Property, plant and equipment, net 539.6 560.2
Goodwill 2,361.1 2,370.2
Other intangible assets, net 614.5 654.1
Other assets 268.9 366.4
Total Assets $ 6,079.7 $ 6,222.0
Liabilities and Stockholders' Equity:
Accounts payable $ 558.9 $ 527.4
Accrued compensation 167.3 173.5
Other accrued liabilities 698.5 658.0
Short-term debt 174.0 210.7
Current portion of long-term debt 0.8 ...
1.2
Total Current Liabilities 1,599.5 1,570.8
Long-term debt 1,661.6 1,706.5 Other noncurrent liabilities 743.6 944.5
Stockholders' Equity - Parent 2,071.5 1,996.7 Stockholders' Equity - Noncontrolling Interests 3.5 3.5
Total Stockholders' Equity 2,075.0 2,000.2
Total Liabilities and Stockholders' Equity $ 6,079.7 $ 6,222.0
Newell Rubbermaid Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in millions)
Twelve Months Ended December 31,
2013 2012
Operating Activities:
Net income $ 474.6 $ 401.3
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 158.9 163.7
Net gain from sale of discontinued operations (87.4) (5.2)
Loss on extinguishments of debt -- 10.9
Non-cash restructuring costs 4.2 0.3
Deferred income taxes 92.0 71.2
Stock-based compensation expense 37.2 32.9
Other, net 32.3 12.0
Changes in operating assets and liabilities, excluding the effects of acquisitions and divestitures:
Accounts receivable (19.0) (101.2)
Inventories (61.6) 7.7
Accounts payable 59.0 56.3
Accrued liabilities and other (85.0) (31.4)
Net cash provided by operating activities $ 605.2 $ 618.5
Investing Activities:
Proceeds from sale of discontinued operations and noncurrent assets $ 189.8 $ 43.5
Capital expenditures (138.2) (177.2)
Acquisitions and acquisition-related activity -- (26.5)
Other 1.8 (2.8)
Net cash provided by (used in) investing activities $ 53.4 $ (163.0)
Financing Activities:
Net short-term borrowings $ (35.8) $ 106.0
Proceeds from issuance of debt, net of debt issuance costs -- 841.9
Payments on debt -- (1,203.4)
Repurchase and retirement of shares of common stock (470.0) (91.5)
Cash dividends (174.1) (125.9)
Excess tax benefits related to stock-based compensation 15.8 12.7
Other stock-based compensation activity, net 50.6 14.2
Net cash used in financing activities $ (613.5) $ (446.0)
Currency rate effect on cash and cash equivalents $ (2.6) $ 4.1
Increase in cash and cash equivalents $ 42.5 $ 13.6
Cash and cash equivalents at beginning of year 183.8 170.2
Cash and cash equivalents at end of year $ 226.3 $ 183.8
Newell Rubbermaid Inc.
Financial Worksheet- Segment Reporting
(In Millions)
2013 2012
Reconciliation (1)
Reconciliation (1)
Year-over-year changes
Reported Excluded Normalized Operating
Reported Excluded Normalized Operating Net Sales Normalized Oil
Net Sales OI Items OI Margin Net Sales OI Items OI Margin $ % $ %
Q1:
Writing $ 340.6 $ 63.2 $ -- $ 63.2 18.6% $ 375.6 $ 66.4 $ -- $ 66.4 17.7% $ (35.0) (9.3)% $ (3.2) (4.8)%
Home Solutions 338.9 34.1 -- 34.1 10.1% 326.7 30.9 -- 30.9 9.5% 12.2 3.7% 3.2 10.4%
Tools 188.6 18.7 -- 18.7 9.9% 190.6 28.7 -- 28.7 15.1% (2.0) (1.0)% (10.0) (34.8)%
Commercial Products 183.1 21.6 -- 21.6 11.8% 175.4 18.6 -- 18.6 10.6% 7.7 4.4% 3.0 16.1%
Baby & Parenting 189.6 23.9 -- 23.9 12.6% 182.2 22.4 -- 22.4 12.3% 7.4 4.1% 1.5 6.7%
Restructuring Costs -- (34.4) 34.4 --
-- (12.1) 12.1 --
--
--
Corporate -- (29.3) 6.6 (22.7)
-- (31.7) 10.0 (21.7)
--
(1.0) (4.6)%
Total $ 1,240.8 $ 97.8 $ 41.0 $ 138.8 11.2% $ 1,250.5 $ 123.2 $ 22.1 $ 145.3 11.6% $ (9.7) (0.8)% $ (6.5) (4.5)%
2013 2012
Reconciliation (1)
Reconciliation (1)
Year-over-year changes
Reported Excluded Normalized Operating
Reported Excluded Normalized Operating Net Sales Normalized Oil
Net Sales OI Items OI Margin Net Sales OI Items OI Margin $ % $ %
Q2:
Writing $ 477.8 $ 123.6 $ -- $ 123.6 25.9% $ 459.1 $ 105.7 $ -- $ 105.7 23.0% $ 18.7 4.1% $ 17.9 16.9%
Home Solutions 399.1 53.7 -- 53.7 13.5% 391.3 42.6 -- 42.6 10.9% 7.8 2.0% 11.1 26.1%
Tools 198.0 18.3 -- 18.3 9.2% 202.4 30.5 -- 30.5 15.1% (4.4) (2.2)% (12.2) (40.0)%
Commercial Products 203.6 21.9 -- 21.9 10.8% 190.1 21.1 -- 21.1 11.1% 13.5 7.1% 0.8 3.8%
Baby & Parenting 196.2 23.8 -- 23.8 12.1% 182.4 19.2 -- 19.2 10.5% 13.8 7.6% 4.6 24.0%
Restructuring Costs -- (32.0) 32.0 --
(10.0) 10.0 --
--
--
Corporate -- (23.9) 2.1 (21.8)
(31.7) 10.5 (21.2)
--
(0.6) (2.8)%
Total $ 1,474.7 $ 185.4 $ 34.1 $ 219.5 14.9% $ 1,425.3 $ 177.4 $ 20.5 $ 197.9 13.9% $ 49.4 3.5% $ 21.6 10.9%
2013 2012
Reconciliation (1)
Reconciliation (1)
Year-over-year changes
Reported Excluded Normalized Operating
Reported Excluded Normalized Operating Net Sales Normalized Oil
Net Sales OI Items OI Margin Net Sales OI Items OI Margin $ % $ %
Q3:
Writing $ 454.7 $ 108.8 $ 0.3 $ 109.1 24.0% $ 458.6 $ 83.6 $ 1.2 $ 84.8 18.5% $ (3.9) (0.9)% $ 24.3 28.7%
Home Solutions 431.4 66.3 -- 66.3 15.4% 403.8 64.0 2.0 66.0 16.3% 27.6 6.8% 0.3 0.5%
Tools 210.6 12.3 -- 12.3 5.8% 203.6 26.8 -- 26.8 13.2% 7.0 3.4% (14.5) (54.1)%
Commercial Products 196.3 23.5 -- 23.5 12.0% 205.6 31.2 -- 31.2 15.2% (9.3) (4.5)% (7.7) (24.7)%
Baby & Parenting 194.2 23.9 0.8 24.7 12.7% 185.3 18.3 -- 18.3 9.9% 8.9 4.8% 6.4 35.0%
Restructuring Costs -- (31.3) 31.3 --
-- (12.3) 12.3 --
--
--
Corporate -- (24.9) 5.7 (19.2)
-- (24.6) 5.4 (19.2)
--
-- 0.0%
Total $ 1,487.2 $ 178.6 $ 38.1 $ 216.7 14.6% $ 1,456.9 $ 187.0 $ 20.9 $ 207.9 14.3% $ 30.3 2.1% $ 8.8 4.2%
2013 2012
Reconciliation (1)
Reconciliation (1)
Year-over-year changes
Reported Excluded Normalized Operating
Reported Excluded Normalized Operating Net Sales Normalized Oil
Net Sales OI Items OI Margin Net Sales OI Items OI Margin $ % $ %
Q4:
Writing $ 433.0 $ 94.3 $ -- $ 94.3 21.8% $ 430.9 $ 79.2 $ -- $ 79.2 18.4% $ 2.1 0.5% $ 15.1 19.1%
Home Solutions 423.9 58.0 -- 58.0 13.7% 432.0 59.8 2.9 62.7 14.5% (8.1) (1.9)% (4.7) (7.5)%
Tools 220.7 19.0 -- 19.0 8.6% 209.5 23.8 -- 23.8 11.4% 11.2 5.3% (4.8) (20.2)%
Commercial Products 202.9 15.5 -- 15.5 7.6% 188.6 22.0 -- 22.0 11.7% 14.3 7.6% (6.5) (29.5)%
Baby & Parenting 209.3 19.6 -- 19.6 9.4% 186.2 12.8 -- 12.8 6.9% 23.1 12.4% 6.8 53.1%
Restructuring Costs -- (13.4) 13.4 --
-- (18.5) 18.5 --
--
--
Corporate -- (33.8) 9.4 (24.4)
-- (26.7) 2.5 (24.2)
--
(0.2) (0.8)%
Total $ 1,489.8 $ 159.2 $ 22.8 $ 182.0 12.2% $ 1,447.2 $ 152.4 $ 23.9 $ 176.3 12.2% $ 42.6 2.9% $ 5.7 3.2%
2013 2012
Reconciliation (1)
Reconciliation (1)
Year-over-year changes
Reported Excluded Normalized Operating
Reported Excluded Normalized Operating Net Sales Normalized Oil
Net Sales OI Items OI Margin Net Sales OI Items OI Margin $ % $ %
YE:
Writing $ 1,706.1 $ 389.9 $ 0.3 $ 390.2 22.9% $ 1,724.2 $ 334.9 $ 1.2 $ 336.1 19.5% $ (18.1) (1.0)% $ 54.1 16.1%
Home Solutions 1,593.3 212.1 -- 212.1 13.3% 1,553.8 197.3 4.9 202.2 13.0% 39.5 2.5% 9.9 4.9%
Tools 817.9 68.3 -- 68.3 8.4% 806.1 109.8 -- 109.8 13.6% 11.8 1.5% (41.5) (37.8)%
Commercial Products 785.9 82.5 -- 82.5 10.5% 759.7 92.9 -- 92.9 12.2% 26.2 3.4% (10.4) (11.2)%
Baby & Parenting 789.3 91.2 0.8 92.0 11.7% 736.1 72.7 -- 72.7 9.9% 53.2 7.2% 19.3 26.5%
Restructuring Costs -- (111.1) 111.1 --
-- (52.9) 52.9 --
--
--
Corporate -- (111.9) 23.8 (88.1)
-- (114.7) 28.4 (86.3)
--
(1.8) (2.1)%
Total $ 5,692.5 $ 621.0 $ 136.0 $ 757.0 13.3% $ 5,579.9 $ 640.0 $ 87.4 $ 727.4 13.0% $ 112.6 2.0% $ 29.6 4.1%
(1) Excluded items consist of organizational change implementation, restructuring-related and restructuring costs. Organizational change implementation and restructuring-related costs of $24.9 million and restructuring costs of $111.1 million incurred during the twelve months ended December 31, 2013 relate to Project Renewal. Restructuring-related costs of $34.5 million and restructuring costs of $52.9 million during the twelve months ended December 31, 2012 relate to the European Transformation Plan and Project Renewal.
