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6:37 am Clorox beats by $0.11, beats on revs; raises FY16 guidance (CLX) :
Reports Q3 (Mar) earnings of $1.21 per share, $0.11 better than the Capital IQ Consensus of $1.10; revenues rose 1.8% year/year to $1.43 bln vs the $1.41 bln Capital IQ Consensus.
Co issues raises guidance for FY16, sees EPS of $4.85-4.95 vs. $4.92 Capital IQ Consensus Estimate, up from previous outlook of $4.75 to $4.90. Raises sales growth outlook to 1% to 2% sales growth, or 4% to 5% currency-neutral (previously flat to 1% growth, 3% to 4% currency neutral). Revenue consensus represents +0.8% growth. CLX now sees about 50 basis points of EBIT margin expansion (previously 50-75 basis points).
Third-quarter diluted EPS results were driven largely by gross margin expansion and higher sales, partially offset by higher advertising and sales promotion spending and the impact of unfavorable foreign currency exchange rates.
6:37 am Clorox beats by $0.11, beats on revs; raises FY16 guidance (CLX) :
Reports Q3 (Mar) earnings of $1.21 per share, $0.11 better than the Capital IQ Consensus of $1.10; revenues rose 1.8% year/year to $1.43 bln vs the $1.41 bln Capital IQ Consensus.
Co issues raises guidance for FY16, sees EPS of $4.85-4.95 vs. $4.92 Capital IQ Consensus Estimate, up from previous outlook of $4.75 to $4.90. Raises sales growth outlook to 1% to 2% sales growth, or 4% to 5% currency-neutral (previously flat to 1% growth, 3% to 4% currency neutral). Revenue consensus represents +0.8% growth. CLX now sees about 50 basis points of EBIT margin expansion (previously 50-75 basis points).
Third-quarter diluted EPS results were driven largely by gross margin expansion and higher sales, partially offset by higher advertising and sales promotion spending and the impact of unfavorable foreign currency exchange rates.
The "Street" has XRAY coming in at .65 for the quarter that should be reported on or about May 6, 2016! All post's welcome! The "Good Dr's In"!
The "Street" has XRAY coming in at .65 for the quarter that should be reported on or about May 6, 2016! All post's welcome! The "Good Dr's In"!
Lithia Reports Adjusted EPS of $1.55 for First Quarter 2016
Lithia Increases Dividend to $0.25 per Share for First Quarter
Marketwired Lithia Motors
April 21, 2016 6:59 AM
????
MEDFORD, OR--(Marketwired - Apr 21, 2016) - Lithia Motors, Inc. (NYSE: LAD) reported the highest first quarter adjusted net income in company history and increased adjusted net income 9% for the first quarter 2016 over the prior year period. 2016 first quarter adjusted net income was $40.4 million, or $1.55 per diluted share, compared to 2015 first quarter adjusted net income of $36.9 million, or $1.39 per diluted share.
Unadjusted net income for the first quarter 2016 was $40.3 million, or $1.55 per diluted share, compared to $40.7 million, or $1.53 per diluted share, for the first quarter of 2015. As shown in the attached non-GAAP reconciliation tables, the 2016 first quarter adjusted results exclude a non-core benefit related to an equity investment and the gain on the sale of a store offset by a legal reserve adjustment. These non-core items result in no change to earnings per share. The 2015 first quarter adjusted results exclude a $0.14 non-core net benefit from an equity investment and the gain on the sale of a store.
First quarter 2016 revenue increased $193.7 million, or 11%, to $2.0 billion from $1.8 billion for the first quarter 2015.
First Quarter-over-Quarter Operating Highlights:
Total same store sales increased 8%
New vehicle same store sales increased 6%
Used vehicle retail same store sales increased 12%
Service, body and parts same store sales increased 10%
Same store F&I per unit increased $111 to $1,292
Adjusted SG&A expense as a percentage of gross profit was 71.1%
"Our performance in the first quarter was solid," said Bryan DeBoer, President and CEO. "We grew adjusted earnings per share 12%, drove double digit increases in both used retail vehicle and service, body and parts sales and set a record in F&I per unit. We also continued to increase revenue and profitability in our DCH stores. While national new vehicle sales growth is moderating, we have significant opportunity to drive earnings growth through focus on growing vehicle market share and retaining service customers longer, improving store performance and targeting strategic acquisitions."
