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WD-40 Company Reports First Quarter 2014 Sales And Earnings
PR Newswire WD-40 Company
40 minutes ago
SAN DIEGO, Jan. 8, 2014 /PRNewswire/ -- WD-40 Company (WDFC) today reported net sales for the first quarter ended November 30, 2013 of $95.5 million, a slight increase from the first quarter last fiscal year and a record quarter for the company. Net income for the first quarter was $11.5 million, an increase of 5% compared to the prior year fiscal quarter.
Summary
First quarter multi-purpose maintenance products sales, which include the WD-40® and 3-IN-ONE® brands were $83.9 million, up 3% from the prior year fiscal quarter. The multi-purpose maintenance products are considered a primary focus for the Company. Homecare and cleaning products sales, which include all other brands, were $11.6 million for the first quarter, down 15%. The U.S. homecare and cleaning products are considered harvest brands providing healthy profit returns to the Company and are becoming a smaller part of the business as the multi-purpose maintenance products sales grow.
Americas segment sales in the first quarter were $44.0 million, down 3% compared to the first quarter of the prior fiscal year. The Europe, Middle East, Africa and India ("EMEA") segment sales in the first quarter were $36.5 million, up 3% from the prior year fiscal quarter. Asia-Pacific segment sales were $15.0 million in the first quarter, up 4% from the prior year fiscal quarter.
Diluted earnings per share were $0.74 in the first quarter, compared to $0.69 per share for the same quarter of the prior fiscal year.
"We are pleased with our results in the quarter coming off of a great fiscal year 2013. While we only had a small increase in sales across the globe due to the timing of promotional activities, the first quarter was the largest sales quarter in our history," said Garry Ridge, WD-40 Company president and chief executive officer. "We remain confident that the base business we have established along with the continued focus on our revised strategic initiatives will produce solid results for the year."
Net sales by segment as a percent of total net sales were 46% from the Americas, 38% from EMEA and 16% from Asia-Pacific.
"Sales in the Americas decreased slightly due to declines in the homecare and cleaning products which offset modest growth in multi-purpose maintenance product sales," Ridge said. "In Asia-Pacific and EMEA, we had steady growth with some slight fluctuations caused by promotional timing as well as a small impact from foreign currency exchange rates in some of our Asian markets. During the first quarter, we also began distribution of the WD-40 brand in Albania, bringing the brand's global reach to 188 countries."
Gross margin was 52.0% in the first quarter compared to 50.1% in the same quarter of the prior fiscal year.
"We are pleased that we were able to improve our gross margin in the quarter which was in part due to our supply chain improvement initiatives," Ridge said.
Selling, general and administrative expenses were up 5% in the first quarter to $26.7 million compared to the same period last fiscal year. Advertising and sales promotion expenses were down 7% in the first quarter to $5.6 million compared to the same period last fiscal year.
"We expect advertising and sales promotion expenses to remain in line with our historic averages for the remainder of the year," Ridge said.
The WD-40 Specialist® product line was launched in fiscal year 2012 and during the first quarter of fiscal 2014 distribution was increased by an additional eight countries, including Australia and Turkey.
"Our continued focus on our multi-purpose maintenance products and broadening our product and revenue base has proven successful with the positive growth of the WD-40 Specialist product line and some exciting items we are working on for the 3-IN-ONE brand," Ridge said. "During the quarter we were also able to maintain modest growth in WD-40 multi-use product sales despite the impacts associated with the timing of promotional activities."
We continue to maintain the homecare and cleaning products, as these brands continue to generate positive cash flow despite the sales declines, with a portion of the declines stemming from our decision to reduce sales of low margin products within these brands," Ridge added.
Dividend and Share Buy-Back
As previously announced, WD-40 Company's board of directors declared on Tuesday, December 10, 2013 a 10% increase in the regular quarterly cash dividend, increasing it from $0.31 per share to $0.34 per share. The dividend is payable on January 31, 2014 to shareholders of record on January 6, 2014.
On June 18, 2013, the board of directors approved a share buy-back plan, which authorizes the Company to acquire up to $60.0 million of its outstanding shares effective from August 1, 2013 through August 31, 2015. During the first quarter of 2014, WD-40 Company acquired $5.2 million in shares under this plan.
Fiscal Year 2014 Guidance
WD-40 Company expects fiscal year 2014 net sales of $383 million to $398 million and net income of $40.5 million to $42.8 million. We expect diluted earnings per share of $2.65 to $2.80 based on an estimated 15.3 million weighted average shares outstanding. Gross margin for the full year is expected to be close to 51%. We also expect advertising and promotion expenses of 6.5% to 7.5% of net sales. This guidance does not include any acquisitions or divestitures, and assumes that foreign currency exchange rates will remain close to 2013 levels.
"Our business continues to be on a solid platform and our tribe works every day to execute our strategic initiatives in order to create a bright future for the company," Ridge said. "We are pleased that we were able to increase our dividend to continue to provide our shareholders a positive return."
More detailed information will be available in WD-40 Company's Form 10-Q which will be filed on January 9, 2014.
About WD-40 Company
WD-40 Company, with headquarters in San Diego, is a global consumer products company dedicated to delivering unique, high-value and easy-to-use solutions for a wide variety of maintenance needs of "doer" and "on-the-job" users by leveraging and building the brand fortress of the company. The company markets multi-purpose maintenance products – under the WD-40® and 3-IN-ONE® brand names. The company also markets homecare and cleaning brands: X-14® mildew stain remover and automatic toilet bowl cleaners, 2000 Flushes® automatic toilet bowl cleaners, Carpet Fresh® and No Vac® rug and room deodorizers, Spot Shot® aerosol and liquid carpet stain removers, 1001® household cleaners and rug and room deodorizers, and Lava® and Solvol® heavy-duty hand cleaners.
WD-40 Company currently markets its products in 188 countries worldwide and recorded sales of $368.5 million in fiscal year 2013. Additional information about WD-40 Company can be obtained online at http://www.wd40company.com.
Except for the historical information contained herein, this news release contains forward-looking statements concerning WD-40 Company's outlook for sales, earnings, dividends and other financial results. These statements are based on an assessment of a variety of factors, contingencies and uncertainties considered relevant by WD-40 Company. Forward-looking statements involve risks and uncertainties, which may cause actual results to differ materially from the forward-looking statements, including the impact of commodity prices, the introduction of new product lines and fluctuating global market conditions, including foreign currency exchange rates, both in the United States and internationally. The company's expectations, beliefs and projections are expressed in good faith and are believed by the company to have a reasonable basis, but there can be no assurance that the company's expectations, beliefs or projections will be achieved or accomplished.
The risks and uncertainties are detailed from time to time in reports filed by WD-40 Company with the SEC, including Forms 8-K, 10-Q, and 10-K, and readers are urged to carefully review these and other documents.
WD-40 COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited and in thousands, except share and per share amounts)
November 30,
August 31,
2013
2013
Assets
Current assets:
Cash and cash equivalents
$
51,419
$
53,434
Short-term investments
40,724
37,516
Trade accounts receivable, less allowance for doubtful
accounts of $735 and $540 at November 30, 2013
and August 31, 2013, respectively
56,477
56,878
Inventories
33,790
32,433
Current deferred tax assets, net
5,681
5,672
Other current assets
6,245
6,210
Total current assets
194,336
192,143
Property and equipment, net
9,088
8,535
Goodwill
95,438
95,236
Other intangible assets, net
23,841
24,292
Other assets
2,907
2,858
Total assets
$
325,610
$
323,064
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable
$
18,523
$
19,693
Accrued liabilities
15,919
16,562
Revolving credit facility
63,000
63,000
Accrued payroll and related expenses
12,192
17,244
Income taxes payable
2,770
1,146
Total current liabilities
112,404
117,645
Long-term deferred tax liabilities, net
24,661
24,011
Deferred and other long-term liabilities
1,943
1,901
Total liabilities
139,008
143,557
Shareholders' equity:
Common stock ? authorized 36,000,000 shares, $0.001 par value;
19,459,734 and 19,392,979 shares issued at November 30, 2013 and
August 31, 2013, respectively; and 15,274,308 and 15,285,536 shares
outstanding at November 30, 2013 and August 31, 2013, respectively
19
19
Additional paid-in capital
134,275
133,239
Retained earnings
220,758
214,034
Accumulated other comprehensive loss
(444)
(5,043)
Common stock held in treasury, at cost ? 4,185,426 and 4,107,443
shares at November 30, 2013 and August 31, 2013, respectively
(168,006)
(162,742)
Total shareholders' equity
186,602
179,507
Total liabilities and shareholders' equity
$
325,610
$
323,064
WD-40 COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited and in thousands, except per share amounts)
Three Months Ended November 30,
2013
2012
Net sales
$
95,541
$
95,264
Cost of products sold
45,868
47,537
Gross profit
49,673
47,727
Operating expenses:
Selling, general and administrative
26,699
25,329
Advertising and sales promotion
5,615
6,067
Amortization of definite-lived intangible assets
592
466
Total operating expenses
32,906
31,862
Income from operations
16,767
15,865
Other income (expense):
Interest income
131
62
Interest expense
(215)
(125)
Other (expense) income, net
(214)
52
Income before income taxes
16,469
15,854
Provision for income taxes
4,987
4,910
Net income
$
11,482
$
10,944
Earnings per common share:
Basic
$
0.75
$
0.69
Diluted
$
0.74
$
0.69
Shares used in per share calculations:
Basic
15,279
15,693
Diluted
15,366
15,807
Dividends declared per common share
$
0.31
$
0.29
WD-40 COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited and in thousands)
Three Months Ended November 30,
2013
2012
Operating activities:
Net income
$
11,482
$
10,944
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization
1,378
1,203
Net gains on sales and disposals of property and equipment
(17)
(9)
Deferred income taxes
(154)
183
Excess tax benefits from settlements of stock-based equity awards
(777)
375
Stock-based compensation
517
619
Unrealized foreign currency exchange gains, net
(1,053)
(210)
Provision for bad debts
215
221
Changes in assets and liabilities:
Trade accounts receivable
2,302
(1,111)
Inventories
(1,088)
(890)
Other assets
117
(613)
Accounts payable and accrued liabilities
(2,580)
646
Accrued payroll and related expenses
(6,720)
981
Income taxes payable
3,052
3,199
Deferred and other long-term liabilities
35
57
Net cash provided by operating activities
6,709
15,595
Investing activities:
Purchases of property and equipment
(1,186)
(527)
Proceeds from sales of property and equipment
95
64
Purchases of short-term investments
(1,282)
(20,928)
Net cash used in investing activities
(2,373)
(21,391)
Financing activities:
Dividends paid
(4,758)
(4,579)
Proceeds from issuance of common stock
1,149
944
Treasury stock purchases
(5,264)
(8,091)
Excess tax benefits from settlements of stock-based equity awards
777
(375)
Net cash used in financing activities
(8,096)
(12,101)
Effect of exchange rate changes on cash and cash equivalents
1,745
613
Net decrease in cash and cash equivalents
(2,015)
(17,284)
Cash and cash equivalents at beginning of period
53,434
69,719
Cash and cash equivalents at end of period
$
51,419
$
52,435
consensus (AZZ) : Reports Q3 (Nov) earnings of $0.72 per share, in-line with the Capital IQ Consensus Estimate consensus of $0.72; revenues rose 32.1% year/year to $197.8 mln vs the $220.54 mln consensus.
consensus (AZZ) : Reports Q3 (Nov) earnings of $0.72 per share, in-line with the Capital IQ Consensus Estimate consensus of $0.72; revenues rose 32.1% year/year to $197.8 mln vs the $220.54 mln consensus.
AZZ incorporated Reports Financial Results for the Third Quarter and Year-To-Date of Fiscal Year 2014
PR Newswire AZZ incorporated
4 minutes ago
FORT WORTH, Texas, Jan. 8, 2014 /PRNewswire/ -- AZZ incorporated (AZZ), a global provider of electrical products and services and a provider of galvanizing services, today announced unaudited financial results for the three and nine-month periods ended November 30, 2013. Revenues for the third quarter were $197.8 million compared to $149.7 million for the same quarter last year, an increase of 32.1 percent. Net income for the third quarter was $18.4 million, or $0.72 per diluted share, compared to net income of $15.4 million, or $0.60 per diluted share, in last year's third fiscal quarter.
For the nine-month period, the Company reported revenues of $570.7 million compared to $430.2 million for the comparable period last year, an increase of 32.7 percent. Net income for the nine months was $49.4 million, or $1.92 per diluted share, compared to $47.2 million, or $1.85 per diluted share in the comparable period of last year.
Non-recurring expenses and income items recorded during the third quarter are related to the fire at our Joliet facility. While we expect to receive additional insurance proceeds under our insurance policy in the future, the ultimate amount that we collect has not yet been determined. Any future recoveries under this policy will be recognized in the period in which proceeds are approved by our insurance carrier. Included with the financial tables is a reconciliation of these non-recurring items for the compared periods.
Our products backlog at the end of our third quarter of fiscal 2014 was $211.8 million, compared to $215.8 million at the end of the third quarter of fiscal 2013 and $221.7 million on February 28, 2013. Incoming orders for the third quarter were $198.2 million while shipments for the quarter totaled $197.8 million, resulting in a book to ship ratio of 100 percent. Of our products backlog of $211.8 million, 24.6 percent is to be delivered outside of the U.S.
Revenues for the Electrical and Industrial Products and Services Segment for the third quarter of fiscal 2014 were $112.0 million as compared to $60.4 million for the same quarter last year, an increase of 85.4 percent. Operating income for the segment increased 32.4 percent to $11.9 million compared to $9.0 million in the same period last year. Operating margins for the third quarter were 10.6 percent for the quarter as compared to 14.8 percent in the prior year period. Nuclear Logistics Incorporated ("NLI"), acquired June 1, 2012 and AZZ WSI LLC (together with its subsidiaries, "WSI"), acquired March 29, 2013, contributed $73.3 million in revenues and $7.1 million in operating income. Excluding NLI and WSI, margins for the quarter would have been 12.4 percent. For the first nine months of fiscal 2014, revenues increased 82.2 percent to $312.6 million and operating income increased 42.0 percent to $35.6 million compared to $171.6 million and $25.1 million respectively, for the first nine months of the prior year. Operating margins for the first nine months were 11.4 percent as compared to 14.6 percent in the prior year period. NLI and WSI contributed $188.0 million in revenues and $16.3 million in operating income. Excluding NLI and WSI, year to date margins would have been 15.5 percent.
Revenues for the Company's Galvanizing Services Segment for the third quarter were $85.7 million, compared to the $89.3 million in the same period last year. Operating income was $21.3 million as compared to $24.4 million in the prior period. Operating margins for the third quarter were 24.9 percent, compared to 27.4 percent in the same period last year. For the first nine months of fiscal 2014, revenues were $258.1 million and operating income $73.3 million compared to $258.6 million and $70.6 million, respectively, for the first nine months of the prior year. Year to date operating margins were 28.4 percent compared to 27.3 percent in the prior year period. The Galvanizing Services Segment recorded non-operating expense items during the third quarter of fiscal 2014 in the amount of $1.3 million resulting from the fire at the Joliet galvanizing facility. The losses at the Joliet facility are expected to continue to be offset with insurance proceeds for business interruption in future quarters, once the claim is settled. Pro forma operating income without the non-operating items would have been $22.7 million for the quarter resulting in an operating margin for the segment of 26.4 percent. The rebuilt Joliet facility began a soft start in mid-November, and we anticipate that this facility will be in full production mode by February 2014.
Based upon the evaluation of information currently available to management, we are revising our fiscal year 2014 guidance for revenues to be in the range of $760 to $770 million. Our earnings are anticipated to be in the range of $2.30 and $2.40 per diluted share. Our guidance reflects the acquisition of WSI during the last eleven months of fiscal 2014.
Tom Ferguson, president and chief executive officer of AZZ incorporated, commented, "While we are not satisfied with our third quarter fiscal 2014 performance, we continue to see progress in our assimilation efforts at WSI and NLI, and believe that fiscal 2015 offers numerous opportunities for growth in these businesses. We continued to face headwinds in many of our served markets and some customers continued to delay deliveries on major project orders. The hard work and dedication of AZZ's employees is appreciated and offers a solid platform for the future. I am optimistic about our future as we take our strong product, service and technology offerings to new geographies, while expanding their penetration in existing markets. While we continue to control SG&A expenses, we are investing in expanding our international market presence and leveraging sales resources across our array of Electrical and Industrial businesses. While we expect our markets to remain sluggish during the fourth quarter of fiscal 2014, we are confident of our opportunities in fiscal 2015 and beyond."
AZZ incorporated will conduct a conference call to discuss financial results for the third quarter of fiscal year 2014 at 11:00 A.M. ET on Wednesday, January 8, 2014. Interested parties can access the conference call by dialing (877) 317-6789 or (412) 317-6789 (international). The call will be web cast via the Internet at www.azz.com/azzinvest.htm. A replay of the call will be available for three days at (877) 344-7529 or (412) 317-0088 (international), confirmation #10038188, or for 30 days at www.azz.com/azzinvest.htm.
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.
AZZ incorporated
Condensed Consolidated Statement of Income
(in thousands except per share amounts)
Three Months Ended
Nine Months Ended
November 30,
2013
November 30,
2012
November 30,
2013
November 30,
2012
(unaudited)
(unaudited)
(unaudited)
(unaudited)
Net sales
$197,755
$149,675
$570,712
$430,203
Costs and Expenses:
Cost of Sales
144,395
104,672
410,732
304,022
Selling, General and Administrative
28,113
17,895
80,978
49,019
Interest Expense
4,615
3,234
13,744
9,802
Net (Gain) Loss on Sales or
Insurance Settlement of Property,
Plant and Equipment
(7,373)
157
(8,256)
(5,794)
Other (Income)
93
(454)
(3,617)
(700)
$169,843
$125,504
$493,581
$356,349
Income before income taxes
27,912
24,171
77,131
73,854
Income Tax Expense
9,467
8,807
27,776
26,631
Net income
$18,445
$15,364
$49,355
$47,223
Net income per share
Basic
$0.72
$0.61
$1.94
$1.87
Diluted
$0.72
$0.60
$1.92
$1.85
Diluted average shares outstanding
25,720
25,603
25,683
25,537
Segment Reporting
(in thousands)
Three Months Ended
Nine Months Ended
November 30,
2013
November 30,
2012
November 30,
2013
November 30,
2012
(unaudited)
(unaudited)
(unaudited)
(unaudited)
Net Sales:
Electrical and Industrial Products
$112,035
$60,421
$312,635
$171,633
Galvanizing Services
85,720
89,254
258,077
258,570
$197,755
$149,675
$570,712
$430,203
Segment Operating Income :
Electrical and Industrial Products
$11,853
$8,952
$35,633
$25,087
Galvanizing Services
21,316
24,449
73,260
70,631
Total Segment Operating Income
$33,169
$33,401
$108,893
$95,718
Condensed Consolidated Balance Sheet
(in thousands)
November 30, 2013
February 28, 2013
(unaudited)
(audited)
Assets:
Current assets
$324,429
$262,432
Net property, plant and equipment
198,103
154,476
Other assets, net
466,643
277,297
Total assets
$989,175
$694,205
Liabilities and shareholders' equity:
Current liabilities
$146,552
$118,899
Long term debt due after one year
416,643
196,429
Other liabilities
51,484
44,943
Shareholders' equity
374,496
333,934
Total liabilities and shareholders' equity
$989,175
$694,205
Condensed Consolidated Statements of Cash Flows
(in thousands)
Nine Months Ended
November 30, 2013
November 30, 2012
(unaudited)
(unaudited)
Net cash provided by (used in) operating activities
$94,614
$66,586
Net cash provided by (used in) investing activities
(309,740)
(133,602)
Net cash provided by (used in) financing activities
210,466
(26,807)
Effect of exchange rate changes on cash
10
26
Net increase (decrease) in cash and cash equivalents
($4,650)
($93,797)
Cash and cash equivalents at beginning of period
55,597
143,303
Cash and cash equivalents at end of period
$50,947
$49,506
AZZ incorporated
Non-GAAP Disclosure
Adjusted Earning and Adjusted Earnings Per Share
Adjusted Earnings and Adjusted Earnings Per Share
In addition to reporting financial results in accordance with GAAP, the Company has provided adjusted earnings and adjusted earnings per share, which are non-GAAP measures. Management believes that the presentation of these measures provides investors with greater transparency comparison of operating results across a broad spectrum of companies , which provides a more complete understanding of the Company's financial performance, competitive position and prospects for the future. Management also believes that investors regularly rely on non-GAAP financial measures, such as adjusted earnings and adjusted earnings per share, to assess operating performance and that such measures may highlight trends in the Company's business that may not otherwise be apparent when relying on financial measures calculated in accordance with GAAP.
The following table provides a reconciliation for the three and nine months ended November 30, 2013 and 2012 between net income and diluted earnings per share calculated in accordance with GAAP to adjusted earnings and adjusted per share, respectively, which are shown net of tax (dollars in thousands, except per share data):
Three Months Ended November 30,
2013
2012
(in thousands)
Per Diluted
Share
Per Diluted
Share
Net income and diluted earnings per share
$18,445
$0.72
$15,364
$0.60
Adjustments (net of tax)
Joliet Facility Fire Operating Loss
888
0.03
638
0.02
Joliet Facility Fire-Business Interruption Insurance Proceeds
-
-
-
-
Joliet Facility Fire-Gain from Property Insurance Proceeds
(4,868)
(0.19)
-
-
Law Suit Settlement
-
-
-
-
Acquisition Related Expenditures
766
0.03
280
0.02
Adjusted earnings and adjusted earnings per share
$15,231
$0.59
$16,282
$0.64
Nine Months Ended November 30,
2013
2012
(in thousands)
Per Diluted
Share
Per Diluted
Share
Net income and diluted earnings per share
$49,355
$1.92
$47,223
$1.85
Adjustments (net of tax)
Joliet Facility Fire Operating Loss
1,898
0.07
1,734
0.07
Joliet Facility Fire-Business Interruption Insurance Proceeds
(1,713)
(0.07)
-
-
Joliet Facility Fire-Gain from Property Insurance Proceeds
(5,237)
(0.20)
(3,836)
(0.16)
Law Suit Settlement
(2,688)
(0.10)
-
-
Acquisition Related Expenditures
2,781
0.11
663
0.03
Adjusted earnings and adjusted earnings per share
$44,396
$1.73
$45,784
$1.79
Contact:
Dana Perry, Senior Vice President – Finance and CFO
AZZ incorporated 817-810-0095
Internet: www.azz.com
Lytham Partners 602-889-9700
Joe Dorame or Robert Blum
Internet: www.lythampartners.com
Shares of Sonic (SONC) have jumped in after-hours trading after the restaurant chain announced earnings that met analyst forecasts.
European Pressphoto Agency
Sonic reported earnings of 14 cents a share–13 cents, not including a “favorable tax ruling”–up from 11 cents a year ago, and in-line with forecasts for 13 cents. The company also predicted earnings growth of 14% to 15% in 2014, which would be roughly in line with forecasts. Same-story sales rose 2.2% and Sonic said it would buy back stock in 2014.
Shares of Sonic (SONC) have jumped in after-hours trading after the restaurant chain announced earnings that met analyst forecasts.
European Pressphoto Agency
Sonic reported earnings of 14 cents a share–13 cents, not including a “favorable tax ruling”–up from 11 cents a year ago, and in-line with forecasts for 13 cents. The company also predicted earnings growth of 14% to 15% in 2014, which would be roughly in line with forecasts. Same-story sales rose 2.2% and Sonic said it would buy back stock in 2014.
Sonic Reports Strong First Quarter of Fiscal 2014 Financial Results
Business Wire Sonic Corp.
9 hours ago
OKLAHOMA CITY--(BUSINESS WIRE)--
Sonic Corp. (SONC), the nation's largest chain of drive-in restaurants, today announced results for the first fiscal quarter ended November 30, 2013.
Key highlights of the company's first fiscal quarter included:
The company's net income was $0.14 per diluted share compared with net income per diluted share of $0.11 in the first quarter of fiscal 2013;
Excluding the benefit from a favorable tax ruling detailed below, net income per diluted share for the first quarter of fiscal 2014 was $0.13, an 18% increase in earnings per share on an adjusted basis compared to the same period prior year;
System-wide same-store sales increased 2.2% during the first fiscal quarter, consisting of a 2.3% same-store sales increase at franchise drive-ins and an increase of 1.9% at company drive-ins;
Company drive-in margins improved by 80 basis points; and
The company purchased $7.5 million of stock as part of a previously announced $40 million share repurchase program.
“Fiscal year 2014 is off to a solid start as we focus on key initiatives such as increased media effectiveness, our innovative product pipeline and layered day-part promotional strategy to drive same-store sales growth and, in turn, margin improvement,” said Cliff Hudson, Chairman, Chief Executive Officer and President. “During the first quarter we built on our solid foundation of service, products and pricing with increased media effectiveness, which is having a positive impact across all markets. We also continued to have strong promotions during the quarter with the continuation of the Summer of Shakes promotion into September, our new Spicy Chicken Sandwich and our popular Cheesecake Bites.
“For the remainder of 2014 we will focus on our multi-layered growth strategy, which incorporates same-store sales growth, leverage from higher sales, deployment of free cash flow1, increasing royalty revenues and new drive-in development to build shareholder value. Over the next few years, we are implementing a number of technology initiatives such as a new digital point-of-purchase technology and a new point-of-sale system to drive improved sales and profits for our brand. We believe these initiatives will fuel our multi-layered growth strategy and will enable us to achieve double-digit earnings per share growth in the near and long term,” concluded Mr. Hudson.
Same-Store Sales
For the first fiscal quarter ended November 30, 2013, system-wide same-store sales increased 2.2%, which was comprised of a 2.3% same-store sales increase at franchise drive-ins and an increase of 1.9% at company drive-ins.
Financial Overview
For the first fiscal quarter ended November 30, 2013, the company's net income totaled $8.2 million or $0.14 per diluted share, compared with net income of $6.1 million or $0.11 per diluted share in the same period in the prior year. During the first quarter of fiscal 2014, the company recognized a $0.5 million tax benefit from a favorable tax ruling. Excluding this tax benefit, net income and net income per diluted share for the first fiscal quarter increased 26% and 18%, respectively.
The following non-GAAP adjustments are intended to supplement the presentation of the company's financial results in accordance with GAAP. The company believes that the presentation of these items provides useful information to investors and management regarding the underlying business trends and the performance of the company's ongoing operations and is helpful for period-to-period and company-to-company comparisons, which management believes will assist investors in analyzing the financial results of the company and predicting future performance.
Three months ended Three months ended
November 30, 2013 November 30, 2012
Net Diluted Net Diluted Net Income Diluted EPS
Income EPS Income EPS
$ Change
% Change
$ Change
% Change
Reported – GAAP $ 8,208 $ 0.14 $ 6,133 $ 0.11 $ 2,075 34 % $ 0.03 27 %
Tax benefit from the IRS’ acceptance of a federal tax method change (484 ) (0.01 ) - -
Adjusted - Non-GAAP $ 7,724 $ 0.13 $ 6,133 $ 0.11 $ 1,591 26 % $ 0.02 18 %
Development
During the first fiscal quarter, seven new franchise drive-ins were opened versus one new franchise drive-in opening during the first quarter of fiscal 2013.
Fiscal Year 2014 Outlook
The company expects its initiatives to drive 14% to 15% earnings per share growth in fiscal 2014 as compared to the adjusted non-GAAP earnings per share for fiscal 2013. The macroeconomic environment and its impact on consumer confidence, in addition to the pacing of capital investments, may impact results. The outlook for fiscal 2014 anticipates the following elements:
Positive same-store sales in the low single digit range for the system;
Company drive-ins expected to perform above the system average in the latter half of the fiscal year as new digital point-of-purchase technology and a new point-of-sale system are implemented;
40 to 50 new franchise drive-in openings and fewer drive-in closings than in fiscal 2013;
Drive-in-level margins improving between 75 to 100 basis points, depending upon the degree of same-store sales growth at company drive-ins and the timing of implementation of the new point-of-sale system in company drive-ins;
Selling, general and administrative expenses of $69 million to $70 million;
Depreciation and amortization expense of $42 million to $42.5 million;
Net interest expense of approximately $25 million;
An income tax rate of between 36.5% to 37.5%, excluding the benefit from the federal tax method change;
Capital expenditures of $65 million to $70 million, which assumes the implementation of a new point-of-sale system and digital point-of-purchase technology in company drive-ins during fiscal 2014 and construction of new and relocated drive-ins;
Free cash flow of approximately $15 million to $25 million; and
The repurchase of $40 million of stock across the fiscal year utilizing existing cash and free cash flow.
Earnings Conference Call
The company will host a conference call and online web simulcast this afternoon beginning at 5:00 p.m. ET. The conference call can be accessed live by dialing (888) 601-3862 or (913) 312-6664 for international callers. A replay will be available one hour after the call and can be accessed by dialing (877) 870-5176 or (858) 384-5517 for international callers; the conference ID is 8332005. The replay will be available until Monday, January 13, 2014. An online replay of the conference call will be available approximately two hours after the conclusion of the live broadcast. A link to this event may be found on the company's investor relations website at http://ir.sonicdrivein.com/.
About Sonic
SONIC®, America's Drive-In®, is the nation's largest chain of drive-in restaurants with more than 3,500 drive-ins serving approximately 3 million customers every day. Over the past 60 years, SONIC has delighted guests with signature menu items, more than 1 million drink combinations, friendly service by iconic Carhops and ongoing support of education through its award-winning Limeades for Learning® program. SONIC received top honors as America's “#1 burger quick service restaurant” in the 2013 Temkin Experience Ratings report. For more information about Sonic Corp. (NASDAQ/NM: SONC) and its subsidiaries, please visit sonicdrivein.com. Customers can also connect with SONIC at facebook.com/sonicdrivein or on Twitter @sonicdrive_in.
This press release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements reflect management's expectations regarding future events and operating performance and speak only as of the date hereof. These forward-looking statements involve a number of risks and uncertainties. Factors that could cause actual results to differ materially from those expressed in, or underlying, these forward-looking statements are detailed in the company's annual and quarterly report filings with the Securities and Exchange Commission. The company undertakes no obligation to publicly release revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unforeseen events, except as required to be reported under the rules and regulations of the Securities and Exchange Commission.
The tables that follow provide information regarding the number of company drive-ins, franchise drive-ins and system drive-ins in operation as of the end of the periods indicated. In addition, these tables provide information regarding franchise sales, system growth in sales, and both franchise and system average drive-in sales and change in same-store sales. System information includes both company and franchise drive-in information, which we believe is useful in analyzing the growth of our brand. While we do not record franchise drive-in sales as revenues, we believe this information is important in understanding our financial performance since we calculate and record franchise royalties based on a percentage of franchise sales. This information also is indicative of the financial health of our franchisees.
SONC-F
1 Free cash flow is defined as net income plus depreciation, amortization and stock compensation expenses, less capital expenditures.
SONIC CORP.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
Three months ended
November 30,
2013 2012
Revenues:
Company Drive-In sales $ 93,499 $ 93,456
Franchise Drive-Ins:
Franchise royalties and fees 31,221 29,920
Lease revenue 886 1,486
Other 1,046 1,146
Total revenues 126,652 126,008
Costs and expenses:
Company Drive-Ins:
Food and packaging 26,236 26,632
Payroll and other employee benefits 33,340 33,465
Other operating expenses, exclusive of
depreciation and amortization included below 21,807 21,976
Total cost of Company Drive-In sales 81,383 82,073
Selling, general and administrative 17,005 16,130
Depreciation and amortization 10,034 10,595
Other operating (income) expense, net (129 ) 7
Total costs and expenses 108,293 108,805
Income from operations 18,359 17,203
Interest expense 6,383 7,675
Interest income (117 ) (141 )
Net interest expense 6,266 7,534
Income before income taxes 12,093 9,669
Provision for income taxes 3,885 3,536
Net income $ 8,208 $ 6,133
Basic income per share $ 0.15 $ 0.11
Diluted income per share $ 0.14 $ 0.11
Weighted average basic shares 56,292 57,672
Weighted average diluted shares 57,897 58,085
SONIC CORP.
Unaudited Supplemental Information
Three months ended
November 30,
2013 2012
Drive-Ins in Operation
Company:
Total at beginning of period 396 409
Opened - -
Sold to franchisees (7 ) -
Closed (net of re-openings) (1 ) -
Total at end of period 388 409
Franchise:
Total at beginning of period 3,126 3,147
Opened 7 1
Acquired from the company 7 -
Closed (net of re-openings) (11 ) (8 )
Total at end of period 3,129 3,140
System-wide:
Total at beginning of period 3,522 3,556
Opened 7 1
Closed (net of re-openings) (12 ) (8 )
Total at end of period 3,517 3,549
Three months ended
November 30,
2013 2012
($ in thousands)
Sales Analysis
Company Drive-Ins:
Total sales $ 93,499 $ 93,456
Average drive-in sales 239 230
Change in same-store sales 1.9 % 4.2 %
Franchised Drive-Ins:
Total sales $ 829,995 $ 808,660
Average drive-in sales 270 262
Change in same-store sales 2.3 % 2.9 %
System-wide:
Change in total sales 2.4 % 2.7 %
Average drive-in sales $ 266 $ 258
Change in same-store sales 2.2 % 3.0 %
Note: Change in same-store sales based on restaurants open for a minimum of 15 months.
SONIC CORP.