Newell Rubbermaid Inc.
Three Months Ended December 31, 2013
In Millions
Currency Analysis
By Segment
As Reported Core Sales (1)
Year-Over-Year Increase (Decrease)
Increase
Increase Currency Excluding Including Currency
2013 2012 (Decrease) 2013 2012 (Decrease) Impact Currency Currency Impact
Writing $ 433.0 $ 430.9 $ 2.1 $ 439.6 $ 430.5 $ 9.1 $ (7.0) 2.1% 0.5% (1.6)%
Home Solutions 423.9 432.0 (8.1) 426.2 431.5 (5.3) (2.8) (1.2)% (1.9)% (0.7)%
Tools 220.7 209.5 11.2 228.1 211.0 17.1 (5.9) 8.1% 5.3% (2.8)%
Commercial Products 202.9 188.6 14.3 204.1 188.7 15.4 (1.1) 8.2% 7.6% (0.6)%
Baby & Parenting 209.3 186.2 23.1 214.6 186.6 28.0 (4.9) 15.0% 12.4% (2.6)%
Total Company $ 1,489.8 $ 1,447.2 $ 42.6 $ 1,512.6 $ 1,448.3 $ 64.3 $ (21.7) 4.4% 2.9% (1.5)%
By Geography
United States $ 996.9 $ 963.6 $ 33.3 $ 996.9 $ 963.6 $ 33.3 $ -- 3.5% 3.5% (0.0)%
Canada 80.9 89.4 (8.5) 84.5 88.5 (4.0) (4.5) (4.5)% (9.5)% (5.0)%
Total North America 1,077.8 1,053.0 24.8 1,081.4 1,052.1 29.3 (4.5) 2.8% 2.4% (0.4)%
Europe, Middle East and Africa 187.8 178.3 9.5 179.7 177.8 1.9 7.6 1.1% 5.3% 4.2%
Latin America 110.9 92.5 18.4 125.0 94.7 30.3 (11.9) 32.0% 19.9% (12.1)%
Asia Pacific 113.3 123.4 (10.1) 126.5 123.7 2.8 (12.9) 2.3% (8.2)% (10.5)%
Total International 412.0 394.2 17.8 431.2 396.2 35.0 (17.2) 8.8% 4.5% (4.3)%
Total Company $ 1,489.8 $ 1,447.2 $ 42.6 $ 1,512.6 $ 1,448.3 $ 64.3 $ (21.7) 4.4% 2.9% (1.5)%
(1) "Core Sales" is determined by applying a fixed exchange rate, calculated as the 12-month average in 2012, to the current and prior year local currency sales amounts, with the difference between the change in "As Reported" sales and the change in "Core Sales" reported in the table as "Currency Impact".
Newell Rubbermaid Inc.
Twelve Months Ended December 31, 2013
In Millions
Currency Analysis
By Segment
As Reported Core Sales (1)
Year-Over-Year Increase (Decrease)
(Decrease)
Increase Currency Excluding Including Currency
2013 2012 Increase 2013 2012 (Decrease) Impact Currency Currency Impact
Writing $ 1,706.1 $ 1,724.2 $ (18.1) $ 1,727.2 $ 1,725.9 $ 1.3 $ (19.4) 0.1% (1.0)% (1.1)%
Home Solutions 1,593.3 1,553.8 39.5 1,599.3 1,553.7 45.6 (6.1) 2.9% 2.5% (0.4)%
Tools 817.9 806.1 11.8 835.5 807.9 27.6 (15.8) 3.4% 1.5% (1.9)%
Commercial Products 785.9 759.7 26.2 789.6 760.0 29.6 (3.4) 3.9% 3.4% (0.5)%
Baby & Parenting 789.3 736.1 53.2 811.4 736.5 74.9 (21.7) 10.2% 7.2% (3.0)%
Total Company $ 5,692.5 $ 5,579.9 $ 112.6 $ 5,763.0 $ 5,584.0 $ 179.0 $ (66.4) 3.2% 2.0% (1.2)%
By Geography
United States $ 3,867.8 $ 3,739.1 $ 128.7 $ 3,867.8 $ 3,739.1 $ 128.7 $ -- 3.4% 3.4% 0.0%
Canada 310.9 325.4 (14.5) 320.7 325.5 (4.8) (9.7) (1.5)% (4.5)% (3.0)%
Total North America 4,178.7 4,064.5 114.2 4,188.5 4,064.6 123.9 (9.7) 3.0% 2.8% (0.2)%
Europe, Middle East and Africa 699.2 707.6 (8.4) 686.1 709.5 (23.4) 15.0 (3.3)% (1.2)% 2.1%
Latin America 392.6 335.5 57.1 426.9 337.2 89.7 (32.6) 26.6% 17.0% (9.6)%
Asia Pacific 422.0 472.3 (50.3) 461.5 472.7 (11.2) (39.1) (2.4)% (10.7)% (8.3)%
Total International 1,513.8 1,515.4 (1.6) 1,574.5 1,519.4 55.1 (56.7) 3.6% (0.1)% (3.7)%
Total Company $ 5,692.5 $ 5,579.9 $ 112.6 $ 5,763.0 $ 5,584.0 $ 179.0 $ (66.4) 3.2% 2.0% (1.2)%
(1) "Core Sales" is determined by applying a fixed exchange rate, calculated as the 12-month average in 2012, to the current and prior year local currency sales amounts, with the difference between the change in "As Reported" sales and the change in "Core Sales" reported in the table as "Currency Impact".
Contact:
Nancy O'Donnell
Vice President, Investor Relations
(770) 418-7723
David Doolittle
Vice President, Global Communications
(770) 418-7519
Utah Medical Products, Inc. Reports Financial Performance for Fourth Quarter and Year 2013
GlobeNewswire Utah Medical Products, Inc.
14 hours ago
SALT LAKE CITY, Jan. 30, 2014 (GLOBE NEWSWIRE) -- Utah Medical Products, Inc. (UTMD) concluded another excellent financial year in 2013 under difficult conditions. The results according to Generally Accepted Accounting Principles in the U.S. (US GAAP) are clouded somewhat by a favorable adjustment to UTMD's tax provision, as explained below.
In the fourth calendar quarter (4Q) 2013 and year of 2013, UTMD's changes in U.S. GAAP financial results compared to the same time period in the prior calendar year were as follows:
4Q Year
(October -- December) (January -- December)
Sales: +3% (3%)
Gross Profit: -- (4%)
Operating Income: -- (2%)
Net Income: +54% +12%
Earnings Per Share: +51% +10%
US GAAP earnings per share (EPS) for the 2013 calendar year were $3.02. Year 2012 EPS were $2.74.