Chris Holzshu, SVP and CFO, said, "Adjusted SG&A as a percentage of gross profit was 71.1% in the first quarter of 2016, an improvement of 20 basis points over the first quarter of 2015. In the first quarter, incremental throughput, or the percentage of additional same store gross profit dollars that we retain after deducting incremental selling costs on a same store basis, was estimated at 37%. Our stores generated strong increases in gross profit and will continue to focus on controlling advertising and personnel cost to improve operating leverage."
Balance Sheet Update
We ended the first quarter with $22 million in cash and $149 million in availability under our credit facilities. Additionally, approximately $200 million of our operating real estate is currently unfinanced, which we estimate could provide an additional $150 million in available liquidity, for total potential liquidity of $321 million.
Dividend Payment and Share Repurchase
Our Board of Directors has approved a 25% increase in our quarterly dividend to $0.25 per share related to first quarter 2016 financial results. We expect to pay the dividend May 27, 2016 to shareholders of record on May 13, 2016.
Since March 31, 2016 we have repurchased approximately 157,500 shares at a weighted average price of $80.90 per share. Year to date, we have repurchased approximately 759,000 shares at a weighted average price of $79.80. Under our existing $250 million share repurchase authorization, approximately $236 million remains available.
2016 Outlook
We project 2016 second quarter earnings of $1.86 to $1.90 per diluted share and 2016 full year earnings of $7.30 to $7.50 per diluted share. Both projections are based on the following annual assumptions:
Total revenues of $8.5 to $8.6 billion
New vehicle sales increasing 4.5%
New vehicle gross margin of 5.8% to 6.0%
Used vehicle sales increasing 9.5%
Used vehicle gross margin of 11.8% to 12.0%
Service body and parts sales increasing 7.5%
Service body and parts gross margin of 48.8% to 49.0%
Finance and insurance gross profit of $1,270 to $1,290 per unit
Tax rate of 39.5%
Average diluted shares outstanding of 25.9 million
These projections exclude the impact of future acquisitions, dispositions and non-core items. Actual results may be affected by items described under Forward-Looking Statements below.
First Quarter Earnings Conference Call and Updated Presentation
The first quarter conference call may be accessed at 10:00 a.m. ET today by telephone at 877-407-8029. An updated presentation highlighting the first quarter results has been added to www.lithiainvestorrelations.com.
To listen live on our website or for replay, visit www.lithiainvestorrelations.com and click on webcasts.
About Lithia
Lithia Motors, Inc. is one of the largest automotive retailers in the United States. Lithia sells 31 brands of new vehicles and all brands of used vehicles at 138 stores in 15 states. Lithia also arranges finance, warranty, and credit insurance contracts; and provides vehicle parts, maintenance, and repair services at all of its locations.
Sites
www.lithia.com
www.lithiainvestorrelations.com
www.lithiacareers.com
Lithia Motors on Facebook
www.facebook.com/LithiaMotors
Lithia Motors on Twitter
http://twitter.com/lithiamotors
Forward-Looking Statements
This press release includes "forward-looking statements" within the meaning of the "Safe-Harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward looking statements include statements regarding our goals, plans, projections and guidance regarding our financial position, results of operations, market position, pending and potential future acquisitions and business strategy, and often contain words such as "project," "outlook," "expect," "anticipate," "intend," "plan," "believe," "estimate," "may," "seek," "would," "should," "likely," "goal," "strategy," "future," "maintain," "continue," "remain," "target" or "will" and similar references to future periods. Examples of forward-looking statements in this press release include, among others, statements regarding:
Expected operating results, such as improved store efficiency and performance; generating 2016 second quarter earnings per share of $1.86 to $1.90 per diluted share and 2016 full year earnings of $7.30 to $7.50 per diluted share and all projections set forth under the headings "2016 Outlook";
Anticipated ability to improve store performance;
Anticipated additions of dealership locations to our portfolio in the future; and
Anticipated availability of liquidity from our credit facility and unfinanced operating real estate.
