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The Street has SAFM coming in at 2.64 to 2.66 for the Third Quarter of 2013
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LAS VEGAS, Aug. 19, 2013 /PRNewswire/ -- SHFL entertainment, Inc. (NASDAQ Global Select Market: SHFL) ("SHFL" or the "Company") announced today that it will release its fiscal 2013 third quarter results after the market closes on Friday, September 6, 2013. No conference call will be held. On July 16, 2013, SHFL entertainment announced that it had entered into a definitive agreement and plan of merger with Bally Technologies, Inc. ( BYI) ("Bally"), pursuant to which Bally has agreed to acquire the Company at a per share price of $23.25 in cash for total consideration of approximately $1.3 billion subject to the satisfaction of the conditions set forth therein.
(Logo: http://photos.prnewswire.com/prnh/20121008/LA88315LOGO)
About SHFL entertainment, Inc.
SHFL entertainment, Inc. is a leading global gaming supplier committed to making gaming more fun for players and more profitable for operators through product innovation, and superior quality and service. The Company operates in legalized gaming markets across the globe and provides state-of-the-art, value-add products in five distinct categories: Utility products, which include automatic card shufflers and roulette chip sorters; Proprietary Table Games, which includes live games, side bets and progressives; Electronic Table Systems, which include various e-Table game configurations; Electronic Gaming Machines, which include video slot machines; and newly introduced iGaming, which features online versions of SHFL entertainment's table games, social gaming, and mobile applications. The Company is included in the S&P SmallCap 600 Index. Information about the Company and its products can be found on the Internet at www.shfl.com, or on Facebook and Twitter.
Forward Looking Statements
This release may contain forward-looking statements that are based on management's current beliefs and expectations about future events, as well as on assumptions made by and information available to management. The Company considers such statements to be made under the safe harbor created by the federal securities laws to which it is subject, and assumes no obligation to update or supplement such statements. Forward-looking statements reflect and are subject to risks and uncertainties that could cause actual results to differ materially from expectations. The Company's beliefs, expectations, forecasts, objectives, anticipations, intentions and strategies regarding the future, including without limitation those concerning expected operating results, revenues and earnings are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from results contemplated by the forward-looking statements, including but not limited to: changes in the market and economic conditions and reduced demand for or increased competition with SHFL's brands or changes in the Company's strategic initiatives of objectives; the Company's inability to accurately gauge the commercial appeal of its brands; increased infringement on SHFL's intellectual property or proprietary brands; the impact of the Company's previously announced proposed merger with Bally Technologies, Inc. on its business, operations and customer relationships; unanticipated changes in the laws, rules or regulations governing gaming and the regulation of gaming in all markets. Additional information on risk factors that could potentially affect the Company's financial results may be found in documents filed by the Company with the Securities and Exchange Commission, including the Company's current reports on Form 8-K, quarterly reports on Form 10-Q and its latest annual report on Form 10-K.
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TTI Net Profit Jumps 22.0% as Sales Hit Record Levels in the First Half 2013 Press Release: Techtronic Industries Co. Ltd. – 11 hours ago 0
HONG KONG, Aug. 21, 2013 /PRNewswire-FirstCall/ -- Hong Kong-based global power equipment and floor care company Techtronic Industries Co. Ltd. ("TTI"/ The Group) (stock code: 669, ADR symbol: TTNDY) announced that it achieved record sales and profits, with gross margin increasing for the sixth consecutive period. In the first half of 2013, the Group's net profit attributable to shareholders reached US$118 million, a 22.0% increase over the first half of 2012. Basic earnings per share were US6.43 cents, 13.0% higher than the same period last year. Group sales rose by 10.1% over the six months to US$2,042 million. The balance sheet remains strong with solid improvements in gearing and working capital as a percentage of sales when compared to the same period in 2012.
Mr. Joseph Galli, CEO of TTI, commented, "This exceptional performance is driven by a continuous flow of innovative new product introductions, category expansion, product mix and a relentless focus on operational efficiency."
The improvement in gross margin was driven by innovative new products, further investment in developing the Company's lithium strategy, category expansion, product mix, and manufacturing and supply chain efficiencies. Strong sales growth in the Group's core businesses was achieved across all key regions including North America, Europe and Australia.
Mr. Horst Pudwill, Chairman of TTI, said "Our powerful new product development machine has put TTI in a position to continue growing and driving profitability to new levels. We look forward to delivering strong sales and profit growth in the second half and beyond."
- End -
About TTI
Founded in 1985 and listed on the Stock Exchange of Hong Kong Limited in 1990, TTI is a world-class leader in quality consumer, professional and industrial products marketed to the home improvement, hardware, and construction industries. An unrelenting strategic focus on Powerful Brands, Innovative Products, Exceptional People, and Operational Excellence drives our success. TTI's powerful brand portfolio includes MILWAUKEE®, AEG® and RYOBI® power tools, accessories and hand tools, RYOBI® and HOMELITE® outdoor products, and HOOVER®, DIRT DEVIL® and VAX® floor care and appliances.
TTI is one of the constituent stocks of MSCI AC Asia Pacific Small Cap index under the MSCI Global Small Cap index. The Company is also one of the constituents on the Hang Seng Consumer Goods Index under the Hang Seng Composite Industry Index, the FTSE Multinational Hong Kong Index and the FTSE Hong Kong Mid Cap Index. For more information, please visit www.ttigroup.com.
All trademarks are intellectual property of their respective owners and are protected under trademark law. AEG®is a registered trademark and its use is pursuant to a License granted by AB Electrolux (publ). RYOBI®is a registered trademark and its use is pursuant to a License granted by Ryobi Limited.
DENTSPLY International Reports Second Quarter 2013 Results
Thomson Reuters ONEPress Release: DENTSPLY International Inc. – Thu, Aug 1, 2013 6:33 AM EDT..
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Earnings per diluted share of $0.60 on a US GAAP reported basis and a record $0.66 on an adjusted basis
•
Adjusted operating margin expanded 60 basis points to 19.2% from 18.6% in the prior year
York, PA - August 1, 2013 - DENTSPLY International Inc. (XRAY) today announced sales and earnings for the three months ended June 30, 2013.
Net sales in the second quarter of 2013 were essentially flat at $761.0 million compared to $763.0 million in the second quarter of 2012. Net sales, excluding precious metals content, in the second quarter of 2013 of $716.0 million increased 2.5% from $698.5 million in the second quarter of 2012. Constant currency net sales growth, excluding precious metals content, in the second quarter was 2.7%, reflecting strong internal growth in the U.S. and more modest internal growth in the other geographic regions.
Net income attributable to DENTSPLY International for the second quarter of 2013 was $87.2 million, or $0.60 per diluted share, compared to $80.8 million, or $0.56 per diluted share in the second quarter of 2012. On an adjusted basis, excluding certain items, earnings grew 7% to $0.66 per diluted share for the second quarter of 2013 from $0.62 in the same period in 2012. A reconciliation of the non-GAAP measure to earnings per share calculated on a US GAAP basis is provided in the attached table.
"DENTSPLY achieved record adjusted earnings for the second quarter driven by an acceleration of internal growth in the U.S. and expansion of adjusted operating margins," said Bret Wise, Chairman and Chief Executive Officer. "Although we are pleased with our second quarter performance, market conditions continue to be difficult in Europe and movement of currency exchange rates has created some further headwind in the second half of the year. As a result, we are revising our expectations for adjusted earnings per share for 2013 to a range of $2.33 to $2.38."
Additional Information
A conference call is scheduled to begin today at 8:30 a.m. (Eastern Time). Supplemental materials for reference during the call will be available for download in the investor relations section of DENTSPLY`s web site, at www.dentsply.com.
A live webcast will be accessible via a link on DENTSPLY`s web site at www.dentsply.com. In order to participate in the call, dial (888) 417-2254 for domestic calls, or (719) 325-2490 for international calls. The Conference ID # is 1879202. At that time, you will be able to discuss second quarter 2013 results with DENTSPLY`s Chairman and Chief Executive Officer, Mr. Bret Wise, President and Chief Financial Officer, Mr. Chris Clark, and Executive Vice President and Chief Operating Officer, Mr. Jim Mosch.
A rebroadcast of the conference call will be available online at the DENTSPLY web site. You may also access a dial-in replay for one week following the call at (888) 203-1112 (for domestic calls) or (719) 457-0820 (for international calls), Replay Passcode # 1879202.
DENTSPLY International Inc. is a leading manufacturer and distributor of dental and other consumable medical device products. The Company believes it is the world`s largest manufacturer of consumable dental products for the professional dental market. For over 110 years, DENTSPLY`s commitment to innovation and professional collaboration has enhanced its portfolio of branded consumables and small equipment. Headquartered in the United States, the Company has global operations with sales in more than 120 countries. Visit www.dentsply.com for more information about DENTSPLY and its products.
This press release contains forward-looking information (within the meaning of the Private Securities Litigation Reform Act of 1995) regarding future events or the future financial performance of the Company that involve substantial risks and uncertainties. Actual events or results may differ materially from those in the projections or other forward-looking information set forth herein as a result of certain risk factors. These risk factors include, without limitation; the continued strength of dental and medical markets, the timing, success and market reception for our new and existing products, uncertainty with respect to governmental actions with respect to dental and medical products, outcome of litigation and/or governmental enforcement actions, continued support of our products by influential dental and medical professionals, our ability to successfully integrate acquisitions, risks associated with foreign currency exchange rates, and changes in the general economic environment that could affect the business. Changes in such assumptions or factors could produce significantly different results.
For an additional description of risk factors, please refer to the Company`s most recent Form 10-K and its subsequent periodic reports on Forms 10-Q filed with the Securities and Exchange Commission.
Non-US GAAP Financial Measures
In addition to the results reported in accordance with US GAAP, the Company provides adjusted net income attributable to DENTSPLY International and adjusted earnings per diluted common share. The Company discloses adjusted net income attributable to DENTSPLY International to allow investors to evaluate the performance of the Company`s operations exclusive of certain items that impact the comparability of results from period to period and certain large non-cash charges related to purchased intangible assets. The Company believes that this information is helpful in understanding underlying operating trends and cash flow generation. The adjusted net income attributable to DENTSPLY International consists of net income attributable to DENTSPLY International adjusted to exclude the impact of the following:
(1) Acquisition related costs. These adjustments include costs related to integrating recently acquired businesses and specific costs related to the consummation of the acquisition process. These costs are irregular in timing and as such may not be indicative of past and future performance of the Company and are therefore excluded to allow investors to better understand underlying operating trends.
(2) Restructuring and other costs, including legal settlements. These adjustments include both costs and income that are irregular in timing, amount and impact to the Company`s financial performance. As such, these items may not be indicative of past and future performance of the Company and are therefore excluded for the purpose of understanding underlying operating trends.
(3) Amortization of purchased intangible assets. This adjustment excludes the periodic amortization expense related to purchased intangible assets. Following a significant acquisition in 2011, the Company began recording large non-cash charges related to the values attributed to purchased intangible assets. These charges have been excluded from adjusted net income attributed to DENTSPLY International to allow investors to evaluate and understand operating trends excluding these large non-cash charges.
(4) Income related to credit risk and fair value adjustments. These adjustments include both the cost and income impacts of adjustments in certain assets and liabilities that are recorded through net income which are due solely to the changes in fair value and credit risk. These items can be variable and driven more by market conditions than the Company`s operating performance. As such, these items may not be indicative of past and future performance of the Company and therefore are excluded for comparability purposes.
(5) Certain fair value adjustments at an unconsolidated affiliated company. This adjustment represents the fair value adjustment of the unconsolidated affiliated company`s convertible debt instrument held by the Company. The affiliate is accounted for under the equity method of accounting. The fair value adjustment is driven by open market pricing of the affiliate`s equity instruments, which has a high degree of variability and may not be indicative of the operating performance of the affiliate or the Company.
(6) Income tax related adjustments. These adjustments include both income tax expenses and income tax benefits that are representative of income tax adjustments mostly related to prior periods, as well as the final settlement of income tax audits. These adjustments are irregular in timing and amount and may significantly impact the Company`s operating performance. As such, these items may not be indicative of past and future performance of the Company and therefore are excluded for comparability purposes.
Adjusted earnings per diluted common share is calculated by dividing adjusted net income attributable to DENTSPLY International by diluted weighted-average common shares outstanding. Adjusted net income attributable to DENTSPLY International and adjusted earnings per diluted common share are considered measures not calculated in accordance with US GAAP, and therefore are non-US GAAP measures. These non-US GAAP measures may differ from other companies. Income tax related adjustments may include the impact to adjust the interim effective income tax rate to the expected annual effective tax rate. The non-US GAAP financial information should not be considered in isolation from, or as a substitute for, measures of financial performance prepared in accordance with US GAAP.
DENTSPLY INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2013 2012 2013 2012
Net sales $ 761,010 $ 762,994 $ 1,493,094 $ 1,479,407
Net sales, excluding precious metal content 715,956 698,480 1,388,604 1,364,105
Cost of products sold 346,054 355,525 689,938 679,188
Gross profit 414,956 407,469 803,156 800,219
% of Net sales 54.5 % 53.4 % 53.8 % 54.1 %
% of Net sales, excluding precious metal content 58.0 % 58.3 % 57.8 % 58.7 %
Selling, general and administrative expenses 289,921 296,034 583,598 600,388
Restructuring and other costs 2,169 2,528 2,834 3,765
Operating income 122,866 108,907 216,724 196,066
% of Net sales 16.1 % 14.3 % 14.5 % 13.3 %
% of Net sales, excluding precious metal content 17.2 % 15.6 % 15.6 % 14.4 %
Net interest and other expense 13,487 13,321 29,451 27,288
Income before income taxes 109,379 95,586 187,273 168,778
Provision for income taxes 22,870 14,875 26,412 29,590
Equity in net earnings (loss) of
unconsolidated affiliated company 2,182 1,329 403 (2,919 )
Net income 88,691 82,040 161,264 136,269
% of Net sales 11.7 % 10.8 % 10.8 % 9.2 %
% of Net sales, excluding precious metal content 12.4 % 11.7 % 11.6 % 10.0 %
Less: Net income attributable to noncontrolling interests 1,463 1,276 2,351 2,220
Net income attributable to DENTSPLY International $ 87,228 $ 80,764 $ 158,913 $ 134,049
% of Net sales 11.5 % 10.6 % 10.6 % 9.1 %
% of Net sales, excluding precious metal content 12.2 % 11.6 % 11.4 % 9.8 %
Earnings per common share:
Basic $ 0.61 $ 0.57 $ 1.11 $ 0.95
Dilutive $ 0.60 $ 0.56 $ 1.10 $ 0.93
Cash dividends declared per common share $ 0.0625 $ 0.0550 $ 0.1250 $ 0.1100
Weighted average common shares outstanding:
Basic 142,922 141,737 142,849 141,729
Dilutive 145,133 143,863 145,107 143,908
DENTSPLY INTERNATIONAL INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, December 31,
2013 2012
Assets
Current Assets:
Cash and cash equivalents $ 57,027 $ 80,132
Accounts and notes receivable-trade, net 499,006 442,412
Inventories, net 433,189 402,940
Prepaid expenses and other current assets 180,811 185,612
Total Current Assets 1,170,033 1,111,096
Property, plant and equipment, net 605,028 614,705
Identifiable intangible assets, net 786,667 830,642
Goodwill, net 2,158,529 2,210,953
Other noncurrent assets, net 154,426 204,901
Total Assets $ 4,874,683 $ 4,972,297
Liabilities and Equity
Current liabilities $ 890,615 $ 927,780
Long-term debt 1,123,792 1,222,035
Deferred income taxes 218,624 232,641
Other noncurrent liabilities 353,556 340,398
Total Liabilities 2,586,587 2,722,854
Total DENTSPLY International Equity 2,250,185 2,208,698
Noncontrolling interests 37,911 40,745
Total Equity 2,288,096 2,249,443
Total Liabilities and Equity $ 4,874,683 $ 4,972,297
DENTSPLY INTERNATIONAL INC.
(In thousands)
Supplemental Summary Cash Flow Information:
Six Months Ended June 30, 2013
Six Months Ended June 30,
2013 2012
Net Cash Provided by Operating Activities $ 131,868 $ 103,395
Net Cash Used in Investing Activities $ 136,188 $ 58,507
Net Cash Used in Financing Activities $ 15,436 $ 67,414
Depreciation $ 41,743 $ 40,357
Amortization $ 23,434 $ 28,014
Capital Expenditures $ 46,151 $ 42,986
Cash Dividends Paid $ 16,928 $ 15,706
DENTSPLY INTERNATIONAL INC.
(In thousands)
Operating Income Summary:
The following tables present the reconciliation of reported US GAAP operating income in total and on a percentage of net sales, excluding precious metal content, to the non-US GAAP financial measures.
Three Months Ended June 30, 2013
Operating Income (Loss) Percentage of Net Sales, Excluding Precious Metal Content
Operating Income $ 122,866 17.2 %
Amortization of Purchased Intangible Assets 11,480 1.5 %
Restructuring and Other Costs, including Legal Settlements 2,285 0.3 %
Acquisition-Related Activities 1,132 0.2 %
Adjusted Non-US GAAP Operating Income $ 137,763 19.2 %
Three Months Ended June 30, 2012
Operating Income (Loss) Percentage of Net Sales, Excluding Precious Metal Content
Operating Income $ 108,907 15.6 %
Amortization of Purchased Intangible Assets 12,685 1.9 %
Acquisition-Related Activities 4,902 0.7 %
Restructuring and Other Costs 2,910 0.4 %
Orthodontic Business Continuity Costs 345 - %
Adjusted Non-US GAAP Operating Income $ 129,749 18.6 %
DENTSPLY INTERNATIONAL INC.
(In thousands)
Operating Income Summary:
The following tables present the reconciliation of reported US GAAP operating income in total and on a percentage of net sales, excluding precious metal content, to the non-US GAAP financial measures.
Six Months Ended June 30, 2013
Operating Income (Loss) Percentage of Net Sales, Excluding Precious Metal Content
Operating Income $ 216,724 15.6 %
Amortization of Purchased Intangible Assets 23,415 1.6 %
Acquisition-Related Activities 3,269 0.3 %
Restructuring and Other Costs, including Legal Settlements 3,058 0.2 %
Adjusted Non-US GAAP Operating Income $ 246,466 17.7 %
Six Months Ended June 30, 2012
Operating Income (Loss) Percentage of Net Sales, Excluding Precious Metal Content
Operating Income $ 196,066 14.4 %
Amortization of Purchased Intangible Assets 28,047 2.1 %
Acquisition-Related Activities 12,436 1.0 %
Restructuring and Other Costs 4,640 0.3 %
Orthodontic Business Continuity Costs 961 - %
Adjusted Non-US GAAP Operating Income $ 242,150 17.8 %
DENTSPLY INTERNATIONAL INC.
(In thousands, except per share amounts)
Earnings Summary:
The following tables present the reconciliation of reported US GAAP net income attributable to DENTSPLY International and on a per common share basis to the non-US GAAP financial measures.
Three Months Ended June 30, 2013
Net Per Diluted
Income Common Share
Net Income Attributable to DENTSPLY International $ 87,228 $ 0.60
Amortization of Purchased Intangible Assets, Net of Tax 8,002 0.06
Restructuring and Other Costs, including Legal Settlements, Net of Tax 1,962 0.01
Acquisition Related Activities, Net of Tax 746 0.01
Credit Risk and Fair Value Adjustments to Outstanding Derivatives, Net of Tax 457 -
Income Tax-Related Adjustments (118 ) -
Gain on Fair Value Adjustments at an Unconsolidated Affiliated Company, Net of Tax (2,446 ) (0.02 )
Adjusted Non-US GAAP Net Income Attributable to DENTSPLY International $ 95,831 $ 0.66
Three Months Ended June 30, 2012
Net Per Diluted
Income Common Share
Net Income Attributable to DENTSPLY International $ 80,764 $ 0.56
Amortization of Purchased Intangible Assets, Net of Tax 9,007 0.06
Acquisition Related Activities, Net of Tax 2,993 0.02
Restructuring and Other Costs, Net of Tax 1,990 0.02
Orthodontics Business Continuity Costs, Net of Tax 213 -
Gain on Fair Value Adjustments at an Unconsolidated Affiliated Company, Net of Tax (1,060 ) (0.01 )
Income Tax-Related Adjustments (5,380 ) (0.03 )
Adjusted Non-US GAAP Net Income Attributable to DENTSPLY International $ 88,527 $ 0.62
DENTSPLY INTERNATIONAL INC.
(In thousands, except per share amounts)
Earnings Summary:
The following tables present the reconciliation of reported US GAAP net income attributable to DENTSPLY International and on a per common share basis to the non-US GAAP financial measures.
Six Months Ended June 30, 2013
Net Per Diluted
Income Common Share
Net Income Attributable to DENTSPLY International $ 158,913 $ 1.10
Amortization of Purchased Intangible Assets, Net of Tax 16,378 0.11
Credit Risk and Fair Value Adjustments to Outstanding Derivatives, Net of Tax 3,190 0.02
Restructuring and Other Costs, including Legal Settlements, Net of Tax 2,501 0.02
Acquisition Related Activities, Net of Tax 2,099 0.01
Gain on Fair Value Adjustments at an Unconsolidated Affiliated Company, Net of Tax (519 ) -
Income Tax-Related Adjustments (11,505 ) (0.08 )
Adjusted Non-US GAAP Net Income Attributable to DENTSPLY International $ 171,057 $ 1.18
Six Months Ended June 30, 2012
Net Per Diluted
Income Common Share
Net Income Attributable to DENTSPLY International $ 134,049 $ 0.93
Amortization of Purchased Intangible Assets, Net of Tax 19,989 0.14
Acquisition Related Activities, Net of Tax 7,789 0.05
Loss on Fair Value Adjustments at an Unconsolidated Affiliated Company, Net of Tax 3,595 0.03
Restructuring and Other Costs, Net of Tax 3,154 0.02
Orthodontics Business Continuity Costs, Net of Tax 621 -
Income Tax-Related Adjustments (5,414 ) (0.03 )
Adjusted Non-US GAAP Net Income Attributable to DENTSPLY International $ 163,783 $ 1.14
DENTSPLY INTERNATIONAL INC.
(In thousands)
Operating Tax Rate Summary:
The following tables present the reconciliation of reported US GAAP effective tax rate as a percentage of income before income taxes to the non-US GAAP financial measure.
Three Months Ended June 30, 2013
Pre-tax Income Income Tax Benefit (Expense) Percentage of Pre-Tax Income
As Reported - US GAAP Operating Results $ 109,379 $ (22,870 ) 20.9 %
Amortization of Purchased Intangible Assets 11,480 (3,478 )
Restructuring and Other Costs, including Legal Settlements 2,285 (323 )
Acquisition-Related Activities 1,132 (386 )
Credit Risk and Fair Value Adjustments to Outstanding Derivatives, Net of Tax 744 (287 )
Gain on Fair Value Adjustments at an Unconsolidated Affiliated Company (45 ) 14
Income Tax-Related Adjustments - (118 )
As Adjusted - Non-US GAAP Operating Results $ 124,975 $ (27,448 ) 22.0 %
Three Months Ended June 30, 2012
Pre-tax Income Income Tax Benefit (Expense) Percentage of Pre-Tax Income
As Reported - US GAAP Operating Results $ 95,586 $ (14,875 ) 15.6 %
Amortization of Purchased Intangible Assets 12,685 (3,678 )
Acquisition-Related Activities 4,902 (1,909 )
Restructuring and Other Costs 2,910 (920 )
Orthodontics Business Continuity Costs, Net of Tax 345 (132 )
Gain on Fair Value Adjustments at an Unconsolidated Affiliated Company (95 ) 30
Income Tax-Related Adjustments - (5,378 )
As Adjusted - Non-US GAAP Operating Results $ 116,333 $ (26,862 ) 23.1 %
DENTSPLY INTERNATIONAL INC.
(In thousands)
Operating Tax Rate Summary:
The following tables present the reconciliation of reported US GAAP effective tax rate as a percentage of income before income taxes to the non-US GAAP financial measure.
Six Months Ended June 30, 2013
Pre-tax Income Income Tax Benefit (Expense) Percentage of Pre-Tax Income
As Reported - US GAAP Operating Results $ 187,273 $ (26,412 ) 14.1 %
Amortization of Purchased Intangible Assets 23,415 (7,037 )
Credit Risk and Fair Value Adjustments to Outstanding Derivatives, Net of Tax 5,195 (2,005 )
Acquisition-Related Activities 3,269 (1,170 )
Restructuring and Other Costs, including Legal Settlements 3,058 (557 )
Gain on Fair Value Adjustments at an Unconsolidated Affiliated Company (13 ) 4
Income Tax-Related Adjustments - (11,505 )
As Adjusted - Non-US GAAP Operating Results $ 222,197 $ (48,682 ) 21.9 %
Six Months Ended June 30, 2012
Pre-tax Income Income Tax Benefit (Expense) Percentage of Pre-Tax Income
As Reported - US GAAP Operating Results $ 168,778 $ (29,590 ) 17.5 %
Amortization of Purchased Intangible Assets 28,047 (8,058 )
Acquisition-Related Activities 12,436 (4,647 )
Restructuring and Other Costs 4,640 (1,486 )
Orthodontics Business Continuity Costs, Net of Tax 961 (340 )
Loss on Fair Value Adjustments at an Unconsolidated Affiliated Company 178 (54 )
Income Tax-Related Adjustments - (5,414 )
As Adjusted - Non-US GAAP Operating Results $ 215,040 $ (49,589 ) 23.1 %
For further information contact:
Derek Leckow
Vice President
Investor Relations
(717) 849-7863
--------------------------------------------------------------------------------
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The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and other applicable laws; and
(ii) they are solely responsible for the content, accuracy and originality of the
information contained therein.
Bally Technologies, Inc. Reports Record Revenue of $997 Million and Record Diluted EPS of $3.45 for the Year Ended June 30, 2013
Business WirePress Release: Bally Technologies, Inc. – Thu, Aug 15, 2013
Bally Technologies' Chief Financial Officer Neil Davidson. (Photo: Business Wire) <a href="http://www.businesswire.com/cgi-bin/mmg.cgi?eid=50692120&lang=en"> Multimedia Gallery URL</a>View Photo.
Bally Technologies' Chief Financial Officer Neil Davidson. (Photo: Business Wire) Multimedia Gallery URL
Bally Technologies, Inc. (BYI):
•FOURTH QUARTER REVENUE INCREASES TO A RECORD $264 MILLION WITH RECORD DILUTED EPS OF $0.95
•SYSTEMS REVENUE SETS ANNUAL RECORD OF $252 MILLION, INCREASING 19 PERCENT FROM PRIOR YEAR
•WIDE-AREA PROGRESSIVE INSTALLED BASE GROWS 38 PERCENT AND SETS RECORD ANNUAL REVENUE
Bally Technologies, Inc. (BYI), a leader in slots, video machines, casino management, interactive applications, and networked and server-based systems for the global gaming industry, today announced record quarterly diluted earnings per share (“Diluted EPS”) of $0.95 and record quarterly revenue of $264 million for the three months ended June 30, 2013. Diluted EPS was a record $3.45 on record annual revenues of $997 million for the year ended June 30, 2013.
“Fiscal 2013 was a truly momentous year in Bally’s history,” said Ramesh Srinivasan, the Company’s President and Chief Executive Officer. “We made enormous progress in many different ways, including continued growth in wide-area progressive (“WAP”) units, record Gaming Operations revenue, significant success in new markets like Canada, Illinois, and South Africa, establishing new revenue records in Systems while setting up Systems for further growth in the years ahead, and the launch of Bally content in regulated online jurisdictions. These achievements position us well for continued growth in fiscal 2014 and beyond.”
Srinivasan added, “The planned acquisition of SHFL entertainment will position us even better as an innovative end-to-end gaming solutions provider. We remain steadfastly focused on executing well in our core business and are looking forward to this September’s Global Gaming Expo, where we will demonstrate our industry-leading cross-platform solutions for games, systems, and interactive. We will also demonstrate how well positioned and ready we are to connect operators’ gaming worlds through a single view of the player.”
“Bally remains unwavering in its commitment to shareholder value, as demonstrated by the 38 percent two-year Diluted EPS compound annual growth rate, among many other critical metrics,” said Neil Davidson, the Company’s Chief Financial Officer. “The growth and stability of our revenues that are recurring in nature continue to provide significant financial flexibility. With the planned acquisition of SHFL entertainment we now expect to utilize the majority of our excess free cash flow to repay debt. Since June 30, we have paid down an additional $45 million on our revolving credit facility placing our leverage at 1.7x.”
Fiscal Year 2013 Highlights
Three Months Ended June 30,
Year Ended June 30,
2013
%
Rev
2012
%
Rev
2013
%
Rev
2012
%
Rev
(dollars in millions, except per share amounts)
Revenues:
Gaming Equipment $ 88.7 34 % $ 96.8 39 % $ 339.8 34 % $ 310.7 35 %
Gaming Operations 102.8 39 % 93.7 38 % 405.0 41 % 357.4 41 %
Systems 72.9 27 % 55.3 23 % 252.2 25 % 211.7 24 %
Total revenues $ 264.4 100 % $ 245.8 100 % $ 997.0 100 % $ 879.8 100 %
Gross Margin:
Gaming Equipment (1) $ 44.0 50 % $ 44.8 46 % $ 170.6 50 % $ 139.8 45 %
Gaming Operations 71.0 69 % 67.1 72 % 282.8 70 % 257.7 72 %
Systems (1) 57.7 79 % 40.9 74 % 192.6 76 % 155.9 74 %
Total gross margin $ 172.7 65 % $ 152.8 62 % $ 646.0 65 % $ 553.4 63 %
Selling, general and administrative $ 72.1 27 % $ 62.7 26 % $ 276.7 28 % $ 245.0 28 %
Research and development costs 30.3 11 % 25.6 10 % 111.1 11 % 96.2 11 %
Loss contingency accrual — — 10.0 4 % — — 10.0 1 %
Depreciation and amortization 5.7 3 % 5.7 2 % 22.7 3 % 22.8 3 %
Operating income $ 64.6 24 % $ 48.8 20 % $ 235.5 24 % $ 179.4 20 %
Adjusted EBITDA $ 87.5 $ 81.8 $ 332.5 $ 282.5
Diluted EPS $ 0.95 $ 0.61 $ 3.45 $ 2.28
(1)
Gross Margin from Gaming Equipment and Systems excludes amortization related to certain intangibles, including core technology and license rights, which are included in depreciation and amortization.
Three Months Ended
June 30,
Year Ended
June 30,
2013 2012 2013 2012
Operating Statistics
New gaming devices 4,911 5,322 19,007 16,504
New unit Average Selling Price (“ASP”) $ 16,224 $ 17,182 $ 16,411 $ 17,044
As of June 30,
2013
2012
End-of-period installed base:
Linked progressive systems
2,463
1,792
Rental and daily-fee games
14,855
14,890
Lottery systems
11,846
11,718
Centrally determined systems
35,284
47,633
Highlights of Certain Results for the Three Months Ended June 30, 2013
Overall
• Total revenue increased 8 percent to a quarterly record $264 million as compared with $246 million last year.
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization, including share-based compensation), a non-GAAP financial measure, increased 7 percent to a quarterly record $88 million as compared with $82 million last year.
• Selling, general and administrative expenses (“SG&A”) increased to 27 percent of total revenues as compared with 26 percent last year, driven by an increase in payroll to support key new markets.
• Research and development expenses (“R&D”) increased to 11 percent of total revenues as compared with 10 percent last year.
• Operating income increased 32 percent to a quarterly record $65 million compared with $49 million last year. Operating margin increased to 24 percent from 20 percent last year. The prior period included a loss contingency of $10 million related to certain legal matters.
• Diluted EPS increased 56 percent to a quarterly record $0.95 from $0.61 last year. Non-GAAP EPS increased 22 percent to $0.95 from $0.78 last year.
Gaming Equipment
• Revenues decreased 8 percent to $89 million as compared with $97 million last year, driven by fewer new casino openings. Current period sales included the shipment of 200 Canadian video lottery terminals (“VLT”), as well as the shipment of 713 units into the Illinois video gaming terminal (“VGT”) market.
• ASP of new gaming devices decreased 6 percent to $16,224 per unit from $17,182 last year, primarily as a result of a higher mix of lower-ASP VLT and VGT units sold in the quarter.
• New-unit sales to international customers were 24 percent of total new-unit shipments.
• Gross margin increased to 50 percent from 46 percent last year, due to continued cost reductions on the Pro Series™ line of cabinets and sales mix.
Gaming Operations
• Revenues increased 10 percent to a quarterly record $103 million as compared with $94 million last year, driven primarily by a 38 percent growth in the installed base of WAP games, as well as record quarterly lottery systems revenue.
• Gross margin decreased to 69 percent from 72 percent last year, primarily due to higher jackpot expense and higher depreciation expense.
Systems
• Revenues increased 32 percent to a quarterly record $73 million as compared with $55 million last year.
• Maintenance revenues increased 25 percent to a quarterly record $25 million as compared with $20 million last year.
• Gross margin increased to 79 percent from 74 percent last year, primarily as a result of the change in product mix. Specifically, hardware sales were 28 percent of systems revenues, and software and service sales were 38 percent, as compared to 29 percent for hardware and 35 percent for software and services in the same period last year.
Highlights of Certain Results for the Fiscal Year Ended June 30, 2013
Overall
• Total revenue increased 13 percent to a record $997 million as compared with $880 million last year.
• Adjusted EBITDA increased 18 percent to a record $332 million as compared with $282 million last year.
• SG&A remained constant at 28 percent of total revenues.
• R&D remained constant at 11 percent of total revenues.
• Operating income increased 31 percent to a record $236 million compared with $179 million last year. Operating margin increased to 24 percent from 20 percent last year. The prior period included a loss contingency of $10 million related to certain legal matters.
• Diluted EPS increased 51 percent to a record $3.45 from $2.28 last year. Non-GAAP EPS increased 41 percent to $3.45 from $2.45 last year.
Gaming Equipment
• Revenues increased 9 percent to $340 million as compared with $311 million last year, driven by higher domestic replacement sales, including 2,226 Canadian VLT shipments, as well as by 1,943 shipments into the Illinois VGT market.
• ASP of new gaming devices decreased 4 percent to $16,411 per unit from $17,044 last year, primarily as a result of a higher mix of lower-ASP VLT and VGT units sold.
• New-unit sales to international customers were 19 percent of total new-unit shipments.
• Gross margin increased to 50 percent from 45 percent last year, due to continued cost reductions on certain models of the Pro Series cabinets and sales mix.
Gaming Operations
• Revenues increased 13 percent to a record $405 million as compared with $357 million last year, driven by 38 percent growth in the installed base of WAP games, as well as record annual lottery systems revenue.
• Gross margin decreased to 70 percent from 72 percent last year, primarily due to higher jackpot expense.
Systems
• Revenues increased 19 percent to a record $252 million as compared with $212 million last year.
• Maintenance revenues increased 22 percent to a record $91 million as compared with $75 million last year.
• Gross margin increased to 76 percent from 74 percent last year, primarily as a result of the change in mix of products. Specifically, hardware sales were 30 percent of systems revenues, and software and service sales were 34 percent, as compared to 32 percent for hardware and 33 percent for software and services in the same period last year.
Fiscal 2014 Business Update
The Company reiterated fiscal 2014 guidance for Diluted EPS of $3.70 to $4.05 provided on July 16, 2013. As a result of normal seasonal trends, the timing of new openings and major systems installs, the Company expects that its Diluted EPS in the second half of fiscal 2014 will exceed the first half, with the second quarter being stronger than the first quarter. This guidance anticipates continued year-over-year growth in each of game sales, gaming operations, and systems revenues. This guidance does not reflect the impact of the planned acquisition of SHFL entertainment or any acquisition-related costs or savings.
The Company has provided this range of earnings guidance for fiscal 2014 to give investors general information on the overall direction of its business at this time. The guidance provided is subject to numerous uncertainties, including, among others, overall economic and capital-market conditions, the market for gaming devices and systems, changes in gaming legislation, the timing of new jurisdictions and casino openings, the timing and completion of new systems installations, competitive product introductions, complex revenue-recognition rules related to the Company’s business, and assumptions about the Company’s new product introductions and regulatory approvals. The Company does not intend and undertakes no obligation to update its forward-looking statements, including forecasts, potential opportunities for growth in new and existing markets, and future prospects for proposed new products. Accordingly, the Company does not intend to update guidance during the quarter. Additional information about the factors that could potentially affect the Company’s financial results included in today’s press release can be found in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.
Non-GAAP Financial Measures
The following table reconciles the Company’s net income attributable to Bally Technologies, Inc., as determined in accordance with generally accepted accounting principles (“GAAP”), to Adjusted EBITDA:
Three Months Ended Year Ended
June 30, June 30,
2013 2012 2013 2012
(in 000s)
Net income attributable to Bally Technologies, Inc. $ 37,337 $ 26,521 $ 141,444 $ 101,148
Loss contingency accrual — 10,000 — 10,000
Interest expense, net 2,986 2,620 12,792 12,157
Income tax expense 21,229 19,295 76,574 63,549
Depreciation and amortization 22,266 20,128 88,272 81,453
Share-based compensation 3,704 3,186 13,380 14,172
Adjusted EBITDA $ 87,522 $ 81,750 $ 332,462 $ 282,479
Adjusted EBITDA is a supplemental non-GAAP financial measure used by the Company’s management and by some industry analysts to evaluate the Company’s ability to service debt, and is used by some investors and financial analysts in the gaming industry in measuring and comparing Bally’s leverage, liquidity, and operating performance to other gaming companies. Adjusted EBITDA should not be considered an alternative to operating income or net cash from operations as determined in accordance with GAAP. Not all companies calculate Adjusted EBITDA the same way, and the Company’s presentation may be different from those presented by other companies.
The following table reconciles the Company’s Diluted EPS, as determined in accordance with GAAP, to non-GAAP EPS:
Three Months Ended Year Ended
June 30, June 30,
2013 2012 2013 2012
Diluted EPS $ 0.95 $ 0.61 $ 3.45 $ 2.28
Loss contingency accrual, net of tax — 0.17 — 0.17
Non-GAAP EPS $ 0.95 $ 0.78 $ 3.45 $ 2.45
Non-GAAP EPS is a supplemental non-GAAP financial measure that the Company’s management believes more accurately reflects the Company’s operating results for the periods presented. Non-GAAP EPS should not be considered an alternative to Diluted EPS as determined in accordance with GAAP.
Earnings Conference Call and Webcast
As previously announced, the Company is hosting a conference call and webcast today at 4:30 p.m. EDT (1:30 p.m. PDT). The conference-call dial-in number is 866-524-3160 or 412-317-6760 (International). The webcast can be accessed by visiting BallyTech.com and selecting “Investor Relations.” Interested parties should initiate the call and webcast process at least five minutes prior to the beginning of the presentation. For those who miss this event, an archived version will be available at BallyTech.com until September 15, 2013.
About Bally Technologies, Inc.
With a history dating back to 1932, Las Vegas-based Bally Technologies designs, manufactures, operates, and distributes advanced technology-based gaming devices and systems worldwide, as well as interactive and mobile solutions. Bally’s product line includes reel-spinning slot machines, video slot machines, wide-area progressives, and Class II, lottery, and central determination games and platforms. Bally also offers an array of casino management, slot accounting, bonusing, cashless, and table-management solutions. Additional Company information, including the Company’s investor presentation, can be found at BallyTech.com. Connect with Bally on Facebook, Twitter, YouTube, LinkedIn, and Pinterest.
This news release may contain “forward-looking” statements within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, and is subject to the safe harbors created thereby. Forward looking-statements are subject to change and involve risks and uncertainties that could significantly affect future results, including those risks detailed from time to time in the Company’s filings with the Securities and Exchange Commission. Although the Company believes any expectations expressed in any forward-looking statements are reasonable, future results may differ materially from those expressed in any forward-looking statements. The Company undertakes no obligation to update the information in this press release except as required by law and represents that the information speaks only as of today’s date.
— BALLY TECHNOLOGIES, INC. —
BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS AND YEAR ENDED JUNE 30, 2013 AND JUNE 30, 2012
Three Months Ended Twelve Months Ended
June 30, June 30,
2013 2012 2013 2012
(in 000s, except per share amounts)
Revenues:
Gaming equipment and systems $ 161,625 $ 152,080 $ 592,061 $ 522,342
Gaming operations 102,777 93,715 404,978 357,417
264,402 245,795 997,039 879,759
Costs and expenses:
Cost of gaming equipment and systems (1) 59,827 66,416 228,805 226,636
Cost of gaming operations 31,868 26,573 122,188 99,680
Selling, general and administrative 72,099 62,753 276,685 245,043
Research and development costs 30,326 25,581 111,118 96,182
Loss contingency accrual — 10,000 — 10,000
Depreciation and amortization 5,687 5,686 22,733 22,775
199,807 197,009 761,529 700,316
Operating income 64,595 48,786 235,510 179,443
Other income (expense):
Interest income 1,590 1,526 5,328 5,221
Interest expense (4,576 ) (4,146 ) (18,120 ) (17,378 )
Other, net (3,107 ) (568 ) (6,443 ) (2,827 )
Income from operations before income taxes 58,502 45,598 216,275 164,459
Income tax expense (21,229 ) (19,295 ) (76,574 ) (63,549 )
Net income 37,273 26,303 139,701 100,910
Less net income (loss) attributable to noncontrolling interests
(64 ) (218 ) (1,743 ) (238 )
Net income attributable to Bally Technologies, Inc.
$ 37,337 $ 26,521 $ 141,444 $ 101,148
Basic and Diluted earnings per share attributable to Bally Technologies, Inc.:
Basic earnings per share $ 0.96 $ 0.63 $ 3.53 $ 2.35
Diluted earnings per share $ 0.95 $ 0.61 $ 3.45 $ 2.28
Weighted average shares outstanding:
Basic 38,696 42,238 40,120 42,985
Diluted 39,374 43,607 40,992 44,420
(1) Cost of gaming equipment and systems excludes amortization related to certain intangibles, including core technology and license rights, which are included in depreciation and amortization.
BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2013 AND 2012
June 30,
2013
June 30,
2012
(in 000s, except share amounts)
ASSETS
Current assets:
Cash and cash equivalents $ 63,220 $ 32,673
Restricted cash 12,939 13,645
Accounts and notes receivable, net of allowances for doubtful accounts of $14,813 and $14,073 248,497 264,842
Inventories 68,407 75,066
Prepaid and refundable income tax 21,845 13,755
Deferred income tax assets 38,305 42,822
Deferred cost of revenue 22,417 17,615
Prepaid assets 14,527 13,061
Other current assets 2,920 6,980
Total current assets 493,077 480,459
Restricted long-term investments 14,786 12,171
Long-term accounts and notes receivables, net of allowances for doubtful accounts of $1,764 and $3,029 65,456 55,786
Property, plant and equipment, net of accumulated depreciation of $60,556 and $58,823 35,097 30,667
Leased gaming equipment, net of accumulated depreciation of $209,680 and $185,846 113,751 121,151
Goodwill 172,162 171,971
Intangible assets, net 25,076 39,166
Deferred income tax assets 17,944 7,409
Income tax receivable 1,837 12,041
Deferred cost of revenue 12,105 16,542
Other assets, net 27,974 23,104
Total assets $ 979,265 $ 970,467
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 25,863 $ 41,414
Accrued and other liabilities 91,127 85,310
Jackpot liabilities 11,731 11,682
Deferred revenue 62,254 46,314
Income tax payable 11,345 12,226
Current maturities of long-term debt 24,615 17,091
Total current liabilities 226,935 214,037
Long-term debt, net of current maturities 580,000 494,375
Deferred revenue 23,696 26,715
Other income tax liability 12,658 13,922
Other liabilities 16,804 23,943
Total liabilities 860,093 772,992
Commitments and contingencies
Stockholders’ equity:
Special stock, 10,000,000 shares authorized: Series E, $100 liquidation value; 0 and 115 shares issued and outstanding — 12
Common stock, $.10 par value; 100,000,000 shares authorized; 65,318,000 and 63,150,000 shares issued and 38,855,000 and 42,102,000 outstanding 6,523 6,309
Treasury stock at cost, 26,463,000 and 21,048,000 shares (1,058,381 ) (790,633 )
Additional paid-in capital 535,759 489,002
Accumulated other comprehensive loss (10,692 ) (13,477 )
Retained earnings 646,339 504,895
Total Bally Technologies, Inc. stockholders’ equity 119,548 196,108
Noncontrolling interests (376 ) 1,367
Total stockholders’ equity 119,172 197,475
Total liabilities and stockholders’ equity $ 979,265 $ 970,467
Photos/Multimedia Gallery Available: http://www.businesswire.com/multimedia/home/20130815006183/en/
MULTIMEDIA AVAILABLE:http://www.businesswire.com/cgi-bin/mmg.cgi?eid=50692120&lang=en
.
.
Contact:.
.
Bally Technologies, Inc.
Laura Olson-Reyes, 702-584-7742
Senior Director, Marketing & Corporate Communications
Lolson-reyes@ballytech.com
Michael Carlotti, 702-584-7995
Vice President of Treasury and Investor Relations
mcarlotti@ballytech.com
Mike Trask, 702-584-7451
Mobile: 702-330-6679
Corporate Communications Manager
MTrask@ballytech.com
TrueBlue Reports 2013 Second Quarter Results
Business WirePress Release: TrueBlue, Inc. – Wed, Jul 24, 2013 4:05 PM EDT..
TrueBlue, Inc. (TBI) today reported revenue for the second quarter of 2013 of $422 million, an increase of 19 percent compared to revenue of $354 million for the second quarter of 2012. Net income for the quarter was $12.5 million or $0.31 per diluted share, compared to net income of $10.3 million or $0.26 per diluted share for the second quarter of 2012.
“We are pleased with the double-digit year-over-year revenue growth we experienced this quarter,” TrueBlue CEO Steve Cooper said. “Overall, demand for our specialized blue-collar staffing solutions grew across most industries and locations.”
TrueBlue acquired MDT Personnel in the first quarter of 2013 and its integration into the company is now complete, Cooper said.
“Our teams have combined very well and I’m pleased with the way they have engaged our customers,” he said. “We’ve been successful in retaining customers and penetrating more deeply into the market.”
Cooper added that TrueBlue is optimistic about the company’s growth prospects. “Favorable trends in the staffing industry, along with the strength of our organic and acquisition growth strategies, give us confidence that we’re on track to deliver long-term shareholder value. With both the anticipated revenue decline in a large project and MDT integration costs mostly behind us, we expect to see higher levels of profit growth during the remainder of the year.”
TrueBlue estimates revenue in the range of $450 million to $460 million and net income per diluted share of $0.44 to $0.49 for the third quarter of 2013.
Management will discuss second quarter 2013 results on a conference call at 2 p.m. Pacific Standard Time (5 pm. Eastern Standard Time), today, Wednesday, July 24. The conference call can be accessed on TrueBlue’s web site: www.trueblue.com
About TrueBlue
TrueBlue (TBI) is the leading provider of blue-collar staffing and helps over 140,000 businesses be more productive through easy access to dependable temporary labor. TrueBlue provides specialized blue-collar staffing solutions to industries that include construction, manufacturing, transportation, aviation, waste, hospitality, retail, renewable energy and more. Through its Labor Ready, CLP, Spartan Staffing, PlaneTechs, and Centerline service lines, TrueBlue connects approximately 350,000 people to work annually across the U.S., Canada and Puerto Rico. Learn more about TrueBlue at www.trueblue.com.
Forward-looking Statements
This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “may,” “will,” “should,” “expects,” “intends,” “projects,” “plans,” “believes,” “estimates,” “targets,” “anticipates,” and similar expressions are used to identify these forward-looking statements. Examples of forward-looking statements include statements relating to our future financial condition and operating results, as well as any other statement that does not directly relate to any historical or current fact. Forward-looking statements are based on our current expectations and assumptions, which may not prove to be accurate. These statements are not guarantees and are subject to risks, uncertainties, and changes in circumstances that are difficult to predict. Many factors could cause actual results to differ materially and adversely from these forward-looking statements. Examples of such factors can be found in our reports filed with the SEC, including the information under the heading ‘Risk Factors’ in our Annual Report on Form 10-K for the fiscal year ended Dec. 28, 2012 and in our quarterly reports on Form 10-Q subsequently filed. Any forward-looking statement speaks only as of the date on which it is made, and we assume no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law.
TRUEBLUE, INC.
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share data)
13 Weeks Ended 26 Weeks Ended
June 28, June 29, June 28, June 29,
2013 2012 2013 2012
Revenue from services $ 422,310 $ 354,261 $ 768,809 $ 665,448
Cost of services 310,437 260,725 570,296 492,677
Gross profit 111,873 93,536 198,513 172,771
Selling, general and administrative expenses 89,339 71,526 177,771 143,610
Depreciation and amortization 5,203 4,729 10,362 9,496
Income from operations 17,331 17,281 10,380 19,665
Interest and other income, net 275 412 752 677
Income before tax expense (benefit) 17,606 17,693 11,132 20,342
Income tax expense (benefit) 5,069 7,356 (330 ) 8,475
Net income $ 12,537 $ 10,337 $ 11,462 $ 11,867
Net income per common share
Basic $ 0.31 $ 0.26 $ 0.29 $ 0.30
Diluted $ 0.31 $ 0.26 $ 0.28 $ 0.30
Weighted average shares outstanding
Basic 40,140 39,701 39,962 39,563
Diluted 40,421 40,097 40,248 39,993
TRUEBLUE, INC.
SUMMARY CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands)
June 28, December 28,
2013 2012
Assets
Current assets
Cash and cash equivalents $ 136,004 $ 129,513
Accounts receivable, net 199,315 167,292
Other current assets 20,884 20,361
Total current assets 356,203 317,166
Property and equipment, net 56,314 58,171
Restricted cash and investments 134,052 136,259
Other assets, net 129,119 90,147
Total assets $ 675,688 $ 601,743
Liabilities and shareholders' equity
Current liabilities $ 127,272 $ 113,556
Long-term liabilities 194,924 154,513
Total liabilities 322,196 268,069
Shareholders' equity 353,492 333,674
Total liabilities and shareholders' equity $ 675,688 $ 601,743
TRUEBLUE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
26 Weeks Ended
June 28, June 29,
2013 2012
Cash flows from operating activities
Net income $ 11,462 $ 11,867
Adjustments to reconcile net income to net cash from operating activities
Depreciation and amortization 10,362 9,496
Provision for doubtful accounts 6,415 2,022
Stock-based compensation 4,594 4,846
Deferred income taxes (2,564 ) (15 )
Other operating activities 848 972
Changes in operating assets and liabilities, net of acquisitions
Accounts receivable (8,528 ) (11,938 )
Income taxes (143 ) 4,488
Other assets 341 2,084
Accounts payable and other accrued expenses
(7,496
) (3,173 )
Accrued wages and benefits
7,053
5,949
Workers' compensation claims reserve 1,583 882
Other liabilities 186 277
Net cash provided by operating activities
24,113
27,757
Cash flows from investing activities
Capital expenditures (7,200 ) (9,535 )
Acquisition of businesses, net of cash acquired (54,873 ) -
Change in restricted cash and cash equivalents
3,709
9,774
Purchases of restricted investments (6,789 ) (18,153 )
Maturities of restricted investments 10,871 12,726
Other - -
Net cash used in investing activities
(54,282
) (5,188 )
Cash flows from financing activities
Purchases and retirement of common stock - (3,990 )
Net proceeds from stock option exercises and employee stock purchase plans
6,023 3,142
Common stock repurchases for taxes upon vesting of restricted stock
(2,182 ) (1,996 )
Proceeds from note payable 34,000 -
Payments on debt (1,115 ) (88 )
Other 478 556
Net cash provided by (used in) financing activities 37,204 (2,376 )
Effect of exchange rates on cash (544 ) (58 )
Net change in cash and cash equivalents 6,491 20,135
CASH AND CASH EQUIVALENTS, beginning of period 129,513 109,311
CASH AND CASH EQUIVALENTS, end of period $ 136,004 $ 129,446
.
.
Contact:.
.
TrueBlue, Inc.
EVP & C
Derrek Gafford, 253-680-8214
or
VP of Corporate Communications
Stacey Burke, 253-680-8291.
...
Rick's Cabaret International, Inc. Reports 20.4% Increase In Net Income For Its Third Quarter; Revenues Rose 18.3%
Non-GAAP Net Income Rose 31.5% to $3.4 Million
PR NewswirePress Release: Rick's Cabaret International, Inc. –
HOUSTON, Aug. 8, 2013 /PRNewswire/ -- Rick's Cabaret International, Inc. (RICK) today reported consolidated total revenues of $28.3 million for its third quarter ended June 30, 2013, an increase of 18.3 percent over the $23.9 million in the same period last year.
(Logo: http://photos.prnewswire.com/prnh/20110418/MM85342LOGO)
Consolidated net income was $2.2 million, an increase of 20.4 percent over the $1.8 million last year; non-GAAP* net income of $3.4 million versus $2.6 million last year; GAAP earnings of 23 cents per diluted share vs. 19 cents last year; non-GAAP earnings per share of 35 cents versus 27 cents last year; GAAP income from operations this quarter was $5.7 million compared with $4.0 million in the same quarter last year while non-GAAP income from operations** was $7.0 million compared with $5.1 million. Adjusted EBITDA*** was $6.9 million, versus $5.4 million last year.
Net income was impacted by $540,000 in one time or unusual expenses of $230,000 in costs for new businesses yet to be opened, and $310,000 to settle two lawsuits. "The quarter was strong and we are particularly pleased with the performance of the Jaguars clubs and our new Bombshells Restaurant in Dallas," said Eric Langan, president and CEO of the company. "The challenges of the last four years are largely behind us, we have learned from mistakes such as the Las Vegas acquisition, and we are now on a solid growth trajectory."
Mr. Langan noted that the cost of goods sold for same-location-same-period of club operations for the third quarter was 12.9 percent, compared to 13.7 percent for the same period ended June 30, 2012. The decrease was due principally to the hiring of a corporate beverage director and the continuing of the company's national buying power for alcoholic beverages and energy drinks. Operating margin, the percentage of operating income to total revenues, was 20 percent this year versus 16.9 percent.
Mr. Langan will discuss the quarterly results in a conference call today at 4:30 p.m. EDT. The call is being webcast by PrecisionIR, www.precisionir.com and can be accessed at the Rick's Cabaret investor website, www.ricksinvestor.com or via www.InvestorCalendar.com. The toll free dial-in number is 877-407-8033; live international dial-in is 201-689-8033. The replay number is 877-660-6853 (International:201-612-7415) with Conference ID 416486 and replay is available until August 15th at 11:59 PM.
RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
(in thousands, except per share data)
June 30,
2013
September 30, 2012
Assets
(UNAUDITED)
Current assets:
Cash and cash equivalents
$ 9,045
$ 5,520
Accounts receivable:
Trade, net
1,876
1,743
Other, net
486
296
Marketable securities
551
1,059
Inventories
1,475
1,260
Deferred tax asset
4,463
3,635
Prepaid expenses and other current assets
2,297
1,123
Assets of discontinued operations
26
72
Total current assets
20,219
14,708
Property and equipment, net
95,359
79,940
Other assets:
Goodwill
43,987
43,421
Other indefinite lived intangibles
54,966
50,608
Definite lived intangibles
1,153
1,177
Other
4,717
2,539
Total other assets
104,823
97,745
Total assets
$ 220,401
$ 192,393
LIABILITIES AND STOCKHOLDERS' EQUITY
(in thousands, except per share data)
June 30,
2013
September 30, 2012
Liabilities and Stockholders' Equity
(UNAUDITED)
Current liabilities:
Accounts payable
$
2,364
$
1,865
Accrued liabilities
6,878
4,298
Texas patron tax liability
12,335
9,849
Current portion of derivative liabilities
-
75
Current portion of long-term debt
7,770
6,603
Liabilities of discontinued operations
47
163
Total current liabilities
29,394
22,853
Deferred tax liability
25,824
23,963
Other long-term liabilities
876
833
Long-term debt
68,774
56,925
Total liabilities
124,868
104,574
Commitments and contingencies
Temporary equity - Common stock, subject to put rights zero and 9 shares, respectively
-
207
PERMANENT STOCKHOLDERS' EQUITY:
Preferred stock, $.10 par, 1,000 shares authorized; none issued and outstanding
-
-
Common stock, $.01 par, 20,000 shares authorized; 9,520 and 9,584 shares issued and outstanding, respectively
95
96
Additional paid-in capital
61,554
61,212
Accumulated other comprehensive income
46
59
Retained earnings
30,536
22,939
Total Rick's permanent stockholders' equity
92,231
84,306
Noncontrolling interests
3,302
3,306
Total permanent stockholders' equity
95,533
87,612
Total liabilities and stockholders' equity
$
220,401
$
192,393
RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
FOR THE THREE MONTHS
ENDED JUNE 30,
FOR THE NINE MONTHS
ENDED JUNE 30,
2013
2012
2013
2012
(UNAUDITED)
(UNAUDITED)
Revenues:
Sales of alcoholic beverages
$ 11,105
$ 9,711
$ 32,554
$ 29,033
Sales of food and merchandise
3,288
2,286
8,744
6,619
Service revenues
12,382
10,576
38,089
31,743
Other
1,533
1,348
4,790
3,958
Total revenues
28,308
23,921
84,177
71,353
Operating expenses:
Cost of goods sold
3,680
3,279
10,561
9,601
Salaries and wages
6,413
5,299
18,600
15,428
Stock compensation
282
12
845
33
Other general and administrative:
Taxes and permits
4,275
3,618
13,069
11,018
Charge card fees
410
361
1,126
1,042
Rent
846
726
2,199
2,150
Legal and professional
642
992
2,263
2,433
Advertising and marketing
1,181
959
3,452
2,994
Insurance
573
387
1,642
1,027
Utilities
523
454
1,564
1,264
Depreciation and amortization
1,337
1,398
3,969
3,708
Settlement of lawsuits
160
200
160
2,031
Loss on sale of assets
-
332
-
332
Other
2,336
1,867
6,967
5,432
Total operating expenses
22,658
19,884
66,417
58,493
Operating income
5,650
4,037
17,760
12,860
Other income (expense):
Interest income and other
(2)
(2)
6
2
Interest expense
(1,868)
(1,098)
(5,273)
(3,178)
Gain (loss) on change in fair value of derivative instruments
1
(17)
2
120
Income from continuing operations before income taxes
3,781
2,920
12,495
9,804
Income taxes
1,409
1,022
4,608
3,366
Income from continuing operations
2,372
1,898
7,887
6,438
Loss from discontinued operations, net of income taxes
(124)
(22)
(141)
(155)
Net income
2,248
1,876
7,746
6,283
Less: net income attributable to noncontrolling interests
(53)
(53)
(159)
(159)
Net income attributable to Rick's Cabaret International, Inc.
$ 2,195
$ 1,823
$ 7,587
$ 6,124
Basic earnings (loss) per share attributable to Rick's shareholders:
Income from continuing operations
$ 0.24
$ 0.19
$ 0.81
$ 0.65
Loss from discontinued operations
$ (0.01)
$ (0.00)
$ (0.01)
$ (0.02)
Net income
$ 0.23
$ 0.19
$ 0.80
$ 0.63
Diluted earnings (loss) per share attributable to Rick's shareholders:
Income from continuing operations
$ 0.24
$ 0.19
$ 0.81
$ 0.65
Loss from discontinued operations
$ (0.01)
$ (0.00)
$ (0.01)
$ (0.02)
Net income
$ 0.23
$ 0.19
$ 0.79
$ 0.63
Weighted average number of common shares outstanding:
Basic
9,479
9,725
9,523
9,710
Diluted
9,647
9,731
9,871
9,717
The following tables present our non-GAAP measures for the periods ended June 30, 2013 and 2012 (in thousands, except per share amounts):
For the Three Months
For the Nine Months
Ended June 30,
Ended June 30,
(in thousands)
2013
2012
2013
2012
Reconciliation of GAAP net income to
Adjusted EBITDA
GAAP net income
$ 2,195
$ 1,823
$ 7,587
$ 6,124
Income tax expense
1,409
1,022
4,608
3,366
Interest expense and income and gain on derivative
1,869
1,117
5,265
3,056
Loss from discontinued operations
124
22
141
155
Depreciation and amortization
1,337
1,398
3,969
3,708
Adjusted EBITDA
$ 6,934
$ 5,382
$ 21,570
$ 16,409
Reconcilation of GAAP net income (loss) to
non-GAAP net income
GAAP net income
$ 2,195
$ 1,823
$ 7,587
$ 6,124
Patron tax
746
726
2,536
2,265
Amortization of intangibles
92
117
322
345
(Gain) loss on change in fair value of derivative instruments
(1)
17
(2)
(120)
Stock-based compensation
282
12
845
33
Litigation and other one-time settlements
160
200
160
2,031
Income tax expense
1,409
1,022
4,608
3,366
Acquisition costs
30
-
119
131
Loss from discontinued operations, net of income taxes
124
22
141
155
Non-GAAP provision for income taxes
(1,664)
(1,374)
(5,415)
(5,004)
Non-GAAP net income
$ 3,373
$ 2,565
$ 10,901
$ 9,326
Reconciliation of GAAP diluted net income
per share to non-GAAP diluted net income per share
Fully diluted shares
9,647
9,731
9,871
9,717
GAAP net income
$ 0.23
$ 0.19
$ 0.77
$ 0.63
Patron tax
0.08
0.07
0.26
0.23
Amortization of intangibles
0.01
0.01
0.03
0.04
(Gain) loss on change in fair value of derivative instruments
-
0.00
(0.00)
(0.01)
Stock-based compensation
0.03
0.00
0.09
0.00
Litigation and other one-time settlements
0.02
0.02
0.02
0.21
Income tax expense
0.15
0.11
0.47
0.35
Acquisition costs
0.00
-
0.01
0.01
Loss from discontinued operations, net of income taxes
0.01
0.00
0.01
0.02
Non-GAAP provision for income taxes
(0.17)
(0.14)
(0.55)
(0.51)
Non-GAAP diluted net income per share
$ 0.35
$ 0.27
$ 1.11
$ 0.96
Reconciliation of GAAP operating income to
non-GAAP operating income
GAAP operating income
$ 5,650
$ 4,037
$ 17,760
$ 12,860
Patron tax
746
726
2,536
2,265
Amortization of intangibles
92
117
322
345
Stock-based compensation
282
12
845
33
Litigation and other one-time settlements
160
200
160
2,031
Acquisition costs
30
-
134
131
Non-GAAP operating income
$ 6,960
$ 5,092
$ 21,757
$ 17,665
Reconciliation of GAAP operating margin to
non-GAAP operating margin
GAAP operating income
20.0%
16.9%
21.1%
18.0%
Patron tax
2.6%
3.0%
3.0%
3.2%
Amortization of intangibles
0.3%
0.5%
0.4%
0.5%
Stock-based compensation
1.0%
0.1%
1.0%
0.0%
Litigation and other one-time settlements
0.6%
0.8%
0.2%
2.8%
Acquisition costs
0.1%
0.0%
0.2%
0.2%
Non-GAAP operating margin
24.6%
21.3%
25.8%
24.8%
* Non-GAAP Net Income. We exclude from non-GAAP net income amortization of intangibles, patron taxes, income tax expense, impairment charges, gains and losses from asset sales, stock based compensation, litigation 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.