Excluding the noncash effects of depreciation, amortization of intangible assets and non-cash stock option expense and asset impairment expense, 2013 consolidated earnings before taxes plus interest expense were $18,136 compared to $18,703 in 2012. Currency amounts in this report are in thousands, except per share amounts and where noted.
As shareholders likely remember, in March 2011 UTMD acquired 100% of the stock of Femcare Holdings Limited in the UK, and its subsidiaries. Included in the purchase price were identifiable intangible assets (IIA) of $38.8 million, almost all of which are being amortized over a fifteen year useful life in operating expenses. This approximately $2.5 million per year amortization expense reduces the income statement tax provision, but is not deductible on the tax return. As a consequence, on the acquisition date, UTMD created a deferred tax liability (DTL) on its balance sheet, using UK tax rates then in effect, which represented the tax impact of the amortization of IIA over the fifteen year life.
In 2013, the government of Great Britain enacted law that substantially reduces corporate income tax rates looking forward. According to U.S. GAAP, the total effect of the tax rate changes on deferred tax balances is recorded as a component of the income tax provision related to continuing operations for the period in which the law is enacted. In other words, the total reduction in the DTL that results from lower future tax rates over the remaining almost 12 years of Femcare IIA amortization, which amounts to $976, reduced UTMD's reported 2013 tax provision and increased reported net profit by the same amount, per U.S. GAAP.
The adjustment only affected UTMD's income tax provision, net income and EPS; not sales, gross profits, operating income or earnings before taxes. Without including the effect of reducing the income tax provision, UTMD's changes in net income and EPS (on a non-GAAP basis) compared to the same time periods in the prior calendar year were as follows:
4Q Year
(October -- December) (January -- December)
Net Income: +10% +3%
Earnings Per Share: +9% +1%
Profitability measures compared to the same time periods in the prior calendar year were as follows:
4Q13 4Q12 2013 2012
Gross Profit Margin (GPM): 59.4% 61.2% 59.9% 60.9%
Operating Profit Margin (OPM): 35.3% 36.3% 36.6% 36.6%
Net Profit Margin (NPM): 34.4% 23.0% 28.2% 24.5%
Without the tax provision adjustment,
Net Profit Margin (Non-GAAP): 24.7% 23.0% 25.8% 24.5%
According to CEO Kevin Cornwell,
"Non-U.S. GAAP earnings per share (EPS) in 2013 without the $976 tax provision adjustment were $2.76, up 1% compared to management's beginning of year projection in its SEC Form 10-K of down 3%. We are pleased that UTMD achieved its financial plan for 2013, with sales slightly lower than projected, but with net income and EPS higher.
Certainly, UTMD shareholders have benefited substantially by the reductions in UK corporate income taxes. We applaud the UK government for its sensible pro-growth, pro-employment tax policy.
We invite shareholders to read UTMD's SEC Form 10-K which will be published by March 17 to obtain more details regarding 2013 performance and management projections for 2014. UTMD's focus remains on creating excellent long term shareholder value through providing highly reliable devices that help clinicians improve care and lower overall health care costs. We appreciate the continued confidence that our shareholders have demonstrated in the Company's prospects for future success."
Sales.
Total consolidated sales were down 2.5% in 2013 compared to 2012. A decline of 2% was projected at the beginning of 2013 due to known distributor overstocking in 2012. The marginal difference can be explained by the strength of the U.S. Dollar (USD) relative to the Great Britain Pound (GBP) and Euro in the first three quarters of 2013, and the significant weakness of the Australian Dollar (AUD) in the last three quarters of the year.
Domestic U.S. sales in 2013 were $18,965 (47% of total sales) compared to $19,961 (48% of total sales) in 2012. In 4Q 2013, domestic U.S. sales were $4,542 (45% of total sales) compared to $4,436 (45% of total sales) in 4Q 2012. International sales in 2013 were $21,528 compared to $21,591 in 2012. In 4Q 2013, international sales were $5,543 compared to $5,397 in 4Q 2012.
The two primary causes of $996 net lower domestic sales were $570 lower sales to Cooper Surgical, Femcare's US distributor of Filshie Clips, as previously anticipated in UTMD's 2012 SEC Form 10-K, and $832 lower sales of neonatal products to domestic users. The decline in sales of domestic neonatal products was due to lower NICU utilization of specialty devices and tightening of compliance under GPO contracts by U.S. hospitals. (In contrast, sales of neonatal products to international customers increased $212 (16%)). Other domestic end user product sales were up $209. Also helping offset the lower domestic Cooper and neonatal product sales were sales of UTMD's components and finished devices for use by other companies (OEM customers) in their products, which were up $178 (11%).
U.S. dollar (USD) denominated sales of devices to international customers by UTMD's Ireland facility (excluding intercompany sales) were up 16% in 2013 compared to 2012, and were down 2% for 4Q 2013 compared to 4Q 2012. In Euro terms, UTMD Ltd (Ireland) 2013 sales were up 13% for the year and down 7% for 4Q. The average currency exchange rate in 2013 was 1.323 USD/Euro compared to 1.289 USD/Euro in 2012. The average currency exchange rate was 1.355 USD/Euro in 4Q 2013 compared to 1.282 USD/Euro in 4Q 2012. Intercompany sales of products manufactured in Ireland increased 33% in 2013 (in Euro terms).
USD denominated sales of devices to domestic and international customers by Femcare Group, Ltd (Femcare-Nikomed Ltd. and Femcare-Australia Ltd.), excluding intercompany sales, were down 7% in 2013 compared to 2012, and were up 8% for 4Q 2013 compared to 4Q 2012. In GBP terms, 2013 Femcare UK subsidiary sales were down 5% for the year and up 14% for 4Q. Sales to Femcare's US distributor, Cooper Surgical Inc., by the Femcare UK subsidiary, as previously described in UTMD's 2012 SEC Form 10-K, were down $570 in 2013. In AUD terms, 2013 Femcare Australia subsidiary sales were down only 1% for the year and for 4Q. Because of the very weak AUD, however, USD denominated Australia sales were down 8% for the year and 12% for 4Q. The average currency exchange rate in 2013 was 0.966 USD/AUD compared to 1.036 USD/AUD in 2012. The average currency exchange rate was 0.930 USD/AUD in 4Q 2013 compared to 1.039 USD/AUD in 4Q 2012. Obviously, because over half of UTMD's consolidated sales are to customers outside of the U.S., fluctuations in currency exchange rates relative to the USD can have a significant effect on consolidated sales reported in USD terms in any particular reporting period.
Gross Profit.
UTMD's 2013 average gross profit margin (GPM) declined more than expected, from 60.9% in 2012 to 59.9% in 2013. About half the decline was anticipated from a less favorable product mix, as growth in sales came from lower profit margin sales in international and domestic OEM sales channels, and revenue declines largely came from domestic direct sales channels with typically higher gross margins. Although raw material costs did experience about 3% inflation, a little more than expected, and fixed labor and overhead costs had to be absorbed on less revenue, also as expected, the difference between management's beginning of year projection of a 60.2% GPM can be explained by a 25% increase in health plan expenses in the U.S. and a 17% increase in Ireland. In USD terms, health plan expenses increased more than $200, representing a half percentage point dilution in the GPM.
Operating Profit.
Operating Profit results from subtracting operating expenses from gross profit. Operating expenses in 2013 were 23.3% of sales compared to 24.3% of sales in 2012. Operating expenses in 4Q 2013 were 24.1% of sales compared to 24.9% of sales in 4Q 2012. By tightly controlling operating expenses, UTMD was able to make up for the decline in GPM and achieve a 2013 operating profit margin (OPM) the same as in 2012. Operating profit in 2013 was $14,828 (36.6% of sales) compared to $15,196 in 2012 (36.6% of sales). In 4Q 2013, UTMD's operating profit was $3,559 (35.3% of sales) compared to 4Q 2012 operating profit of $3,570 (36.3% of sales).
Operating expenses are comprised of general and administrative (G&A) expenses, sales and marketing (S&M) expenses and product development (R&D) expenses. In USD terms, 2013 operating expenses were $9,445 compared to $10,111 in 2012. G&A expenses were $6,164 (15.2% of 2013 sales) compared to $6,836 (16.5% of 2012 sales). G&A expenses in 2012 included U.S. litigation expenses of $170 which did not repeat in 2013. UTMD was also able to substantially reduce G&A expenses in Australia, helped in part by a much weaker AUD, and continued to reduce G&A expenses in the UK. Amortization of the acquired Femcare identifiable intangible assets (IIA) is part of G&A expenses. Amortization of Femcare IIA were 6.2% of sales in both 2013 and 2012. The IIA amortization expense, a noncash expense, of about $2.5 million per year, depending on the USD/GBP exchange rate, will continue until March 2026 (or until the value of remaining IIA becomes impaired). S&M expenses were $2,790 (6.9% of 2013 sales) compared to $2,711 (6.5% of 2012 sales). S&M expenses were up as a result of UTMD being fully staffed in its direct sales force in the UK and Ireland. R&D expenses were $491 (1.2% of 2013 sales) compared to $563 (1.4% of 2012 sales).