Unaudited Supplemental Information
Three months ended
November 30,
2013 2012
Revenues (in thousands)
Company Drive-In sales $ 93,499 $ 93,456
Franchise Drive-Ins:
Franchise royalties 30,912 29,914
Franchise fees 309 6
Lease revenue 886 1,486
Other 1,046 1,146
Total revenues $ 126,652 $ 126,008
Three months ended
November 30,
2013 2012
Margin Analysis (percentage of Company Drive-In sales)
Company Drive-Ins:
Food and packaging 28.1 % 28.5 %
Payroll and employee benefits 35.6 35.8
Other operating expenses 23.3 23.5
Cost of Company Drive-In sales 87.0 % 87.8 %
November 30, August 31,
2013 2013
Selected Balance Sheet Data (In thousands)
Cash and cash equivalents $ 95,893 $ 77,896
Current assets 140,717 140,722
Property, equipment and capital leases, net 396,766 399,661
Total assets $ 656,581 $ 660,794
Current liabilities, including capital lease obligations and
long-term debt due within one year $ 62,697 $ 72,930
Obligations under capital leases due after one year 21,473 22,458
Long-term debt due after one year 434,932 437,380
Total liabilities 571,258 583,330
Stockholders' equity $ 85,323 $ 77,464
Contact:
Sonic Corp.
Claudia San Pedro, 405-225-4846
Vice President of Investor Relations,
Communications and Treasurer
The "Street" has SCHN coming in at -.04 for the quarter that should be reported on or about January 08, 2014! All post's welcome! The "Good Dr's In"!
The "Street" has SCHN coming in at -.04 for the quarter that should be reported on or about January 08, 2014! All post's welcome! The "Good Dr's In"!
The "Street has WDFC coming in at .75 for the 1st quarter that should be reported on or about January 08, 2014! All post's welcome! The "Good Dr's In"!
The "Street has WDFC coming in at .75 for the 1st quarter that should be reported on or about January 08, 2014! All post's welcome! The "Good Dr's In"!
The "Street" has SONC coming in at .15 for the 1st Quarter that should be reported on January 06, 2014! All post's welcome! The "Good Dr's In"!
The "Street" has SONC coming in at .15 for the 1st Quarter that should be reported on or about January 06, 2014! All post's welcome! The "Good Dr's In"!
Sonic to Release First Quarter 2014 Financial Results on January 6, 2014
Business Wire Sonic Corp.
December 30, 2013 10:11 AM
OKLAHOMA CITY--(BUSINESS WIRE)--
Sonic Corp. (SONC), the nation's largest chain of drive-in restaurants, today announced that it will release results for the quarter ended November 30, 2013 after the market close on January 6, 2014. The company will host a conference call to review financial results on Monday, January 6, 2014, at 5:00 PM ET.
The conference call can be accessed live over the phone by dialing (888) 601-3862 or (913) 312-6664 for international callers. A replay will be available one hour after the call and can be accessed by dialing (877) 870-5176 or (858) 384-5517 for international callers; the conference ID is 8332005. The replay will be available until Monday, January 13, 2014. An online replay of the conference call will be available approximately two hours after the conclusion of the live broadcast. A link to this event will be available on the investor section of the company's website, www.sonicdrivein.com.
About Sonic
SONIC®, America's Drive-In®, is the nation's largest chain of drive-in restaurants with more than 3,500 drive-ins serving approximately 3 million customers every day. Over the past 60 years, SONIC has delighted guests with signature menu items, more than 1 million drink combinations, friendly service by iconic Carhops and ongoing support of education through its award-winning Limeades for Learning® program. SONIC received top honors as America's "#1 burger quick service restaurant" in the 2013 Temkin Experience Ratings report. For more information about Sonic Corp. (NASDAQ/NM: SONC) and its subsidiaries, please visit www.sonicdrivein.com. Customers can also connect with SONIC at facebook.com/sonicdrivein or on Twitter @sonicdrive_in.
SONC-F
Contact:
Sonic Corp.
Claudia San Pedro, 405-225-4846
Vice President of Investor Relations/Communications and Treasurer
Schnitzer Announces First Quarter Fiscal 2014 Earnings Date and Conference Call January 8, 2014 – 11:30 a.m. Eastern
Business Wire Schnitzer Steel Industries, Inc.
December 19, 2013 1:09 PM
PORTLAND, Ore.--(BUSINESS WIRE)--
Schnitzer Steel Industries, Inc. (SCHN) will report its first quarter fiscal 2014 financial results on Wednesday, January 8, 2014 and will webcast a conference call to discuss the performance at 11:30 a.m. Eastern on the same day.
The webcast of the call and the accompanying slide presentation may be accessed on Schnitzer’s website under the Investor section Event Calendar at www.schnitzersteel.com/events. The call will be hosted by Tamara L. Lundgren, President and Chief Executive Officer, and Richard D. Peach, Senior Vice President and Chief Financial Officer.
Replay Information
Toll Free Dial: (855) 859-2056
Toll Free International Dial: (404) 537-3406
Conference ID: 27251997
Replay Available: 01/08/2014 – 01/15/2014
About Schnitzer Steel Industries, Inc.
Schnitzer Steel Industries, Inc. is one of the largest manufacturers and exporters of recycled ferrous metal products in the United States with 60 operating facilities located in 14 states, Puerto Rico and Western Canada. The business has seven deep water export facilities located on both the East and West Coasts and in Hawaii and Puerto Rico. The Company’s integrated operating platform also includes its auto parts and steel manufacturing businesses. The Company’s auto parts business sells used auto parts through its 61 self-service facilities located in 16 states and Western Canada. With an effective annual production capacity of approximately 800,000 tons, the Company’s steel manufacturing business produces finished steel products, including rebar, wire rod and other specialty products. The Company commenced its 107th year of operation in fiscal 2013.
Contact:
Schnitzer Steel Industries, Inc.
Investor Relations: Alexandra Deignan, 646-278-9711
Website: www.schnitzersteel.com
Email: ir@schn.com
Schnitzer Reports Fourth Quarter Fiscal 2013 Financial Results
Steel Manufacturing Business Reports Best Performance since Fiscal 2008
Additional Cost Savings and Productivity Improvements Planned for Metals Recycling Business in Fiscal 2014
Reported Results Include a Non-cash Goodwill Impairment and Other Charges in the Metals Recycling Business
Business Wire Schnitzer Steel Industries, Inc.
October 29, 2013 8:30 AM
PORTLAND, Ore.--(BUSINESS WIRE)--
Schnitzer Steel Industries, Inc. (SCHN) today reported an adjusted loss per share of $(0.51) for the fourth quarter ended August 31, 2013, excluding a non-cash goodwill impairment charge, other asset impairment charges, restructuring charges and tax valuation allowances. The Company reported a loss per share of $(10.82) for the fourth quarter ended August 31, 2013. This compares with an adjusted earnings per share of $0.11, excluding restructuring charges, and a reported loss per share of $(0.02) for the fourth quarter of fiscal 2012. Notwithstanding the significant impact to earnings as a result of the impairments and other charges, the Company generated positive operating cash flows of $38 million in the fourth quarter.
Challenging market conditions for recycled ferrous metals resulted in lower export selling prices and reduced sales volumes as compared to both the third quarter of fiscal 2013 and the fourth quarter of fiscal 2012. In addition, purchase prices for raw materials did not decrease as much as selling prices during the quarter due to constrained supply which contributed to operating margin compression in both our Metals Recycling and Auto Parts Businesses.
In the fourth quarter, our Metals Recycling Business took a non-cash goodwill impairment charge of $321 million and other asset impairment charges of $13 million. In the fourth quarter, MRB’s adjusted operating loss of $6 per ton excludes the non-cash goodwill impairment, other asset impairment charges and restructuring charges. MRB's adjusted operating income includes an estimated adverse impact of $12 per ton from a combination of average inventory costing and other items related to inventory valuations, costs associated with fire damage at two facilities and a bad debt expense from a customer bankruptcy.
Our Auto Parts Business generated operating margins of 7% in the fourth quarter, before the impact of new stores opened in fiscal 2013. APB's operating margin includes an adverse impact of approximately 400 basis points from average inventory costing. During the fourth quarter, APB incurred $2 million of operating losses related to the new sites added during fiscal 2013 which lowered APB's reported operating margin to 4%.
Our Steel Manufacturing Business reported its best fourth quarter and full year performance since fiscal 2008, generating $2 million of quarterly operating income driven largely by slowly improving demand leading to increased sales volumes and by productivity improvements.
During fiscal 2013, we implemented restructuring initiatives which reduced annual operating expenses by $25 million. These benefits were more than offset by the impact of adverse market conditions. In light of continued market challenges, we are implementing additional cost reduction and productivity improvement initiatives which are targeted to further reduce our annual operating expenses by $30 million with approximately 70% expected to benefit fiscal 2014 performance and the full benefits achieved in fiscal 2015. The additional savings, which are primarily in our Metals Recycling operations, are expected to result from a combination of reducing organizational layers, productivity improvements, procurement savings, internal synergies and other operating efficiencies. We anticipate incremental restructuring charges of $3 million to be incurred in fiscal 2014.
Consolidated Summary Results
($ in millions, except per share amounts)
Quarter Year
4Q13
3Q13
4Q12
2013
2012
Revenues $ 657 $ 710 $ 762 $ 2,622 $ 3,341
Operating Income (Loss) (348 ) 7 (1 ) (328 ) 54
Goodwill Impairment Charge 321 — — 321 —
Other Asset Impairment Charges 13 — — 13 —
Restructuring Charges 3 2 5 8 5
Adjusted Operating Income (Loss) (11 ) 9 4 14 59
Net Income (Loss) attributable to SSI (289 ) 1 — (281 ) 27
Adjusted Net Income (Loss) attributable to SSI(1) $ (14 ) $ 2 $ 3 $ (2 ) $ 31
Net Income (Loss) per share attributable to SSI $ (10.82 ) $ 0.03 $ (0.02 ) $ (10.56 ) $ 0.99
Adjusted diluted EPS attributable to SSI(1) $ (0.51 ) $ 0.09 $ 0.11 $ (0.07 ) $ 1.12
(1) Includes same adjustments, net of tax, as in adjusted operating income above as well as a valuation allowance on deferred tax assets of $29 million. See Non-GAAP Financial Measures for reconciliation to U.S. GAAP.
Tamara Lundgren, President and Chief Executive Officer, commented on the Company’s results, “While each of our businesses is well positioned to achieve higher profitability when market conditions improve, this quarter was negatively impacted by a number of significant items and an adverse impact from average inventory costs. Notwithstanding the significant impact to reported earnings, we generated $38 million of operating cash flow in the fourth quarter and continued to invest in our business and to return capital to our shareholders through our quarterly dividend.”
Lundgren continued: "In fiscal 2013, we delivered $25 million of savings from reducing SG&A and production efficiencies which lowered our cost of goods sold. However, these benefits were offset by the adverse impact of weak market conditions. In fiscal 2014, we expect to deliver organic growth in each of our businesses and, in addition, we are targeting $30 million of additional savings. With our major capital projects completed, we also anticipate significantly lower capital spending in fiscal 2014.”
Lundgren concluded: “With slowly improving demand for steel driving increased sales volumes and with the benefits of productivity improvements, SMB delivered its best performance since fiscal 2008. Our focus in fiscal 2014 will be to continue to deliver cost savings and productivity improvements throughout the Company and to further leverage the synergies between APB and MRB, all of which we expect will make our Company stronger in the long-run. We are very gratified that, in light of the market environment that the Company is facing, our teams continue to do an unwavering and excellent job in serving our customers and our communities. It is their commitment to excellence that was reflected in our selection as “Scrap Company of the Year” by American Metal Market.”
Metals Recycling Business
Summary of Metals Recycling Business Results
($ in millions, except selling prices; Fe volumes 000s long tons; NFe volumes M lbs)
Quarter Year
4Q13 3Q13 4Q12 2013 2012
Total Revenues $ 535 $ 605 $ 652 $ 2,210 $ 2,949
Ferrous Revenues $ 398 $ 465 $ 485 $ 1,677 $ 2,298
Ferrous Volumes 1,088 1,164 1,178 4,309 5,115
Avg. Net Ferrous Sales Prices ($/LT)(1) $ 336 $ 367 $ 378 $ 358 $ 415
Nonferrous Revenues $ 129 $ 131 $ 158 $ 502 $ 614
Nonferrous Volumes 141 135 169 520 629
Avg. Net Nonferrous Sales Prices ($/lb)(1) $ 0.89 $ 0.94 $ 0.90 $ 0.93 $ 0.94
Operating Income (Loss)(2) $ (340 ) $ 9 $ 13 $ (312 ) $ 64
Goodwill Impairment 321 — — 321 —
Asset Impairment Charges 13 — — 13 —
Adjusted Operating Income (Loss)(3)(4) $ (6 ) $ 9 $ 13 $ 23 $ 64
(1) Sales prices are shown net of freight.
(2) Operating income (loss) does not include the impact of restructuring charges.
(3) See Non-GAAP Financial Measures for reconciliation to U.S. GAAP.
(4) Numbers may not foot due to rounding
Sales Volumes: Ferrous sales volumes of 1.1 million tons in the fourth quarter decreased 7% from the third quarter, primarily due to softer export demand. Nonferrous sales volumes of 141 million pounds increased 4% sequentially, primarily due to benefits from higher production levels and increased shipments in August.
Export customers accounted for 74% of total ferrous sales volumes in the fourth quarter. Our ferrous and nonferrous products were shipped to 14 countries, with Turkey, China and South Korea the top export destinations for ferrous shipments.
Pricing: Demand softened in the export markets in early June, driving average ferrous net sales prices in the fourth quarter down by $31 per ton, or 8%, from third quarter levels. Domestic selling prices were also lower sequentially, however an upward movement mid-quarter resulted in a lower overall decline as compared to export prices. Nonferrous prices decreased 5% sequentially in the fourth quarter, primarily due to lower commodity prices.
Margins: Adjusted operating loss per ferrous ton of $6 in the fourth quarter of fiscal 2013 reflected weaker export market conditions, including an estimated adverse impact of $12 per ton from a combination of average inventory costs and other items related to inventory valuations, costs associated with fire damage at two facilities and a bad debt expense related to a customer bankruptcy.
Auto Parts Business
Summary of Auto Parts Business Results
($ in millions, except locations)
Quarter Year
4Q13 3Q13 4Q12 2013 2012
Revenues $ 79 $ 86 $ 72 $ 313 $ 317
Operating Income(1)(2) $ 3 $ 8 $ 2 $ 25 $ 33
Car Purchase Volumes (000s) 94 95 81 356 339
Locations (end of quarter) 61 61 51 61 51
(1) Operating income does not include the impact of restructuring charges.
(2) See Non-GAAP Financial Measures for reconciliation to U.S. GAAP.
Revenues: Revenues in the fourth quarter decreased 8% sequentially resulting from a decline in commodity prices and seasonally lower admissions and part sales.
Margins: Operating margins of 7%, before the impact of new stores added in fiscal 2013, were compressed by lower commodity prices, an estimated adverse impact of approximately 400 basis points from average inventory costing, and retail seasonality. During the fourth quarter, APB incurred $2 million of operating losses related to the new sites added during fiscal 2013, including integration and startup costs, which lowered APB's reported operating margin to 4%. (See Non-GAAP Financial Measures for reconciliation to U.S. GAAP)
Steel Manufacturing Business
Summary of Steel Manufacturing Business Results
($ in millions, except selling prices; volume in thousands of short tons)
Quarter Year
4Q13 3Q13 4Q12 2013 2012
Revenues $ 96 $ 93 $ 90 $ 352 $ 333
Operating Income (Loss) $ 2 $ — $ (3 ) $ 7 $ (2 )
Avg. Net Sales Prices ($/ST) $ 667 $ 687 $ 685 $ 680 $ 715
Finished Goods Sales Volumes 138 125 126 488 447
Sales Volumes: Finished steel sales volumes of 138 thousand tons increased 10% from the third quarter as well as the prior year quarter due to higher demand for long products on the West Coast.
Pricing: Average net sales prices for finished steel products decreased 3% primarily due to the impact of lower scrap prices on selling prices for finished goods.
Margins: Operating income of $2 million resulted from improved demand for finished steel products, benefits from higher sales volumes and operational efficiencies arising from productivity improvements.
Cost Reductions
During fiscal 2013, SG&A was lower by 9%, or $19 million, as compared to the prior year, excluding $5 million of operating expenses related to new APB sites in fiscal 2013 and $2 million of environmental credits which benefited fiscal 2012. Including production efficiencies which reduced costs of goods sold, our cost reduction initiatives lowered annual pre-tax operating costs by $25 million in fiscal 2013. Total restructuring charges in fiscal 2013 were $8 million pre-tax, or approximately $0.20 of diluted earnings per share. During the fourth quarter, we incurred $3 million of restructuring charges, or approximately $0.05 of diluted earnings per share. The restructuring charges consisted primarily of cash severance costs from headcount reductions, contract termination costs, and other related costs.
An additional cost reduction program beginning in fiscal 2014 is targeted to further reduce operating expenses by $30 million, primarily in our Metals Recycling Business. We expect these cost reductions to include approximately $27 million from reduced production expenses within costs of goods sold and $3 million from reduced SG&A.
Fiscal Year 2013 Results
For fiscal 2013, Schnitzer reported full year revenues of $2.6 billion and adjusted loss per share of $(0.07). Reported loss per share was $(10.56) for fiscal 2013. This compares with fiscal 2012 revenues of $3.3 billion and adjusted diluted earnings per share of $1.12 and reported diluted earnings per share of $0.99.
During fiscal 2013, the Company invested $50 million in acquisitions, including the purchase of noncontrolling interests, and $90 million in capital expenditures and returned $20 million to shareholders through dividend payments.
The Company's effective tax rate for fiscal year 2013 was a benefit of 17% which was lower than the federal statutory rate primarily due to the recognition of a valuation allowance on deferred tax assets and the impact of the non-deductible portion of the goodwill impairment charge.
Analysts' Conference Call: Fourth Quarter of Fiscal 2013
A conference call and slide presentation to discuss results will be held today, October 29, 2013, at 11:30 a.m. EDT hosted by Tamara Lundgren, President and Chief Executive Officer, and Richard Peach, Chief Financial Officer. The call and the slides will be webcast and accessible on the Company's website at www.schnitzersteel.com.
Summary financial data is provided in the following pages. The slides and related materials will be available prior to the call on the website.
SCHNITZER STEEL INDUSTRIES, INC.
FINANCIAL HIGHLIGHTS
(in thousands)
(Unaudited)
For the Three Months Ended For the Year Ended
August 31,
2013
May 31,
2013
August 31,
2012
August 31,
2013
August 31,
2012
REVENUES:
Metals Recycling Business:
Ferrous revenues $ 397,947 $ 465,194 $ 485,030 $ 1,677,035 $ 2,297,580
Nonferrous revenues 129,199 130,600 157,915 501,655 614,467
Other revenues 7,817 9,076 8,864 31,794 36,660
Total Metals Recycling Business revenues 534,963 604,870 651,809 2,210,484 2,948,707
Auto Parts Business 79,231 86,439 71,662 313,306 316,884
Steel Manufacturing Business 96,235 92,943 90,179 352,454 333,227
Intercompany sales eliminations (53,844 ) (73,957 ) (51,365 ) (254,333 ) (257,880 )
Total revenues $ 656,585 $ 710,295 $ 762,285 $ 2,621,911 $ 3,340,938
OPERATING INCOME (LOSS):
Adjusted Metals Recycling Business(1) $ (6,097 ) $ 8,789 $ 13,004 $ 22,504 $ 63,872
Auto Parts Business 3,191 8,273 1,611 24,539 33,304
Steel Manufacturing Business 2,169 (72 ) (2,683 ) 6,541 (2,081 )
Segment operating income (loss)(2) (737 ) 16,990 11,932 53,584 95,095
Corporate expense (10,188 ) (8,625 ) (8,875 ) (38,750 ) (37,512 )
Intercompany eliminations 299 695 588 (664 ) 1,097
Adjusted operating income (loss) (10,626 ) 9,060 3,645 14,170 58,680
Goodwill impairment charge (321,000 ) — — (321,000 ) —
Other asset impairment charges (13,053 ) — — (13,053 ) —
Restructuring charges (2,900 ) (1,873 ) (5,012 ) (7,906 ) (5,012 )
Total operating income (loss) $ (347,579 ) $ 7,187 $ (1,367 ) $ (327,789 ) $ 53,668
(1) Adjusted for goodwill impairment charge and other asset impairment charges. See Non-GAAP Financial Measures for reconciliation to U.S. GAAP.
(2) Segment operating income (loss) does not include the impact of restructuring charges.
SCHNITZER STEEL INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
For the Three Months Ended Fiscal Year Ended
August 31,
2013
May 31,
2013
August 31,
2012
August 31,
2013
August 31,
2012
Revenues $ 656,586 $ 710,295 $ 762,285 $ 2,621,911 $ 3,340,938
Cost of goods sold 620,457 652,263 712,434 2,415,391 3,079,716
Selling, general and administrative 47,388 49,390 46,668 193,533 205,178
Income from joint ventures (633 ) (418 ) (462 ) (1,183 ) (2,636 )
Goodwill impairment charge 321,000 — — 321,000 —
Other asset impairment charges 13,053 — — 13,053 —
Restructuring 2,900 1,873 5,012 7,906 5,012
Operating income (loss) (347,579 ) 7,187 (1,367 ) (327,789 ) 53,668
Interest expense (2,584 ) (2,788 ) (2,407 ) (9,743 ) (11,880 )
Other income (expense), net (332 ) 141 1,097 83 1,168
Income (loss) before income taxes (350,495 ) 4,540 (2,677 ) (337,449 ) 42,956
Income tax benefit (expense)
61,617 (2,986 ) 1,830 57,426 (14,039 )
Net income (loss) (288,878 ) 1,554 (847 ) (280,023 ) 28,917
Net income (loss) attributable to noncontrolling interests (356 ) (734 ) 362 (1,419 ) (1,513 )
Net income (loss) attributable to SSI $ (289,234 ) $ 820 $ (485 ) $ (281,442 ) $ 27,404
Income (loss) per share attributable to SSI - basic $ (10.82 ) $ 0.03 $ (0.02 ) $ (10.56 ) $ 1.00
Income (loss) per share attributable to SSI - diluted $ (10.82 ) $ 0.03 $ (0.02 ) $ (10.56 ) $ 0.99
Weighted average number of common shares:
Basic 26,733 26,671 26,777 26,656 27,317
Diluted 26,733 26,813 26,777 26,656 27,553
Dividends declared per common share $ 0.188 $ 0.188 $ 0.188 $ 0.750 $ 0.410
SCHNITZER STEEL INDUSTRIES, INC.
SELECTED OPERATING STATISTICS
(Unaudited)
Fiscal Year Fiscal Year
1Q13 2Q13 3Q13 4Q13 2013 1Q12 2Q12 3Q12 4Q12 2012
Metals Recycling Business
Ferrous Selling Prices ($/LT) (1)
Domestic $ 354 $ 363 $ 367 $ 346 $ 358 $ 420 $ 424 $ 414 $ 357 $ 406
Exports 360 374 367 332 359 436 420 427 384 417
Average $ 358 $ 372 $ 367 $ 336 $ 358 $ 432 $ 421 $ 424 $ 378 $ 415
Ferrous Sales Volume (LT)
Domestic 279,450 260,509 314,240 288,112 1,142,311 319,450 297,142 308,521 261,748 1,186,861
Export 675,212 842,509 849,991 799,644 3,167,356 912,939 1,055,237 1,044,063 915,927 3,928,166
Total Processed 954,662 1,103,018 1,164,231 1,087,756 4,309,667 1,232,389 1,352,379 1,352,584 1,177,675 5,115,027
Nonferrous Average Price ($/LB) (1) $ 0.95 $ 0.97 $ 0.94 $ 0.89 $ 0.93 $ 1.00 $ 0.91 $ 0.97 $ 0.90 $ 0.94
Nonferrous Sales Volume (LB, in 000s) 118,931 125,500 135,256 140,755 520,442 137,243 168,545 154,071 168,794 628,652
Steel Manufacturing Business
Sales Prices ($/ST) (1) (2)
Average $ 680 $ 690 $ 687 $ 667 $ 680 $ 722 $ 725 $ 734 $ 685 $ 715
Sales Volume (ST) (2)
Rebar 78,159 58,132 71,561 83,911 291,763 62,487 51,141 55,378 74,797 243,803
Coiled Products 45,533 32,130 46,088 46,334 170,085 39,120 55,785 42,753 45,103 182,761
Merchant Bar and Other 5,926 5,355 7,358 7,298 25,937 5,030 5,097 4,812 5,837 20,776
Total 129,618 95,617 125,007 137,543 487,785 106,637 112,023 102,943 125,737 447,340
Auto Parts Business
Car purchase volumes (000) 79 88 95 94 356 85 84 89 81 339
Number of self-service locations at end of quarter 51 59 61 61 61 50 51 51 51 51
(1) Price information is shown after a reduction for the cost of freight incurred to deliver the product to the customer.
(2) Excludes billet sales.
SCHNITZER STEEL INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
August 31, 2013 August 31, 2012
Assets
Current Assets:
Cash and cash equivalents $ 13,481 $ 89,863
Accounts receivable, net 188,270 137,313
Inventories, net 236,049 246,992
Other current assets 29,430 42,651
Total current assets 467,230 516,819
Property, plant and equipment, net 564,426 564,185
Goodwill and other assets 373,856 682,569
Total assets $ 1,405,512 $ 1,763,573
Liabilities and Equity
Current liabilities:
Short-term borrowings $ 9,174 $ 683
Other current liabilities 156,960 178,159
Total current liabilities 166,134 178,842
Long-term debt, net of current maturities 372,663 334,629
Other long-term liabilities 85,516 142,158
Redeemable noncontrolling interest — 22,248
Equity:
Total Schnitzer Steel Industries, Inc. ("SSI") shareholders' equity 776,558 1,080,583
Noncontrolling interests 4,641 5,113
Total equity 781,199 1,085,696
Total liabilities and equity $ 1,405,512 $ 1,763,573
Non-GAAP Financial Measures
This press release contains certain non-GAAP financial measures as defined under SEC rules such as adjusted operating income, adjusted net income attributable to SSI, adjusted diluted earnings per share attributable to SSI and the impact from new stores in our Auto Parts Business. As required by SEC rules, the Company has provided reconciliations of these measures to the most directly comparable U.S. GAAP measures. Management believes that each of the foregoing non-GAAP financial measures provides a meaningful presentation of the Company's results from its core underlying business operations excluding adjustments for goodwill and other impairment charges, restructuring charges, tax valuation allowances and startup costs that are not related to the Company's core underlying business operational performance and improves the period-to-period comparability of the Company's results from its core underlying business operations. These non-GAAP financial measures should be considered in addition to, but not as a substitute for, the most directly comparable U.S. GAAP measures.
Operating Income (Loss)
($ in millions) Quarter Year
4Q13 3Q13 4Q12 2013 2012
Consolidated Operating Income (Loss):
Operating Income (Loss) $ (348 ) $ 7 $ (1 ) $ (328 ) $ 54
Goodwill Impairment Charge 321 — — 321 —
Other Asset Impairment Charges 13 — — 13 —
Restructuring Charges 3 2 5 8 5
Adjusted Operating Income (Loss) $ (11 ) $ 9 $ 4 $ 14 $ 59
MRB Operating Income (Loss):
Operating Income (Loss) $ (340 ) $ 9 $ 13 $ (312 ) $ 64
Goodwill Impairment Charge 321 — — 321 —
Other Asset Impairment Charges 13 — — 13 —
Adjusted Operating Income (Loss)(1) $ (6 ) $ 9 $ 13 $ 23 $ 64
(1) Numbers may not foot due to rounding
Net Income (Loss) attributable to SSI
($ in millions) Quarter Year
4Q13 3Q13 4Q12 2013 2012
Net Income (Loss) attributable to SSI $ (289 ) $ 1 $ — $ (281 ) $ 27
Goodwill impairment charge, net of tax 254 — — 254 —
Other asset impairment charges, net of tax 9 — — 9 —
Restructuring charges, net of tax 1 1 3 5 3
Valuation allowance on deferred tax assets 11 — — 11 —
Adjusted Net Income (Loss) attributable to SSI(1) $ (14 ) $ 2 $ 3 $ (2 ) $ 31
(1) Numbers may not foot due to rounding
Diluted Earnings per share attributable to SSI
($ per share) Quarter Year
4Q13 3Q13 4Q12 2013 2012
Net Income (Loss) per share attributable to SSI $ (10.82 ) $ 0.03 $ (0.02 ) $ (10.56 ) $ 0.99
Goodwill impairment charge, net of tax, per share 9.52 — — 9.55 —
Other asset impairment charges, net of tax, per share 0.33 — — 0.33 —
Restructuring charges, net of tax, per share 0.05 0.06 0.12 0.20 0.12
Valuation allowance on deferred tax assets, per share 0.41 — 0.01 0.41 0.01
Adjusted Diluted EPS attributable to SSI $ (0.51 ) $ 0.09 $ 0.11 $ (0.07 ) $ 1.12
Auto Parts Business New Stores Impact
($ in millions) 4Q13
Existing Stores(1) New Stores(2) Reported
Revenues $ 72 $ 7 $ 79
Operating Income (Loss)
$ 5 $ (2 ) $ 3
Operating Income Margin 7 % NM 4 %
Car Purchase Volumes (000) 84 10 94
3Q13
Existing Stores(1) New Stores(2) Reported
Revenues(3) $ 80 $ 7 $ 86
Operating Income (Loss)(3) $ 10 $ (1 ) $ 8
Operating Income Margin 12 % NM 10 %
Car Purchase Volumes (000) 87 8 95
FY13
Existing Stores(1) New Stores(2) Reported
Revenues
$ 296 $ 17 $ 313
Operating Income (Loss)(3)
$ 29 $ (5 ) $ 25
Operating Income Margin 10 % NM 8 %
Car Purchase Volumes (000) 335 21 356
(1) Existing Stores represents APB operations for stores owned one year or more.
(2) New Stores represent new acquisitions, or greenfield development, owned less than one year.
(3) Does not foot due to rounding.
NM = Not meaningful
About Schnitzer Steel Industries, Inc.
Schnitzer Steel Industries, Inc. is one of the largest manufacturers and exporters of recycled ferrous metal products in the United States with 60 operating facilities located in 14 states, Puerto Rico and Western Canada. The business has seven deep water export facilities located on both the East and West Coasts and in Hawaii and Puerto Rico. The Company's integrated operating platform also includes its auto parts and steel manufacturing businesses. The Company's auto parts business sells used auto parts through its 61 self-service facilities located in 16 states and Western Canada. With an effective annual production capacity of approximately 800,000 tons, the Company's steel manufacturing business produces finished steel products, including rebar, wire rod and other specialty products. The Company commenced its 106th year of operations in 2013.
Safe Harbor for Forward Looking Statements
Statements and information included in this press release that are not purely historical are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and are made pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Except as noted herein or as the context may otherwise require, all references to “we,” “our,” “us” and “SSI” refer to the Company and its consolidated subsidiaries.
Forward-looking statements in this press release include statements regarding our expectations, intentions, beliefs and strategies regarding the future, which may include statements regarding trends, cyclicality and changes in the markets we sell into; strategic direction; changes to manufacturing and production processes; the cost of compliance with environmental and other laws; expected tax rates, deductions and credits; the realization of deferred tax assets; planned capital expenditures; liquidity positions; ability to generate cash from continuing operations; the potential impact of adopting new accounting pronouncements; expected results, including pricing, sales volumes and profitability; obligations under our retirement plans; benefits, savings or additional costs from business realignment and cost containment programs; and the adequacy of accruals.
When used in this report, the words “believes,” “expects,” “anticipates,” “intends,” “assumes,” “estimates,” “evaluates,” “may,” “could,” “opinions,” “forecasts,” “future,” “forward,” “potential,” “probable,” and similar expressions are intended to identify forward-looking statements.
We may make other forward-looking statements from time to time, including in reports filed with the Securities and Exchange Commission, press releases and public conference calls. All forward-looking statements we make are based on information available to us at the time the statements are made, and we assume no obligation to update any forward-looking statements, except as may be required by law. Our business is subject to the effects of changes in domestic and global economic conditions and a number of other risks and uncertainties that could cause actual results to differ materially from those included in, or implied by, such forward-looking statements. Some of these risks and uncertainties are discussed in Item 1A. Risk Factors of Part I of our most recent quarterly report on Form 10-Q and annual report on Form 10-K. Examples of these risks include: potential environmental cleanup costs related to the Portland Harbor Superfund site; the impact of general economic conditions; volatile supply and demand conditions affecting prices and volumes in the markets for both our products and raw materials we purchase; difficulties associated with acquisitions and integration of acquired businesses; the impact of goodwill impairment charges; the impact of long-lived asset impairment charges; the realization of expected cost reductions related to restructuring initiatives; the inability of customers to fulfill their contractual obligations; the impact of foreign currency fluctuations; potential limitations on our ability to access capital resources and existing credit facilities; restrictions on our business and financial covenants under our bank credit agreement; the impact of the consolidation in the steel industry; the impact of imports of foreign steel into the U.S.; inability to realize expected benefits from investments in technology; freight rates and availability of transportation; impact of equipment upgrades and failures on production; product liability claims; the impact of impairment of our deferred tax assets; costs associated with compliance with environmental regulations; the adverse impact of climate change; inability to obtain or renew business licenses and permits; compliance with greenhouse gas emission regulations; reliance on employees subject to collective bargaining agreements; and the impact of the underfunded status of multiemployer plans in which we participate.
Contact:
Schnitzer Steel Industries, Inc.