** Non-GAAP Operating Income. We exclude from Non-GAAP operating income 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.
*** Adjusted EBITDA. We exclude from Adjusted EBITDA 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.
Our Form 10-Q contains additional details relative to each of the non-GAAP financial measures and is posted on our website at www.ricksinvestor.com.
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" and "Tootsie's Cabaret" and other brand names. 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.
RLJ Entertainment Reports Financial Results for the Second Quarter Ended June 30, 2013
GlobeNewswirePress Release: RLJ Entertainment, Inc. – Mon, Aug 5, 2013 8:30 AM EDT..
SILVER SPRING, Md., Aug. 5, 2013 (GLOBE NEWSWIRE) -- RLJ Entertainment Inc., ("RLJ Entertainment" or "the Company") (RLJE), today reported results for the second quarter ended June 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, fitness and faith, by using new technologies to deliver that content to consumers.
Robert L. Johnson, Chairman of RLJ Entertainment stated, "We continue to make solid progress integrating the Acorn and Image businesses and I am pleased with management's hard work to date to refine the growth strategy and its content investment approach. The team is highly focused on positioning RLJ Entertainment for growth over the long-term, which includes investing in a targeted portfolio of content offerings and leveraging a strong set of traditional and digital distribution channels, particularly in the US and UK. To support these efforts, Miguel Penella and I have made several key appointments over the last few months, including Drew Wilson, our CFO, and Nina Henderson Moore, President of our Urban Digital Channel, 'OnCue'. I firmly believe we now have the right executive team in place to build an exciting content company that satisfies increasing consumer demand for unique, quality content across multiple platforms."
GAAP Financial Results
The financial results for the three and six months ended June 30, 2013 reflect the operating activities of RLJ Entertainment and its subsidiaries (referred to as the "successor" period). The results for the three and six months ended June 30, 2012 reflect the operations of only the Acorn Media and its subsidiaries businesses (referred to as the "predecessor" period). The comparative discussion below for these periods is based on Generally Accepted Accounting Principles (or 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 June 30, 2013, net revenue increased $17.0 million to $34.3 million. Net revenue for the six months ended June 30, 2013 increased $37.7 million to $74.6 million.
Net loss for the three months ended June 30, 2013 totaled $16.9 million, compared to net loss of $554,000 in three months ended June 30, 2012. For the six months ended June 30, 2013 net loss totaled $20.5 million, compared to net income of $288,000 in the six months ended June 30, 2012.
Miguel Penella, Chief Executive Officer of RLJ Entertainment, commented:
"Our results during the second quarter reflect the continued successful execution of our business strategy and the progress we have made bringing together Acorn and Image. We remain highly focused on identifying synergies derived from the merger of the two companies, securing additional cost savings, refining and strengthening our content investment strategy through capital reallocation, and improving our balance sheet. While these efforts have impacted our financial results in the quarter, we are confident that the steps we are taking will solidify further growth opportunities, clarify the RLJ Entertainment investment thesis, and enable us to achieve our long-term financial targets."
Proforma Financial Results
The Company is presenting financial information for the three and six month's ended June 30, 2013 and pro forma financial information for three and six months ended June 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 operating results of RLJ Entertainment as if Image Entertainment 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 RLJ Entertainment's future operating results.
For the three months ended June 30, 2013, RLJ Entertainment net revenue declined $6.3 million to $34.3 million compared to pro forma net revenue of $40.6 million in the three months ended June 30, 2012. The decline in net revenue is primarily attributable to the timing of certain title releases between quarters and a significant one-time transaction related to management's planned execution of synergies to consolidate fulfillment partners. Management believes that the consolidation will position the Company for future costs savings by combining, at scale, all of its operations under a single distribution and fulfillment partner. In addition, Image gross sales increased by 4.0% but were offset by increased price rebate and return reserves for the three months ended June 30, 2013 compared to the three months ended 2012. Image's 2012 revenues included a significant reduction in rebates and sales returns reserves that did not repeat in the three months ended June 30, 2013.
For the six months ended June 30, 2013, RLJ Entertainment net revenue declined $7.4 million to $74.6 million compared to pro forma net revenue of $82.0 million for the six months ended June 30, 2012. Results were primarily attributable to the timing of certain title releases between quarters and a significant one-time transaction related to the planned execution of synergies to consolidate fulfillment partners in the second quarter of 2013, as explained above. Acorn revenue increased 12% in the six months ended June 30, 2013 versus the prior year primarily due to the release of "Foyle's War 8" offset by the Image revenue decline resulting from the timing of three high-profile titles in 2012, "The Double," "All Things Fall Apart" and "Beneath the Darkness" that performed at or above expectations compared to two high-profile titles, "The Numbers Station" and "Day of the Falcon in 2013."
Adjusted EBITDA decreased $12.1 million for the three months ended June 30, 2013, compared to the same period in 2012. The decline in Adjusted EBITDA was primarily attributable to significant charges the company recorded in COGS and SG&A related to (a) finished goods inventory impairment charge ($3.2 million) from the early termination of a content output agreement, (b) finished goods inventory write-down ($1.5 million) associated with the Madacy line and other obsolete hard goods inventory and (c) the recording of minor asserted legal claims of $0.5 million. Additionally, the decrease in Adjusted EBITDA was partly driven by (i) the decline in revenue for the quarter versus prior year resulting from the timing of key title releases ($4 million) and (ii) the impact of a single wholesale return transaction in the quarter resulting from management's consolidation of a fulfillment partner. The sales return had a $1.1 million in Adjusted EBITDA negative impact. We expect the returned inventory to be resold at normal pricing in upcoming quarters.
Adjusted EBITDA decreased $13.6 million for the six months ended June 30, 2013, as compared to the prior year. The decline in Adjusted EBITDA for the six months ended June 30, 2013 primarily relates to items discussed above in the three months ended June 30, 2013 Adjusted EBITDA variance along with the impact of increased foreign currency loss of $1.4 million during the six months ended June 30, 2013.
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)
June 30, 2013 and December 31, 2012
ASSETS Successor
(In thousands, except share data) June 30, 2013 December 31, 2012
Current assets:
Cash and cash equivalents $ 3,693 $ 4,739
Accounts receivable, net 19,395 20,484
Inventories, net 15,165 23,029
Investment in content, net 26,507 30,981
Prepaid expenses and other assets 1,759 1,938
Total current assets 66,519 81,171
Noncurrent portion of accounts receivable 3,361 4,127
Noncurrent portion of investment in content 55,112 58,816
Property, equipment and improvements, net 1,448 1,800
Equity investment in ACL 21,470 25,449
Other intangible assets 21,334 23,883
Goodwill 47,382 47,382
Total assets $ 216,626 $ 242,628
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities $ 28,151 $ 30,590
Accrued royalties and distribution fees 34,091 32,658
Deferred revenue 3,787 4,339
Current portion of long term debt 11,449 4,000
Total current liabilities 77,478 71,587
Long-term portion of debt, less debt discount 68,158 78,323
Deferred tax liability 350 350
Stock warrant liability 3,522 4,324
Total liabilities 149,508 154,584
Stockholders' equity:
Common stock, $0.001 par value, 250 million shares authorized, 13,430,177 and 13,377,546 shares issued and outstanding at June 30, 2013 and December 31, 2012, respectively 13 13
Additional paid-in capital 86,284 86,133
Retained earnings (deficit) (18,759) 1,743
Accumulated other comprehensive gain (loss) (420) 155
Net stockholders' equity 67,118 88,044
Total liabilities and stockholders' equity $ 216,626 $ 242,628
RLJ ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
For the Three and Six Months Ended June 30, 2013 and 2012
Successor Predecessor
(In thousands, except per share data) Three Months Ended
June 30, 2013 Six Months Ended
June 30, 2013 Three Months Ended
June 30, 2012 Six Months Ended
June 30, 2012
Revenue $ 34,286 $ 74,592 $ 17,294 $ 36,879
Cost of sales 36,144 63,880 9,419 19,484
Gross profit (loss) (1,858) 10,712 7,875 17,395
Selling expenses 5,602 11,649 3,112 6,675
General and administrative expenses 6,592 12,267 4,805 9,652
Depreciation and amortization 1,494 2,920 130 261
Total selling, general and administrative expenses 13,688 26,836 8,047 16,588
INCOME (LOSS) FROM OPERATIONS (15,546) (16,124) (172) 807
Equity earnings of affiliates 911 1,560 497 521
Interest expense, net (1,882) (4,008) (420) (577)
Other income (expense) 158 (919) (566) (383)
Total other income (expense) (813) (3,367) (489) (439)
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES (16,359) (19,491) (661) 368
Provision (benefit) for income taxes 585 1,011 (107) 80
NET INCOME (LOSS) (16,944) (20,502) (554) 288
Less net income (loss) attributable to noncontrolling interests — — (35) 56
NET INCOME (LOSS) APPLICABLE TO COMMON SHAREHOLDERS $ (16,944) $ (20,502) $ (519) $ 232
Net income (loss) per common share:
Unrestricted common stock:
Basic $ (1.27) $ (1.53) $ (0.51) $ 0.23
Diluted $ (1.27) $ (1.53) $ (0.51) $ 0.23
Restricted common stock:
Basic $ (1.27) $ (1.53) $ — $ —
Diluted $ (1.27) $ (1.53) $ — $ —
Unrestricted weighted average shares outstanding:
Basic 13,340 13,340 1,023 1,023
Diluted 13,340 13,340 1,023 1,031
Restricted weighted average shares outstanding:
Basic and diluted 49 43 — —
RLJ ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(unaudited)
For the Three and Six Months Ended June 30, 2013 and 2012
Successor Predecessor
(In thousands) Three Months Ended
June 30, 2013 Six Months Ended
June 30, 2013 Three Months Ended
June 30, 2012 Six Months Ended
June 30, 2012
NET INCOME (LOSS):
Net income (loss) $ (16,944) $ (20,502) $ (554) $ 288
Other comprehensive income (loss):
Foreign currency translation gain (loss) 106 (575) (57) 144
Total comprehensive income (loss) (16,838) (21,077) (611) 432
Less: comprehensive income (loss) attributable to noncontrolling interests:
Share of net income (loss) — — (35) 56
Share of foreign currency translation loss — — (3) (5)
Comprehensive income (loss) attributable to noncontrolling interest — — (38) 51
Comprehensive income (loss) attributable to common shareholders $ (16,838) $ (21,077) $ (573) $ 381
RLJ ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF EQUITY
(unaudited)
For the Six Months Ended June 30, 2013 (Successor)
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 Stockholders' Equity
Balance at January 1, 2013 13,378 $ 13 $ 86,133 $ — $ 1,743 $ 155 $ — $ — $ 88,044
Issuance of restricted common stock for services 52 — — — — — — — —
Stock-based compensation — — 151 — — — — — 151
Foreign Currency Translation — — — — — (575) — — (575)
Net loss — — — — (20,502) — — — (20,502)
Balance at June 30, 2013 13,430 $ 13 $ 86,284 $ — $ (18,759) $ (420) $ — $ — $ 67,118
For the Six Months Ended June 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 Stockholders' Equity
Balance at January 1, 2012 1,023 $ 10 $ 4,451 $ (684) $ 26,295 $ (421) $ (583) $ 759 $ 29,827
Stock-based compensation — — 231 — — — — — 231
Net income — — — — 232 — — 56 288
Foreign Currency Translation — — — — — 149 — (5) 144
Stockholders' Distributions — — — — (3,737) — — (265) (4,002)
Balance at June 30, 2012 1,023 $ 10 $ 4,682 $ (684) $ 22,790 $ (272) $ (583) $ 545 $ 26,488
RLJ ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
For the Six Months Ended June 30, 2013 and 2012
Successor Predecessor
(In thousands) 2013 2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (20,502) $ 288
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Equity earnings in affiliates (1,560) (521)
Amortization of content, including impairments 36,588 8,149
Depreciation and amortization 370 221
Amortization of intangible assets 2,550 40
Foreign currency exchange loss 1,774 376
Fair value of stock warrant liability (802) —
Noncash interest expense 584 —
Stock-based compensation expense 151 231
Changes in assets and liabilities associated with operating activities:
Accounts receivable, net 1,669 4,365
Inventories, net 7,793 592
Investment in content, net (27,930) (8,802)
Prepaid expenses and other assets 183 (626)
Accounts payable and accrued liabilities (1,946) (4,828)
Deferred revenue (552) —
Net cash used in operating activities (1,630) (515)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (28) (402)
Acquisition of ACL — (21,871)
Dividends received from ACL 4,005 1,105
Net cash provided by (used in) investing activities $ 3,977 $ (21,168)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under revolving credit facility $ 10,398 $ 5,901
Repayments of borrowings under revolving credit facility (3,000) —
Proceeds from debt 191 20,700
Repayment of debt (10,452) (1,334)
Distributions to stockholders — (4,002)
Net cash provided by (used in) financing activities (2,863) 21,265
Effect of exchange rate changes on cash (530) (219)
NET DECREASE IN CASH: (1,046) (637)
Cash at beginning of period 4,739 1,625
Cash at end of period $ 3,693 $ 988
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 2,608 $ 462
Income taxes $ 253 $ 546
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 six months ended June 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 Six Months Ended June 30, 2013 and 2012
Three Months Ended June 30, Six Months Ended June 30,
(in thousands) 2013
Actual 2012
Proforma (1) 2013
Actual 2012
Proforma (1)
Revenues $ 34,286 $ 40,563 $ 74,592 $ 82,009
Costs of sales 36,144 29,341 63,880 58,199
Gross profit (1,858) 11,222 10,712 23,810
Selling, general and administrative expenses 13,688 13,895 26,836 29,759
Income (loss) from operations (15,546) (2,673) (16,124) (5,949)
Equity earnings of affiliates 911 496 1,560 1,024
Interest expense, net (1,882) (1,938) (4,008) (3,876)
Other income (expense) 158 (751) (919) 1,775
Provision (benefit) for income taxes 585 30 1,011 77
Net income (loss) $ (16,944) $ (4,836) $ (20,502) $ (6,949)
Adjusted EBITDA $ (6,274) $ 5,801 $ (2,538) $ 11,050
*Notes to the Proforma Income Statement Table:
(1) An adjustment for interest expense has been made to the prior year three and six month ended June 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 GAAP net loss:
Three Months Ended June 30, Six Months Ended June 30,
(in thousands) 2013
Actual 2012
Proforma 2013
Actual 2012
Proforma
Net income (loss) $ (16,944) $ (4,836) $ (20,502) $ (6,949)
Amortization of content 19,319 18,382 36,588 33,995
Cash investment in content (13,468) (13,588) (27,930) (28,407)
Depreciation and amortization 1,494 1,422 2,920 2,833
Interest expense 1,882 1,938 4,008 3.876
Provision (benefit) for income tax 585 (30) 1,011 (77)
Transactions costs and severance 1,379 2,058 2,018 4,885
Warrant liability (598) — (802) —
Stock-based compensation 77 455 151 894
Adjusted EBITDA $ (6,274) $ 5,801 $ (2,538) $ 11,050
The above Adjusted EBITDA presentation differs from the Adjusted EBITDA presentation for the period ended March 31, 2013 and 2012. The amounts excluded from the current presentation of Adjusted EBITDA are ACL EBITDA, foreign currency exchange gain (loss) and other income related to Madacy.
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Contact:.
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Sloane & Company
Erica Bartsch, 212-446-1875
ebartsch@sloanepr.com
Traci Otey Blunt, 240-744-7858
The RLJ Companies
press@rljcompanies.com
Wireless Telecom Group Announces Second Quarter Financial Results Including Increases in Net Sales of 22.7% and Net Income of 61.4% and Contract Award of $1.1M with the FAA
Business WirePress Release: Wireless Telecom Group, Inc. – 5 Wireless Telecom Group, Inc. (NYSE MKT: WTT) announced today results for the second quarter and six months ended June 30, 2013.
For the quarter ended June 30, 2013, the Company reported net sales of $8,705,000, compared to $7,092,000 for the same period in 2012, an increase of 22.7%.
The Company also reported net income of $1,058,000 or $0.04 per diluted share for the second quarter of 2013, compared to net income of $655,000, or $0.03 per diluted share, for the second quarter of 2012, an increase of 61.4%.
For the six months ended June 30, 2013, the Company reported net sales of $15,502,000, compared to $13,994,000 for the same period in 2012, an increase of 10.8%.
The Company also reported net income of $1,404,000 or $0.06 per diluted share for the first six months of 2013, compared to net income of $1,311,000, or $0.05 per diluted share, for the same period of 2012, an increase of 7.1%.
For the quarter ended June 30, 2013, total operating expenses were $3,363,000, as compared to $2,981,000 for the same period of 2012, an increase of 12.8%.
For the six months ended June 30, 2013, total operating expenses were $6,439,000, as compared to $5,784,000 for the same period of 2012, an increase of 11.3%.
The increase in second quarter and six months ended June 30, 2013 operating expenses was primarily due to increases in professional and consulting fees, non-employee sales commissions and stock compensation expense.
Additionally, on August 1, 2013, the Company’s wholly-owned subsidiary, Boonton Electronics, was awarded a contract with the Federal Aviation Administration (“FAA”) to supply Boonton 4500B RF Peak Power Meters in support of the Common Air Route Surveillance Radar (“CARSR”) installations. The total order value of the product to be sold under the contract is approximately $1.1M and a considerable portion of the order is expected to be realized over fiscal years 2013 and 2014.
Paul Genova, CEO of Wireless Telecom Group, Inc. stated “We are excited by the continued growth in our Network Solutions business segment, resulting in improvements to both revenue and segment income. Revenue in our Network Solutions segment for the first half of 2013 increased 49% to $9,748,000 compared to the prior year period, while segment income for the first half of 2013 increased 48% to $2,312,000 compared to the prior year period. Although our Test and Measurement segment experienced soft order flow during the first half of 2013, recent order activity has been very encouraging, including a $1.1M contract award received in early August from the FAA.”
Continued Genova, “We value our relationship with those government agencies critical to our success, including the FAA, and continue to be a proud supplier of test instruments in support of ongoing maintenance and development of state of the art communication systems.”
Genova continued, “We will continue to execute our strategic plan and build upon current order momentum as we head into the second half of 2013.”
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 regarding Boonton 4500B RF Peak Power Meters, including the timing associated with the realization of revenue thereunder; improvements, if any, to both revenue and Network Solutions segment income; growth in the Company’s Network Solutions business segment; Test and Measurement segment order flow, including recent order activity; and the Company’s ability to execute on its strategic plan and build upon order momentum as it heads into the second half of 2013 and beyond. 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.
SELECTED FINANCIAL RESULTS
(In thousands, except per share amounts)
Three months ended Six months ended
June 30, June 30,
(Unaudited) (Unaudited)
2013 2012 2013 2012
Statement of Operations Data:
Net sales $ 8,705 $ 7,092 $ 15,502 $ 13,994
Gross profit 4,080 3,590 7,401 6,945
Operating expenses
Research and development 627 620 1,239 1,219
Sales and marketing 1,319 1,160 2,341 2,232
General and administrative 1,417 1,201 2,859 2,333
Total operating expenses 3,363 2,981 6,439 5,784
Interest and other (income) expense (201) (22) (215) (31)
Income before income taxes 918 631 1,177 1,191
Net income $1,058 $655 $1,404 $1,311
Net Income per common share:
Basic $0.04 $0.03 $0.06 $0.05
Diluted $0.04 $0.03 $0.06 $0.05
Weighted average shares outstanding:
Basic 23,853 24,305 23,863 24,368
Diluted 24,433 24,664 24,358 24,729
June 30, December 31,
2013 2012
(Unaudited)
Balance Sheet Data:
Cash & cash equivalents $ 12,407 $ 12,970
Working capital $ 27,604 $ 26,516
Total assets $ 41,839 $ 41,230
Total liabilities $ 4,586 $ 5,315
Shareholders’ equity $ 37,253 $ 35,915
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Contact:.
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Wireless Telecom Group, Inc.
Robert Censullo, 973-386-9696
Lakes Entertainment Announces Results for Second Quarter 2013
Business WirePress Release: Lakes Entertainment, Inc. – 7 hours ago..
Lakes Entertainment, Inc. (LACO) today announced results for the three months ended June 30, 2013.
Second Quarter Results
Net earnings for the second quarter of 2013 were $0.2 million, compared to net earnings of $0.4 million in the second quarter of 2012. Loss from operations was $1.2 million for the second quarter of 2013 compared to a loss from operations of $1.1 million for the second quarter of 2012. Basic and diluted earnings were $0.01 per share for the second quarter of 2013 compared to earnings of $0.02 per share for the second quarter of 2012.
Lakes Entertainment reported second quarter 2013 net revenues of $8.5 million, compared to prior-year second quarter net revenues of $2.5 million. The increase was due primarily to the addition of $4.9 million in net revenue 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 contributing to the increase in revenues was an additional $1.1 million in management fees earned during the second quarter of 2013 compared to the second quarter of 2012 related to the Red Hawk Casino, owned by the Shingle Springs Band of Miwok Indians, near Sacramento, California.
During the second quarter of 2013, property operating expenses for Rocky Gap, which primarily related to gaming operations, rooms, food and beverage and golf were $3.4 million.
For the second quarter of 2013, selling, general and administrative expenses were $4.6 million compared to $1.9 million in the second quarter of 2012. Included in these amounts were Lakes corporate selling, general and administrative expenses of $2.0 million and $1.9 million during the second quarters of 2013 and 2012, respectively. The increase in Lakes corporate selling, general and administrative expenses was due primarily to an increase in professional fees which was partially offset by a decrease in payroll and related expenses and travel expenses. Rocky Gap selling, general and administrative expenses were $2.6 million during the second quarter of 2013.
On May 22, 2013, Rocky Gap opened its recently completed gaming facility which features 558 video lottery terminals, 10 table games, 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. A new event center is being constructed which will be able to accommodate large groups and will feature multiple flexible use meeting rooms and is expected to be available for use in the fourth quarter of 2013. Lakes expenses certain project preopening costs as incurred. During the second quarter of 2013, Lakes recognized preopening expenses of $0.9 million related to the Rocky Gap project. There were no preopening expenses during the second quarter of 2012.
There were no impairments and other losses during the second quarter of 2013. Lakes recognized impairments and other losses of $1.4 million during the second quarter of 2012 which included $0.8 million due to the March 2012 determination that Lakes would not continue to move forward with the casino project with the Jamul Indian Village (“Jamul Tribe”) near San Diego, California, and the termination of Lakes’ agreement with the Jamul Tribe. Also included in impairments and other losses for the three months ended July 1, 2012 were $0.6 million related to costs associated with development plans for the Rocky Gap project which were subsequently revised.
Amortization of intangible assets related to Indian casino projects was $0.3 million for each of the second quarters of 2013 and 2012.
Depreciation and amortization was $0.5 million for the three months ended June 30, 2013 compared to $0.1 million for the three months ended July 1, 2012. The increase related to depreciation on Rocky Gap fixed assets.
Other income, net, was $1.5 million for the second quarter of 2013 compared to $1.4 million for the second quarter of 2012, a significant portion of which relates to non-cash accretion of interest on the Company’s notes receivable.
As of June 30, 2013, the Company was in a year-to-date pre-tax book loss position. There was no income tax benefit for the second quarter of 2013 because the Company has utilized all carry back potential and future realization of benefits is uncertain. The income tax benefit for the second quarter of 2012 was $0.1 million and resulted from the Company’s ability to carry back its taxable losses to a prior year and receive a refund of taxes previously paid.
Six Month Results
Net losses for the six months ended June 30, 2013 were $0.1 million, compared to net earnings of $2.2 million for the six months ended July 1, 2012. Loss from operations was $3.1 million for the first six months of 2013 compared to $2.7 million for the first six months of 2012. Basic and diluted losses were less than $0.01 per share for the first half of 2013 compared to earnings of $0.08 per share for the first half of 2012.
Lakes Entertainment reported net revenues of $11.9 million for the first six months of 2013, compared to net revenues of $4.5 million in the prior year period. The increase was due primarily to the addition of $5.4 million in net revenue related to the operation of Rocky Gap. Also contributing to the increase in revenues was an additional $1.9 million in management fees earned during the first half of 2013 compared to the prior year period related to the Red Hawk Casino.
During the first six months of 2013, property operating expenses for Rocky Gap which related primarily to gaming operations, rooms, food and beverage and golf were $4.0 million.
For the six months ended June 30, 2013, selling, general and administrative expenses were $8.4 million compared to $4.2 million for the six months ended July 1, 2012. Included in these amounts were Lakes corporate selling, general and administrative expenses of $4.0 million and $4.2 million, during the first six 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 which was partially offset by an increase in professional fees. Rocky Gap selling, general and administrative expenses were $4.4 million during the first six months of 2013.
During the six months ended June 30, 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.
There were no impairments and other losses during the six months ended June 30, 2013. Lakes recognized impairments and other losses of $2.3 million during the six months ended July 1, 2012 which included $1.7 million due to the March 2012 determination that Lakes would not continue to move forward with the casino project with the Jamul Tribe, and the termination of Lakes’ agreement with the Jamul Tribe. Also included in impairments and other losses for the six months ended July 1, 2012 were $0.6 million related to costs associated with development plans for the Rocky Gap project which were subsequently revised.
Amortization of intangible assets related to Indian casino projects was $0.5 million for both the six months ended June 30, 2013 and the six months ended July 1, 2012.
Depreciation and amortization was $0.7 million for the six months ended June 30, 2013 compared to $0.1 million for the six months ended July 1, 2012. The increase related to depreciation on Rocky Gap fixed assets.
Other income, net, was $3.0 million for the six months ended June 30, 2013 compared to $2.7 million for the six months ended July 1, 2012. A significant portion of the remaining other income, net, in both periods relates to non-cash accretion of interest on the Company’s notes receivable.
There was no income tax benefit for the six months ended June 30, 2013 because the Company has utilized all carry back potential. The income tax benefit for the six months ended July 1, 2012 was $2.1 million and was primarily due to the Company’s ability to carry back its estimated taxable losses to a prior year and receive a refund of taxes previously paid
Tim Cope, President and Chief Financial Officer of Lakes stated, "We are excited to have opened the new gaming facility at our Rocky Gap Casino Resort near Cumberland, Maryland. Construction of the event center at Rocky Gap is on track and we expect to open that space during the fourth quarter of this year.” Mr. Cope continued, “While initial results at Rocky Gap were below expectation, we have been able to implement marketing plans to make the surrounding market aware of our offerings and we have seen increases in visitation and a growth in revenue during the month of July. Management fees from the Red Hawk Casino were up again this quarter over the prior year second quarter due primarily to a decrease in operating expenses related to a favorable state revenue share audit.”
Further commenting, Lyle Berman, Chief Executive Officer of Lakes stated, “During the month of July, we entered into a debt termination agreement with the Shingle Springs Tribe which is contingent upon the Tribe making a payment to us of $57.1 million. If the Tribe makes this payment our management agreement for the Red Hawk Casino would also terminate at that time. All existing agreements will remain as is until such payment is made and if the payment is not made then the existing agreements with the tribe will remain in place under their existing terms until their original expiration, which is December 2015. If the accelerated payment of $57.1 million is made to us under this agreement, it will allow us greater flexibility in considering new investments.” Mr. Berman continued, “In addition, we 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. 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.”
About Lakes Entertainment
Lakes Entertainment, Inc. currently owns the Rocky Gap Casino Resort near Cumberland, Maryland. Lakes has a management agreement with the Shingle Springs Band of Miwok Indians to manage the Red Hawk Casino. Lakes 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, those relating to the inability to complete or possible delays in completion of Lakes' casino projects, including various regulatory approvals and numerous other conditions which must be satisfied before completion of these projects; possible termination or adverse modification of management or development contracts; Lakes operates in a highly competitive industry; possible changes in regulations; reliance on continued positive relationships with Indian tribes and repayment of amounts owed to Lakes by Indian tribes; 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)
June 30, 2013 December 30, 2012
Assets
Current assets:
Cash and cash equivalents $ 26,753 $ 32,480
Management fees receivable 2,131 -
Income taxes receivable 2,166 2,161
Prepaids 1,092 186
Other 2,166 1,069
Total current assets 34,308 35,896
Property and equipment, net 28,238 13,279
Long-term assets related to Indian casino projects:
Notes and interest receivable, net of current portion and allowance 40,661 38,247
Intangible assets 2,599 3,127
Management fees receivable and other 553 4,786
Total long-term assets related to Indian casino projects 43,813 46,160
Other assets:
Investment in unconsolidated investee 20,997 20,161
License fee 2,085 2,100
Land held for development 1,130 1,130
Other 955 996
Total other assets 25,167 24,387
Total assets $ 131,526 $ 119,722
Liabilities and shareholders' equity
Current liabilities:
Current portion of contract acquisition costs payable, net $ 1,391 $ 1,265
Current portion of Long-term debt 475 -
Other 3,926 2,978
Total current liabilities 5,792 4,243
Long-term debt, net 10,813 -
Long-term contract acquisition costs payable, net 2,550 3,302
Total long-term liabilities 13,363 3,302
Total liabilities 19,155 7,545
Total shareholders' equity 112,371 112,177
Total liabilities and shareholders' equity $ 131,526
$
119,722
LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Operations
(In thousands, except per share data)
Three months ended Six months ended
June 30, 2013 July 1, 2012 June 30, 2013 July 1, 2012
Revenues:
Management fees $ 3,650 $ 2,503 $ 6,378 $ 4,446
Gaming 3,188 - 3,188 -
Room 615 - 879 -
Food and beverage 703 - 901 -
Other operating 410 - 507 -
License fees and other 23 16 40 36
Gross revenues 8,589 2,519 11,893 4,482
Less promotional allowances 40 - 40 -
Net revenues 8,549 2,519 11,853 4,482
Costs and expenses:
Gaming 2,018 - 2,018 -
Room 214 - 325 -
Food and beverage 759 - 1,062 -
Other operating 418 - 633 -
Selling, general and administrative 4,613 1,905 8,380 4,208
Impairments and other losses - 1,399 - 2,328
Preopening expenses 902 - 1,167 -
Amortization of intangible assets related to Indian casino projects 265 265 529 528
Loss on disposal of property and equipment 143 143
Depreciation and amortization 460 51 717 106
Total costs and expenses 9,792 3,620 14,974 7,170
Loss from operations (1,243 ) (1,101 ) (3,121 ) (2,688 )
Other income (expense):
Interest income 1,741 1,578 3,494 3,161
Interest expense (264 ) (242 ) (472 ) (494 )
Other 10 44 10 58
Total other income, net 1,487 1,380 3,032 2,725
Earnings (loss) before income taxes 244 279 (89 ) 37
Income tax benefit - (145 ) - (2,142 )
Net earnings (loss) including noncontrolling interest 244 424 (89 ) 2,179
Net loss attributable to noncontrolling interest - 1 - 61
Net earnings (loss) attributable to Lakes Entertainment, Inc. $ 244 $ 425 $ (89 ) $ 2,240
Weighted-average common shares outstanding
Basic 26,441 26,441 26,441 26,436
Diluted 26,643 26,441 26,441 26,436
Earnings (loss) per share
Basic $ 0.01 $ 0.02 $ 0.00 $ 0.08
Diluted $ 0.01 $ 0.02 $ 0.00 $ 0.08
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Contact:.
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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 Second Quarter 2013 Results and Provides Market Update
Business WirePress Release: Entertainment Gaming Asia Inc. – 13 hours ago..
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 second quarter ended June 30, 2013 and reviewed recent corporate progress.
Highlights:
• Total consolidated revenue of $5.8 million for the second quarter of 2013
• Total revenue from gaming operations of $5.7 million for the second quarter of 2013
• Average consolidated win per unit per day (WUD) from slot operations of $135 for the second quarter of 2013
• Dreamworld Pailin, the Company’s first casino development project, contributed $907,000 to gaming revenue for the second quarter of 2013
• Adjusted EBITDA (earnings from continuing operations before interest, taxes, depreciation, amortization and non-cash charges) of $1.9 million for the second quarter of 2013
• Net loss from continuing operations of $385,000 for the second quarter of 2013
• Cash balance of $4.8 million and zero debt as of June 30, 2013
• The Company is preparing to implement a strategic plan to refocus the gaming operations of Dreamworld Pailin with the goal of improving its bottom-line performance
• Dreamworld Poipet, a slot hall developed by the Company in an established gaming market near the Cambodia-Thailand border, officially opened in May 2013 and achieved positive EBITDA for the month of July 2013
• The new high-security Dolphin gaming chips and plaques manufacturing plant in Hong Kong is fully operational with attractive growth potential, including a near-term order pipeline of approximately $2 million in revenue as of June 30, 2013
Clarence Chung, Chairman and Chief Executive Officer of Entertainment Gaming Asia, commented, “It has been an eventful quarter for the Company with the opening of our new Dreamworld Poipet slot club, the completion of the relocation and repositioning of our gaming products division and the formulation of a strategic plan to drive improved earnings performance for Dreamworld Pailin.
“Quarterly performance benefited from strong contribution from our operations in NagaWorld. However, overall results were negatively impacted by lower revenue and high non-recurring costs for the gaming products division primarily due to the relocation of the manufacturing facilities from Australia to Hong Kong during the quarter and a gross margin loss for Dreamworld Pailin.
“In addition to strong performance from NagaWorld, slot operations revenue benefited from Dreamworld Poipet. Our targeted marketing efforts have helped to begin building a quality player base for these operations and the achievement of positive EBITDA for the month of July. Slot operations performance in the quarter was negatively impacted by a decrease in revenue for our operations in the Philippines. This market is experiencing increasing competition from the development of major integrated casino resorts in Manila. With a solid local player base and proactive approach to marketing to our target customers, we are focused on improving customer loyalty. Further, this increasing competition is likely to bring consolidation at the slot club level and, we believe, this could provide an opportunity for us.
“For Dreamworld Pailin, we are preparing to implement efforts to refocus these operations that we believe will better allow us to capitalize on the existing market conditions and substantially reduce operating costs. We intend to introduce a new operating model with an increased focus on VIP players and a shift in the mix of gaming offerings, with the goal of improving the earnings potential for these operations.
“In addition to our gaming operations, our gaming products provide a diversified revenue stream with attractive earnings potential. With the production plant relocation behind us, we entered the third quarter of 2013 with a gaming chip and plaque order pipeline of approximately $2 million in revenue expected to be recorded during the third quarter, a more normalized operating cost structure and a focus on expanding our product offerings and customer base.
“We believe we have developed a business model that provides the ability to generate quality recurring cash flow. This has allowed us to invest in and grow our operations and pay down all of our debt. We are focused on growing our existing businesses and building our resources as we actively seek new growth opportunities in the high-growth economies of Indo-China.”
Q2 2013 Financial Review
The Company effected a 1:4 reverse stock split of its common shares on June 12, 2012. All historical share amounts and share information presented have been proportionally adjusted to reflect the impact of this reverse stock split, including basic and diluted weighted-average shares and shares issued and outstanding.
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 second quarter of 2013 consolidated revenue was $5.8 million, a decrease of 5% compared to $6.2 million in the second quarter of 2012. The decrease was primarily due to lower sales of gaming products partially offset by higher gaming operations revenue.
Revenue from gaming operations, which included slot and casino operations, was $5.7 million in the second quarter of 2013, an increase of 9% compared to $5.2 million in the second quarter of 2012. The increase was attributed to incremental revenue from the Dreamworld Pailin casino, which opened in May 2012, partially offset by lower slot operations revenue.
The Company recorded $4.8 million in revenue for slot operations in the second quarter of 2013, a decrease of 4% compared to $5.0 million in the second quarter of 2012 mainly attributable to the Philippine operations. The decrease in Philippine slot revenue was due to higher jackpot payouts and increasing competition in the market. Despite the revenue decline, Philippine average WUD improved slightly compared with the prior year quarter due to a lower installed base with higher performing machines.
The Company maintained strong revenue for Cambodia slot operations. NagaWorld operations contributed $3.7 million in revenue and $256 in average WUD to the second quarter of 2013, consistent with the same period last year. Dreamworld Poipet provided incremental revenue, which was offset by a decline in Thansur Bokor operations. Cambodia average WUD declined for the second quarter of 2013 compared to the prior year period due to the addition of machines in Dreamworld Poipet, which officially opened in May 2013, and to a lesser extent, Thansur Bokor, which officially opened in May 2012.
Slot Operations
Net Revenue to EGT (in millions)
Q2:13
Q2:12
Y/Y ?
Cambodia (1) $4.0 $4.0 -
Philippines $0.8 $1.0 -20%
Consolidated $4.8 $5.0 -4%
WUD (2)
Q2:13
Q2:12
Y/Y ?
Cambodia (1) $169 $215 -21%
Philippines $74 $72 3%
Consolidated $135 $147 -8%
EGM Seats in Operation
6/30/13
6/30/12
Y/Y ?
Cambodia (1) 1,062 818 30%
Philippines 570 623 -9%
Consolidated 1,632 1,441 13%
(1) Includes Dreamworld Poipet, which operates under a machine operation and participation agreement. Dreamworld Poipet soft opened on March 28, 2013 with 166 EGM seats and grand opened on May 9, 2013 with approximately 300 EGM seats.
(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 second quarter of 2013, one venue in Cambodia operated during a soft open. Had these seats been included in the WUD calculation, Cambodia and consolidated WUD for this period would have been $157 and $129, respectively. During the second quarter of 2012, one venue in Cambodia operated during a soft open and 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 $907,000 to total gaming revenue in the second quarter of 2013, down from $1.1 million in the first quarter of 2013. The decline was due to lower player traffic levels. Operating expense for Dreamworld Pailin was $1.2 million for the second quarter of 2013, down from $1.3 million in the first quarter of 2013 due to the lower player traffic and cost reduction initiatives.
Revenue from gaming products, which comprised the manufacture and sale of gaming chips and plaques, was $162,000 in the second quarter of 2013, down from $978,000 in the second quarter of 2012. The decrease was mainly the result of the short production period given the strategic relocation of the manufacturing facilities from Australia to Hong Kong during the quarter. The relocation commenced in March and was completed in May 2013. However, final set-up including new personnel training, consultants and equipment testing resulted in approximately $166,000 in non-recurring operating costs and lower production efficiencies. As a result, the Company incurred a gross margin loss of $384,000 for these operations during the second quarter.
Entertainment Gaming Asia reported adjusted EBITDA of $1.9 million in the second quarter of 2013 compared to $2.8 million in the prior year period.
The Company reported a net loss from continuing operations of $385,000, or $0.01 per share, on a weighted average diluted share count of approximately 30.0 million in the second quarter of 2013. This compared to net income of $429,000, or $0.02 per share, on a weighted average diluted share count of approximately 31.3 million for the second quarter of 2012.
The decrease in adjusted EBITDA and the increase in net loss from continuing operations were primarily the result of the gross margin loss for the casino operations, lower revenue and high non-recurring costs for the gaming products division and foreign currency losses of approximately $292,000 compared to gains of approximately $25,000 in the prior year period. This negative differential in foreign exchange of approximately $317,000 was due to the strengthening of the U.S. dollar compared to foreign currencies in the markets in which the Company operates. The decrease in adjusted EBITDA and the increase in net loss from continuing operations were partially offset by lower operating expenses, including selling, general and administrative expenses, which were $1.4 million in the second quarter of 2013 compared to $1.6 million in the prior year period.
Refocusing Dreamworld Pailin to Improve Bottom-Line Performance
The Company is formulating a strategic change in the operating model for Dreamworld Pailin located at the Cambodia-Thailand border. Dreamworld Pailin opened in May 2012 and presently houses 26 table games and 58 EGM seats.
Dreamworld Pailin’s financial performance has been slow to ramp up and these operations are not yet profitable. After a thorough analysis of the operating results and market trends, the Company has formulated a new operating plan which it anticipates will better capitalize on the market conditions and allow for a substantial reduction in operating expenses.
The new strategy entails a shift in the primary focus to the VIP market. As a result, the Company intends to reduce the number of tables in operation from 26 to approximately 16. The Company has recently expanded its new junket program to include five VIP promoters and is focused on adding more quality promoters to the program. In place of the removed tables, the Company intends to add semi-live electronic gaming tables with approximately 30 seats, which are intended to appeal to visiting individual mass market players. With its strong relationships with gaming suppliers, the Company plans to obtain these machines on a revenue sharing basis resulting in minimal capital investment.
By decreasing the emphasis on the higher-cost, mass market tour groups and increasing the focus on the VIP market, the Company’s goal is to significantly reduce operating costs by approximately 30-40% while increasing the dollar level of play. Under this refocused operating model, the Company estimates Dreamworld Pailin will achieve break-even to positive EBITDA within the next two quarters.
Clarence Chung, Chairman and Chief Executive Officer of Entertainment Gaming Asia, commented, “As our first casino development project, Dreamworld Pailin has provided us a valuable learning experience with relatively low capital investment. The challenges we have faced in our first year of operations have provided us a firm understanding of this market and we are proactively taking steps to enhance the earnings potential for this project.
“Casino development remains a primary component of our growth strategy and this experience has provided us deeper operational expertise, which better prepares us for success in future projects. We are actively pursuing new projects in existing ready player markets that we believe will add meaningful scale to our operations.”
Dreamworld Poipet Ramping Up
The Company held the grand opening for Dreamworld Poipet, a slot hall in the established gaming market of Poipet at the Cambodia-Thailand border, on May 9, 2013. This $7.5 million project, which the Company exclusively developed and operates as a stand-alone extension to an existing casino, houses approximately 300 premium quality EGM seats.
With eight existing casinos in operation, Poipet is an established and growing regional gaming market. Given Dreamworld Poipet’s prominent location in the area and targeted marketing programs, the Company’s goal is to ramp up these operations and capture a meaningful share of the market.
Dreamworld Poipet has a low operating cost structure and requires average WUD of only approximately $25 to achieve breakeven EBITDA. In July 2013, the Company achieved solid improvement in operating performance and these operations contributed positive EBITDA. The Company continues to refine and expand its marketing programs and has already established a meaningful and growing quality player base.
Strong Potential for Dolphin Gaming Products
The Company entered the third quarter of 2013 with a strong order pipeline of approximately $2 million in revenue and a more normalized cost structure for the new gaming chips and plaque manufacturing facility in Hong Kong. The plant is working double shifts (24 hours/day) to fulfill these orders from existing customers and expects to book this revenue in the third quarter of 2013.
With a strong existing customer base and relationships, a comprehensive suite of products and high-security production facilities located amidst the growing Asian gaming markets, the Company believes it is well positioned to benefit from the major casino development anticipated over the next several years in Asia. This combined with the ability to meaningfully reduce operating expenses in this relatively lower cost market, provides the potential to make the Company’s gaming products division a meaningful contributor to future earnings.
In addition, the Company is actively working on opportunities to expand its product offerings to include other gaming products. Adding to the product mix should further deepen the Company’s existing customer relationships and increase its marketability to new customers.
Clarence Chung, Chairman and Chief Executive Officer of Entertainment Gaming Asia, concluded, “We are committed to increasing shareholder value. We believe that our business model offers growth potential and the ability to generate quality recurring cash flow. This combined with our established presence and strong relationships in our markets provide us a solid foundation from which to capitalize on the growth opportunities in our target markets in Asia.”
Entertainment Gaming Asia is hosting a conference call and simultaneous webcast at 8:30 a.m. ET today, August 8, 2013, both of which are open to the general public. The conference call number is 800/905-9496 or 212/231-2937. 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 table game product 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, obtain the gaming license and building permits for gaming development projects on a timely basis or at all, complete construction and development of the casino and gaming projects on budget and in a timely manner, identify and implement successful marketing and promotional strategies at the Company’s casino 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 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
Ended June 30,
Six-Month Periods
Ended June 30,
(amounts in thousands, except per share data)
2013 2012 2013 2012
Revenues:
Gaming operations, gross $ 5,685 $ 5,198 $ 10,959 $ 10,154
Less: promotional allowances — — — —
Gaming operations, net
5,685 5,198 10,959 10,154
Gaming products 162 978 1,589 1,509
Total revenues 5,847 6,176 12,548 11,663
Operating costs and expenses:
Cost of gaming operations
Gaming equipment depreciation 1,262 1,180 2,404 2,289
Casino contract amortization 617 615 1,238 1,230
Other gaming related intangibles amortization 63 63 126 126
Other operating costs 1,730 950 3,491 1,474
Cost of gaming products 546 810 2,041 1,230
Selling, general and administrative expenses 1,440 1,637 3,057 3,222
Stock-based compensation expenses 198 287 445 552
Gain on dispositions of assets — (17) — (29)
Impairment of assets — 71 — 71
Product development expenses 35 86 155 186
Depreciation and amortization 47 59 77 90
Total operating costs and expenses 5,938 5,741 13,034 10,441
(Loss)/income from operations (91) 435 (486) 1,222
Other (expense)/income:
Interest expense and finance fees (1) (36) (5) (89)
Interest income — 14 4 26
Foreign currency (losses)/gains (292) 25 (188) 214
Other income 7 26 10 26
Total other (expense)/income (286) 29 (179) 177
(Loss)/income from continuing operations before income tax expense (377) 464 (665) 1,399
Income tax expense (8) (35) (49) (89)
Net (loss)/income from continuing operations (385) 429 (714) 1,310
Net income/(loss) from discontinued operations, net of tax 99 55 (2,080) 146
Net (loss)/income $ (286) $ 484 $ (2,794) $ 1,456
Basic and diluted earnings per share:
(Loss)/earnings from continuing operations $ (0.01) $ 0.02 $ (0.02) $ 0.05
(Loss)/earnings from discontinued operations, net of tax
$
— $ —
$
(0.07) $ —
(Loss)/earnings $ (0.01) $ 0.02 $ (0.09) $ 0.05
Weighted average common shares outstanding
Basic 30,025 29,918 30,024 29,909
Diluted 30,025 31,329 30,024 30,717
Entertainment Gaming Asia Inc.
Consolidated Balance Sheets
June 30,
2013
December 31,
2012
(amounts in thousands, except per share data) (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 4,789 $ 10,365
Accounts receivable, net 404 1,841
Other receivables 692 112
Inventories 1,108 2,047
Prepaid expenses and other current assets 526 387
Total current assets 7,519 14,752
Gaming equipment, net 9,874 9,724
Casino contracts 6,682 7,982
Property and equipment, net 8,751 6,170
Goodwill 362 380
Intangible assets, net 1,065 1,253
Contract amendment fees 288 342
Deferred tax assets — 201
Prepaids, deposits and other assets 2,558 2,914
Total assets $ 37,099 $ 43,718
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 844 $ 3,636
Amount due a related party 21 —
Accrued expenses 1,625 2,619
Customer deposits and other current liabilities 564 656
Total current liabilities 3,054 6,911
Other liabilities 738 1,078
Deferred tax liability 137 137
Total liabilities 3,929 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 32,813 32,224
Accumulated other comprehensive income 712 929
(Accumulated losses)/retained earnings since January 1, 2011 ($386.1 million accumulated deficit eliminated upon quasi-reorganization) (386) 2,408
Total EGT stockholders’ equity 33,169 35,591
Non-controlling interest 1 1
Total stockholders’ equity 33,170 35,592
Total liabilities and stockholders’ equity $ 37,099 $ 43,718
Entertainment Gaming Asia Inc.
Adjusted EBITDA from Continuing Operations
(Unaudited)
Three-Month Periods
Ended June 30,
Six-Month Periods
Ended June 30,
(amounts in thousands) 2013 2012 2013 2012
Net (loss)/income from continuing operations – GAAP $ (385) $ 429 $ (714) $ 1,310
Interest expense and finance fees 1 36 5 89
Interest income — (14) (4) (26)
Income tax expense 8 35 49 89
Depreciation and amortization 2,064 1,936 3,966 3,770
Stock-based compensation expenses 198 287 445 552
Impairment of assets — 71 — 71
Gain on dispositions of assets — (17) — (29)
EBITDA from continuing operations, as adjusted
$
1,886
$
2,763
$
3,747
$
5,826
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.
.
.
Contact:.
.
Entertainment Gaming Asia Inc.
Traci Mangini, 312-867-0848
tracimangini@EGT-Group.com
WisdomTree Announces Second Quarter 2013 Results
GlobeNewswirePress Release: WisdomTree Investments, Inc. – Fri, Jul 26, 2013 7:00 AM EDT..
$5.0 Billion Net Inflows in Quarter
Net Inflow Market Share 29% in Second Quarter, 15% First Half
Record Revenues, Up 83% From Year Ago Quarter
Record Net Income $12.2 Million, Up 56% From Prior Quarter
Diluted EPS $0.09
NEW YORK, July 26, 2013 (GLOBE NEWSWIRE) -- WisdomTree Investments, Inc. (WETF), an exchange-traded fund ("ETF") sponsor and asset manager, today reported net income of $12.2 million for the second quarter of 2013, or $0.09 per share on a fully diluted basis. This compares to $0.1 million in the second quarter of 2012 and $7.9 million in the first quarter of 2013.
WisdomTree CEO and President Jonathan Steinberg commented, "With $5.0 billion in net inflows for the quarter and nearly $11 billion in the first half of 2013, we continued our positive momentum from the first quarter to achieve a strong second quarter with record market share gains. WisdomTree was the third best asset gatherer across all U.S. mutual fund and ETF complexes in the second quarter according to Morningstar."
Mr. Steinberg continued, "WisdomTree's innovative ETF strategies are powering our top-line growth, with our currency hedged equity and domestic equity families leading our net inflows in the second quarter. While growing our existing funds, we are also seeking to bolster and expand upon the success of these strategies by launching new funds. In the second quarter, we listed two new currency hedged equity funds and our first dividend growth ETF.
Mr. Steinberg concluded, "Our robust asset growth is translating into excellent financial results with record revenues and net income in the second quarter. While we believe the ETF industry is still in its early innings of growth, WisdomTree is already proving the efficiency and scale of our business model: we achieved a 33% pre-tax margin on a base of $28.4 billion in average assets."
Assets Under Management, Net Inflows and Market Share
ETF assets under management ("AUM") were $29.0 billion at June 30, 2013, up 93.1% from $15.0 billion at June 30, 2012, and up 15.4% from $25.1 billion at March 31, 2013. Net inflows for the second quarter of 2013 were $5.0 billion as compared to $0.3 billion in the second quarter of 2012 and $5.9 billion in the first quarter of 2013. WisdomTree's market share of industry net inflows was 29.4% in the second quarter of 2013 as compared to 1.4% in the second quarter of 2012 and 10.8% in the first quarter of 2013. For the first six months of 2013, WisdomTree's market share was 15.2% as compared to 3.4% for the first six months of 2012.
Summary Operating and Financial Highlights
Three Months Ended
Change From
Jun. 30, Mar. 31, Jun. 30, Mar. 31, Jun. 30,
Operating Highlights (in billions): 2013 2013 2012 2013 2012
ETF AUM $29.0 $25.1 $15.0 15.4% 93.1%
ETF net inflows $5.0 $5.9 $0.3 (15.8%) nm
Average ETF AUM $28.4 $21.9 $15.1 29.4% 87.8%
Average ETF advisory fee 0.52% 0.54% 0.54% (0.02) (0.02)
Market share of industry inflows 29.4% 10.8% 1.4% +18.6 +28.0
Financial Highlights (in millions):
Total revenues $37.3 $29.3 $20.4 27.2% 83.1%
Net income $12.2 $7.9 $0.1 55.9% nm
Proforma operating income (non-GAAP) $12.2 $7.9 $3.1 55.9% 290.4%
Gross margin1 74% 72% 67% +2 +7
Pre-tax margin 33% 27% 1% +6 +32
Proforma pre-tax margin (non-GAAP) 33% 27% 15% +6 +18
Six Months Ended
Jun. 30, Jun. 30,
Operating Highlights (in billions): 2013 2012 Change
ETF AUM $29.0 $15.0 93.1%
ETF net inflows $10.9 $2.6 311.6%
Average ETF AUM $25.2 $14.7 71.3%
Average ETF advisory fee 0.53% 0.54% (0.01)
Market share of industry inflows 15.2% 3.4% +11.8
Financial Highlights (in millions):
Total revenues $66.7 $39.6 68.5%
Net income $20.1 $1.2 nm
Proforma operating income (non-GAAP) $20.1 $5.0 302.8%
Gross margin1 73% 65% +8
Pre-tax margin 30% 3% +27
Proforma pre-tax margin (non-GAAP) 30% 13% +17
1 Gross margin is defined as total revenues less fund management and administration expenses and third-party sharing arrangements.
Recent Business Developments
• On May 1, 2013, WisdomTree announced the appointment of Ryan Louvar as General Counsel for WisdomTree Funds
• On May 22, 2013, WisdomTree announced the launch of the WisdomTree U.S. Dividend Growth Fund (DGRW)
• On June 13, 2013, WisdomTree announced the listing of 12 additional ETFs on Bolsa Mexicana de Valores
• On June 28, 2013, WisdomTree announced the launch of the WisdomTree Japan Hedged SmallCap Equity Fund (DXJS) and the WisdomTree United Kingdom Hedged Equity Fund (DXPS)
• On July 9, 2013, WisdomTree announced 6 ETFs filed notifications with the Financial Services Agency of Japan
• On July 16, 2013, WisdomTree announced the WisdomTree Emerging Markets Local Debt Fund (ELD) received an NAIC Designation
• On July 24, 2013, WisdomTree announced Win Neuger joined the Board of Directors
• On July 25, 2013, WisdomTree announced the launch of the WisdomTree U.S. SmallCap Dividend Growth Fund (DGRS)
Performance
40% of the $25.8 billion invested in our 35 equity ETFs on June 30, 2013 were in funds that, since their respective inceptions, outperformed their capitalization-weighted or competitive benchmarks through that date. 51%, or 18 of our 35 equity ETFs, outperformed their capitalization-weighted or competitive benchmarks since their respective inceptions through June 30, 2013. For more information about WisdomTree ETFs including standardized performance, please click here or visit www.wisdomtree.com.
Second Quarter Financial Discussion
Revenues
Total revenues increased 83.1% to a record $37.3 million as compared to the second quarter of 2012 and 27.2% compared to the first quarter of 2013 primarily due to higher average AUM as a result of $5.0 billion of net inflows into our ETFs.
Our average advisory fee earned was 0.52% as compared to 0.54% for the second quarter of 2012 and first quarter of 2013 due to the majority of our inflows arising from our Japan Hedged Equity Fund (DXJ), which is priced at 0.48%.
Margins
Our gross margin, which is our total revenues less fund management and administration expenses and third party sharing arrangements, was 74% in the second quarter of 2013 as compared to 67% in the second quarter of 2012 and 72% in the first quarter of 2013. Higher AUM and the end of our joint venture with BNY Mellon were the primary drivers for the higher gross margin.
Our pre-tax margin was 33% in the second quarter of 2013 as compared to 1% (or 15% proforma) in the second quarter of 2012 and 27% in the first quarter of 2013 reflecting the operating scale in our business model.
Expenses
Total expenses increased 23.8% to $25.1 million from $20.3 million in the second quarter of 2012 and increased 16.8% from $21.5 million in the first quarter of 2013. Included in the prior periods were non-operating items related to patent litigation and ETF shareholder proxy.
Three Months Ended Change from
(in thousands) Jun. 30, Mar. 31, Jun. 30, Mar. 31, Jun. 30,
2013 2013 2012 2013 2012
Total expenses $25,089 $21,487 $20,264 16.8% 23.8%
Patent litigation, net -- -- 191
ETF shareholder proxy -- -- (3,198)
Proforma operating expenses (non-GAAP) $25,089 $21,487 $17,257 16.8% 45.4%
• Compensation and benefits expense increased 72.5% to $9.4 million compared to the second quarter of 2012. This increase was primarily due to higher accrued incentive compensation due to our record level of net inflows. In addition, we incurred higher stock based compensation due to equity awards granted to our employees as part of year-end compensation. Lastly, we incurred higher headcount related expenses. Our headcount at the end of the second quarter of 2013 was 79 compared to 66 at the end of the second quarter of 2012.
Compensation and benefits expense increased 26.3% compared to the first quarter of 2013 primarily due to higher accrued incentive compensation due to our strong results.
• Fund management and administration expenses increased 63.6% to $9.1 million compared to the second 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 $0.6 million in higher costs, while eliminating the expense of the third-party sharing arrangement. Higher average AUM resulted in a $2.7 million increase in portfolio management, fund administration, accounting, index licensing, regulatory and distribution fees. We also incurred $0.3 million in higher printing related fees due to an increase in the number of holders of our ETFs.
Fund management and administration expenses increased 10.7% compared to the first quarter of 2013 primarily due to higher average AUM.
• Marketing and advertising expenses increased 41.9% to $2.2 million compared to the second quarter of 2012 and increased 13.4% compared to the first quarter of 2013 primarily due to higher levels of advertising related activities to support our growth.
• Sales and business development expenses increased 80.5% to $1.5 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 15.6% compared to the first quarter of 2013 primarily due to lower level of sales related spending.
• Professional and consulting fees decreased 53.1% to $0.7 million compared to the second quarter of 2012 primarily due to lower variable stock based compensation, which ended as of the end of 2012, partly offset by higher corporate consulting related fees. Professional and consulting fees increased slightly compared to the first quarter of 2013.
• Occupancy, communication and equipment expense increased 57.6% to $0.6 million compared to the second quarter of 2012 and increased 56.8% compared to the first quarter of 2013. This increase was primarily due to $0.2 million in commercial rent tax expense payable to NYC on our office space since 2008.
• Third-party sharing arrangements expense declined 65.2% to $0.4 million compared to the second quarter of 2012 due to the end of our joint venture with BNY Mellon discussed above.
Third-party sharing arrangements expense increased $0.3 million compared to the first quarter of 2013 primarily due to higher inflows raised by our marketing agent in Latin America.
• Other expenses increased 42.8% to $1.1 million compared to the second quarter of 2012 and increased 23.2% compared to the first quarter of 2013 primarily due to higher general and administrative expenses.
Balance Sheet
As of June 30, 2013, WisdomTree had total assets of $97.1 million which consisted primarily of cash and cash equivalents of $70.7 million and investments of $11.4 million. There were approximately 128.0 million shares of common stock issued as of June 30, 2013. Fully diluted weighted average shares outstanding was approximately 140 million.
Conference Call
WisdomTree will discuss its results and operational highlights during a conference call on Friday, July 26, 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 34.3% of our ETF AUM at June 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.
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 51 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 $31.6 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 subsidiaries WisdomTree Asset Management, Inc. and WisdomTree Retirement Services, 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 Retirement Services, Inc. supports the use of the WisdomTree ETFs in retirement plans by financial professionals.
WISDOMTREE INVESTMENTS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands)
(Unaudited)
Three Months Ended % Change From Six Months Ended
Jun. 30,
2013 Mar. 31,
2013 Jun. 30,
2012 Mar. 31,
2013 Jun. 30,
2012 Jun. 30,
2013 Jun. 30,
2012 %
Change
Revenues
ETF advisory fees $ 37,101 $ 29,153 $ 20,230 27.3% 83.4% $ 66,254 $ 39,205 69.0%
Other income 230 188 163 22.3% 41.1% 418 358 16.8%
Total revenues 37,331 29,341 20,393 27.2% 83.1% 66,672 39,563 68.5%
Expenses
Compensation and benefits 9,447 7,482 5,477 26.3% 72.5% 16,929 11,334 49.4%
Fund management and administration 9,106 8,223 5,567 10.7% 63.6% 17,329 11,006 57.5%
Marketing and advertising 2,196 1,937 1,548 13.4% 41.9% 4,133 2,874 43.8%
Sales and business development 1,520 1,801 842 -15.6% 80.5% 3,321 1,702 95.1%
Professional and consulting fees 657 613 1,401 7.2% -53.1% 1,270 2,510 -49.4%
Occupancy, communication and equipment 591 377 375 56.8% 57.6% 968 676 43.2%
Depreciation and amortization 83 82 75 1.2% 10.7% 165 146 13.0%
Third party sharing arrangements 428 111 1,229 285.6% -65.2% 539 2,974 -81.9%
Other 1,061 861 743 23.2% 42.8% 1,922 1,352 42.2%
ETF shareholder proxy -- -- 3,198 n/a n/a -- 3,264 n/a
Patent litigation, net -- -- (191) n/a n/a -- 481 n/a
Total expenses 25,089 21,487 20,264 16.8% 23.8% 46,576 38,319 21.5%
Income before provision for income taxes 12,242 7,854 129 55.9% n/a 20,096 1,244 n/a
Provision for income taxes -- -- --
-- --
Net income $ 12,242 $ 7,854 $ 129 55.9% n/a $ 20,096 $ 1,244 n/a
Net income per share - basic $ 0.10 $ 0.06 $ 0.00
$ 0.16 $ 0.01
Net income per share - diluted $ 0.09 $ 0.06 $ 0.00
$ 0.14 $ 0.01
Weighted average common shares - basic 125,771 125,436 121,920
125,605 120,551
Weighted average common shares - diluted 140,081 139,650 138,477
139,716 137,748
WISDOMTREE INVESTMENTS, INC.
NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands)
(Unaudited)
Three Months Ended Six Months Ended
Jun. 30,
2013 Mar. 31,
2013 Jun. 30,
2012 Jun. 30,
2013 Jun. 30,
2012
Revenues
ETF advisory fees $ 37,101 $ 29,153 $ 20,230 $ 66,254 $ 39,205
Other income 230 188 163 418 358
Total revenues 37,331 29,341 20,393 66,672 39,563
Operating expenses
Compensation and benefits 9,447 7,482 5,477 16,929 11,334
Fund management and administration 9,106 8,223 5,567 17,329 11,006
Marketing and advertising 2,196 1,937 1,548 4,133 2,874
Sales and business development 1,520 1,801 842 3,321 1,702
Professional and consulting fees 657 613 1,401 1,270 2,510
Occupancy, communication and equipment 591 377 375 968 676
Depreciation and amortization 83 82 75 165 146
Third party sharing arrangements 428 111 1,229 539 2,974
Other 1,061 861 743 1,922 1,352
Total proforma operating expenses 25,089 21,487 17,257 46,576 34,574
Proforma operating income 12,242 7,854 3,136 20,096 4,989
ETF shareholder proxy -- -- 3,198 -- 3,264
Patent litigation, net -- -- (191) -- 481
Income before provision for income taxes 12,242 7,854 129 20,096 1,244
Provision for income taxes -- -- -- -- --
Net income $ 12,242 $ 7,854 $ 129 $ 20,096 $ 1,244
WISDOMTREE INVESTMENTS, INC.
CONSOLIDATED BALANCE SHEET
(in thousands, except per share amount)
June 30,
2013 December 31,
2012
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 70,733 $ 41,246
Accounts receivable 12,460 9,348
Other current assets 2,015 1,273
Total current assets 85,208 51,867
Fixed assets, net 438 480
Investments 11,375 11,036
Other noncurrent assets 51 42
Total assets $ 97,072 $ 63,425
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Current liabilities:
Fund management and administration payable $ 10,671 $ 6,924
Compensation and benefits payable 7,232 2,156
Accounts payable and other liabilities 3,783 3,272
Total current liabilities 21,686 12,352
Other noncurrent liabilities -- 13
Total liabilities 21,686 12,365
STOCKHOLDERS' EQUITY
Common stock, par value $0.01; 250,000 shares authorized:
issued: 128,017 and 126,554 1,280 1,265
outstanding: 125,978 and 125,272
Additional paid-in capital 182,041 177,826
Accumulated deficit (107,935) (128,031)
Total stockholders' equity 75,386 51,060
Total liabilities and stockholders' equity $ 97,072 $ 63,425
WISDOMTREE INVESTMENTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
Six Months Ended
June 30,
2013 June 30,
2012
Cash flows from operating activities
Net income $ 20,096 $ 1,244
Non-cash items included in net income:
Depreciation and amortization 165 146
Stock-based compensation 3,405 4,033
Deferred rent (69) (71)
Accretion to interest income and other 94 80
Changes in operating assets and liabilities:
Accounts receivable (3,112) (1,980)
Other assets (761) (497)
Fund management and administration payable 3,747 2,499
Compensation and benefits payable 5,076 (1,362)
Accounts payable and other liabilities 568 4,438
Net cash provided by operating activities 29,209 8,530
Cash flows from investing activities
Purchase of fixed assets (123) (125)
Purchase of investments (2,943) (5,241)
Proceeds from the redemption of investments 2,520 4,437
Net cash used in investing activities (546) (929)
Cash flows from financing activities
Net proceeds from sale of common stock -- 4,329
Shares repurchased (249) (1,033)
Proceeds from exercise of stock options 1,073 2,773
Net cash provided by financing activities 824 6,069
Net increase in cash and cash equivalents 29,487 13,670
Cash and cash equivalents - beginning of period 41,246 25,630
Cash and cash equivalents - end of period $ 70,733 $ 39,300
Supplemental disclosure of cash flow information
Cash paid for income taxes $ 34 $ 16
WisdomTree Investments, Inc.
Key Operating Statistics (Unaudited)
Three Months Ended For the Six Months Ended
June 30,
2013 March 31,
2013 June 30,
2012 June 30,
2013 June 30,
2012
Total ETFs (in millions)
Beginning of period assets 25,103 18,286 15,691 18,286 12,182
Inflows/(outflows) 4,962 5,893 338 10,855 2,637
Market appreciation/(depreciation) (1,090) 924 (1,025) (166) 185
End of period assets 28,975 25,103 15,004 28,975 15,004
Average assets during the period 28,390 21,934 15,116 25,162 14,690
ETF Industry and Market Share (in billions)
ETF industry net inflows 16.9 54.4 25.0 71.3 78.2
WisdomTree market share of industry inflows 29.4% 10.8% 1.4% 15.2% 3.4%
International Developed Equity ETFs (in millions)
Beginning of period assets 8,525 3,732 2,964 3,732 2,407
Inflows/(outflows) 4,433 4,210 137 8,643 439
Market appreciation/(depreciation) (55) 583 (255) 528 --
End of period assets 12,903 8,525 2,846 12,903 2,846
Average assets during the period 11,444 6,072 2,853 8,758 2,767
Emerging Markets Equity ETFs (in millions)
Beginning of period assets 8,071 7,332 5,594 7,332 3,613
Inflows/(outflows) (51) 876 462 825 1,860
Market appreciation/(depreciation) (848) (137) (626) (985) (43)
End of period assets 7,172 8,071 5,430 7,172 5,430
Average assets during the period 7,964 7,905 5,398 7,934 5,089
US Equity ETFs (in millions)
Beginning of period assets 5,161 4,371 4,275 4,371 3,429
Inflows/(outflows) 547 291 (113) 838 452
Market appreciation/(depreciation) 69 499 (68) 568 213
End of period assets 5,777 5,161 4,094 5,777 4,094
Average assets during the period 5,541 4,749 4,101 5,145 4,045
Fixed Income ETFs (in millions)
Beginning of period assets 2,600 2,118 1,735 2,118 1,506
Inflows/(outflows) 78 508 (8) 586 153
Market appreciation/(depreciation) (241) (26) (29) (267) 39
End of period assets 2,437 2,600 1,698 2,437 1,698
Average assets during the period 2,700 2,453 1,716 2,577 1,671
Currency ETFs (in millions)
Beginning of period assets 626 611 881 611 950
Inflows/(outflows) (62) 12 (82) (50) (186)
Market appreciation/(depreciation) (17) 3 (30) (14) 5
End of period assets 547 626 769 547 769
Average assets during the period 607 637 828 622 881
Alternative Strategy ETFs (in millions)
Beginning of period assets 120 122 242 122 277
Inflows/(outflows) 17 (4) (58) 13 (81)
Market appreciation/(depreciation) 2 2 (17) 4 (29)
End of period assets 139 120 167 139 167
Average assets during the period 134 118 220 126 237
Average ETF assets during the period
International developed equity ETFs 40% 27% 19% 35% 19%
Emerging markets equity ETFs 28% 36% 36% 32% 35%
US equity ETFs 20% 22% 27% 20% 27%
Fixed income ETFs 10% 11% 11% 10% 11%
Currency ETFs 2% 3% 6% 2% 6%
Alternative strategy ETFs 0% 1% 1% 1% 2%
Total 100% 100% 100% 100% 100%
Average ETF advisory fee during the period
Alternative strategy ETFs 0.94% 0.94% 0.95% 0.94% 0.95%
Emerging markets equity ETFs 0.66% 0.67% 0.66% 0.66% 0.64%
Fixed income ETFs 0.55% 0.55% 0.55% 0.55% 0.55%
Currency ETFs 0.51% 0.51% 0.50% 0.51% 0.53%
International developed equity ETFs 0.50% 0.52% 0.54% 0.51% 0.54%
US equity ETFs 0.35% 0.35% 0.35% 0.35% 0.35%
Blended total 0.52% 0.54% 0.54% 0.53% 0.54%
Number of ETFs - end of the period
International developed equity ETFs 20 18 18 20 18
US equity ETFs 12 11 12 12 12
Fixed income ETFs 6 6 5 6 5
Currency ETFs 5 5 7 5 7
Emerging markets equity ETFs 5 5 4 5 4
Alternative strategy ETFs 2 2 2 2 2
Total 50 47 48 50 48
Headcount 79 72 66 79 66
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 and proforma pre-tax operating 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.
WISDOMTREE INVESTMENTS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
GAAP to NON-GAAP RECONCILIATION
(in thousands)
(Unaudited)
For the Three Months Ended For the Six Months Ended
Jun. 30,
2013 Mar. 31,
2013 Jun. 30,
2012 Jun. 30,
2013 Jun. 30,
2012
GAAP total expenses $ 25,089 $ 21,487 $ 20,264 $ 46,576 $ 38,319
ETF shareholder proxy -- -- (3,198) -- (3,264)
Patent litigation, net -- -- 191 -- (481)
Proforma operating expenses $ 25,089 $ 21,487 $ 17,257 $ 46,576 $ 34,574
GAAP net income $ 12,242 $ 7,854 $ 129 $ 20,096 $ 1,244
ETF shareholder proxy -- -- 3,198 -- 3,264
Patent litigation, net -- -- (191) -- 481
Proforma operating income $ 12,242 $ 7,854 $ 3,136 $ 20,096 $ 4,989
GAAP net income $ 12,242 $ 7,854 $ 129 $ 20,096 $ 1,244
Divide GAAP total revenue 37,331 29,341 20,393 66,672 39,563
GAAP pre-tax margin 32.8% 26.8% 0.6% 30.1% 3.1%
Proforma pre-tax net income $ 12,242 $ 7,854 $ 3,136 $ 20,096 $ 4,989
Divide GAAP total revenue 37,331 29,341 20,393 66,672 39,563
Proforma pre-tax operating margin 32.8% 26.8% 15.4% 30.1% 12.6%
.
.
Contact:.
.
WisdomTree Investments, Inc.
Stuart Bell / Jessica Zaloom
+1.917.267.3702 / +1.917.267.3735
sbell@wisdomtree.com / jzaloom@wisdomtree.com
.
Sonic Reports Third Fiscal Quarter 2013 Financial Results
Business WirePress Release: Sonic Corp. – Mon, Jun 24, 2013 4:01 PM EDT..
Sonic Corp. (SONC), the nation's largest chain of drive-in restaurants, today announced results for the third fiscal quarter ended May 31, 2013.
Key highlights of the company's third quarter report included:
• The company's net income per diluted share increased 8% to $0.26 in the third quarter of fiscal 2013 compared with net income per diluted share of $0.24 in the third quarter of fiscal 2012;
• System-wide same-store sales increased 0.1% during the third quarter, consisting of 0.2% same-store sales increase at franchise drive-ins and a decrease of 1.1% at company drive-ins; weather is estimated to have had a 300 to 400 basis point adverse impact on system-wide same-store sales for the quarter; and
• The company purchased $11 million of stock during the third fiscal quarter bringing fiscal year-to-date purchases to $35.5 million representing approximately 6% of its outstanding stock as of the beginning of the fiscal year.
“While challenging weather in March and April had a significant impact on our third quarter results, we were pleased to see our same-store sales return to positive in April and May,” said Clifford Hudson, Chairman, Chief Executive Officer and President. “Our new product pipeline and the increased efficiency of our media spending, including the shift to increased national advertising, continue to be positive drivers of our business.
“We remain confident in our plan to grow shareholder value by way of the company’s multi-layered growth strategy,” added Hudson. “We expect the increased effectiveness of our media, our innovative product pipeline and layered day-part promotional strategy to continue to drive same-store sales growth and in turn margin improvement, which will also be enhanced by technology investments. This, combined with a new lower-cost, small building prototype, will improve the return on investment of new drive-ins, encouraging increased development. Finally, we will continue to utilize the strength and flexibility of our franchise business model to grow operating income and use our free cash flow1 to opportunistically invest in our brand, repurchase stock and pay down debt. We expect each of the layers in our growth strategy to contribute to our ability to grow earnings per share at a rate in the low-to-mid teens in both the near term and long term.”
Financial Overview
For the third fiscal quarter ended May 31, 2013, the company's net income totaled $14.8 million or $0.26 per diluted share compared with net income of $14.4 million or $0.24 per diluted share in the same period of the prior year.
For the first nine months of fiscal 2013, net income totaled $24.5 million or $0.43 per diluted share compared with net income of $21.6 million or $0.36 per diluted share for the same period in 2012 representing a 19% increase fiscal year-to-date.
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.
Nine months ended Nine months ended
May 31, 2013 May 31, 2012
Net Diluted Net Diluted Net Income Diluted EPS
Income EPS Income EPS
$ Change
% Change
$ Change
% Change
Reported – GAAP $ 24,503 $ 0.43 $ 21,583 $ 0.36 $ 2,920 14 % $ 0.07 19 %
After-tax loss from early extinguishment of debt 315 0.01 - -
Retroactive tax benefit of WOTC and resolution of tax matters
(743 ) (0.02 ) - -
Adjusted - Non-GAAP $ 24,075 $ 0.42 $ 21,583 $ 0.36 $ 2,492 12 % $ 0.06 17 %
Company drive-in sales for the first nine months of fiscal 2013 decreased by $8.4 million compared to the same period in the prior year primarily as a result of the refranchising of 34 company drive-ins during the second fiscal quarter of 2012.
Same-Store Sales
For the third quarter ended May 31, 2013, system-wide same-store sales increased 0.1%, which was comprised of 0.2% same-store sales increase at franchise drive-ins and a decrease of 1.1% at company drive-ins. Weather is estimated to have had a 300 to 400 basis point adverse impact on system-wide same-store sales for the quarter. Despite the adverse weather, system-wide same-store sales were positive in April and improved further in May.
Development
Five new franchise drive-ins were opened in the third quarter of fiscal 2013 versus seven new franchise drive-in openings during the third quarter of fiscal 2012.
Fiscal Year 2013 Outlook
The company expects its initiatives to drive sales’ improvements going forward. However, uncertainty with regard to the macroeconomic environment and its impact on consumer confidence may result in sales volatility. The outlook for fiscal 2013 anticipates the following elements:
• Positive same-store sales in the low single digit range;
• Drive-in level margins to improve from 50 to 75 basis points;
• 25 to 30 new franchise drive-in openings;
• Selling, general and administrative expenses of $66 to $66.5 million;
• Depreciation and amortization of $40 to $40.5 million;
• Net interest expense of approximately $28 to $28.5 million excluding the impact of debt extinguishment charges;
• An income tax rate between 36.5% and 37.5% for the fourth fiscal quarter and between 34.5% and 35.5% for fiscal 2013;
• Capital expenditures of $35 to $40 million which includes partial implementation of technology initiatives in company drive-ins and implementation of the supply chain management system; and
• Free cash flow of $45 to $50 million for fiscal 2013.
Investor Day
The company will host an investor day with industry analysts and institutional investors on Thursday, June 27, 2013. The meeting will begin at 8:00 a.m. EDT at the NASDAQ Marketsite. The event will be simulcast over the internet and a link to this event may be found on the company's investor relations website at http://ir.sonicdrivein.com/.
Earnings Conference Call
The company will host a conference call and online web simulcast this afternoon beginning at 5:00 p.m. EDT. The conference call can be accessed live by dialing (888) 811-5427 or (913) 981-5578 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 2939382. The replay will be available until Monday, July 1, 2013. 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 three million customers every day. Over the past 60 years, SONIC has delighted guests with signature menu items, more than one 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.
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.
1 Free cash flow is defined as net income plus depreciation, amortization and stock compensation expenses, less capital expenditures.
SONC-G
SONIC CORP.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Three months ended Nine months ended
May 31, May 31,
2013 2012 2013 2012
Revenues:
Company Drive-In sales $ 108,445 $ 110,070 $ 285,607 $ 294,037
Franchise Drive-Ins:
Franchise royalties and fees 35,833 35,801 91,749 90,831
Lease revenue 1,089 2,056 3,524 4,605
Other 1,267 1,500 2,903 3,317
Total revenues 146,634 149,427 383,783 392,790
Costs and expenses:
Company Drive-Ins:
Food and packaging 30,776 30,600 80,954 83,011
Payroll and other employee benefits 37,924 38,539 102,837 106,363
Other operating expenses, exclusive of
depreciation and amortization included below 21,356 22,261 62,143 65,899
Total cost of Company Drive-In sales 90,056 91,400 245,934 255,273
Selling, general and administrative 16,943 16,951 48,540 48,452
Depreciation and amortization 9,783 10,288 30,447 31,264
Provision for impairment of long-lived assets - 203 - 376
Other operating income, net (142 ) (151 ) (353 ) (613 )
Total costs and expenses 116,640 118,691 324,568 334,752
Income from operations 29,994 30,736 59,215 58,038
Interest expense 7,170 7,836 22,293 23,807
Interest income (153 ) (174 ) (462 ) (477 )
Loss from early extinguishment of debt - - 492 -
Net interest expense 7,017 7,662 22,323 23,330
Income before income taxes 22,977 23,074 36,892 34,708
Provision for income taxes 8,184 8,667 12,389 13,125
Net income $ 14,793 $ 14,407 $ 24,503 $ 21,583
Basic income per share $ 0.26 $ 0.24 $ 0.43 $ 0.36
Diluted income per share $ 0.26 $ 0.24 $ 0.43 $ 0.36
Weighted average basic shares 56,005 59,936 56,492 60,736
Weighted average diluted shares 56,845 59,961 57,118 60,767
SONIC CORP.
Unaudited Supplemental Information
Three months ended Nine months ended
May 31, May 31, May 31, May 31,
2013 2012 2013 2012
Drive-Ins in Operation
Company:
Total at beginning of period 405 412 409 446
Opened 1 - 1 -
Acquired from (sold to) franchisees 1 (1 ) 1 (35 )
Closed (net of re-openings) - (2 ) (4 ) (2 )
Total at end of period 407 409 407 409
Franchise:
Total at beginning of period 3,121 3,138 3,147 3,115
Opened 5 7 9 19
Acquired from (sold to) the company (1 ) 1 (1 ) 35
Closed (net of re-openings) (6 ) (5 ) (36 ) (28 )
Total at end of period 3,119 3,141 3,119 3,141
System-wide:
Total at beginning of period 3,526 3,550 3,556 3,561
Opened 6 7 10 19
Closed (net of re-openings) (6 ) (7 ) (40 ) (30 )
Total at end of period 3,526 3,550 3,526 3,550
Three months ended Nine months ended
May 31,
May 31,
May 31,
May 31,
2013
2012
2013
2012
($ in thousands) ($ in thousands)
Sales Analysis
Company Drive-Ins:
Total sales $ 108,445 $ 110,070 $ 285,607 $ 294,037
Average drive-in sales 267 268 704 688
Change in same-store sales (1.1 ) % 3.7 % 1.5 % 2.3 %
Franchised Drive-Ins:
Total sales $ 937,092 $ 934,449 $ 2,469,033 $ 2,431,649
Average drive-in sales 306 298 798 779
Change in same-store sales 0.2 % 2.7 % 0.9 % 2.2 %
System-wide:
Change in total sales 0.1 % 2.4 % 1.0 % 2.9 %
Average drive-in sales $ 301 $ 294 $ 787 $ 768
Change in same-store sales 0.1 % 2.8 % 0.9 % 2.2 %
Note: Change in same-store sales based on restaurants open for a minimum of 15 months.
SONIC CORP.
Unaudited Supplemental Information
Three months ended Nine months ended
May 31, May 31, May 31, May 31,
2013 2012 2013 2012
Revenues (in thousands)
Company Drive-In sales $ 108,445 $ 110,070 $ 285,607 $ 294,037
Franchise Drive-Ins:
Franchise royalties 35,756 35,599 91,491 89,980
Franchise fees 77 202 258 851
Lease revenue 1,089 2,056 3,524 4,605
Other 1,267 1,500 2,903 3,317
Total revenues $ 146,634 $ 149,427 $ 383,783 $ 392,790
Three months ended Nine months ended
May 31, May 31, May 31, May 31,
2013 2012 2013 2012
Margin Analysis (percentage of Company Drive-In sales)
Company Drive-Ins:
Food and packaging 28.4 % 27.8 % 28.3 % 28.2 %
Payroll and employee benefits 35.0 35.0 36.0 36.2
Other operating expenses 19.6 20.2 21.8 22.4
Cost of Company Drive-In sales 83.0 % 83.0 % 86.1 % 86.8 %
May 31, August 31,
2013 2012
Balance Sheet Data (In thousands)
Cash and cash equivalents $ 53,554 $ 52,647
Current assets 110,948 107,151
Property, equipment and capital leases, net 400,968 443,008
Total assets 642,504 680,760
Current liabilities, including capital lease obligations and
long-term debt due within one year 71,865 80,516
Obligations under capital leases due after one year 23,904 27,377
Long-term debt due after one year 436,135 466,613
Total liabilities 582,068 621,513
Stockholders' equity $ 60,436 $ 59,247
.
.
Contact:.
.
Sonic Corp.
Claudia San Pedro, 405-225-4846
Vice President of Investor Relations, Communications and Treasurer
Nathan's Famous, Inc. Reports First Quarter Results
PR NewswirePress Release: Nathan's Famous, Inc. – 6 hours ago..
JERICHO, N.Y., Aug. 7, 2013 /PRNewswire/ -- Nathan's Famous, Inc. (NATH) today reported results for the first quarter of its 2014 fiscal year that ended June 30, 2013.
For the fiscal quarter ended June 30, 2013:
•Net income increased by 67.2% to $3,354,000 as compared to $2,006,000 for the thirteen weeks ended June 24, 2012;
•Earnings per diluted share increased by 65.9% to $0.73 as compared to $0.44 for the thirteen weeks ended June 24, 2012; and
•Revenues increased by 15.9% to $23,401,000, as compared to $20,182,000 during the thirteen weeks ended June 24, 2012.
The Company also reported the following:
•Sales from the Branded Product Program, featuring the sale of Nathan's hot dogs to the foodservice industry, increased by 11.3% to $13,141,000 during the thirteen weeks ended June 30, 2013, as compared to sales of $11,806,000 during the thirteen weeks ended June 24, 2012.
•Sales from the Company-owned restaurants were $3,726,000 during the thirteen weeks ended June 30, 2013 as compared to $4,588,000 during the thirteen weeks ended June 24, 2012; however, 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 reopened until May 20, and operated for only 5 weeks of the quarter this year, compared to the full 13 weeks last year; and (2) The temporary closing of our Yonkers restaurant for redevelopment since December 2012. We estimate that these two factors negatively impacted sales by approximately $1,400,000.
•Since reopening, sales at our Flagship Coney Island restaurant for the five weeks ending June 30, 2013 were approximately 19% higher than the comparative five weeks of the previous fiscal period. Sales during the thirteen weeks ended June 30, 2013 at our seasonal Boardwalk restaurant in Coney Island were approximately 35% higher than the thirteen weeks ended June 24, 2012, although there can be no assurance as to the continuation of these trends.
•Gross profit decreased to 20.6% of sales during the thirteen weeks ended June 30, 2013, as compared to 20.8% of sales during the thirteen weeks ended June 24, 2012 due primarily to the impact of lower sales at the Company-operated restaurants.
•License royalties were $2,265,000 during the thirteen weeks ended June 30, 2013, as compared to $2,229,000 during the thirteen weeks ended June 24, 2012.
•Revenues from franchise operations were $1,347,000 during the thirteen weeks ended June 30, 2013, as compared to $1,430,000 during the thirteen weeks ended June 24, 2012. Eight new franchised units were opened during the thirteen weeks ended June 30, 2013, including four Branded Menu Program outlets and our first location in Moscow.
•Nathan's realized a gain of $2,801,000 during the thirteen weeks ended June 30, 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.
About Nathan's Famous
Nathan's products are currently distributed 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 310 units, comprised of 307 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 business and economic conditions; the impact of competitive products and pricing; the ability to obtain an adequate supply of beef and other food products at competitive prices; capacity; the regulatory and trade environment; 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.
Nathan's Famous, Inc.
Financial Highlights
Thirteen weeks ended
June 30, 2013
June 24, 2012
(unaudited)
Total revenues
$ 23,401,000
$ 20,182,000
Net income
$ 3,354,000
$ 2,006,000
Basic income per share
Net income
$ 0.76
$ 0.46
Diluted income per share
Net income
$ 0.73
$ 0.44
Weighted-average shares used in
computing income per share
KKR & Co. L.P. Announces Second Quarter 2013 Results
Realization activity drives record cash carry and $0.42 distribution per common unit
GAAP net income (loss) attributable to KKR & Co. L.P. was $15.1 million and $208.6 million for the quarter and six months ended June 30, 2013, respectively, down from $146.3 million and $336.7 million in the comparable periods of 2012.
Assets under management (“AUM”) totaled $83.5 billion as of June 30, 2013, up from $78.3 billion as of March 31, 2013.
Fee related earnings (“FRE”) were $98.2 million and $186.2 million for the quarter and six months ended June 30, 2013, respectively, up from $69.8 million and $143.1 million in the comparable periods of 2012.
Total distributable earnings were $403.8 million for the quarter ended June 30, 2013, down from $406.1 million for the quarter ended June 30, 2012. Total distributable earnings were $694.4 million for the six months ended June 30, 2013, up from $570.2 million in the comparable period of 2012.
Economic net income (“ENI”) was $144.4 million and $792.2 million for the quarter and six months ended June 30, 2013, respectively, down from $546.1 million and $1,273.3 million in the comparable periods of 2012.
After-tax ENI was $0.18 and $1.06 per adjusted unit for the quarter and six months ended June 30, 2013, respectively, down from $0.74 and $1.73 per adjusted unit in the comparable periods of 2012.
Book value was $6.9 billion on a total reportable segment basis as of June 30, 2013 or $9.65 per adjusted unit.
KKR & Co. L.P. declares a second quarter distribution of $0.42 per common unit, which includes $0.23 per common unit of cash carry and $0.09 per common unit of net realized principal investment income.
Business WirePress Release: KKR & Co. L.P. – Fri, Jul 26, 2013 8:00 AM EDT..
KKR & Co. L.P. ( KKR ) today reported its second quarter 2013 results.
AUM and fee paying assets under management (FPAUM) were $83.5 billion and $68.0 billion, respectively as of June 30, 2013, both up from March 31, 2013. The increases in both AUM and FPAUM were primarily attributable to new capital raised relating to the Asian Fund II. The increases were partially offset by distributions to fund limited partners and to a lesser extent the impact of the Asian Fund entering its post-investment period.
For the quarter and six months ended June 30, 2013, FRE was $98.2 million and $186.2 million, respectively, up from $69.8 million and $143.1 million in the comparable periods of 2012. The increase in both comparable periods was primarily driven by new capital raised over the past twelve months and the acquisition of Prisma.
For the quarter and six months ended June 30, 2013, the carrying value of our private equity investment portfolio appreciated 0.9% and 6.6%, respectively. ENI was $144.4 million and $792.2 million for the quarter and six months ended June 30, 2013, respectively, down from $546.1 million and $1,273.3 million in the comparable periods of 2012. The decrease in both comparable periods was primarily due to lower investment income earned from our principal investments as well as a lower level of net carried interest earned from our private equity funds. While the fair value of our principal investments increased during the quarter and six months ended June 30, 2013, the level of appreciation was lower than in the comparable periods of 2012.
Over the past year, organic fee-paying AUM inflows have exceeded $19 billion, supporting the continued growth of our Private Markets business as well as the scaling of our newer strategies in Public Markets, said Henry R. Kravis and George R. Roberts, Co-Chairmen and Co-Chief Executive Officers of KKR. In addition, our realization activity in the second quarter drove the highest cash carry weve reported since going public, contributing to a quarterly distribution of $0.42 per unit.
Note: Certain financial measures, including FRE, ENI, after-tax ENI, ENI after taxes and equity-based charges, fee related EBITDA, book value, cash and short-term investments and adjusted units, are not presented in accordance with accounting principles generally accepted in the United States of America (GAAP). See Exhibits A and B for a reconciliation of such measures to financial results prepared in accordance with GAAP.
GAAP RESULTS
GAAP results for the quarter and six months ended June 30, 2013 included net income attributable to KKR & Co. L.P. of $15.1 million and $208.6 million, respectively, and net income attributable to KKR & Co. L.P. per common unit of $0.05 and $0.72, respectively, on a diluted basis. For the quarter and six months ended June 30, 2012, net income attributable to KKR & Co. L.P. was $146.3 million and $336.7 million, respectively, and net income attributable to KKR & Co. L.P. per common unit was $0.58 and $1.37, respectively, on a diluted basis. The decrease in both comparable periods was primarily due to a lower level of investment appreciation recorded in net gains (losses) from investment activities. The decrease in net gains (losses) from investment activities was partially offset by increases in fees primarily attributable to the acquisition of Prisma and higher transaction fees. The decrease in compensation and benefits expense was primarily attributable to lower carry pool allocations as a result of the recognition of lower carried interest during the quarter and six months ended June 30, 2013 compared to the comparable periods in 2012.
SEGMENT RESULTS
Private Markets
AUM was $54.5 billion as of June 30, 2013, an increase of $4.2 billion, or 8.3%, compared to AUM of $50.3 billion as of March 31, 2013. The increase was primarily attributable to new capital raised from the Asian Fund II and to a lesser extent appreciation in the fair value of our private equity portfolio. These increases were partially offset by distributions to the limited partners of our private equity funds arising from realizations and a reduction in AUM as a result of the Asian Fund entering its post-investment period.
FPAUM was $45.9 billion as of June 30, 2013, an increase of $4.7 billion, or 11.4%, compared to FPAUM of $41.2 billion as of March 31, 2013. The increase was primarily attributable to new capital raised from the Asian Fund II partially offset by distributions to the limited partners of our private equity funds arising from realizations and the reduction in the fee base of the Asian Fund as a result of the fund entering the post-investment period.
FRE was $42.6 million for the quarter ended June 30, 2013, an increase of $6.4 million, or 17.6%, compared to FRE of $36.2 million for the quarter ended June 30, 2012. FRE was $83.4 million for the six months ended June 30, 2013, an increase of $9.4 million, or 12.7%, compared to FRE of $74.0 million for the six months ended June 30, 2012. The increase in both comparable periods was primarily driven by higher management fees resulting from new capital raised and higher transaction fees. These increases were partially offset by higher compensation expense due to additional headcount.
ENI was $72.0 million for the quarter ended June 30, 2013, a decrease of $102.7 million, or 58.7%, compared to ENI of $174.7 million for the quarter ended June 30, 2012. ENI was $338.7 million for the six months ended June 30, 2013, a decrease of $101.4 million, or 23.0%, compared to ENI of $440.1 million for the six months ended June 30, 2012. The decrease in both comparable periods was primarily attributable to lower net carried interest resulting from a lower level of appreciation in our private equity portfolio, partially offset by the increase in FRE discussed above.
Public Markets
AUM was $29.0 billion as of June 30, 2013, an increase of $1.1 billion, or 3.9%, compared to AUM of $27.9 billion as of March 31, 2013. FPAUM was $22.0 billion as of June 30, 2013, an increase of $0.8 billion, or 3.7%, compared to FPAUM of $21.2 billion as of March 31, 2013. For both AUM and FPAUM, the increases were primarily attributable to net new capital raised and to a lesser extent appreciation in the net asset values of certain credit investment vehicles.
FRE was $34.4 million for the quarter ended June 30, 2013, an increase of $22.1 million compared to FRE of $12.3 million for the quarter ended June 30, 2012. FRE was $71.5 million for the six months ended June 30, 2013, an increase of $43.8 million compared to FRE of $27.7 million for the six months ended June 30, 2012. The increase in both comparable periods was principally attributable to (i) higher management fees related to new capital raised, (ii) the acquisition of Prisma and (iii) higher incentive fees earned.
ENI was $40.5 million for the three months ended June 30, 2013, an increase of $33.7 million compared to ENI of $6.8 million for the three months ended June 30, 2012. ENI was $89.6 million for the six months ended June 30, 2013, an increase of $58.9 million compared to ENI of $30.7 million for the six months ended June 30, 2012. The increase in both comparable periods was primarily driven by the increase in FRE discussed above and to a lesser extent higher net carried interest due to investment appreciation of certain carry-earning investment vehicles.
Capital Markets and Principal Activities
FRE was $21.2 million for the quarter ended June 30, 2013, which was the same as in the quarter ended June 30, 2012.
FRE was $31.3 million for the six months ended June 30, 2013, a decrease of $10.2 million, or 24.5%, compared to FRE of $41.5 million for the six months ended June 30, 2012. The decrease was primarily driven by a lower level of overall capital markets transaction activity.
ENI was $31.9 million for the quarter ended June 30, 2013, a decrease of $332.6 million compared to ENI of $364.5 million for the quarter ended June 30, 2012. ENI was $363.8 million for the six months ended June 30, 2013, a decrease of $438.8 million compared to ENI of $802.6 million for the six months ended June 30, 2012. The decrease in both comparative periods was primarily due to a lower level of investment income from our principal investments. While the fair value of our principal investments increased during the quarter and six months ended June 30, 2013, the level of appreciation was lower than in the comparable periods of 2012.
CAPITAL AND LIQUIDITY
As of June 30, 2013, KKR had $2.0 billion of cash and short-term investments on a total reportable segment basis and $1.0 billion of outstanding debt obligations. KKRs availability for borrowings was $750.0 million (reduced for an outstanding letter of credit), which does not include a $500.0 million revolving credit facility for use in its capital markets business that was undrawn as of June 30, 2013.
As of June 30, 2013, KKRs portion of total uncalled commitments to its investment funds was $786.6 million, consisting of the following (amounts in thousands):
Uncalled
Commitments
Private Markets
North America Fund XI $ 229,600
Real Estate Fund 135,100
European Fund III 125,100
Asian Fund II 75,000
2006 Fund 63,800
Infrastructure 28,900
E2 Investors (Annex Fund) 14,000
Asian Fund 10,900
Natural Resources 10,300
China Growth Fund 6,500
Other 11,300
Total Private Markets Commitments 710,500
Public Markets
Direct Lending Vehicles 30,100
Mezzanine Fund 29,600
Special Situations Vehicles 16,400
Total Public Markets Commitments 76,100
Total Uncalled Commitments $ 786,600
DISTRIBUTION
A distribution of $0.42 per common unit has been declared, comprised of (i) $0.10 per common unit from after-tax FRE, (ii) $0.23 per common unit from realized cash carry, and (iii) $0.09 per common unit from net realized principal investment income. The distribution will be paid on August 20, 2013 to unitholders of record as of the close of business on August 5, 2013. Please refer to the distribution policy presented later in this release.
CONFERENCE CALL
A conference call to discuss KKRs financial results will be held on Friday, July 26, 2013 at 10:00 a.m. EDT. The conference call may be accessed by dialing (877) 303-2917 (U.S. callers) or +1 (253) 237-1135 (non-U.S. callers); a pass code is not required. Additionally, the conference call will be broadcast live over the Internet and may be accessed through the Public Investors section of KKRs website at http://ir.kkr.com/kkr_ir/kkr_events.cfm . A replay of the live broadcast will be available on KKRs website or by dialing (855) 859-2056 (U.S. callers) or +1 (404) 537-3406 (non-U.S. callers), pass code 14885175, beginning approximately two hours after the broadcast.
From time to time, KKR may use its website as a channel of distribution of material company information. Financial and other important information regarding KKR is routinely posted and accessible on the Investor Center for KKR & Co. L.P. at http://ir.kkr.com/kkr_ir/kkr_events.cfm . In addition, you may automatically receive email alerts and other information about KKR by enrolling your email address at the Email Alerts area of the Investor Center on the website.
ABOUT KKR
Founded in 1976 and led by Henry Kravis and George Roberts , KKR is a leading global investment firm with $83.5 billion in assets under management as of June 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. For additional information, please visit KKRs website at www.kkr.com .
FORWARD-LOOKING STATEMENTS
This release contains certain forward-looking statements. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. The forward-looking statements are based on KKRs beliefs, assumptions and expectations of its future performance, taking into account all information currently available to it. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to KKR or are within its control. If a change occurs, KKRs business, financial condition, liquidity and results of operations, including but not limited to AUM, FPAUM, FRE, total distributable earnings, ENI, after-tax ENI, ENI after taxes and equity-based charges, fee related EBITDA, committed dollars invested and syndicated capital, uncalled commitments, core interest expense, cash and short-term investments, net realized principal investment income and book value, may vary materially from those expressed in the forward-looking statements. The following factors, among others, could cause actual results to vary from the forward-looking statements: the general volatility of the capital markets; failure to realize the benefits of or changes in KKRs business strategies including the ability to realize the anticipated synergies from acquisitions or strategic partnerships such as Prisma or Nephila; availability, terms and deployment of capital; availability of qualified personnel and expense of recruiting and retaining such personnel; changes in the asset management industry, interest rates or the general economy; underperformance of KKR's investments and decreased ability to raise funds; and the degree and nature of KKRs competition. KKR does not undertake any obligation to update any forward-looking statements to reflect circumstances or events that occur after the date on which such statements were made except as required by law. In addition, KKRs business strategy is focused on the long term and financial results are subject to significant volatility. Additional information about factors affecting KKR is available in KKR & Co. L.P.s Annual Report on Form 10-K for the fiscal year ended December 31, 2012, filed with the SEC on February 22, 2013, and other filings with the SEC, which are available at www.sec.gov .
KKR
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (GAAP BASIS - UNAUDITED)
(Amounts in thousands, except common unit and per common unit amounts)
Quarter Ended Six Months Ended
June 30, 2013 June 30, 2012 June 30, 2013 June 30, 2012
Revenues
Fees $ 166,376 $ 112,360 $ 317,616 $ 228,667
Expenses
Compensation and Benefits 200,602 280,640 531,723 653,050
Occupancy and Related Charges 13,878 14,095 28,399 29,292
General, Administrative and Other 77,542 54,004 171,230 111,655
Total Expenses 292,022 348,739 731,352 793,997
Investment Income (Loss)
Net Gains (Losses) from Investment Activities 98,537 1,601,688 2,368,354 4,688,553
Dividend Income
209,486 79,919 248,955 252,858
Interest Income 128,020 87,892 237,389 164,091
Interest Expense (24,614 ) (16,884 ) (47,637 ) (34,889 )
Total Investment Income (Loss) 411,429 1,752,615 2,807,061 5,070,613
Income (Loss) Before Taxes 285,783 1,516,236 2,393,325 4,505,283
Income Taxes 8,525 11,093 17,881 28,165
Net Income (Loss) 277,258 1,505,143 2,375,444 4,477,118
Net Income (Loss) Attributable to
Redeemable Noncontrolling Interests (7,800 ) 3,285 16,823 8,557
Net Income (Loss) Attributable to
Noncontrolling Interests 269,924 1,355,597 2,150,048 4,131,864
Net Income (Loss) Attributable to KKR & Co. L.P. $ 15,134 $ 146,261 $ 208,573 $ 336,697
Distributions Declared per KKR & Co. L.P. Common Unit $ 0.42 $ 0.13 $ 0.69 $ 0.28
Net Income (Loss) Attributable to KKR & Co. L.P. Per Common Unit
Basic $ 0.06 $ 0.62 $ 0.79 $ 1.45
Diluted (a) $ 0.05 $ 0.58 $ 0.72 $ 1.37
Weighted Average Common Units Outstanding
Basic 271,983,811 235,781,983 264,555,267 232,440,659
Diluted (a) 298,078,764 252,507,802 290,104,942 245,169,954
(a) KKR Holdings L.P. units have been excluded from the calculation of diluted earnings per common unit given that the exchange of these units would proportionally increase KKR & Co. L.P.s interests in KKRs business and would have an anti-dilutive effect on earnings per common unit as a result of certain tax benefits KKR & Co. L.P. is assumed to receive upon the exchange.
KKR
STATEMENTS OF OPERATIONS AND OTHER SELECTED FINANCIAL INFORMATION
TOTAL REPORTABLE SEGMENTS (UNAUDITED)
(Amounts in thousands, except unit and per unit amounts)
Quarter Ended Six Months Ended
June 30, 2013 March 31, 2013 June 30, 2012 June 30, 2013 June 30, 2012
Fees
Management and incentive fees:
Management fees $ 164,176 $ 152,963 $ 129,626 $ 317,139 $ 258,269
Incentive fees 15,590 18,849 4,057 34,439 13,727
Management and incentive fees 179,766 171,812 133,683 351,578 271,996
Monitoring and transaction fees:
Monitoring fees 28,907 32,068 27,786 60,975 53,608
Transaction fees 62,785 40,299 43,706 103,084 88,004
Fee credits (34,751 ) (23,065 ) (16,689 ) (57,816 ) (36,032 )
Net monitoring and transaction fees 56,941 49,302 54,803 106,243 105,580
Total fees 236,707 221,114 188,486 457,821 377,576
Expenses
Compensation and benefits 80,436 75,162 62,746 155,598 125,470
Occupancy and related charges 13,067 13,322 13,239 26,389 27,700
Other operating expenses 45,027 44,630 42,729 89,657 81,278
Total expenses 138,530 133,114 118,714 271,644 234,448
Fee Related Earnings 98,177 88,000 69,772 186,177 143,128
Investment income (loss)
Realized carried interest 269,828 88,167 65,600 357,995 140,478
Unrealized carried interest (202,018 ) 331,198 217,274 129,180 611,760
Gross carried interest 67,810 419,365 282,874 487,175 752,238
Less: allocation to KKR carry pool (26,536 ) (169,504 ) (112,553 ) (196,040 ) (304,059 )
Less: management fee refunds (a) (4,735 ) (9,216 ) (32,804 ) (13,951 ) (73,512 )
Net carried interest 36,539 240,645 137,517 277,184 374,667
Other investment income (loss) 11,050 320,198 340,103 331,248 760,010
Total investment income (loss) 47,589 560,843 477,620 608,432 1,134,677
Income (Loss) before noncontrolling interests
in Income of consolidated entities 145,766 648,843 547,392 794,609 1,277,805
Income (Loss) attributable to
noncontrolling interests 1,323 1,101 1,277 2,424 4,488
Economic Net Income (Loss) $ 144,443 $ 647,742 $ 546,115 $ 792,185 $ 1,273,317
Provision for Income Taxes 13,486 20,117 25,857 33,603 69,240
Economic Net Income (Loss), After Taxes (b) $ 130,957 $ 627,625 $ 520,258 $ 758,582 $ 1,204,077
Economic Net Income (Loss), After Taxes per Adjusted Unit (b) $ 0.18 $ 0.88 $ 0.74 $ 1.06 $ 1.73
Assets Under Management $ 83,500,900 $ 78,253,400 $ 61,488,900 $ 83,500,900 $ 61,488,900
Fee Paying Assets Under Management $ 67,956,400 $ 62,454,100 $ 47,200,500 $ 67,956,400 $ 47,200,500
Committed Dollars Invested and Syndicated Capital $ 1,889,400 $ 824,400 $ 680,200 $ 2,713,800 $ 1,713,200
Uncalled Commitments $ 21,364,400 $ 16,207,300 $ 10,610,300 $ 21,364,400 $ 10,610,300
Other Information
Fee Related Earnings $ 98,177 $ 88,000 $ 69,772 $ 186,177 $ 143,128
Plus: depreciation and amortization 3,708 3,681 3,093 7,389 5,646
Fee Related EBITDA $ 101,885 $ 91,681 $ 72,865 $ 193,566 $ 148,774
Distributed Earnings $ 313,559 $ 198,720 $ 104,548 $ 512,279 $ 216,034
Plus: Undistributed net realized principal investment income 90,217 91,894 301,580 182,111 354,198
Total Distributable Earnings (b) $ 403,776 $ 290,614 $ 406,128 $ 694,390 $ 570,232
GAAP interest expense $ 24,614 $ 23,023 $ 16,884 $ 47,637 $ 34,889
Less: interest expense related to debt obligations
from investment financing arrangements 8,404 6,790 7,461 15,194 15,534
Core Interest Expense (b) $ 16,210 $ 16,233 $ 9,423 $ 32,443 $ 19,355
Economic Net Income (Loss), After Taxes and Equity-based Charges (b) $ 105,021 $ 600,207 $ 506,208 $ 705,228 $ 1,173,763
(a) As of June 30, 2013, there is no carried interest subject to management fee refunds, which may reduce carried interest in future periods.
(b) See definitions for economic net income (loss), after taxes, adjusted units, total distributable earnings, core interest expense and economic net income (loss), after taxes and equity-based charges under Notes to Reportable Segments.
KKR
STATEMENTS OF OPERATIONS AND OTHER SELECTED FINANCIAL INFORMATION
PRIVATE MARKETS SEGMENTS (UNAUDITED)
(Amounts in thousands)
Quarter Ended Six Months Ended
June 30, 2013 March 31, 2013 June 30, 2012 June 30, 2013 June 30, 2012
Fees
Management and incentive fees:
Management fees $ 114,700 $ 106,605 $ 107,170 $ 221,305 $ 214,082
Incentive fees - - - - -
Management and incentive fees 114,700 106,605 107,170 221,305 214,082
Monitoring and transaction fees:
Monitoring fees 28,907 32,068 27,786 60,975 53,608
Transaction fees 25,231 16,412 10,768 41,643 22,435
Fee credits (29,547 ) (21,009 ) (15,642 ) (50,556 ) (33,348 )
Net monitoring and transaction fees 24,591 27,471 22,912 52,062 42,695
Total fees 139,291 134,076 130,082 273,367 256,777
Expenses
Compensation and benefits 51,516 48,001 45,991 99,517 90,477
Occupancy and related charges 11,143 11,425 11,633 22,568 24,438
Other operating expenses 33,988 33,942 36,230 67,930 67,905
Total expenses 96,647 93,368 93,854 190,015 182,820
Fee Related Earnings 42,644 40,708 36,228 83,352 73,957
Investment income (loss)
Realized carried interest 269,828 88,167 65,600 357,995 140,478
Unrealized carried interest (212,809 ) 310,799 226,186 97,990 605,813
Gross carried interest 57,019 398,966 291,786 455,985 746,291
Less: allocation to KKR carry pool (22,220 ) (161,344 ) (116,118 ) (183,564 ) (301,680 )
Less: management fee refunds (4,735 ) (9,216 ) (32,804 ) (13,951 ) (73,512 )
Net carried interest 30,064 228,406 142,864 258,470 371,099
Other investment income (loss) (249 ) (2,035 ) (3,990 ) (2,284 ) (2,338 )
Total investment income (loss) 29,815 226,371 138,874 256,186 368,761
Income (Loss) before noncontrolling interests
in Income of consolidated entities 72,459 267,079 175,102 339,538 442,718
Income (Loss) attributable to
noncontrolling interests 411 398 358 809 2,654
Economic Net Income (Loss) $ 72,048 $ 266,681 $ 174,744 $ 338,729 $ 440,064
Assets Under Management $ 54,452,400 $ 50,340,400 $ 45,528,100 $ 54,452,400 $ 45,528,100
Fee Paying Assets Under Management $ 45,907,500 $ 41,218,000 $ 37,858,300 $ 45,907,500 $ 37,858,300
Committed Dollars Invested $ 1,314,000 $ 598,500 $ 606,300 $ 1,912,500 $ 1,182,500
Uncalled Commitments $ 19,972,800 $ 14,560,900 $ 9,304,500 $ 19,972,800 $ 9,304,500
KKR
STATEMENTS OF OPERATIONS AND OTHER SELECTED FINANCIAL INFORMATION
PUBLIC MARKETS SEGMENTS (UNAUDITED)
(Amounts in thousands)
Quarter Ended Six Months Ended
June 30, 2013 March 31, 2013 June 30, 2012 June 30, 2013 June 30, 2012
Fees
Management and incentive fees:
Management fees $ 49,476 $ 46,358 $ 22,456 $ 95,834 $ 44,187
Incentive fees 15,590 18,849 4,057
34,439 13,727
Management and incentive fees 65,066 65,207 26,513 130,273 57,914
Monitoring and transaction fees:
Monitoring fees - - - - -
Transaction fees 7,243 3,106 1,319 10,349 3,741
Fee credits (5,204 ) (2,056 ) (1,047 ) (7,260 ) (2,684 )
Net monitoring and transaction fees 2,039 1,050 272 3,089 1,057
Total fees 67,105 66,257 26,785 133,362 58,971
Expenses
Compensation and benefits 21,990 19,700 9,229 41,690 20,611
Occupancy and related charges 1,615 1,542 1,366 3,157 2,784
Other operating expenses 9,147 7,826 3,880 16,973 7,857
Total expenses 32,752 29,068 14,475 61,820 31,252
Fee Related Earnings 34,353 37,189 12,310 71,542 27,719
Investment income (loss)
Realized carried interest - - - - -
Unrealized carried interest 10,791 20,399 (8,912 ) 31,190 5,947
Gross carried interest 10,791 20,399 (8,912 ) 31,190 5,947
Less: allocation to KKR carry pool (4,316 ) (8,160 ) 3,565 (12,476 ) (2,379 )
Less: management fee refunds - - - - -
Net carried interest 6,475 12,239 (5,347 ) 18,714 3,568
Other investment income (loss) 22 62 (12 ) 84 (35 )
Total investment income (loss) 6,497 12,301 (5,359 ) 18,798 3,533
Income (Loss) before noncontrolling interests
in Income of consolidated entities 40,850 49,490 6,951 90,340 31,252
Income (Loss) attributable to
noncontrolling interests 378 355 123 733 554
Economic Net Income (Loss) $ 40,472 $ 49,135 $ 6,828 $ 89,607 $ 30,698
Assets Under Management $ 29,048,500 $ 27,913,000 $ 15,960,800 $ 29,048,500 $ 15,960,800
Fee Paying Assets Under Management $ 22,048,900 $ 21,236,100 $ 9,342,200 $ 22,048,900 $ 9,342,200
Committed Dollars Invested $ 370,800 $ 164,900 $ 73,900 $ 535,700 $ 280,100
Uncalled Commitments $ 1,391,600 $ 1,646,400 $ 1,305,800 $ 1,391,600 $ 1,305,800
KKR
STATEMENTS OF OPERATIONS AND OTHER SELECTED FINANCIAL INFORMATION
CAPITAL MARKETS AND PRINCIPAL ACTIVITIES SEGMENTS (UNAUDITED)
(Amounts in thousands)
Quarter Ended Six Months Ended
June 30, 2013 March 31, 2013 June 30, 2012 June 30, 2013 June 30, 2012
Fees
Management and incentive fees:
Management fees $ - $ - $ - $ - $ -
Incentive fees - - - - -
Management and incentive fees - - - - -
Monitoring and transaction fees:
Monitoring fees - - - - -
Transaction fees 30,311 20,781 31,619 51,092 61,828
Fee credits - - - - -
Net monitoring and transaction fees 30,311 20,781 31,619 51,092 61,828
Total fees 30,311 20,781 31,619 51,092 61,828
Expenses
Compensation and benefits 6,930 7,461 7,526 14,391 14,382
Occupancy and related charges 309 355 240 664 478
Other operating expenses 1,892 2,862 2,619 4,754 5,516
Total expenses 9,131 10,678 10,385 19,809 20,376
Fee Related Earnings 21,180 10,103 21,234 31,283 41,452
Investment income (loss)
Realized carried interest - - - - -
Unrealized carried interest - - - - -
Gross carried interest - - - - -
Less: allocation to KKR carry pool - - - - -
Less: management fee refunds - - - - -
Net carried interest - - - - -
Other investment income (loss) (a) 11,277 322,171 344,105 333,448 762,383
Total investment income (loss) 11,277 322,171 344,105 333,448 762,383
Income (Loss) before noncontrolling interests
in Income of consolidated entities 32,457 332,274 365,339 364,731 803,835
Income (Loss) attributable to
noncontrolling interests 534 348 796 882 1,280
Economic Net Income (Loss) $ 31,923 $ 331,926 $ 364,543 $ 363,849 $ 802,555
Syndicated Capital $ 204,600 $ 61,000 $ - $ 265,600 $ 250,600
(a) Amount is net of (i) interest expense and (ii) certain compensation and general and administrative expenses incurred in the generation of net realized principal investment income that is not included in Compensation and benefits and Other operating expenses above and on page 6.
KKR
STATEMENTS OF OPERATIONS
TOTAL REPORTABLE SEGMENTS (UNAUDITED)
Quarter Ended June 30, 2013
(Amounts in thousands)
Capital Markets Total
Private Markets Public Markets and Principal Reportable
Segment Segment Activities Segment Segments
Fees
Management and incentive fees:
Management fees $ 114,700 $ 49,476 $ - $ 164,176
Incentive fees - 15,590 - 15,590
Management and incentive fees 114,700 65,066 - 179,766
Monitoring and transaction fees:
Monitoring fees 28,907 - - 28,907
Transaction fees 25,231 7,243 30,311 62,785
Fee credits (29,547 ) (5,204 ) - (34,751 )
Net monitoring and transaction fees 24,591 2,039 30,311 56,941
Total fees 139,291 67,105 30,311 236,707
Expenses
Compensation and benefits 51,516 21,990 6,930 80,436
Occupancy and related charges 11,143 1,615 309 13,067
Other operating expenses 33,988 9,147 1,892 45,027
Total expenses 96,647 32,752 9,131 138,530
Fee Related Earnings 42,644 34,353 21,180 98,177
Investment income (loss)
Realized carried interest 269,828 - - 269,828
Unrealized carried interest (212,809 ) 10,791 - (202,018 )
Gross carried interest 57,019 10,791 - 67,810
Less: allocation to KKR carry pool (22,220 ) (4,316 ) - (26,536 )
Less: management fee refunds (4,735 ) - - (4,735 )
Net carried interest 30,064 6,475 - 36,539
Other investment income (loss) (249 ) 22 11,277 11,050
Total investment income (loss) 29,815 6,497 11,277 47,589
Income (Loss) before noncontrolling interests
in Income of consolidated entities 72,459 40,850 32,457 145,766
Income (Loss) attributable to
noncontrolling interests 411 378 534 1,323
Economic Net Income (Loss) $ 72,048 $ 40,472 $ 31,923 $ 144,443
KKR
STATEMENTS OF OPERATIONS
TOTAL REPORTABLE SEGMENTS (UNAUDITED)
Quarter Ended March 31, 2013
(Amounts in thousands)
Capital Markets Total
Private Markets Public Markets and Principal Reportable
Segment Segment Activities Segment Segments
Fees
Management and incentive fees:
Management fees $ 106,605 $ 46,358 $ - $ 152,963
Incentive fees - 18,849 - 18,849
Management and incentive fees 106,605 65,207 - 171,812
Monitoring and transaction fees:
Monitoring fees 32,068 - - 32,068
Transaction fees 16,412 3,106 20,781 40,299
Fee credits (21,009 ) (2,056 ) - (23,065 )
Net monitoring and transaction fees 27,471 1,050 20,781 49,302
Total fees 134,076 66,257 20,781 221,114
Expenses
Compensation and benefits 48,001 19,700 7,461 75,162
Occupancy and related charges 11,425 1,542 355 13,322
Other operating expenses 33,942 7,826 2,862 44,630
Total expenses 93,368 29,068 10,678 133,114
Fee Related Earnings 40,708 37,189 10,103 88,000
Investment income (loss)
Realized carried interest 88,167 - - 88,167
Unrealized carried interest 310,799 20,399 - 331,198
Gross carried interest 398,966 20,399 - 419,365
Less: allocation to KKR carry pool (161,344 ) (8,160 ) - (169,504 )
Less: management fee refunds (9,216 ) - - (9,216 )
Net carried interest 228,406 12,239 - 240,645
Other investment income (loss) (2,035 ) 62 322,171 320,198
Total investment income (loss) 226,371 12,301 322,171 560,843
Income (Loss) before noncontrolling interests
in Income of consolidated entities 267,079 49,490 332,274 648,843
Income (Loss) attributable to
noncontrolling interests 398 355 348 1,101
Economic Net Income (Loss) $ 266,681 $ 49,135 $ 331,926 $ 647,742
KKR
STATEMENTS OF OPERATIONS
TOTAL REPORTABLE SEGMENTS (UNAUDITED)
Quarter Ended June 30, 2012
(Amounts in thousands)
Capital Markets Total
Private Markets Public Markets
and Principal
Reportable
Segment Segment Activities Segment Segments
Fees
Management and incentive fees:
Management fees $ 107,170 $ 22,456 $ - $ 129,626
Incentive fees - 4,057 - 4,057
Management and incentive fees 107,170 26,513 - 133,683
Monitoring and transaction fees:
Monitoring fees 27,786 - - 27,786
Transaction fees 10,768 1,319 31,619 43,706
Fee credits (15,642 ) (1,047 ) - (16,689 )
Net monitoring and transaction fees 22,912 272 31,619 54,803
Total fees 130,082 26,785 31,619 188,486
Expenses
Compensation and benefits 45,991 9,229 7,526 62,746
Occupancy and related charges 11,633 1,366 240 13,239
Other operating expenses 36,230 3,880 2,619 42,729
Total expenses 93,854 14,475 10,385 118,714
Fee Related Earnings 36,228 12,310 21,234 69,772
Investment income (loss)
Realized carried interest 65,600 - - 65,600
Unrealized carried interest 226,186 (8,912 ) - 217,274
Gross carried interest 291,786 (8,912 ) - 282,874
Less: allocation to KKR carry pool (116,118 ) 3,565 - (112,553 )
Less: management fee refunds (32,804 ) - - (32,804 )
Net carried interest 142,864 (5,347 ) - 137,517
Other investment income (loss) (3,990 ) (12 ) 344,105 340,103
Total investment income (loss) 138,874 (5,359 ) 344,105 477,620
Income (Loss) before noncontrolling interests
in Income of consolidated entities 175,102 6,951 365,339 547,392
Income (Loss) attributable to
noncontrolling interests 358 123 796 1,277
Economic Net Income (Loss) $ 174,744 $ 6,828 $ 364,543 $ 546,115
...
KKR
STATEMENTS OF OPERATIONS
TOTAL REPORTABLE SEGMENTS (UNAUDITED)
Six Months Ended June 30, 2013
(Amounts in thousands)
Capital Markets Total
Private Markets Public Markets and Principal Reportable
Segment Segment Activities Segment Segments
Fees
Management and incentive fees:
Management fees $ 221,305 $ 95,834 $ - $ 317,139
Incentive fees - 34,439 - 34,439
Management and incentive fees 221,305 130,273 - 351,578
Monitoring and transaction fees:
Monitoring fees 60,975 - - 60,975
Transaction fees 41,643 10,349 51,092 103,084
Fee credits (50,556 )
(7,260 ) - (57,816 ) Net monitoring and transaction fees 52,062 3,089 51,092 106,243 Total fees 273,367 133,362 51,092 457,821 Expenses Compensation and benefits 99,517 41,690 14,391 155,598 Occupancy and related charges 22,568 3,157 664 26,389 Other operating expenses 67,930 16,973 4,754 89,657 Total expenses 190,015 61,820 19,809 271,644 Fee Related Earnings 83,352 71,542 31,283 186,177 Investment income (loss) Realized carried interest 357,995 - - 357,995 Unrealized carried interest 97,990 31,190 - 129,180 Gross carried interest 455,985 31,190 - 487,175 Less: allocation to KKR carry pool (183,564 ) (12,476 ) - (196,040 ) Less: management fee refunds (13,951 ) - - (13,951 ) Net carried interest 258,470 18,714 - 277,184 Other investment income (loss) (2,284 ) 84 333,448 331,248 Total investment income (loss) 256,186 18,798 333,448 608,432 Income (Loss) before noncontrolling interests in Income of consolidated entities 339,538 90,340 364,731 794,609 Income (Loss) attributable to noncontrolling interests 809 733 882 2,424 Economic Net Income (Loss) $ 338,729 $ 89,607 $ 363,849 $ 792,185
KKR
STATEMENTS OF OPERATIONS
TOTAL REPORTABLE SEGMENTS (UNAUDITED)
Six Months Ended June 30, 2012
(Amounts in thousands)
Capital Markets Total
Private Markets Public Markets and Principal Reportable
Segment Segment Activities Segment Segments
Fees
Management and incentive fees:
Management fees $ 214,082 $ 44,187 $ - $ 258,269
Incentive fees - 13,727 - 13,727
Management and incentive fees 214,082 57,914 - 271,996
Monitoring and transaction fees:
Monitoring fees 53,608 - - 53,608
Transaction fees 22,435 3,741 61,828 88,004
Fee credits (33,348 ) (2,684 ) - (36,032 )
Net monitoring and transaction fees 42,695 1,057 61,828 105,580
Total fees 256,777 58,971 61,828 377,576
Expenses
Compensation and benefits 90,477 20,611 14,382 125,470
Occupancy and related charges 24,438 2,784 478 27,700
Other operating expenses 67,905 7,857 5,516 81,278
Total expenses 182,820 31,252 20,376 234,448
Fee Related Earnings 73,957 27,719 41,452 143,128
Investment income (loss)
Realized carried interest 140,478 - - 140,478
Unrealized carried interest 605,813 5,947 - 611,760
Gross carried interest 746,291 5,947 - 752,238
Less: allocation to KKR carry pool (301,680 ) (2,379 ) - (304,059 )
Less: management fee refunds (73,512 ) - - (73,512 )
Net carried interest 371,099 3,568 - 374,667
Other investment income (loss) (2,338 ) (35 ) 762,383 760,010
Total investment income (loss) 368,761 3,533 762,383 1,134,677
Income (Loss) before noncontrolling interests
in Income of consolidated entities 442,718 31,252 803,835 1,277,805
Income (Loss) attributable to
noncontrolling interests 2,654 554 1,280 4,488
Economic Net Income (Loss) $ 440,064 $ 30,698 $ 802,555 $ 1,273,317
KKR
BALANCE SHEETS
TOTAL REPORTABLE SEGMENTS (UNAUDITED)
(Amounts in thousands, except per unit amounts)
As of June 30, 2013
Private
Markets
Segment
Public
Markets
Segment
Capital
Markets and
Principal
Activities
Segment
Total
Reportable
Segments
Cash and short-term investments $ 322,639 $ 35,229 $ 1,636,977 $ 1,994,845
Investments - - 4,607,196 (a) 4,607,196
Unrealized carry 770,245 43,653 - 813,898
Other assets 316,317 308,837 68,028 693,182
Total assets $ 1,409,201 $ 387,719 $ 6,312,201 $ 8,109,121
Debt obligations $ - $ - $ 1,000,000 $ 1,000,000
Other liabilities 111,550 38,181 39,356 189,087
Total liabilities 111,550 38,181 1,039,356 1,189,087
Noncontrolling interests 1,457 825 18,695 20,977
Book value $ 1,296,194 $ 348,713 $ 5,254,150 $ 6,899,057
Book value per adjusted unit $ 1.81 $ 0.49 $ 7.35 $ 9.65
As of December 31, 2012
Private
Markets
Segment
Public
Markets
Segment
Capital
Markets and
Principal
Activities
Segment
Total
Reportable
Segments
Cash and short-term investments $ 358,237 $ 28,690 $ 1,147,360 $ 1,534,287
Investments - - 4,758,157 4,758,157
Unrealized carry 730,292 24,939 - 755,231
Other assets 207,047 280,472 62,119 549,638
Total assets $ 1,295,576 $ 334,101 $ 5,967,636 $ 7,597,313
Debt obligations $ - $ - $ 500,000 $ 500,000
Other liabilities 78,724 16,433 24,275 119,432
Total liabilities 78,724 16,433 524,275 619,432
Noncontrolling interests 1,339 739 18,619 20,697
Book value $ 1,215,513 $ 316,929 $ 5,424,742 $ 6,957,184
Book value per adjusted unit $ 1.72 $ 0.45 $ 7.70 $ 9.87
(a) See Capital Markets and Principal Activities segment schedule of investments that follows.