EBT.
Earnings Before Tax (EBT) results from subtracting non-operating expenses from operating profit. Non-operating expenses in 2013 were $352 compared to $659 in 2012. The largest component of non-operating expense was interest on UTMD's loans required to finance the 2011 acquisition of Femcare. Interest expense in 2013 was just $438 compared to $652 in 2012 because of UTMD's rate of reduction of its debt balance. 2013 EBT was $14,476 (35.7% of sales) compared to 2012 EBT of $14,537 (35.0% of sales). 2013 EBT and all other income statement measures above the EBT line were unaffected by the reduction in the DTL and income tax provision triggered as a result of the change in UK corporate income tax rates.
Net Profit.
Net profit results from subtracting estimated income taxes from EBT. The consolidated income tax provision rate for 2013 was 21.2% compared to 30.0% in 2012. The lower rate was due to a lower income tax provision rate on UK subsidiary EBT during the year plus the $976 reduction in the provision due to the adjustment in the DTL for future tax periods. The non-U.S. GAAP 2013 provision rate, excluding the $976 reduction, was 28.0%.
UTMD's U.S. GAAP net profit in 2013 was $11,406 (28.2% of consolidated sales) compared to $10,169 in 2012 (24.5% of sales). The non-U.S. GAAP net profit (before applying the $976 tax reduction to the provision due to the reduction in the DTL) was $10,430 (25.8% of sales) compared to $10,169 in 2012.
Despite the headwinds including lower revenues and GPM, UTMD was able to achieve higher net profits in 2013. The higher net profit margin drove UTMD's Return on Shareholder Equity for the year of 2013. Because of a 10% increase in the denominator ($10 million year to prior year increase in Shareholders' Equity), UTMD achieved an ROE (prior to the payment of cash dividends) of 20% compared to 22% in 2012.
Earnings Per Share (EPS).
Outstanding shares at the end of 2013 were 3,743,000 compared to 3,703,000 at the end of 2012. The number of shares used for calculating earnings per share was higher than ending shares because of a time-weighted calculation of average outstanding shares plus dilution from unexercised employee and director options. The total number of outstanding unexercised employee and outside director options at December 31, 2013 was 91,000 shares at an average exercise price of $27.39/ share, including shares awarded but not vested. This compares to 149,500 unexercised option shares outstanding at the end of 2012. The decrease was again due to options exercised by employees after a substantial increase in share price during the year. UTMD's dilution from unexercised option shares added to actual weighted average outstanding shares for purposes of calculating EPS was 43,500 in 4Q 2013 compared to 33,900 in 4Q 2012, and 46,600 for the year 2013 compared to 34,000 in 2012. The increase in dilution was due to a higher average share price in 2013 compared to 2012. No new options were awarded in 2013. In 2012, 13,000 option shares were awarded on October 24, 2012 to 11 employees at an exercise price of $33.30 per share.
UTMD paid $3,675 in cash dividends ($.985/share) to its shareholders in 2013 compared to $3,555 ($.965/share) in 2012. Dividends paid to shareholders during 2013 were 35% of non-GAAP net profits and 36% of non-GAAP EPS (excluding the $976 lower tax provision from the DTL adjustment), and 32% of reported net profits and 33% of reported EPS.
UTMD did not repurchase any of its shares in the open market during 2013. In 2012, the Company repurchased 15,000 shares at $33.57/ share. The Company retains the financial ability for repurchasing its shares when they seem undervalued. The closing share price at the end of 2013 was $57.16, up 59% from the $36.05 closing price at the end of 2012.
Changes in UTMD's Balance Sheet at the end of 2013 from the end of 2012 again represented significant improvement and deleveraging. At the end of 2013, UTMD owned $81 million in total assets including $14 million in cash, offset by about $9 million in bank debt. Intangible assets represented 60% of total assets. Stockholders' Equity was $61 million. In comparison, at the end of 2012, UTMD had $9 million in cash and equivalents as part of $77 million in total assets, and $13 million in bank debt. Intangible assets were 65% of total assets, and Stockholders' Equity was $51 million. The $10 million increase in Shareholders' Equity was achieved in spite of $3.7 million in cash dividends paid to shareholders, which reduces Shareholders' Equity.
Some other highlights regarding changes in UTMD's Balance Sheet during 2013 include:
1) Cash and investments balances increased $5.5 million even though the Company distributed $3.7 million in cash payments to shareholders and reduced loan principal balances in USD terms by $3.9 million.
2) The Deferred Tax Liability resulting from the amortization of Identifiable Intangible Assets from the Femcare acquisition plus other long term liabilities declined $1.7 million.
3) Accounts Receivable over 90 days from date of invoice remained less than 1% of trade receivables.
Financial ratios as of December 31, 2013 which may be of interest to shareholders follow:
1) Current Ratio = 3.2
2) Days in Trade Receivables (based on 4Q sales activity) = 32
3) Average Inventory Turns (based on 4Q CGS) = 3.5
4) 2013 ROE = 20% (prior to payment of dividends)
Investors are cautioned that this press release may contain forward looking statements and that actual events may differ from those projected. Risk factors that could cause results to differ materially from those projected include market acceptance of products, timing of regulatory approval of new products, regulatory intervention in current operations, government health care "reforms", fluctuation in foreign currency exchange rates, the Company's ability to efficiently manufacture, market, and sell its products, among other factors that have been and will be outlined in UTMD's public disclosure filings with the SEC.
Utah Medical Products, Inc., with particular interest in health care for women and their babies, develops, manufactures, assembles and markets a broad range of disposable and reusable specialty medical devices designed for better health outcomes for patients and their care-providers. For more information about Utah Medical Products, Inc., visit UTMD's website at www.utahmed.com.
Utah Medical Products, Inc.
INCOME STATEMENT, Fourth Quarter (3 months ended December 31)
(in thousands except earnings per share):
4Q 2013 4Q 2012 Percent Change
Net Sales $10,085 $9,832 +2.6%
Gross Profit 5,994 6,021 (0.4%)
Operating Income 3,559 3,570 (0.3%)
Income Before Tax 3,485 3,322 +4.9%
Net Income 3,468 2,259 +53.5%
Earnings Per Share $0.917 $0.606 +51.2%
Shares Outstanding (diluted) 3,784 3,727
INCOME STATEMENT, Year (12 months ended December 31)
(in thousands except earnings per share):
2013 2012 Percent Change
Net Sales $40,493 $41,552 (2.5%)
Gross Profit 24,273 25,307 (4.1%)
Operating Income 14,828 15,196 (2.4%)
Income Before Tax 14,476 14,537 (0.4%)
Net Income 11,406 10,169 +12.2%
Earnings Per Share $3.022 $2.740 +10.3%
Shares Outstanding (diluted) 3,775 3,711
BALANCE SHEET
(in thousands) (audited) (unaudited) (audited)
DEC 31, 2013 SEP 30, 2013 DEC 31, 2012
Assets
Cash & Investments $14,451 $13,922 $8,913
Accounts & Other Receivables, Net 4,388 4,963 4,341
Inventories 4,704 4,660 4,353
Other Current Assets 743 986 928
Total Current Assets 24,286 24,531 18,535
Property & Equipment, Net 8,330 8,279 8,428
Intangible Assets, Net 48,095 47,789 49,972
Total Assets $80,711 $80,599 $76,935
Liabilities & Shareholders' Equity
A/P & Accrued Liabilities $3,559 $5,240 $3,821
Current Portion of Notes Payable 4,052 3,989 4,002
Total Current Liabilities 7,611 9,229 7,823
Notes Payable (excluding current portion) 5,065 5,983 9,003
Other LT Liabilities -- -- 363
Deferred Tax Liability -- Intangibles 6,510 7,433 7,890
Deferred Income Taxes 944 878 884
Stockholders' Equity 60,581 57,076 50,972
Total Liabilities & Shareholders' Equity $80,711 $80,599 $76,935
Contact:
Paul Richins
(801) 566-1200
Wynn Macau Earnings Beat Estimates on Margin Improvement
By Vinicy Chan Jan 30, 2014 1:21 PM PT 0 Comments Email Print
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WYNN:US201.517.64 3.94%
Wynn Macau Ltd. (1128) profit rose 32 percent in the fourth quarter as billionaire Steve Wynn’s casino operator raised margins by attracting more premium mass-market gamblers.
Adjusted property earnings before interest, taxes, depreciation and amortization, or Ebitda, rose to $374.2 million from $283.2 million a year earlier, according to a statement by parent company Wynn Resorts Ltd. (WYNN) dated Jan. 30. That surpassed the $343.3 million average of 10 analyst estimates compiled by Bloomberg. Net revenue jumped 25 percent to $1.12 billion.
Wynn Macau “gained mass market share as it converted 12 to 13 VIP gaming tables to mass in mid-October,” Karen Tang, a Hong Kong-based analyst at Deutsche Bank AG, wrote in a research note published Jan. 27.