Investor Relations:
Alexandra Deignan, 646-278-9711
adeignan@schn.com
or
Media Relations:
Tom Zelenka, 503-323-2821
tzelenka@schn.com
or
Company Info:
www.schnitzersteel.com
ir@schn.com
KKR Income Opportunities Fund Declares Special Distribution of $0.163 Per Share and Monthly Distributions of $0.125 Per Share
Business Wire KKR Income Opportunities Fund
19 hours ago
NEW YORK--(BUSINESS WIRE)--
KKR Income Opportunities Fund (the “Fund”) (KIO) today announced additional cash distributions with the record, ex-dividend and payable dates outlined below. A special distribution of $0.163 per common share ($0.124 relating to net investment income and $0.039 relating to short-term capital gains), will be payable January 31, 2014 to shareholders of record on December 30, 2013.
The special distribution schedule is as follows:
Ex-Date: December 26, 2013
Record Date: December 30, 2013
Payable Date: January 31, 2014
Amount: $0.163 per share
The Fund also today announced additional monthly distributions of $0.125 per common share, payable on the dates below. Based on the Fund’s initial public offering price of $20.00 per share and current share price of $18.05 (as of its close on December 18, 2013), the distributions represent an annualized distribution rate of 7.5% and 8.3%, respectively (calculated by annualizing the distribution amount and dividing it by the IPO share price or current price, as the case may be).
The monthly distribution schedule is as follows for the months of February, March and April:
Ex-Date: February 6, 2014
Record Date: February 10, 2014
Payable Date: February 24, 2014
Amount: $0.125 per share
Ex-Date: March 13, 2014
Record Date: March 17, 2014
Payable Date: March 31, 2014
Amount: $0.125 per share
Ex-Date: April 16, 2014
Record Date: April 21, 2014
Payable Date: April 28, 2014
Amount: $0.125 per share
Information regarding the distribution rate is included for informational purposes only and is not necessarily indicative of future results, the achievement of which cannot be assured. The distribution rate should not be considered the yield or total return on an investment in the Fund.
The Fund is a recently organized, non-diversified, closed-end fund. Investors should consider the Fund’s investment objectives, risks, charges and expenses carefully before investing.
The investment return, price, yields, market value and net asset value (NAV) of a fund's shares will fluctuate with market conditions. Closed-end funds frequently trade at a discount to their NAV, which may increase an investor’s risk of loss. There is no assurance that the Fund will meet its investment objective.
An investment in the Fund is not appropriate for all investors and is not intended to be a complete investment program. The Fund is designed as a long-term investment and not as a trading vehicle. Investors should carefully review and consider the Fund’s investment objective, risk, charges and expenses before investing.
Investment return and principal value will fluctuate, and it is possible to lose money by investing in the Fund. Past performance is not a guarantee of future results. Please see the Fund’s prospectus for more risk information.
Forward Looking Statements
This press release contains certain statements that may include "forward-looking statements" within the meaning of the federal securities laws. All statements, other than statements of historical fact, included herein are "forward-looking statements." The forward-looking statements are based on the Fund’s and 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 the Fund or KKR or are within their control. The Fund and KKR do 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.
This document is not an offer to sell securities and is not soliciting an offer to buy securities in any jurisdiction where the offer or sale is not permitted. Investors should consider the Fund’s investment objectives, risks, charges and expenses carefully before investing. The prospectus, which contains this and other important information about the Fund, should be read carefully before investing. A copy of the prospectus can be obtained on the Fund website. An investment in the Fund should not constitute a complete investment program.
KKR Income Opportunities Fund
KKR Income Opportunities Fund is a recently organized non-diversified, closed-end fund that trades on the New York Stock Exchange under the symbol “KIO”. The Fund’s primary investment objective is to seek a high level of current income with a secondary objective of capital appreciation. The Fund seeks to achieve its investment objectives by employing a dynamic strategy of investing in a targeted portfolio of loans and fixed-income instruments (including derivatives) of U.S. and non-U.S. issuers and implementing hedging strategies in order to achieve attractive risk-adjusted returns.
About KKR Asset Management
Launched by KKR in 2004, KAM invests on behalf of its managed funds, clients and accounts across long/short equities and the corporate credit spectrum, including secured credit, bank loans and high yield securities and alternative assets such as mezzanine financing, special situations investing and structured finance. With more than 100 employees, including approximately 50 investment professionals, KAM's investment teams are closely aligned with KKR's wealth of private equity investment and industry resources. KAM has $30.5 billion in assets under management as of September 30, 2013.
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.
Contact the Fund at (855) 330-3927 or visit the Fund’s website at www.kkrfunds.com/kio for additional information.
The Fund will invest in loans and other types of fixed-income instruments and securities. Such investments may be secured, partially secured or unsecured and may be unrated, and whether or not rated, may have speculative characteristics. The market price of the Fund’s investments will change in response to changes in interest rates and other factors. Generally, when interest rates rise, the values of fixed-income instruments fall, and vice versa.
Use of leverage creates an opportunity for increased income and return for Common Shareholders but, at the same time, creates risks, including the likelihood of greater volatility in the NAV and market price of, and distributions on, the Common Shares. In particular, leverage may magnify interest rate risk, which is the risk that the prices of portfolio securities will fall (or rise) if market interest rates for those types of securities rise (or fall). As a result, leverage may cause greater changes in the Fund’s NAV, which will be borne entirely by the Fund’s Common Shareholders.
Derivative investments have risks, including the imperfect correlation between the value of such instruments and the underlying assets of the Fund. The risk of loss from a short sale is unlimited because the Fund must purchase the shorted security at a higher price to complete the transaction and there is no upper limit for the security price. The use of options, swaps, and derivatives by the Fund has the potential to significantly increase the Fund’s volatility.
Investments in ETFs are subject to a variety of risks, including all of the risks of a direct investment in the underlying securities that the ETF holds. ETFs are also subject to certain additional risks, including, without limitation, the risk that their prices may not correlate perfectly with changes in the prices of the underlying securities they are designed to track, and the risk of trading in an ETF halting due to market conditions or other reasons, based on the policies of the exchange upon which the ETF trades. ETF shares may trade at a premium or discount to their NAV because the supply and demand in the market for ETF shares at any point in time may not be identical to the supply and demand in the market for the underlying securities.
In addition to the normal risks associated with investing, international investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles or from social, economic or political instability in other nations. The Fund’s investments in securities or other instruments of non-U.S. issuers or borrowers may be traded in undeveloped, inefficient and less liquid markets and may experience greater price volatility and changes in value.
Contact:
Media:
Kristi Huller, 212-230-9722
Kristi.Huller@kkr.com
The "Street has AZZ coming in at .76 for the quarter that should be reported on or about Janaury 06, 2013!
All post's welcome!
The "Good Dr's In"!
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Rick's Cabaret International, Inc. Reports $13.4 Million Non-GAAP Net Income For Fiscal 2013 vs. Year Ago $12.3 Million; Non-GAAP EPS Was $1.40 vs. $1.27
PR Newswire Rick's Cabaret International, Inc.
December 16, 2013 4:05 PM
HOUSTON, Dec. 16, 2013 /PRNewswire/ -- Rick's Cabaret International, Inc., (RICK), the publicly traded hospitality company operating gentlemen's clubs and restaurants, today reported non-GAAP* net income of $13.4 million for the year ended September 30, 2013 vs. $12.3 million in the previous year, on revenue of $112.2 million vs. $95.2 in the previous year. Non-GAAP EPS was $1.40 vs. $1.27 in the previous year. GAAP net income was $9.2 million vs. $7.6 million, with EPS of 96 cents vs. 78 cents last year.
(Logo: http://photos.prnewswire.com/prnh/20110418/MM85342LOGO)
For its fourth quarter ended September 30, 2013, the Company GAAP net income was $1.6 million vs. $1.5 million in the previous year; non-GAAP net income was $2.5 million vs. $3.0 million last year; GAAP EPS was 17 cents for the quarter vs. 15 cents last year; non-GAAP EPS for the fourth quarter of 2013 was 27 cents vs. 31 cents last year.
"Fiscal 2013 was in many ways a transitional year for us as we moved from a recessionary model in many clubs to our more typical formats," said President and CEO Eric Langan. "This shift means that some lower margin customers are visiting the clubs less frequently, but higher margin guests are returning, which helps improve our income picture. The year was also notable for the launch of our restaurant division, which we believe will become a solid growth catalyst in the future. Going forward, we are looking at a strong 2014. We have over 40 locations open at the present time, with six more in various stages of development or construction. We continue to examine acquisition possibilities and ways to unlock the value of our real estate."
The Company will hold a conference call today at 4:30 pm ET during which Mr. Langan will discuss the fiscal year and quarterly results, and comment on the outlook for fiscal 2014. The call-in number is 877-407-8033 (International:201-689-8033), with webcast at www.ricksinvestor.com. Replay of the call is available at 877-660-6853 (ID number 13572974). In addition, following the conference call today the Company plans a "Due Diligence Reception" from 6 p.m. to 8 p.m. at its New York City Rick's Cabaret club (50 West 33rd St.) during which investors will get a chance to tour the club and see its operations first hand.
In the Management Discussion and Analysis section of the Company's Form 10K filed today with the SEC, the company said:
The increase in total revenues for fiscal 2013 was generated chiefly from new clubs and restaurants acquired or launched in 2013, a full year of revenues from clubs purchased in 2012, and increased sales at some existing clubs, especially XTC Cabaret in Austin, Rick's Cabaret DFW and the two cabarets in Minneapolis, MN.
Non-GAAP operating margins were 24.5 percent, level with the previous year, while GAAP operating margins increased to 19.7 percent for 2013 compared to 17.3 percent for the prior year.
The increase in both GAAP and non-GAAP net income, although slowed in part by costs associated with the opening of new restaurants, was attributed to pricing changes, lower cost of goods sold achieved through better inventory management and other efficiencies, and a decline in legal and professional expenses.
Cash flow generated from operating activities remained level with 2012, at $18.4 million.
As of September 30, 2013, the company had long-term debt of $78.6 million compared to $63.5 million a year earlier, of which $38.7 million is related to real estate. A total of $24.4 million in principally real estate debt was added as a result of 2013 acquisitions, while the Company also amortized $9.3 million of long-term debt during the year.
RICK'S CABARET INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF INCOME
Year Ended September 30
Year Ended September 30,
(in thousands, except per share data)
2013
2012
2011
Revenues:
Sales of alcoholic beverages
$
43,189
$
38,687
$
32,575
Sales of food and merchandise
12,249
8,810
7,402
Service revenues
49,974
41,942
38,178
Other
6,796
5,781
5,336
Total revenues
112,208
95,220
83,491
Operating expenses:
Cost of goods sold
14,152
12,644
10,427
Salaries and wages
25,145
20,857
18,321
Stock-based compensation
847
315
8
Other general and administrative:
Taxes and permits
17,607
14,639
12,542
Charge card fees
1,482
1,352
1,361
Rent
3,642
2,872
2,988
Legal and professional
3,114
5,861
2,289
Advertising and marketing
4,611
4,046
3,471
Depreciation and amortization
5,314
4,921
3,904
Insurance
2,208
1,439
1,157
Utilities
2,241
1,762
1,605
Loss on sale of property and other
16
332
-
Other
9,716
7,667
6,624
Total operating expenses
90,095
78,707
64,697
Income from operations
22,113
16,513
18,794
Other income (expense):
Interest income
9
19
118
Interest expense
(6,538)
(4,003)
(3,930)
Interest expense – loan origination costs
(539)
(310)
(359)
Gain on change in fair value of derivative instruments
1
117
129
Gain on settlement of debt
-
-
903
Income from continuing operations before income taxes
15,046
12,336
15,655
Income taxes
5,501
4,374
5,403
Income from continuing operations
9,545
7,962
10,252
Loss from discontinued operations, net of income taxes
(143)
(172)
(2,195)
Net income
9,402
7,790
8,057
Less: net income attributable to noncontrolling interests
(211)
(212)
(211)
Net income attributable to Rick's Cabaret International, Inc.
$
9,191
$
7,578
$
7,846
Basic earnings (loss) per share attributable to Rick's shareholders:
Income from continuing operations
$
0.98
$
0.80
$
1.01
Loss from discontinued operations
(0.02)
(0.02)
(0.22)
Net income
$
0.97
$
0.78
$
0.79
Diluted earnings (loss) per share attributable to Rick's shareholders:
Income from continuing operations
$
0.98
$
0.80
$
1.01
Loss from discontinued operations
(0.01)
(0.02)
(0.22)
Net income
$
0.96
$
0.78
$
0.79
Weighted average number of common shares outstanding:
Basic
9,518
9,691
9,930
Diluted
9,615
9,697
9,932
RICK'S CABARET INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF INCOME
Quarter Ended September 30
Quarter Ended September 30,
(in thousands, except per share data)
2013
2012
Revenues:
Sales of alcoholic beverages
$ 10,635
$ 9,654
Sales of food and merchandise
3,505
2,191
Service revenues
11,885
10,199
Other
2,006
1,823
Total revenues
28,031
23,867
Operating expenses:
Cost of goods sold
3,591
3,043
Salaries and wages
6,545
5,429
Stock-based compensation
2
282
Other general and administrative:
Taxes and permits
4,538
3,621
Charge card fees
356
310
Rent
1,443
722
Legal and professional
851
3,428
Advertising and marketing
1,159
1,052
Depreciation and amortization
1,345
1,213
Insurance
566
412
Utilities
677
498
Loss on sale of property and other
16
-
Other
2,589
2,235
Total operating expenses
23,678
20,214
Income from operations
4,353
3,653
Other income (expense):
Interest income
3
17
Interest expense
(1,804)
(1,255)
Gain on change in fair value of derivative instruments
(1)
117
Gain on settlement of debt
-
-
Income from continuing operations before income taxes
2,551
2,532
Income taxes
893
1,008
Income from continuing operations
1,658
1,524
Loss from discontinued operations, net of income taxes
(2)
(17)
Net income
1,656
1,507
Less: net income attributable to non-controlling interests
(52)
(53)
Net income attributable to Rick's Cabaret International, Inc.
$ 1,604
$ 1,454
Basic earnings (loss) per share attributable to Rick's shareholders:
Income from continuing operations
$ 0.17
$ 0.15
Loss from discontinued operations
-
-
Net income
$ 0.17
$ 0.15
Diluted earnings (loss) per share attributable to Rick's shareholders:
Income from continuing operations
$ 0.17
$ 0.15
Loss from discontinued operations
-
-
Net income
$ 0.17
$ 0.15
Weighted average number of common shares outstanding:
Basic
9,504
9,633
Diluted
9,603
9,636
RICK'S CABARET INTERNATIONAL, INC.
NON-GAAP* MEASURES FOR YEAR ENDING SEPTEMBER 30
The following tables present our non-GAAP measures for the periods indicated (in thousands, except per share amounts):
For the Year Ended
September 30,
(in thousands)
2013
2012
2011
Reconciliation of GAAP net income to
Adjusted EBITDA
GAAP net income
$ 9,191
$ 7,578
$ 7,846
Income tax expense
5,501
4,374
5,403
Interest expense and income and gain on derivative
7,067
4,177
4,042
Litigation and other one-time settlements
707
2,533
-
Acquisition costs
166
-
119
Loss from discontinued operations
143
172
2,195
Depreciation and amortization
5,314
4,921
3,904
Adjusted EBITDA **
$ 28,089
$ 23,755
$ 23,509
Reconciliation of GAAP net income (loss) to
non-GAAP net income
GAAP net income
$ 9,191
$ 7,578
$ 7,846
Patron tax
3,236
3,019
2,875
Amortization of intangibles
409
463
459
(Gain) loss on change in fair value of derivative instruments
(1)
(117)
(129)
Stock-based compensation
847
315
8
Litigation and other one-time settlements
707
2,533
-
Income tax expense
5,501
4,374
5,403
Acquisition costs
166
462
100
Loss from discontinued operations, net of income taxes
143
172
2,195
Non-GAAP provision for income taxes
(6,773)
(6,469)
(6,562)
Non-GAAP net income
$ 13,426
$ 12,330
$ 12,195
Reconciliation of GAAP diluted net income
per share to non-GAAP diluted net income per share
Fully diluted shares
9,615
9,697
9,932
GAAP net income
$ 0.96
$ 0.78
$ 0.79
Patron tax
0.34
0.31
0.29
Amortization of intangibles
0.04
0.05
0.05
(Gain) loss on change in fair value of derivative instruments
(0.00)
(0.01)
(0.01)
Stock-based compensation
0.09
0.03
0.00
Litigation and other one-time settlements
0.07
0.26
-
Income tax expense
0.57
0.45
0.54
Acquisition costs
0.02
0.05
0.01
Loss from discontinued operations, net of income taxes
0.01
0.02
0.22
Non-GAAP provision for income taxes
(0.70)
(0.67)
(0.66)
Non-GAAP diluted net income per share
$ 1.40
$ 1.27
$ 1.23
Reconciliation of GAAP operating income to
non-GAAP operating income
GAAP operating income
$22,113
$16,513
$ 18,794
Patron tax
3,236
3,019
2,875
Amortization of intangibles
409
463
459
Stock-based compensation
847
315
8
Litigation and other one-time settlements
707
2,533
-
Acquisition costs
166
462
100
Non-GAAP operating income
$27,478
$23,305
$ 22,236
Reconciliation of GAAP operating margin to
non-GAAP operating margin
GAAP operating income
19.7%
17.3%
22.5%
Patron tax
2.9%
3.2%
3.4%
Amortization of intangibles
0.4%
0.5%
0.5%
Stock-based compensation
0.8%
0.3%
0.0%
Litigation and other one-time settlements
0.6%
2.7%
0.0%
Acquisition costs
0.1%
0.5%
0.1%
Non-GAAP operating margin
24.5%
24.5%
26.6%
*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: Rick's Cabaret International, Inc. (RICK) is home to restaurants and upscale adult nightclubs serving primarily businessmen and professionals that offer live entertainment, dining and bar operations. Nightclubs in New York City, Los Angeles, Miami, Philadelphia, Charlotte, Dallas/Ft. Worth, Houston, Minneapolis, Indianapolis and other cities operate as "Rick's Cabaret," "XTC," "Club Onyx," "Vivid Cabaret," "Jaguars" and "Tootsie's Cabaret" and other brand names. Restaurants include "Bombshells" and "Ricky Bobby Sports Saloon." Sexual contact is not permitted at any locations. Rick's Cabaret also operates a media division, ED Publications. Rick's Cabaret common stock is traded on NASDAQ under the symbol RICK. For further information contact ir@ricks.com or visit www.ricksinvestor.com. Twitter: @rickscabaret; Facebook: http://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. For further information visit www.ricksinvestor.com.
Sanderson Farms, Inc. Reports Results for Fourth Quarter and Fiscal 2013
Business Wire Sanderson Farms, Inc.
7 hours ago
LAUREL, Miss.--(BUSINESS WIRE)--
Sanderson Farms, Inc. (SAFM) today reported results for the fourth quarter and fiscal year ended October 31, 2013.
Net sales for the fourth quarter of fiscal 2013 were $727.1 million compared with $648.4 million for the same period a year ago. For the quarter, the Company reported net income of $45.3 million, or $1.97 per share, compared with net income of $9.3 million, or $0.41 per share, for the fourth quarter of fiscal 2012.
Net sales for fiscal 2013 were $2.683 billion compared with $2.386 billion for fiscal 2012. Net income for the year totaled $130.6 million, or $5.68 per share, compared with net income of $53.9 million, or $2.35 per share, for last year.
"The fourth quarter of fiscal 2013 marked a strong finish to a successful year for Sanderson Farms and the poultry industry,” said Joe F. Sanderson, Jr., chairman and chief executive officer of Sanderson Farms, Inc. "We reported record annual sales of $2.683 billion, a 12.4 percent increase over fiscal 2012. While poultry markets improved compared to fiscal 2012, grain prices remained near record high levels during much of fiscal 2013 before moderating during the fourth quarter on optimism surrounding the current year’s grain harvest. However, the improved poultry market prices more than offset the higher feed costs, and our margins improved significantly during fiscal 2013 compared to fiscal 2012. For the year, we sold 3.031 billion pounds of dressed poultry, another record, compared with 2.952 billion pounds in fiscal 2012.”
According to Sanderson, overall market prices for poultry products were higher in the fourth quarter of fiscal 2013 compared with prices a year ago, but came down significantly from peaks earlier during the year. As measured by a simple average of the Georgia dock price for whole chickens, prices were higher by approximately 10.9 percent in the Company's fourth fiscal quarter compared with the same period in fiscal 2012, and were higher by 10.4 percent for the fiscal year compared with the prior year. The Georgia Dock whole bird price remained in record territory through all of fiscal 2013 and reflected steady demand for the Company’s retail chill pack product during this fiscal year. Boneless breast meat prices averaged 8.4 percent higher in the fourth quarter than the prior-year period. For fiscal 2013, boneless prices were 15.3 percent higher when compared with fiscal 2012. Jumbo wing prices averaged $1.43 per pound during the fourth quarter of fiscal 2013, down 16.5 percent from the average of $1.71 per pound during the prior-year period. Jumbo wing prices averaged $1.50 per pound during the fiscal year, down 5.1 percent from the average of $1.58 per pound for fiscal 2012. The average market price for bulk leg quarters decreased approximately 1.4 percent for the quarter, and decreased approximately 0.5 percent for fiscal 2013. The steady dark meat prices reflect continued good export demand during the year. Cash prices for corn and soybean meal, the Company’s primary feed ingredients, increased during the year but were down 32.8 percent and 1.6 percent, respectively, during the fourth fiscal quarter when compared with the fourth quarter a year ago. For the year, total feed costs in broiler flocks processed were 5.7 percent higher than fiscal 2012.
“We are pleased that our profitability during fiscal 2013 allowed us to significantly reduce outstanding debt and strengthen our balance sheet,” Sanderson continued. “As a result, we are well positioned to continue our growth strategy, and we began construction of our new poultry complex in Palestine, Texas, in October. Operations at that new facility are scheduled to start in the first calendar quarter of 2015, and the pounds produced in Palestine, at full production, will represent a 16 percent increase in our capacity.
“As of October 31, 2013, our balance sheet reflected $924.6 million in assets, stockholders’ equity of $671.6 million and net working capital of $269.2 million. Our total long-term debt at year-end was $29.4 million. A strong balance sheet is an important advantage in our industry, especially given today’s economic environment, and provides us with the financial strength to not only support our growth strategy, but also to manage our operations through challenging market conditions. We deeply appreciate the hard work and dedication to excellence of our employees, growers and everyone associated with our Company,” Sanderson concluded.
Sanderson Farms will hold a conference call to discuss this press release today, December 17, 2013, 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 December 27, 2013. Those without Internet access, or who prefer to participate via telephone, may call 1-888-244-2414, access code 6917097.
Sanderson Farms, Inc. is engaged in the production, processing, marketing and distribution of fresh and frozen chicken and other prepared food items. 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 and price 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 Sanderson Farms. 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 demand for its products, future prices for feed grains and future production levels.
SANDERSON FARMS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
Three Months Ended
Twelve Months Ended
October 31,
October 31,
2013
2012
2013
2012
(Unaudited) (Unaudited)
Net sales
$
727,061 $ 648,379 $ 2,682,980 $ 2,386,105
Costs and expenses:
Cost of sales 624,937 612,547 2,377,055 2,212,692
Selling, general and administrative 30,345 20,325 100,247 77,097
655,282 632,872 2,477,302 2,289,789
Operating income 71,779 15,507 205,678 96,316
Other income (expense):
Interest income 15 8 27 17
Interest expense (1,159 ) (1,814 ) (6,136 ) (9,201 )
Other 510 0 544 (560 )
(634 ) (1,806 ) (5,565 ) (9,744 )
Income before income taxes 71,145 13,701 200,113 86,572
Income tax expense 25,875 4,354 69,496 32,628
Net income $ 45,270 $ 9,347 $ 130,617 $ 53,944
Basic earnings per share $ 1.97 $ 0.41 $ 5.68 $ 2.35
Diluted earnings per share $ 1.97 $ 0.41 $ 5.68 $ 2.35
Dividends per share $ 0.20 $ 0.17 $ 0.71 $ 0.68
SANDERSON FARMS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands)
October 31,
October 31,
2013
2012
ASSETS
Current assets:
Cash and cash equivalents $ 85,563 $ 27,802
Accounts receivable, net 108,980 98,022
Inventories 205,855 235,912
Refundable income taxes 0 4,467
Deferred income taxes 478 3,945
Prepaid expenses 29,867 27,639
Total current assets 430,743 397,787
Property, plant and equipment 1,035,044 985,198
Less accumulated depreciation (546,578 ) (489,885 )
488,466 495,313
Other assets 5,436 3,353
Total assets $ 924,645 $ 896,453
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 81,418 $ 82,755
Accrued expenses 58,271 42,082
Accrued income taxes 11,055 0
Current maturities of long-term debt 10,799 10,757
Total current liabilities 161,543 135,594
Long-term debt, less current maturities 29,414 150,212
Claims payable 9,000 4,000
Deferred income taxes 53,089 56,572
Stockholders' equity:
Common stock 23,016 22,969
Paid-in capital 142,482 135,283
Retained earnings 506,101 391,823
Total stockholders’ equity 671,599 550,075
Total liability and stockholders’ equity $ 924,645 $ 896,453
SAFM-G
Contact:
Sanderson Farms, Inc.
Mike Cockrell, 601-426-1454
Treasurer & Chief Financial Officer
Shelby American Brings Back Iconic Shelby GT for 2014 with World-Class Power and Performance
Supercharged Optioned Shelby GT/SC Offers up to 624 HP
Shelby GT unveiled at the LA Auto Show
Available in 430 HP naturally aspirated, 525 HP or 624 HP GT/SC versions
Shelby GT/SC version expected to go 0-60 mph in 3.7 seconds
Business Wire Shelby American, Inc.
November 21, 2013 2:30 PM
Shelby American Brings Back Iconic Shelby GT for 2014 with World-Class Power and Performance.
View gallery
Shelby GT unveiled at the LA Auto Show. Available in 430 HP naturally aspirated, 525 HP or 624 HP GT/SC …
LOS ANGELES--(BUSINESS WIRE)--
Shelby American, a wholly owned subsidiary of Carroll Shelby International Inc. (CSBI:PK), returned one of its most popular cars to the lineup today by unveiling the Shelby GT at the LA Auto Show. The new generation Shelby GT is based on the 2014 Ford Mustang GT with an incredibly attractive base price and 430 HP. The optional Shelby GT/SC supercharged model comes in either a 525 HP or a staggering 624 HP version, making it the most potent version of the car ever made.
“The Shelby GT was one of the most important vehicles in modern day Shelby history,” said John Luft, president of Shelby American. “It kicked off Shelby’s rebirth in Las Vegas by putting a Mustang-based small block car into Ford dealerships. Ever since the Shelby GT went out of production, people have clamored for its return.”
In 2007, Ford Division, Carroll Shelby and Ford Racing created the Shelby GT. Beginning as 4.6L Mustang GT’s assembled at Ford’s Flat Rock, Mich. plant, they were shipped to Shelby in Las Vegas for transformation. The 320 HP 2007 Shelby GT coupes were all Performance White or Black with silver stripes. In 2008, Shelby added Vista Blue and a choice of coupe or convertible. About 8,000 Shelby GT’s were built.
The Shelby GT was wildly popular and the people who snagged one have been one of the most passionate owner groups. The cars were often tailored with custom parts to fit an owner’s personality and then driven hard on both the street and track. The Shelby GT totally dominated its SCCA racing class in 2007 and 2008.
“Based on the standard Mustang GT, the total cost of our entry-level 2014 Shelby GT is only about $45,000, yet offers so much more than the previous model,” said, Gary Patterson, Shelby American VP of Sales. “The performance-to-price ratio makes the Shelby GT perfect for any serious pony car enthusiast.”
The new Shelby GT is a post-title program; Ford dealers send a customer’s Mustang GT coupe or convertible to Shelby for upfit. Every material performance aspect of the car is enhanced or replaced to create a potent, balanced performer worthy of the Shelby name. Entry-level package upgrades include a Ford Racing suspension, Shelby branded exhaust, intake and engine tune for 430 HP, specially designed wheels and tires, short shifter, hood and Le Mans stripes that make it uniquely Shelby. Every Shelby GT version is 50 state emissions legal and runs on pump gas.
One of the car’s most appealing aspects is the opportunity for personalization. Choosing from an array of options, customers can opt for a more hard-edged suspension, better braking and supercharger upgrades, as well as a vast selection of performance and styling parts from Shelby Performance Parts.
“While the Shelby GT is very affordable for such an exclusive vehicle, a post title program allows us to take performance to new levels,” said Shelby American VP of Production, Gary Davis. “Working with partners like Ford Racing, it is docile enough to be a daily driver and still dominate the track on the weekends.”
The 624 HP Shelby GT/SC version is expected to blast from 0-60 mph in about 3.7 seconds; the quarter mile time should be in the mid 11 second range. The car should also pull over 1 G on the lateral skid-pad.
“No other carmaker offers this level of performance, heritage and iconic styling at this price, making the Shelby GT the best all-around American car in its class,” said Luft. “Each car will be issued a Shelby American CSM number for documentation in our Shelby American Worldwide Registry to help maximize potential future value.”
The price of the base Shelby GT package, not including the car, is $14,995, making a nicely equipped car about $45,000 in total. The Shelby GT/SC package begins at $27,995. Customers can build their Shelby GT online at www.shelbyamerican.com/2014shelbygt.
About Shelby American, Inc. and Carroll Shelby Licensing
Founded by legend Carroll Shelby, 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; it offers the Shelby GT, 1000, GT350, GT500 Super Snake and GTS post-title packages for the 2005-2014 Ford Mustang. Shelby American also builds the Shelby Raptor muscle truck and Shelby Focus ST hot hatch. For more information, visit www.shelbyamerican.com. Shelby American is a division of Carroll Shelby International Inc. (CSBI.PK). Carroll Shelby Licensing Inc., also a wholly owned division, is the exclusive holder of Carroll Shelby's trademarks and vehicle design rights. It also holds trademark rights for Shelby-branded apparel, accessories and collectibles. Info is at www.shelbylicensing.com.
Photos/Multimedia Gallery Available: http://www.businesswire.com/multimedia/home/20131121006297/en/
MULTIMEDIA AVAILABLE:http://www.businesswire.com/cgi-bin/mmg.cgi?eid=50756223&lang=en
Contact:
TPRM
Scott Black, 214-520-3430
sblack@tprm.com
Newell Rubbermaid Appoints Paula S. Larson Chief Human Resources Officer
Global executive is known for leading change and building high-performing organizations
Business WirePress Release: Newell Rubbermaid – Thu, Dec 5, 2013 11:03 AM EST
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NWL 31.21 +0.28
ATLANTA--(BUSINESS WIRE)--
Newell Rubbermaid (NWL) today announced it has appointed Paula S. Larson, a global executive known for building high-performing organizations and employee development, to the position of Executive Vice President and Chief Human Resources Officer, effective Dec. 16. She succeeds James M. Sweet, who is retiring after nearly a decade of leading the company’s transformation efforts.
Larson, age 50, has built her career leading change as both an HR business partner and strategic consultant. Her emphasis on cultural and geographic diversity comes from having worked extensively across 80 countries, including living in Asia, Europe and North America. Most recently, she was Chief Human Resources Officer for The Western Union Company, where she revamped the company’s approach to people development and drove a performance-based culture to help accelerate growth. Previously, as Chief Human Resources Officer at Invensys plc, the London-based global technology group, she helped engineer the transition from a holding company into an integrated operating company, which helped drive Invensys to a top-5 performance among the London FTSE100 during the difficult recession year of 2009.
“The development of our people is at the foundation of our Growth Game Plan – and throughout her career, Paula has helped companies navigate change and empower employees to achieve sustainable growth,” said Michael Polk, Newell Rubbermaid’s President and Chief Executive Officer. “As we deploy our new operating model and build key capabilities to speed, Paula has the perfect combination of strategic and executional HR leadership to strengthen our talent base and support our global growth ambition.”
“Newell Rubbermaid is a company with strong brands, and I am excited to be joining at this key moment when the transition to a new operating model is allowing employees to work in a more empowering environment to enhance company value,” said Larson. “My two key goals are to help ensure we delight shareholders and create an ‘I want to work here’ culture for Newell’s diverse workforce.”
Before Invensys, Larson was VP of Human Resources for the Hydraulics division of Eaton Corp., where she helped support the globalization of this complex business unit. She also spent over a decade at GE, where she won several coveted Executive Awards for HR leadership and was one of the company’s first Six Sigma black belts in human resources. Before that, Larson spent nearly five years at a global HR consultancy, Dugan Unlimited, where she lived and worked extensively overseas during assignments for global clients. She has a B.A. in Psychology from Michigan State, an MBA with international business concentration from the University of New Haven and an M.A. in Industrial/Organizational Psychology from New York University.
Sweet, age 61, announced his intention to retire after nearly ten years of HR partnership with three Newell Rubbermaid chief executives.
“Jim has helped shape Newell Rubbermaid into the company we are today, helping bring together the siloed structures of the old global business unit model into the new operating model we launched earlier this year,” said CEO Polk. “Jim’s commitment to every day great execution has been a model for our organization and is beginning to pay off in our results as we drive the Growth Game Plan into Action. I have been very pleased to have had the opportunity to work with Jim and wish him only the best in his retirement.”
About Newell Rubbermaid
Newell Rubbermaid Inc., an S&P 500 company, is a global marketer of consumer and commercial products with 2012 sales of approximately $5.6 billion and a strong portfolio of leading brands, including Sharpie®, Paper Mate®, Rubbermaid Commercial Products®, Irwin®, Lenox®, Parker®, Waterman®, Rubbermaid®, Levolor®, Calphalon®, Goody®, Graco®, Aprica® and Dymo®. 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.