By their nature, forward-looking statements involve risks and uncertainties because they relate to events that depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance, and our actual results of operations, financial condition and liquidity and development of the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements in this press release. The risks and uncertainties that could cause actual results to differ materially from estimated or projected results include, without limitation, future economic and financial conditions (both nationally and locally), changes in customer demand, our relationship with, and the financial and operational stability of, vehicle manufacturers and other suppliers, risks associated with our indebtedness (including available borrowing capacity, compliance with financial covenants and ability to refinance or repay indebtedness on favorable terms), government regulations, legislation and others set forth throughout Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations and in Part I, Item 1A. Risk Factors of our most recent Annual Report on Form 10-K, and from time to time in our other filings with the SEC. We urge you to carefully consider this information and not place undue reliance on forward-looking statements. We undertake no duty to update our forward-looking statements, including our earnings outlook, which are made as of the date of this release.
Non-GAAP Financial Measures
This press release and the attached financial tables contain non-GAAP financial measures such as adjusted net income and diluted earnings per share, adjusted SG&A as a percentage of revenues and gross profit, adjusted operating margin, adjusted operating profit as a percentage of gross profit, and adjusted pre-tax margin. Non-GAAP measures do not have definitions under GAAP and may be defined differently by and not comparable to similarly titled measures used by other companies. As a result, we review any non-GAAP financial measures in connection with a review of the most directly comparable measures calculated in accordance with GAAP. We caution you not to place undue reliance on such non-GAAP measures, but also to consider them with the most directly comparable GAAP measures. We present cash flows from operations in the attached tables, adjusted to include the change in non-trade floor plan debt to improve the visibility of cash flows related to vehicle financing. As required by SEC rules, we have reconciled these measures to the most directly comparable GAAP measures in the attachments to this release. We believe the non-GAAP financial measures we present improve the transparency of our disclosures; provide a meaningful presentation of our results from core business operations, because they exclude items not related to core business operations and other non-cash items; and improve the period-to-period comparability of our results from core business operations. These presentations should not be considered an alternative to GAAP measures.
Lithia Motors, Inc.
Consolidated Statements of Operations (Unaudited)
(In thousands except per share data)
Three months ended
March 31, Increase %
Increase
2016 2015 (Decrease) (Decrease)
Revenues:
New vehicle retail $ 1,096,055 $ 1,007,816 $ 88,239 8.8 %
Used vehicle retail 532,726 462,931 69,795 15.1
Used vehicle wholesale 65,146 62,208 2,938 4.7
Finance and insurance 77,638 64,604 13,034 20.2
Service, body and parts 196,675 173,475 23,200 13.4
Fleet and other 14,621 18,144 (3,523 ) (19.4 )
Total revenues 1,982,861 1,789,178 193,683 10.8
Cost of sales:
New vehicle retail 1,029,289 946,042 83,247 8.8
Used vehicle retail 468,449 403,489 64,960 16.1
Used vehicle wholesale 63,316 60,047 3,269 5.4
Service, body and parts 100,556 89,036 11,520 12.9
Fleet and other 14,069 17,189 (3,120 ) (18.2 )
Total cost of sales 1,675,679 1,515,803 159,876 10.5
Gross profit 307,182 273,375 33,807 12.4
Asset impairments 3,498 4,130 (632 ) NM
SG&A expense 219,106 191,618 27,488 14.3
Depreciation and amortization 11,663 9,726 1,937 19.9
Income from operations 72,915 67,901 5,014 7.4
Floor plan interest expense (5,909 ) (4,649 ) 1,260 27.1
Other interest expense (5,459 ) (4,828 ) 631 13.1
Other expense, net (1,526 ) (368 ) 1,158 NM
Income before income taxes 60,021 58,056 1,965 3.4
Income tax expense (19,751 ) (17,403 ) 2,348 13.5
Income tax rate 32.9 % 30.0 %
Net income $ 40,270 $ 40,653 $ (383 ) (0.9 )%
Diluted net income per share:
Net income per share $ 1.55 $ 1.53 $ 0.02 1.3 %
Diluted shares outstanding 25,973 26,519 (546 ) (2.1 )%
NM - not meaningful
Lithia Motors, Inc.