Bigger rivals including Sands China Ltd. (1928) and Galaxy Entertainment Group Ltd. (27) have been adding shops, restaurants and entertainment shows to lure the mass and premium mass market gamblers who bet in cash and provide fatter margins because they don’t rely on junket operators to bring them to Macau.
Wynn’s premium-mass segment could grow further in 2014 after the company renovates the Wynn Hotel tower, Praveen Choudhary, a Hong Kong-based Morgan Stanley analyst, wrote in a research note dated Jan. 7.
Photographer: Lam Yik Fei/Bloomberg
Vehicles drive past the Wynn Macau casino resort, operated by Wynn Resorts Ltd., in Macau, China.
Junket Operators
Casino revenue in Macau, the only place in China where casinos are legal, jumped 19 percent to $45 billion last year, with about two-thirds of the revenue coming from high-stake bettors from mainland China whose gambling trips are arranged by junket operators.
Casino operators have to pay commission, about 1.25 percent of the total bets made by VIPs, to the junket operators who are in charge of recruiting high rollers, giving them credit to gamble, collecting debts and arranging transportation to accommodation.
Wynn Macau rose 1.4 percent to close at HK$33.15 in Hong Kong yesterday, compared with the 0.5 percent decline in the city’s benchmark Hang Seng Index. The city’s stock market will be closed today and on Feb. 3 for the Lunar New Year break.
The company is building the $4 billion Wynn Palace casino resort on the Chinese city’s Cotai Strip, the Asian equivalent of the Las Vegas Strip. The resort will feature floral sculptures the size of “floats of the Rose Bowl Parade,” Wynn earlier said. It is scheduled to open in early 2016.
To contact the reporter on this story: Vinicy Chan in Hong Kong at vchan91@bloomberg.net
To contact the editor responsible for this story: Dave McCombs at dmccombs@bloomberg.net
Wynn Macau Earnings Beat Estimates on Margin Improvement
By Vinicy Chan Jan 30, 2014 1:21 PM PT 0 Comments Email Print
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Wynn Macau Ltd. (1128) profit rose 32 percent in the fourth quarter as billionaire Steve Wynn’s casino operator raised margins by attracting more premium mass-market gamblers.
Adjusted property earnings before interest, taxes, depreciation and amortization, or Ebitda, rose to $374.2 million from $283.2 million a year earlier, according to a statement by parent company Wynn Resorts Ltd. (WYNN) dated Jan. 30. That surpassed the $343.3 million average of 10 analyst estimates compiled by Bloomberg. Net revenue jumped 25 percent to $1.12 billion.
Wynn Macau “gained mass market share as it converted 12 to 13 VIP gaming tables to mass in mid-October,” Karen Tang, a Hong Kong-based analyst at Deutsche Bank AG, wrote in a research note published Jan. 27.
Bigger rivals including Sands China Ltd. (1928) and Galaxy Entertainment Group Ltd. (27) have been adding shops, restaurants and entertainment shows to lure the mass and premium mass market gamblers who bet in cash and provide fatter margins because they don’t rely on junket operators to bring them to Macau.
Wynn’s premium-mass segment could grow further in 2014 after the company renovates the Wynn Hotel tower, Praveen Choudhary, a Hong Kong-based Morgan Stanley analyst, wrote in a research note dated Jan. 7.
Photographer: Lam Yik Fei/Bloomberg
Vehicles drive past the Wynn Macau casino resort, operated by Wynn Resorts Ltd., in Macau, China.
Junket Operators
Casino revenue in Macau, the only place in China where casinos are legal, jumped 19 percent to $45 billion last year, with about two-thirds of the revenue coming from high-stake bettors from mainland China whose gambling trips are arranged by junket operators.
Casino operators have to pay commission, about 1.25 percent of the total bets made by VIPs, to the junket operators who are in charge of recruiting high rollers, giving them credit to gamble, collecting debts and arranging transportation to accommodation.
Wynn Macau rose 1.4 percent to close at HK$33.15 in Hong Kong yesterday, compared with the 0.5 percent decline in the city’s benchmark Hang Seng Index. The city’s stock market will be closed today and on Feb. 3 for the Lunar New Year break.
The company is building the $4 billion Wynn Palace casino resort on the Chinese city’s Cotai Strip, the Asian equivalent of the Las Vegas Strip. The resort will feature floral sculptures the size of “floats of the Rose Bowl Parade,” Wynn earlier said. It is scheduled to open in early 2016.
To contact the reporter on this story: Vinicy Chan in Hong Kong at vchan91@bloomberg.net
To contact the editor responsible for this story: Dave McCombs at dmccombs@bloomberg.net
Wynn Resorts Earnings Beat Estimates as Macau Revenue Surges
By Christopher Palmeri Jan 30, 2014 4:44 PM PT 0 Comments Email Print
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Wynn Resorts Ltd. (WYNN), the casino company controlled by billionaire Steve Wynn, reported fourth-quarter earnings that beat analysts’ estimates as revenue in Macau surged. The shares rose in extended trading.
Profit increased to $2.27 a share, excluding items, compared with the $1.75 average of 22 analysts’ estimates compiled by Bloomberg. Revenue gained 18 percent to $1.52 billion, the Las Vegas-based company said in a statement today. Analysts on average had projected $1.44 billion.
“Results were primarily driven by strong mass market revenues in Macau, which we view favorably, given that it is a more stable and higher-margin business,” said John Kempf, an RBC Capital Markets LLC analyst in a research note today.
Sales in Macau, Wynn Resorts’ biggest market, rose 25 percent to $1.12 billion in the quarter. Gambling industry revenue in the enclave, the only part of China where casinos are legal, increased 24 percent in the fourth quarter to $12.5 billion, according to the Gaming Inspection and Coordination Bureau there.
The company’s Las Vegas business posted a 2.4 percent gain in revenue to $400 million. It benefited from higher room rates and an increase in convention business, Wynn said on a conference call today. Results in that market in 2014 would be equal or better, he said.
‘Very Satisfying’
Net income rose to $213.9 million, or $2.10 a share, from $111.4 million, or $1.10, a year earlier.
“The numbers speak for themselves,” Wynn, 72, said. “For two hotels to have cash flow of $1.8 billion and change is very satisfying.”
Las Vegas Sands Corp., the world’s largest casino company, reported yesterday that revenue in Macau climbed 28 percent to $2.53 billion in the fourth quarter and sales in Las Vegas rose 25 percent to $385.7 million.
Wynn Resorts is building a $4 billion resort on the Cotai Strip, the Asian equivalent of the Las Vegas Strip. The resort will open in January 2016, Wynn said today. The company will complete a second phase of the project two years later that could bring total spending there to $9 billion, he said.
It will add another 1,500 hotel rooms, all of which will be suites with massage rooms and 80-inch television sets, Wynn said.
Wynn Resorts’ shares climbed as much as 5.2 percent to $211.98 in extended trading. They closed up 3.9 percent to $201.51 in New York. The stock has gained 63 percent in the past 12 months compared with 19 percent for the Standard & Poor’s 500 Index.
To contact the reporter on this story: Christopher Palmeri in Los Angeles at cpalmeri1@bloomberg.net
Wynn Resorts Earnings Beat Estimates as Macau Revenue Surges
By Christopher Palmeri Jan 30, 2014 4:44 PM PT 0 Comments Email Print
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WYNN:US201.517.64 3.94%
Wynn Resorts Ltd. (WYNN), the casino company controlled by billionaire Steve Wynn, reported fourth-quarter earnings that beat analysts’ estimates as revenue in Macau surged. The shares rose in extended trading.
Profit increased to $2.27 a share, excluding items, compared with the $1.75 average of 22 analysts’ estimates compiled by Bloomberg. Revenue gained 18 percent to $1.52 billion, the Las Vegas-based company said in a statement today. Analysts on average had projected $1.44 billion.
“Results were primarily driven by strong mass market revenues in Macau, which we view favorably, given that it is a more stable and higher-margin business,” said John Kempf, an RBC Capital Markets LLC analyst in a research note today.
Sales in Macau, Wynn Resorts’ biggest market, rose 25 percent to $1.12 billion in the quarter. Gambling industry revenue in the enclave, the only part of China where casinos are legal, increased 24 percent in the fourth quarter to $12.5 billion, according to the Gaming Inspection and Coordination Bureau there.
The company’s Las Vegas business posted a 2.4 percent gain in revenue to $400 million. It benefited from higher room rates and an increase in convention business, Wynn said on a conference call today. Results in that market in 2014 would be equal or better, he said.
‘Very Satisfying’
Net income rose to $213.9 million, or $2.10 a share, from $111.4 million, or $1.10, a year earlier.
“The numbers speak for themselves,” Wynn, 72, said. “For two hotels to have cash flow of $1.8 billion and change is very satisfying.”
Las Vegas Sands Corp., the world’s largest casino company, reported yesterday that revenue in Macau climbed 28 percent to $2.53 billion in the fourth quarter and sales in Las Vegas rose 25 percent to $385.7 million.
Wynn Resorts is building a $4 billion resort on the Cotai Strip, the Asian equivalent of the Las Vegas Strip. The resort will open in January 2016, Wynn said today. The company will complete a second phase of the project two years later that could bring total spending there to $9 billion, he said.