NWL-EX
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Contact:
Newell Rubbermaid
Nancy O’Donnell, +1-770-418-7723
Vice President, Investor Relations
or
David Doolittle, +1-770-418-7519
Vice President, Global Communications
Lithia Motors Reports Adjusted EPS of $1.13 for Third Quarter 2013, Revenue Up 22%; Increases 2013 Outlook
Lithia Motors Declares $0.13 per Share Dividend for Third Quarter 2013
MEDFORD, OR--(Marketwired - Oct 23, 2013) - Lithia Motors, Inc. (NYSE: LAD) today reported the highest quarterly adjusted net income from continuing operations in Company history, and a 27% increase in adjusted net income per share from continuing operations for the third quarter 2013 over the prior year period.
Adjusted income from continuing operations for the third quarter 2013 was $29.6 million, or $1.13 per diluted share. This compares to 2012 third quarter income from continuing operations of $23.1 million, or $0.89 per diluted share.
Unadjusted net income from continuing operations for the third quarter of 2013 was $30.9 million, or $1.18 per diluted share. As shown in the attached non-GAAP reconciliation tables, the 2013 third quarter adjusted results from continuing operations exclude a $1.3 million benefit, or $0.05 per diluted share, related to a non-core tax attribute. We did not have any adjustments to the 2012 third quarter results from continuing operations.
Third quarter 2013 revenue from continuing operations increased $190.8 million, or 22%, to $1.1 billion from $878.5 million in the third quarter of 2012.
Third Quarter-over-Quarter Operating Highlights:
•New vehicle same store sales increased 16%
•Used vehicle retail same store sales increased 17%
•Service, body and parts same store sales increased 6%
•SG&A expense as a percentage of gross profit decreased 120 basis points to 65.6%
"Our stores delivered another solid quarter of sales growth that outpaced the national rate of recovery," said Bryan DeBoer, President and CEO. "However, opportunities continue to exist for our team to improve new and used vehicle sales volumes and new vehicle gross margin levels. Our focus is on capturing the benefit of additional unit sales for future business -- both through the sale of trade-in vehicles, incremental F&I income and the annuity value of future service work on vehicles sold today."
For the first nine months of 2013, adjusted net income per diluted share from continuing operations increased 36% to $3.02 from $2.22 for the first nine months of 2012. Unadjusted, net income from continuing operations was $2.98 per diluted share for the first nine months of 2013, compared to $2.28 per diluted share for the first nine months of 2012.
Chris Holzshu, SVP and CFO, said, "Adjusted SG&A expense as a percentage of gross profit was a record low 65.6% in the quarter, and 66.8% for the first nine months of 2013. Our same store incremental throughput, or the percentage of additional gross profit we retain after selling costs, was 41% in the third quarter. Our target of 50% incremental throughput remains unchanged, and we believe it is achievable despite the shortfall in the quarter. Our stores remain focused on leveraging our cost structure as we grow organically and through acquisitions."
Corporate Development
On October 7, 2013, we acquired Stockton Nissan Kia in Stockton, California, with estimated annualized revenues of $45 million.
Bryan DeBoer, President and CEO, stated, "We are pleased to add another store to the family, bringing the total number of new locations in 2013 to five. As the improvement in new vehicle sales growth moderates, acquisitions will become an increasingly important component in our strategic plan."
Balance Sheet Update
We ended the third quarter with $16 million in cash and $165 million in available credit on our credit facilities. Additionally, approximately $160 million of our operating real estate is currently unfinanced, which we estimate could provide up to an additional $120 million in available liquidity, for total liquidity of $301 million.
Dividend Payment
Lithia announced that the Board of Directors has approved a dividend of $0.13 per share related to third quarter 2013 financial results. Lithia will pay the dividend November 22, 2013 to shareholders of record on November 8, 2013.
Increased Outlook for 2013
We project 2013 fourth quarter earnings of $0.88 to $0.90 per diluted share and full year 2013 earnings of $3.90 to $3.92 per diluted share. Both projections are based on the following annual assumptions:
•Total revenues of $3.9 to $4.0 billion
•New vehicle same store sales increasing 16.6%
•New vehicle gross margin of 6.4% to 6.6%
•Used vehicle same store sales increasing 17.2%
•Used vehicle gross margin of 14.6% to 14.8%
•Service body and parts same store sales increasing 6.3%
•Service body and parts gross margin of 48.3% to 48.5%
•Finance and insurance gross profit of $1,100 per unit
•Tax rate of 39.5%
•Average diluted shares outstanding of 26.2 million
•Capital expenditures of $55 million
•Guidance excludes the impact of future acquisitions, dispositions, and any potential non-core items
Outlook for 2014
We project 2014 first quarter earnings of $0.91 to $0.93 per diluted share and full-year 2014 earnings of $4.15 to $4.25 per diluted share. Both projections are based on the following annual assumptions:
•Total revenues of $4.3 to $4.4 billion
•New vehicle same store sales increasing 8.2%
•New vehicle gross margin of 6.2% to 6.4%
•Used vehicle same store sales increasing 7.6%
•Used vehicle gross margin of 14.5% to 14.7%
•Service body and parts same store sales increasing 6.0%
•Service body and parts gross margin of 48.0% to 48.2%
•Finance and insurance gross profit of $1,100 per unit
•Tax rate of 39.5%
•Average diluted shares outstanding of 26.4 million
•Capital expenditures of $63 million
•Guidance excludes the impact of future acquisitions, dispositions, and any potential non-core items
Third Quarter Earnings Conference Call and Updated Presentation
The third quarter conference call may be accessed at 10:00 a.m. ET today by telephone at 877-407-8029. An updated presentation highlighting the third 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 27 brands of new vehicles and all brands of used vehicles at 92 stores in 11 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," or "will" and similar references to future periods. Examples of forward-looking statements in this press release include our outlook of earnings per share results and the assumptions that underlie them.
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 from time to time in our 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 %
September 30, Increase Increase
2013 2012 (Decrease) (Decrease)
Revenues:
New vehicle retail $ 604,135 $ 491,846 $ 112,289 22.8 %
Used vehicle retail 280,734 227,157 53,577 23.6
Used vehicle wholesale 43,396 35,006 8,390 24.0
Finance and insurance 37,132 30,929 6,203 20.1
Service, body and parts 97,784 89,038 8,746 9.8
Fleet and other 6,109 4,550 1,559 34.3
Total revenues 1,069,290 878,526 190,764 21.7
Cost of sales:
New vehicle retail 565,549 456,753 108,796 23.8
Used vehicle retail 239,093 193,885 45,208 23.3
Used vehicle wholesale 42,686 35,042 7,644 21.8
Service, body and parts 50,793 46,033 4,760 10.3
Fleet and other 5,780 4,303 1,477 34.3
Total cost of sales 903,901 736,016 167,885 22.8
Gross profit 165,389 142,510 22,879 16.1
SG&A expense 108,570 95,132 13,438 14.1
Depreciation and amortization 5,099 4,351 748 17.2
Income from operations 51,720 43,027 8,693 20.2
Floor plan interest expense (2,909 ) (3,370 ) (461 ) (13.7 )
Other interest expense (1,933 ) (2,125 ) (192 ) (9.0 )
Other income, net 835 453 382 84.3
Income from continuing operations before income taxes 47,713 37,985 9,728 25.6
Income tax expense (16,822 ) (14,893 ) 1,929 13.0
Income tax rate 35.3 % 39.2 %
Income from continuing operations $ 30,891 $ 23,092 $ 7,799 33.8 %
Income from discontinued operations, net of tax 127 151 (24 ) (15.9 )
Net income $ 31,018 $ 23,243 $ 7,775 33.5 %
Diluted net income per share:
Continuing operations $ 1.18 $ 0.89 $ 0.29 32.6 %
Discontinued operations - 0.01 (0.01 ) (100.0 )
Net income per share $ 1.18 $ 0.90 $ 0.28 31.1 %
Diluted shares outstanding 26,237 25,947 290 1.1 %
Lithia Motors, Inc.
Key Performance Metrics (Unaudited)
Three months ended %
September 30, Increase Increase
2013 2012 (Decrease) (Decrease)
Gross margin
New vehicle retail 6.4 % 7.1 % (70) bps
Used vehicle retail 14.8 14.6 20 bps
Used vehicle wholesale 1.6 (0.1 ) 170 bps
Finance and insurance 100.0 100.0 - bps
Service, body and parts 48.1 48.3 (20) bps
Fleet and Other 5.4 5.4 - bps
Gross profit margin 15.5 16.2 (70) bps
Unit sales
New vehicle retail 18,109 14,841 3,268 22.0 %
Used vehicle retail 15,496 13,211 2,285 17.3
Used vehicle wholesale 6,059 5,142 917 17.8
Total units sold 39,664 33,194 6,470 19.5
Average selling price
New vehicle retail 33,361 $ 33,141 $ 220 0.7 %
Used vehicle retail 18,117 17,195 922 5.4
Used vehicle wholesale 7,162 6,808 354 5.2
Average gross profit per unit
New vehicle retail 2,131 $ 2,365 $ (234 ) (9.9) %
Used vehicle retail 2,687 2,519 168 6.7
Used vehicle wholesale 117 (7 ) 124 NM
Finance and insurance 1,105 1,103 2 0.2
Revenue mix
New vehicle retail 56.5 % 56.0 %
Used vehicle retail 26.3 25.9
Used vehicle wholesale 4.1 4.0
Finance and insurance, net 3.5 3.5
Service, body and parts 9.1 10.1
Fleet and other 0.5 0.5
Adjusted As reported
Three months ended
September 30, Three months ended
September 30,
Other metrics 2013 2012 2013 2012
SG&A as a % of revenue 10.2 % 10.8 % 10.2 % 10.8 %
SG&A as a % of gross profit 65.6 66.8 65.6 66.8
Operating profit as a % of revenue 4.8 4.9 4.8 4.9
Operating profit as a % of gross profit 31.3 30.2 31.3 30.2
Pretax margin 4.5 4.3 4.5 4.3
Net profit margin 2.8 2.6 2.9 2.6
NM - not meaningful
Lithia Motors, Inc.
Same Store Operating Highlights (Unaudited)
Three months ended %
September 30, Increase Increase
2013 2012 (Decrease) (Decrease)
Revenues
New vehicle retail $ 569,744 $ 492,063 $ 77,681 15.8 %
Used vehicle retail 265,734 227,311 38,423 16.9
Used vehicle wholesale 41,371 35,084 6,287 17.9
Finance and insurance 35,110 30,003 5,107 17.0
Service, body and parts 93,938 88,989 4,949 5.6
Fleet and other 5,997 4,397 1,600 36.4
Total revenues $ 1,011,894 $ 877,847 $ 134,047 15.3
Gross profit
New vehicle retail $ 35,995 $ 35,107 $ 888 2.5 %
Used vehicle retail 39,766 33,312 6,454 19.4
Used vehicle wholesale 642 (32 ) 674 NM
Finance and insurance 35,110 30,003 5,107 17.0
Service, body and parts 44,281 42,034 2,247 5.3
Fleet and other 209 96 113 117.7
Total gross profit $ 156,003 $ 140,520 $ 15,483 11.0
Gross margin
New vehicle retail 6.3 % 7.1 % (80) bps
Used vehicle retail 15.0 14.7 30 bps
Used vehicle wholesale 1.6 (0.1 ) 170 bps
Finance and insurance 100.0 100.0 - bps
Service, body and parts 47.1 47.2 (10) bps
Fleet and Other 3.5 2.2 130 bps
Gross profit margin 15.4 16.0 (60) bps
Unit sales
New vehicle retail 17,048 14,846 2,202 14.8 %
Used vehicle retail 14,690 13,223 1,467 11.1
Used vehicle wholesale 5,783 5,148 635 12.3
Total units sold 37,521 33,217 4,304 13.0
Average selling price
New vehicle retail $ 33,420 $ 33,144 $ 276 0.8 %
Used vehicle retail 18,089 17,191 898 5.2
Used vehicle wholesale 7,154 6,815 339 5.0
Average gross profit per unit
New vehicle retail $ 2,111 $ 2,365 $ (254 ) (10.7) %
Used vehicle retail 2,707 2,519 188 7.5
Used vehicle wholesale 111 (6 ) 117 NM
Finance and insurance 1,106 1,069 37 3.5
Lithia Motors, Inc.
Consolidated Statements of Operations (Unaudited)
(In thousands except per share data)
Nine months ended %
September 30, Increase Increase
2013 2012 (Decrease) (Decrease)
Revenues:
New vehicle retail $ 1,667,063 $ 1,340,731 $ 326,332 24.3 %
Used vehicle retail 778,427 625,117 153,310 24.5
Used vehicle wholesale 120,593 103,469 17,124 16.5
Finance and insurance 103,013 82,989 20,024 24.1
Service, body and parts 282,686 258,038 24,648 9.6
Fleet and other 29,093 28,770 323 1.1
Total revenues 2,980,875 2,439,114 541,761 22.2
Cost of sales:
New vehicle retail 1,555,042 1,241,820 313,222 25.2
Used vehicle retail 662,920 532,577 130,343 24.5
Used vehicle wholesale 118,214 102,812 15,402 15.0
Service, body and parts 145,223 133,224 11,999 9.0
Fleet and other 27,816 27,741 75 0.3
Total cost of sales 2,509,215 2,038,174 471,041 23.1
Gross profit 471,660 400,940 70,720 17.6
Asset impairments - 115 (115 ) (100.0 )
SG&A expense 318,984 276,561 42,423 15.3
Depreciation and amortization 14,719 12,687 2,032 16.0
Income from operations 137,957 111,577 26,380 23.6
Floor plan interest expense (9,394 ) (9,326 ) 68 0.7
Other interest expense (6,235 ) (7,382 ) (1,147 ) (15.5 )
Other income, net 2,220 1,770 450 25.4
Income from continuing operations before income taxes 124,548 96,639 27,909 28.9
Income tax expense (46,494 ) (36,908 ) 9,586 26.0
Income tax rate 37.3 % 38.2 %
Income from continuing operations $ 78,054 $ 59,731 $ 18,323 30.7 %
Income from discontinued operations, net of tax 574 799 (225 ) (28.2 )
Net income $ 78,628 $ 60,530 $ 18,098 29.9 %
Diluted net income per share:
Continuing operations $ 2.98 $ 2.28 $ 0.70 30.7 %
Discontinued operations 0.03 0.03 - -
Net income per share $ 3.01 $ 2.31 $ 0.70 30.3 %
Diluted shares outstanding 26,159 26,203 (44 ) (0.2) %
Lithia Motors, Inc.
Key Performance Metrics (Unaudited)
Nine months ended %
September 30, Increase Increase
2013 2012 (Decrease) (Decrease)
Gross margin
New vehicle retail 6.7 % 7.4 % (70) bps
Used vehicle retail 14.8 14.8 - bps
Used vehicle wholesale 2.0 0.6 140 bps
Finance and insurance 100.0 100.0 - bps
Service, body and parts 48.6 48.4 20 bps
Fleet and Other 4.4 3.6 80 bps
Gross profit margin 15.8 16.4 (60) bps
Unit sales
New vehicle retail 49,853 40,953 8,900 21.7 %
Used vehicle retail 43,231 36,022 7,209 20.0
Used vehicle wholesale 16,624 14,135 2,489 17.6
Total units sold 109,708 91,110 18,598 20.4
...
Average selling price
New vehicle retail $ 33,440 $ 32,738 $ 702 2.1 %
Used vehicle retail 18,006 17,354 652 3.8
Used vehicle wholesale 7,254 7,320 (66 ) (0.9 )
Average gross profit per unit
New vehicle retail $ 2,247 $ 2,415 $ (168 ) (7.0 )%
Used vehicle retail 2,672 2,569 103 4.0
Used vehicle wholesale 143 46 97 210.9
Finance and insurance 1,107 1,078 29 2.7
Revenue mix
New vehicle retail 55.9 % 55.0 %
Used vehicle retail 26.1 25.6
Used vehicle wholesale 4.0 4.2
Finance and insurance, net 3.5 3.4
Service, body and parts 9.5 10.6
Fleet and other 1.0 1.2
Adjusted As reported
Nine months ended
September 30, Nine months ended
September 30,
Other metrics 2013 2012 2013 2012
SG&A as a % of revenue 10.6 % 11.4 % 10.7 % 11.3 %
SG&A as a % of gross profit 66.8 69.2 67.6 69.0
Operating profit as a % of revenue 4.8 4.5 4.6 4.6
Operating profit as a % of gross profit 30.1 27.7 29.2 27.8
Pretax margin 4.3 3.9 4.2 4.0
Net profit margin 2.6 2.4 2.6 2.4
Lithia Motors, Inc.
Same Store Operating Highlights (Unaudited)
Nine months ended %
September 30, Increase Increase
2013 2012 (Decrease) (Decrease)
Revenues
New vehicle retail $ 1,585,504 $ 1,336,187 $ 249,317 18.7 %
Used vehicle retail 739,487 622,080 117,407 18.9
Used vehicle wholesale 113,417 102,892 10,525 10.2
Finance and insurance 97,671 80,983 16,688 20.6
Service, body and parts 273,130 256,782 16,348 6.4
Fleet and Other 28,683 28,313 370 1.3
Total revenues $ 2,837,892 $ 2,427,237 $ 410,655 16.9
Gross profit
New vehicle retail $ 105,498 $ 98,458 $ 7,040 7.2 %
Used vehicle retail 110,616 92,251 18,365 19.9
Used vehicle wholesale 2,402 712 1,690 237.4
Finance and insurance 97,671 80,983 16,688 20.6
Service, body and parts 130,208 121,537 8,671 7.1
Fleet and Other 882 612 270 44.1
Total gross profit $ 447,277 $ 394,553 $ 52,724 13.4
Gross margin
New vehicle retail 6.7 % 7.4 % (70) bps
Used vehicle retail 15.0 14.8 20 bps
Used vehicle wholesale 2.1 0.7 140 bps
Finance and insurance 100.0 100.0 - bps
Service, body and parts 47.7 47.3 40 bps
Fleet and Other 3.1 2.2 90 bps
Gross profit margin 15.8 16.3 (50) bps
Unit sales
New vehicle retail 47,411 40,816 6,595 16.2 %
Used vehicle retail 41,197 35,841 5,356 14.9
Used vehicle wholesale 15,752 14,046 1,706 12.1
Total units sold 104,360 90,703 13,657 15.1
Average selling price
New vehicle retail $ 33,442 $ 32,737 $ 705 2.2 %
Used vehicle retail 17,950 17,357 593 3.4
Used vehicle wholesale 7,200 7,325 (125 ) (1.7 )
Average gross profit per unit
New vehicle retail $ 2,225 $ 2,412 $ (187 ) (7.8) %
Used vehicle retail 2,685 2,574 111 4.3
Used vehicle wholesale 152 51 101 198.0
Finance and insurance 1,102 1,056 46 4.4
Lithia Motors, Inc.
Other Highlights (Unaudited)
As of
September 30, December 31, September 30,
2013 2012 2012
Days Supply(1)
New vehicle inventory 76 76 75
Used vehicle inventory 52 56 50
(1) Days supply calculated based on current inventory levels, excluding in-transit vehicles, and a 30-day historical cost of sales level.
Financial covenants
Requirement As of September 30, 2013
Current ratio Not less than 1.20 to 1 1.44 to 1
Fixed charge coverage ratio Not less than 1.20 to 1 3.54 to 1
Leverage ratio Not more than 5.00 to 1 1.48 to 1
Funded debt restriction Not more than $375 million $169.3 million
Lithia Motors, Inc.
Other Highlights (Unaudited)
Three months ended
September 30, Nine months ended
September 30,
2013 2012 2013 2012
New vehicle unit sales brand mix
Chrysler 29.5 % 32.7 % 30.1 % 32.3 %
Toyota 14.9 14.3 14.8 13.7
General Motors 14.5 15.2 15.5 15.4
Honda, Acura 8.8 6.8 7.7 6.9
Subaru 8.0 6.8 7.8 7.1
BMW, MINI 6.4 6.4 6.4 6.6
Ford 5.9 5.2 5.9 5.3
Nissan 2.8 2.9 2.8 2.9
Volkswagen, Audi 2.8 2.4 2.3 2.1
Hyundai 2.6 3.7 2.7 3.9
Mercedes 2.5 2.2 2.5 2.0
Kia 0.7 0.8 0.6 1.0
Mazda 0.4 0.4 0.5 0.5
Other 0.2 0.2 0.4 0.3
Three months ended
September 30, Nine months ended
September 30,
2013 2012 2013 2012
Revenue geographic mix
Texas 24.0 % 24.4 % 24.9 % 25.0 %
Oregon 22.0 20.1 21.1 20.2
California 10.1 10.0 10.4 10.3
Montana 9.1 9.2 9.0 9.0
Washington 8.0 8.5 8.1 8.1
Alaska 7.9 8.4 7.8 8.7
Idaho 5.0 5.4 5.1 5.4
Nevada 5.0 4.6 4.8 4.7
Iowa 4.9 5.3 4.8 5.0
North Dakota 2.3 2.3 2.4 2.3
New Mexico 1.7 1.8 1.6 1.3
As of October 23, 2013
Current store count mix # of stores % of total
Chrysler 23 25.1 %
General Motors 13 14.1
Honda, Acura 10 10.9
Toyota 9 9.8
BMW, MINI 9 9.8
Hyundai 5 5.4
Ford 5 5.4
Mercedes 4 4.3
Subaru 4 4.3
Nissan 4 4.3
Volkswagen, Audi 3 3.3
Other 3 3.3
Lithia Motors, Inc.
Consolidated Balance Sheets (Unaudited)
(In thousands)
September 30, 2013 December 31, 2012
Cash and cash equivalents $ 16,093 $ 42,839
Trade receivables, net 140,086 133,149
Inventories, net 755,698 723,326
Deferred income taxes 1,999 3,832
Other current assets 9,477 17,484
Assets held for sale 11,845 12,579
Total current assets $ 935,198 $ 933,209
Property and equipment, net 452,367 425,086
Goodwill 40,313 32,047
Franchise value 66,465 62,429
Deferred income taxes 15,826 17,123
Other non-current assets 29,009 22,808
Total assets $ 1,539,178 $ 1,492,702
Floor plan notes payable $ 19,221 $ 13,454
Floor plan notes payable: non trade 569,027 568,130
Current maturities of long-term debt 7,066 8,182
Trade payables 48,645 41,589
Accrued liabilities 94,678 81,602
Liabilities related to assets held for sale 7,403 8,347
Total current liabilities $ 746,040 $ 721,304
Long-term debt 218,172 286,876
Deferred revenue 40,774 33,589
Other long-term liabilities 27,063 22,832
Total liabilities $ 1,032,049 $ 1,064,601
Class A common stock 267,004 268,801
Class B common stock 319 343
Additional paid-in capital 20,401 12,399
Accumulated other comprehensive loss (1,677 ) (2,615 )
Retained earnings 221,082 149,173
Total liabilities & stockholders' equity $ 1,539,178 $ 1,492,702
Lithia Motors, Inc.
Summarized Cash Flow from Operations (Unaudited)
(In thousands)
Nine months ended
September 30,
2013 2012
Net income $ 78,628 $ 60,530
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Asset impairments - 115
Depreciation and amortization 14,719 12,687
Depreciation and amortization within discontinued operations - 186
Stock-based compensation 4,161 2,329
(Gain) loss on disposal of assets 107 (775 )
(Gain) loss on disposal activities within discontinued operations - 397
Deferred income taxes 8,504 6,851
Excess tax benefit from share-based payment arrangements (5,956 ) (1,629 )
(Increase) decrease:
Trade receivables, net (6,937 ) (29,160 )
Inventories (18,187 ) (158,186 )
Other current assets 5,464 3,169
Other non-current assets (3,804 ) (4,346 )
Increase (decrease):
Floor plan notes payable, net 5,721 (93,975 )
Trade payables 4,848 5,381
Accrued liabilities 13,099 10,164
Other long-term liabilities and deferred revenue 12,307 9,927
Net cash provided by (used in) operating activities $ 112,674 $ (176,335 )
Lithia Motors, Inc.
Reconciliation of Non-GAAP Cash Flow from Operations (Unaudited)
(In thousands)
Nine months ended
September 30,
Net cash provided by (used in) operating activities 2013 2012
As reported $ 112,674 $ (176,335 )
Floor plan notes payable, non-trade, net 2,685 272,760
Adjusted $ 115,359 $ 96,425
Lithia Motors, Inc.
Reconciliation of Certain Non-GAAP Financial Measures (Unaudited)
(In thousands, except for per share data)
Three months ended September 30, 2013
As reported Tax attribute Adjusted
Income from continuing operations before income taxes $ 47,713 $ - $ 47,713
Income tax expense (16,822 ) (1,284 ) (18,106 )
Net income from continuing operations $ 30,891 $ (1,284 ) $ 29,607
Diluted earnings per share from continuing operations $ 1.18 $ (0.05 ) $ 1.13
Diluted share count 26,237
Lithia Motors, Inc.
Reconciliation of Certain Non-GAAP Financial Measures (Unaudited)
(In thousands, except for per share data)
Nine months ended September 30, 2013
As reported Reserve adjustment Tax attribute Adjusted
Selling, general and administrative $ 318,984 $ (3,813 ) $ - $ 315,171
Income from operations $ 137,957 $ 3,813 $ - $ 141,770
Income from continuing operations before income taxes $ 124,548 $ 3,813 $ - $ 128,361
Income tax expense (46,494 ) (1,484 ) (1,512 ) (49,490 )
Net income from continuing operations $ 78,054 $ 2,329 $ (1,512 ) $ 78,871
Diluted earnings per share from continuing operations $ 2.98 $ 0.09 $ (0.05 ) $ 3.02
Diluted share count 26,159
Nine months ended September 30, 2012
As reported Asset impairment and disposal gain Equity investment Tax attribute Adjusted
Asset impairments $ 115 $ (115 ) $ - $ - $ -
Selling, general and administrative 276,561 739 - - 277,300
Income from operations 111,577 (624 ) - - 110,953
Other income, net 1,770 - (244 ) - 1,526
Income from continuing operations before income taxes $ 96,639 $ (624 ) $ (244 ) $ - $ 95,771
Income tax expense (36,908 ) 244 95 (1,066 ) (37,635 )
Net income from continuing operations $ 59,731 $ (380 ) $ (149 ) $ (1,066 ) $ 58,136
Diluted earnings per share from continuing operations $ 2.28 $ (0.01 ) $ (0.01 ) $ (0.04 ) $ 2.22
Diluted share count 26,203
Contact:
John North
VP Finance and Controller
(541) 618-5748
SIFCO Industries, Inc. (“SIFCO”) Announces Fiscal 2013 Financial Results
.
Business Wire
SIFCO Industries, Inc.
SIFCO Industries, Inc. (NYSE MKT: SIF) today announced financial results for its fiscal year 2013, which ended September 30, 2013.
Fiscal Year
• Net sales in fiscal 2013 increased 12.8% to $116.0 million, compared to $102.9 million in fiscal 2012.
• Income from continuing operations in fiscal 2013 was $9.8 million, or $1.81 per diluted share, compared with $6.3 million, or $1.18 per diluted share, in fiscal 2012.
• Net income for fiscal 2013 was $10.2 million, or $1.90 per diluted share, compared with net income of $6.5 million, or $1.22 per diluted share, in fiscal 2012.
CEO Michael S. Lipscomb stated, "SIFCO completed its strategic move back to its forging and finishing core competencies. During fiscal 2013, SIFCO sold its Applied Surface Concepts business, discontinued its Turbine Component Services and Repair business, and purchased General Aluminum Forge. SIFCO now reports as one business segment, SIFCO Forged Components. SIFCO is now a focused supplier of forged and finished products to the Aerospace and Energy markets.”
The results for fiscal 2013 include the results of General Aluminum Forge, which was acquired in July 2013.
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
Fiscal Year Ended September 30
(Amounts in thousands, except per share data)
Fiscal Year Ended
September 30,
2013 2012
Net sales $ 116,001 $ 102,900
Cost of goods sold 87,986 81,094
Gross margin 28,015 21,806
Selling, general and administrative expenses 12,262 9,906
Amortization of intangible assets 2,076 2,879
Loss (gain) on disposal of operating assets (89 ) —
Operating income 13,766 9,021
Interest income (24 ) (27 )
Interest expense 342 471
Foreign currency exchange (gain) loss, net 23 (16 )
Other income, net (421 ) (575 )
Income from continuing operations before income tax provision 13,846 9,168
Income tax provision 4,088 2,861
Income from continuing operations 9,758 6,307
Income (loss) from discontinued operations, net of tax 476 241
Net income $ 10,234 $ 6,548
Income per share from continuing operations
Basic $
1.82
$ 1.19
Diluted $ 1.81 $ 1.18
Income (loss) per share from discontinued operations, net of tax
Basic $ 0.09 $ 0.04
Diluted $ 0.09 $ 0.04
Net income per share
Basic $ 1.91 $ 1.23
Diluted $ 1.90 $ 1.22
Weighted-average number of common shares (basic) 5,363 5,317
Weighted-average number of common shares (diluted) 5,401 5,380
Contact:
SIFCO Industries, Inc.
Catherine M. Kramer, 216-881-8600
www.sifco.com
Wireless Telecom Group Announces Third Quarter Financial Results Including Increase in Net Sales of 19.0% over Prior Year Quarter
Wireless Telecom Group, Inc. (NYSE MKT: WTT) announced today results for the third quarter and nine months ended September 30, 2013.
For the quarter ended September 30, 2013, the Company reported net sales of $8,791,000, compared to $7,385,000 for the same period in 2012, an increase of 19.0%. Net sales in the Network Solutions segment were $6,272,000, compared to $3,087,000 for the same period in 2012, an increase of 103%. Net sales in the Test and Measurement segment were $2,519,000, compared to $4,298,000 for the same period in 2012, a decrease of 41%.
For the nine months ended September 30, 2013, the Company reported net sales of $24,293,000, compared to $21,379,000 for the same period in 2012, an increase of 13.6%. Net sales in the Network Solutions segment were $16,020,000, compared to $9,634,000 for the same period in 2012, an increase of 66%. Net sales in the Test and Measurement segment were $8,273,000, compared to $11,745,000 for the same period in 2012, a decrease of 30%.
Income before taxes for the three and nine month periods was $732,000 and $1,909,000 for 2013 compared to $726,000 and $1,917,000 for 2012, respectively.
Net Income for the three and nine month periods was $1,090,000 and $2,494,000 or $.04 and $.10 per diluted share for 2013 and $855,000 and $2,166,000 or $.03 and $.09 per diluted share for 2012, respectively.
Paul Genova CEO of Wireless Telecom Group, Inc. commented “Gains generated by strong revenue and profit growth in our Network Solutions segment were offset by softness in our Test and Measurement segment. Revenue in our Network Solutions segment for the nine months of 2013 increased 66% to $16,020,000 compared to the prior year period, while segment income increased 90% to $4,095,000 compared to the prior year period.”
Stated Genova “We believe that the product and channel investments we made in Network Solutions have been critical in driving the strong growth thus far this year. Our Test and Measurement segment experienced soft order flow during the first three quarters of 2013; however, recent order activity has been very encouraging, including a $1.1M contract award received in early August from the FAA.”
Genova continued “Operating income for the periods ended 2013 were impacted by lower revenue in our Test and Measurement segment reducing gross margins, professional fees related to our pursuit of strategic opportunities and non-cash charges related to our stock compensation plans. However, our cash position improved to $14,200,000 and we plan to continue executing our strategic plan building upon current order momentum driving towards a strong finish to 2013 with expected improvement in revenue, earnings and cash flow.”
Wireless Telecom Group designs and manufactures radio frequency (RF) and microwave-based products for wireless and advanced communications industries and markets its products and services worldwide under the Boonton, Microlab and Noisecom brands. Its complementary suite of high performance components and instruments includes RF combiners and broadband combiner boxes for in-building distributed antenna systems deployments, RF power splitters and diplexers, hybrid couplers, peak power meters, signal analyzers, noise modules, precision noise and generators. The Company serves both commercial and government markets with workflow-oriented, WiFi, WiMAX, satellite, cable, radar, avionics, medical, and computing applications. Wireless Telecom Group is headquartered in Parsippany, New Jersey, in the New York City metropolitan area, and maintains a global network of Sales and Service offices for excellent product service and support.
Wireless Telecom Group’s website address is http://www.wtcom.com. Except for historical information, the matters discussed in this news release may be considered "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. Such statements include declarations regarding the intent, belief or current expectations of the Company and its management. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties that could materially affect actual results. Specifically, no assurances can be made with respect to: the contract awarded by the FAA or the Company’s ability to: drive strong growth as a result of product and channel investments made in the Company’s Network Solutions segment and to make effective future product and channel investments, continue growth in the Company’s Network Solutions business segment, improve both revenue and segment income, improve order activity, continue execution on the Company’s strategic plan, including continued revenue, earnings and cash flow improvements, increase value to the Company’s shareholders, and drive towards a strong finish to the Company’s year-end 2013. Further information regarding risks and uncertainties that could affect the Company’s results are identified in the Company's reports and registration statements filed with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2012.
See following Selected Financial Results
SELECTED FINANCIAL RESULTS
(In thousands, except per share amounts)
Three months ended
September 30,
Nine months ended
September 30,
(Unaudited) (Unaudited)
2013
2012
2013
2012
Statement of Operations Data:
Net sales $ 8,791 $ 7,385 $ 24,293 $ 21,379
Gross profit 4,235 3,700 11,636 10,645
Operating expenses
Research and development 720 672 1,959 1,891
Sales and marketing 1,182 1,116 3,524 3,348
General and administrative 1,762 1,139 4,620 3,472
Total operating expenses 3,664 2,927 10,103 8,711
Operating income 571 773 1,533 1,934
Interest and other (income) expense (161 ) 47 (376 ) 17
Income before income taxes 732 726 1,909 1,917
Net income $1,090 $855 $2,494 $ 2,166
Net Income per common share:
Basic $0.05 $0.04 $0.10 $ 0.09
Diluted $0.04 $0.03 $0.10 $ 0.09
Weighted average shares outstanding:
Basic 23,980 24,233 23,903 24,323
Diluted 24,605 24,640 24,441 24,698
September 30, December 31,
2013
2012
(Unaudited)
Balance Sheet Data:
Cash & cash equivalents $ 14,170 $ 12,970
Working capital $ 28,326 $ 26,516
Total assets $ 41,177 $ 41,230
Total liabilities $ 2,518 $ 5,315
Shareholders’ equity $ 38,659 $ 35,915
Contact:
Wireless Telecom Group, Inc.