KKR
CAPITAL MARKETS AND PRINCIPAL ACTIVITIES SEGMENT SCHEDULE OF INVESTMENTS (UNAUDITED)
(Amounts in thousands, except percentage amounts)
As of June 30, 2013
Investment
Fair Value as
Fair a Percentage of
Cost
Value
Total Investments
Co-Investments in Portfolio Companies of
Private Equity Investment Vehicles:
Alliance Boots GmbH 195,640 473,795 10.3 %
HCA Inc. 96,289 306,709 6.6 %
The Nielsen Company B.V. 87,657 196,662 4.3 %
NXP B.V. 167,276 196,601 4.3 %
Samson Resources Corporation 237,514 190,012 4.1 %
ProSiebenSat.1 Media AG 226,913 183,483 4.0 %
KION Group GmbH 128,058 162,598 3.5 %
US Foods, Inc. 100,000 130,000 2.8 %
Biomet, Inc. 151,444 121,155 2.6 %
First Data Corporation 135,258 94,681 2.1 %
Dollar General Corporation 14,043 78,796 1.7 %
Energy Future Holdings Corp. 200,000 10,000 0.2 %
1,740,092 2,144,492 46.5 %
Private Equity Investment Vehicles
KKR 2006 Fund L.P. 346,036 394,058 8.5 %
KKR European Fund III L.P. 233,706 261,169 5.7 %
KKR Asian Fund L.P. 82,542 92,554 2.0 %
KKR European Fund II L.P. 54,546 57,806 1.2 %
KKR Millennium Fund L.P. 53,844 44,969 1.0 %
KKR North America Fund XI L.P. 20,177 21,510 0.5 %
KKR E2 Investors, L.P. 10,418 20,568 0.4 %
KKR European Fund L.P. 47,664 4,318 0.1 %
KKR China Growth Fund L.P. 3,286 3,314 0.1 %
Co-Investment Vehicles 546 653 0.0 %
852,765 900,919 19.5 %
Private Equity Total 2,592,857 3,045,411 66.0 %
Real Assets
Royalties and Drilling 142,272 157,062 3.4 %
Real Estate Fund 83,920 100,355 2.2 %
Infrastructure Fund 25,825 26,570 0.6 %
Co-Investments 10,835 12,988 0.3 %
Natural Resources 13,172 8,836 0.2 %
Real Assets Total 276,024 305,811 6.7 %
Private Markets Total 2,868,881 3,351,222 72.7 %
Public Markets Investment Strategies
Liquid Credit 187,263 195,094 4.2 %
Long/Short Equities 100,000 109,906 2.4 %
Credit Relative Value 82,000 88,775 1.9 %
Direct Lending 39,069 44,006 1.0 %
Special Situations 27,297 30,661 0.7 %
Mezzanine Fund 14,564 17,937 0.4 %
Public Markets Total 450,193 486,379 10.6 %
Other 760,606 769,595 16.7 %
Total Investments $ 4,079,680 $ 4,607,196 100.0 %
KKR
CAPITAL MARKETS AND PRINCIPAL ACTIVITIES SEGMENT SCHEDULE OF INVESTMENTS, CONTINUED (UNAUDITED)
(Amounts in thousands, except percentage amounts)
As of June 30, 2013
Fair Value as
a Percentage
Investment
Cost
Fair
Value
of Total
Investments
Significant Aggregate Investments: (a)
Alliance Boots GmbH $ 228,769 $ 545,895 11.9 %
HCA Inc. 117,624 365,344 7.9 %
346,393 911,239 19.8 %
Other investments 3,733,287 3,695,957 80.2 %
Total Investments $ 4,079,680 $ 4,607,196 100.0 %
(a)
The significant aggregate investments include investments in portfolio companies with individual fair values of 5% or more of the Capital Markets and Principal Activities segment investments balance as of June 30, 2013. The fair value figures include the co-investment and the limited partner and/or general partner interests in the underlying portfolio company.
KKR
ASSETS UNDER MANAGEMENT* (UNAUDITED)
(Amounts in thousands)
Private
Markets
Segment
Public
Markets
Segment
Total
Reportable
Segments
Quarter Ended June 30, 2013
March 31, 2013 $ 50,340,400 $ 27,913,000 $ 78,253,400
New Capital Raised 6,681,000 1,703,300 8,384,300
Distributions (2,685,400 ) (720,500 ) (c) (3,405,900 )
Net Changes in Fee Base of Certain Funds (a) (272,300 ) - (272,300 )
Foreign Exchange 12,600 - 12,600
Change in Value 376,100 152,700 528,800
June 30, 2013 $ 54,452,400 $ 29,048,500 $ 83,500,900
Six Months Ended June 30, 2013
December 31, 2012 $ 49,127,600 $ 26,399,900 $ 75,527,500
New Capital Raised 7,648,200 3,234,800 10,883,000
Distributions (4,517,400 ) (1,400,200 ) (d) (5,917,600 )
Net Changes in Fee Base of Certain Funds (a) (272,300 ) - (272,300 )
Foreign Exchange (11,000 ) - (11,000 )
Change in Value 2,477,300 814,000 3,291,300
June 30, 2013 $ 54,452,400 $ 29,048,500 $ 83,500,900
Trailing Twelve Months Ended June 30, 2013
June 30, 2012 $ 45,528,100 $ 15,960,800 $ 61,488,900
New Capital Raised 14,551,400 5,464,000 20,015,400
Acquisitions (b) - 8,086,900 8,086,900
Distributions (10,254,300 ) (2,091,500 ) (e) (12,345,800 )
Net Changes in Fee Base of Certain Funds (a) (1,600,200 ) - (1,600,200 )
Foreign Exchange 68,200 - 68,200
Change in Value 6,159,200 1,628,300 7,787,500
June 30, 2013 $ 54,452,400 $ 29,048,500 $ 83,500,900
* Assets Under Management exclude those assets managed by entities where KKR holds less than a 50% ownership interest.
(a) Represents the impact of including certain funds entering the post-investment period.
(b) Represents AUM of Prisma as of October 1, 2012, the date of acquisition. This figure excludes new capital raised and distributions since the acquisition.
(c) Includes $193.5 million of redemptions by fund investors.
(d) Includes $539.2 million of redemptions by fund investors.
(e) Includes $709.1 million of redemptions by fund investors.
KKR
FEE PAYING ASSETS UNDER MANAGEMENT* (UNAUDITED)
(Amounts in thousands)
Private
Markets
Segment
Public
Markets
Segment
Total
Reportable
Segments
Quarter Ended June 30, 2013
March 31, 2013 $ 41,218,000 $ 21,236,100 $ 62,454,100
New Capital Raised 6,402,100 1,203,000 7,605,100
Distributions (1,109,900 ) (437,200 ) (c) (1,547,100 )
Net Changes in Fee Base of Certain Funds (a) (654,700 ) - (654,700 )
Foreign Exchange 48,300 - 48,300
Change in Value 3,700 47,000 50,700
June 30, 2013 $ 45,907,500 $ 22,048,900 $ 67,956,400
Six Months Ended June 30, 2013
December 31, 2012 $ 41,173,000 $ 19,673,000 $ 60,846,000
New Capital Raised 7,363,900 2,734,300 10,098,200
Distributions (1,951,000 ) (973,700 ) (d) (2,924,700 )
Net Changes in Fee Base of Certain Funds (a) (654,700 ) - (654,700 )
Foreign Exchange (55,400 ) - (55,400 )
Change in Value 31,700 615,300 647,000
June 30, 2013 $ 45,907,500 $ 22,048,900 $ 67,956,400
Trailing Twelve Months Ended June 30, 2013
June 30, 2012 $ 37,858,300 $ 9,342,200 $ 47,200,500
New Capital Raised 14,361,000 4,727,500 19,088,500
Acquisitions (b) - 8,078,400 8,078,400
Distributions (2,757,200 ) (1,322,300 ) (e) (4,079,500 )
Net Changes in Fee Base of Certain Funds (a) (3,860,100 ) - (3,860,100 )
Foreign Exchange 238,300 - 238,300
Change in Value 67,200 1,223,100 1,290,300
June 30, 2013 $ 45,907,500 $ 22,048,900 $ 67,956,400
* Fee Paying Assets Under Management exclude those assets managed by entities where KKR holds less than a 50% ownership interest.
(a) Represents the impact of including certain funds entering the post-investment period.
(b) Represents FPAUM of Prisma as of October 1, 2012, the date of acquisition. This figure excludes new capital raised and distributions since the acquisition.
(c) Includes $193.5 million of redemptions by fund investors.
(d) Includes $539.2 million of redemptions by fund investors.
(e) Includes $709.1 million of redemptions by fund investors.
KKR
INVESTMENT VEHICLE SUMMARY (a) (UNAUDITED)
As of June 30, 2013
(Amounts in millions, except percentages)
Investment Period Amount
Commencement
Date
End Date Commitment
Uncalled
Commitments
Percentage
Committed
by General
Partner
Invested Realized
Remaining
Cost
Remaining
Fair Value
Private Markets
Private Equity Funds
Asian Fund II 4/2013 4/2019 $ 5,825.0 $ 5,825.0 1.3% $ - $ - $ - $ -
North America Fund XI 9/2012 9/2018 7,230.7 6,740.2 3.5% 490.5 3.9 490.5 524.5
China Growth Fund 11/2010 11/2016 1,010.0 692.4 1.0% 317.6 28.5 300.1 305.4
E2 Investors (Annex Fund) 8/2009 11/2013 345.9 191.6 4.3% 154.3 - 154.2 325.2
European Fund III 3/2008 3/2014 6,077.2 1,729.2 4.6% 4,348.0 549.5 3,990.6 4,697.2
Asian Fund 7/2007 4/2013 3,983.2 273.9 2.5% 3,709.3 1,623.7 2,864.8 4,737.9
2006 Fund 9/2006 9/2012 17,642.2 1,269.1 2.1% 16,373.1 10,509.6 10,021.7 14,378.1
European Fund II 11/2005 10/2008 5,750.8 - 2.1% 5,750.8 2,442.6 3,922.9 4,926.6
Millennium Fund 12/2002 12/2008 6,000.0 - 2.5% 6,000.0 9,320.5 2,218.9 3,335.2
European Fund 12/1999 12/2005 3,085.4 - 3.2% 3,085.4 8,720.0 - 51.7
Total Private Equity Funds 56,950.4 16,721.4 40,229.0 33,198.3 23,963.7 33,281.8
Co-Investment Vehicles Various Various 2,434.1 504.1 Various 1,930.0 2,318.9 1,309.7 1,752.0
Total Private Equity 59,384.5 17,225.5 42,159.0 35,517.2 25,273.4 35,033.8
Real Assets
Natural Resources Fund Various Various 1,232.0 658.9 Various 573.1 46.9 547.0 370.1
Global Energy Opportunities Various Various 1,011.0 884.4 Various 126.6 - 126.6 113.4
Infrastructure Fund Various Various 1,041.5 614.2 4.8% 427.3 9.0 427.3 437.9
Infrastructure Co-Investments Various Various 1,356.7 252.2 Various 1,104.5 190.5 1,104.5 1,355.8
Real Estate Fund 5/2013 (b) 500.0 337.6 40% 162.4 - 162.4 203.8
Real Assets 5,141.2 2,747.3 2,393.9 246.4 2,367.8 2,481.0
Private Markets Total 64,525.7 19,972.8 44,552.9 35,763.6 27,641.2 37,514.8
Public Markets
Special Situations Vehicles Various Various 2,131.9 407.5 Various 1,724.4 417.9 1,562.4 1,904.3
Mezzanine Fund 3/2010 8/2015 987.0 650.7 4.6% 336.3 52.3 336.3 394.6
Direct Lending Vehicles Various Various 668.5 333.4 Various 335.1 9.4 335.1 359.4
Public Markets Total 3,787.4 1,391.6 2,395.8 479.6 2,233.8 2,658.3
Grand Total $ 68,313.1 $ 21,364.4 $ 46,948.7 $ 36,243.2 $ 29,875.0 $ 40,173.1
(a) Reflects investment vehicles for which KKR has the ability to earn carried interest.
(b) Third anniversary of final close.
KKR
DISTRIBUTION CALCULATION (UNAUDITED)
(Amounts in thousands, except unit and per unit amounts)
Quarter Ended Six Months Ended
June 30, 2013 March 31, 2013 June 30, 2012 June 30, 2013 June 30, 2012
FRE (a) $ 98,177 $ 88,000 $ 69,772 $ 186,177 $ 143,128
Realized cash carry 161,897 52,900 39,360 214,797 84,287
Net realized principal investment income 150,361 153,156 301,580 303,517 354,198
Less: local income taxes (5,336 ) (2,341 ) (3,307 ) (7,677 ) (6,893 )
Less: noncontrolling interests (1,323 ) (1,101 ) (1,277 ) (2,424 ) (4,488 )
Total Distributable Earnings 403,776 290,614 406,128 694,390 570,232
Less: Undistributed net realized principal investment income (90,217 ) (91,894 ) (301,580 ) (182,111 ) (354,198 )
Distributed Earnings 313,559 198,720 104,548 512,279 216,034
Distributed Earnings to KKR & Co. L.P. (b) 126,295 75,749 36,401 202,044 74,201
Less: estimated current corporate income taxes (10,125 ) (6,376 ) (4,268 ) (16,501 ) (8,290 )
Distributed Earnings to KKR & Co. L.P., After Taxes 116,170 69,373 32,133 185,543 65,911
Distribution per KKR & Co. L.P. common unit $ 0.42 $ 0.27 $ 0.13 $ 0.69 $ 0.28
Components of Distribution per KKR & Co. L.P. common unit
After-tax FRE $ 0.10 $ 0.10 $ 0.07 $ 0.20 $ 0.15
Realized Cash Carry $ 0.23 $ 0.08 $ 0.06 $ 0.31 $ 0.13
Distributed Net Realized Principal Investment Income $ 0.09 $ 0.09 $ - $ 0.18 $ -
Outstanding KKR & Co. L.P. common units 277,834,343 261,781,303 238,155,157
(a) See Exhibit A for a reconciliation of such measure to financial results prepared in accordance with GAAP.
(b) Represents the amount of distributed earnings allocable to KKR & Co. L.P. based on its ownership in the KKR business.
DISTRIBUTION POLICY
KKR intends to make quarterly cash distributions in amounts that in the aggregate are expected to constitute substantially all of the cash earnings of its investment management business and 40% of the net cash income from realized principal investments, in each case in excess of amounts determined by KKR to be necessary or appropriate to provide for the conduct of its business, to make appropriate investments in its business and its investment funds and to comply with applicable law and any of its debt instruments or other obligations. For purposes of KKR’s distribution policy, its distributions are expected to consist of (i) FRE, (ii) carry distributions received from KKR’s investment funds which have not been allocated as part of its carry pool and (iii) a percentage of net realized principal investment income. This amount is expected to be reduced by (i) corporate and applicable local taxes, if any, (ii) non-controlling interests, and (iii) amounts determined by KKR to be necessary or appropriate for the conduct of its business and other matters as discussed above.
The declaration and payment of any distributions are subject to the discretion of the board of directors of the general partner of KKR & Co. L.P., which may change the distribution policy at any time, and the terms of its limited partnership agreement. There can be no assurance that distributions will be made as intended or at all or that unitholders will receive sufficient distributions to satisfy payment of their tax liabilities as limited partners of KKR & Co. L.P. When KKR & Co. L.P. receives distributions from the KKR Group Partnerships (the holding companies of the KKR business), KKR Holdings receives its pro rata share of such distributions from the KKR Group Partnerships.
KKR
Notes to Reportable Segments (Unaudited)
The segment key performance measures that follow are used by management in making operating and resource deployment decisions as well as assessing the overall performance of each of KKR’s reportable business segments. The reportable segments for KKR’s business are presented prior to giving effect to the allocation of income (loss) between KKR & Co. L.P. and KKR Holdings L.P. and as such represent the business in total. In addition, KKR’s reportable segments are presented without giving effect to the consolidation of the funds that KKR manages.
KKR discloses the following financial measures in this earnings release that are calculated and presented using methodologies other than in accordance with GAAP. We believe that providing these performance measures on a supplemental basis to our GAAP results is helpful to unitholders in assessing the overall performance of KKR’s businesses. These financial measures should not be considered as a substitute for similar financial measures calculated in accordance with GAAP. We caution readers that these non-GAAP financial measures may differ from the calculations of other investment managers, and as a result, may not be comparable to similar measures presented by other investment managers. Reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are included elsewhere within this earnings release.
Fee related earnings (“FRE”) is comprised of segment operating revenues less segment operating expenses, excluding certain compensation and general and administrative expenses incurred in the generation of net realized principal investment income. This measure is used by management as an alternative measurement of the operating earnings of KKR and its business segments before investment income. We believe this measure is useful to unitholders as it provides additional insight into the operating profitability of our fee generating management companies and capital markets businesses. The components of FRE on a segment basis differ from the equivalent GAAP amounts on a consolidated basis as a result of: (i) the inclusion of management fees earned from consolidated funds that were eliminated in consolidation; (ii) the exclusion of fees and expenses of certain consolidated entities; (iii) the exclusion of charges relating to the amortization of intangible assets; (iv) the exclusion of charges relating to carry pool allocations; (v) the exclusion of non-cash equity charges and other non-cash compensation charges borne by KKR Holdings or incurred under the KKR & Co. L.P. 2010 Equity Incentive Plan; (vi) the exclusion of certain reimbursable expenses; and (vii) the exclusion of certain non-recurring items.
Economic net income (loss) (“ENI”) is a measure of profitability for KKR’s reportable segments and is used by management as an alternative measurement of the operating and investment earnings of KKR and its business segments. We believe this measure is useful to unitholders as it provides additional insight into the overall profitability of KKR’s businesses inclusive of investment income and carried interest. ENI is comprised of: (i) FRE plus (ii) segment investment income (loss), which is reduced for carry pool allocations, management fee refunds, interest expense and certain compensation and general and administrative expenses incurred in the generation of net realized principal investment income; less (iii) certain economic interests in KKR’s segments held by third parties. ENI differs from net income (loss) on a GAAP basis as a result of: (i) the exclusion of the items referred to in FRE above; (ii) the exclusion of investment income (loss) relating to noncontrolling interests; and (iii) the exclusion of income taxes.
Economic net income (loss), after taxes is used to measure KKR’s implied ENI on a fully diluted basis. We believe this measure is useful to unitholders as it provides an indication of KKR’s ENI as if all outstanding KKR Holdings units had been exchanged for common units of KKR & Co. L.P. Economic Net Income (Loss), After Taxes is calculated by deducting from ENI the implied income tax provision that has been calculated assuming that all income is allocated to KKR & Co. L.P., which would occur following an exchange of all KKR Holdings units for common units of KKR & Co. L.P. The assumptions and methodology used to calculate the implied income tax provision are consistent with those used in calculating the tax provision for KKR & Co. L.P. under GAAP. The implied income tax provision does not give effect to any tax savings or deductions that may result from the exchange of KKR Holdings units.
Economic net income (loss), after taxes and equity-based charges is used to measure KKR’s implied ENI on a fully diluted basis. We believe this measure is useful to unitholders as it provides an indication of KKR’s ENI as if all outstanding KKR Holdings units had been exchanged for common units of KKR & Co. L.P. Economic Net Income (Loss), After Taxes and Equity-based Charges is calculated by deducting from ENI: (i) equity-based charges associated with equity awards granted under the KKR & Co. L.P. 2010 Equity Incentive Plan; and (ii) the implied income tax provision that has been calculated assuming that all income is allocated to KKR & Co. L.P., which would occur following an exchange of all KKR Holdings units for common units of KKR & Co. L.P. The assumptions and methodology used to calculate the implied income tax provision are consistent with those used in calculating the tax provision for KKR & Co. L.P. under GAAP. The implied income tax provision does not give effect to any tax savings or deductions that may result from the exchange of KKR Holdings units.
Net realized principal investment income refers to net cash income from (i) realized investment gains and losses excluding certain realized investment losses from principal investments during the second quarter of 2013 to the extent unrealized losses on these investments were recognized prior to the combination with KPE on October 1, 2009, (ii) dividend income and (iii) interest income net of interest expense less certain compensation and general and administrative expenses incurred in the generation of net realized principal investment income in each case generated by KKR’s principal investments held on or through KKR’s balance sheet in our Capital Markets and Principal Activities segment. This is a term to describe a portion of KKR’s quarterly distribution.
Total distributable earnings is the sum of (i) FRE, (ii) carry distributions received from KKR’s investment funds which have not been allocated as part of its carry pool and (iii) net realized principal investment income; less (i) applicable local income taxes, if any, and (ii) noncontrolling interests. We believe this measure is useful to unitholders as it provides a supplemental measure to assess performance, excluding the impact of mark-to-market gains (losses), and also assess amounts available for distribution to KKR unitholders. However, total distributable earnings is not a measure that calculates actual distributions under KKR’s current distribution policy.
Assets under management (“AUM”) represent the assets from which KKR is entitled to receive fees or a carried interest and general partner capital. We believe this measure is useful to unitholders as it provides additional insight into KKR’s capital raising activities and the overall activity in its investment funds and vehicles. KKR calculates the amount of AUM as of any date as the sum of: (i) the fair value of the investments of KKR’s investment funds plus uncalled capital commitments from these funds; (ii) the fair value of investments in KKR’s co-investment vehicles; (iii) the net asset value of certain of KKR's fixed income products; (iv) the value of outstanding structured finance vehicles; and (v) the fair value of other assets managed by KKR. KKR’s definition of AUM is not based on any definition of AUM that may be set forth in the agreements governing the investment funds, vehicles or accounts that it manages or calculated pursuant to any regulatory definitions.
Fee paying AUM (“FPAUM”) represents only those assets under management from which KKR receives fees. We believe this measure is useful to unitholders as it provides additional insight into the capital base upon which KKR earns management fees. This relates to KKR’s capital raising activities and the overall activity in its investment funds and vehicles, for only those funds and vehicles where KKR receives fees (i.e., excluding vehicles that receive only carried interest or general partner capital). FPAUM is the sum of all of the individual fee bases that are used to calculate KKR’s fees and differs from AUM in the following respects: (i) assets from which KKR does not receive a fee are excluded (i.e., assets with respect to which it receives only carried interest) and (ii) certain assets, primarily in its private equity funds, are reflected based on capital commitments and invested capital as opposed to fair value because fees are not impacted by changes in the fair value of underlying investments.
Committed dollars invested is the aggregate amount of capital commitments that have been invested by KKR’s investment funds and carry-yielding co-investment vehicles and is used as a measure of investment activity for KKR and its business segments during a given period. We believe this measure is useful to unitholders as it provides additional insight into KKR’s investment of committed capital. Such amounts include: (i) capital invested by fund investors and co-investors with respect to which KKR is entitled to a fee or carried interest and (ii) capital invested by KKR’s investment funds and vehicles.
Syndicated capital is the aggregate amount of debt or equity capital in transactions originated by KKR investment funds and vehicles, which has been distributed to third parties in exchange for a fee. It does not include (i) capital committed to such transactions by carry-yielding co-investment vehicles, which is instead reported in committed dollars invested and (ii) debt capital that is arranged as part of the acquisition financing of transactions originated by KKR investment funds and vehicles. Syndicated capital is used as a measure of investment activity for KKR and its business segments during a given period, and we believe that this measure is useful to unitholders as it provides additional insight into levels of syndication activity in KKR’s Capital Markets and Principal Activities segment and across its investment platform.
Uncalled commitments are used as a measure of unfunded capital commitments that KKR’s investment funds and carry-paying co-investment vehicles have received from partners to contribute capital to fund future investments. We believe this measure is useful to unitholders as it provides additional insight into the amount of capital that is available to KKR’s investment funds and vehicles to make future investments.
Adjusted units are used as a measure of the total equity ownership of KKR that is held by KKR & Co. L.P. and KKR Holdings and represent the fully diluted unit count using the if-converted method. We believe this measure is useful to unitholders as it provides an indication of the total equity ownership of KKR as if all outstanding KKR Holdings units had been exchanged for common units of KKR & Co. L.P.
Core interest expense is used by management as an alternative measurement of interest expense incurred by KKR on a segment basis and excludes interest expense related to debt obligations from investment financing arrangements related to certain of KKR’s private equity funds, investment vehicles and principal investments. These financing arrangements are not direct obligations of the general partners of KKR’s private equity funds or its management companies. On a segment basis, interest expense is included in other investment income. We believe this measure is useful to unitholders as it provides an indication of the amount of interest expense borne by KKR excluding interest expense that is allocated to KKR’s investment funds and vehicles and other noncontrolling interest holders. Additionally, we believe this measure is useful for analyzing KKR’s ability to service its debt obligations.
Book value is a measure of the net assets of KKR’s reportable segments and is used by management primarily in assessing the unrealized value of our investment portfolio, including carried interest, as well as our overall liquidity position. We believe this measure is useful to unitholders as it provides additional insight into the assets and liabilities of KKR excluding the assets and liabilities that are allocated to noncontrolling interest holders. Book value differs from the equivalent GAAP amounts on a consolidated basis primarily as a result of the exclusion of ownership interests attributable to KKR Holdings L.P.
Fee related EBITDA is comprised of FRE before the impact of depreciation of fixed assets and amortization of intangible assets and is used by management as a measure of the cash earnings of KKR and its business segments before investment income. We believe this measure is useful to unitholders as it provides additional insight into the amount of cash earnings generated by KKR’s management companies and capital markets businesses.
Cash and short-term investments represent cash and liquid short-term investments in high-grade, short-duration cash management strategies used by KKR to generate additional yield on our excess liquidity and is used by management in evaluating KKR’s liquidity position. We believe this measure is useful to unitholders as it provides additional insight into KKR’s available liquidity. Cash and short-term investments differ from cash and cash equivalents on a GAAP basis as a result of the inclusion of liquid short-term investments in cash and short-term investments.
KKR
EXHIBIT A
RECONCILIATION OF NET INCOME (LOSS) ATTRIBUTABLE TO KKR & CO. L.P. PER COMMON UNIT (GAAP BASIS)
TO ENI AFTER TAXES PER ADJUSTED UNIT (UNAUDITED)
(Amounts in thousands, except common unit and per common unit amounts)
Quarter Ended
June 30, 2013 March 31, 2013 June 30, 2012
Net income (loss) attributable to KKR & Co. L.P. per common unit $ 0.06 $ 0.75 $ 0.62
Weighted Average Common Units Outstanding 271,983,811 257,044,184 235,781,983
Net income (loss) attributable to KKR & Co. L.P. 15,134 193,439 146,261
Plus: Net income (loss) attributable to noncontrolling
interests held by KKR Holdings L.P.
28,106 334,112 292,833
Plus: Non-cash equity based charges 80,318 81,650 93,540
Plus: Amortization of intangibles and other, net 12,360 29,185 2,388
Plus: Income taxes 8,525 9,356 11,093
Economic net income (loss) 144,443 647,742 546,115
Less: Provision for income taxes 13,486 20,117 25,857
Less: Equity-based charges associated with the KKR & Co. L.P. 2010 equity incentive plan 25,936 27,418 14,050
Economic net income (loss) after taxes and equity-based charges 105,021 600,207 506,208
Plus: Equity-based charges associated with the KKR & Co. L.P. 2010 equity incentive plan 25,936 27,418 14,050
Economic net income (loss) after taxes 130,957 627,625 520,258
Weighted Average Adjusted Units 715,453,358 711,229,881 700,720,686
Economic net income (loss) after taxes per adjusted unit $ 0.18 $ 0.88 $ 0.74
Six Months Ended
June 30, 2013 June 30, 2012
Net income (loss) attributable to KKR & Co. L.P. per common unit $ 0.79 $ 1.45
Weighted Average Common Units Outstanding 264,555,267 232,440,659
Net income (loss) attributable to KKR & Co. L.P. 208,573 336,697
Plus: Net income (loss) attributable to noncontrolling
interests held by KKR Holdings L.P.
362,218 697,024
Plus: Non-cash equity based charges 161,968 207,881
Plus: Amortization of intangibles and other, net 41,545 3,550
Plus: Income taxes 17,881 28,165
Economic net income (loss) 792,185 1,273,317
Less: Provision for income taxes 33,603 69,240
Less: Equity-based charges associated with the KKR & Co. L.P. 2010 equity incentive plan 53,354 30,314
Economic net income (loss) after taxes and equity-based charges 705,228 1,173,763
Plus: Equity-based charges associated with the KKR & Co. L.P. 2010 equity incentive plan 53,354 30,314
Economic net income (loss) after taxes 758,582 1,204,077
Weighted Average Adjusted Units 713,353,287 696,408,937
Economic net income (loss) after taxes per adjusted unit $ 1.06 $ 1.73
KKR
EXHIBIT A (CONTINUED)
RECONCILIATION OF NET INCOME (LOSS) ATTRIBUTABLE TO KKR & CO. L.P. (GAAP BASIS)
TO ECONOMIC NET INCOME (LOSS), FEE RELATED EARNINGS, FEE RELATED EBITDA, AND TOTAL DISTRIBUTABLE EARNINGS (UNAUDITED)
(Amounts in thousands)
Quarter Ended
June 30, 2013 March 31, 2013 June 30, 2012
Net income (loss) attributable to KKR & Co. L.P. $ 15,134 $ 193,439 $ 146,261
Plus: Net income (loss) attributable to noncontrolling
interests held by KKR Holdings L.P.
28,106 334,112 292,833
Plus: Non-cash equity based charges 80,318 81,650 93,540
Plus: Amortization of intangibles and other, net 12,360 29,185 2,388
Plus: Income taxes 8,525 9,356 11,093
Economic net income (loss) 144,443 647,742 546,115
Plus: Income attributable to segment noncontrolling interests 1,323 1,101 1,277
Less: Investment income (loss) 47,589 560,843 477,620
Fee related earnings 98,177 88,000 69,772
Plus: Depreciation and amortization 3,708 3,681 3,093
Fee related EBITDA $ 101,885 $ 91,681 $ 72,865
Less: Depreciation and amortization 3,708 3,681 3,093
Plus: Realized cash carry 161,897 52,900 39,360
Plus: Net realized principal investment income 150,361 153,156 301,580
Less: Local income taxes and noncontrolling interests 6,659 3,442 4,584
Total distributable earnings $ 403,776 $ 290,614 $ 406,128
Six Months Ended
June 30, 2013 June 30, 2012
Net income (loss) attributable to KKR & Co. L.P. $ 208,573 $ 336,697
Plus: Net income (loss) attributable to noncontrolling
interests held by KKR Holdings L.P.
362,218 697,024
Plus: Non-cash equity based charges 161,968 207,881
Plus: Amortization of intangibles and other, net 41,545 3,550
Plus: Income taxes 17,881 28,165
Economic net income (loss) 792,185 1,273,317
Plus: Income attributable to segment noncontrolling interests 2,424 4,488
Less: Investment income (loss) 608,432 1,134,677
Fee related earnings 186,177 143,128
Plus: Depreciation and amortization 7,389 5,646
Fee related EBITDA $ 193,566 $ 148,774
Less: Depreciation and amortization 7,389 5,646
Plus: Realized cash carry 214,797 84,287
Plus: Net realized principal investment income 303,517 354,198
Less: Local income taxes and noncontrolling interests 10,101 11,381
Total distributable earnings $ 694,390 $ 570,232
KKR
EXHIBIT A (CONTINUED)
RECONCILIATION OF KKR & CO. L.P. PARTNERS' CAPITAL (GAAP BASIS)
TO BOOK VALUE AND BOOK VALUE PER ADJUSTED UNIT (UNAUDITED)
(Amounts in thousands, except common unit and per common unit amounts)
As of As of
June 30, 2013 December 31, 2012
KKR & Co. L.P. partners’ capital $ 2,287,389 $ 2,004,359
Noncontrolling interests held by KKR Holdings L.P. 4,699,114 4,981,864
Equity impact of KKR Management Holdings Corp. and other (87,446 ) (29,039 )
Book value 6,899,057 6,957,184
Adjusted units 715,296,775 704,780,484
Book value per adjusted unit $ 9.65 $ 9.87
RECONCILIATION OF CASH AND CASH EQUIVALENTS (GAAP BASIS)
TO CASH AND SHORT-TERM INVESTMENTS (SEGMENT BASIS) (UNAUDITED)
(Amounts in thousands)
As of
As of
June 30, 2013 December 31, 2012
Cash and cash equivalents $ 1,167,413 $ 1,230,464
Liquid short-term investments 827,432 303,823
Cash and short-term investments $ 1,994,845 $ 1,534,287
KKR
EXHIBIT B
RECONCILIATION OF WEIGHTED AVERAGE GAAP COMMON UNITS OUTSTANDING TO WEIGHTED AVERAGE ADJUSTED UNITS (UNAUDITED)
The following table provides a reconciliation of KKR's Weighted Average GAAP Common Units Outstanding to Weighted Average Adjusted Units.
Quarter Ended
June 30, 2013 March 31, 2013 June 30, 2012
Weighted Average GAAP Common Units Outstanding - Basic 271,983,811 257,044,184 235,781,983
Weighted Average Unvested Common Units(a) 26,094,953 24,998,337 16,725,819
Weighted Average GAAP Common Units Outstanding - Diluted 298,078,764 282,042,521 252,507,802
Adjustments:
Weighted Average KKR Holdings Units(b) 417,374,594 429,187,360 448,212,884
Weighted Average Adjusted Units 715,453,358 711,229,881 700,720,686
Six Months Ended
June 30, 2013 June 30, 2012
Weighted Average GAAP Common Units Outstanding - Basic 264,555,267 232,440,659
Weighted Average Unvested Common Units(a) 25,549,675 12,729,295
Weighted Average GAAP Common Units Outstanding - Diluted 290,104,942 245,169,954
Adjustments:
Weighted Average KKR Holdings Units(b) 423,248,345 451,238,983
Weighted Average Adjusted Units 713,353,287 696,408,937
RECONCILIATION OF GAAP COMMON UNITS OUTSTANDING TO ADJUSTED UNITS (UNAUDITED)
The following table provides a reconciliation of KKR's GAAP Common Units Outstanding to Adjusted Units.
As of As of
June 30, 2013 December 31, 2012
GAAP Common Units Outstanding - Basic 277,834,343 253,363,691
Unvested Common Units(a) 25,501,501 18,863,517
GAAP Common Units Outstanding - Diluted 303,335,844 272,227,208
Adjustments:
KKR Holdings Units(b) 411,960,931 432,553,276
Adjusted Units 715,296,775 704,780,484
(a)
Represents equity awards granted under the KKR & Co. L.P. 2010 Equity Incentive Plan. The issuance of common units of KKR & Co. L.P. pursuant to awards under its equity incentive plan dilutes KKR common unitholders and KKR Holdings pro rata in accordance with their respective percentage interests in the KKR business.
(b)
Common units that may be issued by KKR & Co. L.P. upon exchange of units in KKR Holdings L.P. for KKR common units.
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Contact:.
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Investor Relations:
Kohlberg Kravis Roberts & Co. L.P.
Craig Larson, +1-877-610-4910 (U.S.) / +1-212-230-9410
investor-relations@kkr.com
or
Media:
Kohlberg Kravis Roberts & Co. L.P.
Kristi Huller, +1-212-750-8300
media@kkr.com
LIONSGATE TO RELEASE FISCAL YEAR 2014 FIRST QUARTER EARNINGS AFTER MARKET CLOSE ON THURSDAY, AUGUST 8, 2013, AND TO HOLD ANALYST AND INVESTOR CONFERENCE CALL ON FRIDAY, AUGUST 9, 2013
CNW GroupPress Release: Lionsgate – Mon, Jul 29, 2013 8:01 AM EDT..
SANTA MONICA, Calif. and VANCOUVER , British Columbia , July 29, 2013 /CNW/ - Lionsgate (LGF), a leading global entertainment company, today announced it will release its financial results for the first quarter of fiscal year 2014 (quarter ended June 30, 2013 ) after market close on Thursday, August 8, 2013 .
(Logo: http://photos.prnewswire.com/prnh/20110919/LA70620LOGO)
Lionsgate senior management will hold its analyst and investor conference call to discuss its first quarter fiscal 2014 financial results at 9:00 A.M. ET / 6:00 A.M. PT on Friday, August 9, 2013 . Interested parties may participate live in the conference call by calling 1-800-230-1059 (612-288-0329 outside the U.S. and Canada ). A full digital replay will be available from Friday morning, August 9 , through Friday, August 16 , by dialing 1-800-475-6701 (320-365-3844 outside the U.S. and Canada ) and using access code 298340.
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. The Company has built a strong television presence in production of primetime cable and broadcast network series, distribution and syndication of programming and an array of channel assets. Lionsgate currently has 28 shows on 20 networks spanning its production, distribution and syndication businesses, including such critically-acclaimed hits as the multiple Emmy Award-winning Mad Men, Nurse Jackie, Anger Management, the network series Nashville , the syndication successes Tyler Perry's House of Payne, its spinoff Meet the Browns and The Wendy Williams Show as well as the 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, Tyler Perry's Temptation, Warm Bodies, Texas Chainsaw 3D, The Expendables 2, The Possession, Sinister, The Cabin in the Woods and Arbitrage.
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
or
Cristina Castaneda
310-255-5114
ccastaneda@lionsgate.com
SOURCE: Lionsgate
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Contact:.
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http://www.lionsgate.com
http://photos.prnewswire.com/prnh/20110919/LA70620LOG
Utah Medical Products, Inc. Reports Financial Performance for Second Quarter 2013
GlobeNewswirePress Release: Utah Medical Products, Inc. – Thu, Jul 25, 2013 9:00 AM EDT..
SALT LAKE CITY, July 25, 2013 (GLOBE NEWSWIRE) -- In the second calendar quarter (2Q) and first half (1H) of 2013, Utah Medical Products, Inc.'s (UTMD) changes in financial results compared to the same time period in the prior calendar year were as follows:
2Q 1H
(April -- June) (January -- June)
Sales: - (4%)
Gross Profit: - (4%)
Operating Income: + 5% (1%)
Net Income: + 10% + 3%
Earnings Per Share: + 8% + 1%
Earnings per share for the most recent twelve months (TTM) were $2.76. Excluding the noncash effects of depreciation, amortization of intangible assets and stock option expense, TTM consolidated earnings before taxes plus interest expense were $18,544. Currency amounts throughout this report are in thousands, except per share amounts and where noted.
UTMD achieved the following profit margins in 2Q 2013 and 1H 2013 compared to 2Q 2012 and 1H 2012:
2Q 2013 2Q 2012 1H 2013 1H 2012
(Apr -- Jun) (Apr -- Jun) (Jan -- Jun) (Jan -- Jun)
Gross Profit Margin (gross profits/ sales): 60.5% 60.6% 60.5% 60.3%
Operating Profit Margin (operating profits/ sales): 37.1% 35.4% 37.3% 36.1%
Net Profit Margin (profit after taxes/ sales): 26.3% 24.0% 26.3% 24.4%
Income Statement Summary.
Due to distributor overstocking in 1Q 2012, the comparison of 2013 income statement results with the prior year started off negative, as sales, gross profits, operating income, net income and earnings per share were down 7%, 7%, 5%, 2% and 4%, respectively, in 1Q 2013 compared to 1Q 2012, as reported on April 25, 2013.
Performance in 2Q 2013 was consistent in sales and gross profits with 2Q 2012, with better operating income, net income and eps. As a result, the comparison of 1H 2013 with 1H 2012 remains negative, although less so than after 1Q.
As an alternative comparison, the following table compares 1H 2013 quarterly average income statement results with the average quarterly performance for the entire year of 2012:
1H 2013 2012 Year
Quarterly Average Quarterly Average
Sales: (2%) $ 10,188 $ 10,388
Gross Profit: (3%) 6,165 6,327
Operating Income: -- 3,802 3,799
Net Income: +6% 2,684 2,542
Earnings Per Share: +4% .713 .685
Shareholders may recall UTMD's guidance for 2013 provided in its year-end December 31, 2012 SEC Form 10-K, as follows:
"In summary, management expects revenues and net income in 2013 to decline about 2%, and gross profit, operating income, EBT and eps to be down about 3% compared to 2012."
Based on 1H 2013 actual results, the Company is on its plan for sales and gross profits, and exceeding its plan for other profitability measures.
According to CEO Kevin Cornwell,
"After an outstanding financial performance year in 2012, UTMD expected a slightly negative comparison in 2013 in a difficult economic environment for medical device companies. After the first half of 2013, although some sales categories are lagging our expectations, profits from excellent operational performance are exceeding expectations to the point that UTMD may be able to match last year's eps instead of being down 3%, as previously projected."
Sales. The global consolidated sales comparisons of 2Q 2013 to 2Q 2012, and 1H 2013 to 1H 2012, were negatively affected by the currency exchange impact of a stronger U.S. Dollar (USD or $) relative to the British Pound (GBP) and the Australian Dollar (AUD). The GBP was about 3% weaker in the 2Q and about 2% weaker for the 1H. The AUD was about 1% weaker in the 2Q and about 2% weaker for the 1H. In contrast, the Euro was about 2% stronger in the 2Q and about the same for the 1H. If currency exchange rates in 2013 had been the same as in 2012, consolidated sales would have been about $44 higher in 2Q 2013, and about $103 higher in 1H 2013.
U.S. domestic sales were 2% higher in 2Q 2013 than in 2Q 2012, and 5% lower in 1H 2013 than in 1H 2012. Sales of Femcare's Filshie Clip System devices to Cooper Surgical Inc. for distribution in the U.S. were 97% higher in 2Q 2013 compared to 2Q 2012, and 6% lower in 1H 2013 compared to 1H 2012. Filshie Clip System sales to Cooper were 22% of total domestic sales in 2Q 2013 compared to 11% in 2Q 2012. Filshie Clip System sales to Cooper were 22% of total domestic sales in both 1H 2013 and 1H 2012.
International sales in 2Q 2013 were down 2%, and in 1H 2013 were down 3%. International sales were 51% of total consolidated 2Q 2013 sales, and 52% of 1H 2013 sales. UK subsidiary sales were 40% of total international sales in 2Q 2013, and 41% in 1H 2013. Australia subsidiary sales were 16% of total international sales in 2Q 2013, and 15% of total international sales in 1H 2013. Ireland subsidiary sales were 21% of total international sales in 2Q 2013, and 22% in 1H 2013.
In product categories, 2Q 2013 blood pressure monitoring device/ components (BPM) sales were up 1%, neonatal device sales were down 20%, gynecology/ electrosurgery device sales were up 6% and obstetrics device sales were down 5%. For 1H 2013 compared to 1H 2012 global sales in product categories, BPM sales were up 3%, neonatal device sales were down 12%, gynecology/ electrosurgery device sales were down 4% and obstetrics device sales were down 5%.
Gross Profit. UTMD's consolidated gross profit margin (GPM), gross profits divided by sales, was 60.5% in both 2Q 2013 and 1H 2013 compared to 60.6% in 2Q 2012 and 60.3% in 1H 2012.
Operating Income. UTMD's 2Q and 1H 2013 operating profit margins (OPMs), operating income divided by sales, were 37.1% and 37.3% respectively, compared to 35.4% and 36.1% in the same periods of 2012. Operating expenses in 2Q 2013 were $186 lower than in 2Q 2012. About 72% of the $186 2Q decline was in general and administrative (G&A) expenses as a result of further consolidation of overhead resources in the UK and AUS, combined with the weaker GBP and AUD. In contrast to the negative impact on sales, the currency exchange resulting from a stronger USD had a positive impact on consolidating operating expenses from UTMD's UK and Australia subsidiaries. In summary, the higher OPMs in 2013 were due to 1) GPM consistent with the prior year, and 2) improved productivity of operating resources in the UK and AUS.
Earnings before Tax (EBT). Compared to 2Q 2012, 2Q 2013 EBT improved not only as a result of $163 higher operating income (despite slightly lower sales), but also from $58 lower interest expense as a result of repaying the debt obtained to help acquire Femcare in March 2011. Interest expense in 2Q and 1H 2013 was $113 and $235, respectively, compared to $171 and $360 in the same periods of 2012. In summary, 2Q and 1H 2013 EBT margins were 36.3% and 36.4%, respectively, compared to 34.2% and 34.7% in the same periods of 2012.
Net Income. UTMD's net income increased 10% in 2Q 2013 and 3% in 1H 2013 compared to the same periods in the prior year. Although diluted by the amortization of intangible assets and interest expense on debt assumed in completing the Femcare acquisition, 2Q 2013 and 1H 2013 net profit margins (NPMs), net income divided by sales, remained excellent at 26.3% for both periods compared to 24.0% and 24.4% for 2Q 2012 and 1H 2012, respectively. As of April 1, 2013, the UK corporate income tax rate was reduced to 23% from 24%.
Earnings per share (EPS). 2Q 2013 EPS increased 5.1 cents (8%) compared to 2Q 2012 as a result of the improved profit margins and lower corporate income tax rate in the UK. For 1H 2013, EPS increased 2.1 cents (1%) compared to 1H 2012. Counteracting the profit increase, diluted shares outstanding used to calculate 2Q 2013 EPS increased to 3,769,588 from 3,710,827 in 2Q 2012. Diluted shares used to calculate 1H 2013 EPS increased to 3,763,834 from 3,693,590 in 1H 2012. The increases were due to a much higher average share price in the stock market during 2013 compared to the prior year, and exercises of employee/ director options. The Company has not repurchased any of its shares to date in 2013. The same was true in 2012. Notwithstanding, the Company retains the financial ability for repurchasing its shares when they seem undervalued. The closing share price at the end of 2Q 2013 was $54.30 compared to $36.05 at the end of calendar year 2012, and $33.53 at the end of 2Q 2012.
Excluding the noncash effects of depreciation, amortization of intangible assets and stock option expense, 2Q 2013 and 1H 2013 consolidated earnings before taxes plus interest expense were $4,535 and $9,245 respectively.
UTMD's June 30, 2013 balance sheet compared with its December 31, 2012 balance sheet demonstrates continued improvement. Debt incurred in March 2011 to help finance the Femcare acquisition was $26,934. As of June 30, 2013, the remaining debt balance was $10,543. In just nine calendar quarters, UTMD has repaid 61% of the acquisition debt. 1H 2013 capital expenditures were $111, less than depreciation of fixed assets by $197.
Key balance sheet changes as of June 30, 2013 from the end of 2012 follow:
[Million $$]
Cash & Investments: + 2.5
Receivables & Inventory: + 1.3
Intangible Assets (net): (4.0)
Total Current Liabilities: + 0.8
Notes Payable: (2.5)
Shareholders' Equity: + 1.7
Financial ratios as of June 30, 2013 follow:
1) Current Ratio (including the current portion of loans) = 2.6
2) Days in Receivables (based on 2Q sales activity) = 46
3) Average Inventory Turns (based on 2Q CGS) = 3.6
4) Year-to-Date ROE = 21% (prior to dividend payments)
= 14% (after accrual of shareholder dividends)
UTMD's dilution from unexercised option shares added to actual weighted average outstanding shares for purposes of calculating eps was 44,511 in 2Q 2013 compared to 32,825 in 2Q 2012, and 45,567 in 1H 2013 compared to 30,099 in 1H 2012. The actual number of outstanding shares at the end of 2Q 2013 was 3,728,300 which included 2Q 2013 employee option exercises of 6,400 shares. The total number of outstanding unexercised options at June 30, 2013 was 109,400 shares at an average exercise price of $27.01/ share, including shares awarded but not vested. This compares to 183,500 option shares outstanding at the end of 2Q 2012 at an average exercise price of $25.89/ share. No option shares have been awarded to date in 2013.
Risk factors that could cause results to differ materially in future quarters include clinical acceptance of products, timing of regulatory approvals of new products and of distributing existing products in new geographical areas, government intervention in the health care marketplace, distribution restrictions by anticompetitive hospital administrative agreements, foreign currency exchange rates, the Company's ability to efficiently manufacture, market, and sell its products globally, among other factors that have been outlined in UTMD's public disclosure filings with the SEC. The SEC Form 10-Q for 2Q 2013 will be filed with the SEC by August 9.
Utah Medical Products, Inc., with particular interest in health care for women and their babies, develops, manufactures and markets a broad range of disposable and reusable specialty medical devices recognized by clinicians in hundreds of countries around the world as the standard for obtaining optimal long term outcomes for their patients. For more information about Utah Medical Products, Inc., visit UTMD's website at www.utahmed.com.
Utah Medical Products, Inc.
INCOME STATEMENT, Second Quarter (3 months ended June 30)
(in thousands except earnings per share):
2Q 2013 2Q 2012 Percent Change
Net Sales $10,002 $10,025 (0.2%)
Gross Profit 6,048 6,071 (0.4%)
Operating Income 3,715 3,552 + 4.6%
Income Before Tax 3,627 3,430 + 5.7%
Net Income 2,632 2,401 + 9.6%
Earnings Per Share $0.698 $0.647 + 7.9%
Shares Outstanding (diluted) 3,770 3,711
INCOME STATEMENT, First Half (6 months ended June 30)
(in thousands except earnings per share):
1H 2013 1H 2012 Percent Change
Net Sales $20,376 $21,230 (4.0%)
Gross Profit 12,329 12,809 (3.7%)
Operating Income 7,605 7,667 (0.8%)
Income Before Tax 7,414 7,367 + 0.6%
Net Income 5,368 5,190 + 3.4%
Earnings Per Share $1.426 $1.405 + 1.5%
Shares Outstanding (diluted) 3,764 3,694
BALANCE SHEET
(in thousands) (unaudited) (unaudited) (audited) (unaudited)
JUN 30, 2013 MAR 31, 2013 DEC 31, 2012 JUN 30, 2012
Assets
Cash & Investments $11,437 $10,918 $8,913 $7,984
Accounts & Other Receivables, Net 5,673 5,363 4,341 5,089
Inventories 4,367 4,406 4,353 4,834
Other Current Assets 812 910 928 745
Total Current Assets 22,289 21,597 18,535 18,652
Property & Equipment, Net 8,155 8,203 8,428 8,532
Intangible Assets, Net 45,985 46,562 49,972 49,696
Total Assets $76,429 $76,362 $76,935 $76,880
Liabilities & Shareholders' Equity
A/P & Accrued Liabilities $4,773 $5,193 $3,821 $5,345
Current Portion of Notes Payable 3,834 3,831 4,002 5,406
Total Current Liabilities 8,607 9,024 7,823 10,751
Notes Payable (excluding current portion) 6,709 7,663 9,003 11,154
Other LT Liabilities -- 339 363 438
Deferred Tax Liability -- Intangible 7,583 7,733 7,890 8,216
Deferred Revenue and Income Taxes 889 887 884 773
Shareholders' Equity 52,641 50,716 50,972 45,548
Total Liabilities & Shareholders' Equity $76,429 $76,362 $76,935 $76,880
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Contact:.
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Paul Richins
(801) 566-1200
Bally Technologies, Inc. to Acquire SHFL Entertainment, Inc.
Combination Will Create a World-Class Gaming Organization With the Industry's Most Diversified Suite of Innovative Products and Successful Brands
PR NewswirePress Release: SHFL entertainment, Inc. – Tue, Jul 16, 2013 8:00 AM EDT..
LAS VEGAS, July 16, 2013 /PRNewswire/ -- SHFL entertainment, Inc. (NASDAQ Global Select Market: SHFL) ("SHFL" or the "Company") today announced that it has entered into a definitive agreement and plan of merger with Bally Technologies, Inc. (BYI) ("Bally"), pursuant to which Bally has agreed to acquire the Company at a per share price of $23.25 in cash for total consideration of approximately $1.3 billion. This consideration represents a premium of 37% over the average closing price of SHFL common stock for the 90 days ended July 15, 2013 and a premium of 24% over the closing price of SHFL common stock on July 15, 2013.
(Logo: http://photos.prnewswire.com/prnh/20121008/LA88315LOGO)
The transaction, which was unanimously approved by both the SHFL and Bally Boards of Directors, combines two best-in-class, highly complementary and customer-centric gaming technology companies with a shared focus on innovation.
"We believe that now is the right time to join forces with Bally as there is a unique opportunity to combine each other's many strengths, particularly our talented teams who have been the key drivers of success for each organization. It also represents an opportunity for our shareholders to receive a significant premium for their shares," said Gavin Isaacs, SHFL's Chief Executive Officer. "Like SHFL, Bally focuses on creating both entertaining player experiences through high-performing content and state-of-the-art technological solutions to increase productivity on the casino floor. United, we become a larger, stronger organization that we believe will best position the company for future growth. Equally important, we share a common vision to build the industry's leading supplier based on delivering superior products, solutions and services to customers around the world."
"Both Bally and SHFL have long histories of proven innovation, excellent customer service and successfully anticipating and adapting to changes within our industry, which makes bringing our two companies together a great strategic fit," said Ramesh Srinivasan, Bally's President and Chief Executive Officer. "The transformational acquisition of SHFL – which joins two high-caliber, talented and creative teams – will further enhance our ability to deliver future growth and serve our customers. SHFL's intellectual property, renowned brands and industry-leading suite of diverse, high-performance products will enable us to offer an unparalleled offering of gaming products and services, which – when combined with our content, technology, operational capabilities and respective geographic footprints – will provide the most comprehensive product portfolio offered around the world."
Additional Transaction Details
Bally will acquire all of the outstanding shares of SHFL for a per share price of $23.25 in cash, representing a total enterprise value of approximately $1.3 billion, including debt of $8 million and cash of $41 million as of April 30, 2013.
The transaction is subject to approval by SHFL's shareholders, required regulatory and other approvals and customary closing conditions. The transaction is expected to close no later than June 15, 2014. Bally has obtained committed financing to complete the acquisition and the transaction is not subject to a financing contingency.
Conference Call and Webcast
Bally is hosting a conference call and webcast today for its investors at 8:30 a.m. EDT (5:30 a.m. PDT). The conference call dial-in number is 1-866-843-0890 or 1-412-317-9250 (International); passcode 1154979. The webcast can be accessed by visiting BallyTech.com and selecting "Investor Relations." Interested parties should initiate the call and webcast process at least five minutes prior to the beginning of the presentation. Gavin Isaacs also will be participating in the conference call.
Financial and Legal Advisory
Macquarie Capital served as SHFL's exclusive financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP served as legal counsel to SHFL.
Goldman, Sachs & Co. and Groton Partners served as financial advisors and Gibson, Dunn & Crutcher LLP served as the legal advisor to Bally. Wells Fargo Bank, JPMorgan Chase Bank, N.A., Bank of America Merrill Lynch, Goldman Sachs Bank USA and Union Bank, N.A. provided the committed financing for the transaction.
About SHFL entertainment, Inc.
SHFL entertainment, Inc. is a leading global gaming supplier committed to making gaming more fun for players and more profitable for operators through product innovation, and superior quality and service. The Company operates in legalized gaming markets across the globe and provides state-of-the-art, value-add products in five distinct categories: Utility products, which include automatic card shufflers and roulette chip sorters; Proprietary Table Games, which includes live games, side bets and progressives; Electronic Table Systems, which include various e-Table game configurations; Electronic Gaming Machines, which include video slot machines; and newly introduced iGaming, which features online versions of SHFL's table games, social gaming, and mobile applications. The Company is included in the S&P SmallCap 600 Index. Information about the Company and its products can be found on the Internet at www.SHFL.com, or on Facebook and Twitter.
Forward Looking Statements
This communication may contain forward-looking statements. Forward-looking statements may be typically identified by such words as "may," "will," "should," "expect," "anticipate," "plan," "likely," "believe," "estimate," "project," "intend," and other similar expressions among others. These forward-looking statements are subject to known and unknown risks and uncertainties that could cause our actual results to differ materially from the expectations expressed in the forward-looking statements. Although we believe that the expectations reflected in our forward-looking statements are reasonable, any or all of our forward-looking statements may prove to be incorrect. Consequently, no forward-looking statements may be guaranteed and there can be no assurance that the actual results or developments anticipated by such forward looking statements will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, SHFL entertainment, Inc. (the "Company") or its business or operations. Factors which could cause our actual results to differ from those projected or contemplated in any such forward-looking statements include, but are not limited to, the following factors: (1) the risk that the conditions to the closing of the merger are not satisfied (including a failure of the shareholders of the Company to approve, on a timely basis or otherwise, the merger and the risk that regulatory approvals required for the merger are not obtained, on a timely basis or otherwise, or are obtained subject to conditions that are not anticipated); (2) litigation relating to the merger; (3) uncertainties as to the timing of the consummation of the merger and the ability of each of the Company and Bally Technologies, Inc. ("Bally") to consummate the merger; (4) risks that the proposed transaction disrupts the current plans and operations of the Company; (5) the ability of the Company to retain and hire key personnel; (6) competitive responses to the proposed merger; (7) unexpected costs, charges or expenses resulting from the merger; (8) the failure by Bally to obtain the necessary debt financing arrangements set forth in the commitment letter received in connection with the merger; (9) potential adverse reactions or changes to business relationships resulting from the announcement or completion of the merger; and (10) legislative, regulatory and economic developments. The foregoing review of important factors that could cause actual events to differ from expectations should not be construed as exhaustive and should be read in conjunction with statements that are included herein and elsewhere, including the risk factors included in the Company's most recent Annual Report on Form 10-K for the year ended October 31, 2012, and our more recent reports filed with the U.S. Securities and Exchange Commission (the "SEC"). The Company can give no assurance that the conditions to the Merger will be satisfied. Except as required by applicable law, the Company undertakes no obligation to revise or update any forward-looking statement, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.
Additional Information and Where to Find It
This communication is being made in respect of the proposed transaction involving the Company and Bally. The proposed transaction will be submitted to the shareholders of the Company for their consideration. In connection with the proposed transaction, the Company will prepare a proxy statement to be filed with the SEC. The Company and Bally also plan to file with the SEC other documents regarding the proposed transaction. THE COMPANY'S SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT REGARDING THE PROPOSED TRANSACTION AND ANY OTHER RELEVANT DOCUMENTS CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. When completed, a definitive proxy statement and a form of proxy will be mailed to the shareholders of the Company. The Company's shareholders will be able to obtain, without charge, a copy of the proxy statement (when available) and other relevant documents filed with the SEC from the SEC's website at http://www.sec.gov. The Company's shareholders will also be able to obtain, without charge, a copy of the proxy statement and other relevant documents (when available) by going to the Company's Investor Relations website page at http://ir.shfl.com or by contacting Investor Relations by mail to SHFL entertainment, Inc., Attn: Investor Relations, 1106 Palms Airport Drive, Las Vegas, NV 89119, or by phone at (702) 897-7150.
Participants in Solicitation
The Company and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the Company's shareholders with respect to the meeting of shareholders that will be held to consider the proposed Merger. Information about the Company's directors and executive officers and their ownership of the Company's common stock is set forth in the proxy statement for the Company's 2013 Annual Meeting of Shareholders, which was filed with the SEC on February 1, 2013. Shareholders may obtain additional information regarding the interests of the Company and its directors and executive officers in the proposed Merger, which may be different than those of the Company's shareholders generally, by reading the proxy statement and other relevant documents regarding the proposed Merger, when it becomes available. You may obtain free copies of this document as described in the preceding paragraph.
Colgate Announces 2nd Quarter 2013 Results
Strong Organic Sales Growth Worldwide
Business WirePress Release: Colgate-Palmolive Company –
Colgate-Palmolive Company (CL) today reported worldwide Net sales of $4,346 million in second quarter 2013, an increase of 2.0% versus second quarter 2012. Global unit volume grew 4.0%, pricing increased 1.0% and foreign exchange was negative 3.0%. Organic sales (Net sales excluding foreign exchange, acquisitions and divestments) grew 5.5%.
Net income and Diluted earnings per share in second quarter 2013 were $561 million and $0.60, respectively. Net income in second quarter 2013 included $101 million ($0.10 per diluted share) of aftertax charges resulting from the implementation of the previously disclosed four-year Global Growth and Efficiency Program (the “2012 Restructuring Program”), costs associated with the sale of land in Mexico and a charge associated with an existing European competition law matter.
Net income and Diluted earnings per share in second quarter 2012 were $627 million and $0.65, respectively. Net income in second quarter 2012 included aftertax charges of $14 million ($0.02 per diluted share) resulting from the items described in Table 8.
Excluding the above noted items in both periods, Net income in second quarter 2013 was $662 million, an increase of 3% versus second quarter 2012, and Diluted earnings per share in second quarter 2013 was $0.70, an increase of 4% versus second quarter 2012.
Gross profit margin was 58.3% in second quarter 2013 versus 57.7% in the year ago quarter. Excluding the above noted items in both periods, Gross profit margin was 58.6% in second quarter 2013, an increase of 70 basis points versus the year ago quarter, as higher pricing and cost savings from the Company’s funding-the-growth initiatives more than offset higher raw and packaging material costs.
Selling, general and administrative expenses were 35.1% of Net sales in second quarter 2013 versus 34.3% in second quarter 2012. Excluding the above noted items in both periods, Selling, general and administrative expenses increased by 60 basis points to 34.8% of Net sales in second quarter 2013, as advertising investment increased by 70 basis points and overhead expenses decreased by 10 basis points, both as a percentage of Net sales. Worldwide advertising investment increased 9% versus the year ago quarter to $497 million.