It will add another 1,500 hotel rooms, all of which will be suites with massage rooms and 80-inch television sets, Wynn said.
Wynn Resorts’ shares climbed as much as 5.2 percent to $211.98 in extended trading. They closed up 3.9 percent to $201.51 in New York. The stock has gained 63 percent in the past 12 months compared with 19 percent for the Standard & Poor’s 500 Index.
To contact the reporter on this story: Christopher Palmeri in Los Angeles at cpalmeri1@bloomberg.net
Wynn Resorts Earnings Beat Estimates as Macau Revenue Surges
By Christopher Palmeri Jan 30, 2014 4:44 PM PT 0 Comments Email Print
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WYNN:US201.517.64 3.94%
Wynn Resorts Ltd. (WYNN), the casino company controlled by billionaire Steve Wynn, reported fourth-quarter earnings that beat analysts’ estimates as revenue in Macau surged. The shares rose in extended trading.
Profit increased to $2.27 a share, excluding items, compared with the $1.75 average of 22 analysts’ estimates compiled by Bloomberg. Revenue gained 18 percent to $1.52 billion, the Las Vegas-based company said in a statement today. Analysts on average had projected $1.44 billion.
“Results were primarily driven by strong mass market revenues in Macau, which we view favorably, given that it is a more stable and higher-margin business,” said John Kempf, an RBC Capital Markets LLC analyst in a research note today.
Sales in Macau, Wynn Resorts’ biggest market, rose 25 percent to $1.12 billion in the quarter. Gambling industry revenue in the enclave, the only part of China where casinos are legal, increased 24 percent in the fourth quarter to $12.5 billion, according to the Gaming Inspection and Coordination Bureau there.
The company’s Las Vegas business posted a 2.4 percent gain in revenue to $400 million. It benefited from higher room rates and an increase in convention business, Wynn said on a conference call today. Results in that market in 2014 would be equal or better, he said.
‘Very Satisfying’
Net income rose to $213.9 million, or $2.10 a share, from $111.4 million, or $1.10, a year earlier.
“The numbers speak for themselves,” Wynn, 72, said. “For two hotels to have cash flow of $1.8 billion and change is very satisfying.”
Las Vegas Sands Corp., the world’s largest casino company, reported yesterday that revenue in Macau climbed 28 percent to $2.53 billion in the fourth quarter and sales in Las Vegas rose 25 percent to $385.7 million.
Wynn Resorts is building a $4 billion resort on the Cotai Strip, the Asian equivalent of the Las Vegas Strip. The resort will open in January 2016, Wynn said today. The company will complete a second phase of the project two years later that could bring total spending there to $9 billion, he said.
It will add another 1,500 hotel rooms, all of which will be suites with massage rooms and 80-inch television sets, Wynn said.
Wynn Resorts’ shares climbed as much as 5.2 percent to $211.98 in extended trading. They closed up 3.9 percent to $201.51 in New York. The stock has gained 63 percent in the past 12 months compared with 19 percent for the Standard & Poor’s 500 Index.
To contact the reporter on this story: Christopher Palmeri in Los Angeles at cpalmeri1@bloomberg.net
Wynn Palace Project in Macau
The Company is currently constructing Wynn Palace, a full-scale integrated resort containing a 1,700-room hotel, performance lake, meeting space, casino, spa, retail offerings, and food and beverage outlets on Cotai in Macau. In July 2013, we signed a $2.6 billion guaranteed maximum price (GMP) contract for the project’s construction. The total project budget, including construction costs, capitalized interest, pre-opening expenses, land costs and financing fees, is $4.0 billion. We expect to open our resort on Cotai in the first half of 2016.
During the fourth quarter of 2013, we invested approximately $184.9 million in our Cotai project, taking the total investment to date to $704 million.
Wynn Resorts, Limited Reports Fourth Quarter and Year End 2013 Results
Business Wire Wynn Resorts, Limited
2 hours ago
LAS VEGAS--(BUSINESS WIRE)--
Wynn Resorts, Limited (WYNN) today reported financial results for the fourth quarter and year ended December 31, 2013.
Net revenues for the fourth quarter of 2013 were $1,519.9 million, compared to $1,289.1 million in the fourth quarter of 2012. The growth was driven by a 24.6% revenue increase from our Macau operations and 2.4% higher net revenues from our Las Vegas operations. Adjusted property EBITDA (1) was $498.4 million for the fourth quarter of 2013, a 25.1% increase from $398.5 million in the fourth quarter of 2012.
For the full year, net revenues were $5,620.9 million in 2013, up 9.1% from $5,154.3 million in 2012. Adjusted property EBITDA grew 14.9% to reach an annual record of $1,810.8 million in 2013, a result of record annual performances at both Wynn Macau and Wynn Las Vegas. For 2013, adjusted property EBITDA at Wynn Macau rose 13.4% to $1,324.1 million and increased 19.1% to $486.7 million at Wynn Las Vegas.
On a US GAAP basis, net income attributable to Wynn Resorts for the fourth quarter of 2013 was $213.9 million, or $2.10 per diluted share, compared to a net income attributable to Wynn Resorts of $111.4 million, or $1.10 per diluted share, in the fourth quarter of 2012. Such figures for the full year were $728.7 million, or $7.17 per diluted share, in 2013 and $502.0 million, or $4.82 per diluted share, in 2012.
Adjusted net income attributable to Wynn Resorts (2) in the fourth quarter of 2013 was $231.2 million, or $2.27 per diluted share (adjusted EPS), compared to an adjusted net income attributable to Wynn Resorts of $118.2 million, or $1.17 per diluted share, in the fourth quarter of 2012. For the full year, adjusted net income attributable to Wynn Resorts rose significantly in 2013 to $776.8 million, or $7.64 per diluted share. This amount compares to $558.4 million, or $5.36 per diluted share, in 2012.
Wynn Resorts also announced today that the Company has approved a cash dividend for the quarter of $1.25 per common share. This dividend will be payable on February 27, 2014, to stockholders of record on February 13, 2014.
Macau Operations
In the fourth quarter of 2013, net revenues were $1,119.9 million, a 24.6% increase from the $898.7 million generated in the fourth quarter of 2012. Adjusted property EBITDA in the fourth quarter of 2013 reached a record $374.2 million, up 32.1% from $283.2 million in the fourth quarter of 2012.
Table games results in Macau are segregated into two distinct reporting categories, the VIP segment and the mass market segment.
Table games turnover in the VIP segment was $34.4 billion for the fourth quarter of 2013, a 23.9% increase from $27.7 billion in the fourth quarter of 2012. VIP table games win as a percentage of turnover (calculated before commissions) for the quarter was 2.92%, within the expected range of 2.7% to 3.0% and below the 2.96% experienced in the fourth quarter of 2012.
Table games win in the mass market segment increased by 34.6% in the fourth quarter to $292.9 million. Mass market table games win per unit per day increased by 22.5% to $14,552 from $11,875 in the fourth quarter of 2012. Drop in the mass market segment was $691.8 million in the fourth quarter of 2013, down 1.1% from the December 2012 quarter, while the segment’s win percentage of 42.3% compares to 31.1% in last year’s fourth quarter and sequentially to 38.0% in the third quarter of 2013. Note that customers purchase mass market gaming chips at either the gaming tables or the casino cage. Chips purchased at the casino cage are excluded from table games drop and will increase the expected win percentage. With the increased purchases at the casino cage, we believe the relevant indicator of volumes in the mass market segment should be table games win.
Slot machine handle of $1.4 billion for the fourth quarter of 2013 was 28.3% above the prior-year quarter, and slot win increased 26.8% compared to the prior-year period. Win per unit per day was 38.5% higher at $879, compared to $635 in the fourth quarter of 2012. The average number of slots in the 2013 fourth quarter declined by 81 machines versus the 2012 period due to various changes designed to enhance the comfort of the casino floor.
As of January 26, 2014, we have 513 tables (283 VIP tables, 220 mass market tables and 10 poker tables) and 866 slot machines at Wynn Macau.
For the fourth quarter of 2013, we achieved an average daily rate (ADR) of $315, modestly above the $314 reported in the 2012 fourth quarter. Occupancy at Wynn Macau of 96.7% compares to 96.5% in the prior-year period, and revenue per available room (REVPAR) rose 0.6% to $304 in the 2013 quarter from $303 in last year’s fourth quarter. Gross non-casino revenues increased 3.9% during the quarter to $108.5 million.
During the first half of 2013, we began a renovation of the approximately 600 guestrooms in the original Wynn Macau tower, resulting in an approximate 3% reduction in the number of available room-nights in the 2013 fourth quarter versus the prior-year period. We completed the guestroom renovation in mid-December.