Robert Censullo, 973-386-9696
RLJ Entertainment Reports Financial Results for the Third Quarter Ended September 30, 2013
RLJ Entertainment, Inc. November 7, 2013 9:49 AM
SILVER SPRING, Md., Nov. 7, 2013 (GLOBE NEWSWIRE) -- RLJ Entertainment Inc., ("RLJ Entertainment" or "the Company") (RLJE), today reported results for the third quarter ended September 30, 2013. Full detail of the financial results as well as Management Discussion and Analysis, or MD&A, can be found in the Company's Form 10-Q filed with the SEC.
RLJ Entertainment is a leading creator, owner and distributor of media content across digital, broadcast and physical platforms. The Company leverages its branding expertise, access to content and direct to consumer skills to optimize the value of its programs for distinct audiences. RLJ Entertainment was formed in October 2012 through the business combination of RLJ Acquisition, Inc., Image Entertainment, Inc. and Acorn Media Group, Inc.
RLJ Entertainment is focused on driving growth through the development of interest-based entertainment services for targeted audiences in niche genres including British drama and mystery, urban, action/thriller, and fitness, by using new technologies to deliver that content to consumers.
Robert L. Johnson, Chairman of RLJ Entertainment stated, "The business continued to perform on plan this quarter and I am pleased to see the results of management's focus on driving greater efficiencies across all areas of the business. With a capital reallocation strategy that will more effectively maximize the Company's cash flow combined with strategic cost savings, the business is well positioned to execute on its strategic growth plan and to build shareholder value."
GAAP Financial Results
The financial results for the three and nine months ended September 30, 2013 reflect the operating activities of RLJ Entertainment and its subsidiaries (referred to as the "successor" period). The results for the three and nine months ended September 30, 2012 reflect the operations of only the Acorn Media and its subsidiaries (referred to as the "predecessor" period). The comparative discussion below for these periods is based on Generally Accepted Accounting Principles in the United States (or U.S. GAAP) and the results for the 2012 predecessor periods are not indicative of, or comparable to, results for the 2013 successor periods.
The Company has included in this release an extensive discussion and presentation of pro forma information in order to assist investors' understanding of the Company's ability to generate cash and grow and meet its financial commitments. The Company will not necessarily present this same level of disclosure on an ongoing basis.
GAAP Financial Results
Based on the consolidated financial statements as presented in the Company's Form 10-Q for the three months ended September 30, 2013, net revenue increased $12.2 million to $32.7 million. Net revenue for the nine months ended September 30, 2013 increased $49.9 million to $107.3 million.
Net loss for the three months ended September 30, 2013 totaled $8.5 million, compared to net loss of $482,000 for the three months ended September 30, 2012. For the nine months ended September 30, 2013, net loss totaled $29.0 million, compared to net loss of $194,000 for the nine months ended September 30, 2012.
Miguel Penella, Chief Executive Officer of RLJ Entertainment, commented:
"I am pleased with the direction of the business in the third quarter as we continued to strengthen our content investment strategy through capital reallocation and securing additional cost savings. These initiatives led to year over year EBITDA growth, even on a lower base of revenue, underscoring the efficiencies that we are driving in the business. Going forward, I am confident that we are making the right decisions to establish a solid video entertainment platform and distribution strategy that positions the business for long term growth."
Proforma Financial Results
The Company is presenting financial information for the three and nine month's ended September 30, 2013 and pro forma financial information for three and nine months ended September 30, 2012 due to the closing of the business combination among RLJ Entertainment, Image Entertainment and Acorn Media on October 3, 2012. Unaudited pro forma financial information reflects the 2012 operating results of RLJ Entertainment as if Image Entertainment and Acorn Media were acquired as of the beginning of 2012. These combined results are not necessarily indicative of the results that may have been achieved had the combined companies been combined as of such date or period, or of RLJ Entertainment's future operating results.
For the three months ended September 30, 2013, RLJ Entertainment net revenue declined $6.4 million to $32.7 million compared to pro forma net revenue of $39.1 million for the three months ended September 30, 2012. The decrease in revenue was primarily driven by a decrease in the Company's wholesale distribution segment as follows: (i) the timing release of one high-profile title ("The Tall Man") released in 2012 with no equivalent release in 2013 (the Company has three high-profile titles releasing in the fourth quarter of 2013 consisting of "The Colony," "Paradise" and "Doc Martin 6"), (ii) a significant reduction in rebates and sales return reserves in 2012 that did not repeat in the same quarter of the current year, and (iii) higher than expected returns from a former U.S. distribution partner, which was terminated in the second quarter of 2013, and from the Company's Canadian distributor.
Partially offsetting the declines in revenue for the three months ended September 30, 2013 was growth in both the Company's direct-to-consumer segment, which increased 7.7% or $549,000 for the quarter, and the Company's UK wholesale distribution business, which increased 12.6% or $283,000. The Company experienced growth in its proprietary network, Acorn TV. As of October 31, 2013, the pay subscribers for Acorn TV have grown by 100% to over 40,000 compared to December 2012.
For the nine months ended September 30, 2013, RLJ Entertainment net revenue declined $13.8 million to $107.3 million compared to pro forma net revenue of $121.2 million for the nine months ended September 30, 2012. The decline was driven by a decrease in the Company's wholesale distribution segment, primarily within the US market, due to: (i) the full release of five high-profile releases in 2012 ("The Double," "All Things Fall Apart," "Beneath the Darkness," "The Tall Man," and "Doc Martin 5") versus only two high-profile releases in 2013 year-to-date ("The Numbers Station" and "Day of the "Falcon"), (ii) a significant reduction in rebates and sales return reserves in 2012 that did not repeat in the current year, and (iii) higher than expected sales returns from a former distributor and from the Company's Canadian distributor. These declines were partially offset by solid growth in both our direct-to-consumer segment, which increased 9.6% or $2.1 million for the nine months ended, and our UK wholesale distribution business, which grew $7.3 or $546,000 year-to-date versus the same period for the prior year. The Company experienced growth in its proprietary network, Acorn TV. Acorn TV contributed $485,000 in increased revenues for the nine months ended September 2013.
Adjusted EBITDA increased $8.3 million to $3.7 million for the three months ended September 30, 2013, compared to the same period in 2012. The increase in Adjusted EBITDA for the three months ended September 30, 2013, is primarily attributable to reduced expenditures for investments in content. In 2012, the Company made significant expenditures related to its production of Foyle's War 8, which was released in the first quarter of 2013. The Company is now just starting preproduction for Foyle's War 9.
Adjusted EBITDA decreased $5.3 million to $1.2 million for the nine months ended September 30, 2013, as compared to the prior year period. The decline in Adjusted EBITDA for the nine months ended September 30, 2013 primarily relates to significant charges recorded by the Company in COGS related to the early termination of a multi-year content output arrangement with a content supplier in the second quarter of 2013. The impact of this management decision contributed to the total inventory impairment of $6.2 million recognized during the nine months ended September 2013.
Adjusted EBITDA is a non-GAAP financial measure. See below for a reconciliation to U.S. GAAP.
RLJ Entertainment, Inc. (RLJE) is a premier independent licensee and distributor of entertainment content and programming in 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 (stand-up comedy, feature films), One Village (urban), Acacia (fitness), Slingshot (faith), Athena (educational), Criterion (art films) and Madacy (gift sets). These titles are distributed in multiple formats including DVD, Blu-Ray, digital download, digital streaming, broadcast television (including satellite and cable), theatrical and non-theatrical.
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. And through its direct-to-consumer business, RLJE has direct contacts and billing relationships with millions of consumers.
RLJE leverages its management experience to acquire, distribute, and monetize existing and original content for its many distribution channels, including its nascent branded digital subscription channels, and engages distinct audiences with programming that appeals directly to their unique viewing interests. RLJE has proprietary e-commerce web sites for the Acorn and Acacia brands, and owns the recently launched Acorn TV digital subscription service.
Forward Looking Statements
This press release may include "forward looking statements" within the meaning of the "safe harbor" provisions of the United Stated Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "anticipate", "believe", "expect", "estimate", "plan", "outlook", and "project" and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. Investors are cautioned that such forward looking statements with respect to revenues, earnings, EBITDA, performance, strategies, prospects and other aspects of the business of RLJ Entertainment is based on current expectations that are subject to risks and uncertainties.
A number of factors could cause actual results or outcomes to differ materially from those indicated by such forward looking statements. These factors include, but are not limited to: (1) RLJ Entertainment's ability to integrate the businesses of Image Entertainment, Inc. and Acorn Media Group, Inc.; (2) the inability of RLJ Entertainment to fully realize the anticipated benefits of the business combination with Image Entertainment, Inc. and Acorn Media Group, Inc. or such benefits taking longer to realize than expected; (3) the ability of RLJ Entertainment's officers and directors to generate a number of potential investment opportunities; (4) RLJ Entertainment's ability to maintain relationships with customers, employees, suppliers and lessors; (5) the loss of key personnel; (6) delays in the release of new titles or other content; (7) the effects of disruptions in RLJ Entertainment's supply chain; (8) the limited liquidity and trading of RLJ Entertainment's public securities; (9) RLJ Entertainment's financial performance, including the ability of RLJ Entertainment to achieve revenue growth and EBITDA margins or realize synergies; (10) the possibility that RLJ Entertainment may be adversely affected by other economic, business, and/or competitive factors; (11) the need for additional capital and the availability of financing; (12) technological changes; (13) pricing and availability of products and services; (14) demand for RLJ Entertainment's products and services; (15) the ability to leverage and monetize content; and (16) other risks and uncertainties indicated from time to time in filings with the SEC by RLJ Entertainment.
Readers are referred to the most recent reports filed with the SEC by RLJ Entertainment. Readers are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made, and we undertake no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.
RLJ ENTERTAINMENT, INC.
CONDENSED Consolidated Balance Sheets
(unaudited)
September 30, 2013 and December 31, 2012
Successor
(In thousands, except share data) September 30, December 31,
2013 2012
ASSETS
Current assets:
Cash and cash equivalents $ 2,630 $ 4,739
Accounts receivable, net 12,148 20,484
Inventories, net 16,718 23,029
Investments in content, net 36,600 30,981
Prepaid expenses and other assets 3,097 1,938
Total current assets 71,193 81,171
Noncurrent portion of accounts receivable 3,250 4,127
Noncurrent portion of investments in content 46,441 58,816
Property, equipment and improvements, net 1,576 1,800
Equity investment in affiliates 24,269 25,449
Other intangible assets 20,144 23,883
Goodwill 47,066 47,382
Total assets $ 213,939 $ 242,628
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 23,322 $ 30,590
Accrued royalties and distribution fees 38,491 32,658
Deferred revenue 5,747 4,339
Current portion of long term debt 15,040 4,000
Total current liabilities 82,600 71,587
Long term portion of debt, less debt discount 63,858 78,323
Deferred tax liability 350 350
Stock warrant liability 7,406 4,324
Total liabilities 154,214 154,584
Equity:
Common stock, $0.001 par value, 250 million shares authorized,
13,700,862 and 13,377,546 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively 13 13
Additional paid-in capital 86,596 86,133
Retained earnings (deficit) (27,267) 1,743
Accumulated other comprehensive gain 383 155
Total equity 59,725 88,044
Total liabilities and equity $ 213,939 $ 242,628
RLJ ENTERTAINMENT, INC.
Consolidated Statements of Operations
(unaudited)
For the Three and Nine Months Ended September 30, 2013 and 2012
Successor Predecessor
(In thousands, except per share data) Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended
September 30, September 30, September 30, September 30,
2013 2013 2012 2012
Revenue $ 32,741 $ 107,333 $ 20,568 $ 57,447
Cost of sales 24,747 88,627 12,149 31,633
Gross profit 7,994 18,706 8,419 25,814
Selling expenses 6,397 18,046 4,388 11,063
General and administrative expenses 4,560 16,827 4,955 14,607
Depreciation and amortization 1,388 4,308 137 398
Total selling, general and administrative expenses 12,345 39,181 9,480 26,068
LOSS FROM OPERATIONS (4,351) (20,475) (1,061) (254)
Equity earnings of affiliates 1,364 2,924 462 983
Interest expense, net (2,019) (6,027) (261) (838)
Other income (expense) (2,832) (3,751) 501 118
Total other income (expense) (3,487) (6,854) 702 263
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES (7,838) (27,329) (359) 9
Provision for income taxes 670 1,681 123 203
NET LOSS (8,508) (29,010) (482) (194)
Less (net income) loss attributable to noncontrolling interests — — 13 (43)
NET LOSS APPLICABLE TO COMMON SHAREHOLDERS $ (8,508) $ (29,010) $ (469) $ (237)
Net loss per common share:
Unrestricted common stock:
Basic and diluted $ (0.62) $ (2.15) $ (0.46) $ (0.23)
Restricted common stock:
Basic and diluted $ (0.62) $ (2.15) $ — $ —
Unrestricted weighted average shares outstanding:
Basic and diluted 13,340 13,340 1,023 1,023
Restricted weighted average shares outstanding:
Basic and diluted 292 127 — —
RLJ ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(unaudited)
For the Three and Nine Months Ended September 30, 2013 and 2012
Successor Predecessor
(In thousands) Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended
September 30, September 30, September 30, September 30,
2013 2013 2012 2012
NET LOSS:
Net loss $ (8,508) $ (29,010) $ (482) $ (194)
Other comprehensive income (loss):
Foreign currency translation gain 803 228 151 295
Total comprehensive income (loss) (7,705) (28,782) (331) 101
Less: comprehensive income (loss) attributable to noncontrolling interests:
Share of net income (loss) — — (13) 43
Share of foreign currency translation gain — — 42 37
Comprehensive income attributable to noncontrolling interest — — 29 80
Comprehensive income (loss) attributable to common shareholders $ (7,705) $ (28,782) $ (360) $ 21
RLJ ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF EQUITY
(unaudited)
For the Nine Months Ended September 30, 2013 (Successor)
Common Stock
Accumulated
(In thousands) Shares Par
Value Additional Paid-
in Capital Stockholder
Notes
Receivable Retained
Earnings
(Deficit) Other
Comprehensive
Gain Treasury
Stock Non-
controlling
Interests Total
Equity
Balance at January 1, 2013 13,378 $ 13 $ 86,133 $ — $ 1,743 $ 155 $ — $ — $ 88,044
Issuance of restricted common stock for services 323 — — — — — — — —
Stock-based compensation — — 463 — — — — — 463
Foreign currency translation — — — — — 228 — — 228
Net loss — — — — (29,010) — — — (29,010)
Balance at September 30, 2013 13,701 $ 13 $ 86,596 $ — $ (27,267) $ 383 $ — $ — $ 59,725
For the Nine Months Ended September 30, 2012 (Predecessor)
Common Stock
Accumulated
(In thousands) Shares Par
Value Additional Paid-
in Capital Stockholder
Notes
Receivable Retained
Earnings Other
Comprehensive
Loss Treasury
Stock Non-
controlling
Interests Total
Equity
Balance at January 1, 2012 1,023 $ 10 $ 4,451 $ (684) $ 26,295 $ (421) $ (583) $ 759 $ 29,827
Stock-based compensation — — 373 — — — — — 373
Foreign currency translation — — — — — 258 — 37 295
Net income — — — — (237) — — 43 (194)
Stockholders' Distributions — — — — (4,879) — — (265) (5,144)
Balance at September 30, 2012 1,023 $ 10 $ 4,834 $ (684) $ 21,179 $ (163) $ (583) $ 574 $ 25,157
RLJ ENTERTAINMENT, INC.
Consolidated Statements of Cash Flows
(unaudited)
For the Nine Months Ended September 30, 2013 and 2012
(In thousands) Successor Predecessor
2013 2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (29,010) $ (194)
Adjustments to reconcile net loss to net cash:
Equity earnings in affiliates (2,924) (983)
Amortization of content, including impairments 50,535 11,412
Depreciation and amortization 510 339
Amortization of intangible assets 3,798 59
Foreign currency exchange loss/(gain) 706 (310)
Fair value adjustment of stock warrant liability 3,082 —
Noncash interest expense 750 —
Stock-based compensation expense 463 373
Changes in assets and liabilities:
Accounts receivable, net 9,151 3,487
Inventories, net 6,308 (244)
Investment in content, net (38,276) (18,935)
Prepaid expenses and other assets (361) (1,137)
Accounts payable and accrued liabilities (7,617) 877
Deferred revenue 1,403 —
Net cash used in operating activities (1,482) (5,256)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (350) (505)
Acquisition of affiliate — (21,871)
Dividends received from affiliate 4,005 2,682
Net cash provided by (used in) investing activities 3,655 (19,694)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under revolving credit facility 10,398 6,167
Repayments of borrowings under revolving credit facility (3,000) —
Proceeds from debt 191 27,511
Repayment of debt (11,452) (3,502)
Distributions to stockholders — (5,144)
Net cash provided by (used in) financing activities (3,863) 25,032
Effect of exchange rate changes on cash (419) (198)
NET DECREASE IN CASH: (2,109) (116)
Cash at beginning of period 4,739 1,625
Cash at end of period $ 2,630 $ 1,509
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 4,183 $ 659
Income taxes $ 539 $ 727
RLJ ENTERTAINMENT, INC.
Unaudited pro forma financial information reflects the operating results of RLJE as if Image and Acorn Media were acquired as of the periods indicated. These combined results are not necessarily indicative of the results that may have been achieved had the combined companies been combined as of such dates or periods, or of our future operating results.
Management believes Adjusted EBITDA to be a meaningful indicator of our performance that provides useful information to investors regarding our financial condition and results of operations because it removes material noncash items that allows investors to analyze the operating performance of the business using the same metric management uses. The exclusion of noncash items better reflects our ability to make investments in the business and meet obligations. Presentation of Adjusted EBITDA 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. The Company uses this measure to assess operating results and performance of its business, perform analytical comparisons, identify strategies to improve performance and allocate resources to its business segments. While management considers Adjusted EBITDA to be important measures 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 GAAP. Not all companies calculate Adjusted EBITDA in the same manner and the measure as presented may not be comparable to similarly-titled measures presented by other companies.
The following unaudited pro forma financial information for the three and nine months ended September 30, 2013 and 2012 reflects the operating results of RLJE as if Image and Acorn Media were acquired as of January 1, 2012. The unaudited pro forma financial information does not include adjustments for Business Combination transaction costs and severance incurred and other one-time expenses, nor does it include adjustments for synergies. These combined results are not necessarily indicative of the results that may have been achieved had the companies been combined as of such historical dates or periods, or of RLJE's future operating results.
Proforma Income Statement
(unaudited)
For the Three and Nine Months Ended September 30, 2013 and 2012
Three Months Ended Nine Months Ended
September 30, September 30,
(In thousands) 2013 2012 2013 2012
Actual Proforma (1) Actual Proforma (1)
Revenues $ 32,741 $ 39,152 $ 107,333 $ 121,161
Costs of sales 24,747 27,007 88,627 85,206
Gross profit 7,994 12,145 18,706 35,955
Selling, general and administrative expenses 12,345 16,202 39,181 45,961
Loss from operations (4,351) (4,057) (20,475) (10,006)
Equity earnings of affiliates 1,364 294 2,924 1,318
Interest expense, net (2,019) (1,938) (6,027) (5,814)
Other income (expense) (2,832) 675 (3,751) 2,450
Provision for income taxes (670) (123) (1,681) (46)
Net loss $ (8,508) $ (5,149) $ (29,010) $ (12,098)
Adjusted EBITDA $ 3,717 $ (4,547) $ 1,179 $ 6,503
Notes to the Proforma Income Statement Table:
(1) An adjustment for interest expense has been made to the prior year three and nine month ended September 30, 2012 as if the existing debt was in place throughout the period.
The following table includes the reconciliation of our consolidated Adjusted EBITDA to consolidated U.S. GAAP net loss:
Three Months Ended
September 30, Nine Months Ended
September 30,
(In thousands) 2013 2012 2013 2012
Actual Proforma Actual Proforma
Net loss $ (8,508) $ (5,149) $ (29,010) $ (12,098)
Amortization of content 13,947 15,513 50,535 49,508
Cash investment in content (10,346) (21,756) (38,276) (50,163)
Depreciation and amortization 1,388 1,413 4,308 4,246
Interest expense 2,019 1,938 6,027 5,814
Provision for income tax 670 123 1,681 46
Transactions costs and severance 351 2,901 2,369 7,786
Warrant liability fair value adjustment 3,884 — 3,082 —
Stock-based compensation 312 470 463 1,364
Adjusted EBITDA $ 3,717 $ (4,547) $ 1,179 $ 6,503
Contact:
Sloane & Company
Erica Bartsch, 212-446-1875
ebartsch@sloanepr.com
Traci Otey Blunt, 240-744-7858
The RLJ Companies
press@rljcompanies.com
TheStreet Reports Third Quarter 2013 Results
TheStreet, Inc. November 7, 2013 4:01 PM
NEW YORK, Nov. 7, 2013 /PRNewswire/ -- TheStreet, Inc. (TST), a leading digital financial media company, today reported financial results for the third quarter of 2013. The Company reported revenue of $13.6 million, a net loss of $1.2 million and Adjusted EBITDA(1) of $261 thousand for the quarter.
(Logo: http://photos.prnewswire.com/prnh/20130102/NY35868LOGO-b )
The Company generated $481 thousand in operating cash flow for the nine months ended September 30, 2013, compared to a use of $5.8 million in operating cash flow for the prior year period.
Revenue for the third quarter increased 17% compared to the same period last year and 1% sequentially. Subscription Services revenue was $11.2 million for the third quarter, an increase of 25% compared to the prior year period and 4% sequentially. The increase in revenue was the result of our acquisitions of The Deal and DealFlow Media properties, completed in September 2012 and April 2013, respectively. Media revenue was $2.4 million for the third quarter, a decrease of 9% compared to the prior year period and 11% sequentially.
"TheStreet's third quarter revenue growth of 17% is our second consecutive quarter with year-over-year revenue growth and reflects the continued execution of our strategy," said Elisabeth DeMarse, Chairman, President and Chief Executive Officer. "It's a very exciting time for TheStreet. We're growing our topline, generating cash, expanding our robust M&A pipeline and investing in great products with market appeal that can dominate", concluded DeMarse.
Operating expenses in the third quarter of 2013 were $14.8 million, a decrease of 7% as compared to the prior year period. Excluding restructuring charges, operating expenses increased by $1.9 million as the result of our acquisitions.
The Company's net loss was $1.2 million in the third quarter of 2013 compared to a net loss of $4.2 million in the prior year period. The Company reported basic and diluted net loss per share attributable to common stockholders of $0.03 in the third quarter of 2013, as compared to a net loss per share of $0.13 in the prior year period.
Adjusted EBITDA was $261 thousand in the third quarter of 2013 compared to $1.0 million in the prior year period.
The Company ended the third quarter of 2013 with cash and cash equivalents, restricted cash and marketable securities of $58.4 million.
Selected Operating Results of Third Quarter 2013
•The number of paid subscriptions at period end was 82,300, an increase of 11% from the prior year and 6% sequentially (2).
•Average monthly churn improved to 2.0% from 2.6% in the prior year period (2) (3).
•Average revenue per user decreased 6.2% as compared to the prior year period (2).
Conference Call Information
TheStreet will discuss its financial results for the third quarter today at 4:30 p.m. ET.
To participate in the call, please dial (800) 649-5127 (domestic) or (914) 495-8549 (international). The Conference ID number is 78042860. This call is being webcast and can be accessed in 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 ninety 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 RateWatch. 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.
Non-GAAP Financial Information
(1) To supplement the Company's financial statements presented in accordance with generally accepted accounting principles ("GAAP"), the Company uses non-GAAP measures of certain components of financial performance, including "EBITDA," "Adjusted EBITDA" and "free cash flow." EBITDA is adjusted from results based on GAAP to exclude interest, income taxes, depreciation and amortization. This non-GAAP measure is provided to enhance investors' overall understanding of the Company's current financial performance and its prospects for the future. Specifically, the Company believes that the non-GAAP EBITDA results are an important indicator of the operational strength of the Company's business and provide an indication of the Company's ability to service debt and fund acquisitions and capital expenditures. EBITDA eliminates the uneven effect of considerable amounts of non-cash depreciation of tangible assets and amortization of certain intangible assets that were recognized in business combinations. Adjusted EBITDA further eliminates the impact of non-cash stock compensation, restructuring, transaction related costs and other charges affecting comparability. A limitation of these measures, however, is that they do not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues in the Company's businesses. Management evaluates the investments in such tangible and intangible assets through other financial measures, such as capital expenditure budgets and investment spending levels. "Free cash flow" means net loss plus non-cash expenses net of gains/losses on dispositions of assets, less changes in operating assets and liabilities and capital expenditures. The Company believes that this non-GAAP financial measure is an important indicator of the Company's financial results because it gives investors a view of the Company's ability to generate cash.
(2) Excludes the impact of the acquisition of The Deal and DealFlow Media assets.
(3) Average monthly churn rate is defined as subscriber terminations/expirations in the quarter divided by the sum of the beginning subscribers and gross subscriber additions for the quarter, then divided by three. Subscriptions that are on a free-trial basis are not regarded as added or terminated unless the subscription is active at the end of the free-trial period.
Notice Regarding Forward-Looking Statements
This press release contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding the impact of the Company's restructuring, growth initiatives and expectations for 2013. Such forward-looking statements are subject to risks and uncertainties, including those described in the Company's filings with the Securities and Exchange Commission ("SEC") that could cause actual results to differ materially from those reflected in the forward-looking statements. Factors that might contribute to such differences include, among others, economic downturns and the general state of the economy, including the financial markets and mergers and acquisitions environment, our ability to drive revenue, and increase or retain current subscription revenue, our ability to optimize our free site and generate new subscription revenue; our ability to successfully integrate The Deal and other acquisitions; our ability to develop new products; competition and other factors set forth in our filings with the SEC, which are available on the SEC's website at www.sec.gov. All forward-looking statements contained herein are made as of the date of this press release. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results or occurrences. The Company disclaims any obligation to update these forward-looking statements, whether as a result of new information, future developments or otherwise.
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
THESTREET, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
September 30, 2013
December 31, 2012
(unaudited)
Current Assets:
Cash and cash equivalents
$ 39,625,879
$ 23,845,360
Marketable securities
9,576,760
18,096,091
Accounts receivable, net of allowance for doubtful
accounts of $194,537 as of September 30, 2013 and $165,291
as of December 31, 2012
4,275,053
5,750,753
Other receivables, net
367,618
1,134,142
Prepaid expenses and other current assets
1,608,459
1,450,742
Total current assets
55,453,769
50,277,088
Property and equipment, net of accumulated depreciation
and amortization of $15,599,302 as of September 30, 2013
and $14,633,037 as of December 31, 2012
4,679,286
5,672,000
Marketable securities
7,858,120
17,298,227
Other assets
12,197
69,957
Goodwill
27,997,286
25,726,239
Other intangibles, net of accumulated amortization of $7,912,147
as of September 30, 2013 and $6,699,283 as of December 31, 2012
11,085,143
11,190,557
Restricted cash
1,301,000
1,301,000
Total assets
$ 108,386,801
$ 111,535,068
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable
$ 2,121,205
$ 3,813,955
Accrued expenses
4,110,176
5,921,152
Deferred revenue
23,300,954
21,080,759
Other current liabilities
783,462
632,618
Total current liabilities
30,315,797
31,448,484
Deferred tax liability
288,000
288,000
Other liabilities
4,087,449
4,340,749
Total liabilities
34,691,246
36,077,233
Stockholders' Equity:
Preferred stock; $0.01 par value; 10,000,000 shares
authorized; 5,500 shares issued and 5,500 shares
outstanding as of September 30, 2013 and December 31, 2012;
the aggregate liquidation preference totals $55,000,000 as of
September 30, 2013 and December 31, 2012
55
55
Common stock; $0.01 par value; 100,000,000 shares
authorized; 40,803,091 shares issued and 33,902,028
shares outstanding as of September 30, 2013, and 39,855,468
shares issued and 33,027,752 shares outstanding as of
December 31, 2012
408,031
398,555
Additional paid-in capital
273,341,774
270,943,151
Accumulated other comprehensive income
(164,968)
(128,994)
Treasury stock at cost; 6,901,063 shares as of September 30, 2013
and 6,827,716 shares as of December 31, 2012
(12,110,108)
(11,974,261)
Accumulated deficit
(187,779,229)
(183,780,671)
Total stockholders' equity
73,695,555
75,457,835
Total liabilities and stockholders' equity
$ 108,386,801
$ 111,535,068
THESTREET, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
For the Three Months Ended September 30,
For the Nine Months Ended September 30,
2013
2012
2013
2012
Net revenue:
Subscription services
$ 11,169,084
$ 8,956,184
$ 32,179,403
$ 26,784,377
Media
2,415,644
2,641,571
7,469,905
10,110,361
Total net revenue
13,584,728
11,597,755
39,649,308
36,894,738
Operating expense:
Cost of services
7,460,950
5,699,275
20,607,534
17,834,336
Sales and marketing
3,525,520
2,717,794
10,644,273
10,076,902
General and administrative
2,755,016
3,143,160
9,230,616
10,242,852
Depreciation and amortization
883,760
1,295,197
2,762,283
3,740,649
Restructuring and other charges
-
3,046,104
385,610
6,039,797
Loss (gain) on disposition of assets
171,000
14,011
187,434
(205,989)
Total operating expense
14,796,246
15,915,541
43,817,750
47,728,547
Operating loss
(1,211,518)
(4,317,786)
(4,168,442)
(10,833,809)
Net interest income
32,053
91,271
169,884
295,216
Net loss
(1,179,465)
(4,226,515)
(3,998,558)
(10,538,593)
Preferred stock cash dividends
-
-
-
192,848
Net loss attributable to common stockholders
$ (1,179,465)
$ (4,226,515)
$ (3,998,558)
$ (10,731,441)
Basic and diluted net loss per share:
Net loss
$ (0.03)
$ (0.13)
$ (0.12)
$ (0.32)
Preferred stock cash dividends
-
-
-
(0.01)
Net loss attributable to common stockholders
$ (0.03)
$ (0.13)
$ (0.12)
$ (0.33)
Weighted average basic and diluted shares outstanding
33,892,790
32,848,076
33,654,044
32,648,487
Net loss
$ (1,179,465)
$ (4,226,515)
$ (3,998,558)
$ (10,538,593)
Net interest income
(32,053)
(91,271)
(169,884)
(295,216)
Depreciation and amortization
883,760
1,295,197
2,762,283
3,740,649
EBITDA
(327,758)
(3,022,589)
(1,406,159)
(7,093,160)
Restructuring and other charges
-
3,046,104
385,610
6,039,797
Stock based compensation
417,616
565,601
1,216,041
1,632,405
Loss (gain) on disposition of assets
171,000
14,011
187,434
(205,989)
Transaction related costs
-
443,318
141,118
518,647
Adjusted EBITDA
$ 260,858
$ 1,046,445
$ 524,044
$ 891,700
THESTREET, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
For the Nine Months Ended September 30,
2013
2012
Cash Flows from Operating Activities:
Net loss
$ (3,998,558)
$ (10,538,593)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Stock-based compensation expense
1,216,041
1,632,405
Provision for doubtful accounts
3,730
100,887
Depreciation and amortization
2,762,283
3,740,649
Restructuring and other charges
393,195
1,396,695
Deferred rent
(241,899)
(239,968)
Noncash barter activity
20,000
126,940
Loss (gain) on disposition of assets
187,434
(205,989)
Changes in operating assets and liabilities:
Accounts receivable
1,773,584
2,058,490
Other receivables
865,159
(502,866)
Prepaid expenses and other current assets
(145,417)
(334,508)
Other assets
2,928
40,601
Accounts payable
(1,695,000)
(473,986)
Accrued expenses
(1,954,966)
(1,531,416)
Deferred revenue
1,375,369
(1,139,243)
Other current liabilities
(58,676)
113,626
Other liabilities
(24,001)
-
Net cash provided by (used in) operating activities
481,206
(5,756,276)
Cash Flows from Investing Activities:
Purchase of marketable securities
-
(41,151,130)
Sale and maturity of marketable securities
17,923,464
30,363,261
Purchase of assets from DealFlow Media, Inc.
(1,764,716)
-
Purchase of The Deal, LLC
-
(5,430,063)
Capital expenditures
(813,469)
(915,263)
Proceeds from the disposition of assets
71,881
222,300
Net cash provided by (used in) investing activities
15,417,160
(16,910,895)
Cash Flows from Financing Activities:
Cash dividends paid on common stock
-
(1,640,421)
Cash dividends paid on preferred stock
-
(192,848)
Proceeds from the sale of common stock
-
135,000
Proceeds from the exercise of stock options
18,000
-
Shares withheld on RSU vesting to pay for withholding taxes
(135,847)
(830,669)
Net cash used in financing activities
(117,847)
(2,528,938)
Net increase (decrease) in cash and cash equivalents
15,780,519
(25,196,109)
Cash and cash equivalents, beginning of period
23,845,360
44,865,191
Cash and cash equivalents, end of period
$ 39,625,879
$ 19,669,082
Noncash investing and financing activities:
Stock issued for business combination
$ 780,863
$ -
Net loss
$ (3,998,558)
$ (10,538,593)
Noncash expenditures
4,340,784
6,551,619
Changes in operating assets and liabilities
138,980
(1,769,302)
Capital expenditures
(813,469)
(915,263)
Free cash flow
$ (332,263)
$ (6,671,539)
I believe it's fairly Valued at $2.75 to $3.00 per share based on the Company's underlying Fundamentals!