Operating profit decreased 8% to $906 million in second quarter 2013 compared to $982 million in second quarter 2012. Excluding the above noted items in both periods, Operating profit increased 3% to $1,032 million.
Net cash provided by operations year to date increased 11% to $1,325 million, compared to $1,193 million in the comparable 2012 period. The increase was driven by strong operating earnings as well as a continued tight focus on working capital. Free cash flow before dividends (Net cash provided by operations less Capital expenditures) exceeded 100% of Net income. Working capital as a percentage of Net sales improved to negative 0.2% versus 2.8% in the year ago period, mainly due to accrued liabilities related to the 2012 Restructuring Program and the timing of dividend payments.
Ian Cook, Chairman, President and Chief Executive Officer, commented on the results and outlook excluding the 2013 and 2012 items noted above, “We are delighted that our strong growth momentum continued on both the top and bottom lines. For the fifth consecutive quarter, gross profit margin, operating profit margin and net income as a percent of sales all increased versus the year ago period.
“The strong 5.5% organic sales growth was led by the emerging markets where organic sales grew a robust 8.5%. All operating divisions achieved positive unit volume growth in the quarter. We were particularly pleased to see a return to unit volume growth at Hill’s one quarter earlier than expected.
“Advertising investment increased versus year ago, both absolutely and as a percent to sales, and we continue to plan for higher levels of commercial investment in the balance of the year in support of a very full pipeline of new products worldwide.
“Colgate’s global market shares in toothpaste and manual toothbrushes are both at record highs year to date. Colgate’s share of the global toothpaste market strengthened to 45.4% year to date, up 0.1 share points versus year ago. Our global leadership in manual toothbrushes also strengthened during the quarter with Colgate’s global market share in that category reaching 33.3% year to date, up 0.4 share points versus year ago.
“Looking forward, we expect our growth momentum to continue as we progress through the year. We are pleased that our global restructuring program is on track and proceeding smoothly. We also continue to be sharply focused on our aggressive funding-the-growth programs and our strategic worldwide pricing initiatives.
“Based on this, we continue to anticipate another year of strong organic sales growth and gross margin expansion in 2013. In light of the ongoing impact of the Venezuela currency devaluation and the recent volatility in foreign exchange in other countries, we now expect diluted earnings per share to grow 4.5% to 5.5% for the year, on a dollar basis, assuming average exchange rates in the balance of the year are equal to current spot rates.”
At 11:00 a.m. ET today, Colgate will host a conference call to elaborate on second quarter results. To access this call as a webcast, please go to Colgate’s web site at http://www.colgatepalmolive.com.
The following are comments about divisional performance for second quarter 2013 versus the year ago period. See attached Geographic Sales Analysis Percentage Changes and Segment Information schedules for additional information on divisional net sales and operating profit.
North America (18% of Company Sales)
North America Net sales increased 5.0% in second quarter 2013. Unit volume increased 6.0% with 1.0% lower pricing and foreign exchange was even with the year ago quarter. Organic sales increased 5.0% during the quarter.
Operating profit in North America increased 20% in the second quarter of 2013 to $227 million, or 370 basis points to 29.8% of Net sales. This increase in Operating profit was primarily due to an increase in Gross profit and a decrease in Selling, general and administrative expenses, both as a percentage of Net sales. This increase in Gross profit was mainly driven by lower raw and packing material costs and cost savings from the Company’s funding-the-growth initiatives which were partially offset by lower pricing. This decrease in Selling, general and administrative expenses was due to lower overhead costs which was partially offset by higher advertising investment.
In the U.S., new product launches are contributing to volume growth across categories. Market share gains year to date were seen in manual toothbrushes, powered toothbrushes, mouthwash, body washes and fabric conditioners. In toothpaste, the success of Colgate Optic White and Colgate Optic White Dual Action toothpastes helped drive market share for the Colgate Optic White brand to 5.6% year to date, up 1.0 share points versus year ago. In manual toothbrushes, Colgate achieved brand market leadership with its market share in that category reaching a record 37.2% year to date, up 0.6 share points versus year ago. This success was driven by strong sales of Colgate 360° Optic White, Colgate 360° Total Advanced Floss Tip bristles and Colgate Extra Clean manual toothbrushes.
Successful new products driving volume growth in the U.S. in other categories include Colgate Total Advanced Pro-Shield and Colgate Optic White mouthwashes, Softsoap brand Acai Berry & Tropical Water and Softsoap brand Coconut Island Quench body washes, Palmolive Soft Touch and Ajax with Aloe dish liquids and Suavitel Silky Essence fabric conditioner.
Exciting new products launching in third quarter 2013 include Colgate MaxFresh Cool Scrub and Colgate Sensitive SmartFoam with Whitening toothpastes and Colgate SlimSoft manual toothbrush.
Latin America (29% of Company Sales)
Latin America Net sales decreased 1.5% in second quarter 2013. Unit volume increased 2.0% with 4.5% higher pricing and 8.0% negative foreign exchange. Volume gains were led by Mexico, Brazil, Venezuela and the Southern Cone region. Organic sales for Latin America increased 7.0% during the quarter.
Operating profit in Latin America decreased 6% in the second quarter of 2013 to $352 million, or 120 basis points to 27.5% of Net sales. This decrease in Operating profit was primarily due to a decrease in Gross profit and an increase in Selling, general and administrative expenses, both as a percentage of Net sales. This decrease in Gross profit was due to higher costs, primarily in Venezuela, which were partially offset by cost savings from the Company’s funding-the-growth initiatives and higher pricing. This increase in Selling, general and administrative expenses was primarily due to higher advertising investment and higher overhead expenses due primarily to higher costs in Venezuela.
Colgate’s strong leadership in oral care throughout Latin America continued during the quarter with year-to-date toothpaste market share gains in Brazil, Chile, Paraguay, Uruguay, the Dominican Republic and Puerto Rico. Strong sales of Colgate Luminous White, Colgate Total Professional Gum Health and Colgate Triple Action Extra Whitening toothpastes drove volume growth throughout the region. Colgate strengthened its leadership of the manual toothbrush market throughout the region, driven by strong sales of Colgate 360° Luminous White, Colgate Triple Action and Colgate Premier manual toothbrushes. In mouthwash, Colgate’s year-to-date market share is at a record high in the region with gains driven by Colgate Luminous White mouthwash.
Products in other categories contributing to volume growth include Protex Men, Protex Vitamin E and Palmolive Naturals Olive and Aloe bar soaps, Lady Speed Stick and Speed Stick deodorants, and Axion dish liquid.
Europe/South Pacific (19% of Company Sales)
Europe/South Pacific Net sales in second quarter 2013 decreased 3.0%. Unit volume increased 0.5% with 3.0% lower pricing and 0.5% negative foreign exchange. Volume gains in the United Kingdom, Germany and Australia were partially offset by volume declines in France and Greece. Organic sales for Europe/South Pacific decreased 2.0%.
Operating profit in Europe/South Pacific increased 6% in the second quarter of 2013 to $189 million, or 180 basis points to 22.9% of Net sales. The increase in Operating profit was primarily due to an increase in Gross profit and a decrease in Selling, general and administrative expenses both as a percentage of Net sales. This increase in Gross profit was primarily driven by savings from the Company’s funding-the-growth initiatives and lower raw and packing material costs, which were partially offset by lower pricing. This decrease in Selling, general and administrative expenses was driven by higher advertising investment which was more than offset by lower overhead costs.
Colgate continued its oral care leadership in the Europe/South Pacific region with toothpaste share gains led by the United Kingdom, France, Poland, Holland, Czech Republic, Croatia and Slovakia. Successful premium products driving share gains include Colgate Max White One Luminous, Colgate MaxFresh ActiClean with SmartFoam and Colgate Total Pro Gum Health toothpastes. In the manual toothbrush category, Colgate 360° Max White One and elmex Erosion manual toothbrushes contributed to volume growth throughout the region.
Recent premium innovations contributing to volume growth in other product categories include Colgate Max White One, Colgate Total Pro Gum Health and elmex Senstive Professional mouthwashes, Colgate ProClinical electric toothbrush, Sanex Men Dermo Double Protect deodorant, Sanex Surgras and Palmolive Mediterranean Moments shower gels, Ajax Pure Home liquid cleaner and Soupline Aroma Sensations fabric conditioner.
Greater Asia/Africa (21% of Company Sales)
Greater Asia/Africa Net sales and unit volume increased 8.0% and 9.5%, respectively, during second quarter 2013. Pricing was even with the year ago period and foreign exchange was negative 1.5%. Volume gains were led by India, the Greater China region, Thailand, Turkey and Russia. Organic sales for Greater Asia/Africa increased 9.5%.
Operating profit in Greater Asia/Africa increased 8% in the second quarter of 2013 to $238 million, and remained flat at 25.6% of Net sales, as an increase in Gross profit was partially offset by an increase in Selling, general and administrative expenses, both as a percentage of Net sales. This increase in Gross profit was primarily due to cost savings from the Company’s funding-the-growth initiatives, partially offset by higher raw and packing material costs. This increase in Selling, general and administrative expenses was driven by higher advertising investment which was partially offset by lower overhead costs.
Colgate continued its toothpaste leadership in Greater Asia, driven by market share gains in India, China, Russia, South Africa, Turkey, Thailand, the Philippines, Singapore and Hong Kong. Successful new products including Colgate 360° Pro Gum Health, Colgate Optic White, Colgate Visible White and Darlie Enamel toothpastes contributed to volume growth throughout the region.
Successful products contributing to volume growth in other categories in the region include Colgate Slim Soft and Colgate 360° Surround manual toothbrushes, Colgate Optic White and Colgate Plax Herbal mouthwashes and Protex for Men shower gel.
Hill’s Pet Nutrition (13% of Company Sales)
Hill’s Net sales increased 3.5% during second quarter 2013. Unit volume increased 2.5%, pricing increased 3.0% and foreign exchange was negative 2.0%. Volume gains in the U.S., Russia, Korea, Germany, France and Brazil were partially offset by volume declines in Japan, Italy and the United Kingdom. Hill’s organic sales increased 5.5%.
Hill’s Operating profit decreased 6% in the second quarter of 2013 to $136 million, or 250 basis points to 24.8% of Net sales. This decrease in Operating profit was primarily due to a decrease in Gross profit and an increase in Selling, general and administrative expenses, both as a percentage of Net sales. This decrease in Gross profit was primarily driven by higher raw and packaging material costs due in part to formulation changes, which was partially offset by cost savings from the Company’s funding-the-growth initiatives and higher pricing. This increase in Selling, general and administrative expenses was due to increased investment in customer development initiatives and higher advertising investment.
New product introductions driving volume growth in the U.S. include the successful launch of a new natural pet food brand, Hill’s Ideal Balance, with natural ingredients perfectly balanced.
New product introductions driving volume growth globally, include the launch of breakthrough weight loss nutrition, Hill’s Prescription Diet Metabolic and the relaunch of Hill’s Science Diet with natural ingredients and improved taste.
***
About Colgate-Palmolive: Colgate-Palmolive is a leading global consumer products company, tightly focused on Oral Care, Personal Care, Home Care and Pet Nutrition. Colgate sells its products in over 200 countries and territories around the world under such internationally recognized brand names as Colgate, Palmolive, Mennen, Speed Stick, Lady Speed Stick, Softsoap, Irish Spring, Protex, Sorriso, Kolynos, elmex, Tom’s of Maine, Sanex, Ajax, Axion, Fabuloso, Soupline and Suavitel, as well as Hill’s Science Diet and Hill’s Prescription Diet. For more information about Colgate’s global business, visit the Company’s web site at http://www.colgatepalmolive.com. To learn more about Colgate Bright Smiles, Bright Futures® oral health education program, please visit http://www.colgatebsbf.com. CL-E
Market Share Information
Management uses market share information as a key indicator to monitor business health and performance. References to market share in this press release are based on a combination of consumption and market share data provided by third-party vendors, primarily Nielsen, and internal estimates. All market share references represent the percentage of the dollar value of sales of our products, relative to all product sales in the category in the countries in which the Company competes and purchases data. Market share data is subject to limitations on the availability of up-to-date information. We believe that the third-party vendors we use to provide data are reliable, but we have not verified the accuracy or completeness of the data or any assumptions underlying the data. In addition, market share information calculated by the Company may be different from market share information calculated by other companies due to differences in category definitions, the use of data from different countries, internal estimates and other factors.
Cautionary Statement on Forward-Looking Statements
This press release and the related webcast (other than historical information) may contain forward-looking statements. Such statements may relate, for example, to sales or volume growth, organic sales growth, profit or profit margin growth, earnings growth, financial goals, the impact of currency devaluations, exchange controls, price controls and labor unrest, including in Venezuela, cost-reduction plans including the 2012 Restructuring Program, tax rates, new product introductions or commercial investment levels. These statements are made on the basis of our views and assumptions as of this time and we undertake no obligation to update these statements. We caution investors that any such forward-looking statements are not guarantees of future performance and that actual events or results may differ materially from those statements. Investors should consult the Company’s filings with the Securities and Exchange Commission (including the information set forth under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012) for information about certain factors that could cause such differences. Copies of these filings may be obtained upon request from the Company’s Investor Relations Department or on the Company’s web site at http://www.colgatepalmolive.com.
Non-GAAP Financial Measures
The following provides information regarding the non-GAAP financial measures used in this earnings release and/or the related webcast:
This release discusses organic sales growth, which is Net sales growth excluding the impact of foreign exchange, acquisitions and divestments. Management believes this measure provides investors with useful supplemental information regarding the Company’s underlying sales trends by presenting sales growth excluding the external factor of foreign exchange as well as the impact from acquisitions and divestments. See “Geographic Sales Analysis Percentage Changes” for the three and six months ended June 30, 2013 vs 2012 included with this release for a comparison of organic sales growth to sales growth in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
To supplement Colgate’s Condensed Consolidated Income Statements presented in accordance with GAAP, the Company has disclosed non-GAAP measures of operating results that exclude certain items. Worldwide Gross profit, Gross profit margin, Selling, general and administrative expenses, Selling, general and administrative expenses as a percentage of Net sales, Other (income) expense, net, Operating profit, Operating profit margin, Net income attributable to Colgate-Palmolive Company and Diluted earnings per common share are discussed both as reported (on a GAAP basis) and, as applicable, excluding charges resulting from the implementation of the 2012 Restructuring Program, the one-time charge resulting from the Venezuela devaluation, a charge associated with a European competition law matter, costs related to the sale of land in Mexico and costs associated with various business realignment and other cost-saving initiatives (non-GAAP). Management believes these non-GAAP financial measures provide investors with useful supplemental information regarding the performance of the Company’s ongoing operations. See “Non-GAAP Reconciliations” for the three and six months ended June 30, 2013 and 2012 included with this release for a reconciliation of these financial measures to the related GAAP measures.
The Company uses these financial measures internally in its budgeting process and as factors in determining compensation. While the Company believes that these financial measures are useful in evaluating the Company’s business, this information should be considered as supplemental in nature and is not meant to be considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP. In addition, these non-GAAP financial measures may not be the same as similar measures presented by other companies.
The Company defines free cash flow before dividends as Net cash provided by operations less Capital expenditures. As management uses this measure to evaluate the Company’s ability to satisfy current and future obligations, repurchase stock, pay dividends and fund future business opportunities, the Company believes that it provides useful information to investors. Free cash flow before dividends is not a measure of cash available for discretionary expenditures since the Company has certain non-discretionary obligations such as debt service that are not deducted from the measure. Free cash flow before dividends is not a GAAP measurement and may not be comparable to similarly titled measures reported by other companies. See “Condensed Consolidated Statements of Cash Flows” for the six months ended June 30, 2013 and 2012 for a comparison of free cash flow before dividends to Net cash provided by operations as reported in accordance with GAAP.
(See attached tables for second quarter results.)
Table 1
Colgate-Palmolive Company
Condensed Consolidated Income Statements
For the Three Months Ended June 30, 2013 and 2012
(Dollars in Millions Except Per Share Amounts) (Unaudited)
2013 2012
Net sales $ 4,346 $ 4,267
Cost of sales 1,812 1,806
Gross profit 2,534 2,461
Gross profit margin 58.3 % 57.7 %
Selling, general and administrative expenses 1,526 1,464
Other (income) expense, net 102 15
Operating profit 906 982
Operating profit margin 20.8 % 23.0 %
Interest expense, net (5 ) 6
Income before income taxes 911 976
Provision for income taxes 307 311
Effective tax rate 33.7 % 31.9 %
Net income including noncontrolling interests 604 665
Less: Net income attributable to noncontrolling interests 43 38
Net income attributable to Colgate-Palmolive Company $ 561 $ 627
Earnings per common share
Basic $ 0.60 $ 0.66
Diluted $ 0.60 $ 0.65
Average common shares outstanding
Basic 933.1 954.6
Diluted 942.3 962.7
Table 2
Colgate-Palmolive Company
Condensed Consolidated Income Statements
For the Six Months Ended June 30, 2013 and 2012
(Dollars in Millions Except Per Share Amounts) (Unaudited)
2013 2012
Net sales $ 8,661 $ 8,467
Cost of sales 3,612 3,569
Gross profit 5,049 4,898
Gross profit margin 58.3 % 57.8 %
Selling, general and administrative expenses 3,062 2,942
Other (income) expense, net 339 36
Operating profit 1,648 1,920
Operating profit margin 19.0 % 22.7 %
Interest expense, net (8 ) 16
Income before income taxes 1,656 1,904
Provision for income taxes 546 606
Effective tax rate 33.0 % 31.8 %
Net income including noncontrolling interests 1,110 1,298
Less: Net income attributable to noncontrolling interests 89 78
Net income attributable to Colgate-Palmolive Company $ 1,021 $ 1,220
Earnings per common share
Basic $ 1.09 $ 1.27
Diluted $ 1.08 $ 1.26
Average common shares outstanding
Basic 934.8 957.4
Diluted 943.6 965.2
Table 3
Colgate-Palmolive Company
Condensed Consolidated Balance Sheets
As of June 30, 2013, December 31, 2012 and June 30, 2012
(Dollars in Millions) (Unaudited)
June 30, December 31, June 30,
2013 2012 2012
Cash and cash equivalents $ 884 $ 884 $ 995
Receivables, net 1,778 1,668 1,785
Inventories 1,440 1,365 1,368
Other current assets 765 639 687
Property, plant and equipment, net 3,776 3,842 3,625
Other assets, including goodwill and intangibles 4,844 4,996 4,693
Total assets $ 13,487 $ 13,394 $ 13,153
Total debt $ 5,628 $ 5,230 $ 5,363
Other current liabilities 3,848 3,432 3,271
Other non-current liabilities 2,207 2,342 2,009
Total liabilities 11,683 11,004 10,643
Total Colgate-Palmolive Company shareholders' equity 1,531 2,189 2,306
Noncontrolling interests 273 201 204
Total liabilities and shareholders' equity $ 13,487 $ 13,394 $ 13,153
Supplemental Balance Sheet Information
Debt less cash, cash equivalents and marketable securities* $ 4,570 $ 4,230 $ 4,282
Working capital % of sales (0.2 )% 0.7 % 2.8 %
*
Marketable securities of $174, $116 and $86 as of June 30, 2013, December 31, 2012 and June 30, 2012, respectively, are included in Other current assets.
Table 4
Colgate-Palmolive Company
Condensed Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 2013 and 2012
(Dollars in Millions) (Unaudited)
2013 2012
Operating Activities
Net income including noncontrolling interests $ 1,110 $ 1,298
Adjustments to reconcile net income including noncontrolling interests to net cash provided by operations:
Depreciation and amortization 221 211
Restructuring and termination benefits, net of cash 105 (27 )
Voluntary benefit plan contributions (100 ) (100 )
Stock-based compensation expense 52 48
Venezuela devaluation charge 172 -
Deferred income taxes (48 ) 14
Cash effects of changes in:
Receivables (194 ) (119 )
Inventories (118 ) (46 )
Accounts payable and other accruals 89 (148 )
Other non-current assets and liabilities 36 62
Net cash provided by operations 1,325 1,193
Investing Activities
Capital expenditures (243 ) (189 )
Purchases of marketable securities and investments (246 ) (219 )
Proceeds from sale of marketable securities and investments 92 71
Payment for acquisitions, net of cash acquired - (29 )
Other (1 ) 45
Net cash used in investing activities (398 ) (321 )
Financing Activities
Principal payments on debt (3,425 ) (2,307 )
Proceeds from issuance of debt 3,803 2,873
Dividends paid (625 ) (593 )
Purchases of treasury shares (771 ) (894 )
Proceeds from exercise of stock options and excess tax benefits 172 191
Net cash used in financing activities (846 ) (730 )
Effect of exchange rate changes on Cash and cash equivalents (81 ) (25 )
Net increase (decrease) in Cash and cash equivalents - 117
Cash and cash equivalents at beginning of period 884 878
Cash and cash equivalents at end of period $ 884 $ 995
Supplemental Cash Flow Information
Free cash flow before dividends (Net cash provided by operations less Capital expenditures)
Net cash provided by operations $ 1,325 $ 1,193
Less: Capital expenditures (243 ) (189 )
Free cash flow before dividends $ 1,082 $ 1,004
Income taxes paid $ 561 $ 682
Table 5
Colgate-Palmolive Company
Segment Information
For the Three and Six Months Ended June 30, 2013 and 2012
(Dollars in Millions) (Unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
2013 2012 2013 2012
Net sales
Oral, Personal and Home Care
North America $ 762 $ 727 $ 1,526 $ 1,451
Latin America 1,282 1,300 2,496 2,501
Europe/South Pacific 824 850 1,672 1,704
Greater Asia/Africa 929 859 1,884 1,738
Total Oral, Personal and Home Care 3,797 3,736 7,578 7,394
Pet Nutrition 549 531 1,083 1,073
Total Net sales $ 4,346 $ 4,267 $ 8,661 $ 8,467
Three Months Ended
June 30,
Six Months Ended
June 30,
2013 2012 2013 2012
Operating profit
Oral, Personal and Home Care
North America $ 227 $ 190 $ 442 $ 367
Latin America 352 373 664 723
Europe/South Pacific 189 179 389 362
Greater Asia/Africa 238 220 486 440
Total Oral, Personal and Home Care 1,006 962 1,981 1,892
Pet Nutrition 136 145 272 293
Corporate(1) (236 ) (125 ) (605 ) (265 )
Total Operating profit
$ 906 $ 982 $ 1,648 $ 1,920
Note:
(1) Corporate operations includes costs related to stock options and restricted stock awards, research and development costs, Corporate overhead costs, restructuring and related implementation costs and gains and losses on sales of non-core product lines and assets.
Corporate Operating profit(loss) for the three months ended June 30, 2013 includes costs of $102 associated with the 2012 Restructuring Program, a charge of $18 for a competition law matter in France related to the home care and personal care sectors and costs of $6 related to the sale of land in Mexico. For the three months ended June 30, 2012, Corporate Operating profit(loss) included costs of $6 related to the sale of land in Mexico and costs of $13 associated with various business realignment and other cost-saving initiatives.
Corporate Operating profit(loss) for the six months ended June 30, 2013 includes costs of $168 associated with the 2012 Restructuring Program, a one-time $172 charge for the impact of the devaluation in Venezuela, a charge of $18 for a competition law matter in France related to the home care and personal care sectors and costs of $11 related to the sale of land in Mexico. For the six months ended June 30, 2012, Corporate Operating profit(loss) included costs of $13 related to the sale of land in Mexico and costs of $18 associated with various business realignment and other cost-saving initiatives.
Table 6
Colgate-Palmolive Company
Geographic Sales Analysis Percentage Changes
For the Three Months Ended June 30, 2013 vs 2012
(Unaudited)
COMPONENTS OF SALES CHANGE
Pricing
Coupons
Sales 3 Months Consumer &
Change Organic As Reported Organic Ex-Divested Trade Foreign
Region
As Reported
Sales Change
Volume
Volume
Volume
Incentives
Exchange
Total Company 2.0 % 5.5 % 4.0 % 4.5 % 4.5 % 1.0 % (3.0)%
Europe/South Pacific (3.0)% (2.0)% 0.5 % 1.0 % 1.0 % (3.0)% (0.5)%
Latin America (1.5)% 7.0 % 2.0 % 2.5 % 2.5 % 4.5 % (8.0)%
Greater Asia/Africa 8.0 % 9.5 % 9.5 % 9.5 % 9.5 % - % (1.5)%
Total International 1.0 % 5.0 % 4.0 % 4.0 % 4.0 % 1.0 % (4.0)%
North America 5.0 % 5.0 % 6.0 % 6.0 % 6.0 % (1.0)% - %
Total CP Products 1.5 % 5.0 % 4.5 % 4.5 % 4.5 % 0.5 % (3.5)%
Hill's 3.5 % 5.5 % 2.5 % 2.5 % 2.5 % 3.0 % (2.0)%
Emerging Markets (1) 3.0 % 8.5 % 5.5 % 6.0 % 6.0 % 2.5 % (5.0)%
Developed Markets 0.5 % 1.5 % 2.5 % 2.5 % 2.5 % (1.0)% (1.0)%
Notes:
(1) Emerging Markets include Latin America, Greater Asia/Africa (excluding Japan) and Central Europe.
Table 7
Colgate-Palmolive Company
Geographic Sales Analysis Percentage Changes
For the Six Months Ended June 30, 2013 vs 2012
(Unaudited)
COMPONENTS OF SALES CHANGE
Pricing
Coupons
Sales 6 Months Consumer &
Change Organic As Reported Organic Ex-Divested Trade Foreign
Region
As Reported
Sales Change
Volume
Volume
Volume
Incentives
Exchange
Total Company 2.5 % 5.5 % 4.0 % 4.0 % 4.5 % 1.5 % (3.0)%
Europe/South Pacific (2.0)% (1.0)% - % 0.5 % 0.5 % (1.5)% (0.5)%
Latin America - % 8.0 % 4.0 % 4.5 % 4.5 % 3.5 % (7.5)%
Greater Asia/Africa 8.5 % 10.0 % 10.5 % 10.5 % 10.5 % (0.5)% (1.5)%
Total International 2.0 % 6.0 % 4.5 % 5.0 % 5.0 % 1.0 % (3.5)%
North America 5.0 % 5.0 % 4.5 % 4.5 % 4.5 % 0.5 % - %
Total CP Products 2.5 % 6.0 % 4.5 % 5.0 % 5.0 % 1.0 % (3.0)%
Hill's 1.0% 3.0 % (0.5)% (0.5)% (0.5)% 3.5 % (2.0)%
Emerging Markets (1) 3.5 % 9.0 % 6.5 % 7.0 % 7.0 % 2.0 % (5.0)%
Developed Markets 1.0 % 2.0 % 1.5 % 1.5 % 1.5 % 0.5 % (1.0)%
Notes:
(1) Emerging Markets include Latin America, Greater Asia/Africa (excluding Japan) and Central Europe.
Table 8
Colgate-Palmolive Company
Non-GAAP Reconciliations
For the Three Months Ended June 30, 2013 and 2012
(Dollars in Millions Except Per Share Amounts) (Unaudited)
Gross Profit 2013 2012
Gross profit, GAAP $ 2,534 $ 2,461
2012 Restructuring Program 10 -
Costs related to the sale of land in Mexico 4 6
Business realignment and other cost-saving initiatives - 2
Gross profit, non-GAAP $ 2,548 $ 2,469
Basis Point
Gross Profit Margin 2013 2012 Change
Gross profit margin, GAAP 58.3 % 57.7 % 60
2012 Restructuring Program 0.2 % -
Costs related to the sale of land in Mexico 0.1 % 0.1 %
Business realignment and other cost-saving initiatives - 0.1 %
Gross profit margin, non-GAAP 58.6 % 57.9 % 70
Selling, General and Administrative Expenses 2013 2012
Selling, general and administrative expenses, GAAP $ 1,526 $ 1,464
2012 Restructuring Program (14 ) -
Business realignment and other cost-saving initiatives - (5 )
Selling, general and administrative expenses, non-GAAP $ 1,512 $ 1,459
Basis Point
Selling, General and Administrative Expenses as a Percentage of Net Sales 2013 2012 Change
Selling, general and administrative expenses as a percentage of Net sales, GAAP 35.1 % 34.3 % 80
2012 Restructuring Program (0.3 %) -
Business realignment and other cost-saving initiatives - (0.1 %)
Selling, general and administrative expenses as a percentage of Net sales, non-GAAP 34.8 % 34.2 % 60
Other (Income) Expense, Net 2013 2012
Other (income) expense, net, GAAP $ 102 $ 15
2012 Restructuring Program (78 ) -
Charge for a French competition law matter (18 ) -
Costs related to the sale of land in Mexico (2 ) -
Business realignment and other cost-saving initiatives - (6 )
Other (income) expense, net, non-GAAP $ 4 $ 9
Operating Profit 2013 2012 % Change
Operating profit, GAAP $ 906 $ 982 (8 %)
2012 Restructuring Program 102 -
Charge for a French competition law matter 18 -
Costs related to the sale of land in Mexico 6 6
Business realignment and other cost-saving initiatives - 13
Operating profit, non-GAAP $ 1,032 $ 1,001 3 %
Basis Point
Operating Profit Margin 2013 2012 Change
Operating profit margin, GAAP 20.8 % 23.0 % (220 )
2012 Restructuring Program 2.4 % -
Charge for a French competition law matter 0.4 % -
Costs related to the sale of land in Mexico 0.1 % 0.2 %
Business realignment and other cost-saving initiatives - 0.3 %
Operating profit margin, non-GAAP 23.7 % 23.5 % 20
Net Income Attributable to Colgate-Palmolive Company 2013 2012 % Change
Net income attributable to Colgate-Palmolive Company, GAAP $ 561 $ 627 (11 %)
2012 Restructuring Program 79 -
Charge for a French competition law matter 18 -
Costs related to the sale of land in Mexico 4 5
Business realignment and other cost-saving initiatives - 9
Net income attributable to Colgate-Palmolive Company, non-GAAP $ 662 $ 641 3 %
Earnings Per Common Share, Diluted (1) (2) 2013 2012 % Change
Diluted earnings per common share, GAAP $ 0.60 $ 0.65 (8 %)
2012 Restructuring Program 0.08 -
Charge for a French competition law matter 0.02 -
Costs related to the sale of land in Mexico - 0.01
Business realignment and other cost-saving initiatives - 0.01
Diluted earnings per common share, non-GAAP $ 0.70 $ 0.67 4 %
(1) The impact of non-GAAP adjustments on the diluted earnings per share may not necessarily equal the difference between "GAAP" and "non-GAAP" as a result of rounding.
(2) As a result of the two-for-one stock split, effective May 15, 2013, all historical per share data and number of shares were retroactively adjusted. Diluted earnings per share was computed independently for each quarter presented.
Table 9
Colgate-Palmolive Company
Non-GAAP Reconciliations
For the Six Months Ended June 30, 2013 and 2012
(Dollars in Millions Except Per Share Amounts) (Unaudited)
Gross Profit 2013 2012
Gross profit, GAAP $ 5,049 $ 4,898
2012 Restructuring Program 18 -
Costs related to the sale of land in Mexico 8 13
Business realignment and other cost-saving initiatives - 4
Gross profit, non-GAAP $ 5,075 $ 4,915
Basis Point
Gross Profit Margin 2013 2012 Change
Gross profit margin, GAAP 58.3 % 57.8 % 50
2012 Restructuring Program 0.2 % -
Costs related to the sale of land in Mexico 0.1 % 0.2 %
Gross profit margin, non-GAAP 58.6 % 58.0 % 60
Selling, General and Administrative Expenses 2013 2012
Selling, general and administrative expenses, GAAP $ 3,062 $ 2,942
2012 Restructuring Program (22 ) -
Business realignment and other cost-saving initiatives - (12 )
Selling, general and administrative expenses, non-GAAP $ 3,040 $ 2,930
Basis Point
Selling, General and Administrative Expenses as a Percentage of Net Sales 2013 2012 Change
Selling, general and administrative expenses as a percentage of Net sales, GAAP 35.4 % 34.7 % 70
2012 Restructuring Program (0.3 %) -
Business realignment and other cost-saving initiatives - (0.1 %)
Selling, general and administrative expenses as a percentage of Net sales, non-GAAP 35.1 % 34.6 % 50
Other (Income) Expense, Net 2013 2012
Other (income) expense, net, GAAP $ 339 $ 36
2012 Restructuring Program (128 ) -
Venezuela devaluation charge (172 ) -
Charge for a French competition law matter (18 ) -
Costs related to the sale of land in Mexico (3 ) -
Business realignment and other cost-saving initiatives - (2 )
Other (income) expense, net, non-GAAP $ 18 $ 34
Operating Profit 2013 2012 % Change
Operating profit, GAAP $ 1,648 $ 1,920 (14 %)
2012 Restructuring Program 168 -
Venezuela devaluation charge 172 -
Charge for a French competition law matter 18 -
Costs related to the sale of land in Mexico 11 13
Business realignment and other cost-saving initiatives - 18
Operating profit, non-GAAP $ 2,017 $ 1,951 3 %
Basis Point
Operating Profit Margin 2013 2012 Change
Operating profit margin, GAAP 19.0 % 22.7 % (370 )
2012 Restructuring Program 2.0 % -
Venezuela devaluation charge 2.0 % -
Charge for a French competition law matter 0.2 % -
Costs related to the sale of land in Mexico 0.1 % 0.1 %
Business realignment and other cost-saving initiatives - 0.2 %
Operating profit margin, non-GAAP 23.3 % 23.0 % 30
Net Income Attributable to Colgate-Palmolive Company 2013 2012 % Change
Net income attributable to Colgate-Palmolive Company, GAAP $ 1,021 $ 1,220 (16 %)
2012 Restructuring Program 131 -
Venezuela devaluation charge 111 -
Charge for a French competition law matter 18 -
Costs related to the sale of land in Mexico 7 10
Business realignment and other cost-saving initiatives - 12
Net income attributable to Colgate-Palmolive Company, non-GAAP $ 1,288 $ 1,242 4 %
Earnings Per Common Share, Diluted (1) (2) 2013 2012 % Change
Diluted earnings per common share, GAAP $ 1.08 $ 1.26 (14 %)
2012 Restructuring Program 0.14 -
Venezuela devaluation charge 0.12 -
Charge for a French competition law matter 0.02 -
Costs related to the sale of land in Mexico - 0.01
Business realignment and other cost-saving initiatives - 0.02
Diluted earnings per common share, non-GAAP $ 1.36 $ 1.29 5 %
(1) The impact of non-GAAP adjustments on the diluted earnings per share may not necessarily equal the difference between "GAAP" and "non-GAAP" as a result of rounding.
(2) As a result of the two-for-one stock split, effective May 15, 2013, all historical per share data and number of shares were retroactively adjusted. Diluted earnings per share was computed independently for each quarter and the year-to-date period presented. As a result of the stock split, changes in shares outstanding during the year and rounding, the sum of the quarters' earnings per share may not necessarily equal the earnings per share for the year-to-date period.
.
.
Contact:.
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Colgate-Palmolive Company
Bina Thompson, 212-310-3072
Hope Spiller, 212-310-2291
The Clorox Company Reports Solid Q4 and Fiscal Year 2013 Earnings Growth; Confirms Outlook for Fiscal 2014
MarketwiredPress Release: The Clorox Company – Thu, Aug 1, 2013 OAKLAND, CA--(Marketwired - Aug 1, 2013) - The Clorox Company (NYSE: CLX) today reported results for its fourth quarter and fiscal year 2013, which ended June 30. For the full fiscal year, the company delivered 3 percent sales growth, 80 basis points of gross margin expansion and $4.31 diluted earnings per share (EPS) from continuing operations. For the fourth quarter, the company reported a slight increase in sales, gross margin expansion of 130 basis points and $1.38 diluted EPS from continuing operations.
"Clorox people around the world delivered solid results this fiscal year," said Chairman and CEO Don Knauss. "We grew sales in all four segments behind product innovation across multiple brands and delivered strong gross margin expansion."
Commenting on the company's fourth-quarter results, Knauss said, "In Q4 we delivered strong margin expansion and diluted EPS growth from continuing operations of 5 percent. Excluding the impact of foreign currencies, sales grew nearly 1.5 percent in the quarter. While sales results came in slightly lower than anticipated, I feel good about our plans to address the competitive pressures we're facing, including increased merchandising activity as well as product innovation scheduled to launch in fiscal year 2014."
All results in this press release are on a continuing operations basis unless otherwise indicated. Some information in this release is reported on a non-GAAP basis. See "Non-GAAP Financial Information" below and the tables toward the end of this press release for more information and a reconciliation of key fourth-quarter results.
Fiscal Fourth-Quarter Results
Following is a summary of key fourth-quarter results. All comparisons are with the fourth quarter of fiscal year 2012, unless otherwise stated.
•$1.38 diluted earnings per share (5% increase)
•3% volume decrease
•Slight increase in sales
Clorox reported fourth-quarter earnings of $184 million, or $1.38 diluted EPS. This compares with $174 million, or $1.32 diluted EPS, in the year-ago quarter, an increase of 5 percent diluted EPS. Current-quarter results reflect the benefit of strong cost savings and price increases, partially offset by higher manufacturing and logistics costs, including the impact of inflationary pressures, and unfavorable foreign currency exchange rates.
Volume for the fourth quarter decreased 3 percent, primarily driven by declines in the company's Home Care, Charcoal and International businesses. Sales were up slightly, reflecting the benefit of price increases, favorable product mix and lower trade spending, largely offset by lower volume and unfavorable foreign currency exchange rates. Excluding the impact of foreign currency declines, sales grew nearly 1.5 percent.
Gross margin increased 130 basis points to 44 percent, compared to 42.7 percent in the year-ago quarter. The increase in gross margin was driven primarily by the benefit of strong cost savings and price increases, partially offset by higher manufacturing and logistics costs.
Advertising spending for the quarter was 8.4 percent of sales, a modest increase versus the year-ago period. The rate of advertising spending for Clorox's U.S. retail business was above 9 percent of sales, but lower for the company's International business in response to continued economic challenges and price controls in Venezuela and Argentina.
EBIT margin increased 60 basis points, driven primarily by gross margin expansion, partially offset by slightly higher advertising and sales promotion and other expenses.
Key Segment Results
Following is a summary of key fourth-quarter results by reportable segment. All comparisons are with the fourth quarter of fiscal 2012, unless otherwise stated.
Cleaning
(Laundry, Home Care, Professional Products)
•4% volume decrease
•1% sales decrease
•7% pretax earnings increase
Volume declines for the segment were driven primarily by lower shipments of Clorox® disinfecting wipes due to increased competitive activity and the resulting decrease in merchandising support. Laundry volume was flat reflecting increased shipments of Clorox® bleach, driven by strong category growth following last year's conversion to a new, concentrated formula, offset by lower shipments of Clorox 2® due to declines in market share. The Professional Products business continued to deliver strong volume growth primarily driven by record shipments of cleaning products. The variance between volume and sales reflects the benefits of favorable product mix and price increases implemented earlier this fiscal year behind innovation in spray cleaners. Pretax earnings growth reflected significant gross margin improvement, supported by cost savings stemming from the company's conversion to concentrated bleach.
Household
(Bags and Wraps, Charcoal, Cat Litter)
•1% volume decrease
•2% sales increase
•6% pretax earnings increase
The segment's volume decrease was driven primarily by declines in Charcoal, due to continued cold weather in the early part of the quarter, with significantly improving trends in June from better weather and Kingsford market share gains. Cat Litter volume grew behind new products and increased merchandising support. Glad volume was also up, largely due to continued strong growth and innovation in premium trash bags. The variance between volume and sales was due to the impact of earlier price increases on cat litter and charcoal products. Pretax earnings increased driven primarily by higher sales and the benefit of strong cost savings resulting in gross margin expansion.
Lifestyle
(Dressings and Sauces, Water Filtration, Natural Personal Care)
•Flat volume
•2% sales increase
•5% pretax earnings decrease
Volume in the segment was flat. Food business volume was up, driven primarily by Hidden Valley base business growth and higher shipments of new Hidden Valley® pasta salad kits. Volume declined in Water Filtration primarily due to increased competitive activity, earlier price increases and a comparison to strong volume in the year-ago quarter behind the pipeline build of Brita Bottle®. Burt's Bees volume was flat due to a comparison to double-digit growth in the year-ago quarter behind the pipeline build of güd® products. Retail consumption for Burt's Bees® products was up double-digits in the quarter. Segment sales outpaced volume primarily driven by the benefit of prior-year price increases on Brita® products. Pretax earnings declined primarily due to investments in systems and processes to support long-term growth for the Burt's Bees business.
International
(All countries outside of the U.S.)
•6% volume decrease
•1% sales decrease
•8% pretax earnings decrease
Volume decreased primarily due to the exit from nonstrategic export businesses, and declines in Canada and Argentina. Segment sales decreased due to lower volume and declines in foreign currencies, partially offset by the benefit of favorable mix and price increases. Pretax earnings decreased primarily due to higher manufacturing and logistics costs, including inflationary pressures, and lower sales. These factors were partially offset by the benefit of cost savings.
Fiscal Year 2013 Results
Following is a summary of key fiscal year 2013 results.
•$4.31 diluted EPS (5% increase)
•Flat volume
•3% sales increase
For fiscal year 2013, Clorox reported earnings of $574 million, or $4.31 diluted EPS, versus $543 million, or $4.10 diluted EPS in fiscal year 2012, an increase of 5 percent. Fiscal year results were primarily driven by the benefit of price increases and strong cost savings, partially offset by higher manufacturing and logistics costs, other supply chain costs and unfavorable foreign currency exchange rates.
Volume for fiscal year 2013 was flat versus the year-ago period, reflecting gains in the Professional Products, Food, Burt's Bees and Homecare businesses, offset by declines in the Charcoal, International and Brita businesses. Sales grew 3 percent with gains in all four segments, reflecting strong product innovation and the benefit of price increases, partially offset by unfavorable foreign currency exchange rates.
Gross margin increased 80 basis points to 42.9 percent from 42.1 percent in fiscal year 2012. The year-over-year increase was driven primarily by the benefit of cost savings and price increases, partially offset by higher manufacturing and logistics costs.
EBIT margin increased 60 basis points, primarily driven by gross margin expansion and lower selling and administrative expenses as a percentage of sales, partially offset by foreign currency declines.
Net cash provided by continuing operations increased to $777 million from $620 million in fiscal year 2012. The increase was due primarily to favorable changes in working capital, the prior period settlement of interest-rate forward contracts and higher earnings.
Clorox continues to use its strong cash flow to invest in the business, maintain debt leverage within its target range and return excess cash to shareholders through dividends and share repurchases. In the fourth quarter, the company increased its dividend by 11 percent and repurchased about 1.5 million shares of its common stock at a cost of approximately $128 million.
In addition to repurchasing company stock, Clorox reduced its debt to EBITDA ratio to 2.1 at the end of fiscal year 2013, near the lower end of its target range of 2.0 to 2.5.
Clorox Confirms Fiscal Year 2014 Financial Outlook
•2-4% sales growth
•EBIT margin up 25-50 basis points
•Diluted EPS in the range of $4.55-$4.70
Clorox continues to anticipate sales growth for fiscal 2014 in the range of 2 percent to 4 percent, with the first half of the fiscal year at the lower end or potentially below that range. Moderating factors include a challenging comparison to about 5.5 percent sales growth in the first half of fiscal 2013; the near-term effects of unfavorable foreign currencies; and heightened competitive pressure on laundry additives and disinfecting wipes. In addition, the company continues to anticipate a negative impact of 1 percentage point from foreign currency declines in Argentina and other countries. This outlook also reflects about 3 percentage points of incremental sales growth from product innovation.
Clorox continues to anticipate EBIT margin to increase in the range of 25-50 basis points, reflecting cost savings of about 150 basis points and lower selling and administrative expenses as a percentage of sales. We anticipate these benefits to be moderated by about 100 basis points of higher commodity costs and high inflation in some international markets.
The company's outlook continues to reflect an impact of about 5-10 cents diluted EPS related to continued market challenges in Argentina and Venezuela, including the effect of high inflation on manufacturing and logistics costs and price controls, as well as the currency devaluation in Venezuela that took place in February of this year. This outlook does not include a contingency for any additional currency devaluation in Venezuela.
Clorox continues to anticipate a higher effective tax rate of 34 to 35 percent for fiscal 2014.
Net of all these factors, Clorox continues to anticipate fiscal 2014 diluted EPS from continuing operations in the range of $4.55 to $4.70.
The recent rise of the U.S. dollar and volatility in some commodity prices are pressuring Clorox's sales and margins in the near term. If these factors remain elevated, the company's full-year results will be negatively affected. Our current outlook assumes about a percentage point of impact from foreign currency declines and another percentage point from commodity cost increases, with oil prices in the range of $90 to $100 per barrel.
For More Detailed Financial Information
Visit the Investors: Financial Reporting: Financial Results section of the company's website at TheCloroxCompany.com for the following:
•Supplemental volume and sales growth information
•Supplemental gross margin driver information
•Reconciliation of certain non-GAAP financial information, including earnings from continuing operations before interest and taxes (EBIT) and earnings from continuing operations before interest, taxes, depreciation and amortization (EBITDA)
•Reconciliation of economic profit (EP)
•Supplemental balance sheet and cash flow information and free cash flow reconciliation
•Supplemental price-change information
•Calculation of return on invested capital (ROIC)
Note: Percentage and basis-point changes noted in this press release are calculated based on rounded numbers. Supplemental materials are available in the Investors: Financial Reporting: Financial Results section of the company's website at TheCloroxCompany.com.
The Clorox Company
The Clorox Company is a leading multinational manufacturer and marketer of consumer and professional products with approximately 8,400 employees and fiscal year 2013 revenues of $5.6 billion. Clorox markets some of the most trusted and recognized brand names, including its namesake bleach and cleaning products, Clorox Healthcare™, HealthLink®, Aplicare® and Dispatch® products, Green Works® naturally derived products, Pine-Sol® cleaners, Poett® home care products, Fresh Step® cat litter, Glad® bags, wraps and containers, Kingsford® charcoal, Hidden Valley® and KC Masterpiece® dressings and sauces, Brita® water-filtration products, and Burt's Bees® and gud® natural personal care products. Nearly 90 percent of the company's brands hold the No. 1 or No. 2 market share positions in their categories. Clorox's commitment to corporate responsibility includes making a positive difference in its communities. In fiscal year 2013, The Clorox Company Foundation awarded $4.1 million in cash grants, and Clorox made product donations valued at nearly $10 million. For more information, visit TheCloroxCompany.com.
Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), and such forward-looking statements involve risks and uncertainties. Except for historical information, matters discussed above, including statements about future volume, sales, costs, cost savings, earnings, cash flows, plans, objectives, expectations, growth, or profitability, are forward-looking statements based on management's estimates, assumptions and projections. Words such as "will," "could," "may," "expects," "anticipates," "targets," "goals," "projects," "intends," "plans," "believes," "seeks," "estimates," and variations on such words, and similar expressions, are intended to identify such forward-looking statements. These forward-looking statements are only predictions, subject to risks and uncertainties, and actual results could differ materially from those discussed above. Important factors that could affect performance and cause results to differ materially from management's expectations are described in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Annual Report on Form 10-K for the fiscal year ended June 30, 2012, as updated from time to time in the company's SEC filings. These factors include, but are not limited to: the company's costs, including volatility and increases in commodity costs such as resin, diesel, chlor-alkali, sodium hypochlorite, high-strength bleach, agricultural commodities and other raw materials; increases in energy costs; the ability of the company to implement and generate expected savings from its programs to reduce costs, including its supply chain restructuring and other restructuring plans; supply disruptions or any future supply constraints that may affect key commodities or product inputs; risks inherent in relationships with suppliers, including sole-source or single-source suppliers; risks related to the handling and/or transportation of hazardous substances, including, but not limited to, chlorine; the success of the company's strategies; the ability to manage and realize the benefits of joint ventures and other cooperative relationships, including the company's joint venture regarding the company's Glad® plastic bags, wraps and containers business, and the agreements relating to the provision of information technology, procure to pay and other key services by third parties; risks relating to acquisitions, mergers and divestitures, and the costs associated therewith; risks inherent in maintaining an effective system of internal controls, including the potential impact of acquisitions or the use of third-party service providers, and the need to refine controls to adjust for accounting, financial reporting and other organizational changes or business conditions; the ability of the company to successfully manage tax, regulatory, product liability, intellectual property, environmental and other legal matters, including the risk resulting from joint and several liability for environmental contingencies and risks inherent in litigation, including class action litigation and International litigation; risks related to maintaining and updating the company's information systems, including potential disruptions, costs and the ability of the company to implement adequate information systems in order to support the current business and to support the company's potential growth; the ability of the company to develop commercially successful products that delight the consumer; consumer and customer reaction to price changes; actions by competitors; risks related to customer concentration; customer-specific ordering patterns and trends; risks arising out of natural disasters; the impact of disease outbreaks, or pandemics on the company's suppliers' or customers' operations; changes in the company's tax rate; unfavorable worldwide, regional or local general economic and marketplace conditions and events, including consumer confidence and consumer spending levels, the rate of economic growth, the rate of inflation or deflation, and the financial condition of the company's customers, suppliers and service providers; foreign currency exchange rate fluctuations and other risks of international operations, including government-imposed price controls; unfavorable political conditions in the countries where the company does business and other operational risks in such countries; the impact of the volatility of the debt and equity markets on the company's cost of borrowing, cost of capital and access to funds, including commercial paper and its credit facility; risks relating to changes in the company's capital structure, including risks related to the company's ability to implement share repurchase plans and the impact thereof on the company's capital structure and earnings per share; the impact of any unanticipated restructuring or asset-impairment charges and the ability of the company to successfully implement restructuring plans; risks arising from declines in cash flow, whether resulting from declining sales, declining product categories, higher cost levels, tax payments, debt payments, share repurchases, higher capital spending, interest cost increases greater than management's expectations, interest rate fluctuations, increases in debt or changes in credit ratings, or otherwise; the costs and availability of shipping and transport services; potential costs in the event of stockholder activism; and the company's ability to maintain its business reputation and the reputation of its brands.
The company's forward-looking statements in this press release are based on management's current views and assumptions regarding future events and speak only as of their dates. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by the federal securities laws.
Non-GAAP Financial Information
This press release contains non-GAAP financial information relating to EBIT margin, the debt to EBITDA ratio and sales growth. The company has included reconciliations of non-GAAP financial information related to sales growth, EBIT margin and the debt to EBITDA ratio to the most directly comparable financial measure calculated in accordance with generally accepted accounting principles in the U.S. (GAAP). See the end of this press release for these reconciliations.
The company has disclosed information related to these non-GAAP financial measures to supplement its condensed consolidated financial statements presented in accordance with GAAP. These non-GAAP financial measures exclude certain items that are included in the company's results reported in accordance with GAAP, including interest income, interest expense, depreciation and amortization, the impact of foreign currency exchange transactions and acquisitions. Management believes these non-GAAP financial measures provide useful additional information to investors about trends in the company's operations and are useful for period-over-period comparisons. These non-GAAP financial measures should not be considered in isolation or as a substitute for the comparable GAAP measures. In addition, these non-GAAP measures may not be the same as similar measures provided by other companies due to potential differences in methods of calculation and items being excluded. They should only be read in connection with the company's condensed consolidated financial statements presented in accordance with GAAP.
For recent presentations made by company management and other investor materials, visit Investor Events.
Condensed Consolidated Statements of Earnings
Dollars in millions, except per share amounts
Three Months Ended Twelve Months Ended
6/30/2013 6/30/2012 6/30/2013 6/30/2012
(Unaudited) (Unaudited) (Unaudited)
Net sales $ 1,547 $ 1,541 $ 5,623 $ 5,468
Cost of products sold 867 883 3,211 3,164
Gross profit 680 658 2,412 2,304
Selling and administrative expenses 212 213 807 798
Advertising costs 130 123 500 482
Research and development costs 35 34 130 121
Interest expense 26 33 122 125
Other expense (income), net 8 4 - (13 )
Earnings from continuing operations before income taxes 269 251 853 791
Income taxes on continuing operations 85 77 279 248
Earnings from continuing operations 184 174 574 543
Losses from discontinued operations, net of tax (1 ) - (2 ) (2 )
Net earnings $ 183 $ 174 $ 572 $ 541
Net earnings (losses) per share
Basic
Continuing operations $ 1.40 $ 1.34 $ 4.38 $ 4.15
Discontinued operations (0.01 ) - (0.01 ) (0.01 )
Basic net earnings per share $ 1.39 $ 1.34 $ 4.37 $ 4.14
Diluted
Continuing operations $ 1.38 $ 1.32 $ 4.31 $ 4.10
Discontinued operations (0.01 ) - (0.01 ) (0.01 )
Diluted net earnings per share $ 1.37 $ 1.32 $ 4.30 $ 4.09
Weighted average shares outstanding (in thousands)
Basic 131,422 130,061 131,075 130,852
Diluted 133,612 131,395 132,969 132,310
Reportable Segment Information
(Unaudited)
Dollars in millions
Fourth Quarter Net Sales Earnings (Losses) from Continuing Operations Before Income Taxes
Three Months Ended Three Months Ended
6/30/13 6/30/12 % Change (1) 6/30/13 6/30/12 % Change (1)
Cleaning Segment $ 432 $ 436 -1 % $ 101 $ 94 7 %
Household Segment 568 559 2 % 154 145 6 %
Lifestyle Segment 239 235 2 % 62 65 -5 %
International Segment 308 311 -1 % 23 25 -8 %
Corporate - - - (71 ) (78 ) -9 %
Total Company $ 1,547 $ 1,541 0 % $ 269 $ 251 7 %
Year-to-Date Net Sales Earnings (Losses) from Continuing Operations Before Income Taxes
Twelve Months Ended Twelve Months Ended
6/30/13 6/30/12 % Change (1) 6/30/13 6/30/12 % Change (1)
Cleaning Segment $ 1,783 $ 1,692 5 % $ 420 $ 381 10 %
Household Segment 1,693 1,676 1 % 336 298 13 %
Lifestyle Segment 929 901 3 % 259 265 -2 %
International Segment 1,218 1,199 2 % 96 119 -19 %
Corporate - - - (258 ) (272 ) -5 %
Total Company $ 5,623 $ 5,468 3 % $ 853 $ 791 8 %
(1) Percentages based on rounded numbers.
Condensed Consolidated Balance Sheets
Dollars in millions
6/30/2013 6/30/2012
(Unaudited)
ASSETS
Current assets
Cash and cash equivalents $ 299 $ 267
Receivables, net 580 576
Inventories, net 394 384
Other current assets 147 149
Total current assets 1,420 1,376
Property, plant and equipment, net 1,021 1,081
Goodwill 1,105 1,112
Trademarks, net 553 556
Other intangible assets, net 74 86
Other assets 138 144
Total assets $ 4,311 $ 4,355
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities
Notes and loans payable $ 202 $ 300
Current maturities of long-term debt - 850
Accounts payable 413 412
Accrued liabilities 490 494
Income taxes payable 29 5
Total current liabilities 1,134 2,061
Long-term debt 2,170 1,571
Other liabilities 742 739
Deferred income taxes 119 119
Total liabilities 4,165 4,490
Stockholders' equity (deficit)
Common stock 159 159
Additional paid-in capital 661 633
Retained earnings 1,561 1,350
Treasury shares (1,868 ) (1,881 )
Accumulated other comprehensive net losses (367 ) (396 )
Stockholders' equity (deficit) 146 (135 )
Total liabilities and stockholders' equity (deficit) $ 4,311 $ 4,355
The tables below present the reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures and other supplemental information. See "Non-GAAP Financial Information" above for further information regarding the company's use of non-GAAP financial measures.
Fourth-Quarter Sales Growth Reconciliation
Q4
Fiscal
2013 Q4
Fiscal
2012
Base sales growth - non-GAAP 1.3 % 3.2 %
Foreign exchange -0.9 -0.8
Acquisitions -- 1.6
Total sales growth - GAAP 0.4 % 4.0 %
Fiscal Year Sales Growth Reconciliation
Fiscal
2013 Fiscal
2012
Base sales growth - non-GAAP 2.7 % 3.8 %
Foreign exchange -0.6 -0.2
Acquisitions 0.7 0.9
Total sales growth - GAAP 2.8 % 4.5 %
Fourth-Quarter EBIT(1) Margin Reconciliation
Q4
Fiscal
2013 Q4
Fiscal
2012
Earnings from continuing operations before income taxes - GAAP $ 269 $ 251
Interest Income -1 -1
Interest Expense 26 33
EBIT (1)- non-GAAP $ 294 $ 283
EBIT margin(2) - non-GAAP 19.0 % 18.4 %
Net Sales $ 1,547 $ 1,541
Fiscal Year EBIT(1) Margin Reconciliation
Fiscal
2013 Fiscal
2012
Earnings from continuing operations before income taxes - GAAP $ 853 $ 791
Interest Income -3 -3
Interest Expense 122 125
EBIT (1) - non-GAAP $ 972 $ 913
EBIT margin(2) - non-GAAP 17.3 % 16.7 %
Net Sales $ 5,623 $ 5,468
Depreciation and Amortization $ 182 $ 178
EBITDA(3)- non-GAAP $ 1,154 $ 1,091
Debt to EBITDA(4) 2.1 2.5
Total Debt(5) $ 2,372 $ 2,721
(1) EBIT represents Earnings from Continuing Operations Before Interest and Taxes
(2) EBIT margin is a measure of EBIT as a percentage of net sales.
(3) EBITDA represents Earnings from Continuing Operations Before Interest, Taxes and Depreciation and Amortization.
(4) Debt to EBITDA represents total debt divided by EBITDA.
Note: The Company calculates EBITDA for compliance with its debt covenants using earnings from continuing operations for the trailing four quarters, as contractually defined.
(5) Total debt represents the sum of notes and loans payable, current maturities of long-term debt, and long-term debt.
For Gross Margin Drivers, please refer to the Supplemental Information: Gross Margin Driver page in the Financial Results section of the company's website TheCloroxCompany.com.
LOS GATOS, Calif., July 22, 2013 /PRNewswire/ -- Netflix, Inc. (NFLX) has released its second-quarter 2013 financial results by posting them to its website. Please visit the Netflix investor relations website at http://ir.netflix.com to view the Q2'13 financial results and letter to shareholders.
(Logo: http://photos.prnewswire.com/prnh/20101014/SF81638LOGO)
As previously announced, Netflix Chief Executive Officer Reed Hastings, Chief Financial Officer David Wells and Chief Content Officer Ted Sarandos will participate in a live video interview about the Company's financial results and business outlook at 3:00 p.m. Pacific Time. The interview will be conducted by Rich Greenfield, BTIG Research, and Julia Boorstin, CNBC, with questions submitted via email or twitter. Questions from investors should be submitted to rgreenfield@btig.com /@RichBTIG or Julia.boorstin@nbcuni.com /@JBoorstin.
The live broadcast will be at www.youtube.com/netflixir.
About Netflix, Inc.
Netflix is the world's leading Internet television network with nearly 38 million members in 40 countries enjoying more than one billion hours of TV shows and movies per month, including original series. For one low monthly price, Netflix members can watch as much as they want, anytime, anywhere, on nearly any Internet-connected screen. Members can play, pause and resume watching, all without commercials or commitments. Learn more about how Netflix (NFLX) is pioneering Internet television at www.netflix.com or follow Netflix on Facebook and Twitter
SIFCO Industries, Inc. Adds to Its Forged Components Group by Acquiring MW General, Inc. (DBA General Aluminium Forgings)
Business WirePress Release: SIFCO Industries, Inc. – Tue, Jul 23,
SIFCO Industries, Inc. (NYSE MKT: SIF) (“SIFCO”), a leading supplier of forged components to the aerospace and energy industries, announces the acquisition of substantially all of the operating assets and operations of MW General, Inc. (DBA General Aluminium Forgings) (“GAF”). GAF is an aerospace component supplier located in Colorado Springs, Colorado, principally supplying precision aluminum forgings to the commercial aerospace industry. GAF also supplies components to the military and medical industries. The transaction closed on July 23, 2013. Specific terms of the transaction were not disclosed.
SIFCO Industries, Inc. will operate the business under a newly created entity, General Aluminum Forgings, LLC, and will conduct business under the trade name General Aluminum Forge (“GAF”). GAF will be a wholly-owned subsidiary of Quality Aluminum Forge, LLC, SIFCO’s existing aluminum forging business. This acquisition increases SIFCO’s presence in the aluminum forging market, expands its capacity and broadens its customer base. The acquisition also continues SIFCO’s focus on growing its presence in the commercial aerospace market.
SIFCO Chief Executive Officer, Michael S. Lipscomb, said: “The addition of GAF meaningfully grows our aluminum forgings business and increases our aluminum product capabilities. We are very pleased to add this business to our growing forge family.”
About SIFCO Industries, Inc. - SIFCO Industries, Inc. is engaged in producing a variety of metalworking processes, services and products produced primarily to specific customer design requirements. The processes and services include forging, heat-treating, coating, welding, and machining. The products include forgings, machined forged parts and other machined metal parts, and remanufactured component parts for turbine engines. The Company’s operations are conducted in two business segments: Forged Components and Turbine Components Services and Repair. In May 2013, SIFCO Industries was recognized at the 2013 Leading EDGE Awards. This award was developed by the Entrepreneurs EDGE to recognize value-creating, mid-sized companies in the Northeast Ohio region.
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 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 not limited to, economic conditions, competition and other uncertainties detailed from time to time in the Company Securities and Exchange Commission filings.
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Contact:.
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SIFCO Industries, Inc.
Catherine Kramer, 216-426-3168
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Yahoo! Reports Second Quarter 2013 Results
Business WirePress Release: Yahoo! Inc. – 4 hours ago..
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SUNNYVALE, Calif.--(BUSINESS WIRE)--
Yahoo! Inc. (YHOO) today reported results for the quarter ended June 30, 2013.