Wynn Palace Project in Macau
The Company is currently constructing Wynn Palace, a full-scale integrated resort containing a 1,700-room hotel, performance lake, meeting space, casino, spa, retail offerings, and food and beverage outlets on Cotai in Macau. In July 2013, we signed a $2.6 billion guaranteed maximum price (GMP) contract for the project’s construction. The total project budget, including construction costs, capitalized interest, pre-opening expenses, land costs and financing fees, is $4.0 billion. We expect to open our resort on Cotai in the first half of 2016.
During the fourth quarter of 2013, we invested approximately $184.9 million in our Cotai project, taking the total investment to date to $704 million.
Las Vegas Operations
For the quarter ended December 31, 2013, net revenues were $400.0 million, a 2.4% increase from $390.4 million in the fourth quarter of 2012. Adjusted property EBITDA was $124.2 million, up 7.7% from the $115.3 million generated in the comparable period in 2012. EBITDA margin on net revenues rose to 31.0% in the fourth quarter of 2013, from 29.5% in the fourth quarter of 2012.
Net casino revenues in the fourth quarter of 2013 were $202.3 million, a 12.1% increase from the fourth quarter of 2012. Table games drop of $724.4 million was up 6.6% compared to $679.4 million in the 2012 quarter. Table games win percentage was 28.8%, above both the property’s expected range of 21% to 24% and the 26.8% reported in the 2012 quarter. Slot machine handle of $731.9 million was 3.5% below the $758.4 million in the comparable period of 2012, while net slot win was down 6.3% due in part to lower hold in the 2013 quarter.
Room revenues were up 2.3% to $89.8 million during the quarter, versus $87.8 million in the fourth quarter of 2012. Average daily rate (ADR) modestly improved to $256 from $254, and occupancy increased to 80.8% from 79.2% in the fourth quarter of 2012. Revenue per available room (REVPAR) was $207 in the 2013 fourth quarter, 3.0% above the $201 reported in the prior-year quarter.
Food and beverage revenues in the fourth quarter of 2013 were $98.1 million, down 11.7% from the 2012 fourth quarter primarily due to declines in nightclub and catering revenues. Retail revenues improved 6.9% from last year’s quarter to $23.6 million, a result of reconfigurations to our retail area in the first half of 2013. Entertainment revenues declined to $18.0 million in the 2013 fourth quarter from $21.0 million due to a show that ended its run at the Encore Theater in November 2012.
Balance Sheet and Other
Our total cash and investments balance at December 31, 2013 was $2.9 billion. Total debt outstanding at the end of the quarter was $6.6 billion, including $3.1 billion of Wynn Las Vegas debt, $1.5 billion of Wynn Macau debt and $1.9 billion at the parent company. Note that, during the 2013 fourth quarter, Wynn Macau, Limited issued $600.0 million of new 5.25% senior notes due in 2021. Additionally, Wynn Las Vegas, LLC redeemed the remaining $225.3 million of its 7.875% first mortgage notes due in 2017.
Conference Call Information
The Company will hold a conference call to discuss its results on January 30, 2014 at 1:30 p.m. PT (4:30 p.m. ET). Interested parties are invited to join the call by accessing a live audio webcast at http://www.wynnresorts.com.
Forward-looking Statements
This release contains forward-looking statements regarding operating trends and future results of operations. Such forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those we express in these forward-looking statements, including, but not limited to, our dependence on existing management, results of regulatory or enforcement actions and probity investigations, pending or future legal proceedings, uncertainties over the development and success of new gaming and resort properties, adverse tourism trends, general global macroeconomic conditions, changes in gaming laws or regulations, volatility and weakness in world-wide credit and financial markets, and our substantial indebtedness and leverage. Additional information concerning potential factors that could affect the Company's financial results is included in the Company's Annual Report on Form 10-K for the year ended December 31, 2012 and the Company's other periodic reports filed with the Securities and Exchange Commission. The Company is under no obligation to (and expressly disclaims any such obligation to) update or revise its forward-looking statements as a result of new information, future events or otherwise.
Non-GAAP Financial Measures
(1) “Adjusted property EBITDA” is earnings before interest, taxes, depreciation, amortization, pre-opening costs, property charges and other, corporate expenses, intercompany golf course and water rights leases, stock-based compensation, and other non-operating income and expenses, and includes equity in income from unconsolidated affiliates. Adjusted property EBITDA is presented exclusively as a supplemental disclosure because management believes that it is widely used to measure the performance, and as a basis for valuation, of gaming companies. Management uses adjusted property EBITDA as a measure of the operating performance of its segments and to compare the operating performance of its properties with those of its competitors. The Company also presents adjusted property EBITDA because it is used by some investors as a way to measure a company’s ability to incur and service debt, make capital expenditures and meet working capital requirements. Gaming companies have historically reported EBITDA as a supplement to financial measures in accordance with U.S. generally accepted accounting principles (“GAAP”). In order to view the operations of their casinos on a more stand-alone basis, gaming companies, including Wynn Resorts, Limited, have historically excluded from their EBITDA calculations pre-opening expenses, property charges, corporate expenses and stock-based compensation, that do not relate to the management of specific casino properties. However, adjusted property EBITDA should not be considered as an alternative to operating income as an indicator of the Company’s performance, as an alternative to cash flows from operating activities as a measure of liquidity, or as an alternative to any other measure determined in accordance with GAAP. Unlike net income, adjusted property EBITDA does not include depreciation or interest expense and therefore does not reflect current or future capital expenditures or the cost of capital. The Company has significant uses of cash flows, including capital expenditures, interest payments, debt principal repayments, taxes and other non-recurring charges, which are not reflected in adjusted property EBITDA. Also, Wynn Resorts’ calculation of adjusted property EBITDA may be different from the calculation methods used by other companies and, therefore, comparability may be limited.
(2) Adjusted net income attributable to Wynn Resorts, Limited is net income before pre-opening costs, property charges and other, and certain other non-operating income and expenses. Adjusted net income attributable to Wynn Resorts, Limited and adjusted net income per share attributable to Wynn Resorts, Limited (“EPS”) are presented as supplemental disclosures because management believes that these financial measures are widely used to measure the performance, and as a principal basis for valuation, of gaming companies. These measures are used by management and/or evaluated by some investors, in addition to income and EPS computed in accordance with GAAP, as an additional basis for assessing period-to-period results of our business. Adjusted net income attributable to Wynn Resorts, Limited and adjusted net income attributable to Wynn Resorts, Limited per share may be different from the calculation methods used by other companies and, therefore, comparability may be limited.
The Company has included schedules in the tables that accompany this release that reconcile (i) net income attributable to Wynn Resorts, Limited to adjusted net income attributable to Wynn Resorts, Limited, and (ii) operating income to adjusted property EBITDA and adjusted property EBITDA to net income attributable to Wynn Resorts, Limited.