<eom>
Nathan's Famous, Inc. Reports Second Quarter Results
Nathan's Famous, Inc. 2 hours ago
JERICHO, N.Y., Nov. 8, 2013 /PRNewswire/ -- Nathan's Famous, Inc. (NATH) today reported results for the second quarter of its 2014 fiscal year that ended September 29, 2013.
For the fiscal quarter ended September 29, 2013:
•Net income was $2,648,000 as compared to $2,845,000 for the thirteen weeks ended September 23, 2012;
•Earnings per diluted share were $0.57 as compared to $0.62 for the thirteen weeks ended September 23, 2012; and
•Revenues increased by 10.8% to $23,662,000, as compared to $21,360,000 during the thirteen weeks ended September 23, 2012.
For the twenty-six weeks ended September 29, 2013:
•Net income increased by 23.7% to $6,002,000 as compared to $4,851,000 for the twenty-six weeks ended September 23, 2012;
•Earnings per diluted share increased by 22.6% to $1.30 as compared to $1.06 for the twenty-six weeks ended September 23, 2012; and
•Revenues increased by 13.3% to $47,063,000, as compared to $41,542,000 during the twenty-six weeks ended September 23, 2012.
The Company also reported the following:
•In March 2014, our new license agreement will commence with John Morrell & Co. replacing SMG, Inc. as Nathan's exclusive licensee to manufacture and sell branded hot dog, sausage and corned beef products at retail. As previously disclosed, we believe the financial terms of the John Morrell agreement are more advantageous to us compared to the financial terms of the current SMG agreement. Among those improved terms are royalties of 10.8% of net sales, compared to approximately 4.5% of net sales under the SMG agreement, as well as significant minimum annual royalty guarantees. Under the John Morrell Agreement, the minimum guarantee for the first year is $10 Million, and we believe that actual royalties should exceed the minimum. Royalties earned under the SMG agreement over the last 12 months were $5,366,000.
•License royalties pursuant to all license agreements were $4,416,000 during the twenty-six weeks ended September 29, 2013, as compared to $4,351,000 during the twenty-six weeks ended September 23, 2012.
•Sales from the Branded Product Program, featuring the sale of Nathan's hot dogs to the foodservice industry, increased by 16.4% to $27,101,000 during the twenty-six weeks ended September 29, 2013, as compared to sales of $23,291,000 during the twenty-six weeks ended September 23, 2012.
•Sales from the Company-owned restaurants were $9,545,000 during the twenty-six weeks ended September 29, 2013 as compared to $10,697,000 during the twenty-six weeks ended September 23, 2012; the decline in sales was due to the following: (1) Our Flagship Coney Island restaurant, which was severely damaged by Superstorm Sandy, was not fully repaired and did not reopen until May 20, 2013, and operated for only 18 weeks of the current fiscal year, compared to the full 26 weeks at this point of fiscal 2013; and (2) The temporary closing of our Yonkers restaurant for redevelopment since December 2012. We estimate that these two factors negatively impacted the sales comparison by approximately $1,895,000.
•Sales at our two Coney Island locations were approximately $801,000 higher in the aggregate than last season even though our Flagship Coney Island restaurant only operated for 18 weeks during the fiscal period ending September 29, 2013. Sales at our seasonal Boardwalk restaurant in Coney Island were approximately 17.1% higher during the 26 weeks ended September 29, 2013 than the 26 weeks ended September 23, 2012.
•Gross profit decreased to 21.7% of sales during the twenty-six weeks ended September 29, 2013, as compared to 23.9% of sales during the twenty-six weeks ended September 23, 2012 due primarily to the impact of the higher cost of beef. During the second quarter fiscal 2014, the cost of our beef products were approximately 9.0% higher than the second quarter fiscal 2013 due primarily to an unusual increase in the beef trimmings markets during August and September 2013. We have begun taking steps to pass the recent cost increases on through price increases but there can be no assurance we will be successful in doing so.
•Revenues from franchise operations were $2,863,000 during the twenty-six weeks ended September 29, 2013, as compared to $2,938,000 during the twenty-six weeks ended September 23, 2012. Fifteen new franchised units were opened during the twenty-six weeks ended September 29, 2013, including four Branded Menu Program outlets and seven locations in Moscow.
•Nathan's realized a gain of $2,801,000 during the twenty-six weeks ended September 29, 2013 in connection with the settlement of its flood damage and contents loss insurance claims relating to Superstorm Sandy.
•Nathan's recognized an impairment charge of $400,000 in connection with a long-term investment.
•Nathan's final appeal in the SMG litigation was denied. As a result, the judgment of $4,910,000 and all post-judgment interest of $1,099,000, was satisfied on July 24, 2013. As previously described, we accrued the expense of the judgment in October 2010, and have been accruing the expenses for post-judgment interest on a monthly basis throughout the appeals process.
•In October, 2013, Nathan's was ranked #55 on the Forbes list of the Best Small Companies in America and was listed as the Best Small Company in New York State.
About Nathan's Famous
Nathan's is a Russell 2000 Company that currently distributes its products in 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, the Cayman Islands and nine foreign countries through its restaurant system, foodservice sales programs and product licensing activities. The Nathan's restaurant system currently consists of 314 units, comprised of 309 franchised units and five company-owned units (including one seasonal unit). For additional information about Nathan's please visit our website at www.nathansfamous.com.
Except for historical information contained in this news release, the matters discussed are forward looking statements that involve risks and uncertainties. Words such as "anticipate", "believe", "estimate", "expect", "intend", and similar expressions identify forward-looking statements, which are based on the current belief of the Company's management, as well as assumptions made by and information currently available to the Company's management. Among the factors that could cause actual results to differ materially are the following: the effect of economic, weather (including the continued impact of Hurricane Sandy and the three-year drought in the Midwest which has caused an increase in corn pricing and reduced supply of cattle), continued increases in the price of beef trimmings; legislative and business conditions; the collectibility of receivables; changes in consumer tastes; the status of our licensing and supply agreements, including the impact of a new supply agreement for hot dogs with John Morrell & Co. and the termination in 2014 of our existing hot dog supply agreement with SMG and any issues arising from or related to the transition from SMG to John Morrell & Co. as our primary hot dog supplier; the ability to continue to attract franchisees; no material increases in the minimum wage; our ability to attract competent restaurant and managerial personnel; and the future effects of any food borne illness; such as bovine spongiform encephalopathy, BSE; and the risk factors reported from time to time in the Company's SEC reports. The Company does not undertake any obligation to update such forward-looking statements.
COMPANY Ronald G. DeVos, Vice President - Finance and CFO
CONTACT: (516) 338-8500 ext. 229
Nathan's Famous, Inc.
Financial Highlights
Thirteen weeks ended
Twenty-six weeks ended
Sept. 29, 2013
Sept. 23, 2012
Sept. 29, 2013
Sept. 23, 2012
(unaudited)
(unaudited)
Total revenues
$ 23,662,000
$ 21,360,000
$ 47,063,000
$ 41,542,000
Net income
$ 2,648,000
$ 2,845,000
$ 6,002,000
$ 4,851,000
Basic income per share
Net income
$ 0.59
$ 0.65
$ 1.35
$ 1.11
Diluted income per share
Net income
$ 0.57
$ 0.62
$ 1.30
$ 1.06
Weighted-average shares used in
computing income per share
Basic
4,460,000
4,407,000
4,437,000
4,387,000
Diluted
4,625,000
4,604,000
4,603,000
4,568,000
PhotoMedex Reports Third Quarter 2013 Financial Results
Conference Call Begins Today at 11:00 a.m. Eastern Time
Business WirePress Release: PhotoMedex, Inc. – 10 hours ago..
MONTGOMERYVILLE, Pa.--(BUSINESS WIRE)--
PhotoMedex, Inc. (PHMD) today reported financial results for the three and nine months ended September 30, 2013.
Revenues for the third quarter of 2013 were $45.9 million, a decrease of 19.0% compared with revenues for the third quarter of 2012 of $56.7 million. The decline in revenues was primarily due to no consumer sales to the Company’s distributor in Japan in the third quarter of 2013 as this distributor implemented a change to its business model that affected most of the manufacturers it represents to retail channels, and determined to reduce inventory levels to mitigate investment risk during this transition. According to third-party data, no!no! product sales in Japan at the retail level during the third quarter of 2013 were comparable to the third quarter of 2012. Also contributing to the decline in revenues was the scheduling of a Home Shopping Network 24-hour event in the fourth quarter of 2013 that occurred in the third quarter of 2012. Had the revenue contributions from these two events remained at the second quarter levels, the third quarter revenues would have been approximately $13 million higher.
Management expects revenues for the fourth quarter of 2013 to be more than $55 million without any expected contribution from Japan.
Net income for the third quarter of 2013 was $0.9 million or $0.04 per diluted per share, which included $1.2 million in stock-based compensation expense and $1.6 million in depreciation and amortization expense. This compares with net income for the third quarter of 2012 of $7.5 million or $0.35 per diluted share, which included $1.5 million in stock-based compensation expense and $1.4 million in depreciation and amortization expense.
Revenues for the nine months ended September 30, 2013 were $161.2 million, a decrease of 2.8% compared with revenues for the nine months ended September 30, 2012 of $165.9 million.
Net income for the nine months ended September 30, 2013 was $15.2 million or $0.74 per diluted per share, which included $3.8 million in stock-based compensation expense and $4.5 million in depreciation and amortization expense. This compares with net income for the nine months ended September 30, 2012 of $16.6 million or $0.83 per diluted share, which included $4.8 million in stock-based compensation expense and $4.2 million in depreciation and amortization expense.
As of September 30, 2013 the Company had cash and cash equivalents of $49.0 million or $2.39 per diluted share, compared with $62.3 million as of December 31, 2012. During the third quarter of 2013 the Company repurchased 846,924 shares of its common stock under its Share Repurchase program at an average price of $16.05 per share, for a total of $13.6 million. Since the beginning of the year, the Company has repurchased 1,171,682 shares of its common stock for a total of $19.0 million, and has $25.2 million remaining available to repurchase shares under the $55 million board authorized program.
Dr. Dolev Rafaeli, PhotoMedex CEO, commented, “While a change in business model at our distributor in Japan impacted orders for the no!no! during the quarter, we are pleased that product demand from Japanese consumers held steady. In addition, a major beauty event on HSN that occurred in last year’s third quarter will take place this year in the fourth quarter. At this event last year, we sold a record number of no!no! products and we are looking forward to a similarly strong reception in December when we will offer the no!no! Pro, which has a higher average selling price.
“During the quarter we acquired a Brazilian distributor and subsequently launched the no!no! brand and recorded our first sales. Retail advertising in Brazil began last week, and we are excited to begin ramping up this next major phase of our growth strategy,” Dr. Rafaeli continued. “We continued to make progress in Germany with our no!no! brand and are on track to meet our expectations for 2014. Sales to Bed Bath & Beyond in the U.S. were as expected and in the coming months they will be upgrading from the no!no! Plus to the higher-priced 8800. Neova® consumer revenues were up more than five-fold over the prior year as testament to the success of our marketing platform.”
Dr. Rafaeli added, “XTRAC® was a particularly bright spot during the quarter, with treatment revenues up more than 90% over the prior year. We have been running advertising spots on national cable TV with heavier concentration in certain major metropolitan areas, and are seeing conversion rates of appointments scheduled through our call center running as high as 87%. We expect record revenues for XTRAC in the fourth quarter to exceed $5.0 million.”
A reconciliation of non-GAAP financial measures to GAAP financial measures, and a presentation of the most directly comparable GAAP financial measures are included below.
Non-GAAP Measures
To supplement PhotoMedex’s consolidated financial statements presented in accordance with GAAP, PhotoMedex provides certain non-GAAP measures of financial performance. These non-GAAP measures include non-GAAP adjusted income and non-GAAP adjusted income per share.
PhotoMedex’s 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 current financial performance and to provide further information for comparative purposes.
Specifically, the Company believes the non-GAAP measures provide useful information to management and investors by isolating certain expenses, gains and losses that may not be indicative of the Company’s core operating results and business outlook. In addition, PhotoMedex believes non-GAAP measures enhance the comparability of results against prior periods. Reconciliation to the most directly comparable GAAP measure of all non-GAAP measures included in this press release is as follows:
(Unaudited)
Three Months Ended September 30, Nine Months Ended September 30,
(ooo's) except per share amounts 2013 2012 2013 2012
Net Income as reported $ 886 $ 7,525 $ 15,192 $ 16,595
Adjustments:
Depreciation and amortization expense 1,551 1,405 4,510 4,176
Interest expense, net 1 (6 ) 10 401
Income tax expense (benefit) (1,336 ) 2,500 3072 3,606
EBITDA $ 1,102 $ 11,424 $ 22,784 $ 24,778
Stock-based compensation expense 1,211 1,529 3,795 4,817
Non-GAAP adjusted income $ 2,313 $ 12,953 $ 26,579 $ 29,595
Common shares outstanding at
September 30, 2013
20,441 20,441 20,441 21,477
Non-GAAP adjusted income per share $ 0.11 $ 0.63 $ 1.30 $ 1.38
Conference Call
PhotoMedex will hold a conference call to discuss the Company’s third quarter 2013 results and answer questions today, November 6, 2013 beginning at 11:00 a.m. Eastern time.
To participate in the conference call, dial toll-free 888-452-4023 or International/toll 719-457-2664 (and confirmation code # 5129582). For the convenience of our participants in Israel, a local/toll-free number (1-80-924-5906) has been set up (the confirmation code remains the same # 5129582). If you are unable to participate, a digital replay of the call will be available from Wednesday, November 6, from 2:00 p.m. ET to Wednesday, November 20, 2013 at 2:00 p.m. ET, 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 # 5129582.
The live broadcast of PhotoMedex, Inc.'s quarterly conference call 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 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.
SAFE HARBOR STATEMENT
Some portions of the conference call, particularly those describing PhotoMedex' 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. In addition, there are risks and uncertainties related to successfully integrating the products and employees of the Company and Radiancy, as well as the ability to ensure continued regulatory compliance, performance and/or market growth. These risks, uncertainties and other factors, and the general risks associated with the businesses of the Company 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. The Company cautions readers not to rely on these forward-looking statements. All forward-looking statements are based on information currently available to the Company and are qualified in their entirety by this cautionary statement. The Company anticipates that subsequent events and developments will cause its views to change. The information contained in this conference call speaks as of the date hereof and the Company has or undertakes no obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.
.
-- Financial Statements follow --
PHOTOMEDEX, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended Sept. 30, Nine Months Ended Sept. 30,
(ooo's) except per share amounts 2013 2012 2013 2012
Revenues $ 45,893 $ 56,681 $ 161,174 $ 165,860
Cost of revenues 9,066 11,281 32,322 34,870
Gross profit 36,827 45,400 128,852 130,990
Operating expenses:
Selling and marketing 30,973 28,285 90,767 85,188
General and administrative 5,972 6,231 17,899 22,593
Research and development and engineering 805 628 2,392 2,146
37,750 35,144 111,058 109,927
Operating income (loss) (923 ) 10,256 17,794 21,063
Interest and other financing income (expense), net 473 (231 ) 470 (862 )
Income (loss) before taxes expense (450 ) 10,025 18,264 20,201
Income tax expense (benefit) (1,336 ) 2,500 3,072 3,606
Net income 1 $ 886 $ 7,525 $ 15,192 $ 16,595
Net income per share:
Basic $ 0.04 $ 0.35 $ 0.74 $ 0.83
Diluted $ 0.04 $ 0.35 $ 0.72 $ 0.81
Shares used in computing net income per share:
Basic 19,983 21,206 20,518 20,001
Diluted 20,441 21,753 20,977 20,549
1 Includes: depreciation and amortization 1,551 1,405 4,510 4,176
Share-based compensation expense 1,211 1,529 3,795 4,817
PHOTOMEDEX, INC.
CONSOLIDATED STATEMENTS OF REVENUES
(UNAUDITED)
For the Three Months Ended
September 30, 2013 June 30, 2013 September 30, 2012
Consumer:
Direct $ 29,351 $ 30,320 $ 30,001
Distributors 1,232 8,435 9,388
Retailer and home shopping channels 6,327 9,918 10,249
sub-total 36,910 48,673 49,638
Physician Recurring
XTRAC treatments 4,200 4,024 2,173
Skin care 1,882 2,142 1,907
Other 1,277 1,210 1,041
sub-total 7,359 7,376 5,121
Professional 1,624 2,016 1,922
Total Revenues $ 45,893 $ 58,065 $ 56,681
PHOTOMEDEX, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
September 30, 2013 December 31, 2012
Assets
Cash, cash equivalents, and short-term investments $ 48,951 $ 62,348
Accounts receivable, net 21,510 19,064
Inventories 27,633 22,467
Other current assets 31,759 32,294
Property and equipment, net 10,001 6,759
Other non-current assets 64,937 68,958
Total Assets $ 204,791 $ 211,890
Liabilities and Stockholders' Equity
Accounts payable and accrued liabilities $ 27,510 $ 34,618
Other current liabilities 6,304 5,259
Bank and lease notes payable 154 619
Other liabilities 3,376 4,067
Stockholders' equity 167,447 167,327
Total Liabilities and Stockholders' Equity $ 204,791 $ 211,890
PHOTOMEDEX, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Nine Months Ended
September 30,
2013 2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 15,192 $ 16,595
Adjustments to reconcile net income to net cash provided by operating activities-
Depreciation and amortization 4,510 4,176
Provision for doubtful accounts 3,428 3,404
Deferred income taxes 3,438 (332 )
Stock-based compensation 3,795 4,817
Changes in assets and liabilities:
(Increase) decrease in--
Current Assets (11,897 ) (23,647 )
Current liabilities (7,062 ) 6,018
Net cash provided by operating activities 11,404 11,031
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds (investment) in short-term deposits (481 ) (18,000 )
Lasers placed in service (4,430 ) (2,129 )
Purchases of PP&E, net (710 ) (277 )
Other (104 ) (34 )
Net cash used in investing activities (5,725 ) (20,440 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of options/issuance of securities (18,959 ) 32,458
Repayments of debt (652 ) (2,457 )
Net cash (used in) provided by financing activities (19,611 ) 30,001
EFFECT OF EXCHANGE RATE CHANGES ON CASH 54 (334 )
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (13,878 ) 20,258
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 44,348 16,549
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 30,470 $ 36,807
Supplemental information: $ 6,582 $ 11,190
Cash paid for income taxes $ 13 $ 77
Cash paid for interest
.
.
Contact:.
.
LHA
Kim Sutton Golodetz, 212-838-3777
Kgolodetz@lhai.com
or
Bruce Voss, 310-691-7100
Bvoss@lhai.com
@LHA_IR_PR
or
PhotoMedex, Inc.
Dennis McGrath, 215-619-3287
Chief Financial Officer
info@photomedex.com
Lakes Entertainment Announces Results for Third Quarter 2013
Business WirePress Release: Lakes Entertainment, Inc. – 7 hours ago..
MINNEAPOLIS--(BUSINESS WIRE)--
Lakes Entertainment, Inc. (LACO) today announced results for the three and nine months ended September 29, 2013.
Third Quarter Results
Net earnings for the third quarter of 2013 were $19.6 million, compared to a net loss of $1.0 million for the third quarter of 2012. Earnings from operations were $18.8 million for the third quarter of 2013 compared to a loss from operations of $2.5 million for the third quarter of 2012. Basic and diluted earnings per share were $0.74 and $0.73, respectively, for the third quarter of 2013 compared to basic and diluted losses of $0.04 per share for the third quarter of 2012.
Lakes Entertainment reported third quarter 2013 net revenues of $15.5 million, compared to prior-year third quarter net revenues of $3.6 million. Included in these amounts were net revenues of $14.1 million and $1.7 million for the third quarters of 2013 and 2012, respectively, related to the operation of the Rocky Gap Casino Resort near Cumberland, Maryland (“Rocky Gap”), which Lakes acquired on August 3, 2012 and which commenced gaming operations on May 22, 2013. Also included in net revenues were $1.4 million in management fees earned during the third quarter of 2013 compared to $1.9 million earned during the third quarter of 2012 related to the Red Hawk Casino, owned by the Shingle Springs Band of Miwok Indians (the “Tribe”), near Sacramento, California. The decrease in management fees earned during the third quarter of 2013 compared to the third quarter of 2012 was due to the August 29, 2013, termination of the management agreement between Lakes and the Tribe for the management of the Red Hawk Casino which resulted in only two months of management fees in the current year third quarter.
As previously announced, on July 17, 2013, Lakes entered into a debt termination agreement (the “Debt Termination Agreement”) with the Tribe relating to amounts Lakes had previously advanced to the Tribe under the development and management agreement for the Red Hawk Casino between Lakes and the Tribe (the “Shingle Springs Notes”). The Debt Termination Agreement required certain conditions to be met, including a lump sum payment by the Shingle Springs Tribe to Lakes of $57.1 million (the “Debt Payment”). The Debt Payment was made on August 29, 2013 (the “Payment Date”) and constituted full and final payment of all debt owed to Lakes as of that date. As a result of the receipt of the Debt Payment, during the third quarter of 2013, Lakes recognized approximately $17.4 million in recovery of impairment charges because the Shingle Springs Notes were valued at $39.7 million as of the Payment Date. The management agreement under which Lakes was managing the Red Hawk Casino also terminated on the Payment Date.
During the third quarter of 2013, Lakes also recognized a gain of $3.8 million on extinguishment of liabilities associated with contract acquisition costs related to the project with the Shingle Springs Tribe that were no longer owed upon the termination of the management agreement between Lakes and the Shingle Springs Tribe.
As of the Payment Date, $2.4 million of intangible assets related to the development and management agreement with the Shingle Springs Tribe were considered fully impaired and were written down to zero resulting in Lakes recognizing an impairment charge of $2.4 million during the third quarter of 2013.
During the third quarter of 2013, property operating expenses for Rocky Gap, which primarily related to gaming operations, rooms, food and beverage and golf, were $8.2 million. During the third quarter of 2012, property operating expenses for Rocky Gap, which primarily related to rooms, food and beverage and golf were $0.8 million. The increase in property operating expenses resulted primarily from the inclusion of gaming-related expenses in the current year quarter. Gaming commenced in May 2013, therefore, there were no such expenses in the prior year third quarter. In addition, because Rocky Gap was acquired on August 3, 2012, the prior year third quarter included only a partial quarter of operating expenses.
For the third quarter of 2013, selling, general and administrative expenses were $5.4 million compared to $2.8 million for the third quarter of 2012. Included in these amounts were Lakes corporate selling, general and administrative expenses of $1.3 million and $2.0 million during the third quarters of 2013 and 2012, respectively. The decrease in Lakes corporate selling, general and administrative expenses was due primarily to a decrease in professional fees as well as decreases in payroll and related expenses and travel expenses. Rocky Gap selling, general and administrative expenses were $4.1 million and $0.8 million during the third quarters of 2013 and 2012, respectively. The increase in Rocky Gap selling, general and administrative expenses was due primarily to increases in professional fees, marketing and advertising expenses, and payroll and related expenses related to the addition of gaming during May 2013.
Lakes recognized impairments and other losses of $3.4 million during the three months ended September 29, 2013 compared to $2.0 million during the three months ended September 30, 2012. Included in the current year impairments were $2.4 million related to the intangible assets associated with the development and management agreement with the Shingle Springs Tribe. In addition, receivables of approximately $1.0 million from related parties, that are directly related to the development and opening of Lakes’ Indian casino projects, were determined to be uncollectible and were impaired during the three months ended September 29, 2013. The prior period impairments and other losses included $1.3 million related to the write-down of land held for sale near Vicksburg, Mississippi to its agreed upon sale price as well as $0.7 million related to costs associated with development plans for Rocky Gap which were subsequently revised.
Depreciation and amortization was $0.8 million for the three months ended September 29, 2013 compared to $0.2 million for the three months ended September 30, 2012. The increase related to depreciation on Rocky Gap fixed assets.
The Company has existing net operating loss carry forwards of approximately $57.0 million related to prior years, that are available to offset future taxable income. In addition, during 2013, as a result of the Debt Termination Agreement and the discount in the amount received on the Shingle Springs Notes compared to their face value, the Company expects a tax deduction of approximately $13.0 million.
There was no income tax provision for the third quarter of 2013 because the Company released valuation allowance against deferred tax assets relating to taxable losses available to offset current income. The $0.1 million income tax benefit for the third quarter of 2012 related primarily to current income tax benefit.
Nine Month Results
Net earnings for the nine months ended September 29, 2013 were $19.5 million, compared to net earnings of $1.2 million for the nine months ended September 30, 2012. Earnings from operations were $15.6 million for the nine months ended September 29, 2013 compared to losses of $5.2 million for the nine months ended September 30, 2012. Basic and diluted earnings per share were $0.74 and $0.73, respectively for the nine months ended September 29, 2013 compared to basic and diluted earnings of $0.05 per share for the nine months ended September 30, 2012.
Lakes Entertainment reported net revenues of $27.3 million for the first nine months of 2013, compared to net revenues of $8.1 million for the prior year period. Included in these amounts were net revenues of $19.5 million and $1.7 million for the nine months ended September 29, 2013 and September 30, 2012, respectively, related to the operation of Rocky Gap. Also contributing to the increase in net revenues was an additional $1.4 million in management fees earned during the first nine months of 2013 compared to the prior year period related to the Red Hawk Casino.
During the first nine months of 2013, property operating expenses for Rocky Gap which primarily related to gaming operations, rooms, food and beverage and golf were $12.2 million. During the first nine months of 2012, property operating expenses for Rocky Gap, which primarily related to rooms, food and beverage and golf were $0.8 million. The increase in property operating expenses resulted primarily from the inclusion of gaming-related expenses in the current year period. Gaming commenced in May 2013, therefore, there were no such expenses in the prior year period. In addition, because Rocky Gap was acquired on August 3, 2012, the prior year period included operating expenses beginning on the date of acquisition.
For the nine months ended September 29, 2013, selling, general and administrative expenses were $13.8 million compared to $7.1 million for the nine months ended September 30, 2012. Included in these amounts were Lakes corporate selling, general and administrative expenses of $5.3 million and $5.9 million, for the first nine months of 2013 and 2012, respectively. The decrease in Lakes corporate selling, general and administrative expenses was due primarily to a decrease in payroll and related expenses and travel expenses. Rocky Gap selling, general and administrative expenses were $8.5 million and $1.2 million during the first nine months of 2013 and 2012, respectively. The increase in Rocky Gap selling, general and administrative expenses was due primarily to increases in professional fees, marketing and advertising expenses, and payroll and related expenses related to the addition of gaming during May 2013.
As a result of the receipt of the Debt Payment, during the third quarter of 2013, Lakes recognized approximately $17.4 million in recovery of impairment charges because the Shingle Springs Notes had previously been impaired and were valued at $39.7 million as of the Payment Date.
During the nine months ended September 29, 2013, Lakes also recognized a gain of $3.8 million on extinguishment of liabilities associated with contract acquisition costs related to the project with the Tribe that were no longer owed upon the termination of the management agreement between Lakes and the Tribe.
Lakes recognized impairments and other losses of $3.4 million during the nine months ended September 29, 2013 compared to $4.3 million during the nine months ended September 30, 2012. Included in the current year impairments were $2.4 million related to the intangible assets associated with the development and management agreement with the Shingle Springs Tribe, which were considered fully impaired upon the termination of the management agreement on August 29, 2013 and were written down to zero. In addition, receivables of approximately $1.0 million from related parties, that are directly related to the development and opening of Lakes’ Indian casino projects, were determined to be uncollectible and were impaired during the nine months ended September 29, 2013. The prior period impairments and other losses included $1.8 million due to the termination of Lakes’ agreement with the Jamul Indian Village for a project near San Diego, California and $1.3 million related to the write-down of land held for sale near Vicksburg, Mississippi to its agreed upon sale price as well as $1.2 million related to costs associated with development plans for Rocky Gap which were subsequently revised.
During the nine months ended September 29, 2013, Lakes recognized preopening expenses of $1.2 million related to the Rocky Gap project. There were no preopening expenses during the prior year period.
Depreciation and amortization was $1.5 million for the nine months ended September 29, 2013 compared to $0.3 million for the nine months ended September 30, 2012. The increase related to depreciation on Rocky Gap fixed assets.
There was no income tax provision for the nine months ended September 29, 2013 because the Company released valuation allowance against deferred tax assets relating to taxable losses available to offset current income. The $2.2 million income tax benefit for the prior year period was primarily due to the Company’s ability to carry back its estimated 2012 taxable loss to a prior year and receive a refund of taxes previously paid.
Tim Cope, President and Chief Financial Officer of Lakes stated, "We are pleased that during the third quarter, our Rocky Gap Casino Resort near Cumberland, Maryland, met our expectations for both gross casino revenues of $10.4 million and other gross operating revenues of $4.2 million and while this casino space is still newly opened we are encouraged by its recent results. Construction of a new event center at Rocky Gap has stayed on track and will be available for use beginning next week. The new event center will be able to accommodate large groups and will feature multiple flexible use meeting rooms. We look forward to expanding our business with this new amenity. The gaming facility features 558 video lottery terminals, 10 table games, three poker tables, a casino bar and a new lobby food and beverage outlet. The AAA Four Diamond Award® winning property also includes a hotel, restaurants, spa, and the only Jack Nicklaus signature golf course in Maryland.”
Further commenting, Lyle Berman, Chief Executive Officer of Lakes stated, “During the third quarter, we received a cash payment of $57.1 million per the terms of our debt termination agreement with the Shingle Springs Tribe. Our management agreement for the Red Hawk Casino also terminated during the third quarter. With the receipt of the $57.1 million, we now have approximately $90 million in available funds on our balance sheet which allows us flexibility as we consider new investments in order to increase shareholder value.” Mr. Berman continued, “In addition, we continue to maintain a 10% ownership interest in Rock Ohio Ventures, LLC’s 80% ownership in the open and operating Horseshoe Casino Cleveland, the Horseshoe Casino Cincinnati, and the Thistledown Racino in North Randall, Ohio. We also effectively own 5% of the company that now owns the Dania Jai Alai fronton in Dania Beach, Florida. That company has a Florida gaming license and is in the development phase of expanding the existing property into a full scale casino operation.”
About Lakes Entertainment
Lakes Entertainment, Inc. currently owns the Rocky Gap Casino Resort near Cumberland, Maryland. Lakes also has an investment in Rock Ohio Ventures, LLC’s casino and racino developments in Ohio, and an investment in Dania Entertainment Center, LLC’s Dania Jai Alai fronton in Dania Beach, Florida.
The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. Certain information included in this press release (as well as information included in oral statements or other written statements made or to be made by Lakes Entertainment, Inc.) contains statements that are forward-looking, such as statements relating to plans for future expansion and other business development activities as well as other capital spending, financing sources and the effects of regulation (including gaming and tax regulation) and competition. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ from those expressed in any forward-looking statements made by or on behalf of the company. These risks and uncertainties include, but are not limited to, need for potential future financing to meet Lakes’ development needs; Lakes operates in a highly competitive industry; possible changes in regulations; possible need for future financing to meet Lakes' expansion goals; risks of entry into new businesses; reliance on Lakes' management; and litigation costs. For more information, review the company's filings with the Securities and Exchange Commission.
LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
September 29, 2013 December 30, 2012
Assets
Current assets:
Cash and cash equivalents $ 41,932 $ 32,480
Short-term investments 48,951 -
Income taxes receivable 2,166 2,161
Prepaid expenses 1,097 186
Other 1,096 1,069
Total current assets 95,242 35,896
Property and equipment, net 29,932 13,279
Long-term assets related to Indian casino projects:
Notes and interest receivable, net of current portion and allowance - 38,247
Intangible assets - 3,127
Management fees receivable and other - 4,786
Total long-term assets related to Indian casino projects - 46,160
Other assets:
Investment in unconsolidated investee 20,997 20,161
License fee 2,050 2,100
Land held for development 1,130 1,130
Other 931 996
Total other assets 25,108 24,387
Total assets $ 150,282 $ 119,722
Liabilities and shareholders' equity
Current liabilities:
Current portion of contract acquisition costs payable, net $ - $ 1,265
Current portion of long-term debt 794 -
Other 4,379 2,978
Total current liabilities 5,173 4,243
Long-term debt, net 12,909 -
Long-term contract acquisition costs payable, net - 3,302
Total long-term liabilities 12,909 3,302
Total liabilities 18,082 7,545
Total shareholders' equity 132,200 112,177
Total liabilities and shareholders' equity $ 150,282 $ 119,722
LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Operations
(In thousands, except per share data)
Three months ended Nine months ended
September 29, 2013 September 30, 2012 September 29, 2013 September 30, 2012
Revenues:
Management fees $ 1,384 $ 1,885 $ 7,762 $ 6,331
Gaming 10,445 - 13,633 -
Room 1,849 763 2,728 763
Food and beverage 1,665 618 2,566 618
Other operating 647 358 1,154 358
License fees and other 26 15 66 51
Gross revenues 16,016 3,639 27,909 8,121
Less promotional allowances 524 - 564 -
Net revenues 15,492 3,639 27,345 8,121
Costs and expenses:
Gaming 6,037 - 8,055 -
Room 255 146 580 146
Food and beverage 1,393 471 2,455 471
Other operating 483 216 1,116 216
Selling, general and administrative 5,398 2,846 13,782 7,054
Recovery of impairment on notes receivable (17,382 ) - (17,382 ) -
Gain on extinguishment of liabilities (3,752 ) - (3,752 ) -
Impairments and other losses 3,356 1,986 3,356 4,314
Preopening expenses - - 1,163 -
Amortization of intangible assets related to Indian casino projects 187 264 716 792
Loss on disposal of property and equipment - - 143 -
Depreciation and amortization 759 229 1,476 335
Total costs and expenses (3,266 ) 6,158 11,708 13,328
Earnings (loss) from operations 18,758 (2,519 ) 15,637 (5,207 )
Other income (expense):
Interest income 1,276 1,614 4,770 4,775
Interest expense (450 ) (228 ) (922 ) (722 )
Other 15 55 25 113
Total other income, net 841 1,441 3,873 4,166
Earnings (loss) before income taxes 19,599 (1,078 ) 19,510 (1,041 )
Income tax benefit - (87 ) - (2,229 )
Net earnings (loss) including noncontrolling interest 19,599 (991 ) 19,510 1,188
Net loss attributable to noncontrolling interest - - - 61
Net earnings (loss) attributable to Lakes Entertainment, Inc. $ 19,599 $ (991 ) $ 19,510 $ 1,249
Other comprehensive loss (9 ) - (9 ) -
Comprehensive earnings (loss) $ 19,590 $ (991 ) $ 19,501 $ 1,249
Weighted-average common shares outstanding
Basic 26,464 26,441 26,449 26,438
Diluted 26,832 26,441 26,670 26,438
Earnings (loss) per share
Basic $ 0.74 $ (0.04 ) $ 0.74 $ 0.05
Diluted $ 0.73 $ (0.04 ) $ 0.73 $ 0.05
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.