Key Performance Metrics (Unaudited)
Three months ended
March 31, Increase %
Increase
2016 2015 (Decrease) (Decrease)
Gross margin
New vehicle retail 6.1 % 6.1 % -- bps
Used vehicle retail 12.1 12.8 (70 )
Used vehicle wholesale 2.8 3.5 (70 )
Finance and insurance 100.0 100.0 --
Service, body and parts 48.9 48.7 20
Fleet and other 3.8 5.3 (150 )
Gross profit margin 15.5 15.3 20
Unit sales
New vehicle retail 32,749 30,623 2,126 6.9 %
Used vehicle retail 27,431 24,204 3,227 13.3
Total retail units sold 60,180 54,827 5,353 9.8
Used vehicle wholesale 9,513 9,144 369 4.0
Average selling price
New vehicle retail $ 33,468 $ 32,910 $ 558 1.7 %
Used vehicle retail 19,421 19,126 295 1.5
Used vehicle wholesale 6,848 6,803 45 0.7
Average gross profit per unit
New vehicle retail $ 2,039 $ 2,017 $ 22 1.1 %
Used vehicle retail 2,343 2,456 (113 ) (4.6 )
Used vehicle wholesale 192 236 (44 ) (18.6 )
Finance and insurance 1,290 1,178 112 9.5
Total vehicle(1) 3,498 3,429 69 2.0
Revenue mix
New vehicle retail 55.3 % 56.3 %
Used vehicle retail 26.9 25.9
Used vehicle wholesale 3.3 3.5
Finance and insurance, net 3.9 3.6
Service, body and parts 9.9 9.7
Fleet and other 0.7 1.0
Adjusted As reported
Three Months Ended
March 31, Three months ended
March 31,
Other metrics 2016 2015 2016 2015
SG&A as a % of revenue 11.0 % 10.9 % 11.0 10.7 %
SG&A as a % of gross profit 71.1 71.3 71.3 70.1
Operating profit as a % of revenue 3.9 3.8 3.7 3.8
Operating profit as a % of gross profit 25.1 25.1 23.7 24.8
Pretax margin 3.3 3.4 3.0 3.2
Net profit margin 2.0 2.1 2.0 2.3
(1) - includes the sales and gross profit related to new, used retail, used wholesale and finance and insurance and unit sales for new and used retail
Lithia Motors, Inc.
Same Store Operating Highlights (Unaudited)
Three months ended
March 31, Increase %
Increase
2016 2015 (Decrease) (Decrease)
Revenues
New vehicle retail $ 1,062,335 $ 1,000,768 $ 61,567 6.2 %
Used vehicle retail 516,277 459,192 57,085 12.4
Used vehicle wholesale 63,805 61,949 1,856 3.0
Finance and insurance 75,365 64,206 11,159 17.4
Service, body and parts 189,968 172,116 17,852 10.4
Fleet and other 14,583 18,145 (3,562 ) (19.6 )
Total revenues $ 1,922,333 $ 1,776,376 $ 145,957 8.2
Gross profit
New vehicle retail $ 64,818 $ 61,278 $ 3,540 5.8 %
Used vehicle retail 62,543 59,026 3,517 6.0
Used vehicle wholesale 1,755 2,222 (467 ) (21.0 )
Finance and insurance 75,365 64,206 11,159 17.4
Service, body and parts 92,956 83,749 9,207 11.0
Fleet and other 544 956 (412 ) (43.1 )
Total gross profit $ 297,981 $ 271,437 $ 26,544 9.8
Gross margin
New vehicle retail 6.1 % 6.1 % -- bps
Used vehicle retail 12.1 12.9 (80 )
Used vehicle wholesale 2.8 3.6 (80 )
Finance and insurance 100.0 100.0 --
Service, body and parts 48.9 48.7 20
Fleet and other 3.7 5.3 (160 )
Total gross profit 15.5 15.3 20
Unit sales
New vehicle retail 31,779 30,391 1,388 4.6 %