WYNN RESORTS, LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(amounts in thousands, except per share data)
(unaudited)
Three Months Ended Year Ended
December 31, December 31,
2013 2012 2013 2012
Operating revenues:
Casino $ 1,262,391 $ 1,019,249 $ 4,490,637 $ 4,034,759
Rooms 119,299 117,965 492,230 479,983
Food and beverage 125,198 135,592 586,672 588,437
Entertainment, retail and other 108,967 108,811 418,705 417,209
Gross revenues 1,615,855 1,381,617 5,988,244 5,520,388
Less: promotional allowances (95,958 ) (92,533 ) (367,308 ) (366,104 )
Net revenues 1,519,897 1,289,084 5,620,936 5,154,284
Operating costs and expenses:
Casino 783,982 652,615 2,846,489 2,626,822
Rooms 32,483 31,334 133,503 126,527
Food and beverage 70,115 72,824 323,573 308,394
Entertainment, retail and other 46,497 45,185 175,257 189,832
General and administrative 116,472 120,187 448,788 441,699
Provision for doubtful accounts 4,773 12,023 11,877 18,091
Pre-opening costs 1,577 466 3,169 466
Depreciation and amortization 91,990 93,057 371,051 373,199
Property charges and other 3,567 3,431 17,138 39,978
Total operating costs and expenses 1,151,456 1,031,122 4,330,845 4,125,008
Operating income 368,441 257,962 1,290,091 1,029,276
Other income (expense):
Interest income 4,118 4,736 15,713 12,543
Interest expense, net of capitalized interest (76,332 ) (77,742 ) (299,022 ) (288,759 )
Increase (decrease) in swap fair value 1,104 (3,939 ) 14,235 991
Loss on extinguishment of debt (13,857 ) (660 ) (40,435 ) (25,151 )
Equity in income from unconsolidated affiliates 206 175 1,085 1,086
Other 471 2,076 4,856 3,012
Other income (expense), net (84,290 ) (75,354 ) (303,568 ) (296,278 )
Income before income taxes 284,151 182,608 986,523 732,998
Benefit (provision) for income taxes 6,335 (16,782 ) 17,634 (4,299 )
Net income 290,486 165,826 1,004,157 728,699
Less: Net income attributable to noncontrolling interests (76,602 ) (54,453 ) (275,505 ) (226,663 )
Net income attributable to Wynn Resorts, Limited $ 213,884 $ 111,373 $ 728,652 $ 502,036
Basic and diluted income per common share:
Net income attributable to Wynn Resorts, Limited:
Basic $ 2.12 $ 1.11 $ 7.25 $ 4.87
Diluted $ 2.10 $ 1.10 $ 7.17 $ 4.82
Weighted average common shares outstanding:
Basic 100,748
100,080 100,540
103,092
Diluted 101,807 101,122 101,641 104,249
Dividends declared per common share $ 4.00 $ 8.00 $ 7.00 $ 9.50
WYNN RESORTS, LIMITED AND SUBSIDIARIES
RECONCILIATION OF NET INCOME ATTRIBUTABLE TO WYNN RESORTS, LIMITED
TO ADJUSTED NET INCOME ATTRIBUTABLE TO WYNN RESORTS, LIMITED
(amounts in thousands, except per share data)
(unaudited)
Three Months Ended Year Ended
December 31, December 31,
2013 2012 2013 2012
Net income attributable to Wynn Resorts, Limited $ 213,884 $ 111,373 $ 728,652 $ 502,036
Pre-opening costs 1,577 466 3,169 466
Loss on extinguishment of debt 13,857 660 40,435 25,151
(Increase) decrease in swap fair value (1,104 ) 3,939 (14,235 ) (991 )
Property charges and other 3,567 3,431 17,138 39,978
Adjustment for noncontrolling interest (547 ) (1,625 ) 1,680 (8,263 )
Adjusted net income attributable to Wynn Resorts, Limited(2) $ 231,234 $ 118,244 $ 776,839 $ 558,377
Adjusted net income attributable to Wynn Resorts, Limited per diluted share $ 2.27 $ 1.17 $ 7.64 $ 5.36
WYNN RESORTS, LIMITED AND SUBSIDIARIES
RECONCILIATION OF OPERATING INCOME TO ADJUSTED PROPERTY EBITDA
AND ADJUSTED PROPERTY EBITDA TO NET INCOME ATTRIBUTABLE TO WYNN RESORTS, LIMITED
(amounts in thousands)
(unaudited)
Three Months Ended December 31, 2013
Macau
Operations
Las Vegas
Operations
Corporate
and Other
Total
Operating income $ 285,555 $ 47,981 $ 34,905 $ 368,441
Pre-opening costs 1,577 - - 1,577
Depreciation and amortization 30,762 59,694 1,534 91,990
Property charges and other 1,500 2,067 - 3,567
Management and royalty fees 44,445 6,001 (50,446 ) -
Corporate expense and other 9,259 8,653 10,208 28,120
Stock-based compensation 1,116 (232 ) 3,582 4,466
Equity in income (loss) from unconsolidated affiliates
- (11 ) 217 206
Adjusted Property EBITDA (1) $ 374,214 $ 124,153 $ - $ 498,367
Three Months Ended December 31, 2012
Macau
Operations
Las Vegas
Operations
Corporate
and Other
Total
Operating income $ 206,374 $ 37,749 $ 13,839 $ 257,962
Pre-opening costs 466 - - 466
Depreciation and amortization 30,248 61,540 1,269 93,057
Property charges and other 1,458 1,973 - 3,431
Management and royalty fees 36,094 5,856 (41,950 ) -
Corporate expense and other 7,513 7,162 22,765 37,440
Stock-based compensation 1,043 1,044 3,857 5,944
Equity in income (loss) from unconsolidated affiliates
- (45 ) 220 175
Adjusted Property EBITDA (1) $ 283,196 $ 115,279 $ - $ 398,475
Three Months Ended
December 31,
2013 2012
Adjusted Property EBITDA (1) $ 498,367 $ 398,475
Pre-opening costs (1,577 ) (466 )
Depreciation and amortization (91,990 ) (93,057 )
Property charges and other (3,567 ) (3,431 )
Corporate expenses and other (28,120 ) (37,440 )
Stock-based compensation (4,466 ) (5,944 )
Interest income 4,118 4,736
Interest expense, net of capitalized interest (76,332 ) (77,742 )
Increase (decrease) in swap fair value 1,104 (3,939 )
Loss on extinguishment of debt (13,857 ) (660 )
Other 471 2,076
Benefit (provision) for income taxes 6,335 (16,782 )
Net income 290,486 165,826
Less: Net income attributable to noncontrolling interests (76,602 ) (54,453 )
Net income attributable to Wynn Resorts, Limited $ 213,884 $ 111,373
WYNN RESORTS, LIMITED AND SUBSIDIARIES
RECONCILIATION OF OPERATING INCOME TO ADJUSTED PROPERTY EBITDA
AND ADJUSTED PROPERTY EBITDA TO NET INCOME ATTRIBUTABLE TO WYNN RESORTS, LIMITED
(amounts in thousands)
(unaudited)
Year Ended December 31, 2013
Macau
Operations
Las Vegas
Operations
Corporate
and Other
Total
Operating income $ 1,002,463 $ 167,050 $ 120,578 $ 1,290,091
Pre-opening costs 3,169 - - 3,169
Depreciation and amortization 119,597 245,119 6,335 371,051
Property charges and other 5,003 12,162 (27 ) 17,138
Management and royalty fees 160,923 23,721 (184,644 ) -
Corporate expense and other 28,593 32,026 28,110 88,729
Stock-based compensation 4,371 6,397 28,770 39,538
Equity in income from unconsolidated affiliates
- 207 878 1,085
Adjusted Property EBITDA (1) $ 1,324,119 $ 486,682 $ - $ 1,810,801
Year Ended December 31, 2012
Macau
Operations
Las Vegas
Operations
Corporate
and Other
Total
Operating income $ 858,131 $ 74,027 $ 97,118 $ 1,029,276
Pre-opening costs 466 - - 466
Depreciation and amortization 119,620 250,153 3,426 373,199
Property charges and other 10,382 29,563 33 39,978
Management and royalty fees 147,101 22,318 (169,419 ) -
Corporate expense and other 29,177 26,809 56,173 112,159
Stock-based compensation 2,463 5,291 11,894 19,648
Equity in income from unconsolidated affiliates
- 311 775 1,086
Adjusted Property EBITDA (1) $ 1,167,340 $ 408,472 $ - $ 1,575,812
Year Ended
December 31,
2013 2012
Adjusted Property EBITDA (1) $ 1,810,801 $ 1,575,812
Pre-opening costs (3,169 ) (466 )
Depreciation and amortization (371,051 ) (373,199 )
Property charges and other (17,138 ) (39,978 )
Corporate expense and other (88,729 ) (112,159 )
Stock-based compensation (39,538 ) (19,648 )
Interest income 15,713 12,543
Interest expense, net of capitalized interest (299,022 ) (288,759 )
Increase in swap fair value 14,235 991
Loss on extinguishment of debt (40,435 ) (25,151 )
Other 4,856 3,012
Benefit (provision) for income taxes 17,634 (4,299 )
Net income 1,004,157 728,699
Less: Net income attributable to noncontrolling interests (275,505 ) (226,663 )
Net income attributable to Wynn Resorts, Limited $ 728,652 $ 502,036
WYNN RESORTS, LIMITED AND SUBSIDIARIES
SUPPLEMENTAL DATA SCHEDULE
Three Months Ended Year Ended
December 31, December 31,
2013 2012 2013 2012
Room Statistics for Macau operations:
Occupancy % 96.7 % 96.5 % 95.5 % 93.0 %
Average Daily Rate (ADR)(a) $ 315 $ 314 $ 313 $ 315
Revenue per available room (REVPAR)(b)
$ 304 $ 303 $ 299 $ 293
Other information for Macau operations:
Table games win per unit per day(c) $ 28,663 $ 23,210 $ 26,188 $ 23,654
Slot machine win per unit per day(d) $ 879 $ 635 $ 777 $ 718
Average number of table games 492 486 491 489
Average number of slot machines 874 955 866 941
Room Statistics for Las Vegas operations:
Occupancy % 80.8 % 79.2 % 84.6 % 82.9 %
Average Daily Rate (ADR)(a)
$ 256 $ 254 $ 258 $ 252
Revenue per available room (REVPAR)(b)
$ 207 $ 201 $ 218 $ 209
Other information for Las Vegas operations:
Table games win per unit per day(c) $ 9,849 $ 8,896 $ 7,729 $ 7,031
Table Win % 28.8 % 26.8 % 25.1 % 21.9 %
Slot machine win per unit per day(d) $ 258 $ 225 $ 239 $ 206
Average number of table games 230 222 233 220
Average number of slot machines 1,877 2,296 2,030 2,358
(a) ADR is Average Daily Rate and is calculated by dividing total room revenue including the retail value of promotional allowances (less service charges, if any) by total rooms occupied including complimentary rooms.
(b) REVPAR is Revenue per Available Room and is calculated by dividing total room revenue including the retail value of promotional allowances (less service charges, if any) by total rooms available.
(c) Table games win per unit per day is shown before discounts and commissions, as applicable.
(d) Slot machine win per unit per day is calculated as gross slot win minus progressive accruals and free play.
Contact:
Wynn Resorts, Limited
Lewis Fanger, Vice President
702-770-7555
investorrelations@wynnresorts.com