Contact:.
.
Investor Relations Contact:
BPC Financial Marketing
John Baldissera, 800-368-1217
or
For Further Information Contact:
Lakes Entertainment, Inc.
Timothy Cope, 952-449-7030.
...
Entertainment Gaming Asia Inc. Reports Third Quarter 2013 Results and Provides Market Update
Business WirePress Release: Entertainment Gaming Asia Inc. – 12 hours ago..
HONG KONG--(BUSINESS WIRE)--
Entertainment Gaming Asia Inc. (EGT) (“Entertainment Gaming Asia” or “the Company”), a leading gaming company focused on emerging gaming markets in Pan-Asia, today reported operating results for the third quarter ended September 30, 2013 and reviewed recent corporate progress.
Highlights:
• Total consolidated revenue of $5.7 million for the third quarter of 2013
• Total revenue from gaming operations of $4.5 million for the third quarter of 2013
• Average consolidated win per unit per day (WUD) from slot operations of $108 for the third quarter of 2013
• Revenue from gaming products of $1.1 million for the quarter of 2013
• Adjusted EBITDA (earnings from continuing operations before interest, taxes, depreciation, amortization and non-cash charges) of $1.8 million for the third quarter of 2013
• Net loss of $309,000 for the third quarter of 2013
• Cash balance of $4.6 million and zero debt as of September 30, 2013
• Dreamworld Poipet achieved positive EBITDA for the third quarter of 2013
• Dolphin gaming chips and plaques current order pipeline of approximately $1.3 million in revenue
Clarence Chung, Chairman and Chief Executive Officer of Entertainment Gaming Asia, commented, “Gaming operations revenue improved slightly for the third quarter compared to the prior year period due to incremental revenue contribution from Dreamworld Poipet and improvement in Dreamworld Pailin, which offset declines in other slot operations.
“Dreamworld Poipet, a slot hall which we developed in an established regional gaming market in Cambodia, posted quarterly sequential improvement and contributed positive EBITDA to the quarter. Since the opening in May 2013, we have been focused on the implementation of targeted marketing programs to develop and expand a quality player base with a goal to capture a meaningful share of this vibrant market.
“Slot operations performance in the quarter was negatively impacted primarily by a decrease in revenue for our operations in NagaWorld and in the Philippines. In NagaWorld, we experienced lower player traffic levels as a result of events related to the national Cambodian elections held in July 2013 and, in the Philippines, we had higher jackpot payouts and increased competition from a major casino resort which opened in Manila earlier in the year.
“For Dreamworld Pailin, we have completed the repositioning of the operations to a leasing model. Under the new operating model, we have leased 10 gaming tables to a third-party operator. We believe this will allow us to leverage the operator’s existing player network in Thailand and provide us with an increase in quality player traffic. In addition, in early November 2013, we added semi-live multi-game electronic gaming tables with 30 seats, increasing the machine base from 58 to 88 seats. We placed these machines on a revenue sharing basis resulting in minimal capital investment to us. These changes to the operating model provide us recurring revenue and a substantially reduced cost structure.
“We believe our gaming products division provides a diversified revenue stream with attractive earnings potential. With the plant relocation completed, we booked approximately $1.1 million in revenue in the third quarter of 2013. Presently, we have a solid confirmed order pipeline for gaming chips and plaques of approximately $1.3 million in revenue and we are optimistic about the potential to secure some major orders in 2014.
“In addition, we recently expanded our gaming products offerings with several distribution agreements with third-party gaming suppliers. Adding to the product mix should further deepen our existing customer relationships and increase marketability to new customers. With a strong gaming chip and plaque product line and an expanding product mix, we are preparing to benefit from the expected growth in Asian gaming over the next several years.
“We believe that our business model offers growth potential and the ability to generate quality recurring cash flow. We are focused on building our resources as we actively seek new projects in the high-growth economies of Indo-China. With our established presence and strong relationships in our markets, we believe we have a solid foundation from which to capitalize on the growth opportunities in our target markets in Asia.”
Q3 2013 Financial Review
On March 28, 2013, the Company sold the portion of its subsidiary Dolphin Products Pty Limited business dedicated to the manufacture and sale of non-gaming plastic products, mainly automotive parts. All historical revenues and expenses associated with non-gaming plastic products operations for the periods presented have been reclassified as discontinued operations. Revenues of these non-gaming products and gaming chips and plaques were previously consolidated under the reporting segment “Other Products.” After the sale, the Company renamed “Other Products” as “Gaming Products,” which comprises its gaming chips and plaques operations.
Entertainment Gaming Asia’s third quarter of 2013 consolidated revenue was $5.7 million, a decrease of 9% compared to $6.2 million in the third quarter of 2012 primarily due to lower sales of gaming products. Gaming operations revenue was relatively unchanged at $4.5 million for the third quarter of 2013, up 1% from the prior year period.
The Company recorded $4.1 million in revenue for slot operations in the third quarter of 2013, essentially unchanged with the third quarter of 2012. Incremental revenue from Dreamworld Poipet, which officially opened in May 2013, offset declines in other slot operations during the quarter.
In Cambodia, the NagaWorld operations contributed $3.0 million in revenue and $201 in average WUD for the third quarter of 2013, down from $3.2 million and $216, respectively, in the prior year period. The decrease was due to lower player traffic levels primarily as a result of events related to the national Cambodian elections held in July 2013. Cambodia average WUD declined for the third quarter of 2013 compared to the prior year period primarily due to the addition of machines in Dreamworld Poipet, which have a lower average net win, and lower average WUD at NagaWorld.
In the Philippines, slot operations revenue declined due to higher jackpot payouts and increasing competition in the market. Despite the revenue decline, Philippine average WUD remained relatively stable compared with the prior year quarter due to a lower installed base with higher performing machines.
Slot Operations
Net Revenue to EGT (in millions) Q3:13 Q3:12 Y/Y ?
Cambodia (1) $3.3 $3.2 2%
Philippines $0.8 $0.9 -10%
Consolidated $4.1 $4.1 -1%
WUD (2) Q3:13 Q3:12 Y/Y ?
Cambodia (1) $126 $175 -28%
Philippines $73 $74 -1%
Consolidated $108 $132 -18%
EGM Seats in Operation 9/30/13 9/30/12 Y/Y ?
Cambodia (1) 1,133 839 35%
Philippines 565 581 -3%
Consolidated 1,698 1,420 20%
(1) Includes Dreamworld Poipet, which operates under a machine operation and participation agreement.
(2) Represents WUD for the Company’s slot machine operations. It excludes EGM seats in operation during venue soft open periods and applies revenue recognized on a cash basis in the calculation of WUD for venues for which revenues are recognized on a cash basis. During the third quarter of 2012, one venue in the Philippines recognized revenue on a cash basis. There were no material differences to average WUD figures for this period had these seats been included in the WUD calculations.
Casino operations, which comprised Dreamworld Pailin, contributed $432,000 to total gaming revenue for the third quarter of 2013, up from $340,000 in the prior year period and down from $907,000 in the second quarter of 2013. The quarterly sequential decline was due to lower player traffic levels as the Company decreased the use of high-cost tour group promoters during the period. Operating expense for Dreamworld Pailin was $703,000 for the third quarter of 2013, down from $1.2 million in the second quarter of 2013 due to cost reduction initiatives and lower player traffic. The full impact of these cost reduction initiatives is expected to be realized late in the fourth quarter of 2013.
Revenue from gaming products, which comprised the manufacture and sale of gaming chips and plaques, was $1.1 million in the third quarter of 2013, down from $1.7 million in the third quarter of 2012. The third quarter of 2013 was comprised solely of reorders from the Company’s growing customer base compared to the prior year period, which primarily included a $1.6 million order for a large rebranding for an existing customer. Given the ramping up of the new production facilities and further efforts to enhance production capacity and response time for large orders, the third quarter of 2013 results were not representative of the new cost structure for the Dolphin operations. The Company expects to achieve full efficiencies and a normalized cost structure for these operations in the next one to two quarters.
Entertainment Gaming Asia reported adjusted EBITDA of $1.8 million in the third quarter of 2013 compared to $2.1 million in the prior year period.
The Company reported a net loss from continuing operations of $309,000, or $0.01 per share, on a weighted average diluted share count of approximately 30.0 million in the third quarter of 2013. This compared to a net loss from continuing operations of $103,000 on a weighted average diluted share count of approximately 29.9 million for the third quarter of 2012.
The increase in net loss from continuing operations was primarily the result of lower slot operations revenue from NagaWorld, lower revenue and ramping up of production efficiencies for the gaming products division and foreign currency losses compared to gains in the prior year period. This negative differential in foreign exchange of approximately $94,000 was due to the strengthening of the U.S. dollar compared to foreign currencies in the markets in which the Company operates. The increase in net loss from continuing operations was partially offset by higher gross profit for the Company’s Philippine slot operations primarily due to an increase in fully depreciated gaming assets and slightly lower operating expenses in the third quarter of 2013.
Entertainment Gaming Asia is hosting a conference call and simultaneous webcast at 8:30 a.m. ET today, November 5, 2013, both of which are open to the general public. The conference call number is 800/734-4208 or 212/231-2919. Questions and answers will be reserved for call-in analysts and investors. Interested parties may also access the live call on the Internet at www.EGT-Group.com. Please allow 15 minutes to register and download and install any necessary software. Following its completion, a replay of the call can be accessed for thirty days on the Internet at www.EGT-Group.com.
About Entertainment Gaming Asia Inc.
Entertainment Gaming Asia Inc. (EGT) is a leading gaming company in Pan-Asia engaged in the development and operation of casinos and gaming venues in the Indo-China region under its “Dreamworld” brand as well as the leasing of electronic gaming machines on a revenue sharing basis to the gaming industry. The Company also manufactures and sells RFID and traditional gaming chips and plaques to major casinos under its “Dolphin” brand. For more information please visit www.EGT-Group.com.
Forward Looking Statements
This press release contains forward-looking statements concerning Entertainment Gaming Asia 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. Those forward-looking statements include statements regarding expectations for the Company’s slot operations business model, the earnings of the Pailin and Poipet gaming projects, the ability to reduce operating expenses for its casino operations in Pailin and otherwise realize the intended benefits of the strategic refocusing of its operations in Pailin, growth of the gaming industry in Asia, the Company’s ability to secure new casino and gaming projects and fund those projects, expectations for the Company’s gaming chips and plaques operations, the expected benefits from the relocation of the gaming chips and plaques operations to Hong Kong, the ability to expand its gaming products offerings and the prospects for the expanded customer base for the Company’s gaming chips and plaques. Such statements are subject to certain risks and uncertainties, and actual circumstances, events or results may differ materially from those projected in such forward-looking statements. Factors that could cause or contribute to differences include, but are not limited to, risks related to the Company’s ability to place gaming machines at significant levels and generate the expected amount of net win from the gaming machines placed, identify and implement successful marketing and promotional strategies at the Company’s casino and gaming projects and identify and successfully develop additional projects in the Indo-China region, acquire additional capital as and when needed, ability to obtain the needed approval by certain customers from local gaming authorities to continue their purchase of gaming chips and plaques from the Hong Kong facility on a timely basis or at all, identify and implement successful marketing and promotional strategies and obtain and fulfill significant purchase orders from the customers for the Company’s gaming chips and plaques, adapt to potential changes in gaming policies and political stability in the countries in which the Company operates and those other risks set forth in the Company’s annual report on Form 10-K for the year ended December 31, 2012 filed with the SEC on March 28, 2013 and subsequently filed quarterly reports on Form 10-Q. The Company cautions readers not to place undue reliance on any forward-looking statements. The Company does not undertake, and specifically disclaims any obligation to update or revise such statements to reflect new circumstances or unanticipated events as they occur.
- financial tables follow -
Entertainment Gaming Asia Inc.
Consolidated Statements of Comprehensive Income
(Unaudited)
Three-Month Periods Nine-Month Periods Ended
Ended September 30, September 30,
(amounts in thousands, except per share data) 2013 2012 2013 2012
Revenues:
Gaming operations, gross $ 4,546 $ 4,480 $ 15,505 $ 14,634
Less: promotional allowances — — — —
Gaming operations, net 4,546 4,480 15,505 14,634
Gaming products 1,106 1,718 2,695 3,228
Total revenues 5,652 6,198 18,200 17,862
Operating costs and expenses:
Cost of gaming operations
Gaming equipment depreciation 1,175 1,228 3,580 3,516
Casino contract amortization 613 617 1,851 1,847
Other gaming related intangibles amortization 63 63 189 189
Other operating costs 1,182 1,051 4,672 2,526
Cost of gaming products 1,131 1,526 3,172 2,756
Selling, general and administrative expenses 1,558 1,491 4,614 4,712
Stock-based compensation expenses 109 123 554 675
Gain on dispositions of assets — (2) — (31)
Impairment of assets — 42 — 114
Product development expenses 51 87 206 273
Depreciation and amortization 51 77 128 168
Total operating costs and expenses 5,933 6,303 18,966 16,745
(Loss)/income from continuing operations (281) (105) (766) 1,117
Other (expense)/income:
Interest expense and finance fees (1) (20) (5) (109)
Interest income — 4 4 32
Foreign currency (losses)/gains (39) 55 (228) 269
Other income/(expense) 1 (3) 11 22
Total other (expense)/income (39) 36 (218) 214
(Loss)/income from continuing operations before income tax expense (320) (69) (984) 1,331
Income tax benefit/(expense) 11 (34) (38) (124)
Net (loss)/income from continuing operations (309) (103) (1,022) 1,207
Net income/(loss) from discontinued operations, net of tax — 146 (2,080) 292
Net (loss)/income $ (309) $ 43 $ (3,102) $ 1,499
Basic and diluted earnings per share:
(Loss)/earnings from continuing operations $ (0.01) $ — $ (0.03) $ 0.04
(Loss)/earnings from discontinued operations, net of tax
$
— $ —
$
(0.07) $ 0.01
(Loss)/earnings $ (0.01) $ — $ (0.10) $ 0.05
Weighted average common shares outstanding
Basic 30,025 29,926 30,024 29,915
Diluted 30,025 29,926 30,024 30,793
Entertainment Gaming Asia Inc.
Consolidated Balance Sheets
September 30, December 31,
2013 2012
(amounts in thousands, except per share data) (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 4,640 $ 10,365
Accounts receivable, net 1,390 1,841
Other receivables 461 112
Inventories 1,443 2,047
Prepaid expenses and other current assets 310 387
Total current assets 8,244 14,752
Gaming equipment, net 9,275 9,724
Casino contracts 6,068 7,982
Property and equipment, net 9,170 6,170
Goodwill 362 380
Intangible assets, net 990 1,253
Contract amendment fees 261 342
Deferred tax assets — 201
Prepaids, deposits and other assets 2,646 2,914
Total assets $ 37,016 $ 43,718
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 557 $ 3,636
Amount due a related party 20 —
Accrued expenses 1,749 2,619
Income tax payable (26) —
Customer deposits and other current liabilities 853 656
Total current liabilities 3,153 6,911
Other liabilities 750 1,078
Deferred tax liability 137 137
Total liabilities 4,040 8,126
Stockholders’ equity:
Common stock, $.001 par value, 75,000,000 shares authorized; 30,024,662 and 29,974,662 shares issued and outstanding, respectively 30 30
Additional paid-in-capital 32,922 32,224
Accumulated other comprehensive income 717 929
(Accumulated losses)/retained earnings since January 1, 2011 ($386.1 million accumulated deficit eliminated upon quasi-reorganization) (694) 2,408
Total EGT stockholders’ equity 32,975 35,591
Non-controlling interest 1 1
Total stockholders’ equity 32,976 35,592
Total liabilities and stockholders’ equity $ 37,016 $ 43,718
Entertainment Gaming Asia Inc.
Adjusted EBITDA from Continuing Operations
(Unaudited)
Three-Month Periods Ended Nine-Month Periods Ended
September 30, September 30,
(amounts in thousands) 2013 2012 2013 2012
Net (loss)/income from continuing operations – GAAP $ (309) $ (103) $ (1,022) $ 1,207
Interest expense and finance fees 1 20 5 109
Interest income — (4) (4) (32)
Income tax (benefit)/expense (11) 34 38 124
Depreciation and amortization 2,008 2,014 5,974 5,783
Stock-based compensation expenses 109 123 554 676
Impairment of assets — 42 — 114
Gain on dispositions of assets — (2) — (31)
EBITDA from continuing operations, as adjusted
$
1,798
$
2,124
$
5,545
$
7,950
Adjusted EBITDA is earnings before interest, taxes, depreciation, amortization, stock-based compensation, and other non-cash operating income and expenses. Adjusted 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 EBITDA as a measure of the operating performance of its segments and to compare the operating performance of its operations with those of its competitors. The Company also presents Adjusted 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 generally accepted accounting principles in the United States (“GAAP”). Adjusted 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/(loss), Adjusted 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 compensates for these limitations by using Adjusted EBITDA as only one of several comparative tools, together with GAAP measurements, to assist in the evaluation of operating performance. Such GAAP measurements include operating income, net income/(loss), cash flows from operations and cash flow data. 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 EBITDA. Entertainment Gaming Asia’s calculation of Adjusted EBITDA may be different from the calculation methods used by other companies and, therefore, comparability may be limited.
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.
Contact:.
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Entertainment Gaming Asia Inc.
Traci Mangini
tracimangini@EGT-Group.com
The "Street" has LGF coming in at -.02 for the quarter that should be reported on or about November 08, 2013! All post's welcome! The "Good Dr's In"!
LIONSGATE TO RELEASE FISCAL YEAR 2014 SECOND QUARTER EARNINGS AND TO HOLD ANALYST AND INVESTOR CONFERENCE CALL PREMARKET ON FRIDAY, NOVEMBER 8, 2013
PR NewswirePress Release: Lionsgate – Wed, Oct 30, 2013 8:00 AM EDT..
SANTA MONICA, Calif. and VANCOUVER, British Columbia, Oct. 30, 2013 /PRNewswire/ -- Lionsgate (LGF), a leading global entertainment company, today announced it will release its financial results for the second quarter of fiscal year 2014 (quarter ended September 30, 2013) premarket on Friday, November 8, 2013.
(Logo: http://photos.prnewswire.com/prnh/20130919/LA83194LOGO)
Lionsgate senior management will hold its analyst and investor conference call to discuss its second quarter fiscal 2014 financial results at 9:00 A.M. ET/6:00 A.M. PT on Friday, November 8, 2013. Interested parties may participate live in the conference call by calling 1-800-230-1951 (612-332-0228 outside the U.S. and Canada). A full digital replay will be available from Friday morning, November 8, through Friday, November 15, by dialing 1-800-475-6701 (320-365-3844 outside the U.S. and Canada) and using access code 305585.
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 30 television shows on 20 different 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 broadcast network series Nashville, the syndication success The Wendy Williams Show and the critically-acclaimed new series Orange Is The New Black.
Its feature film business has been fueled by such recent successes as the blockbuster first installment of The Hunger Games franchise, The Twilight Saga Breaking Dawn – Part 2, Now You See Me, Kevin Hart: Let Me Explain, Warm Bodies, Snitch, Texas Chainsaw 3D, The Expendables 2, The Possession, Sinister, Arbitrage and Pantelion Films' breakout hit Instructions Not Included, the highest-grossing Spanish-language film ever 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
PhotoMedex Reports Second Quarter 2013 Financial Results
Net Income Up 68%, Diluted EPS Up 70%, XTRAC Revenues Up 104%
Gross Margin Expands in all Business Segments
Board Authorizes Additional $30 Million Share Repurchase Program
Business WirePress Release: PhotoMedex, Inc. – Wed, Aug 7, 2013 8:30 AM EDT..
PhotoMedex, Inc. (PHMD) today reported financial results for the three and six months ended June 30, 2013. Financial highlights of the 2013 second quarter and first half include:
• First half 2013 revenues of $115.3 million, an increase of 5.6% compared with the prior-year first half, net income of $14.3 million, an increase of 57.7%, and diluted EPS of $0.68, an increase of 51.1%
• Second quarter 2013 revenues of $58.1 million, a decrease of 1.4% compared with the prior-year second quarter and an increase of 1.5% sequentially
• XTRAC® treatment revenues of $4.0 million, an increase of 103.5% compared with the prior-year second quarter and an increase of 56.6% sequentially
• XTRAC® recurring revenue U.S. installed base of 446 at quarter end, an increase of 45 placements during the quarter, including 22 on the Comeback program of previously sold systems
• NEOVA® skin care revenues of $3.1 million, including $1.0 million of NEOVA® consumer revenues, an increase of 42.1% compared with the prior-year second quarter and an increase of 7.8% sequentially
• Consumer revenues of $48.7 million, a decrease of 3.5% compared with the prior-year second quarter and a decrease of 0.8% sequentially
• Direct-to-consumer channel revenues of $30.3 million, a decrease of 10.0% compared with the prior-year second quarter and a decrease of 4.4% sequentially
• Global retail and home shopping channel revenues of $9.9 million, an increase of 1.6% compared with the prior-year second quarter and a decrease of 17.7% sequentially
• Distributor consumer channel revenues of $8.4 million, an increase of 20.4% compared with the prior-year second quarter and an increase of 59.4% sequentially
• Gross profit of $46.7 million, an increase of 0.3% compared with the prior-year second quarter
• Gross margin of 80.4%, compared with 79.0% in the prior-year second quarter
• Pre-tax income of $9.0 million, an increase of 77.0% compared with the prior-year second quarter
• Earnings per diluted share of $0.34, an increase of 70.0% compared with the prior-year second quarter
• Net income of $7.1 million, an increase of 68.4% compared with the prior-year second quarter
• Non-GAAP adjusted income of $11.8 million or $0.56 per diluted share, an increase of 43.6%, compared with the prior-year second quarter
• Board of Directors authorized an additional $30 million common stock share repurchase program
Reported Financial Results
Revenues for the second quarter of 2013 were $58.1 million, a decrease of 1.4% compared with revenues for the second quarter of 2012 of $58.9 million.
Net income for the second quarter of 2013 was $7.1 million or $0.34 per diluted per share, which included $1.3 million in stock-based compensation expense and $1.5 million in depreciation and amortization expense. This compares with net income for the second quarter of 2012 of $4.2 million or $0.20 per diluted share, which included $1.5 million in stock-based compensation expense and $1.4 million in depreciation and amortization expense.
Revenues for the six months ended June 30, 2013 were $115.3 million, an increase of 5.6% compared with revenues for the six months ended June 30, 2012 of $109.2 million.
Net income for the six months ended June 30, 2013 was $14.3 million or $0.68 per diluted per share, which included $2.6 million in stock-based compensation expense and $3.0 million in depreciation and amortization expense. This compares with net income for the six months ended June 30, 2012 of $9.1 million or $0.45 per diluted share, which included $3.3 million in stock-based compensation expense and $2.8 million in depreciation and amortization expense.
As of June 30, 2013 the Company had cash and cash equivalents of $62.5 million or $2.97 per diluted share, compared with $62.3 million as of December 31, 2012. During the second quarter the Company repurchased 324,758 shares of its common stock in the open market at an average price of $16.53 per share, for a total of $5.4 million. Current assets included $28.6 million in accounts receivable, compared with $19.1 million as of December 31, 2012. The increase in accounts receivables was largely due to the timing of $5.2 million of second quarter shipments related to television home shopping special events in Europe and North America, as well as a $5.3 million site letter of credit not collected until after the quarter had ended.
Management expects revenues for the third quarter of 2013 to be in line with second quarter 2013 revenues.
Dr. Dolev Rafaeli, PhotoMedex CEO, commented, “We are pursuing the next major phase of our growth strategy through expansion of the no!no! brand into Brazil and continued ramp-up in Germany, while building the domestic XTRAC business to critical mass by expanding our patient marketing campaigns and installed base of systems. XTRAC advertising has now been rolled out nationally. Our second quarter XTRAC revenues, which more than doubled over the prior year, show the successful execution of our plan.”
Dr. Rafaeli added, “We are very pleased with the earnings and cash flow we have been consistently generating, and with our ability to increase or decrease our media spend as warranted by market conditions and with a focus on driving profitability. During the quarter our U.S. consumer revenues were impacted by the attack during the Boston Marathon and by the tornados in Oklahoma, which muted the response to our domestic consumer advertising programs as our target customers were engaged with these events yet our advertising expenditures had already been committed. Our efforts to cross-sell the Neova skincare line to the consumer market have been very successful, with sales of more than $1.0 million this quarter representing a 10-fold increase in one year.”
Share Repurchase Expanded
Last year on August 18, 2012 the Company announced that its Board of Directors authorized the repurchase of its common shares on the open market during the ensuing 12 months. It is expected that by the 2013 anniversary date of this program, the Company will have fulfilled the $25 million limit under this program. Consequently, the Board of Directors has authorized an additional $30 million share repurchase program of its common shares in the open market over the next 12 months, at such times and prices as determined appropriate by the Company's management in collaboration with the Board of Directors. The shares will be purchased with cash on hand.
“The expansion of our share repurchase program by a further $30 million is reflective of the confidence we have in the growth of PhotoMedex, our ability to generate free cash flow and our commitment to building shareholder value,” Dr. Rafael concluded.
A reconciliation of non-GAAP financial measures to GAAP financial measures, and a presentation of the most directly comparable GAAP financial measures are included below.
Non-GAAP Measures
To supplement PhotoMedex’s consolidated financial statements presented in accordance with GAAP, PhotoMedex provides certain non-GAAP measures of financial performance. These non-GAAP measures include non-GAAP adjusted income and non-GAAP adjusted income per share.
PhotoMedex’s 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 current financial performance and to provide further information for comparative purposes.
Specifically, the Company believes 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 the Company’s core operating results and business outlook. In addition, PhotoMedex believes non-GAAP measures enhance the comparability of results against prior periods. Reconciliation to the most directly comparable GAAP measure of all non-GAAP measures included in this press release is as follows:
(Unaudited)
Three Months Ended June 30, Six Months Ended June 30,
(ooo's) except per share amounts 2013 2012 2013 2012
Net income as reported $ 7,094 $ 4,213 $ 14,306 $ 9,070
Adjustments:
Depreciation and amortization expense 1,517 1,389 2,959 2,771
Interest expense, net 4 219 9 408
Income tax expense 1,897 866 4,408 1,106
EBITDA $ 10,512 $ 6,687 $ 21,682 $ 13,355
Stock-based compensation expense 1,294 1,535 2,584 3,288
Non-GAAP adjusted income $ 11,806 $ 8,222 $ 24,266 $ 16,643
Fully diluted shares outstanding at June 30 21,033 21,035 21,085 19,942
Non-GAAP adjusted income per share $ 0.56 $ 0.39 $ 1.15 $ 0.83
Conference Call
PhotoMedex will hold a conference call to discuss the Company's second quarter 2013 results and answer questions today, August 7, 2013 beginning at 11:00 a.m. Eastern time.
To participate in the conference call, dial toll-free 800-894-5910 or International/toll 785-424-1052 (and confirmation code # 5523007). For the convenience of participants in Israel, a local/toll-free number (1-80-925-6145) has been set up (the confirmation code remains the same # 5523007). If you are unable to participate, a replay of the call will be available from 2:00 p.m. Eastern time Wednesday, August 7 to 2:00 p.m. Eastern time Wednesday, August 21 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 # 5523007.
The live broadcast of PhotoMedex, Inc.'s quarterly conference call 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 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.
SAFE HARBOR STATEMENT
Some portions of the conference call, particularly those describing PhotoMedex' 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. In addition, there are risks and uncertainties related to successfully integrating the products and employees of the Company and Radiancy, as well as the ability to ensure continued regulatory compliance, performance and/or market growth. These risks, uncertainties and other factors, and the general risks associated with the businesses of the Company 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. The Company cautions readers not to rely on these forward-looking statements. All forward-looking statements are based on information currently available to the Company and are qualified in their entirety by this cautionary statement. The Company anticipates that subsequent events and developments will cause its views to change. The information contained in this conference call speaks as of the date hereof and the Company has or undertakes no obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.
-- Financial Statements follow --
PHOTOMEDEX, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended June 30, Six Months Ended June 30,
(ooo's) except per share amounts 2013 2012 2013 2012
Revenues $ 58,065 $ 58,906 $ 115,281 $ 109,179
Cost of revenues 11,390 12,355 23,256 23,589
Gross profit 46,675 46,551 92,025 85,590
Operating expenses:
Selling and marketing 30,468 31,068 59,794 56,903
General and administrative 6,268 9,243 11,927 16,362
Research and development and engineering 814 760 1,587 1,518
37,550 41,071 73,308 74,783
Operating income 9,125 5,480 18,717 10,807
Interest and other financing income (expense), net (134 ) (401 ) (3 ) (631 )
Income before taxes expense 8,991 5,079 18,714 10,176
Income tax expense (benefit) 1,897 866 4,408 1,106
Net income 1 $ 7,094 $ 4,213 $ 14,306 $ 9,070
Net income per share:
Basic 0.34 0.21 0.69 0.47
Diluted 0.34 0.20 0.68 0.45
Shares used in computing net income per share:
Basic 20,573 20,547 20,625 19,455
Diluted 21,033 21,035 21,085 19,942
1 Includes: depreciation and amortization 1,517 1,389 2,959 2,771
Share-based compensation expense 1,294 1,535 2,584 3,288
CONSOLIDATED STATEMENTS OF REVENUES
(UNAUDITED)
(ooo's) For the Three Months ended:
June 30, 2013 March 31, 2013 June 30, 2012
Consumer:
Direct $ 30,320 $ 31,722 $ 33,696
Distributors 8,435 5,291 7,007
Retailer and home shopping channels 9,918 12,047 9,761
sub-total 48,673 49,060 50,464
Physician Recurring
XTRAC treatments 4,024 2,569 1,977
Skin care 2,142 2,226 2,135
Other 1,210 1,160 1,162
sub-total 7,376 5,955 5,274
Professional 2,016 2,201 3,168
Total Revenues $ 58,065 $ 57,216 $ 58,906
PHOTOMEDEX, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(000's)
June 30, 2013 December 31, 2012
Assets
Cash, cash equivalents, and short-term investments $ 62,485 $ 62,348
Accounts receivable, net 28,548 19,064
Inventories 22,741 22,467
Other current assets 27,519 32,294
Property and equipment, net 8,857 6,759
Other non-current assets 64,982 68,958
Total Assets $ 215,132 $ 211,890
Liabilities and Stockholders' Equity
Accounts payable and accrued liabilities $ 27,762 $ 34,618
Other current liabilities 6,478 5,259
Bank and lease notes payable 374 619
Other liabilities 3,451 4,067
Stockholders' equity 177,067 167,327
Total Liabilities and Stockholders' Equity $ 215,132 $ 211,890
PHOTOMEDEX, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Six Months Ended
June 30
2013 2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 14,306 $ 9,070
Adjustments to reconcile net income to net cash provided by operating
activities--
Depreciation and amortization 2,959 2,771
Provision for doubtful accounts 2,125 2,091
Deferred income taxes 1,982 (1,234 )
Stock-based compensation 2,584 3,288
Changes in assets and liabilities:
(Increase) decrease in--
Current Assets (8,357 ) (23,717 )
Current liabilities (6,079 ) 10,076
Net cash provided by operating activities 9,520 2,345
CASH FLOWS FROM INVESTING ACTIVITIES:
Lasers placed in service (2,780 ) (949 )
Purchases of PP&E, net (474 ) (218 )
Other (3,285 ) (63 )
Net cash used in investing activities (6,539 ) (1,230 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of options/issuance (share-purchase) of securities, net (5,358 ) 37,651
Repayments of debt (432 ) (2,349 )
Net cash (used in) provided by financing activities (5,790 ) 35,302
EFFECT OF EXCHANGE RATE CHANGES ON CASH (239 ) (80 )
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (3,048 ) 36,337
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 44,348 16,549
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 41,300 $ 52,886
Supplemental information:
Cash paid for income taxes $ 4,381 $ 10,922
Cash paid for interest $ 11 $ 77
.
.
Contact:.
.
LHA
Kim Sutton Golodetz, 212-838-3777
Kgolodetz@lhai.com
or
Bruce Voss, 310-691-7100
Bvoss@lhai.com
@LHA_IR_PR
or
PhotoMedex, Inc.
Dennis McGrath, 215-619-3287
Chief Financial Officer
info@photomedex.com
Lakes Entertainment to Host Conference Call and Webcast on Results for Third Quarter 2013
Business WirePress Release: Lakes Entertainment, Inc. – 9 hours ago..