Q2 2012 Q2 2013
Percent
Change
GAAP revenue $1,218 million $1,135 million (7)%
Revenue ex-TAC $1,081 million $1,071 million (1)%
GAAP income from operations $55 million $137 million 150%
Non-GAAP income from operations $240 million $209 million (13)%
GAAP net earnings per diluted share $0.18 $0.30 68%
Non-GAAP net earnings per diluted share $0.30 $0.35 19%
“I'm encouraged by Yahoo!’s performance in the second quarter. Our business saw continued stability, and we launched more products than ever before, introducing a significant new product almost every week,” said Yahoo! CEO Marissa Mayer. “From the new Yahoo! News, the new Yahoo! Sports app, the redesigned Yahoo! search, the new Flickr, the new Yahoo! Mail for tablet, the Yahoo! Weather app, our new Yahoo! app with Summly - this quarter drove tremendous improvements in our product line and our users responded with increased usage and engagement.”
GAAP revenue was $1,135 million for the second quarter of 2013, a 7 percent decrease from the second quarter of 2012. Revenue excluding traffic acquisition costs (“revenue ex-TAC”) was $1,071 million for the second quarter of 2013, a 1 percent decrease compared to the second quarter of 2012.
Adjusted EBITDA for the second quarter of 2013 was $369 million, a 7 percent decrease compared to the same period of 2012.
GAAP income from operations was $137 million for the second quarter of 2013, a 150 percent increase from the second quarter of 2012 (which reflected a restructuring charge of $129 million). Non-GAAP income from operations was $209 million for the second quarter of 2013, a 13 percent decrease from the second quarter of 2012.
GAAP net earnings for the second quarter of 2013 was $331 million, a 46 percent increase from the same period of 2012. Non-GAAP net earnings for the second quarter of 2013 was $386 million, a 6 percent increase from the same period of 2012.
GAAP net earnings per diluted share was $0.30 in the second quarter of 2013, compared to $0.18 in the second quarter of 2012. Non-GAAP net earnings per diluted share was $0.35 in the second quarter of 2013, compared to $0.30 in the second quarter of 2012.
Business Highlights
• Yahoo! accelerated its pace of innovation in the second quarter, launching nearly a dozen new product experiences for its core daily habits — including re-imagined desktop, mobile and tablet versions of Mail, Weather, Flickr, Search, Sports, News, and Yahoo! for iPhone and Android.
• The Company announced two new advertising formats designed to enhance the content experience in a more intuitive and immersive way. Yahoo! Stream Ads offer unobtrusive native ads that are part of a user's Yahoo! news stream. The Company also unveiled a new Yahoo.com Billboard ad, designed to deliver richer content interactions to users and increased effectiveness to advertisers.
• Yahoo! is offering additional content as part of its partnerships with leading news and entertainment brands such as ABC News, CNBC, and Condé Nast Entertainment, adding breadth to its existing portfolio of partner content and enhancing Yahoo!'s cross-screen experiences. The Company also announced a partnership between Yahoo! and Broadway Video Entertainment, along with NBC Entertainment, to bring the "Saturday Night Live" archive clips from 1975 to 2013 exclusively to Yahoo!.
• During the second quarter, Yahoo! made nine acquisitions to strengthen its products, content offerings, core technology and talent — including Summly, Astrid, Milewise, Loki Studios, Go Poll Go, PlayerScale, Rondee, Ghostbird Software and Tumblr. Tumblr is one of the fastest-growing media networks in the world. Its tremendous popularity and engagement among creators, curators and audiences of all ages brings a significant community of users to the Yahoo! network. The combination of Tumblr and Yahoo! is expected to grow Yahoo!'s audience to more than one billion monthly visitors.
Second Quarter 2013 Financial Highlights
Display:
• GAAP display revenue was $472 million for the second quarter of 2013, a 12 percent decrease compared to $535 million for the second quarter of 2012.
• Display revenue ex-TAC was $423 million for the second quarter of 2013, an 11 percent decrease compared to $473 million for the second quarter of 2012.
• The Number of Ads Sold (excluding Korea) decreased approximately 2 percent compared to the second quarter of 2012.
• Price-per-Ad (excluding Korea) decreased approximately 12 percent compared to the second quarter of 2012.
Search:
• GAAP search revenue was $418 million for the second quarter of 2013, a 9 percent decrease compared to $461 million for the second quarter of 2012.
• Search revenue ex-TAC was $403 million for the second quarter of 2013, a 5 percent increase compared to $385 million for the second quarter of 2012.
• Paid Clicks (excluding Korea) increased approximately 21 percent compared to the second quarter of 2012.
• Price-per-Click (excluding Korea) decreased approximately 8 percent compared to the second quarter of 2012.
Cash Balance:
• Cash, cash equivalents, and investments in marketable securities were $4.8 billion as of June 30, 2013 compared to $6 billion as of December 31, 2012, a decrease of $1.2 billion.
• During the second quarter of 2013, Yahoo! repurchased 25 million shares for $653 million and used a net $1 billion in cash for acquisitions (including a net $970 million to acquire Tumblr). These outflows were offset by $846 million in cash from Alibaba Group to redeem the Alibaba Group Preference Shares. The cash received represents the redemption value and includes the stated value of $800 million plus dividends of $46 million.
"We are happy to announce that as of today we have essentially completed our commitment to return $3.65 billion from our Alibaba Group proceeds to shareholders, repurchasing a total of 190 million shares," said Yahoo! CFO Ken Goldman. "As part of our ongoing commitment to shareholders, we plan to continue to execute against the $5 billion share buyback that was authorized last year, of which approximately $1.9 billion remains. We plan to repurchase shares in open market or privately negotiated transactions."
Live Stream
Yahoo! will live stream a video broadcast of the Company's second quarter 2013 financial results at 2 p.m. Pacific Time/5 p.m. Eastern Time today. The live stream will be broadcast from Yahoo!’s Sunnyvale studio and will be available exclusively on Yahoo! Finance at http://finance.yahoo.com. The Company will provide its business outlook for the third quarter and full year during the presentation. Supplemental financial information can be accessed through the Company’s Investor Relations website at http://investor.yahoo.com. The video webcast will be archived after the event at http://investor.yahoo.com and will be available for 90 days following the broadcast.
Non-GAAP Financial Measures
This press release and its attachments include the following financial measures defined as non-GAAP financial measures by the Securities and Exchange Commission (“SEC”): revenue ex-TAC; adjusted EBITDA; non-GAAP income from operations; non-GAAP net earnings; non-GAAP net earnings per share - diluted; and free cash flow.
Revenue ex-TAC is GAAP revenue less traffic acquisition costs. Adjusted EBITDA, non-GAAP income from operations, non-GAAP net earnings and non-GAAP net earnings per share - diluted, exclude from the most comparable GAAP financial measures certain gains, losses, and expenses that we do not believe are indicative of ongoing results, and exclude stock-based compensation expense. Adjusted EBITDA also excludes taxes, depreciation, amortization of intangible assets, other income, net (which includes interest), earnings in equity interests, and net income attributable to noncontrolling interests. Free cash flow is GAAP net cash provided by operating activities (adjusted to include excess tax benefits from stock-based awards), less acquisition of property and equipment, net and dividends received from equity investees.
These measures may be different than non-GAAP financial measures used by other companies. The presentation of this financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with generally accepted accounting principles (“GAAP”). Explanations of the Company’s non-GAAP financial measures and reconciliations of these financial measures to the GAAP financial measures the Company considers most comparable are included in the accompanying “Note to Unaudited Condensed Consolidated Financial Statements,” “Supplemental Financial Data and GAAP to Non-GAAP Reconciliations,” and “GAAP to Non-GAAP Reconciliations.”
About Yahoo!
Yahoo! is focused on making the world's daily habits inspiring and entertaining. By creating highly personalized experiences for our users, we keep people connected to what matters most to them, across devices and around the world. In turn, we create value for advertisers by connecting them with the audiences that build their businesses. Yahoo! is headquartered in Sunnyvale, California, and has offices located throughout the Americas, Asia Pacific (APAC) and the Europe, Middle East and Africa (EMEA) regions. For more information, visit the pressroom (pressroom.yahoo.net) or the Company's blog (yahoo.tumblr.com).
“Affiliates” refers to the third-party entities that have integrated Yahoo!’s advertising offerings into their Websites or other offerings (those Websites and other offerings, “Affiliate sites”).
“Alibaba Group” means Alibaba Group Holding Limited.
“Net earnings” means net income attributable to Yahoo! Inc., and “net earnings per diluted share” means net income attributable to Yahoo! Inc. common stockholders per share – diluted.
“Number of Ads Sold” is defined as the total number of ads displayed, or impressions, for paying advertisers on Yahoo! Properties.
“Paid Clicks” are defined as the total number of times an end-user clicks on a sponsored listing on Yahoo! Properties and Affiliate sites for which an advertiser pays on a per click basis.
“Price-per-Ad” is defined as display revenue from Yahoo! Properties divided by our Number of Ads Sold.
“Price-per-Click” is defined as search revenue divided by our Paid Clicks.
Additional information about how “Number of Ads Sold,” “Paid Clicks,” “Price-per-Ad,” and “Price-per-Click” are defined and calculated is included under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013, which is on file with the SEC and available on the SEC's website at www.sec.gov. Due to the closure of the Korea business in the fourth quarter of 2012, “Number of Ads Sold”, “Paid Clicks”, “Price-per-Ad”, and “Price-per-Click,” as presented above, exclude the Korea market for all periods.
“Search Agreement” refers to the Search and Advertising Services and Sales Agreement between Yahoo! and Microsoft Corporation, as amended.
“TAC” refers to traffic acquisition costs. TAC consists of payments to Affiliates and payments made to companies that direct consumer and business traffic to Yahoo! Properties.
“Yahoo! Properties” refers to the online properties and services that Yahoo! provides to users.
This press release contains forward-looking statements concerning Yahoo!'s expected financial performance and Yahoo!'s strategic and operational plans (including, without limitation, the quotation from management). Risks and uncertainties may cause actual results to differ materially from the results predicted, and reported results should not be considered as an indication of future performance. The potential risks and uncertainties include, among others, acceptance by users of new products and services (including, without limitation, products and services for mobile devices and alternative platforms); Yahoo!'s ability to compete with new or existing competitors; reduction in spending by, or loss of, advertising customers; risks associated with the Search Agreement with Microsoft Corporation; risks related to Yahoo!’s regulatory environment; interruptions or delays in the provision of Yahoo!’s services; security breaches; risks related to joint ventures and the integration of acquisitions; risks related to Yahoo!'s international operations; adverse results in litigation; Yahoo!'s ability to protect its intellectual property and the value of its brands; dependence on third parties for technology, services, content, and distribution; and general economic conditions. All information set forth in this press release and its attachments is as of July 16, 2013. Yahoo! does not intend, and undertakes no duty, to update this information to reflect subsequent events or circumstances. More information about potential factors that could affect the Company's business and financial results is included under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Annual Report on Form 10-K for the year ended December 31, 2012 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2013, which are on file with the SEC and available on the SEC's website at www.sec.gov. Additional information will also be set forth in those sections in Yahoo!’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2013, which will be filed with the SEC in the third quarter of 2013.
Yahoo!, Flickr and the Yahoo! logos are trademarks and/or registered trademarks of Yahoo! Inc. All other names are trademarks and/or registered trademarks of their respective owners.
Yahoo! Inc.
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
December 31,
June 30,
2012
2013
ASSETS
Current assets:
Cash and cash equivalents $ 2,667,778 $ 1,142,223
Short-term marketable securities 1,516,175 1,486,591
Accounts receivable, net 1,008,448 941,811
Prepaid expenses and other current assets 460,312 887,677
Total current assets 5,652,713 4,458,302
Long-term marketable securities 1,838,425 2,161,814
Alibaba Group Preference Shares 816,261 -
Property and equipment, net 1,685,845 1,579,822
Goodwill 3,826,749 4,582,588
Intangible assets, net 153,973 398,300
Other long-term assets 289,130 171,210
Investments in equity interests 2,840,157 2,874,387
Total assets $ 17,103,253 $ 16,226,423
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $ 184,831 $ 120,028
Accrued expenses and other current liabilities 808,475 763,117
Deferred revenue 296,926 294,968
Total current liabilities 1,290,232 1,178,113
Long-term deferred revenue 407,560 333,229
Capital lease and other long-term liabilities 124,587 125,639
Deferred and other long-term tax liabilities, net 675,271 730,708
Total liabilities 2,497,650 2,367,689
Total Yahoo! Inc. stockholders' equity 14,560,200 13,808,864
Noncontrolling interests 45,403 49,870
Total equity 14,605,603 13,858,734
Total liabilities and equity $ 17,103,253 $ 16,226,423
Yahoo! Inc.
Unaudited Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2012 2013 2012 2013
Revenue $ 1,217,794 $ 1,135,244 $ 2,439,027 $ 2,275,612
Operating expenses:
Cost of revenue - traffic acquisition costs 137,025 64,316 281,116 130,384
Cost of revenue - other 278,453 271,262 532,432 549,269
Sales and marketing 272,910 279,738 558,178 536,757
Product development 199,628 236,248 428,106 455,828
General and administrative 136,117 135,039 260,388 268,460
Amortization of intangibles 9,756 8,084 19,809 15,449
Restructuring charges, net 129,092 3,578 134,809 (3,484 )
Total operating expenses 1,162,981 998,265 2,214,838 1,952,663
Income from operations 54,813 136,979 224,189 322,949
Other income, net 20,175 23,606 22,453 40,678
Income before income taxes and earnings in equity interests 74,988 160,585 246,642 363,627
Provision for income taxes (26,523 ) (50,267 ) (82,942 ) (80,003 )
Earnings in equity interests 179,991 224,690 352,234 442,278
Net income 228,456 335,008 515,934 725,902
Less: Net income attributable to noncontrolling interests (1,825 ) (3,858 ) (2,960 ) (4,467 )
Net income attributable to Yahoo! Inc. $ 226,631 $ 331,150 $ 512,974 $ 721,435
Net income attributable to Yahoo! Inc. common stockholders per share - diluted (1) $ 0.18 $ 0.30 $ 0.42 $ 0.65
Shares used in per share calculation - diluted 1,221,719 1,094,694 1,224,102 1,101,395
Stock-based compensation expense by function:
Cost of revenue - other $ 2,614 $ 3,029 $ 5,508 $ 6,607
Sales and marketing 18,981 23,775 40,078 39,820
Product development 17,808 20,537 37,279 28,800
General and administrative 10,168 20,795 22,672 37,514
Restructuring expense reversals, net (3,429 ) - (3,429 ) -
Supplemental Financial Data:
Revenue ex-TAC $ 1,080,769 $ 1,070,928 $ 2,157,911 $ 2,145,228
Adjusted EBITDA $ 397,715 $ 369,182 $ 782,022 $ 754,787
Free cash flow $ 93,390 $ 131,400 $ 289,213 $ 281,308
(1) The impact of outstanding stock awards of entities in which the Company holds equity interests that are accounted for using the equity method reduced the Company's diluted earnings per share by $0.01 for the three months ended June 30, 2012 and the six months ended June 30, 2013.
Yahoo! Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)
Three Months Ended Six Months Ended
June 30, June 30,
2012 2013 2012 2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 228,456 $ 335,008 $ 515,934 $ 725,902
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 131,789 141,426 254,539 285,290
Amortization of intangible assets 28,864 19,067 60,209 37,477
Stock-based compensation expense 46,142 68,136 102,108 112,741
Non-cash restructuring charges 38,638 - 38,638 547
Dividend income related to Alibaba Group Preference Shares - (15,475 ) - (35,726 )
Dividends received from equity investees 83,648 123,058 83,648 135,058
Tax benefits from stock-based awards (4,949 ) 188 (3,935 ) 9,725
Excess tax benefits from stock-based awards (8,609 ) (5,706 ) (16,770 ) (18,513 )
Deferred income taxes (14,075 ) (7,839 ) (18,474 ) (27,997 )
Earnings in equity interests (179,991 ) (224,690 ) (352,234 ) (442,278 )
(Gain) loss from sale of investments, assets, and other, net (15,105 ) 1,270 (18,962 ) 13,175
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable, net (112,549 ) 657 (9,908 ) 58,510
Prepaid expenses and other 20,448 (119,275 ) 11,018 (99,568 )
Accounts payable 6,728 11,381 (35,714 ) (59,754 )
Accrued expenses and other liabilities 28,233 53,711 (15,755 ) (69,761 )
Deferred revenue (3,108 ) (50,089 ) (22,329 ) (75,318 )
Net cash provided by operating activities 274,560 330,828 572,013 549,510
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment, net (106,131 ) (82,076 ) (215,922 ) (151,657 )
Purchases of marketable securities (469,046 ) (763,009 ) (645,266 ) (2,244,302 )
Proceeds from sales of marketable securities 414,478 1,034,246 548,439 1,458,593
Proceeds from maturities of marketable securities 120,798 279,306 198,498 462,406
Proceeds related to the redemption of Alibaba Group Preference Shares - 800,000 - 800,000
Purchases of intangible assets (1,286 ) (924 ) (3,088 ) (2,052 )
Proceeds from the sale of investments 26,132 - 26,132 -
Acquisitions, net of cash acquired - (1,014,010 ) - (1,024,157 )
Other investing activities, net (2,141 ) (6,961 ) (9,421 ) (3,139 )
Net cash (used in) provided by investing activities (17,196 ) 246,572 (100,628 ) (704,308 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock, net 66,248 61,984 77,871 123,092
Repurchases of common stock (455,507 ) (652,750 ) (526,007 ) (1,427,825 )
Excess tax benefits from stock-based awards 8,609 5,706 16,770 18,513
Tax withholdings related to net share settlements of restricted stock units (6,990 ) (7,448 ) (38,494 ) (51,137 )
Other financing activities, net (1,209 ) (1,373 ) (2,222 ) (2,778 )
Net cash used in financing activities (388,849 ) (593,881 ) (472,082 ) (1,340,135 )
Effect of exchange rate changes on cash and cash equivalents (49,214 ) (15,929 ) (22,424 ) (30,622 )
Net change in cash and cash equivalents (180,699 ) (32,410 ) (23,121 ) (1,525,555 )
Cash and cash equivalents, beginning of period 1,719,968 1,174,633 1,562,390 2,667,778
Cash and cash equivalents, end of period $ 1,539,269 $ 1,142,223 $ 1,539,269 $ 1,142,223
Yahoo! Inc.
Note to Unaudited Condensed Consolidated Financial Statements
This press release and its attachments include the non-GAAP financial measures of revenue excluding traffic acquisition costs (“revenue ex-TAC”); adjusted EBITDA; non-GAAP income from operations; non-GAAP net earnings; non-GAAP net earnings per diluted share; and free cash flow, which are reconciled to revenue; net income attributable to Yahoo! Inc. (in the case of adjusted EBITDA and non-GAAP net earnings); income from operations; net income attributable to Yahoo! Inc. common stockholders per share – diluted; and net cash provided by operating activities, which we believe are the most comparable GAAP measures. We use these non-GAAP financial measures for internal managerial purposes and to facilitate period-to-period comparisons. We describe limitations specific to each non-GAAP financial measure below. Management generally compensates for limitations in the use of non-GAAP financial measures by relying on comparable GAAP financial measures and providing investors with a reconciliation of the non-GAAP financial measure to the most directly comparable GAAP financial measure or measures. Further, management uses non-GAAP financial measures only in addition to and in conjunction with results presented in accordance with GAAP. We believe that these non-GAAP financial measures reflect an additional way of viewing aspects of our operations that, when viewed with our GAAP results, provide a more complete understanding of factors and trends affecting our business. These non-GAAP measures should be considered as a supplement to, and not as a substitute for, or superior to, revenue, net income attributable to Yahoo! Inc., income from operations, net income attributable to Yahoo! Inc. common stockholders per share – diluted, and net cash provided by operating activities calculated in accordance with GAAP.
Revenue ex-TAC is a non-GAAP financial measure defined as GAAP revenue less TAC. TAC consists of payments made to third-party entities that have integrated our advertising offerings into their Websites or other offerings (those Websites and other offerings, “Affiliate sites”) and payments made to companies that direct consumer and business traffic to Yahoo!’s online properties and services (“Yahoo! Properties”). Based on the terms of the Search Agreement with Microsoft, Microsoft retains a revenue share of 12 percent of the net (after TAC) search revenue generated on Yahoo! Properties and Affiliate sites in transitioned markets. Yahoo! reports the net revenue it receives under the Search Agreement as revenue and no longer presents the associated TAC. Accordingly, for transitioned markets Yahoo! reports GAAP revenue associated with the Search Agreement on a net (after TAC) basis rather than a gross basis. For markets that have not yet transitioned, revenue continues to be recorded on a gross basis, and TAC is recorded as a part of operating expenses. We present revenue ex-TAC to provide investors a metric used by the Company for evaluation and decision-making purposes during the Microsoft transition and to provide investors with comparable revenue numbers when comparing periods preceding, during and following the transition period. A limitation of revenue ex-TAC is that it is a measure which we have defined for internal and investor purposes that may be unique to the Company, and therefore it may not enhance the comparability of our results to other companies in our industry who have similar business arrangements but address the impact of TAC differently. Management compensates for these limitations by also relying on the comparable GAAP financial measures of revenue and total operating expenses, which includes TAC in non-transitioned markets.
Adjusted EBITDA is defined as net income attributable to Yahoo! Inc. before taxes, depreciation, amortization of intangible assets, stock-based compensation expense, other income, net (which includes interest), earnings in equity interests, net income attributable to noncontrolling interests and other gains, losses, and expenses that we do not believe are indicative of our ongoing results. Yahoo! presents adjusted EBITDA because the exclusion of certain gains, losses, and expenses facilitates comparisons of the operating performance of our Company on a period to period basis. Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation or as a substitute for results reported under GAAP. These limitations include: adjusted EBITDA does not reflect tax payments and such payments reflect a reduction in cash available to us; adjusted EBITDA does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues in our businesses; adjusted EBITDA does not include stock-based compensation expense related to the Company’s workforce; adjusted EBITDA also excludes other income, net (which includes interest), earnings in equity interests, net income attributable to noncontrolling interests and other gains, losses, and expenses that we do not believe are indicative of our ongoing results, and these items may represent a reduction or increase in cash available to us; and adjusted EBITDA is a measure that may be unique to the Company, and therefore it may not enhance the comparability of our results to other companies in our industry. Management compensates for these limitations by also relying on the comparable GAAP financial measure of net income attributable to Yahoo! Inc., which includes taxes, depreciation, amortization, stock-based compensation expense, other income, net (which includes interest), earnings in equity interests, net income attributable to noncontrolling interests and the other gains, losses and expenses that are excluded from adjusted EBITDA.
Non-GAAP income from operations is defined as income from operations excluding certain gains, losses, and expenses that we do not believe are indicative of our ongoing operating results and further adjusted to exclude stock-based compensation expense. Because of the variety of equity awards used by companies, the varying methodologies for determining stock-based compensation expense, and the subjective assumptions involved in those determinations, we believe excluding stock-based compensation expense enhances the ability of management and investors to understand the impact of stock-based compensation expense on income from operations. We consider non-GAAP income from operations to be a profitability measure which facilitates the forecasting of our operating results for future periods and allows for the comparison of our results to historical periods. A limitation of non-GAAP income from operations is that it does not include all items that impact our income from operations for the period. Management compensates for this limitation by also relying on the comparable GAAP financial measure of income from operations which includes the gains, losses, and expenses that are excluded from non-GAAP income from operations.
Non-GAAP net earnings is defined as net income attributable to Yahoo! Inc. excluding certain gains, losses, expenses, and their related tax effects that we do not believe are indicative of our ongoing results and further adjusted to exclude stock-based compensation expense and its related tax effects. Because of the variety of equity awards used by companies, the varying methodologies for determining stock-based compensation expense, and the subjective assumptions involved in those determinations, we believe excluding stock-based compensation expense enhances the ability of management and investors to understand the impact of stock-based compensation expense on net income and net income per share. We consider non-GAAP net earnings and non-GAAP net earnings per diluted share to be profitability measures which facilitate the forecasting of our results for future periods and allow for the comparison of our results to historical periods. A limitation of non-GAAP net earnings and non-GAAP net earnings per diluted share is that they do not include all items that impact our net income and net income per diluted share for the period. Management compensates for this limitation by also relying on the comparable GAAP financial measures of net income attributable to Yahoo! Inc. and net income attributable to Yahoo! Inc. common stockholders per share - diluted, both of which include the gains, losses, expenses and related tax effects that are excluded from non-GAAP net earnings and non-GAAP net earnings per diluted share.
Free cash flow is a non-GAAP financial measure defined as net cash provided by operating activities (adjusted to include excess tax benefits from stock-based awards), less acquisition of property and equipment, net and dividends received from equity investees. We consider free cash flow to be a liquidity measure which provides useful information to management and investors about the amount of cash generated by the business after the acquisition of property and equipment, which can then be used for strategic opportunities including, among others, investing in the Company's business, making strategic acquisitions, strengthening the balance sheet, and repurchasing stock. A limitation of free cash flow is that it does not represent the total increase or decrease in the cash balance for the period. Management compensates for this limitation by also relying on the net change in cash and cash equivalents as presented in the Company’s unaudited condensed consolidated statements of cash flows prepared in accordance with GAAP which incorporates all cash movements during the period.
Yahoo! Inc.
Supplemental Financial Data and GAAP to Non-GAAP Reconciliations
(in thousands)
Three Months Ended Six Months Ended
June 30, June 30,
2012 2013 2012 2013
Revenue for groups of similar services:
Display $ 534,972 $ 471,742 $ 1,046,189 $ 926,813
Search 460,969 418,202 931,366 842,889
Other 221,853 245,300 461,472 505,910
Total revenue $ 1,217,794 $ 1,135,244 $ 2,439,027 $ 2,275,612
Revenue excluding traffic acquisition costs ("revenue ex-TAC") for groups of similar services:
GAAP display revenue $ 534,972 $ 471,742 $ 1,046,189 $ 926,813
TAC associated with display revenue (61,552 ) (48,610 ) (118,978 ) (101,657 )
Display revenue ex-TAC $ 473,420 $ 423,132 $ 927,211 $ 825,156
GAAP search revenue $ 460,969 $ 418,202 $ 931,366 $ 842,889
TAC associated with search revenue for non-transitioned markets (75,473 ) (14,931 ) (162,138 ) (30,988 )
Search revenue ex-TAC $ 385,496 $ 403,271 $ 769,228 $ 811,901
Other GAAP revenue $ 221,853 $ 245,300 $ 461,472 $ 505,910
TAC associated with other GAAP revenue - (775 ) - 2,261
Other revenue ex-TAC $ 221,853 $ 244,525 $ 461,472 $ 508,171
Revenue ex-TAC:
GAAP revenue $ 1,217,794 $ 1,135,244 $ 2,439,027 $ 2,275,612
TAC (137,025 ) (64,316 ) (281,116 ) (130,384 )
Revenue ex-TAC $ 1,080,769 $ 1,070,928 $ 2,157,911 $ 2,145,228
Revenue ex-TAC by segment:
Americas:
GAAP revenue $ 821,751 $ 828,537 $ 1,657,784 $ 1,670,732
TAC (45,910 ) (37,120 ) (88,865 ) (74,642 )
Revenue ex-TAC $ 775,841 $ 791,417 $ 1,568,919 $ 1,596,090
EMEA:
GAAP revenue $ 128,099 $ 97,387 $ 262,061 $ 192,211
TAC (34,187 ) (11,372 ) (79,849 ) (22,908 )
Revenue ex-TAC $ 93,912 $ 86,015 $ 182,212 $ 169,303
Asia Pacific:
GAAP revenue $ 267,944 $ 209,320 $ 519,182 $ 412,669
TAC (56,928 ) (15,824 ) (112,402 ) (32,834 )
Revenue ex-TAC $ 211,016 $ 193,496 $ 406,780 $ 379,835
Total revenue ex-TAC $ 1,080,769 $ 1,070,928 $ 2,157,911 $ 2,145,228
Direct costs by segment (2):
Americas $ 181,510 $ 172,268 $ 360,735 $ 342,392
EMEA 41,277 41,416 81,498 79,844
Asia Pacific 56,248 49,667 107,739 104,681
Global operating costs (3) 410,519 438,395 832,417 863,524
Restructuring charges, net 129,092 3,578 134,809 (3,484 )
Depreciation and amortization 157,739 160,489 310,987 322,581
Stock-based compensation expense 49,571 68,136 105,537 112,741
Income from operations $ 54,813 $ 136,979 $ 224,189 $ 322,949
Reconciliation of net income attributable to Yahoo! Inc. to adjusted EBITDA:
Net income attributable to Yahoo! Inc. $ 226,631 $ 331,150 $ 512,974 $ 721,435
Deal costs related to the sale of Alibaba Group shares 6,500 - 6,500 -
Depreciation and amortization 157,739 160,489 310,987 322,581
Stock-based compensation expense 49,571 68,136 105,537 112,741
Restructuring charges, net 129,092 3,578 134,809 (3,484 )
Other income, net (20,175 ) (23,606 ) (22,453 ) (40,678 )
Provision for income taxes 26,523 50,267 82,942 80,003
Earnings in equity interests (179,991 ) (224,690 ) (352,234 ) (442,278 )
Net income attributable to noncontrolling interests 1,825 3,858 2,960 4,467
Adjusted EBITDA $ 397,715 $ 369,182 $ 782,022 $ 754,787
Reconciliation of net cash provided by operating activities to free cash flow:
Net cash provided by operating activities $ 274,560 $ 330,828 $ 572,013 $ 549,510
Acquisition of property and equipment, net (106,131 ) (82,076 ) (215,922 ) (151,657 )
Dividends received from equity investees (83,648 ) (123,058 ) (83,648 ) (135,058 )
Excess tax benefits from stock-based awards 8,609 5,706 16,770 18,513
Free cash flow $ 93,390 $ 131,400 $ 289,213 $ 281,308
(2) Direct costs for each segment include cost of revenue (excluding TAC) and other operating expenses that are directly attributable to the segment such as employee compensation expense (excluding stock-based compensation expense), local sales and marketing expenses, and facilities expenses.
(3) Global operating costs include product development, service engineering and operations, general and administrative, and other corporate expenses that are managed on a global basis and that are not directly attributable to any particular segment.
Yahoo! Inc.
GAAP to Non-GAAP Reconciliations
(in thousands, except per share amounts)
Three Months Ended
June 30,
2012 2013
GAAP income from operations $ 54,813 $ 136,979
(a) Restructuring charges, net 129,092 3,578
(b) Stock-based compensation expense 49,571 68,136
(c) Deal costs related to the sale of Alibaba Group shares 6,500 -
Non-GAAP income from operations (4) $ 239,976 $ 208,693
GAAP net income attributable to Yahoo! Inc. $ 226,631 $ 331,150
(a) Restructuring charges, net 129,092 3,578
(b) Stock-based compensation expense 49,571 68,136
(c) Deal costs related to the sale of Alibaba Group shares 6,500 -
(d) To adjust the provision for income taxes to exclude the tax impact of items (a) through (c) above for the three months ended June 30, 2012 and 2013 (49,212 ) (16,995 )
Non-GAAP net earnings (5) $ 362,582 $ 385,869
GAAP net income attributable to Yahoo! Inc. common stockholders per share - diluted (1) $ 0.18 $ 0.30
Non-GAAP net earnings per share - diluted (5) $ 0.30 $ 0.35
Shares used in per share calculation - diluted 1,221,719 1,094,694
Six Months Ended
June 30,
2012 2013
GAAP income from operations $ 224,189 $ 322,949
(a) Restructuring charges (reversals), net 134,809 (3,484 )
(b) Stock-based compensation expense 105,537 112,741
(c) Deal costs related to the sale of Alibaba Group shares 6,500 -
Non-GAAP income from operations (4) $ 471,035 $ 432,206
GAAP net income attributable to Yahoo! Inc.
$ 512,974 $ 721,435
(a) Restructuring charges (reversals), net 134,809 (3,484 )
(b) Stock-based compensation expense 105,537 112,741
(c) Deal costs related to the sale of Alibaba Group shares 6,500 -
(d) To adjust the provision for income taxes to exclude the tax impact of items (a) through (c) above for the six months ended June 30, 2012 and 2013 (63,656 ) (24,641 )
Non-GAAP net earnings (5) $ 696,164 $ 806,051
GAAP net income attributable to Yahoo! Inc. common stockholders per share - diluted (1) $ 0.42 $ 0.65
Non-GAAP net earnings per share - diluted (5) $ 0.57 $ 0.73
Shares used in per share calculation - diluted 1,224,102 1,101,395
(1)
The impact of outstanding stock awards of entities in which the Company holds equity interests that are accounted for using the equity method reduced the Company's diluted earnings per share by $0.01 for the three months ended June 30, 2012 and the six months ended June 30, 2013.
(4)
Commencing in 2013, non-GAAP income from operations excludes stock-based compensation expense. Prior period amounts have been revised to conform to the current presentation.
(5)
Commencing in 2013, non-GAAP net earnings and non-GAAP net earnings per share - diluted exclude stock-based compensation expense and its related tax effects. Prior period amounts have been revised to conform to the current presentation.
.
.
Contact:.
.
Media Relations Contact:
Yahoo! Inc.
Sara Gorman, 408-349-4040
media@yahoo-inc.com
or
Investor Relations Contact:
Yahoo! Inc.
Joon Huh, 408-349-3382
investorrelations@yahoo-inc.com
.
Jewett-Cameron Announces 3rd Quarter Financial Results
PR NewswirePress Release: Jewett-Cameron Trading Company Ltd. – NORTH PLAINS, Ore., July 11, 2013 /PRNewswire/ -- Jewett-Cameron Trading Company Ltd. (JCTCF) today reported financial results for the third quarter and nine month periods of fiscal 2013 ended May 31, 2013.
Sales for the third quarter of fiscal 2013 totaled $15.05 million compared to sales of $16.11 million for the third quarter of fiscal 2012. For the quarter, income from operations were $1,686,508 compared to $1,556,199 in the year-ago quarter. After other items and income taxes, the Company reported net income of $1,018,564, or $0.32 per basic and diluted share, compared to net income of $937,090, or $0.29 per basic and diluted share, in last year's third quarter, after adjusting for the Company's 2 for 1 stock split effective May 2, 2013.
For the nine months ended May 31, 2013, Jewett-Cameron reported sales of $38.58 million compared to sales of $35.10 million for the nine months ended May 31, 2012. Income from operations was $3,437,952 in the current nine month period compared to income of $2,391,570 in the year-ago nine month period. The current nine month period was positively affected by the gain on sale of property of $353,852 while the year-ago nine month period was positively affected by the reversal of Litigation Reserves totaling $1,443,629. Including the one-time gains, net income for the nine months ended May 31, 2013 was $2,289,941, or $0.73 per basic and diluted share, compared to net income of $2,288,897, or $0.65 per basic and diluted share, in the prior nine month period, after adjustment for the 2 for 1 stock split.
"An increasing shift towards e-commerce sales of our metal products through our customer's online websites has resulted in lower costs and higher margins," said CEO Don Boone. "We also completed the 2 for 1 stock split of our common shares, and our strong cash position combined with the additional liquidity corresponds to our practice of implementing share re-purchase programs, which we believe is an effective method of enhancing shareholder value."
As of May 31st, 2013, the Company's cash position was $7.68 million, and there is currently no borrowing against its $5.0 million line of credit. During the nine months ended May 31, 2013, the company repurchased and cancelled a total of 814 common shares at a total cost of $4,884, which represents an average price of $6.00 per share. On May 29, 2013, the Company announced the implementation of a new share repurchase plan for the purchase and cancellation of up to 400,000 common shares, which represents approximately 13% of the approximately 3.1 million shares outstanding. The plan commenced on June 3, 2013, and will remain in place until August 16, 2013, but may be limited or terminated at any time without prior notice.
About Jewett-Cameron Trading Company Ltd.
Jewett-Cameron Trading Company is a holding company that, through its subsidiaries, operates out of facilities located in North Plains, Oregon. Jewett-Cameron Lumber Corporation's business consists of the manufacturing and distribution of specialty metal products and wholesale distribution of wood products to home centers and other retailers located primarily in the United States. Greenwood Products is a processor and distributor of industrial wood and other specialty building products principally to customers in the marine and transportation industries in the United States. 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.
CONSOLIDATED BALANCE SHEETS
(Expressed in U.S. Dollars)
(Prepared by Management)
(Unaudited)
May 31,
2013
August 31,
2012
ASSETS
Current assets
Cash
$ 7,678,879
$ 7,309,388
Accounts receivable, net of allowance
of $0 (August 31, 2012 - $6,509)
4,820,700
3,092,842
Inventory, net of allowance
of $139,333 (August 31, 2012 - $139,869) (note 3)
4,674,912
7,085,389
Note receivable
15,000
20,000
Prepaid expenses
1,890,437
388,957
Prepaid income taxes
125,868
-
Total current assets
19,205,796
17,896,576
Property, plant and equipment, net (note 4)
1,995,645
1,997,109
Intangible assets, net (note 5)
384,767
444,203
Deferred income taxes (note 6)
-
101,573
Total assets
$ 21,586,208
$ 20,439,461
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable
$ 410,948
$ 1,577,182
Litigation reserve (note 12(a))
150,837
170,819
Accrued liabilities
1,215,732
1,181,067
Accrued income taxes
-
37,203
Total current liabilities
1,777,517
2,966,271
Deferred tax liability (note 6)
50,444
-
Total liabilities
1,827,961
2,966,271
Contingent liabilities and commitments (note 12)
Stockholders' equity
Capital stock (note 8)
Authorized
21,567,564 common shares, without par value
10,000,000 preferred shares, without par value
Issued
3,135,128 common shares (August 31, 2012 – 3,135,942)
1,479,337
1,479,721
Additional paid-in capital
600,804
600,804
Retained earnings
17,678,106
15,392,665
Total stockholders' equity
19,758,247
17,473,190
Total liabilities and stockholders' equity
$ 21,586,208
$ 20,439,461
JEWETT-CAMERON TRADING COMPANY LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Expressed in U.S. Dollars)
(Prepared by Management)
(Unaudited)
Three Month Periods
to May 31,
Nine Month Periods
to May 31,
2013
2012
2013
2012
SALES
$ 15,051,509
$ 16,113,435
$ 38,575,738
$ 35,105,842
COST OF SALES
12,021,388
13,306,308
31,114,942
28,741,219
GROSS PROFIT
3,030,121
2,807,127
7,460,796
6,364,623
OPERATING EXPENSES
Selling, general and administrative expenses
372,191
233,947
1,176,173
1,122,892
Depreciation and amortization
66,735
61,279
188,431
186,773
Wages and employee benefits
904,687
955,702
2,658,240
2,663,388
1,343,613
1,250,928
4,022,844
3,973,053
Income from operations
1,686,508
1,556,199
3,437,952
2,391,570
OTHER ITEMS
Gain on sale of property, plant and equipment
-
-
353,852
-
Interest and other income
6,734
7,234
30,049
7,234
Interest expense (note 12(a))
-
(743)
(400)
(743)
Litigation income (note 12(a))
-
-
-
1,443,629
6,734
6,491
383,501
1,450,120
Income before income taxes
1,693,242
1,562,690
3,821,453
3,841,690
Income tax expense
(674,678)
(625,600)
(1,531,512)
(1,552,793)
Net income
$ 1,018,564
$ 937,090
$ 2,289,941
$ 2,288,897
Basic earnings per common share
$ 0.32
$ 0.29
$ 0.73
$ 0.65
Diluted earnings per common share
$ 0.32
$ 0.29
$ 0.73
$ 0.65
Weighted average number of common shares outstanding:
Basic
3,135,128
3,199,702
3,135,641
3,547,718
Diluted
3,135,128
3,199,702
3,135,641
3,547,718
JEWETT-CAMERON TRADING COMPANY LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in U.S. Dollars)
(Prepared by Management)
(Unaudited)
Three Month Periods
to May 31,
Nine Month Periods
to May 31,
2013
2012
2013
2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net income
$ 1,018,564
$ 937,090
$ 2,289,941
$ 2,288,897
Items not involving an outlay of cash:
Depreciation and amortization
66,735
61,279
188,431
186,773
Gain on sale of property, plant and equipment
-
-
(353,852)
-
Deferred income tax expense
594
495
152,017
2,052
Interest income on litigation
(6,734)
-
(19,982)
-
Changes in non-cash working capital items:
(Increase) decrease in accounts receivable
2,474,524
(1,219,911)
(1,727,858)
(1,276,868)
Decrease in inventory
1,017,381
1,484,917
2,410,477
817,143
(Increase) decrease in note receivable
(15,000)
-
5,000
(20,000)
Increase in prepaid expenses
(459,525)
(506,245)
(1,501,480)
(859,629)
(Increase) decrease in prepaid income taxes
128,084
-
(125,868)
682,527
Decrease in accounts payable and
accrued liabilities
(835,443)
(16,511)
(1,131,569)
(1,035,089)
Increase (decrease) in accrued income taxes
-
(24,188)
(37,203)
204,170
Net cash provided by operating activities
3,389,180
716,926
148,054
989,976
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment
(52,889)
(5,675)
(183,679)
(36,206)
Purchase of intangible assets and other
-
-
-
(13,050)
Proceeds from sale of property, plant and
equipment
-
-
410,000
-
Net cash provided by (used in) investing activities
(52,889)
(5,675)
226,321
(49,256)
CASH FLOWS FROM FINANCING ACTIVITIES
Redemption of common stock
-
(382,510)
(4,884)
(3,075,559)
Net cash used in financing activities
-
(382,510)
(4,884)
(3,075,559)
Net increase (decrease) in cash
3,336,291
328,741
369,491
(2,134,839)
Cash, beginning of period
4,342,588
4,310,547
7,309,388
6,774,127
Cash, end of period
$ 7,678,879
$ 4,639,288
$ 7,678,879
$ 4,639,288
Contact: Don Boone, President & CEO, (503) 647-0110
WD-40 Company Reports Third Quarter 2013 Sales And Earnings
PR NewswirePress Release: WD-40 Company – 21 minutes ago...
SAN DIEGO, July 8, 2013 /PRNewswire/ -- WD-40 Company (WDFC) today reported net sales for the third quarter ended May 31, 2013 of $93.1 million, an increase of 7% from the third quarter last fiscal year. Year-to-date net sales were $275.1 million, up 7% from the same period last fiscal year.
Net income for the third quarter was $10.3 million, an increase of 12% compared to the prior year fiscal quarter. Year-to-date net income was $31.7 million, an increase of 19% from the prior fiscal year period.
Summary
Third quarter multi-purpose maintenance products sales, which include the WD-40®, 3-IN-ONE® and BLUE WORKS® brands were $82.2 million, up 12% from the prior year fiscal quarter, and $239.4 million year-to-date, up 11% from the same period last fiscal year. The multi-purpose maintenance products are considered a primary focus for the Company. Homecare and cleaning products sales, which include all other brands, were $10.9 million for the third quarter, down 18%, and were $35.7 million year-to-date, down 15%, both as compared to the prior fiscal year periods. 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 third quarter were $47.6 million, up 8% compared to the third quarter last fiscal year and were $133.3 million year-to-date, up 2% compared to the prior fiscal year period. Europe segment sales in the third quarter were $32.5 million, up 8% and were $100.1 million year-to-date, up 13% compared to the same periods last fiscal year. Asia-Pacific segment sales remained constant at $13.0 million in the third quarter and were $41.7 million year-to-date, up 7% compared to the same period last fiscal year.
Diluted earnings per share were $0.66 in the third quarter, compared to $0.57 per share for the same quarter of the prior fiscal year. Year-to-date diluted earnings per share were $2.01 compared to $1.64 in the same period last fiscal year.
"We are pleased with our performance across the globe this past fiscal year, and have confidence in our ability to continue to leverage the WD-40 shield and to create solid growth in our core product lines," said Garry Ridge, WD-40 Company president and chief executive officer. "As we continue to celebrate our 60th anniversary as a company, we are thinking big about our future as we strive to maintain growth in our multi-purpose maintenance products lines and implement our strategic initiatives."
Net sales by segment as a percent of total net sales were as follows: for the Americas, 51% for the third quarter and 49% year-to-date; for Europe, 35% for the third quarter and 36% year-to-date; and, for Asia-Pacific, 14% for the third quarter and 15% year-to-date.
"Our performance in Europe is in line with our expectations and we are seeing the rebound we have been expecting as we keep our focus on long-term growth," Ridge said. "We also continue to see long-term opportunities throughout Asia, particularly in China, but there will always be a lot of ups and downs due to the timing of promotional programs, shifting economic growth patterns and varying industrial activities in China. Despite a slight decline in sales in China so far this year, we continue to make more people aware of our products and make them easier to buy, each and every day."
Gross margin was 51.3% in the third quarter compared to 49.5% in the same quarter last fiscal year. Year-to-date, gross margin was 50.8%, compared to 49.1% in the same period last fiscal year.
"We have been working to get our gross margin above fifty percent and are pleased with our progress," Ridge said. "During the quarter we saw improvements in gross margin from price increases, lower promotional allowances, changes we have made in our supply chain and foreign currency exchange rates, offset by higher input costs and our mix of sales."
Selling, general and administrative expenses were up 13% in the third quarter to $25.7 million and were up 11% year-to-date to $74.9 million as compared to the same periods last fiscal year.
Advertising and sales promotion expenses were down 1% in the third quarter to $6.6 million compared to the same period last fiscal year and were down 8% year-to-date to $18.0 million compared to the same period last fiscal year.
The WD-40 Specialist® product line was launched in fiscal year 2012 and was expanded into additional countries in the first half of fiscal year 2013. During the second quarter of fiscal year 2013, the company launched three additional products in the WD-40 Specialist line. The company also recently launched the WD-40 Specialist Motor Bike line in the U.K. as well.
"We are pleased with the overall performance of the WD-40 Brand and how the WD-40 Specialist line and the power of the shield have helped us grow our business in the multi-purpose maintenance category," Ridge said. "We know it is working as an overall strategy due to the growth we have been able to generate for these new products and the growth of the WD-40 Multi-use Product at the same time."
As we continue our innovation efforts we expect to see success from the products we already have in the marketplace, products we plan to launch within the next year and our long-term opportunities for new product and category introductions," Ridge added.
Dividend and Share Buy-Back
As previously announced, WD-40 Company's board of directors declared on Tuesday, June 18, 2013 the regular quarterly cash dividend $0.31 per share payable on July 31, 2013 to shareholders of record on July 16, 2013. The board of directors also approved a new share buy-back plan on June 18, 2013, which authorizes the Company to acquire up to $60.0 million of its outstanding shares effective from August 1, 2013 through August 31, 2015.
On December 13, 2011, the board of directors authorized a buyback up to $50.0 million of the Company's outstanding shares expiring on December 12, 2013. During the third quarter of 2013, WD-40 Company acquired an additional $9.8 million in shares, bringing the total purchased under this share buy-back plan to $43.5 million.
Revised Fiscal Year 2013 Guidance
WD-40 Company now expects fiscal year 2013 net sales of $356.0 million to $370.0 million. The Company expects net income of $37.6 million to $39.0 million and diluted earnings per share of $2.40 to $2.48 for fiscal year 2013 based on an estimated 15.7 million weighted average shares outstanding. Gross margin for the full year is expected to be close to 51%. The Company expects advertising and promotion expenses of 6.5% to 7.5% of net sales. This guidance is based on using average fiscal year 2012 foreign currency exchange rates.
More detailed information will be available in WD-40 Company's Form 10-Q which will be filed on July 9, 2013.
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® and BLUE WORKS® 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 markets its products in 187 countries worldwide and recorded sales of $343 million in fiscal year 2012. 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 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)
May 31,
August 31,
2013
2012
Assets
Current assets:
Cash and cash equivalents
$
52,273
$
69,719
Short-term investments
35,188
1,033
Trade accounts receivable, less allowance for doubtful accounts of $677 and $391 at May 31, 2013 and August 31, 2012, respectively
56,969
55,491
Inventories
33,925
29,797
Current deferred tax assets, net
5,532
5,551
Other current assets
4,074
4,526
Total current assets
187,961
166,117
Property and equipment, net
8,459
9,063
Goodwill
95,148
95,318
Other intangible assets, net
26,113
27,685
Other assets
2,810
2,687
Total assets
$
320,491
$
300,870
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable
$
21,049
$
21,242
Accrued liabilities
16,144
16,492
Revolving credit facility
63,000
45,000
Accrued payroll and related expenses
11,010
5,904
Income taxes payable
567
807
Total current liabilities
111,770
89,445
Long-term deferred tax liabilities, net
25,244
24,007
Deferred and other long-term liabilities
2,065
1,956
Total liabilities
139,079
115,408
Shareholders' equity:
Common stock ? authorized 36,000,000 shares, $0.001 par value; 19,346,260 and 19,208,845 shares issued at May 31, 2013 and August 31, 2012, respectively; and 15,399,910 and 15,697,534 shares outstanding at May 31, 2013 and August 31, 2012, respectively
19
19
Additional paid-in capital
130,878
126,210
Retained earnings
210,674
193,265
Accumulated other comprehensive loss
(6,560)
(2,727)
Common stock held in treasury, at cost ? 3,946,350 and 3,511,311 shares at May 31, 2013 and August 31, 2012, respectively
(153,599)
(131,305)
Total shareholders' equity
181,412
185,462
Total liabilities and shareholders' equity
$
320,491
$
300,870
WD-40 COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited and in thousands, except per share amounts)
Three Months Ended May 31,
Nine Months Ended May 31,
2013
2012
2013
2012
Net sales
$
93,103
$
87,022
$
275,079
$
257,933
Cost of products sold
45,319
43,940
135,442
131,370
Gross profit
47,784
43,082
139,637
126,563
Operating expenses:
Selling, general and administrative
25,662
22,736
74,947
67,280
Advertising and sales promotion
6,641
6,702
17,978
19,465
Amortization of definite-lived intangible assets
523
504
1,454
1,669
Total operating expenses
32,826
29,942
94,379
88,414
Income from operations
14,958
13,140
45,258
38,149
Other income (expense):
Interest income
105
61
362
182
Interest expense
(182)
(159)
(483)
(484)
Other (expense) income, net
(94)
(170)
493
(342)
Income before income taxes
14,787
12,872
45,630
37,505
Provision for income taxes
4,520
3,736
13,958
10,993
Net income
$
10,267
$
9,136
$
31,672
$
26,512
Earnings per common share:
Basic
$
0.66
$
0.57
$
2.02
$
1.65
Diluted
$
0.66
$
0.57
$
2.01
$
1.64
Shares used in per share calculations:
Basic
15,460
15,872
15,579
15,966
Diluted
15,561
16,008
15,682
16,094
Dividends declared per common share
$
0.31
$
0.29
$
0.91
$
0.85
WD-40 COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited and in thousands)
Nine Months Ended May 31,
2013
2012
Operating activities:
Net income
$
31,672
$
26,512
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
3,765
3,691
Net (gains) losses on sales and disposals of property and equipment
(12)
4
Deferred income taxes
451
664
Excess tax benefits from settlements of stock-based equity awards
(666)
(449)
Stock-based compensation
1,859
2,169
Unrealized foreign currency exchange losses, net
1,326
1,128
Provision for bad debts
399
83
Changes in assets and liabilities:
Trade accounts receivable
(4,395)
2,381
Inventories
(4,421)
(8,451)
Other assets
144
(1,293)
Accounts payable and accrued liabilities
276
2,195
Accrued payroll and related expenses
4,138
(2,960)
Income taxes payable
1,495
1,263
Deferred and other long-term liabilities
127
(536)
Net cash provided by operating activities
36,158
26,401
Investing activities:
Purchases of property and equipment
(1,975)
(3,043)
Proceeds from sales of property and equipment
112
1,133
Purchases of short-term investments
(36,424)
(529)
Maturities of short-term investments
1,029
514
Net cash used in investing activities
(37,258)
(1,925)
Financing activities:
Repayments of long-term debt
-
(10,715)
Proceeds from revolving credit facility
18,000
99,550
Repayments of revolving credit facility
-
(54,550)
Dividends paid
(14,263)
(13,625)
Proceeds from issuance of common stock
3,213
3,112
Treasury stock purchases
(22,294)
(30,901)
Excess tax benefits from settlements of stock-based equity awards
666
449
Net cash used in financing activities
(14,678)
(6,680)
Effect of exchange rate changes on cash and cash equivalents
(1,668)
(2,480)
Net (decrease) increase in cash and cash equivalents
(17,446)
15,316
Cash and cash equivalents at beginning of period
69,719
56,393
Cash and cash equivalents at end of period
$
52,273
$
71,709
WD-40 Company Reports Third Quarter 2013 Sales And Earnings
PR NewswirePress Release: WD-40 Company – 21 minutes ago...
SAN DIEGO, July 8, 2013 /PRNewswire/ -- WD-40 Company (WDFC) today reported net sales for the third quarter ended May 31, 2013 of $93.1 million, an increase of 7% from the third quarter last fiscal year. Year-to-date net sales were $275.1 million, up 7% from the same period last fiscal year.
Net income for the third quarter was $10.3 million, an increase of 12% compared to the prior year fiscal quarter. Year-to-date net income was $31.7 million, an increase of 19% from the prior fiscal year period.
Summary
Third quarter multi-purpose maintenance products sales, which include the WD-40®, 3-IN-ONE® and BLUE WORKS® brands were $82.2 million, up 12% from the prior year fiscal quarter, and $239.4 million year-to-date, up 11% from the same period last fiscal year. The multi-purpose maintenance products are considered a primary focus for the Company. Homecare and cleaning products sales, which include all other brands, were $10.9 million for the third quarter, down 18%, and were $35.7 million year-to-date, down 15%, both as compared to the prior fiscal year periods. 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 third quarter were $47.6 million, up 8% compared to the third quarter last fiscal year and were $133.3 million year-to-date, up 2% compared to the prior fiscal year period. Europe segment sales in the third quarter were $32.5 million, up 8% and were $100.1 million year-to-date, up 13% compared to the same periods last fiscal year. Asia-Pacific segment sales remained constant at $13.0 million in the third quarter and were $41.7 million year-to-date, up 7% compared to the same period last fiscal year.
Diluted earnings per share were $0.66 in the third quarter, compared to $0.57 per share for the same quarter of the prior fiscal year. Year-to-date diluted earnings per share were $2.01 compared to $1.64 in the same period last fiscal year.
"We are pleased with our performance across the globe this past fiscal year, and have confidence in our ability to continue to leverage the WD-40 shield and to create solid growth in our core product lines," said Garry Ridge, WD-40 Company president and chief executive officer. "As we continue to celebrate our 60th anniversary as a company, we are thinking big about our future as we strive to maintain growth in our multi-purpose maintenance products lines and implement our strategic initiatives."
Net sales by segment as a percent of total net sales were as follows: for the Americas, 51% for the third quarter and 49% year-to-date; for Europe, 35% for the third quarter and 36% year-to-date; and, for Asia-Pacific, 14% for the third quarter and 15% year-to-date.
"Our performance in Europe is in line with our expectations and we are seeing the rebound we have been expecting as we keep our focus on long-term growth," Ridge said. "We also continue to see long-term opportunities throughout Asia, particularly in China, but there will always be a lot of ups and downs due to the timing of promotional programs, shifting economic growth patterns and varying industrial activities in China. Despite a slight decline in sales in China so far this year, we continue to make more people aware of our products and make them easier to buy, each and every day."
Gross margin was 51.3% in the third quarter compared to 49.5% in the same quarter last fiscal year. Year-to-date, gross margin was 50.8%, compared to 49.1% in the same period last fiscal year.
"We have been working to get our gross margin above fifty percent and are pleased with our progress," Ridge said. "During the quarter we saw improvements in gross margin from price increases, lower promotional allowances, changes we have made in our supply chain and foreign currency exchange rates, offset by higher input costs and our mix of sales."
Selling, general and administrative expenses were up 13% in the third quarter to $25.7 million and were up 11% year-to-date to $74.9 million as compared to the same periods last fiscal year.
Advertising and sales promotion expenses were down 1% in the third quarter to $6.6 million compared to the same period last fiscal year and were down 8% year-to-date to $18.0 million compared to the same period last fiscal year.
The WD-40 Specialist® product line was launched in fiscal year 2012 and was expanded into additional countries in the first half of fiscal year 2013. During the second quarter of fiscal year 2013, the company launched three additional products in the WD-40 Specialist line. The company also recently launched the WD-40 Specialist Motor Bike line in the U.K. as well.
"We are pleased with the overall performance of the WD-40 Brand and how the WD-40 Specialist line and the power of the shield have helped us grow our business in the multi-purpose maintenance category," Ridge said. "We know it is working as an overall strategy due to the growth we have been able to generate for these new products and the growth of the WD-40 Multi-use Product at the same time."
As we continue our innovation efforts we expect to see success from the products we already have in the marketplace, products we plan to launch within the next year and our long-term opportunities for new product and category introductions," Ridge added.
Dividend and Share Buy-Back
As previously announced, WD-40 Company's board of directors declared on Tuesday, June 18, 2013 the regular quarterly cash dividend $0.31 per share payable on July 31, 2013 to shareholders of record on July 16, 2013. The board of directors also approved a new share buy-back plan on June 18, 2013, which authorizes the Company to acquire up to $60.0 million of its outstanding shares effective from August 1, 2013 through August 31, 2015.
On December 13, 2011, the board of directors authorized a buyback up to $50.0 million of the Company's outstanding shares expiring on December 12, 2013. During the third quarter of 2013, WD-40 Company acquired an additional $9.8 million in shares, bringing the total purchased under this share buy-back plan to $43.5 million.
Revised Fiscal Year 2013 Guidance
WD-40 Company now expects fiscal year 2013 net sales of $356.0 million to $370.0 million. The Company expects net income of $37.6 million to $39.0 million and diluted earnings per share of $2.40 to $2.48 for fiscal year 2013 based on an estimated 15.7 million weighted average shares outstanding. Gross margin for the full year is expected to be close to 51%. The Company expects advertising and promotion expenses of 6.5% to 7.5% of net sales. This guidance is based on using average fiscal year 2012 foreign currency exchange rates.
More detailed information will be available in WD-40 Company's Form 10-Q which will be filed on July 9, 2013.
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® and BLUE WORKS® 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 markets its products in 187 countries worldwide and recorded sales of $343 million in fiscal year 2012. 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 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)
May 31,
August 31,
2013
2012
Assets
Current assets:
Cash and cash equivalents
$
52,273
$
69,719
Short-term investments
35,188
1,033
Trade accounts receivable, less allowance for doubtful accounts of $677 and $391 at May 31, 2013 and August 31, 2012, respectively
56,969
55,491
Inventories
33,925
29,797
Current deferred tax assets, net
5,532
5,551
Other current assets
4,074
4,526
Total current assets
187,961
166,117
Property and equipment, net
8,459
9,063
Goodwill
95,148
95,318
Other intangible assets, net
26,113
27,685
Other assets
2,810
2,687
Total assets
$
320,491
$
300,870
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable
$
21,049
$
21,242
Accrued liabilities
16,144
16,492
Revolving credit facility
63,000
45,000
Accrued payroll and related expenses
11,010
5,904
Income taxes payable
567
807
Total current liabilities
111,770
89,445
Long-term deferred tax liabilities, net
25,244
24,007
Deferred and other long-term liabilities
2,065
1,956
Total liabilities
139,079
115,408
Shareholders' equity:
Common stock ? authorized 36,000,000 shares, $0.001 par value; 19,346,260 and 19,208,845 shares issued at May 31, 2013 and August 31, 2012, respectively; and 15,399,910 and 15,697,534 shares outstanding at May 31, 2013 and August 31, 2012, respectively
19
19
Additional paid-in capital
130,878
126,210
Retained earnings
210,674
193,265
Accumulated other comprehensive loss
(6,560)
(2,727)
Common stock held in treasury, at cost ? 3,946,350 and 3,511,311 shares at May 31, 2013 and August 31, 2012, respectively
(153,599)
(131,305)
Total shareholders' equity
181,412
185,462
Total liabilities and shareholders' equity
$
320,491
$
300,870
WD-40 COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited and in thousands, except per share amounts)
Three Months Ended May 31,
Nine Months Ended May 31,
2013
2012
2013
2012
Net sales
$
93,103
$
87,022
$
275,079
$
257,933
Cost of products sold
45,319
43,940
135,442
131,370
Gross profit
47,784
43,082
139,637
126,563
Operating expenses:
Selling, general and administrative
25,662
22,736
74,947
67,280
Advertising and sales promotion
6,641
6,702
17,978
19,465
Amortization of definite-lived intangible assets
523
504
1,454
1,669
Total operating expenses
32,826
29,942
94,379
88,414
Income from operations
14,958
13,140
45,258
38,149
Other income (expense):
Interest income
105
61
362
182
Interest expense
(182)
(159)
(483)
(484)
Other (expense) income, net
(94)
(170)
493
(342)
Income before income taxes
14,787
12,872
45,630
37,505
Provision for income taxes
4,520
3,736
13,958
10,993
Net income
$
10,267
$
9,136
$
31,672
$
26,512
Earnings per common share:
Basic
$
0.66
$
0.57
$
2.02
$
1.65
Diluted
$
0.66
$
0.57
$
2.01
$
1.64
Shares used in per share calculations:
Basic
15,460
15,872
15,579
15,966
Diluted
15,561
16,008
15,682
16,094
Dividends declared per common share
$
0.31
$
0.29
$
0.91
$
0.85
WD-40 COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited and in thousands)
Nine Months Ended May 31,
2013
2012
Operating activities:
Net income
$
31,672
$
26,512
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
3,765
3,691
Net (gains) losses on sales and disposals of property and equipment
(12)
4
Deferred income taxes
451
664
Excess tax benefits from settlements of stock-based equity awards
(666)
(449)
Stock-based compensation
1,859
2,169
Unrealized foreign currency exchange losses, net
1,326
1,128
Provision for bad debts
399
83
Changes in assets and liabilities:
Trade accounts receivable
(4,395)
2,381
Inventories
(4,421)
(8,451)
Other assets
144
(1,293)
Accounts payable and accrued liabilities
276
2,195
Accrued payroll and related expenses
4,138
(2,960)
Income taxes payable
1,495
1,263
Deferred and other long-term liabilities
127
(536)
Net cash provided by operating activities
36,158
26,401
Investing activities:
Purchases of property and equipment
(1,975)
(3,043)
Proceeds from sales of property and equipment
112
1,133
Purchases of short-term investments
(36,424)
(529)
Maturities of short-term investments
1,029
514
Net cash used in investing activities
(37,258)
(1,925)
Financing activities:
Repayments of long-term debt
-
(10,715)
Proceeds from revolving credit facility
18,000
99,550
Repayments of revolving credit facility
-
(54,550)
Dividends paid
(14,263)
(13,625)
Proceeds from issuance of common stock
3,213
3,112
Treasury stock purchases
(22,294)
(30,901)
Excess tax benefits from settlements of stock-based equity awards
666
449
Net cash used in financing activities
(14,678)
(6,680)
Effect of exchange rate changes on cash and cash equivalents
(1,668)
(2,480)
Net (decrease) increase in cash and cash equivalents
(17,446)
15,316
Cash and cash equivalents at beginning of period
69,719
56,393
Cash and cash equivalents at end of period
$
52,273
$
71,709
Travelzoo Restaurant Offers Inspire First-Time Visits; 81 Percent Plan to Return at Full Price Press Release: Travelzoo – Thu, Jun 20, 2013 10:16 AM EDT
NEW YORK, June 20, 2013 /PRNewswire/ -- Travelzoo Inc. ( TZOO), a global Internet media company, revealed today that its subscribers are using Travelzoo to discover restaurants, both at home and while on vacation, and are later returning as full-price guests, according to an independent survey. Of those diners who purchased a restaurant offer on Travelzoo in the past 12 months, 24 percent have already returned for a full-price experience; a further 57 percent plan to return to the restaurant in the future. In addition, 61 percent of Travelzoo subscribers share their positive experiences with friends and family.