MINNEAPOLIS--(BUSINESS WIRE)--
Lakes Entertainment, Inc. (LACO) announced it will host a conference call and webcast to discuss the Company's third quarter 2013 financial results on Wednesday, November 6, 2013, at 1:00 p.m. Central Time (2:00 p.m. Eastern). The Company will issue financial results prior to the call.
Chairman of the Board and Chief Executive Officer Lyle Berman, and President and Chief Financial Officer Tim Cope, will recap the third quarter results and provide a business update.
WHEN:
Wednesday, November 6, 2013
Conference Call: 1:00 p.m. Central Time (2:00 p.m. Eastern Time)
Dial-in Number: 866-318-8612
Passcode: 91758043
WEBCAST: To listen to a live webcast of the conference call, go to Lakes' web site, www.lakesentertainment.com, and click on "Conference Call."
The webcast replay will be available from 5:00 p.m. Central Time, November 6, 2013, until 12:00 p.m. Central Time on November 20, 2013, on the Lakes Entertainment website at www.lakesentertainment.com. Listening to the webcast requires speakers and Windows Media Player. If you do not have Media Player, download the free software at www.windowsmedia.com.
If you do not have Internet access and want to listen to an audio replay, call 888-286-8010 and enter conference call code 13013268. The audio replay will be available beginning at 5:00 p.m. Central Time, November 6, 2013, until 12:00 p.m. Central Time, November 20, 2013.
About Lakes Entertainment
Lakes Entertainment, Inc. currently owns the Rocky Gap Casino Resort near Cumberland, Maryland. Lakes also has an investment in Rock Ohio Ventures, LLC’s casino and racino developments in Ohio, and an investment in Dania Entertainment Center, LLC’s Dania Jai Alai fronton in Dania Beach, Florida.
The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. Certain information included in this press release (as well as information included in oral statements or other written statements made or to be made by Lakes Entertainment, Inc.) contains statements that are forward-looking, such as statements relating to plans for future expansion and other business development activities as well as other capital spending, financing sources and the effects of regulation (including gaming and tax regulation) and competition. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ from those expressed in any forward-looking statements made by or on behalf of the company. These risks and uncertainties include, but are not limited to, need for potential future financing to meet Lakes’ development needs; Lakes operates in a highly competitive industry; possible changes in regulations; possible need for future financing to meet Lakes' expansion goals; risks of entry into new businesses; reliance on Lakes' management; and litigation costs. For more information, review the company's filings with the Securities and Exchange Commission.
.
.
Contact:.
.
Investor Relations Contact:
BPC Financial Marketing
John Baldissera, 800-368-1217
or
For Further Information Contact:
Lakes Entertainment, Inc.
Timothy Cope, 952-449-7030
..
Jewett-Cameron Announces Fiscal 2013 Financial Results
PR NewswirePress Release: Jewett-Cameron Trading Company Ltd. –
NORTH PLAINS, Ore., Oct. 30, 2013 /PRNewswire/ -- Jewett-Cameron Trading Company Ltd. (JCTCF) today reported financial results for its fourth quarter and fiscal year ended August 31, 2013.
For the fiscal year ended August 31, 2013 Jewett-Cameron reported net income after other items and income taxes of $3,132,019, or $1.00 per diluted share, on sales of $49.29 million, compared to net income of $3,059,931, or $0.89 per diluted share, on sales of $45.95 million, reported for fiscal 2012. The net income in the current year was positively affected by a one-time gain on the sale of property of $353,852 and the prior year's net income was positively affected by litigation income and related interest of $1,457,096. Excluding other items and taxes, income from operations rose to $4,673,690 in fiscal 2013 from $3,563,140 in fiscal 2012.
Sales for the fourth quarter of fiscal 2013 totaled $10.7 million compared to sales of $10.8 million for the fourth quarter of fiscal 2012. The company reported net income of $842,078, or $0.27 per diluted share compared to net income of $771,034, or $0.23 per diluted share, in the fourth quarter of fiscal 2012. All per share amounts have been adjusted for the 2 for 1 stock split of the common shares effective May 2, 2013.
"Our higher sales were primarily due to successful sales efforts and the introduction of several new products," said CEO Don Boone. "We also completed an expansion of our North Plains warehouse which will more easily support the Company's sales growth."
As of August 31, 2013, the Company's cash position was $8.3 million, and currently there is no borrowing against its $5.0 million line of credit. During fiscal 2013, the company repurchased and cancelled a total of 1,006 common shares at a total cost of $7,188, which represents an average price of $7.15 per share.
About Jewett-Cameron Trading Company Ltd.
Jewett-Cameron Trading Company is a holding company that operates through subsidiary companies as follows. Jewett-Cameron Lumber Corporation is a wholesaler of wood products and a manufacturer and distributor of specialty metal products, sold principally to home centers and other retailers. Greenwood Products is a processor and distributor of industrial wood and other specialty building products principally to customers in the marine and transportation industries. MSI-PRO is an importer and distributor of pneumatic air tools, industrial clamps, and the Avenger Products line of sawblades and other products. Jewett-Cameron Seed Company is a processor and distributor of agricultural seeds.
Forward-looking Statements
The information in this release contains certain forward-looking statements that anticipate future trends and events. These statements are based on certain assumptions that may prove to be erroneous and are subject to certain risks, including but not limited to, the uncertainties of the Company's new product introductions, the risks of increased competition and technological change in the Company's industry, and other factors detailed in the Company's SEC filings. Accordingly, actual results may differ, possibly materially, from predictions contained herein.
JEWETT-CAMERON TRADING COMPANY LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Expressed in U.S. Dollars)
AS OF AUGUST 31
2013
2012
ASSETS
Current assets
Cash
$ 8,308,445
$ 7,309,388
Accounts receivable, net of allowance
of $Nil (August 31, 2012 - $6,509)
3,344,777
3,092,842
Inventory, net of allowance
of $134,259 (August 31, 2012 - $139,869) (note 3)
8,520,991
7,085,389
Note receivable
15,000
20,000
Prepaid expenses
587,609
388,957
Prepaid income taxes
270,423
-
Total current assets
21,047,245
17,896,576
Property, plant and equipment, net (note 4)
2,241,950
1,997,109
Intangible assets, net (note 5)
368,662
444,203
Deferred tax assets (note 6)
-
101,573
Total assets
$ 23,657,857
$ 20,439,461
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable
$ 1,715,458
$ 1,577,182
Litigation reserve (note 13(a))
144,103
170,819
Accrued liabilities
1,149,882
1,181,067
Accrued income taxes
-
37,203
Total current liabilities
3,009,443
2,966,271
Deferred tax liability (note 6)
50,393
-
Total liabilities
3,059,836
2,966,271
Contingent liabilities and commitments (note 13)
Stockholders' equity
Capital stock (note 8)
Authorized
21,567,564 common shares, without par value
10,000,000 preferred shares, without par value
Issued
3,134,936 common shares (August 31, 2012 - 3,135,942)
1,479,246
1,479,721
Additional paid-in capital
600,804
600,804
Retained earnings
18,517,971
15,392,665
Total stockholders' equity
20,598,021
17,473,190
Total liabilities and stockholders' equity
$ 23,657,857
$ 20,439,461
JEWETT-CAMERON TRADING COMPANY LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Expressed in U.S. Dollars)
YEAR ENDED AUGUST 31
2013
2012
SALES
$ 49,286,147
$ 45,945,530
COST OF SALES
39,455,054
37,306,129
GROSS PROFIT
9,831,093
8,639,401
OPERATING EXPENSES
Selling, general and administrative
1,503,226
1,463,550
Depreciation and amortization
256,487
244,216
Wages and employee benefits
3,397,690
3,368,495
5,157,403
5,076,261
Income from operations
4,673,690
3,563,140
OTHER ITEMS
Gain on sale of property, plant and equipment
353,852
-
Interest and other income
37,383
13,225
Litigation income (note 13(a))
-
1,443,629
391,235
1,456,854
Income before income taxes
5,064,925
5,019,994
Income taxes (note 6)
Current
1,780,940
1,903,774
Deferred
151,966
56,289
Net income for the year
$ 3,132,019
$ 3,059,931
Basic earnings per common share
$ 1.00
$ 0.89
Diluted earnings per common share
$ 1.00
$ 0.89
Weighted average number of common shares outstanding:
Basic
3,135,509
3,444,212
Diluted
3,135,509
3,444,212
JEWETT-CAMERON TRADING COMPANY LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in U.S. Dollars)
YEAR ENDED AUGUST 31
2013
2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net income for the year
$ 3,132,019
$ 3,059,931
Items not affecting cash:
Depreciation and amortization
256,487
244,216
Gain on sale of property, plant and equipment
(353,852)
-
Deferred income taxes
151,966
56,289
Litigation income
-
(1,443,629)
Interest income on litigation
(26,716)
(13,467)
Changes in non-cash working capital items:
Decrease (increase) in accounts receivable
(251,935)
804,244
Decrease in note receivable
5,000
21,500
Increase in inventory
(1,435,602)
(1,269,796)
Decrease (increase) in prepaid expenses
(198,652)
459,384
Decrease (increase) in prepaid income taxes
(270,423)
682,527
Increase in accounts payable and accrued liabilities
107,091
1,297,138
Increase (decrease) in accrued income taxes
(37,203)
37,203
Net cash provided by operating activities
1,078,180
3,935,540
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds on sale of property, plant and equipment
410,000
-
Purchase of property, plant and equipment
(481,935)
(311,670)
Purchase of intangible assets and other
-
(13,050)
Net cash used in investing activities
(71,935)
(324,720)
CASH FLOWS FROM FINANCING ACTIVITIES
Redemption of common stock
(7,188)
(3,075,559)
Net cash used in financing activities
(7,188)
(3,075,559)
Net increase in cash
999,057
535,261
Cash, beginning of year
7,309,388
6,774,127
Cash, end of year
$ 8,308,445
$ 7,309,388
Contact: Don Boone, President & CEO, (503) 647-0110
AZZ incorporated Reports the Death of Mr. David H. Dingus, President and Chief Executive Officer
AZZ incorporated Mourning Loss of David Dingus; Dana Perry to Assume Duties of President and Chief Executive Officer on Interim Basis
PR NewswirePress Release: AZZ incorporated – Mon, Oct 28, 2013 4:01 PM EDT..
FORT WORTH, Texas, Oct. 28, 2013 /PRNewswire/ -- AZZ incorporated (AZZ) today announced with great sadness the death of Mr. David H. Dingus, Director, President and Chief Executive Officer. Mr. Dingus died unexpectedly on Sunday, October 27 from medical complications related to pancreatic cancer. Mr. Dingus has served as the President and Chief Executive Officer of AZZ incorporated since 2001 and as a member of the Board of Directors of AZZ incorporated since 1999.
Kevern Joyce, Chairman of the Board of Directors of AZZ incorporated, said "The entire AZZ family is saddened by the news of David's death. We grieve David's passing and send our deepest condolences to his family."
The duties of the President and Chief Executive Officer of AZZ incorporated will be assumed on an interim basis by Mr. Dana Perry, the current Senior Vice President of Finance and Chief Financial Officer of AZZ incorporated until AZZ's board of directors appoints a successor to serve in such office on a long-term basis.
AZZ incorporated is a global provider of specialty electrical equipment and highly engineered services to the power generation, transmission, distribution, 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:
Dana Perry, Senior Vice President – Finance and CFO
AZZ incorporated 817-810-0095
Internet: www.azz.com
Lytham Partners 602-889-9700
Joe Dorame or Robert Blum
Internet: www.lythampartners.com
WisdomTree Announces Third Quarter 2013 Results
GlobeNewswirePress Release: WisdomTree Investments, Inc. – Fri, Oct 25, 2013 7:00 AM EDT..
Record net income $15.0 million up 230% from year ago quarter; Diluted EPS $0.11
Record revenues, up 83% from year ago quarter
$1.2 billion net inflows in quarter; Net inflow market share 2.1% in third quarter, 9.8% YTD
NEW YORK, Oct. 25, 2013 (GLOBE NEWSWIRE) -- WisdomTree Investments, Inc. (WETF), an exchange-traded fund ("ETF") sponsor and asset manager, today reported net income of $15.0 million for the third quarter of 2013, or $0.11 per share on a fully diluted basis. This compares to $4.5 million in the third quarter of 2012 and $12.2 million in the second quarter of 2013.
WisdomTree CEO and President Jonathan Steinberg commented, "WisdomTree continues to drive top line growth with $1.2 billion in net inflows in the quarter, comprised by balanced inflows across domestic, international and emerging market equity ETFs; as well as continued strength in our franchise-leading yen hedged Japan fund. We are effectively capitalizing on the greater awareness of our currency hedged equity family which is translating into significant asset growth in sister products. Importantly, we continue to position the company for future growth and have launched eight new ETFs so far this year."
Mr. Steinberg added, "As we continue to grow and reach economies of scale, we are demonstrating the powerful operating leverage in our business. WisdomTree's pre-tax margins reached 38% on a base of $30.5 billion in average assets under management."
Assets Under Management, Net Inflows and Market Share
ETF assets under management ("AUM") were $31.4 billion at September 30, 2013, up 86.8% from $16.8 billion at September 30, 2012, and up 8.2% from $29.0 billion at June 30, 2013. Net inflows for the third quarter of 2013 were $1.2 billion as compared to $1.0 billion in the third quarter of 2012 and $5.0 billion in the second quarter of 2013. WisdomTree's market share of industry net inflows was 2.1% in the third quarter of 2013 as compared to 2.0% in the third quarter of 2012 and 32.2% in the second quarter of 2013. For the first nine months of 2013, WisdomTree's market share was 9.8% as compared to 2.8% in the same period last year.
Summary Operating and Financial Highlights
Three Months Ended Change From
Operating Highlights ($, in billions): Sep. 30,
2013 Jun. 30,
2013 Sep. 30,
2012 Jun. 30,
2013 Sep. 30,
2012
ETF AUM $31.4 $29.0 $16.8 8.2% 86.8%
ETF net inflows $1.2 $5.0 $1.0 (76.6%) 12.0%
Average ETF AUM $30.5 $28.4 $15.8 7.3% 93.2%
Average ETF advisory fee 0.51% 0.52% 0.54% (.01) (0.3)
Market share of industry inflows 2.1% 32.2% 2.0% (30.1) +0.1
Financial Highlights ($, in millions, except per share amounts):
Total revenues $39.6 $37.3 $21.7 6.2% 83.0%
Net income $15.0 $12.2 $4.5 22.2% 230.1%
Diluted earnings per share $0.11 $0.09 $0.03 22.2% 266.7%
Proforma operating income (non-GAAP) $15.0 $12.2 $4.8 22.2% 214.9%
Gross margin1 (non-GAAP) 77% 74% 68% +3 +9
Pre-tax margin 38% 33% 21% +5 +17
Proforma pre-tax margin (non-GAAP) 38% 33% 22% +5 +16
Nine Months Ended
Operating Highlights ($, in billions): Sep. 30,
2013 Sep. 30,
2012
Change
ETF AUM $31.4 $16.8 86.8%
ETF net inflows $12.0 $3.7 227.1%
Average ETF AUM $26.9 $15.1 78.9%
Average ETF advisory fee 0.52% 0.54% (0.02)
Market share of industry inflows 9.8% 2.8% +7.0
Financial Highlights ($, in millions, except per share amounts):
Total revenues $106.3 $61.2 73.6%
Net income $35.1 $5.8 na
Diluted earnings per share $0.25 $0.04 na
Proforma operating income (non-GAAP) $35.1 $9.7 259.9%
Gross margin1 (non-GAAP) 75% 66% +9
Pre-tax margin 33% 9% +24
Proforma pre-tax margin (non-GAAP) 33% 16% +17
1 Gross margin is defined as total revenues less fund management and administration expenses and third-party sharing arrangements.
Recent Business Developments
• On July 25, 2013, WisdomTree announced the launch of the WisdomTree U.S. SmallCap Dividend Growth Fund (DGRS)
• On August 1, 2013, WisdomTree announced the launch of the WisdomTree Emerging Markets Dividend Growth Fund (DGRE)
• On September 12, 2013, WisdomTree announced the WisdomTree Japan Hedged SmallCap Equity Fund (DXJS) filed a notification with the Financial Services Agency of Japan and is now available for sale in Japan through Japanese securities companies
• On September 27, 2013, WisdomTree announced the launch of the WisdomTree Emerging Markets Consumer Growth Fund (EMCG)
• In September 2013, WisdomTree entered agreements to change fund administration and custody services from Bank of New York Mellon to State Street Bank and Trust Company, effective April 1, 2014
• On October 17, 2013, WisdomTree announced the launch of the WisdomTree Germany Hedged Equity Fund (DXGE)
Performance
In evaluating the performance of our equity approach, 41% of the $28.6 billion invested in our equity ETFs and 53% (21 of 40) of our equity ETFs outperformed their capitalization-weighted or competitive benchmarks since their respective inceptions as of September 30, 2013.
In evaluating the performance of our Equity, Fixed Income and Alternatives ETFs against actively managed and indexed based mutual funds and ETFs, 85% of the $30.8 billion invested in our ETFs and 55% (26 of 47) of our ETFs outperformed their comparable Morningstar average since inception as of September 30, 2013.
For more information about WisdomTree ETFs including standardized performance, please click here or visit www.wisdomtree.com.
Third Quarter Financial Discussion
Revenues
Total revenues increased 83.0% to a record $39.6 million as compared to the third quarter of 2012 and 6.2% compared to the second 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 third quarter of 2012 and 0.52% in the second 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 77% in the third quarter of 2013 as compared to 68% in the third quarter of 2012 and 74% in the second quarter of 2013.
Our pre-tax margin was 38% in the third quarter of 2013 as compared to 21% (or 22% proforma) in the third quarter of 2012 and 33% in the second quarter of 2013 reflecting the operating scale in our business model.
Expenses
Total expenses increased 44.0% to $24.7 million from $17.1 million in the third quarter of 2012. Included in the prior year quarter was $0.2 million of net costs related to patent litigation. Excluding this cost, total expenses increased 45.9% compared to the third quarter of 2012. Total expenses decreased 1.7% from $25.1 million in the second quarter of 2013.
• Compensation and benefits expense increased 68.3% to $9.6 million compared to the third quarter of 2012. This increase was primarily due to higher accrued incentive compensation due to our record level of net inflows on a year-to-date basis in 2013; higher headcount related expenses to support our growth; and higher stock based compensation expense due to equity awards granted to our employees as part of 2012 year-end compensation.
Compensation and benefits expense increased 2.1% compared to the second quarter of 2013 primarily due to payroll taxes as a result of option exercises as well as increased headcount. Partly offsetting these increases, was lower accrued incentive compensation due to our lower level of net inflows in the third quarter as compared to the second quarter of 2013.
Our headcount at the end of the third quarter of 2013 was 84 compared to 70 at the end of the third quarter of 2012 and 79 at the end of the second quarter of 2013.
• Fund management and administration expenses increased 55.1% to $8.8 million compared to the third 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 $2.3 million increase in variable fees charged by our third party service providers associated with AUM.
Fund management and administration expenses decreased 3.4% compared to the second quarter of 2013 primarily due to variable regulatory fees associated with net inflow levels. We also incurred higher expenses in the second quarter due to the annual rebalancing of our international equity ETFs.
• Marketing and advertising expenses increased $1.2 million to $2.0 million compared to the third quarter of 2012 primarily due to higher levels of advertising related activities to support our growth. This expense decreased 7.5% compared to the second quarter of 2013 due to lower levels of advertising related activities.
• Sales and business development expenses increased 57.0% to $1.3 million compared to the second quarter of 2012 primarily due to new product development related activities as well as higher levels of spending for sales related initiatives.
Sales and business development expenses decreased 14.1% compared to the second quarter of 2013 primarily due to lower level of sales related spending.
• Professional and consulting fees decreased 58.5% to $0.5 million compared to the third quarter of 2012 primarily due to lower variable stock based compensation, which ended as of the end of 2012. Professional and consulting fees decreased 17.5% compared to the second quarter of 2013 due to lower level of spending for business consultants.
• Occupancy, communication and equipment expense increased 93.3% to $0.7 million compared to the third quarter of 2012 and increased 22.3% compared to the second quarter of 2013. This increase was primarily due to costs for new office space which we will occupy in January 2014 as well as expense related to commercial rent tax.
• Third-party sharing arrangements expense decreased 68.7% to $0.4 million compared to the third quarter of 2012 due to the end of our joint venture with BNY Mellon discussed above.
Third-party sharing arrangements expense decreased 12.6% compared to the second quarter of 2013 due to lower inflow levels by our marketing agent in Latin America.
• Other expenses increased 35.5% to $1.2 million compared to the third quarter of 2012 and increased 9.7% compared to the second quarter of 2013 primarily due to higher general and administrative expenses.
Balance Sheet
As of September 30, 2013, WisdomTree had total assets of $118.3 million which consisted primarily of cash and cash equivalents of $87.1 million and investments of $11.6 million. There were approximately 129.4 million shares of common stock issued as of September 30, 2013. Fully diluted weighted average shares outstanding was approximately 140.0 million.
Conference Call
WisdomTree will discuss its results and operational highlights during a conference call on Friday, October 25, 2013 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 at September 30, 2013--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 June 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 54 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 $32.8 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 Nine Months Ended
Sept. 30,
2013 Jun. 30,
2013 Sept. 30,
2012 Jun. 30,
2013 Sept. 30,
2012 Sept. 30,
2013 Sept. 30,
2012 %
Change
Revenues
ETF advisory fees $ 39,437 $ 37,101 $ 21,440 6.3% 83.9% $ 105,691 $ 60,645 74.3%
Other income 193 230 221 -16.1% -12.7% 611 579 5.5%
Total revenues 39,630 37,331 21,661 6.2% 83.0% 106,302 61,224 73.6%
Expenses
Compensation and benefits 9,648 9,447 5,734 2.1% 68.3% 26,577 17,068 55.7%
Fund management and administration 8,794 9,106 5,671 -3.4% 55.1% 26,123 16,677 56.6%
Marketing and advertising 2,031 2,196 862 -7.5% 135.6% 6,164 3,736 65.0%
Sales and business development 1,305 1,520 831 -14.1% 57.0% 4,626 2,533 82.6%
Professional and consulting fees 542 657 1,305 -17.5% -58.5% 1,812 3,815 -52.5%
Occupancy, communication and equipment 723 591 374 22.3% 93.3% 1,691 1,050 61.0%
Depreciation and amortization 84 83 79 1.2% 6.3% 249 225 10.7%
Third party sharing arrangements 374 428 1,194 -12.6% -68.7% 913 4,168 -78.1%
Other 1,164 1,061 859 9.7% 35.5% 3,086 2,211 39.6%
ETF shareholder proxy -- -- -- n/a n/a -- 3,264 n/a
Patent litigation, net -- -- 219 n/a n/a -- 700 n/a
Total expenses 24,665 25,089 17,128 -1.7% 44.0% 71,241 55,447 28.5%
Income before provision for income taxes 14,965 12,242 4,533 22.2% n/a 35,061 5,777 n/a
Provision for income taxes -- -- --
-- --
Net income $ 14,965 $ 12,242 $ 4,533 22.2% n/a $ 35,061 $ 5,777 n/a
Net income per share - basic $ 0.12 $ 0.10 $ 0.04
$ 0.28 $ 0.05
Net income per share - diluted $ 0.11 $ 0.09 $ 0.03
$ 0.25 $ 0.04
Weighted average common shares - basic 126,509 125,771 123,214
125,909 121,445
Weighted average common shares - diluted 140,097 140,081 138,458
139,805 137,878
WISDOMTREE INVESTMENTS, INC.
NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands)
(Unaudited)
Three Months Ended Nine Months Ended
Sept. 30,
2013 Jun. 30,
2013 Sept. 30,
2012 Sept. 30,
2013 Sept. 30,
2012
Revenues
ETF advisory fees $ 39,437 $ 37,101 $ 21,440 $ 105,691 $ 60,645
Other income 193 230 221 611 579
Total revenues 39,630 37,331 21,661 106,302 61,224
Operating expenses
Compensation and benefits 9,648 9,447 5,734 26,577 17,068
Fund management and administration 8,794 9,106 5,671 26,123 16,677
Marketing and advertising 2,031 2,196 862 6,164 3,736
Sales and business development 1,305 1,520 831 4,626 2,533
Professional and consulting fees 542 657 1,305 1,812 3,815
Occupancy, communication and equipment 723 591 374 1,691 1,050
Depreciation and amortization 84 83 79 249 225
Third party sharing arrangements 374 428 1,194 913 4,168
Other 1,164 1,061 859 3,086 2,211
Total proforma operating expenses 24,665 25,089 16,909 71,241 51,483
Proforma operating income 14,965 12,242 4,752 35,061 9,741
ETF shareholder proxy -- -- -- -- 3,264
Patent litigation, net -- -- 219 -- 700
Income before provision for income taxes 14,965 12,242 4,533 35,061 5,777
Provision for income taxes -- -- -- -- --
Net income $ 14,965 $ 12,242 $ 4,533 $ 35,061 $ 5,777
WISDOMTREE INVESTMENTS, INC.
CONSOLIDATED BALANCE SHEET
(in thousands, except per share amount)
September 30,
2013 December 31,
2012
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 87,114 $ 41,246
Accounts receivable 16,254 9,348
Other current assets 1,975 1,273
Total current assets 105,343 51,867
Fixed assets, net 1,349 480
Investments 11,603 11,036
Other noncurrent assets 50 42
Total assets $ 118,345 $ 63,425
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Current liabilities:
Fund management and administration payable $ 10,621 $ 6,924
Compensation and benefits payable 9,391 2,156
Accounts payable and other liabilities 4,026 3,272
Total current liabilities 24,038 12,352
Other noncurrent liabilities 3,063 13
Total liabilities 27,101 12,365
STOCKHOLDERS' EQUITY
Common stock, par value $0.01; 250,000 shares authorized:
issued: 129,410 and 126,554 1,294 1,265
outstanding: 127,461 and 125,272
Additional paid-in capital 182,920 177,826
Accumulated deficit (92,970) (128,031)
Total stockholders' equity 91,244 51,060
Total liabilities and stockholders' equity $ 118,345 $ 63,425
WISDOMTREE INVESTMENTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
Nine Months Ended
September 30,
2013 September 30,
2012
Cash flows from operating activities
Net income $ 35,061 $ 5,777
Non-cash items included in net income:
Depreciation and amortization 249 225
Stock-based compensation 5,186 5,903
Deferred rent 111 (106)
Accretion to interest income and other 108 89
Changes in operating assets and liabilities:
Accounts receivable (3,683) (3,759)
Other assets (720) (185)
Fund management and administration payable 3,697 (736)
Compensation and benefits payable 7,235 (933)
Accounts payable and other liabilities 471 1,251
Net cash provided by operating activities 47,715 7,526
Cash flows from investing activities
Purchase of fixed assets (1,118) (182)
Purchase of investments (3,358) (6,098)
Proceeds from the redemption of investments 2,693 5,657
Net cash used in investing activities (1,783) (623)
Cash flows from financing activities
Net proceeds from sale of common stock -- 4,329
Shares repurchased (1,413) (1,169)
Proceeds from exercise of stock options 1,349 3,910
Net cash (used in)/provided by financing activities (64) 7,070
Net increase in cash and cash equivalents 45,868 13,973
Cash and cash equivalents - beginning of period 41,246 25,630
Cash and cash equivalents - end of period $ 87,114 $ 39,603
Supplemental disclosure of cash flow information
Cash paid for income taxes $ 33 $ 29
WisdomTree Investments, Inc.
Key Operating Statistics (Unaudited)
Three Months Ended Nine Months Ended
September 30,
2013 June 30,
2013 September 30,
2012 September 30,
2013 September 30,
2012
Total ETFs (in millions)
Beginning of period assets 28,975 25,103 15,004 18,286 12,182
Inflows/(outflows) 1,160 4,962 1,036 12,015 3,673
Market appreciation/(depreciation) 1,217 (1,090) 743 1,051 928
End of period assets 31,352 28,975 16,783 31,352 16,783
Average assets during the period 30,473 28,390 15,769 26,932 15,051
ETF Industry and Market Share (in billions)
ETF industry net inflows 55.4 15.4 51.8 123.0 130.0
WisdomTree market share of industry inflows 2.1% 32.2% 2.0% 9.8% 2.8%
International Developed Equity ETFs (in millions)
Beginning of period assets 12,903 8,525 2,846 3,732 2,407
Inflows/(outflows) 957 4,433 (58) 9,600 381
Market appreciation/(depreciation) 771 (55) 108 1,299 108
End of period assets 14,631 12,903 2,896 14,631 2,896
Average assets during the period 14,063 11,444 2,859 10,526 2,798
Emerging Markets Equity ETFs (in millions)
Beginning of period assets 7,172 8,071 5,430 7,332 3,613
Inflows/(outflows) 286 (51) 736 1,111 2,596
Market appreciation/(depreciation) 245 (848) 376 (740) 333
End of period assets 7,703 7,172 6,542 7,703 6,542
Average assets during the period 7,289 7,964 5,915 7,719 5,365
US Equity ETFs (in millions)
Beginning of period assets 5,777 5,161 4,094 4,371 3,429
Inflows/(outflows) 273 547 363 1,111 815
Market appreciation/(depreciation) 221 69 183 789 396
End of period assets 6,271 5,777 4,640 6,271 4,640
Average assets during the period 6,214 5,541 4,393 5,502 4,161
Fixed Income ETFs (in millions)
Beginning of period assets 2,437 2,600 1,698 2,118 1,506
Inflows/(outflows) (320) 78 148 266 301
Market appreciation/(depreciation) (22) (241) 58 (289) 97
End of period assets 2,095 2,437 1,904 2,095 1,904
Average assets during the period 2,246 2,700 1,749 2,466 1,697
Currency ETFs (in millions)
Beginning of period assets 547 626 769 611 950
Inflows/(outflows) (48) (62) (129) (98) (315)
Market appreciation/(depreciation) 3 (17) 14 (11) 19
End of period assets 502 547 654 502 654
Average assets during the period 515 607 694 586 819
Alternative Strategy ETFs (in millions)
Beginning of period assets 139 120 167 122 277
Inflows/(outflows) 12 17 (24) 25 (105)
Market appreciation/(depreciation) (1) 2 4 3 (25)
End of period assets 150 139 147 150 147
Average assets during the period 146 134 159 133 211
Average ETF assets during the period
International developed equity ETFs 46% 40% 18% 39% 19%
Emerging markets equity ETFs 24% 28% 38% 29% 36%
US equity ETFs 20% 20% 28% 20% 28%
Fixed income ETFs 7% 10% 11% 9% 11%
Currency ETFs 2% 2% 4% 2% 5%
Alternative strategy ETFs 1% 0% 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%
Fixed income ETFs 0.55% 0.55% 0.55% 0.55% 0.55%
Currency ETFs 0.50% 0.51% 0.50% 0.50% 0.50%
International developed equity ETFs 0.50% 0.50% 0.54% 0.51% 0.54%
US equity ETFs 0.35% 0.35% 0.35% 0.35% 0.35%
Blended total 0.51% 0.52% 0.54% 0.52% 0.54%
Number of ETFs - end of the period
International developed equity ETFs 20 20 18 20 18
US equity ETFs 13 12 12 13 12
Emerging markets equity ETFs 7 5 5 7 5
Fixed income ETFs 6 6 5 6 5
Currency ETFs 5 5 7 5 7
Alternative strategy ETFs 2 2 2 2 2
Total 53 50 49 53 49
Headcount 84 79 70 84 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 expenses, proforma pre-tax operating margin and gross margin. 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; and (2) expenses for the WisdomTree ETF shareholder proxy solicitation. 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 Nine Months Ended
Sept. 30,
2013 Jun. 30,
2013 Sept. 30,
2012 Sept. 30,
2013 Sept. 30,
2012
GAAP total expenses $ 24,665 $ 25,089 $ 17,128 $ 71,241 $ 55,447
ETF shareholder proxy -- -- -- -- (3,264)
Patent litigation, net -- -- (219) -- (700)
Proforma operating expenses $ 24,665 $ 25,089 $ 16,909 $ 71,241 $ 51,483
GAAP net income $ 14,965 $ 12,242 $ 4,533 $ 35,061 $ 5,777
ETF shareholder proxy -- -- -- -- 3,264
Patent litigation, net -- -- 219 -- 700
Proforma operating income $ 14,965 $ 12,242 $ 4,752 $ 35,061 $ 9,741
GAAP net income $ 14,965 $ 12,242 $ 4,533 $ 35,061 $ 5,777
Divide GAAP total revenue 39,630 37,331 21,661 106,302 61,224
GAAP pre-tax margin 37.8% 32.8% 20.9% 33.0% 9.4%
Proforma pre-tax net income $ 14,965 $ 12,242 $ 4,752 $ 35,061 $ 9,741
Divide GAAP total revenue 39,630 37,331 21,661 106,302 61,224
Proforma pre-tax operating margin 37.8% 32.8% 21.9% 33.0% 15.9%
GAAP total revenue $ 39,630 $ 37,331 $ 21,661 $ 106,302 $ 61,224
Fund management and administration (8,794) (9,106) (5,671) (26,123) (16,677)
Third party sharing arrangements (374) (428) (1,194) (913) (4,168)
Gross margin $ 30,462 $ 27,797 $ 14,796 $ 79,266 $ 40,379
Gross margin percentage 76.9% 74.5% 68.3% 74.6% 66.0%
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Contact:.
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WisdomTree Investments, Inc.
Stuart Bell / Jessica Zaloom
+1.917.267.3702 / +1.917.267.3735
sbell@wisdomtree.com / jzaloom@wisdomtree.com