Travelzoo dining offers inspire subscribers to make their first visit to a restaurant. Of those who took up a Travelzoo offer, 56 percent went to a restaurant featured on Travelzoo that they would not have otherwise visited. Forty-eight percent recommended restaurants to their friends or family after trying it out with a Travelzoo offer.
In addition to a high percentage returning at full price, 59 percent of Travelzoo diners spend at least 30 percent more than the face value of the offer while dining. Twenty-five percent of Travelzoo diners say they are using Travelzoo to discover restaurants while on vacation.
"Travelzoo has become a force in high-quality dining. Since 2011 we have inspired our subscribers to book more than 2 million tables," said Mike Stitt, vice president and general manager of Travelzoo Local. "Our focus on featuring only high-quality restaurants that offer our subscribers exceptional experiences has been a win-win-win for our brand, our subscribers and those restaurants that we recommend. We now have 26 million subscribers using Travelzoo to discover restaurants they might have never found on their own."
The survey results confirmed Travelzoo restaurant customers are mature and affluent, with 80 percent falling between the ages of 35 to 64, and half having individual annual incomes of $100,000 or more. Two out of three customers are female, with 71 percent considering themselves 'foodies.' Seventy-eight percent live with another adult, and 80 percent have no children living at home, providing more freedom to dine out and greater flexibility to take advantage of dining opportunities. Fifty-seven percent of Travelzoo restaurant customers have dinner at a restaurant between three and seven times per week.
Qualitative feedback from Travelzoo's restaurant partners confirms the quantitative insights from the independent survey:
Chef and owner, Kerry Simon, Simon Restaurant at the Palms Casino Resort, Las Vegas:
"For us, Travelzoo is one of the most effective ways to get visitors to Las Vegas into the restaurant that are definite foodies. I am so impressed with how this works to fill our restaurant almost immediately with a quality clientele that appreciate what we do and spend more. And, because it enables us to reach a national audience of travelers, it is always great exposure for our brand. We have worked with Travelzoo over ten times and this is now part of our ongoing marketing plan."
Marc Glosserman, Founder & CEO, Hill Country Hospitality, Washington, D.C.:
"We have found that partnering with Travelzoo has not only provided a nice jolt to our business in the periods that we run promotions, but that Travelzoo guests are genuinely seeking a quality dining experience -- and it certainly doesn't hurt that they typically spend more in the restaurant than the value of the voucher they are redeeming."
Bart Retolatto, Executive Chef, La Bottega, New York:
"Travelzoo guests are high-quality, sophisticated diners who have taken great interest in the food and proactively interact with the chef. They tend to be 'foodies' and we appreciate that many were true locals from our Chelsea neighborhood."
2013 Travelzoo Dining Survey methodology:
The survey was conducted in April 2013 by ORC International, a leading global market research firm. ORC International surveyed Travelzoo's U.S. subscribers and conducted the survey among a sample of 833 respondents that had purchased a restaurant voucher in the past 12 months.
About Travelzoo
Travelzoo Inc. is a global Internet media company. With more than 26 million subscribers in North America, Europe, and Asia Pacific and 25 offices worldwide, Travelzoo® publishes deals from more than 2,000 travel and entertainment companies. Travelzoo's deal experts review offers to find the best deals and confirm their true value. In Asia Pacific, Travelzoo is independently owned and operated by Travelzoo (Asia) Ltd. and Travelzoo Japan K.K. under a license agreement with Travelzoo Inc.
Certain statements contained in this press release that are not historical facts may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. These forward-looking statements may include, but are not limited to, statements about our plans, objectives, expectations, prospects and intentions, markets in which we participate and other statements contained in this press release that are not historical facts. When used in this press release, the words "expect", "predict", "project", "anticipate", "believe", "estimate", "intend", "plan", "seek" and similar expressions are generally intended to identify forward-looking statements. Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements, including changes in our plans, objectives, expectations, prospects and intentions and other factors discussed in our filings with the SEC. We cannot guarantee any future levels of activity, performance or achievements. Travelzoo undertakes no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this press release. Travelzoo and Top 20 are registered trademarks of Travelzoo. All other names are trademarks and/or registered trademarks of their respective owners.
Media Contact:
Mindy Joyce
Sugarfly Marketing
+1 (646) 259-1546
mindy@sugarflymarketing.com
RLJ Entertainment Chairman Robert L. Johnson Announces $2 Million Stock Purchase Plan
RLJ Entertainment Inc., (RLJE), announced today that Robert L. Johnson, the company's Chairman, has adopted a Rule 10b5-1 plan under which he can purchase up to $2 million worth of RLJ Entertainment’s common stock.
RLJ Entertainment, founded by Robert L. Johnson, founder of Black Entertainment Television and The RLJ Companies, 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.
Mr. Johnson commented, “My decision to acquire additional RLJ Entertainment stock reflects my belief that the current value of the company’s shares do not represent the long-term growth prospects of the business. I have strong confidence in RLJ Entertainment’s management, Miguel Penella, CEO, and Drew Wilson, CFO, and their ability to maximize long-term shareholder value.”
Under the plan, Mr. Johnson may purchase up to $2 million of the company's outstanding shares from time to time over the next 24 months. The share purchases will be made in the open market or in privately negotiated transactions in compliance with applicable laws and regulations, and purchases on the open market will be conducted within the safe harbor provisions of Regulation 10b-18 under the Securities Exchange Act of 1934, as amended.
As of June 19, 2013 Mr. Johnson beneficially owns 6,974,178 shares of the company’s common stock which constitutes approximately 40.56% of the shares of the company’s common stock outstanding. The stock purchase program does not obligate Mr. Johnson to purchase shares of the company’s common stock and the program may be modified or terminated at any time without prior notice.
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.
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.
About RLJ Entertainment - 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 majority-owned subsidiary Agatha Christie Limited (“ACL”), 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.
.
.
Contact:.
.
Sloane & Company
Josh Hochberg, 212-446-1892
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Schnitzer Reports Third Quarter 2013 Financial Results
Higher Volumes in all Businesses and Continued Expansion of Auto Parts Business
Business WirePress Release: Schnitzer Steel Industries, Inc. Schnitzer Steel Industries, Inc. (SCHN) today reported adjusted earnings per share of $0.09 and earnings per share of $0.03 for its fiscal 2013 third quarter ended May 31, 2013. This compares to adjusted earnings per share of $0.36 and earnings per share of $0.32 in the second quarter of 2013. Adjusted results for the third quarter exclude a $2 million, or $0.06 per share, restructuring charge associated with cost reduction initiatives announced in August 2012. Third quarter results were adversely impacted by average inventory accounting which significantly reduced operating income in our Metals Recycling Business by approximately $10 million, or $9 per ton, as compared to the second quarter. The Company's results in the second quarter included $0.10 per share of discrete tax benefits. The Company generated $45 million in operating cash flow during the third quarter and our total debt to total capital ratio at the end of the third quarter approximated the second quarter.
Ferrous export selling prices declined steadily throughout the third quarter, with market prices at the end of May approximately $50 per ton lower than at the end of the second quarter of fiscal 2013 driven primarily by lower export demand. The combination of declining selling prices, constrained supply, adverse impacts of average inventory accounting and lower tax benefits resulted in sequentially lower consolidated net income.
Subsequent to the third quarter, we acquired our first Auto Parts store in Rhode Island which is located near our existing Metals Recycling facilities. This new store adds to our supply chain in the Northeast, increasing our combined regional presence to 16 facilities.
Summary Results
($ in millions, except per share amounts)
Quarter
3Q13 2Q13 Change 3Q12 Change
Revenues $ 710 $ 662 7 % $ 880 (19 )%
Operating Income $ 7 $ 11 (37 )% $ 22 (67 )%
Restructuring Charges 2 2 22 % — NM
Adjusted Operating Income(1) $ 9 $ 13 (30 )% $ 22 (59 )%
Net Income attributable to SSI $ 1 $ 9 (91 )% $ 11 (93 )%
Restructuring Charges, net of tax 1 1 49 % — NM
Adjusted Net Income attributable to SSI(1) $ 2 $ 10 (76 )% $ 11 (79 )%
Net Income per share attributable to SSI $ 0.03 $ 0.32 (91 )% $ 0.40 (92 )%
Restructuring Charges, net of tax, per share 0.06 0.04 50 % — NM
Adjusted diluted EPS attributable to SSI(1)(2) $ 0.09 $ 0.36 (75 )% $ 0.40 (78 )%
(1) Adjusted for restructuring charges. See Non-GAAP Financial Measures for reconciliation to U.S. GAAP.
(2) Second quarter of fiscal 2013 included tax benefits of $3 million, or $0.10 per share, relating to the release of a valuation allowance which had been recorded in the first quarter of fiscal 2013 and other discrete tax benefits.
NM = Not meaningful
“During the third quarter we achieved higher sales volumes in each of our businesses despite weaker market conditions. Operating income in our Metals Recycling Business was negatively impacted by the significant drop in ferrous selling prices which fell more quickly than purchase prices and offset some of the benefits from the increased volumes. Our major capital projects for fiscal 2013 in Canada and Puerto Rico continue to progress on schedule. In our Auto Parts Business, seasonal trends contributed to improved sequential results for stores owned more than one year and the integration of our 11 new sites added this fiscal year are on track. In our Steel Manufacturing Business, higher sales volumes reflected, in part, a market environment that is improving," said Tamara Lundgren, President and Chief Executive Officer. "We generated positive operating cash flow this quarter which enabled us to continue our growth investments and capital allocation priorities while maintaining a healthy balance sheet."
Key business drivers during the third quarter of fiscal 2013:
• Metals Recycling Business (MRB) generated operating income per ferrous ton of approximately $8, which included an adverse impact from average inventory costs of $9 per ton, as compared to the second quarter. Ferrous volumes increased 6% and nonferrous volumes increased 8% sequentially from the second quarter.
• Auto Parts Business (APB) operating income margin of 12%, excluding new sites added in fiscal 2013, reflected seasonally higher parts sales. APB increased its car purchase volumes 3% sequentially, excluding the contribution from new stores in fiscal 2013.
• Steel Manufacturing Business (SMB) selling volumes increased 31% from the second quarter, primarily due to normal seasonal improvements in demand in the third quarter. Operating results were break-even in the third quarter.
Metals Recycling Business
Summary of Metals Recycling Business Results
($ in millions, except selling prices; Fe volumes 000s long tons; NFe volumes M lbs)
Quarter
3Q13 2Q13 Change 3Q12 Change
Total Revenues $ 605 $ 576 5 % $ 787 (23 )%
Ferrous Revenues $ 465 $ 443 5 % $ 622 (25 )%
Ferrous Volumes 1,164 1,103 6 % 1,353 (14 )%
Avg. Net Ferrous Sales Prices ($/LT)(1) $ 367 $ 372 (1 )% $ 424 (13 )%
Nonferrous Revenues $ 131 $ 125 4 % $ 155 (16 )%
Nonferrous Volumes 135 126 8 % 154 (12 )%
Avg. Net Nonferrous Sales Prices ($/lb)(1) $ 0.94 $ 0.97 (3 )% $ 0.97 (3 )%
Operating Income(2) $ 9 $ 14 (38 )% $ 18 (51 )%
(1) Sales prices are shown net of freight
(2) Operating income does not include the impact of restructuring charges
Sales Volumes: Ferrous sales volumes of 1.2 million tons in the third quarter increased 6% sequentially due to stronger domestic volumes and the timing of shipments. Nonferrous sales volumes of 135 million pounds increased 8%, primarily due to higher production levels and inventory draw down to satisfy customer demand.
Export customers accounted for 73% of total ferrous sales volumes in the third quarter. Our ferrous and nonferrous products were shipped to 13 countries, with China, Turkey and Malaysia being the top ferrous export destinations.
Pricing: Export prices declined steadily throughout the quarter as demand moderated. Higher priced sales orders before the market dropped resulted in average net ferrous selling prices which approximated second quarter levels. Nonferrous prices averaged slightly lower than the prior quarter.
Margins: Operating income per ferrous ton was $8, which included a significant adverse impact from average inventory costs of $9 per ton as compared to the second quarter. In the declining selling price environment, average inventory costs did not decline as quickly as cash purchase costs for raw materials, resulting in margin compression. Absent the impact from average inventory accounting, operating income per ferrous ton was in line with the second quarter.
Auto Parts Business
Summary of Auto Parts Business Results
($ in millions)
Quarter
3Q13 2Q13 Change 3Q12 Change
Revenues $ 86 $ 78 11% $ 83 4%
Operating Income(1) $ 8 $ 7 23% $ 13 (34)%
Car Purchase Volumes (000s) 95 88 8% 89 7%
Locations (end of quarter) 61 59 3% 51 20%
(1) Operating income does not include the impact of restructuring charges
Revenues: Revenues in the third quarter increased 11% sequentially due to seasonally stronger admissions and part sales and the incremental contributions from acquisitions.
Margins: During the third quarter, operating margins, excluding the impact of new sites, increased sequentially to 12%, due in part to the impact of normal seasonal improvements in part sales. During the third quarter, APB incurred $1 million of operating losses related to the new sites added during fiscal 2013, including integration and startup costs, which lowered APB's reported operating margin to 10%. (See Non-GAAP Financial Measures for reconciliation to U.S. GAAP.)
New Sites: Subsequent to the third quarter, APB acquired its first store in Rhode Island. This location is near our Metals Recycling facilities and will expand APB's presence in our core Northeastern market and further enhance operational synergies with our Metals Recycling Business.
Steel Manufacturing Business
Summary of Steel Manufacturing Business Results
($ in millions, except selling prices; volume 000s of short tons)
Quarter
3Q13 2Q13 Change 3Q12 Change
Revenues $ 93 $ 71 30% $ 79 18%
Operating Income (Loss) $ — $ 1 NM $ — NM
Avg. Net Sales Prices ($/ST) $ 687 $ 690 —% $ 734 (6)%
Finished Goods Sales Volumes 125 96 31% 103 21%
NM = Not meaningful
Sales Volumes: Finished steel sales volumes of 125 thousand tons increased 31% from the second quarter of fiscal 2013 due to seasonal improvements in demand.
Pricing: Average net sales prices for finished steel products of $687 per short ton approximated the second quarter.
Margins: Operating results during the quarter approximated break-even levels. The decline in margins compared to the second quarter was due primarily to the impact on costs of goods sold from lower utilization levels as customer demand was partially met with inventories produced during the second quarter.
Cost Reductions
During the first nine months of fiscal 2013, SG&A was lower by 10%, or $16 million, as compared to the prior year, excluding the $3 million impact from new APB acquisitions. Our cost reduction initiatives announced in August 2012 are on track to lower annual pre-tax operating costs by $25 million and are anticipated to be substantially implemented by the end of fiscal 2013. During the third quarter, we incurred a $2 million expense related to the restructuring charge, which equates to $0.06 per share. In aggregate, we have incurred $10 million of the total $14 million anticipated pre-tax restructuring charge in fiscal 2013. During the fourth quarter of fiscal 2013, the balance of the restructuring charges will primarily reflect costs of consolidating administrative functions in a single headquarters location.
Corporate Items
The Company's full year tax rate for fiscal 2013 is anticipated to be approximately 35%. The tax rate in the third quarter was higher than the anticipated full year rate due to changes to projected pre-tax income from domestic and foreign operations.
The Company generated $45 million in operating cash flow during the third quarter from a combination of positive earnings and lower working capital. In the second quarter, the Company generated operating cash flow of $16 million. Total debt of $414 million at the end of the third quarter approximated the level at the end of the second quarter.
Analysts' Conference Call: Second Quarter of Fiscal 2013
A conference call and slide presentation to discuss results will be held today, June 27, 2013, at 10:00 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 Nine Months Ended
May 31, 2013
February 28, 2013
May 31, 2012 May 31, 2013 May 31, 2012
REVENUES:
Metal Recycling Business:
Ferrous sales $ 465,194 $ 443,418 $ 621,923 $ 1,279,088 $ 1,812,550
Nonferrous sales 130,600 125,255 155,265 372,456 456,552
Other sales 9,076 7,518 9,339 23,977 27,796
TOTAL MRB SALES 604,870 576,191 786,527 1,675,521 2,296,898
Auto Parts Business 86,439 78,082 82,936 234,075 245,222
Steel Manufacturing Business 92,943 71,247 78,623 256,219 243,048
Intercompany sales and eliminations (73,957 ) (63,310 ) (68,221 ) (200,490 ) (206,515 )
Total Revenues $ 710,295 $ 662,210 $ 879,865 $ 1,965,325 $ 2,578,653
OPERATING INCOME (LOSS):
Metal Recycling Business $ 8,789 $ 14,158 $ 17,817 $ 28,602 $ 50,868
Auto Parts Business 8,273 6,711 12,543 21,348 31,693
Steel Manufacturing Business (72 ) 1,041 253 4,373 602
Segment operating income(1) 16,990 21,910 30,613 54,323 83,163
Corporate expense (8,625 ) (8,942 ) (8,751 ) (28,563 ) (28,635 )
Intercompany eliminations 695 (38 ) 216 (963 ) 506
Adjusted operating income(2)
9,060 12,930 22,078 24,797 55,034
Restructuring charges (1,873 ) (1,540 ) — (5,006 ) —
Total operating income $ 7,187 $ 11,390 $ 22,078 $ 19,791 $ 55,034
(1) Segment operating income does not include the impact of restructuring charges.
(2) Adjusted for restructuring charges. See Non-GAAP Financial Measures for reconciliation to U.S. GAAP.
SCHNITZER STEEL INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands)
(Unaudited)
For the Three Months Ended For the Nine Months Ended
May 31, 2013 February 28, 2013 May 31, 2012 May 31, 2013 May 31, 2012
Revenues $ 710,295 $ 662,210 $ 879,865 $ 1,965,325 $ 2,578,653
Cost of goods sold 652,263 600,786 807,980 1,794,933 2,367,283
Selling, general and administrative 49,390 48,760 50,148 146,144 158,510
Income from joint ventures (418 ) (266 ) (341 ) (549 ) (2,174 )
Restructuring charges 1,873 1,540 — 5,006 —
Operating income 7,187 11,390 22,078 19,791 55,034
Interest expense (2,788 ) (2,354 ) (2,729 ) (7,159 ) (9,473 )
Other income (expense), net 141 (49 ) (154 ) 414 70
Income before income taxes 4,540 8,987 19,195 13,046 45,631
Income tax expense (2,986 ) (244 ) (7,541 ) (4,191 ) (15,870 )
Net income 1,554 8,743 11,654 8,855 29,761
Net income attributable to noncontrolling interests (734 ) (100 ) (413 ) (1,063 ) (1,875 )
Net income attributable to SSI $ 820 $ 8,643 $ 11,241 $ 7,792 $ 27,886
Income per share attributable to SSI - basic $ 0.03 $ 0.32 $ 0.41 $ 0.29 $ 1.01
Income per share attributable to SSI - diluted $ 0.03 $ 0.32 $ 0.40 $ 0.29 $ 1.00
Weighted average number of common shares:
Basic 26,671 26,640 27,531 26,629 27,499
Diluted 26,813 26,781 27,795 26,777 27,748
Dividends declared per common share $ 0.188 $ 0.188 $ 0.188 $ 0.563 $ 0.222
SCHNITZER STEEL INDUSTRIES, INC.
SELECTED OPERATING STATISTICS
(Unaudited)
Fiscal Fiscal
1Q13 2Q13 3Q13 YTD 1Q12 2Q12 3Q12 4Q12 2012
Metals Recycling Business
Ferrous Selling Prices ($/LT) (1)
Domestic $ 354 $ 363 $ 367 $ 362 $ 420 $ 424 $ 414 $ 357 $ 406
Exports 360 374 367 368 436 420 427 384 417
Average $ 358 $ 372 $ 367 $ 366 $ 432 $ 421 $ 424 $ 378 $ 415
Ferrous Sales Volume (LT)
Domestic 279,450 260,509 314,240 854,199 319,451 297,142 308,521 261,747 1,186,861
Export 675,212 842,509 849,991 2,367,713 912,939 1,055,237 1,044,063 915,927 3,928,166
Total 954,662 1,103,018 1,164,231 3,221,912 1,232,390 1,352,379 1,352,584 1,177,674 5,115,027
Nonferrous Average Price ($/LB) (1) $ 0.95 $ 0.97 $ 0.94 $ 0.95 $ 1.00 $ 0.91 $ 0.97 $ 0.90 $ 0.94
Nonferrous Sales Volume (LB, in 000s) 118,931 125,500 135,256 379,688 137,243 168,545 154,071 168,794 628,652
Steel Manufacturing Business
Sales Prices ($/ST) (1) (2)
Average $ 680 $ 690 $ 687 $ 685 $ 722 $ 725 $ 734 $ 685 $ 715
Sales Volume (ST) (2)
Rebar 78,159 58,132 71,561 207,852 62,487 51,141 55,378 74,797 243,803
Coiled Products 45,533 32,130 46,088 123,751 39,120 55,785 42,753 45,103 182,761
Merchant Bar and Other 5,926 5,355 7,358 18,639 5,030 5,097 4,812 5,837 20,776
Total 129,618 95,617 125,007 350,242 106,637 112,023 102,943 125,737 447,340
Auto Parts Business
Car purchase volumes (000) 79 88 95 262 85 84 89 81 339
Number of self-service locations at end of quarter 51 59 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)
May 31, 2013 August 31, 2012
Assets
Current Assets:
Cash and cash equivalents $ 37,078 $ 89,863
Accounts receivable, net 161,808 137,313
Inventories, net 295,678 246,992
Other current assets 40,949 42,651
Total current assets 535,513 516,819
Property, plant and equipment, net 569,219 564,185
Goodwill and other assets 693,041 682,569
Total assets $ 1,797,773 $ 1,763,573
Liabilities and Equity
Current liabilities:
Short-term borrowings $ 693 $ 683
Other current liabilities 161,425 178,159
Total current liabilities 162,118 178,842
Long-term debt 413,401 334,629
Other long-term liabilities 146,644 142,158
Redeemable noncontrolling interest — 22,248
Equity:
Total Schnitzer Steel Industries, Inc. ("SSI") shareholders' equity 1,070,274 1,080,583
Noncontrolling interests 5,336 5,113
Total equity 1,075,610 1,085,696
Total liabilities and equity $ 1,797,773 $ 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 operating income margin for APB stores owned more than a year. 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 adjusted non-GAAP financial measures provides a meaningful presentation of the Company's results from its core business operations excluding adjustments for restructuring charges that are not related to the Company's ongoing core business operations and improves the period-to-period comparability of the Company's results from its core business operations. In addition, management believes that the non-GAAP financial measure relating to the Auto Parts Business new stores impact provides a meaningful presentation of the operating segment's results by excluding operating results relating to newly added stores and thus improve period-to-period comparability of the results of the segment's core business. 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.
Consolidated Operating Income
($ in millions) Quarter
3Q13 2Q13 3Q12
Operating Income $ 7 $ 11 $ 22
Restructuring Charges 2 2 —
Adjusted Operating Income $ 9 $ 13 $ 22
Net Income attributable to SSI
($ in millions) Quarter
3Q13 2Q13 3Q12
Net Income attributable to SSI $ 1 $ 9 $ 11
Restructuring Charges, net of tax 1 1 —
Adjusted Net Income attributable to SSI $ 2 $ 10 $ 11
Diluted Earnings per share attributable to SSI
($ per share) Quarter
3Q13 2Q13 3Q12
Net Income per share attributable to SSI $ 0.03 $ 0.32 $ 0.40
Restructuring Charges, net of tax, per share 0.06 0.04 —
Adjusted Diluted EPS attributable to SSI $ 0.09 $ 0.36 $ 0.40
Auto Parts Business New Stores Impact
($ in millions) 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
2Q13
Existing Stores(1) New Stores(2) Reported
Revenues 75 3 78
Operating Income (Loss)(3) 8 (2 ) 7
Operating Income Margin 11 % NM 9 %
Car Purchase Volumes (000) 84 4 88
(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 59 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 62 self-service facilities located in 17 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 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; 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 “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our most recent annual report on Form 10-K and quarterly report on Form 10-Q. 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 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; product liability claims; 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.
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.
Contact:.
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Schnitzer Steel Industries, Inc.
Investor Relations:
Alexandra Deignan, 646-278-9711
adeignan@schn.com
or
Media Relations:
Chip Terhune, 503-265-6370
cterhune@schn.com
or
Company Info:
www.schnitzersteel.com
ir@schn.com
FORT WORTH, Texas, June 28, 2013 /-- AZZ incorporated ( AZZ), (the "Company" or "AZZ") a manufacturer and provider of electrical services and products and a provider of galvanizing services, today announced unaudited financial results for the three month period ended May 31, 2013. Revenues for the first quarter of fiscal 2014 were $183.2 million compared to $127.1 million for the same quarter last year, an increase of 44 percent. Net income for the first quarter was $14.5 million, or $0.57 per diluted share, compared to net income of $16 million, or $0.63 per diluted share, in last year's first fiscal quarter.
The non-recurring items in the current quarter were significant. These non-recurring items included the continued losses related to the fire of our Joliet facility, income related to a favorable settlement of a law suit and significant expenditures associated with recent acquisitions. During the prior year first quarter, we also recorded non-recurring items for the gain from insurance proceeds related to the fire at the Joliet facility and costs related to our prior year acquisitions. Adjusted earnings per share for the first quarter of fiscal 2014 without these non-recurring items would have been $0.56 per diluted share compared to $0.51, for the first quarter of fiscal 2013 reflecting a year over year improvement of 10 percent. Included with the financial tables is a reconciliation of these non-recurring items.
Backlog at the end of our first quarter was $219.6 million which compares to our backlog at the end of the fourth quarter of fiscal 2013 of $221.7 million. Incoming orders for the first quarter were $181.1 million while shipments for the quarter totaled $183.2 million, resulting in a book to ship ratio of 99 percent. Of the $219.6 million in backlog, 35 percent of it is to be delivered outside of the U.S.
Revenues for the Electrical and Industrial Products and Services Segment for the first quarter of fiscal 2014 were $96.5 million as compared to $44.7 million for the same quarter last year, an increase of 116 percent. NLI, acquired June 1, 2012, and Aquilex SRO acquired on April 1, 2013, contributed $59 million of this increase. Operating income for the segment increased 91 percent to $13 million compared to $6.8 million in the same period last year. NLI and Aquilex SRO contributed $7.5 million to operating income for the three month period ending May 31, 2013. Operating margins for the first quarter were 13.5 percent for the quarter as compared to 15.3 percent in the prior year period.
Revenues for the Company's Galvanizing Service Segment for the first quarter were $86.7 million, compared to the $82.5 million in the same period last year, an increase of 5 percent. Operating income was $25.7 million as compared to $22.6 million in the prior period, an increase of 13.5 percent. Operating margins for the first quarter were 29.6 percent, compared to 27.4 percent in the same period last year. The Galvanizing Service Segment recorded net non-operating income and expense items during the first quarter of fiscal 2014 in the amount of $3.4 million due to the favorable settlement of a lawsuit in the amount of $4.2 million which was partially offset by $0.8 million resulting from the fire at the Joliet galvanizing facility. The losses at the Joliet facility are expected to be partially reimbursed upon final settlement of our business interruption insurance claim. Pro forma operating income without these non-recurring items would have been $22.3 million for the quarter resulting in an operating margin for the segment of 25.7 percent.
David H. Dingus, president and chief executive officer of AZZ incorporated, commented, "AZZ continues to demonstrate our commitment to growth through acquisitions and has strengthened our position globally, especially in the power generation and petrochemical markets. We are excited about our growth opportunities with the addition of a service offering to our portfolio, following the Aquilex SRO acquisition."
Additionally, the Company announced that the Board of Directors, at its regularly scheduled quarterly meeting, declared a $0.14 per share cash dividend on the Company's common stock outstanding. The dividend will be paid at the close of business on July 26, 2013, to shareholders of record on July 12, 2013.
Based upon the evaluation of information currently available to management, we are maintaining our fiscal year 2014 guidance for revenues to be in the range of $825 to $900 million. Our earnings are anticipated to be in the range of $2.65 and $2.95 per diluted share. Our guidance reflects the acquisition of Aquilex SRO during the last eleven months of fiscal 2014. Due to the increased seasonal trends associated with the acquisition of Aquilex SRO, we are issuing quarterly guidance for the balance of fiscal 2014. Our second quarter guidance for revenues will be in the range of $195 million to $210 million and our earnings are anticipated to be in the range of $0.60 to $0.70 per diluted share. The guidance does not reflect any additional gains which may be realized from the insurance settlement associated with the fire loss at the Company's Joliet facility. Any gains will be recognized in the period in which it is received.
At the regularly scheduled Board meeting on June 27, 2013, David H. Dingus, President and CEO of the Company informed the Board of his desire and intent to retire, due to health issues, from his current positions, effective March 1, 2014. The Board of Directors accepted the decision of Mr. Dingus. The Board has appointed a succession committee and will immediately commence a nationwide search to succeed Mr. Dingus. The search will encompass both internal and external candidates. Mr. Dingus advised the Board of his desire to remain an active member of the Board should he be duly re-elected at the Company's upcoming Annual Shareholders meeting. The Board extends to Mr. Dingus best wishes for a wonderful and well deserved retirement and expressed their deep gratitude and appreciation for all the accomplishments of the Company under the leadership of Mr. Dingus. Mr. Dingus joined the Company in September 1998 and has been CEO since 2001.
AZZ incorporated will conduct a conference call to discuss financial results for the first quarter of fiscal year 2014 at 11:00 A.M. ET on Friday, June 28, 2013. 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 #10030002 or for 30 days at www.azz.com/azzinvest.htm.
AZZ incorporated is a specialty electrical service and equipment manufacturer serving the global markets of power generation, transmission and distribution and industrial, 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
---Financial tables on the following page---
AZZ incorporated
Condensed Consolidated Statement of Income
(in thousands except per share amounts)
Three Months Ended May 31,
2013
2012
(unaudited)
(unaudited)
Net sales
$183,175
$127,143
Costs and Expenses:
Cost of Sales
132,459
89,278
Selling, General and Administrative
26,687
15,356
Interest Expense
4,478
3,340
Net (Gain) Loss on Sales or Insurance Settlement of
Property, Plant and Equipment
(23)
(5,969)
Other (Income)
(3,828)
48
$159,773
$102,053
Income before income taxes
$23,402
$25,090
Income Tax Expense
8,855
9,104
Net income
$14,547
$15,986
Net income per share*
Basic
$0.57
$0.63
Diluted
$0.57
$0.63
Diluted average shares outstanding
25,665
25,463
Segment Reporting
(in thousands)
Three Months Ended May 31,
2013
2012
(unaudited)
(unaudited)
Net Sales:
Electrical and Industrial Products
$96,466
$44,682
Galvanizing Services
86,709
82,461
$183,175
$127,143
Segment Operating Income:
Electrical and Industrial Products
$13,048
$6,838
Galvanizing Services
25,699
22,633
Total Segment Operating Income
$38,747
$29,471
AZZ incorporated
Condensed Consolidated Balance Sheet
(in thousands)
May 31, 2013
February 29, 2012
(unaudited)
(audited)
Assets:
Current assets
$320,979
$262,432
Net property, plant and equipment
187,766
154,476
Other assets, net
473,159
277,297
Total assets
$981,904
$694,205
Liabilities and shareholders' equity:
Current liabilities
$149,190
$118,900
Long term debt due after one year
435,393
196,429
Long term accrued liability due after one year
8,910
8,539
Other liabilities
42,083
36,403
Shareholders' equity
346,328
333,934
Total liabilities and shareholders' equity
$981,904
$694,205
Condensed Consolidated Statement of Cash Flows
(in thousands)
Three Months Ended May 31,
2013
2012
(unaudited)
(unaudited)
Net cash provided by (used in) operating activities
$39,879
$16,224
Net cash provided by (used in) investing activities
(288,179)
($3,480)
Net cash provided by (used in) financing activities
234,382
($16,837)
Net cash provided by (used in) effect of exchange rate
(45)
$108
Net increase (decrease) in cash and cash equivalents
(13,963)
($3,985)
Cash and cash equivalents at beginning of period
55,598
$143,303
Cash and cash equivalents at end of period
$41,635
$139,318
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 measure calculated in accordance with GAAP.
The following table provides a reconciliation for the three months ended March 31, 2013 and 2012 between net income attributable to the Company 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 May 31,
2013
2012
$
Per Diluted Share
$
Per Diluted Share
Net income and diluted earnings per share attributable to AZZ incorporated
$14,457
$0.57
$15,986
$0.63
Adjustments (net of tax)
Joliet Facility Fire
$495
$0.02
$334
$0.01
Law Suit Settlement
$(2,611)
$(0.10)
$-
$ -
Acquisition Related Expenditures
$1,981
$0.07
$381
$0.02
Joliet Facility Fire-Gain from Insurance Proceeds
$-
$ -
$(3,823)
$(0.15)
Adjusted earnings and adjusted earnings per share
$14,322
$0.56
$12,878
$0.51
Non-GAAP Disclosure
In addition to the financial information prepared in conformity with GAAP the Company provides historical non-GAAP financial information. Management believes that presentation of non-GAAP financial information is meaningful and useful in understanding the activities and business metrics of the Company's operations. Management believes that these non-GAAP financial measures reflect an additional way of viewing aspects of the Company's business that, when viewed with its GAAP results, provide a more complete understanding of factors and trends affecting its business.
Management provides non-GAAP financial information for informational purposes and to enhance understanding of the Company's GAAP consolidated financial statements. Readers should consider the information in addition to, but not instead of or superior to, its financial statements prepared in accordance with GAAP. The non-GAAP financial information may be determined or calculated differently by other companies, limiting the usefulness of those measures for comparative purposes.
The answer is "YES"! It is "Strong Buy" based on the continuing improvement of the company's underlying fundamentals.
The "Good Dr's In!
<eom>
Rocky Gap revenues top $700,000 in 10 days
Majority of money was from casino’s slot machine operationMatthew Bieniek Cumberland Times-News The Cumberland Times-News Tue Jun 11, 2013, 11:17 PM EDT
ROCKY?GAP — Rocky Gap Casino Resort made $776,133 in revenue from slots and table games during the 10 days it was open in May, state gaming officials said.
The casino opened May 22. More than $600,000 of the revenue was from the slots side of the operation, which took in $648,365.59.
“Gross gaming revenue per unit per day was: $106.39 for slot machines and $1,161.52 for banking table games. Rocky Gap Casino Resort operates 554 slot machines and 10 banking table games,” according to a press release from the Maryland Lottery and Gaming Control Commission.
Allegany County Commission President Michael McKay said it was too early to start thinking about the potential revenue to the county. McKay said he wants to see what happens over a two- to three-year period, at least, before making any judgments.
“With the projections and the May numbers it is too soon to forecast success or have apprehension,” McKay said. “I’m optimistic and excited by the early results.” McKay said he took it as a good sign that it was hard to find parking when he stopped at Rocky Gap on business. But he offered further words of caution.
“We need to be fiscally prudent. ... It’s premature to start commenting and premature for the county to start talking about spending the revenue,” McKay said. The county and the casino company have a payment in lieu of taxes agreement in place that will pay the county at least $295,000 a year.
Slot machine revenue from Rocky Gap included a contribution of $272,315.55 to the state’s education trust fund and local impact grants of $17,830.05. Lakes Entertainment earned $324,128.81, according to commission records. Total table game revenue was $127,767.50.
Rocky Gap helped save the day, or month, for state gambling revenues.
“In a year-to-year comparison — excluding Maryland Live, which opened in June 2012 and Rocky Gap Casino Resort — May 2013 casino revenue decreased from May 2012 by $1,206,766 or 8.29 percent. The addition of Maryland Live and Rocky Gap Casino Resort, however, brought a year-to-year net benefit to the state of $36,599,254. May’s figures brought total fiscal year 2013 gross revenues to $511.1 million,” according to the press release. The Maryland Live Casino is in Anne Arundel County.
Lakes Entertainment controls subsidiary Evitts Resort LLC, which owns the casino.
Lakes also held its 2013 annual shareholders meeting June 5 at Rocky Gap. Shareholders elected a five-member board of directors consisting of Lyle Berman, Timothy Cope, Neil I. Sell, Ray Moberg and Larry C. Barenbaum. Berman is the chief executive officer of the company and Cope is the chief financial officer. The information was reported, as required, to the federal Securities and Exchange Commission.
Contact Matthew Bieniek at mbieniek@times-news.com.
LIONSGATE REPORTS FISCAL 2013 REVENUE OF $2.71 BILLION, ADJUSTED EBITDA OF $329.7 MILLION, NET INCOME OF $232.1 MILLION OR $1.73 BASIC EPS AND ADJUSTED NET INCOME OF $190.1 MILLION OR $1.41 ADJUSTED BASIC EPS
Free Cash Flow Was $280.5 Million For Fiscal 2013
Fourth Quarter Revenue Was $785.7 Million with Adjusted EBITDA of $115.6 Million, Net Income of $163.0 Million or $1.20 Basic EPS, Adjusted Net Income of $89.6 Million or $0.66 Adjusted Basic EPS and Free Cash Flow of $123.3 Million
SANTA MONICA, Caif. and VANCOUVER, British Columbia, May 30, 2013 /PRNewswire/ -- Lionsgate (LGF) today reported revenue of $2.71 billion, adjusted EBITDA of $329.7 million, net income of $232.1 million or $1.73 basic net income per share and adjusted net income of $190.1 million or $1.41 adjusted basic net income per share for Fiscal 2013 (fiscal year ended March 31, 2013).
(Logo: http://photos.prnewswire.com/prnh/20110919/LA70620LOGO)
Revenue of $2.71 billion for fiscal 2013 increased by 71% compared to $1.59 billion in the prior year, reflecting strong performances by the Company throughout its theatrical, home entertainment, international and Lionsgate U.K. operations driven by a successful slate of feature films led by the global blockbuster HUNGER GAMES and TWILIGHT franchises.
Adjusted EBITDA of $329.7 million for fiscal 2013 compared to adjusted EBITDA of $71.6 million in the prior year.
Net income for the fiscal year was $232.1 million or $1.73 basic net income per share on 134.5 million weighted average number of common shares outstanding compared to a $(39.1) million net loss or $(0.30) basic net loss per share on 132.2 million weighted average number of common shares outstanding during the prior year. Adjusted net income of $190.1 million or $1.41 adjusted basic net income per share compared to adjusted net loss of $(13.1) million or $(0.10) adjusted basic net loss per share in the prior year.
Free cash flow of $280.5 million for fiscal 2013 compared to negative free cash flow of $(86.9) million in the prior year.
Lionsgate's filmed entertainment backlog, or already contracted future revenue not yet recorded, was $1.1 billion at March 31, 2013.
"We completed a stellar fiscal 2013 with an outstanding fourth quarter that reflected strong contributions from our young adult franchises as well as the rest of our theatrical slate and our home entertainment and international businesses," said Lionsgate Chief Executive Officer Jon Feltheimer. "We are performing ahead of plan for all of our metrics, and we're pleased with the financial strength of our diverse portfolio of businesses and our strong and growing momentum building Lionsgate into a next generation global content leader."
Overall Motion Picture segment revenue for fiscal 2013 was $2.33 billion, an increase of 96% from the prior year reflecting strong gains in all categories. Within the Motion Picture segment, theatrical revenue in the fiscal year was $535.5 million compared to $208.9 million in the prior year, a 156% increase attributable to the box office performance of a 2013 slate that included THE TWILIGHT SAGA: BREAKING DAWN – PART 2, WARM BODIES, THE EXPENDABLES 2 and MADEA'S WITNESS PROTECTION as well as THE HUNGER GAMES from the 2012 slate. The next HUNGER GAMES installment, THE HUNGER GAMES: CATCHING FIRE, will open worldwide on November 22, 2013.
Lionsgate's home entertainment revenue from both motion pictures and television was $964.1 million for the fiscal year, a 41% increase compared to $683.5 million in the prior year, driven by THE HUNGER GAMES, THE TWILIGHT SAGA: BREAKING DAWN -- PART 1 and THE TWILIGHT SAGA: BREAKING DAWN – PART 2, three of the biggest home entertainment titles of the year, as well as THE EXPENDABLES 2, MADEA'S WITNESS PROTECTION, CABIN IN THE WOODS and WHAT TO EXPECT WHEN YOU'RE EXPECTING. Digital media revenue increased by 46% to $276.6 million in fiscal 2013 compared to $190.1 million in the prior year.
Television revenue included in the Motion Picture segment was $277.9 million in fiscal 2013, more than doubling the $119.9 million generated in the prior year.
International Motion Picture segment revenue of $369.7 million (excluding Lionsgate U.K.) for fiscal 2013 more than tripled the prior year total, driven by the strong international theatrical performances of THE HUNGER GAMES, THE TWILIGHT SAGA: BREAKING DAWN – PART 2, THE TWILIGHT SAGA: BREAKING DAWN – PART 1, STEP UP REVOLUTION and WHAT TO EXPECT WHEN YOU'RE EXPECTING.
Lionsgate U.K. revenue was $147.7 million, an increase of 46% from the prior year, on the strength of a diversified theatrical slate including THE HUNGER GAMES and THE EXPENDABLES 2, Lionsgate U.K.'s SALMON FISHING IN THE YEMEN and third-party titles such as MAGIC MIKE.
Revenue in the Television Production segment in fiscal 2013 was $379.0 million compared to $397.3 million in the prior year. The decline was primarily attributable to a decrease in home entertainment revenue for television programming as the prior year included the licensing of four seasons of MAD MEN to Netflix. Domestic and international licensing of television programming posted gains over the prior year.
Lionsgate senior management will hold its analyst and investor conference call to discuss its fiscal 2013 results at 9:00 A.M. ET/6:00 A.M. PT on Friday, May 31, 2013. Interested parties may participate live in the conference call by calling 1-800-230-1092 (612-332-0107 outside the U.S. and Canada). A full digital replay will be available from Friday morning, May 31, through Friday, June 7, by dialing 1-800-475-6701 (320-365-3844 outside the U.S. and Canada) and using access code 292007.
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 28 television shows on 20 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 new comedy Anger Management, the network series Nashville, the syndication successes Tyler Perry's House of Payne, its spinoff Meet the Browns, For Better Or Worse, The Wendy Williams Show, Are We There Yet? and the upcoming Orange Is The New Black, an original series for Netflix.
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, Tyler Perry's Temptation, Warm Bodies, Snitch, Texas Chainsaw 3D, The Expendables 2, The Possession, Sinister, The Cabin in the Woods and Arbitrage. Lionsgate's home entertainment business is an industry leader in box office-to-DVD and box office-to-VOD revenue conversion rate. Lionsgate handles a prestigious and prolific library of approximately 15,000 motion picture and television titles that is an important source of recurring revenue and serves as the foundation for the growth of the Company's core businesses. The Lionsgate and Summit brands remain synonymous with original, daring, quality entertainment in markets around the world.
For further information, please contact:
Peter D. Wilkes
310-255-3726
pwilkes@lionsgate.com
The matters discussed in this press release include forward-looking statements, including those regarding the performance of future fiscal years. Such statements are subject to a number of risks and uncertainties. Actual results in the future could differ materially and adversely from those described in the forward-looking statements as a result of various important factors, including the substantial investment of capital required to produce and market films and television series, increased costs for producing and marketing feature films and television series, budget overruns, limitations imposed by our credit facility and notes, unpredictability of the commercial success of our motion pictures and television programming, the cost of defending our intellectual property, difficulties in integrating acquired businesses, risks related to our acquisition strategy and integration of acquired businesses, the effects of disposition of businesses or assets, technological changes and other trends affecting the entertainment industry, and the risk factors as set forth in Lionsgate's Annual Report on Form 10-K, filed with the Securities and Exchange Commission (the "SEC") on May 30, 2013, which risk factors are incorporated herein by reference. The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances.
LIONS GATE ENTERTAINMENT CORP.
CONSOLIDATED BALANCE SHEETS
March 31,
March 31,
2013
2012
(Amounts in thousands,
except share amounts)
ASSETS
Cash and cash equivalents
$ 62,363
$ 64,298
Restricted cash
10,664
11,936
Accounts receivable, net of reserves for returns and allowances of $103,418 (March 31, 2012 - $93,860) and provision for doubtful accounts of $4,494 (March 31, 2012 - $4,551)
787,150
784,530
Investment in films and television programs, net
1,244,075
1,329,053
Property and equipment, net
8,530
9,772
Equity method investments
169,450
171,262
Goodwill
323,328
326,633
Other assets
72,619
90,511
Deferred tax assets
82,690
-
Total assets
$ 2,760,869
$ 2,787,995
LIABILITIES
Senior revolving credit facility
$ 338,474
$ 99,750
Senior secured second-priority notes
432,277
431,510
Term loan
-
477,514
Accounts payable and accrued liabilities
313,620
371,092
Participations and residuals
409,763
420,325
Film obligations and production loans
569,019
561,150
Convertible senior subordinated notes and other financing obligations
87,167
108,276
Deferred revenue
254,023
228,593
Total liabilities
2,404,343
2,698,210
Commitments and contingencies
SHAREHOLDERS' EQUITY
Common shares, no par value, 500,000,000 shares authorized, 135,882,899 and 143,980,754 shares issued at March 31, 2013 and March 31, 2012, respectively
672,915
712,623
Accumulated deficit
(309,912)
(542,039)
Accumulated other comprehensive loss
(6,477)
(3,711)
356,526
166,873
Treasury shares, no par value, 11,040,493 shares at March 31, 2012
-
(77,088)
Total shareholders' equity
356,526
89,785
Total liabilities and shareholders' equity
$ 2,760,869
$ 2,787,995
LIONS GATE ENTERTAINMENT CORP.
ANNUAL CONSOLIDATED STATEMENTS OF OPERATIONS
Year
Year
Year
Ended
Ended
Ended
March 31,
March 31,
March 31,
2013
2012
2011
(Amounts in thousands,
except per share amounts)
Revenues
$ 2,708,141
$ 1,587,579
$ 1,582,720
Expenses:
Direct operating
1,390,569
908,402
795,746
Distribution and marketing
817,862
483,513
547,226
General and administration
218,341
168,864
171,407
Gain on sale of asset disposal group
-
(10,967)
-
Depreciation and amortization
8,290
4,276
5,811
Total expenses
2,435,062
1,554,088
1,520,190
Operating income
273,079
33,491
62,530
Other expenses (income):
Interest expense
Contractual cash based interest
75,322
62,430
38,879
Amortization of debt discount (premium) and deferred financing costs
18,258
15,681
16,301
Total interest expense
93,580
78,111
55,180
Interest and other income
(4,036)
(2,752)
(1,742)
Loss on extinguishment of debt
24,089
967
14,505
Total other expenses, net
113,633
76,326
67,943
Income (loss) before equity interests and income taxes
159,446
(42,835)
(5,413)
Equity interests income (loss)
(3,075)
8,412
(20,712)
Income (loss) before income taxes
156,371
(34,423)
(26,125)
Income tax provision (benefit)
(75,756)
4,695
4,256
Net income (loss)
$ 232,127
$ (39,118)
$ (30,381)
Basic Net Income (Loss) Per Common Share
$ 1.73
$ (0.30)
$ (0.23)
Diluted Net Income (Loss) Per Common Share
$ 1.61
$ (0.30)
$ (0.23)
Weighted average number of common shares outstanding:
Basic
134,514
132,226
131,176
Diluted
149,370
132,226
131,176
LIONS GATE ENTERTAINMENT CORP.
FOURTH QUARTER CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months
Three Months
Ended
Ended
March 31,
March 31,
2013
2012
(Amounts in thousands,
except per share amounts)
Revenues
$ 785,708
$ 645,213
Expenses:
Direct operating
419,187
360,743
Distribution and marketing
192,658
204,319
General and administration
75,067
75,713
Depreciation and amortization
2,050
1,673
Total expenses
688,962
642,448
Operating income
96,746
2,765
Other expenses (income):
Interest expense
Contractual cash based interest
15,520
22,087
Amortization of debt discount (premium) and deferred financing costs
4,511
4,885
Total interest expense
20,031
26,972
Interest and other income
(978)
(892)
Loss on extinguishment of debt
278
-
Total other expenses, net
19,331
26,080
Income (loss) before equity interests and income taxes
77,415
(23,315)
Equity interests income (loss)
(1,173)
2,407
Income (loss) before income taxes
76,242
(20,908)
Income tax provision (benefit)
(86,726)
1,838
Net income (loss)
$ 162,968
$ (22,746)
Basic Net Income (Loss) Per Common Share
$ 1.20
$ (0.17)
Diluted Net Income (Loss) Per Common Share
$ 1.10
$ (0.17)
Weighted average number of common shares outstanding:
Basic
135,406
131,735
Diluted
150,350
131,735
LIONS GATE ENTERTAINMENT CORP.
ANNUAL CONSOLIDATED STATEMENTS OF CASH FLOWS
Year
Year
Year
Ended
Ended
Ended
March 31,
March 31,
March 31,
2013
2012
2011
(Amounts in thousands)
Operating Activities:
Net income (loss)
$ 232,127
$ (39,118)
$ (30,381)
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating activities:
Depreciation of property and equipment
3,040
3,023
4,837
Amortization of intangible assets
5,250
1,253
974
Amortization of films and television programs
966,027
603,660
529,428
Amortization of debt discount (premium) and deferred financing costs
18,258
15,681
16,301
Accreted interest payment from equity method investee TV Guide
-
-
10,200
Non-cash stock-based compensation
35,838
9,957
29,204
Gain on sale of asset disposal group
-
(10,967)
-
Loss on extinguishment of debt
24,089
967
14,505
Equity interests (income) loss
3,075
(8,412)
20,712
Deferred income taxes
(87,899)
1,256
689
Changes in operating assets and liabilities:
Restricted cash
1,241
37,636
(43,067)
Accounts receivable, net
(4,948)
(256,208)
(64,203)
Investment in films and television programs
(890,276)
(690,304)
(487,391)
Other assets
(2,682)
1,298
(298)
Accounts payable and accrued liabilities
(50,154)
28,302
3,180
Participations and residuals
(6,875)
19,813
(1,369)
Film obligations
1,920
37,081
19,154
Deferred revenue
28,088
30,969
19,852
Net Cash Flows Provided By (Used In) Operating Activities
276,119
(214,113)
42,327
Investing Activities:
Purchases of investments
(2,022)
-
(13,993)
Proceeds from the sale of investments
6,354
-
20,989
Purchase of Summit, net of unrestricted cash acquired of $315,932
-
(553,732)
-
Buy-out of the earn-out associated with the acquisition of Debmar-Mercury, LLC
-
-
(15,000)
Proceeds from the sale of asset disposal group, net of transaction costs and cash disposed of $3,943
-
9,119
-
Investment in equity method investees
(1,530)
(1,030)
(24,677)
Increase in loans receivable
-
(4,671)
(1,042)
Repayment of loans receivable
4,274
-
8,113
Purchases of property and equipment
(2,581)
(1,885)
(2,756)
Net Cash Flows Provided By (Used In) Investing Activities
4,495
(552,199)
(28,366)
Financing Activities:
Senior revolving credit facility - borrowings
1,160,424
390,650
525,250
Senior revolving credit facility - repayments
(921,700)
(360,650)
(472,500)
Senior revolving credit facility - deferred financing costs
(15,804)
-
-
Senior secured second-priority notes - consent fee
(3,270)
-
-
Senior secured second-priority notes - borrowings, net of deferred financing costs
-
201,955
-
Senior secured second-priority notes - repurchases
-
(9,852)
-
Term Loan - borrowings associated with the acquisition of Summit, net of debt discount of $7,500 and deferred financing costs of $16,350
-
476,150
-
Term Loan - repayments
(484,664)
(15,066)
-
Convertible senior subordinated notes - borrowings
-
45,000
-
Convertible senior subordinated notes - repurchases
(7,639)
(46,059)
-
Individual production loans - borrowings
374,506
327,531
118,589
Individual production loans - repayments
(323,124)
(207,912)
(147,102)
Pennsylvania Regional Center credit facility - repayments
(500)
-
-
Film credit facility - borrowings
4,004
54,325
19,456
Film credit facility - repayments
(47,945)
(30,813)
(34,762)
Change in restricted cash collateral associated with financing activities
-
-
3,087
Repurchase of common shares
-
(77,088)
-
Exercise of stock options
2,897
3,520
-
Tax withholding required on equity awards
(15,995)
(4,320)
(13,476)
Other financing obligations - repayments
(3,710)
-
-
Net Cash Flows Provided By (Used In) Financing Activities
(282,520)
747,371
(1,458)
Net Change In Cash And Cash Equivalents
(1,906)
(18,941)
12,503
Foreign Exchange Effects on Cash
(29)
(3,180)
4,674
Cash and Cash Equivalents - Beginning Of Period
64,298
86,419
69,242
Cash and Cash Equivalents - End Of Period
$ 62,363
$ 64,298
$ 86,419
LIONS GATE ENTERTAINMENT CORP.
FOURTH QUARTER CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months
Three Months
Ended
Ended
March 31,
March 31,
2013
2012
(Amounts in thousands)
Operating Activities:
Net income (loss)
$ 162,968
$ (22,746)
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating activities:
Depreciation of property and equipment
772
640
Amortization of intangible assets
1,278
1,033
Amortization of films and television programs
307,152
248,449
Amortization of debt discount (premium) and deferred financing costs
4,511
4,885
Non-cash stock-based compensation
18,954
2,358
Loss on extinguishment of debt
278
-
Equity interests (income) loss
1,173
(2,407)
Deferred income taxes
(87,899)
1,256
Changes in operating assets and liabilities:
Restricted cash
(6,883)
19,643
Accounts receivable, net
(133,265)
(199,280)
Investment in films and television programs
(186,401)
(138,498)
Other assets
5,268
(400)
Accounts payable and accrued liabilities
(11,163)
80,069
Participations and residuals
5,708
35,654
Film obligations
15,626
(15,310)
Deferred revenue
(40,217)
(17,607)
Net Cash Flows Provided By (Used In) Operating Activities
57,860
(2,261)
Investing Activities:
Purchase of Summit, net of unrestricted cash acquired of $315,932
-
(553,732)
Investment in equity method investees
(1,530)
-
Increase in loans receivable
-
(3,171)
Purchases of property and equipment
(495)
(336)
Net Cash Flows Provided By (Used In) Investing Activities
(2,025)
(557,239)
Financing Activities:
Senior revolving credit facility - borrowings
55,500
127,000
Senior revolving credit facility - repayments
(163,500)
(121,750)
Term Loan - borrowings associated with the acquisition of Summit, net of debt discount of $7,500 and deferred financing costs of $16,350
-
476,150
Term Loan - repayments
-
(15,066)
Convertible senior subordinated notes - borrowings
-
45,000
Individual production loans - borrowings
115,376
129,383
Individual production loans - repayments
(40,576)
(73,914)
Film credit facility - borrowings
10
10,611
Film credit facility - repayments
(8,890)
(7,295)
Change in restricted cash collateral associated with financing activities
12,769
-
Exercise of stock options
-
3,369
Tax withholding required on equity awards
(11,056)
(1,690)
Net Cash Flows Provided By (Used In) Financing Activities
(40,367)
571,798
Net Change In Cash And Cash Equivalents
15,468
12,298
Foreign Exchange Effects on Cash
(1,293)
(851)
Cash and Cash Equivalents - Beginning Of Period
48,188
52,851
Cash and Cash Equivalents - End Of Period
$ 62,363
$ 64,298
LIONS GATE ENTERTAINMENT CORP.
RECONCILIATION OF ANNUAL NET INCOME (LOSS) TO
EBITDA AND EBITDA, AS ADJUSTED
Year
Year
Year
Ended
Ended
Ended
March 31,
March 31,
March 31,
2013
2012
2011
(Amounts in thousands)
Net income (loss)
$ 232,127
$ (39,118)
$ (30,381)
Depreciation and amortization
8,290
4,276
5,811
Contractual cash based interest
75,322
62,430
38,879
Noncash interest expense
18,258
15,681
16,301
Interest and other income
(4,036)
(2,752)
(1,742)
Income tax provision
(75,756)
4,695
4,256
EBITDA
$ 254,205
$ 45,212
$ 33,124
Gain on sale of asset disposal group
-
(10,967)
-
Loss on extinguishment of debt
24,089
967
14,505
Stock-based compensation (1)
47,665
25,014
32,505
Acquisition related charges
2,575
11,957
-
Corporate defense charges (2)
-
(1,726)
22,865
Non-risk prints and advertising expense
1,155
1,095
(25,659)
EBITDA, as adjusted
$ 329,689
$ 71,552
$ 77,340
(1)
The years ended March 31, 2013, 2012 and 2011 include cash settled SARs expense of $12.0 million, $15.3 million, and $3.8 million, respectively.
(2)
The year ended March 31, 2012 includes a benefit for charges associated with a shareholder activist matter of $2.0 million related to a negotiated settlement with a vendor of costs incurred and recorded in fiscal year 2011, and insurance recoveries of related litigation offset by other costs.
LIONS GATE ENTERTAINMENT CORP.
RECONCILIATION OF FOURTH QUARTER NET INCOME (LOSS)
TO EBITDA AND EBITDA, AS ADJUSTED
Three Months
Three Months
Ended
Ended
March 31,
March 31,
2013
2012
(Amounts in thousands)
Net income (loss)
$ 162,968
$ (22,746)
Depreciation and amortization
2,050
1,673
Contractual cash based interest
15,520
22,087
Noncash interest expense
4,511
4,885
Interest and other income
(978)
(892)
Income tax provision
(86,726)
1,838
EBITDA
$ 97,345
$ 6,845
Loss on extinguishment of debt
278
-
Stock-based compensation (1)
22,020
15,282
Acquisition related charges
548
9,632
Corporate defense charges
-
(2,770)
Non-risk prints and advertising expense
(4,554)
1,017
EBITDA, as adjusted
$ 115,637
$ 30,006
(1)
The three months ended March 31, 2013 and 2012 include cash settled SARs expense of $9.7 million and $12.9 million, respectively.
EBITDA is defined as earnings before interest, income tax provision or benefit, and depreciation and amortization. EBITDA is a non-GAAP financial measure.
EBITDA, as adjusted represents EBITDA as defined above adjusted for gain on sale of asset disposal group when applicable, loss on extinguishment of debt, stock-based compensation, acquisition related charges, certain corporate defense and related charges, and non-risk prints and advertising expense. Stock-based compensation represents compensation expenses associated with stock options, restricted share units and cash settled stock appreciation rights ("SARs") and equity settled SARs. Acquisition related charges represent severance and transaction costs associated with the acquisition of Summit. Corporate defense and related charges represent legal fees, other professional fees, and certain other costs associated with a shareholder activist matter. Non-risk prints and advertising expense represents the amount of theatrical marketing expense for third party titles that the Company funded and expensed for which a third party provides a guarantee that such expense will be recouped from the performance of the film (i.e. there is no risk of loss to the company) net of an amount of the estimated amortization of participation expense that would have been recorded if such amount had not been expensed. The amount is subtracted from EBITDA in the three months ended March 31, 2013 because there was no non-risk prints and advertising expense incurred and the amount represents the estimated amortization of participation expense that would have been recorded if such prior period amounts had not been expensed. EBITDA, as adjusted is a non-GAAP financial measure.
Management believes EBITDA and EBITDA, as adjusted to be a meaningful indicator of our performance that provides useful information to investors regarding our financial condition and results of operations. Presentation of EBITDA and EBITDA, as adjusted is a non-GAAP financial measure commonly used in the entertainment industry and by financial analysts and others who follow the industry to measure operating performance. While management considers EBITDA and EBITDA, as adjusted to be an important measure of comparative operating performance, it should be considered in addition to, but not as a substitute for, net income and other measures of financial performance reported in accordance with Generally Accepted Accounting Principles. EBITDA and EBITDA, as adjusted do not reflect cash available to fund cash requirements. Not all companies calculate EBITDA and EBITDA, as adjusted in the same manner and the measure as presented may not be comparable to similarly-titled measures presented by other companies.
LIONS GATE ENTERTAINMENT CORP.
RECONCILIATION OF ANNUAL FREE CASH FLOW
TO NET CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES
Year
Year
Year
Ended
Ended
Ended
March 31,
March 31,
March 31,
2013
2012
2011
(Amounts in thousands)
Net Cash Flows Provided By (Used In) Operating Activities
$ 276,119
$ (214,113)
$ 42,327
Purchases of property and equipment
(2,581)
(1,885)
(2,756)
Net borrowings under and (repayment) of production loans
6,941
143,131
(43,819)
Restricted cash held in trust
-
(13,992)
13,992
Free Cash Flow, as defined
$ 280,479
$ (86,859)
$ 9,744
LIONS GATE ENTERTAINMENT CORP.
RECONCILIATION OF FOURTH QUARTER FREE CASH FLOW
TO NET CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES
Three Months
Three Months
Ended
Ended
March 31,
March 31,
2013
2012
(Amounts in thousands)
Net Cash Flows Provided By (Used In) Operating Activities
$ 57,860
$ (2,261)
Purchases of property and equipment
(495)
(336)
Net borrowings under and (repayment) of production loans
65,920
58,785
Restricted cash held in trust
-
(13,992)
Free Cash Flow, as defined
$ 123,285
$ 42,196
Free cash flow is defined as net cash flows provided by (used in) operating activities, less purchases of property and equipment, plus or minus the net increase or decrease in production loans including production loan activity under the Company's Film Credit Facility, plus the decrease in restricted cash held in a trust for certain obligations until December 31, 2011. The adjustment for the production loans is made because the GAAP based cash flows from operations reflects a non-cash reduction of cash flows for the cost of films associated with production loans prior to the time the Company actually pays for the film. The Company believes that it is more meaningful to reflect the impact of the payment for these films in its free cash flow when the payments are actually made.
Free cash flow is a non-GAAP financial measure as defined in Regulation G promulgated by the Securities and Exchange Commission. This non-GAAP financial measure is in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with Generally Accepted Accounting Principles.
Management believes this non-GAAP measure provides useful information to investors regarding cash that our operating businesses generate whether classified as operating or financing activity (related to the production of our films) within our GAAP based statement of cash flows, before taking into account cash movements that are non-operational. Free cash flow is a non-GAAP financial measure commonly used in the entertainment industry and by financial analysts and others who follow the industry. Not all companies calculate free cash flow in the same manner and the measure as presented may not be comparable to similarly titled measures presented by other companies.
LIONS GATE ENTERTAINMENT CORP.
RECONCILIATION OF ANNUAL EBITDA
TO FREE CASH FLOW
Year
Year
Year
Ended
Ended
Ended
March 31,
March 31,
March 31,
2013
2012
2011
(Amounts in thousands)
EBITDA
$ 254,205
$ 45,212
$ 33,124
Plus: Amortization of film and television programs
966,027
603,660
529,428
Less: Cash paid for film and television programs (1)
(881,415)
(510,092)
(512,056)
Amortization of film and television programs in excess of cash paid
84,612
93,568
17,372
Plus: Non-cash stock-based compensation
35,838
9,957
29,204
Less: Gain on sale of asset disposal group
-
(10,967)
-
Plus: Equity interests (income) loss
3,075
(8,412)
20,712
Plus: Loss on extinguishment of debt
24,089
967
14,505
EBITDA adjusted for net investment in film and television programs,
non-cash stock-based compensation, equity interests (income) loss, and loss on extinguishment of debt
401,819
130,325
114,917
Changes in other operating assets and liabilities:
Restricted cash excluding funds held in trust
1,241
23,644
(29,075)
Accounts receivable, net
(4,948)
(256,208)
(64,203)
Other assets
(2,682)
1,298
(298)
Accounts payable and accrued liabilities
(50,154)
28,302
3,180
Participations and residuals
(6,875)
19,813
(1,369)
Deferred revenue
28,088
30,969
19,852
Accreted interest payment from equity method investee TV Guide
-
-
10,200
(35,330)
(152,182)
(61,713)
Purchases of property and equipment
(2,581)
(1,885)
(2,756)
Interest, taxes and other (2)
(83,429)
(63,117)
(40,704)
Free Cash Flow, as defined
$ 280,479
$ (86,859)
$ 9,744
(1)
Cash paid for film and television programs is calculated using the following amounts as presented in our consolidated statement of cash flows:
Change in investment in film and television programs
$ (890,276)
$ (690,304)
$ (487,391)
Change in film obligations
1,920
37,081
19,154
Individual production loans - borrowings
374,506
327,531
118,589
Individual production loans - repayments
(323,124)
(207,912)
(147,102)
Pennsylvania Regional Center credit facility - repayments
(500)
-
-
Film credit facility - borrowings
4,004
54,325
19,456
Film credit facility - repayments
(47,945)
(30,813)
(34,762)
Total cash paid for film and television programs
$ (881,415)
$ (510,092)
$ (512,056)
(2)
Interest, taxes and other consists of the following:
Contractual cash based interest
$ (75,322)
$ (62,430)
$ (38,879)
Interest and other income
4,036
2,752
1,742
Current income tax provision
(12,143)
(3,439)
(3,567)
Total interest, taxes and other
$ (83,429)
$ (63,117)
$ (40,704)
LIONS GATE ENTERTAINMENT CORP.
RECONCILIATION OF FOURTH QUARTER EBITDA
TO FREE CASH FLOW
Three Months
Three Months
Ended
Ended
March 31,
March 31,
2013
2012
(Amounts in thousands)
EBITDA
$ 97,345
$ 6,845
Plus: Amortization of film and television programs
307,152
248,449
Less: Cash paid for film and television programs (1)
(104,855)
(95,023)
Amortization of film and television programs in excess of cash paid
202,297
153,426
Plus: Non-cash stock-based compensation
18,954
2,358
Plus: Equity interests (income) loss
1,173
(2,407)
Plus: Loss on extinguishment of debt
278
-
EBITDA adjusted for net investment in film and television programs, non-cash stock-based compensation, equity interests (income) loss, and loss on extinguishment of debt
320,047
160,222
Changes in other operating assets and liabilities:
Restricted cash excluding funds held in trust
(6,883)
5,651
Accounts receivable, net
(133,265)
(199,280)
Other assets
5,268
(400)
Accounts payable and accrued liabilities
(11,163)
80,069
Participations and residuals
5,708
35,654
Deferred revenue
(40,217)
(17,607)
(180,552)
(95,913)
Purchases of property and equipment
(495)
(336)
Interest, taxes and other (2)
(15,715)
(21,777)
Free Cash Flow, as defined
$ 123,285
$ 42,196
(1)
Cash paid for film and television programs is calculated using the following amounts as presented in our consolidated statement of cash flows:
Change in investment in film and television programs
$ (186,401)
$ (138,498)
Change in film obligations
15,626
(15,310)
Individual production loans - borrowings
115,376
129,383
Individual production loans - repayments
(40,576)
(73,914)
Film credit facility - borrowings
10
10,611
Film credit facility - repayments
(8,890)
(7,295)
Total cash paid for film and television programs
$ (104,855)
$ (95,023)
(2)
Interest, taxes and other consists of the following:
Contractual cash based interest
$ (15,520)
$ (22,087)
Interest and other income
978
892
Current income tax provision
(1,173)
(582)
Total interest, taxes and other
$ (15,715)
$ (21,777)
This reconciliation is provided to illustrate the difference between our EBITDA and free cash flow which are both separately reconciled to their corresponding GAAP metrics.
LIONS GATE ENTERTAINMENT CORP.
RECONCILIATION OF ANNUAL INCOME (LOSS) BEFORE INCOME TAXES, NET
INCOME (LOSS), BASIC AND DILUTED EPS TO ADJUSTED INCOME (LOSS) BEFORE
INCOME TAXES, NET INCOME (LOSS), BASIC AND DILUTED EPS
Year Ended March 31, 2013
(Amounts in thousands, except per share amounts)
Income before
income taxes
Net income
Basic EPS
Diluted EPS
As reported
$ 156,371
$ 232,127
$ 1.73
$ 1.61
Tax valuation allowance (1)
-
(87,490)
(0.65)
(0.59)
As adjusted for valuation allowance
$ 156,371
$ 144,637
$ 1.08
$ 1.02
Loss on extinguishment of debt (2)
24,089
15,255
0.11
0.10
Stock-based compensation (3)
47,665
30,186
0.22
0.20
As adjusted for valuation allowance, loss on extinguishment of debt and stock-based compensation
$ 228,125
$ 190,078
$ 1.41
$ 1.32
Year Ended March 31, 2012
(Amounts in thousands, except per share amounts)
Income (Loss)
before
income taxes
Net loss
Basic EPS
Diluted EPS
As reported
$ (34,423)
$ (39,118)
$ (0.30)
$ (0.30)
Loss on extinguishment of debt (2)
967
967
0.01
0.01
Stock-based compensation (3)
25,014
25,014
0.19
0.19
As adjusted for loss on extinguishment of debt
and stock-based compensation
$ (8,442)
$ (13,137)
$ (0.10)
$ (0.10)
Year Ended March 31, 2011
(Amounts in thousands, except per share amounts)
Income (Loss)
before
income taxes
Net income (loss)
Basic EPS
Diluted EPS
As reported
$ (26,125)
$ (30,381)
$ (0.23)
$ (0.23)
Loss on extinguishment of debt (2)
14,505
14,505
0.11
0.11
Stock-based compensation (3)
32,505
32,505
0.25
0.25
As adjusted for loss on extinguishment of debt
and stock-based compensation
$ 20,885
$ 16,629
$ 0.13
$ 0.13
LIONS GATE ENTERTAINMENT CORP.
RECONCILIATION OF FOURTH QUARTER INCOME (LOSS) BEFORE INCOME TAXES, NET
INCOME (LOSS), BASIC AND DILUTED EPS TO ADJUSTED INCOME (LOSS) BEFORE
INCOME TAXES, NET INCOME (LOSS), BASIC AND DILUTED EPS
Three Months Ended March 31, 2013
(Amounts in thousands, except per share amounts)
Income before
income taxes
Net income
Basic EPS
Diluted EPS
As reported
$ 76,242
$ 162,968
$ 1.20
$ 1.10
Tax valuation allowance (1)
-
(87,490)
(0.64)
(0.59)
As adjusted for valuation allowance
$ 76,242
$ 75,478
$ 0.56
$ 0.51
Loss on extinguishment of debt (2)
278
176
-
0.01
Stock-based compensation (3)
22,020
13,945
0.10
0.09
As adjusted for valuation allowance, loss on extinguishment
of debt and stock-based compensation
$ 98,540
$ 89,599
$ 0.66
$ 0.61
Three Months Ended March 31, 2012
(Amounts in thousands, except per share amounts)
Loss before
income taxes
Net loss
Basic EPS
Diluted EPS
As reported
$ (20,908)
$ (22,746)
$ (0.17)
$ (0.17)
Stock-based compensation (3)
15,282
15,282
0.11
0.11
As adjusted for stock-based compensation
$ (5,626)
$ (7,464)
$ (0.06)
$ (0.06)
Income (loss) before income taxes, net income (loss) and basic and diluted EPS, as adjusted are adjusted for the following items:
(1) Tax valuation allowance: This adjusts net income to eliminate the discrete tax benefit recognized for financial reporting purposes upon the reduction of the Company's valuation allowance on its remaining net deferred tax assets (excluding certain deferred tax liabilities) as of March 31, 2013 that are expected to be realized in future tax returns. The adjustment presents net income for the year ended March 31, 2013 assuming the valuation allowance on these remaining deferred tax assets was not reversed, consistent with the prior period's presentations.
(2) Loss on early extinguishment of debt: This adjusts income (loss) before income taxes and net income (loss) to eliminate the loss on early extinguishment of debt. The adjustment to net income (loss) is net of the tax impact calculated using the tax rate applicable to each adjustment.
(3) Stock based compensation: Adjustments for stock-based compensation represents compensation expenses associated with stock options, restricted share units, cash settled SARs and equity settled SARs. The adjustment to net income is net of the tax impact calculated using the tax rate applicable to each adjustment.
Management believes that these non-GAAP measures provide useful information to investors regarding the Company's results as compared to historical periods. The Company uses these measures, among other measures, to evaluate the operating performance of the Company. The Company believes that the adjusted results provide relevant and useful information for investors because they clarify the Company's actual operating performance and allow investors to review our operating performance in the same way as our management. Since these measures are not calculated in accordance with generally accepted accounting principles, they should not be considered in isolation of, or as a substitute for income before income taxes, net income, basic and diluted EPS. Not all companies calculate income before income taxes, net income, basic and diluted EPS as adjusted in the same manner and the measures as presented may not be comparable to similarly titled measures presented by other companies.
..
SHFL Entertainment, Inc. Reports Record Revenue Of $77.4 Million In Second Quarter, Up 17% Year-Over-Year
SHFL Also Achieves Record Net Income of $11.8 Million and Record Adjusted EBITDA of $25.4 Million
PR NewswirePress Release: SHFL entertainment – 11 minutes ago...
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LAS VEGAS, June 4, 2013 /PRNewswire/ -- SHFL entertainment, Inc. (NASDAQ Global Select Market: SHFL) ("SHFL" or the "Company") today announced its results for the second quarter ended April 30, 2013.
(Logo: http://photos.prnewswire.com/prnh/20121008/LA88315LOGO)
"Our record second quarter results reflect a continuation of the strong worldwide demand for our innovative products, particularly in Australia and Asia," said Gavin Isaacs, SHFL's Chief Executive Officer. "What's more, we achieved 17% year-over-year growth against a strong comparable quarter last year that included over $2 million in sales from new openings. The MD3 card shuffler helped fuel this quarter's growth with record placements of 520 units, its strongest performance to date. Our slot machine, shuffler, and specialty table games businesses continued to gain momentum, with each segment reporting record revenue in the quarter. Given the 22% increase in net profit that we announced today, we strongly believe that consistent execution against our strategic initiatives is the right blueprint for building long-term, sustainable value for our shareholders."
Second Quarter 2013 Financial Highlights
•Total revenue grew to a record $77.4 million, representing a 17% increase from the prior year period. The Utility, Electronic Gaming Machine ("EGM"), and Proprietary Table Games ("PTG") businesses all saw double-digit growth over the same period last year.
•Recurring revenue grew 8% year-over-year to $31.2 million. A $1.2 million increase in PTG recurring revenue accounted for over half of recurring revenue growth.
•Net income increased 22% year-over-year to a record $11.8 million.
•Compared to the prior year quarter, diluted earnings per share ("EPS") increased 24% to $0.21. Excluding adjustments for expenses related to the terminated Ongame acquisition in last year's comparable quarter, EPS grew 5%.
•Gross margin, driven by an increase in Utility, EGM, and PTG revenue, grew 40 basis points year-over-year to 65%.
•Operating margin was relatively flat year-over-year at 22%.
•Selling, general and administrative ("SG&A") expenses grew to approximately $23.9 million, up $4.1 million year-over-year. The increase primarily relates to the following: $1.5 million in compensation and related expenses, driven by growth related to headcount increases as well as increased medical costs; $0.5 million was due to greater sales and profit-driven compensation expenses as a result of more revenue during the current quarter; $1.3 million was due to legal expenses, driven largely by costs associated with protecting and defending the Company's valuable intellectual property; $0.5 million was due to expanding the Company's iGaming sales team and offices; $0.4 million was related to advertising and tradeshow expenses. Slightly offsetting SG&A expenses were corporate development and due diligence expenses, which relate to the Company's evaluation of strategic M&A, and were $0.6 million less in the current quarter than the year-ago quarter; the prior year period included expenses from the terminated Ongame acquisition.
•Research & Development ("R&D") expenses increased $1.2 million year-over-year to $9.1 million. The increased costs were evenly divided between the hiring of additional iGaming personnel and compliance expenses for new content releases and territory expansion related to the EGM segment.
•Adjusted EBITDA grew 7% year-over-year to a record $25.4 million.
•Free Cash Flow ("FCF")1, a non-GAAP financial measure, was down $3.1 million year-over-year to $8.6 million. FCF was impacted by an approximately $2.3 million increase in cash taxes paid due to increased profitability in the U.S. and Australia, in addition to an increase of $2.5 million in capital expenditures, largely attributable to the Company's construction of a new consolidated facility in Las Vegas.
"Our diverse businesses continue to deliver solid financial results," said Linster Fox, SHFL's Chief Financial Officer. "We are confident that keeping our IP-rich businesses well-capitalized has been, and will continue to be, our most important use of cash. However, given our balance sheet's current strong position, we will continue to look at the best way to manage a balance between investing in our business and capital allocation for potential M&A, stock repurchases, and dividends."
Second Quarter 2013 Business Segment Highlights
Utility
•Utility recurring revenue grew 3% year-over-year to $13.7 million, primarily driven by MD3 card shuffler lease placements in the U.S.
•Total Utility revenue increased 22% over the prior year period to $30.5 million. Growth was driven by sales of the MD3 shuffler in Asia as well as the sale of previously leased i-Deal shufflers to a large casino customer in the U.S.
•Total shufflers on lease declined by 28 units year-over-year to 8,073. The decrease was driven by the sale of previously leased i-Deal shufflers to a large casino customer in the U.S. and slightly offset by new shuffler lease placements.
•Gross margin grew 120 basis points year-over-year to 66%, driven by the sale of previously leased i-Deal shufflers to a large casino customer in the U.S., in addition to shuffler sales in Asia and the U.S.
•Total MD3 units installed totaled 2,734, representing an increase of 1,781 units year-over-year. 520 of those units were placed in the second quarter. Approximately 50% of all MD3 units are currently on lease.
Proprietary Table Games2
•PTG recurring revenue increased 11% year-over-year to $13.0 million. Increased lease placements in all PTG categories - premium table games (Ultimate Texas Hold'em, Mississippi Stud), side bets (6 Card Bonus, Fire Bet), and progressives (Ultimate Texas Hold'em Progressive, Three Card Poker Progressive) – contributed to recurring revenue growth.
•Total PTG revenue increased 18% year-over-year to $14.0 million driven by strong lease placements and increased sales revenue.
•Gross margin increased 20 basis points to 82% due to the increase in total revenues.
•Total progressive units installed grew 12% year-over-year to 1,245, driven by installations of Ultimate Texas Hold'em Progressive and Three Card Poker Progressive.
Electronic Table Systems ("ETS")
•ETS recurring revenue grew 16% to $4.3 million, compared to $3.7 million in the prior year period, due largely to increased placements of SHFL Fusion Virtual (formerly Vegas Star) on participation in New York. To a lesser extent, increases in recurring revenue from SHFL Fusion Hybrid (formerly Rapid) and i-Table also contributed to the increase.
•Total ETS revenue grew 4% year-over-year to $7.1 million driven by increased sales of SHFL Fusion Virtual in Australia.
•ETS gross profit decreased 420 basis points year-over-year to 35% due to accelerated depreciation of Table Master units on lease in advance of the new Table Master Fusion launch.
Electronic Gaming Machines
•Total EGM revenue grew 16% year-over-year to a record $25.7 million, driven primarily by strong sales in Australia and Asia.
•Gross margin remained relatively flat year-over-year at 62%.
•There were 1,192 net sold EGM units in the quarter compared to 1,044 in the year-ago quarter. The current year period included the removal of 78 older eStar units on lease, slightly offset by the addition of 36 Equinox units on lease.
•Approximately 100 units of the Duo Fu Duo Cai progressive jackpot link were sold in Macau in the quarter.
Further detail and analysis of the Company's financial results for the second quarter ended April 30, 2013, is included in its Form 10-Q, which the Company intends to file with the Securities and Exchange Commission today, June 4, 2013.
Webcast & Conference Call Information
Company executives will provide additional perspective on the Company's second quarter results during a conference call on June 4, 2013 at 2:00 pm Pacific Time. Those interested in participating in the call may do so by dialing (201) 689-8263 or toll-free (877) 407-0792 and requesting SHFL entertainment's Second Quarter 2013 Conference Call. A hardcopy of the presentation materials may be printed from the SHFL entertainment, Inc. Investor Relations website, http://ir.shfl.com, shortly before the start of the call. In conjunction with the call, a live audio webcast and a Company slide presentation highlighting second quarter performance may be accessed at http://ir.shfl.com. In order to access the live audio webcast please allow at least 15 minutes before the start of the call to visit SHFL entertainment's Investor Relations website and download/install any necessary audio/video software for the webcast. Immediately following the call and through July 4, 2013, a playback can be heard 24-hours a day by dialing (858) 384-5517 or toll-free (877) 870-5176; replay pin number 414102. Highlights from the conference call can be accessed on the Company's Investor Relations Twitter account, www.twitter.com/shfl_news.
About SHFL entertainment, Inc.
SHFL entertainment, Inc. is a leading global gaming supplier committed to making gaming more fun for players and more profitable for operators through product innovation, and superior quality and service. The Company operates in legalized gaming markets across the globe and provides state-of-the-art, value-add products in five distinct categories: Utility products, which include automatic card shufflers and roulette chip sorters; Proprietary Table Games, which includes live games, side bets and progressives; Electronic Table Systems, which include various e-Table game configurations; Electronic Gaming Machines, which include video slot machines; and newly introduced iGaming, which features online versions of SHFL entertainment's table games, social gaming, and mobile applications. The Company is included in the S&P SmallCap 600 Index. Information about the Company and its products can be found on the Internet at www.shfl.com, or on Facebook, Twitter and YouTube.
Forward Looking Statements
This release contains forward-looking statements within the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. All statements included in this release other than statements that are purely historical are forward-looking statements. Forward-looking statements in this press release include without limitation: (a) the Company's belief that its innovation will continue to drive competition; (b) the Company's intention to continue to execute against our strategic initiatives; (c) the Company's belief that EPS, Adjusted EBITDA and FCF are useful, widely referenced performance measures in the Company's industry and the Company's belief that references to them are helpful to investors; (d) the Company's estimates of diluted EPS, Adjusted EBITDA and FCF and the assumptions upon which they are based; (e) the Company's belief that investing in its intellectual property is an important use of cash; (f) the Company's ability to develop products that achieve commercial success in the very competitive marketplace in which the Company operates; (g) the fact that the Company competes in a single industry and is dependent on the success of its customers and the risks that impact the Company's customers, including a change in demand for gaming, a downturn in general worldwide economic conditions, or the gaming industry may adversely impact the Company or its results of operations. The Company's beliefs, expectations, forecasts, objectives, anticipations, intentions and strategies regarding the future, including without limitation those concerning expected operating results, revenues and earnings are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from results contemplated by the forward-looking statements, including but not limited to: (a) unexpected changes in demand for or increased competition with the Company's products; (b) unexpected factors that limit or eliminate the Company's ability to implement its strategic plan or undertake or complete any of its growth initiatives; (c) inaccuracies in the Company's assumptions as to the financial measures that investors use or the manner in which such financial measures may be used by such investors; (d) reduced demand for or increased competition with the Company's products that affects its EPS and Adjusted EBITDA; (e) unexpected changes to the Company's balance sheet or cash flows that would impede the Company's ability to pursue protection and pursuit of its intellectual property; (f) the Company's inability to accurately gauge the commercial appeal of its products; and (g) unexpected changes in the market and economic conditions and reduced demand for or increased competition with the Company's products. Additional information on risk factors that could potentially affect the Company's financial results may be found in documents filed by the Company with the Securities and Exchange Commission, including the Company's current reports on Form 8-K, quarterly reports on Form 10-Q and its latest annual report on Form 10-K, and are based on information available to the Company on the date hereof. The Company does not intend, and assumes no obligation, to update any forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this press release.
1
Free Cash Flow is Adjusted EBITDA less capital expenditures and cash paid for taxes.
2
As of FY 13, revenues from the iGaming segment are being reported separately from the Proprietary Table Games segment. Please see Business Segment Data table for more details.
SHFL ENTERTAINMENT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
Six Months Ended
April 30,
April 30,
2013
2012
2013
2012
Revenue:
Product leases and royalties
$ 29,240
$ 26,947
$ 58,592
$ 52,900
Product sales and service
48,174
39,107
77,606
69,207
Total revenue
77,414
66,054
136,198
122,107
Costs and expenses:
Cost of leases and royalties
10,582
9,427
20,454
18,378
Cost of sales and service
16,738
14,138
27,778
25,419
Gross profit
50,094
42,489
87,966
78,310
Selling, general and administrative
23,866
19,804
43,912
36,984
Research and development
9,101
7,925
17,348
15,452
Total costs and expenses
60,287
51,294
109,492
96,233
Income from operations
17,127
14,760
26,706
25,874
Other income (expense):
Interest income
188
174
342
313
Interest expense
(299)
(378)
(523)
(855)
Other, net
315
(146)
270
29
Total other income (expense)
204
(350)
89
(513)
Income before income taxes
17,331
14,410
26,795
25,361
Income tax provision
5,491
4,675
7,891
7,977
Net income
$ 11,840
$ 9,735
$ 18,904
$ 17,384
Basic earnings per share:
$ 0.21
$ 0.17
$ 0.33
$ 0.31
Diluted earnings per share:
$ 0.21
$ 0.17
$ 0.33
$ 0.31
Weighted average shares outstanding:
Basic
56,984
55,751
56,832
55,408
Diluted
57,721
56,653
57,541
56,154
SHFL ENTERTAINMENT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
(Unaudited)
April 30,
October 31,
2013
2012
ASSETS
Current assets:
Cash and cash equivalents
$40,808
$24,160
Accounts receivable, net of allowance for bad debts of $359 and $491
47,506
45,708
Investment in sales-type leases and notes receivable, net of allowance
for bad debts of $224 and $8
9,342
9,287
Inventories
28,079
21,906
Prepaid income taxes
8,806
4,053
Deferred income taxes
4,847
4,622
Other current assets
8,308
6,901
Total current assets
147,696
116,637
Investment in sales-type leases and notes receivable, net of current portion
6,499
6,310
Products leased and held for lease, net
32,235
34,639
Property and equipment, net
23,717
17,417
Intangible assets, net
58,591
62,836
Goodwill
88,156
84,950
Deferred income taxes
3,548
5,183
Other assets
2,588
3,079
Total assets
$363,030
$331,051
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable
$12,102
$6,702
Accrued liabilities and other current liabilities
18,098
22,402
Deferred income taxes
16
16
Customer deposits
3,206
3,383
Income tax payable
3,189
4,179
Deferred revenue
6,177
4,799
Current portion of long-term debt
530
-
Total current liabilities
43,318
41,481
Long-term debt
7,299
1,303
Other long-term liabilities
2,085
2,004
Deferred income taxes
1,998
1,493
Total liabilities
54,700
46,281
Commitments and contingencies (See Note 11)
Shareholders' equity:
Common stock, $0.01 par value; 151,368 shares authorized;
56,384 and 55,973 shares issued and outstanding
564
560
Additional paid-in capital
140,517
135,758
Retained earnings
138,348
119,444
Accumulated other comprehensive income
28,901
29,008
Total shareholders' equity
308,330
284,770
Total liabilities and shareholders' equity
$363,030
$331,051
SHFL ENTERTAINMENT, INC.
SUPPLEMENTAL DATA
(Unaudited, in thousands)
Three Months Ended
Six Months Ended
April 30,
April 30,
2013
2012
2013
2012
Cash Flow Data:
Cash provided by operating activities
$ 5,042
$ 4,161
$ 18,253
$ 20,604
Cash used in investing activities:
Payments for products leased and held for lease
$ (3,778)
$ (2,856)
$ (6,623)
$ (6,706)
Purchases of property and equipment
(4,944)
(3,358)
(6,371)
$ (4,240)
Purchases of intangible assets
(91)
(73)
(139)
(4,103)
Acquisition of business
(1,590)
-
(1,590)
(5,500)
Proceeds from sale of leased assets
3,987
988
5,140
1,029
Proceeds from sale of assets
-
-
-
-
Other
(235)
(236)
(475)
(454)
$ (6,651)
$ (5,535)
$(10,058)
$(19,974)
Cash provided by (used in) financing activities
$ 7,766
$ (2,429)
$ 8,602
$ (695)
Free cash flow (2)
$ 8,623
$11,758
$ 18,240
$ 19,648
Reconciliation of net income to Adjusted EBITDA:
Net income
$11,840
$ 9,735
$ 18,904
$ 17,384
Other expense (income)
(204)
350
(89)
513
Share-based compensation
1,478
1,117
2,887
2,049
Income tax provision
5,491
4,675
7,891
7,977
Depreciation and amortization
6,768
6,380
13,656
12,397
Ongame acquisition expenses
-
1,448
-
1,653
Adjusted EBITDA (1)
$25,373
$23,705
$ 43,249
$ 41,973
1.
Adjusted EBITDA is earnings before other expense (income), provision for income taxes, depreciation and amortization expense, Ongame acquisition expenses, and share-based compensation. Adjusted EBITDA is presented exclusively as a supplemental disclosure because management believes that it is a useful performance measure and is widely used to measure performance, and as a basis for valuation, within the Company's industry. Adjusted EBITDA is not calculated in the same manner by all companies and, accordingly, may not be an appropriate measure for comparison. Management uses Adjusted EBITDA as a measure of the operating performance and to compare the operating performance 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 equipment suppliers have historically reported Adjusted EBITDA as a supplement to financial measures in accordance with U.S. generally accepted accounting principles ("GAAP"). Adjusted EBITDA should not be considered as an alternative to operating income (loss), as an indicator of the Company's performance, as an alternate 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 and amortization 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 (loss), 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.
2.
Free cash flow is Adjusted EBITDA less capital expenditures and cash paid for taxes.
SHFL ENTERTAINMENT, INC.
BUSINESS SEGMENT DATA
(Unaudited, in thousands)
Three Months Ended
Six Months Ended
April 30,
April 30,
2013
2012
2013
2012
Utility:
Revenue
$30,517
$24,990
$ 55,801
$ 44,606
Gross profit
20,077
16,154
36,134
27,337
Gross margin
65.8%
64.6%
64.8%
61.3%
Proprietary Table Games:
Revenue
$14,003
$11,886
$ 26,831
$ 23,311
Gross profit
11,509
9,750
22,014
19,042
Gross margin
82.2%
82.0%
82.0%
81.7%
Electronic Table Systems:
Revenue
$ 7,113
$ 6,866
$ 14,218
$ 15,130
Gross profit
2,483
2,684
5,453
6,813
Gross margin
34.9%
39.1%
38.4%
45.0%
Electronic Gaming Machines:
Revenue
$25,745
$22,244
$ 39,062
$ 36,742
Gross profit
15,994
13,833
24,087
22,800
Gross margin
62.1%
62.2%
61.7%
62.1%
iGaming:
Revenue
$ 36
$ 68
$ 286
$ 2,318
Gross profit
31
68
278
2,318
Gross margin
86.1%
100.0%
97.2%
100.0%
Total:
Revenue
$77,414
$66,054
$136,198
$122,107
Gross profit
50,094
42,489
87,966
78,310
Gross margin
64.7%
64.3%
64.6%
64.1%
Adjusted EBITDA
25,373
23,705
43,249
41,973
as a percentage of total revenue
32.8%
35.9%
31.8%
34.4%
Income from operations
$17,127
$14,760
$ 26,706
$ 25,874
as a percentage of total revenue
22.1%
22.3%
19.6%
21.2%
China Automotive Systems Reports First-Quarter Record Net Sales and Higher Net Income
WUHAN, China, May 14, 2013 /PRNewswire-FirstCall/ -- China Automotive Systems, Inc. ("CAAS" or the "Company") (CAAS), a leading power steering components and systems supplier in China, today announced its unaudited financial results for the first quarter ended March 31, 2013.
First Quarter 2013 Highlights
•Net sales increased by 20.1% to a first-quarter record of $97.2 million, compared to $80.9 million in the first quarter of 2012.
•Gross profit increased by 26.0% to $19.4 million, compared to $15.4 million in the first quarter of 2012; gross margin was 20.0%, compared to 19.0% in the first quarter of 2012.
•Income from operations increased by 47.6% to $9.3 million, compared to $6.3 million in the first quarter of 2012, and the operating margin was 9.6%, compared to 7.8% in the first quarter of 2012.
•Net income attributable to parent company's common shareholders was $5.9 million, or diluted earnings per share of $0.21, compared to the net loss attributable to parent company's common shareholders of $0.8 million, or diluted loss per share of $0.03, in the first quarter of 2012.
•Cash and cash equivalents were an all-time high of $90.4 million at March 31, 2013, an increase from $87.6 million at December 31, 2012.
Mr. Qizhou Wu, chief executive officer of CAAS, commented, "In the first quarter of 2013, we achieved record net sales for any first quarter in our history and increased our market share as our sales growth rate reached 20.1%, compared to the 13.2% growth rate of the China automotive market for such period as reported by the China Association of Automobile Manufacturers (CAAM). We sold more high-quality steering systems to our large Chinese customer base in China, including to our new Sino-foreign joint venture customer, SAIC-GM-Wuling ("SGMW"), who has entered into a significant purchase agreement with us recently, and we shipped more of our advanced electric power steering systems to domestic customers. Our leading market share in China increased as our close relationships with many local OEMs resulted in our becoming their preferred supplier for safety-related steering systems. Our first quarter sales were also lifted by strong exports to an OEM customer in North America. With our product portfolio, we have positioned ourselves to benefit from the vehicle growth in the world's two largest automotive markets, China and the United States."
Mr. Jie Li, chief financial officer of CAAS, commented, "Our cash and cash equivalents reached an all-time high of $90.4 million at March 31, 2013, and we believe we will continue to generate cash internally over time. We will use our financial strength to create advanced products to sustain our market leadership in China and create a growing presence in international markets."
First Quarter of 2013
In the first quarter of 2013, net sales increased by 20.1% to a first-quarter record of $97.2 million, compared to $80.9 million in the same quarter of 2012. The net sales increase was mainly due to significant sales to SGMW and an increase in sales to Brilliance Auto, an increase in automotive vehicle sales in China, the sales of new products to a customer in North America, and the appreciation of the Renminbi ("RMB") versus the U.S. dollar, which were partially offset by the lower average selling prices of the products sold in China.
Gross profit increased by 26.0% to $19.4 million in the first quarter of 2013, compared to $15.4 million in the first quarter of 2012. The gross margin was 20.0% in the first quarter of 2013, versus 19.0% in the first quarter of 2012. The increase in gross profit and margin was primarily due to greater sales volume, and lower unit cost mainly as a result of reduced raw material expenses and technical improvements to enhance production efficiency.
Selling expenses rose by 45.5% to $3.2 million in the first quarter of 2013, compared to $2.2 million in the first quarter of 2012. Selling expenses represented 3.3% of net sales in the first quarter of 2013, compared to 2.7% in the first quarter of 2012. The increase was mainly due to higher compensation and transportation expenses due to an increase in the number of sales personnel.
General and administrative expenses ("G&A expenses") increased by 20.6% to $4.1 million in the first quarter of 2013, compared to $3.4 million in the same quarter of 2012. The increase was mainly due to higher attorney expenses. G&A expenses represented 4.2% of net sales in the first quarter of 2013 and in the first quarter of 2012.
Research and development expenses ("R&D expenses") decreased by 5.6% to $3.4 million in the first quarter of 2013, compared to $3.6 million in the first quarter of 2012. The decrease in R&D expenses was mainly due to lower personnel-related expenses and reduced external support fees. R&D expenses represented 3.5% of net sales in the first quarter of 2012, which was a decrease from 4.4% in the first quarter of 2012.
Income from operations increased by 47.6% to $9.3 million in the first quarter of 2013, compared to $6.3 million in the same quarter of 2012. As a percentage of net sales, the operating margin was 9.6% in the first quarter of 2013, compared to 7.8% in the first quarter of 2012. The increase was mainly due to the $4.0 million rise in gross profit and stringent control of operating costs in the first quarter of 2013.
Net financial expenses decreased by 77.8% to $0.2 million in the first quarter of 2013, compared to $0.9 million in the first quarter of 2012. This reduction was primarily due to a decrease in the interest expenses as a result of the redemption of the remaining convertible notes by the Company on May 25, 2012.
There was no gain or loss on change in fair value of derivative in the first quarter of 2013 as all the convertible notes had been redeemed by the second quarter of 2012, compared to a non-cash loss of $3.9 million in the first quarter of 2012 due to movements in the Company's stock prices during such quarter.
Income before income tax expenses and equity in earnings of affiliated companies was $9.2 million in the first quarter of 2013, compared to $1.6 million in the first quarter of 2012. The increase in income before income tax expenses and equity in earnings of affiliated companies in the first quarter of 2013 was mainly due to an increase in operating income of $3.0 million, a decrease in financial expenses of $0.7 million, and a decrease in the loss in fair value of derivatives of $3.9 million in the first quarter of 2012, while there was no such loss in the first quarter of 2013.
Net income attributable to parent company's common shareholders was $5.9 million in the first quarter of 2013, compared to net loss attributable to parent company's common shareholders of $0.8 million, including net income of $0.03 million from discontinued operations, in the corresponding quarter of 2012. Diluted earnings per share were $0.21 in the first quarter of 2013, compared to diluted loss per share of $0.03 in the first quarter of 2012. The weighted average number of diluted common shares outstanding was 28,050,937 in the first quarter of 2013, compared to 28,260,302 in the first quarter of 2012.
As of March 31, 2013, total cash and cash equivalents were $90.4 million, compared to $87.6 million as of December 31, 2012. Working capital was $144.5 million as of March 31, 2013, compared to $138.7 million as of December 31, 2012.
Business Outlook
Management reiterates its revenue guidance of 10% year-over-year growth in the full year 2013. This target is based on the Company's current views on operating and market conditions, which are subject to change.
Conference Call
Management will conduct a conference call on May 14th at 8:00 A.M. EDT / 8:00 P.M. Beijing Time to discuss these results. A question and answer session will follow management's presentation. To participate, please call the following numbers 10 minutes before the call start time and ask to be connected to the "China Automotive Systems" conference call:
Phone Number:
+1-877-407-8031 (North America)
Phone Number:
+1-201-689-8031 (International)
In addition, the conference call will be broadcast live over the Internet at http://www.caasauto.com. Please go to the web site at least 15 minutes early to register, download and install any necessary software.
A telephone replay of the call will be available after the conclusion of the conference call through 11:59 P.M. EDT on June 14, 2013. The dial-in details for the replay are:
U.S. Toll Free Number:
+1-877-660-6853
International dial-in number:
+1-201-612-7415
Use Conference ID "413624" to access the replay.
About China Automotive Systems, Inc.
Based in Hubei Province, the People's Republic of China, China Automotive Systems, Inc. is a leading supplier of power steering components and systems to the Chinese automotive industry, operating through ten Sino-foreign joint ventures. The Company offers a full range of steering system parts for passenger automobiles and commercial vehicles. The Company currently offers four separate series of power steering with an annual production capacity of over 4.0 million sets, steering columns, steering oil pumps and steering hoses. Its customer base is comprised of leading Chinese auto manufacturers, such as China FAW Group, Corp., Dongfeng Auto Group Co., Ltd., BYD Auto Company Limited, Beiqi Foton Motor Co., Ltd., Chery Automobile Co., Ltd., and Chrysler North America. For more information, please visit: http://www.caasauto.com
Forward Looking Statements
This press release contains statements that are "forward-looking statements" as defined under the Private Securities Litigation Reform Act of 1995. Forward-looking statements represent our estimates and assumptions only as of the date of this press release. These forward-looking statements include statements regarding the qualitative and quantitative effects of the accounting errors, the periods involved, the nature of the Company's review and any anticipated conclusions of the Company or its management and other statements that are not historical facts. Our actual results may differ materially from the results described in or anticipated by our forward-looking statements due to certain risks and uncertainties. As a result, the Company's actual results could differ materially from those contained in these forward-looking statements due to a number of factors, including those described under the heading "Risk Factors" in the Company's Form 10-K annual report filed with the Securities and Exchange Commission on March 27, 2013, and in documents subsequently filed by the Company from time to time with the Securities and Exchange Commission. We expressly disclaim any duty to provide updates to any forward-looking statements made in this press release, whether as a result of new information, future events or otherwise.
For further information, please contact:
Jie Li
Chief Financial Officer
China Automotive Systems, Inc.
Email: jieli@chl.com.cn
Kevin Theiss
Investor Relations
Grayling
Tel: +1-646-284-9409
Email: kevin.theiss@grayling.com
China Automotive Systems, Inc. and Subsidiaries
Condensed Unaudited Consolidated Balance Sheets
(In thousands of USD unless otherwise indicated)
March 31, 2013
December 31, 2012
ASSETS
Current assets:
Cash and cash equivalents
$
90,352
$
87,649
Pledged cash deposits
26,230
26,481
Accounts and notes receivable, net - unrelated parties
230,493
211,306
Accounts and notes receivable, net - related parties
15,120
12,286
Advance payments and others - unrelated parties
4,774
3,127
Advance payments and others - related parties
672
779
Inventories
45,270
43,542
Current deferred tax assets
3,600
4,392
Total current assets
416,511
389,562
Non-current assets:
Property, plant and equipment, net
81,168
81,691
Intangible assets, net
695
676
Other receivables, net - unrelated parties
1,002
849
Other receivables, net - related parties
80
107
Advance payment for property, plant and equipment - unrelated parties
1,330
1,001
Advance payment for property, plant and equipment - related parties
3,808
4,162
Long-term investments
3,733
3,665
Non-current deferred tax assets
4,206
4,112
Total assets
$
512,533
$
485,825
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Bank and government loans
$
46,934
$
40,284
Accounts and notes payable - unrelated parties
176,476
166,380
Accounts and notes payable - related parties
4,864
4,521
Customer deposits
903
870
Accrued payroll and related costs
5,675
5,472
Accrued expenses and other payables
24,022
23,063
Accrued pension costs
4,177
4,255
Taxes payable
5,989
5,593
Amounts due to shareholders/directors
293
332
Deferred tax liabilities
63
46
Advances payable
2,600
-
Total current liabilities
271,996
250,816
Long-term liabilities:
Advances payable
-
2,609
Total liabilities
271,996
253,425
Commitments and Contingencies
Stockholders' equity-
Common stock, $0.0001 par value - Authorized - 80,000,000 shares; Issued– 28,260,302 and 28,260,302 shares at March 31, 2013 and December 31, 2012, respectively
3
3
Additional paid-in capital
39,371
39,371
Retained earnings-
Appropriated
9,953
9,953
Unappropriated
125,269
119,329
Accumulated other comprehensive income
26,406
25,898
Treasury stock - 217,283 and 217,283 shares at March 31, 2013 and December 31, 2012, respectively
(1,000)
(1,000)
Total parent company stockholders' equity
200,002
193,554
Non-controlling interests
40,535
38,846
Total stockholders' equity
240,537
232,400
Total liabilities and stockholders' equity
$
512,533
$
485,825
The condensed consolidated balance sheet of the Company as of December 31, 2012 has been adjusted to reflect the discontinued business of Zhejiang Henglong & Vie Pump-Manu Co., Ltd. ("Zhejiang business"), the Company's 51% equity interest in which was disposed of in May 2012.
China Automotive Systems, Inc. and Subsidiaries
Condensed Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss)
(In thousands of USD unless otherwise indicated)
Three Months Ended March 31,
2013
2012
Net product sales
Unrelated parties
$
89,021
$
73,027
Related parties
8,143
7,893
97,164
80,920
Cost of product sold
Unrelated parties
71,137
59,363
Related parties
6,665
6,179
77,802
65,542
Gross profit
19,362
15,378
Gain on other sales
674
112
Less: Operating expenses
Selling expenses
3,164
2,180
General and administrative expenses
4,126
3,382
Research and development expenses
3,400
3,592
Total operating expenses
10,690
9,154
Income from operations
9,346
6,336
Other income, net
70
72
Financial expenses, net
(201)
(912)
Gain on change in fair value of derivative
-
(3,861)
Income before income tax expenses and equity in earnings of affiliated companies
9,215
1,635
Less: Income taxes
1,747
1,461
Equity in earnings of affiliated companies
58
80
Income from continuing operations
7,526
254
Discontinued operations - net of income tax
-
31
Net income
7,526
285
Net income attributable to non-controlling interests
1,586
1,054
Net income (loss) attributable to parent company's common shareholders
$
5,940
$
(769)
Comprehensive income:
Income from continuing operations
$
7,526
$
254
Income from discontinued operations
-
31
Net income
7,526
285
Other comprehensive income:
Foreign currency translation gain, net of tax - continuing operations
612
481
Foreign currency translation gain, net of tax - discontinued operations
-
21
Foreign currency translation gain, net of tax
612
502
Comprehensive income - continuing operations
8,138
735
Comprehensive income - discontinued operations
-
52
Comprehensive income
8,138
787
Comprehensive income attributable to non-controlling interests
1,689
1,099
Comprehensive income attributable to parent company
$
6,449
$
(312)
Net income (loss) attributable to parent company's common shareholders per share
Basic -
Income (loss) from continuing operations attributable to shareholders
$
0.21
$
(0.03)
Income (loss) per share from discontinued operations
-
-
Basic
$
0.21
$
(0.03)
Diluted-
Income (loss) from continuing operations attributable to shareholders
$
0.21
$
(0.03)
Income (loss) per share from discontinued operations
-
-
Diluted
$
0.21
$
(0.03)
Weighted average number of common shares outstanding
Basic
28,043,019
28,260,302
Diluted
28,050,937
28,260,302
The condensed unaudited consolidated statement of operations and comprehensive income of the Company for the three months ended March 31, 2012 has been adjusted to reflect the discontinued Zhejiang business, the Company's 51% equity interest in which was disposed of in May 2012.
China Automotive Systems, Inc. and Subsidiaries
Condensed Unaudited Consolidated Statements of Cash Flows
(In thousands of USD unless otherwise indicated)
Three Months Ended March 31,
2013
2012
Cash flows from operating activities:
Net income
$
7,526
$
285
Adjustments to reconcile net income from operations to net cash provided by (used in) operating activities:
Depreciation and amortization
3,468
3,507
Increase (decrease) in allowance for doubtful accounts
(95)
69
Inventory write downs
224
117
Deferred income taxes
738
119
Equity in earnings of affiliated companies
(58)
(80)
Loss on change in fair value of derivative
-
3,861
Amortization of debt issue cost
38
-
Loss (gain) on fixed assets disposals
(165)
2
Changes in operating assets and liabilities:
(Increase) decrease in:
Pledged deposits
321
(122)
Accounts and notes receivable
(21,381)
1,610
Advance payments and others
(1,529)
902
Inventories
(1839)
(6,746)
Increase (decrease) in:
Accounts and notes payable
9,985
954
Customer deposits
32
(567)
Accrued payroll and related costs
189
(399)
Accrued expenses and other payables
900
1,696
Accrued pension costs
(89)
229
Taxes payable
382
2,447
Advances payable
(16)
634
Net cash provided by (used in) operating activities
(1,369)
8,518
Cash flows from investing activities:
Increase in other receivables
(122)
(600)
Proceeds from disposal of equipment
405
101
Payments to acquire property, plant and equipment
(2,843)
(1,992)
Payments to acquire intangible assets
(60)
(4)
Net cash used in investing activities
(2,620)
(2,495)
Cash flows from financing activities:
Proceeds from government and bank loan
8,101
1,589
Repayments of bank loan
(1,595)
-
Dividends paid to the non-controlling interests
-
(796)
Increase (decrease) in amounts due to shareholders/directors
(40)
1
Net cash provided by financing activities
6,466
794
Effects of exchange rate on cash and cash equivalents
226
75
Net increase in cash and cash equivalents
2,703
6,892
Cash and cash equivalents at beginning of period
87,649
72,960
Cash and cash equivalents at end of period
$
90,352
$
79,852
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Three Months Ended
March 31,
2013
2012
Cash paid for interest
$
374
$
789
Cash paid for income taxes
$
1,263
$
552
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Three Months Ended
March 31,
2013
2012
Advance payments for acquiring property, plant and
equipment
$
5,138
$
5,960
Dividends payable to non-controlling interests
$
163
$
807
Sanderson Farms, Inc. Reports Results for Second Quarter of Fiscal 2013
Sanderson Farms, Inc. (SAFM) today reported results for its second fiscal quarter and six months ended April 30, 2013.
Net sales for the second quarter of fiscal 2013 were $621.2 million compared with $595.0 million for the same period a year ago. For the quarter, net income was $24.4 million, or $1.06 per share, compared with net income of $23.9 million, or $1.04 per share, for the second quarter of fiscal 2012.
Net sales for the first six months of fiscal 2013 were $1,217.0 million compared with $1,112.9 million for the same period of fiscal 2012. Net income for the first half of the year totaled $17.4 million, or $0.76 per share, compared with net income of $15.9 million, or $0.69 per share, for the first six months of last year.
“The results for our second quarter of fiscal 2013 reflect improved market conditions driven primarily by an overall increase in demand for poultry products," said Joe F. Sanderson, Jr., chairman and chief executive officer of Sanderson Farms, Inc. “Our net sales were 4.4 percent higher compared with the second quarter of fiscal 2012, reflecting higher average sales prices of chicken. While our volumes reflect the production cuts we put in place last fall, demand for chicken remains strong from our retail grocery store and export customers. In addition, while customer traffic through food service establishments remains challenged by macroeconomic factors, several new chicken items on quick serve menus and chicken promotions in casual dining restaurants, coupled with relatively high priced beef, contributed to better market prices during the quarter for products produced at our food service plants.
“Our profitability for the second quarter continued to be adversely affected by relatively high feed costs,” added Sanderson. “Feed costs in flocks processed increased 14.3 percent compared with last year’s second fiscal quarter, and remain high relative to historical costs. Because of the tight supply of both corn and soybeans, we expect grain prices to remain high and volatile at least until markets get some visibility on the quantity and quality of this year’s corn and soybean crops. The late planting season caused by cold and wet weather across much of the corn belt is contributing to price volatility. That said, we have priced most all of our grain needs through July at levels that will allow us to slightly reduce our feed costs per pound each successive month through July.”
According to Sanderson, overall market prices for poultry products were higher during the second quarter of fiscal 2013 compared with the same quarter a year ago. As measured by a simple average of the Georgia dock price for whole chickens, prices increased approximately 9.9 percent in the Company's second fiscal quarter compared with the same period in 2012 and remain at record levels. Bulk leg quarter market prices were flat with last year's second quarter, and continue to reflect strong export demand. Boneless breast meat prices during the second quarter were 14.2 percent higher than the prior year period, and have continued to move higher in May. Jumbo wing prices were down 4.4 percent for the second quarter of 2013 compared with the same period last year. Prices paid for corn and soybean meal, the Company’s primary feed ingredients, increased 15.9 percent and 37.2 percent, respectively, compared with the second quarter of fiscal 2012.
“Looking ahead, we are reasonably optimistic as we head into the summer months and what is typically a period of better demand for chicken. While grain costs remain above historical levels, demand for chicken products is strong. Weekly broiler egg sets continue to run slightly above last year’s numbers, but breeder placements remain lower and it appears the reduced size of the breeder flock will constrain production over the short term despite higher industry returns. While macroeconomic conditions have continued to affect consumer behavior, market prices for boneless breast meat sold to our food service customers improved through April and May, and market prices for retail grocery store products have also moved higher. Regardless of market conditions, however, we will maintain our focus on our operating performance and sales execution,” Sanderson concluded.
Sanderson Farms will hold a conference call to discuss this press release today, May 30, 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 or through www.earnings.com. To listen to the live call, please go to the Web site at least 15 minutes early to register and 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 June 30, 2013. Those without Internet access may listen and participate in the call by dialing 888-596-2572, confirmation code 6119362.
Sanderson Farms, Inc. is engaged in the production, processing, marketing and distribution of fresh and frozen chicken and other prepared chicken 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 Quarterly Report on Form 10-Q for the quarter ended April 30, 2013, and the following:
(1) Changes in the market price for the Company’s finished products and feed grains, both of which may fluctuate substantially and exhibit cyclical characteristics typically associated with commodity markets.
(2) Changes in economic and business conditions, monetary and fiscal policies or the amount of growth, stagnation or recession in the global or U.S. economies, either of which may affect the value of inventories, the collectability of accounts receivable or the financial integrity of customers, and the ability of the end user or consumer to afford protein.
(3) Changes in the political or economic climate, trade policies, laws and regulations or the domestic poultry industry of countries to which the Company or other companies in the poultry industry ship product, and other changes that might limit the Company’s or the industry’s access to foreign markets.
(4) Changes in laws, regulations, and other activities in government agencies and similar organizations applicable to the Company and the poultry industry and changes in laws, regulations and other activities in government agencies and similar organizations related to food safety.
(5) Various inventory risks due to changes in market conditions, including, but not limited to, the risk that market values of live and processed poultry inventories might be lower than the cost of such inventories, requiring a downward adjustment to record the value of such inventories at the lower of cost or market as required by generally accepted accounting principles.
(6) Changes in and effects of competition, which is significant in all markets in which the Company competes, and the effectiveness of marketing and advertising programs. The Company competes with regional and national firms, some of which have greater financial and marketing resources than the Company.
(7) Changes in accounting policies and practices adopted voluntarily by the Company or required to be adopted by accounting principles generally accepted in the United States.
(8) Disease outbreaks affecting the production performance and/or marketability of the Company’s poultry products, or the contamination of its products.
(9) Changes in the availability and cost of labor and growers.
(10) The loss of any of the Company’s major customers.
(11) Inclement weather that could hurt Company flocks or otherwise adversely affect its operations, or changes in global weather patterns that could impact the supply of feed grains.
(12) Failure to respond to changing consumer preferences.
(13) Failure to successfully and efficiently start up and run a new plant or integrate any business the Company might acquire.
Readers are cautioned not to place undue reliance on forward-looking statements made by or on behalf of 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 earnings, production levels, grain prices, supply and demand factors, and other industry conditions.
SANDERSON FARMS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Unaudited)
(In thousands, except per share amounts)
Three Months Ended
Six Months Ended
April 30,
April 30,
2013
2012
2013
2012
Net sales $ 621,195 $ 595,046 $ 1,216,955 $ 1,112,872
Costs and expenses:
Cost of sales 562,233 535,901 1,147,100 1,044,905
Selling, general and administrative 19,832 18,165 40,397 36,068
582,065 554,066 1,187,497 1,080,973
Operating income 39,130 40,980 29,458 31,899
Other income (expense):
Interest income 4 4 7 6
Interest expense (1,807 ) (2,426 ) (3,612 ) (5,388 )
Other (120 ) (1 ) 51 (565 )
(1,923 ) (2,423 ) (3,554 ) (5,947 )
Income before income taxes 37,207 38,557 25,904 25,952
Income tax expense 12,836 14,692 8,476 10,076
Net income $ 24,371 $ 23,865 $ 17,428 $ 15,876
Basic earnings per share $ 1.06 $ 1.04 $ 0.76 $ 0.69
Diluted earnings per share $ 1.06 $ 1.04 $ 0.76 $ 0.69
Dividends per share $ 0.17 $ 0.17 $ 0.34 $ 0.34
SANDERSON FARMS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands)
April 30,
October 31,
2013
2012
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 24,087 $ 27,802
Accounts receivable, net 113,092 98,022
Inventories 226,590 235,912
Refundable income taxes 0 4,467
Deferred income taxes 1,895 3,945
Prepaid expenses and other current assets 27,466 27,639
Total current assets 393,130 397,787
Property, plant and equipment 1,009,432 985,198
Less accumulated depreciation (515,475 ) (489,885 )
493,957 495,313
Other assets 3,142 3,353
Total assets $ 890,229 $ 896,453
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 114,418 $ 124,837
Current maturities of long-term debt 10,757 10,757
Total current liabilities 125,175 135,594
Long-term debt, less current maturities 139,840 150,212
Claims payable 9,900 4,000
Deferred income taxes 54,378 56,572
Stockholders' equity:
Common stock 23,015 22,969
Paid-in capital 136,495 135,283
Retained earnings 401,426 391,823
Total stockholders’ equity 560,936 550,075
$ 890,229 $ 896,453
SAFM-G
.
.
Contact:.
.
Sanderson Farms, Inc.
Mike Cockrell, 601-649-4030
Treasurer & Chief Financial Officer
Jewett-Cameron Trading Company Ltd. Authorizes Share Repurchase Plan
NORTH PLAINS, Ore., May 29, 2013 /PRNewswire/ -- Jewett-Cameron Trading Company Ltd. ("Jewett-Cameron") (JCTCF) today is pleased to announce that its Board of Directors has authorized the implementation of a share repurchase plan to purchase for cancellation up to 400,000 common shares through facilities of the NASDAQ Stock Market ("NASDAQ"). This amount represents approximately 13% of the approximately 3.1 million common shares outstanding. Since the 4th quarter of Fiscal 2010, the Company repurchased 1,646,826 common shares (adjusted for a 2 for 1 stock split effective May 1, 2013) under prior formal plans of repurchase.
Transactions may involve Jewett-Cameron insiders or their affiliates executed in compliance with Jewett-Cameron's Insider Trading Policy.
The share repurchase plan will be effected in accordance with Rule 10b-18 under the U.S. Securities Exchange Act of 1934, which contains restrictions on the number of shares that may be purchased on a single day, subject to certain exceptions for block purchases, based on the average daily trading volumes ("ADTV") of Jewett-Cameron's shares on NASDAQ. Purchases shall be limited to daily purchases in an amount up to 25% of the ADTV in its shares, or one "Block" purchase per week in lieu of the 25% of ADTV limitation for compliance with Rule 10b-18(b)(4). A "block" as defined under Rule 10b-18(a)(5) means a quantity of stock that, among other things, is at least 5,000 shares and has a purchase price of at least US$50,000.
This share repurchase plan may commence on June 3, 2013 and will remain in place until August 16, 2013 but may be limited or terminated at any time without prior notice.
The share repurchase program was approved by the Company's Board of Directors as part of its ongoing consideration of alternative ways to leverage the Company's strong cash position. The Board of Directors believes that a share repurchase program at this time is in the best interests of the Company and its shareholders, and will not impact the Company's ability to execute its growth plans.
About Jewett-Cameron Trading Company Ltd.
Jewett-Cameron Trading Company Ltd. was incorporated in British Columbia on July 8, 1987 as a holding company for Jewett-Cameron Lumber Corporation ("JCLC"), incorporated September 1953. Jewett-Cameron Trading Company, Ltd. acquired all the shares of JCLC through a stock-for-stock exchange on July 13, 1987, and at that time JCLC became a wholly owned subsidiary. JCLC has the following wholly owned subsidiaries. MSI-PRO Co. ("MSI"), incorporated April 1996, Jewett-Cameron Seed Company, ("JCSC"), incorporated October 2000, and Greenwood Products, Inc. ("Greenwood"), incorporated February 2002. Jewett-Cameron Trading Company, Ltd. and its subsidiaries (the "Company") have no significant assets in Canada.
The Company, through its subsidiaries operates out of facilities located in North Plains, Oregon and the vicinity of Portland, Oregon. JCLC's business consists of the manufacturing and distribution of specialty metal products and wholesale distribution of wood products to home centers and other retailers located primarily in the United States. Greenwood is a processor and distributor of industrial wood and other specialty building products principally to customers in the marine and transportation industries in the United States. MSI is an importer and distributor of pneumatic air tools and industrial clamps in the United States. JCSC is a processor and distributor of agricultural seeds in the United States.
Safe Harbor Statement
This press release contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, included in this press release regarding our strategy, future operations, future financial position, future revenues, certain statements and expectations regarding the asset acquisition, projected costs, prospects, plans and objectives of management are forward-looking statements. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. There are a number of important factors that could cause Jewett-Cameron's actual results to differ materially from those indicated by such forward-looking statements which are described in the "Risk Factors" section of our most recent periodic report and registration statement filed with the SEC. We disclaim any intention or obligation to update any forward-looking statements.
For further information, contact:
Donald Boone
President/CEO, Jewett-Cameron Trading Company Ltd.
(503) 647-0110
ImmuCell Announces Increase in Product Sales and Continued Profitability
MarketwiredPress Release: ImmuCell Corporation – Tue, May 14, PORTLAND, ME--(Marketwired - May 14, 2013) - ImmuCell Corporation (NASDAQ: ICCC) today announced the results of its operations for the three-month period ended March 31, 2013.
During the three-month period ended March 31, 2013, product sales increased by 8%, or $130,000, to $1,847,000 in comparison to $1,717,000 during the same period in 2012.
Net operating income was $327,000 during the three-month period ended March 31, 2013, in comparison to net operating income of $281,000 during the same period in 2012. The net income was $204,000, or $0.07 per share, during the three-month period ended March 31, 2013, in comparison to net income of $155,000, or $0.05 per share, during the same period in 2012. The improved financial performance is largely due to increased gross margin from sales of First Defense®.
"In this extremely challenging dairy and beef economy with a record low milk-to-feed price ratio narrowing our customers' profit margins, our product sales increased by 8% and 5% during the three-month and twelve-month periods ended March 31, 2013, respectively," commented Michael F. Brigham, President and CEO. "This sales growth contributed to our continued profitability, while we are actively seeking a partner to help us complete the development and commercialization of Mast Out®."
Cash, cash equivalents and short-term investments increased by 8%, or $392,000, to $5,305,000 as of March 31, 2013, in comparison to $4,914,000 as of December 31, 2012. Stockholders' equity increased by 2%, or $219,000, to $9,413,000 as of March 31, 2013, in comparison to $9,195,000 as of December 31, 2012. The Company had 3,019,000 shares of common stock outstanding as of March 31, 2013.
About ImmuCell:
ImmuCell Corporation's (NASDAQ: ICCC) purpose is to create scientifically-proven and practical products that result in a measurable economic impact on animal health and productivity in the dairy and beef industries. Press releases and other information about the Company are available at our web-site, (http://www.immucell.com).
Contact:
Michael F. Brigham, President and Chief Executive Officer
(207) 878-2770 Ext. 3106
(Unaudited)
For the Three-Month Periods Ended March 31,
(In thousands, except per share amounts) 2013 2012
Product sales $ 1,847 $ 1,717
Costs of goods sold 793 704
Gross margin 1,054 1,013
Product development expenses 267 248
Sales, marketing and administrative expenses 461 484
Other operating expenses 728 732
NET OPERATING INCOME 326 281
Other revenues (expenses), net 44 (10 )
INCOME BEFORE INCOME TAXES 370 271
Income tax expense 166 116
NET INCOME $ 204 $ 155
Weighted average common shares outstanding:
Basic 3,019 3,016
Diluted 3,084 3,103
NET INCOME PER SHARE:
Basic $ 0.07 $ 0.05
Diluted $ 0.07 $ 0.05
(Unaudited)
As of
March 31, 2013 As of
December 31, 2012
(In thousands)
Cash, cash equivalents and short-term investments $ 5,305 $ 4,914
Total assets 11,111 11,030
Net working capital 7,082 6,697
Stockholders' equity $ 9,413 $ 9,195
.
.
Contact:.
.
Michael F. Brigham
President and Chief Executive Officer
(207) 878-2770 Ext. 3106
The Street has SAFM coming in at -.79 to .80 for the Second Quarter of 2013
All post's welcome!
The "Good Dr's In"!