Used vehicle retail 26,531 23,972 2,559 10.7
Total retail units sold 58,310 54,363 3,947 7.3
Used vehicle wholesale 9,255 9,063 192 2.1
Average selling price
New vehicle retail $ 33,429 $ 32,930 $ 499 1.5 %
Used vehicle retail 19,459 19,155 304 1.6
Used vehicle wholesale 6,894 6,835 59 0.9
Average gross profit per unit
New vehicle retail $ 2,040 $ 2,016 $ 24 1.2 %
Used vehicle retail 2,357 2,462 (105 ) (4.3 )
Used vehicle wholesale 190 245 (55 ) (22.4 )
Finance and insurance 1,292 1,181 111 9.4
Total vehicle(1) 3,507 3,435 72 2.1
(1) - includes the sales and gross profit related to new, used retail, used wholesale and finance and insurance and unit sales for new and used retail
Lithia Motors, Inc.
Segment Operating Highlights (Unaudited)
Three months ended
March 31, Increase %
Increase
2016 2015 (Decrease) (Decrease)
Revenues
Domestic $ 768,902 $ 690,682 $ 78,220 11.3 %
Import 865,743 760,080 105,663 13.9
Luxury 346,813 336,993 9,820 2.9
Total segment revenues 1,981,458 1,787,755 193,703 10.8
Corporate and other 1,403 1,423 (20 ) (1.4 )
Total revenues $ 1,982,861 $ 1,789,178 $ 193,683 10.8
Segment Income(1)
Domestic $ 21,730 $ 27,294 $ (5,564 ) (20.4) %
Import 22,633 17,063 5,570 32.6
Luxury 4,235 6,645 (2,410 ) (36.3 )
Total segment income 48,598 51,002 (2,404 ) (4.7 )
Corporate and other 30,071 21,976 8,095 36.8
Depreciation and amortization (11,663 ) (9,726 ) (1,937 ) 19.9
Other interest expense (5,459 ) (4,828 ) (631 ) 13.1
Other expense, net (1,526 ) (368 ) (1,158 ) NM
Income before income taxes $ 60,021 58,056 $ 1,965 3.4
(1) Segment income for each of the segments is defined as Income before income taxes, less Depreciation and amortization, Other interest expense and Other expense, net.
Retail New Vehicle Unit Sales
Domestic 10,649 10,012 637 6.4 %
Import 18,114 16,805 1,309 7.8
Luxury 4,063 3,865 198 5.1
Total 32,826 30,682 2,144 7.0
Allocated to management (77 ) (59 ) (18 ) NM
Total retail new vehicle unit sales 32,749 30,623 2,126 6.9
NM - not meaningful
Lithia Motors, Inc.
Other Highlights (Unaudited)
As of
March 31, December 31, March 31,
2016 2015 2015
Days Supply(1)
New vehicle inventory 78 67 62
Used vehicle inventory 53 55 49
(1) Days supply calculated based on current inventory levels, excluding in-transit vehicles, and a 30-day historical cost of sales level.
Financial covenants
Requirement As of March 31, 2016
Current ratio Not less than 1.10 to 1 1.25 to 1
Fixed charge coverage ratio Not less than 1.20 to 1 2.87 to 1
Leverage ratio Not more than 5.00 to 1 1.75 to 1
Funded debt restriction Not more than $600 million $414.4 million
Lithia Motors, Inc.
Other Highlights (Unaudited)
Three months ended
March 31,
2016 2015
New vehicle unit sales brand mix
Honda, Acura 23.2 % 22.0 %
Toyota, Lexus 19.7 20.1
Chrysler 18.6 19.1
General Motors 8.8 9.0
Subaru 7.3 7.2
BMW, Mini 5.5 5.8
Ford 5.2 4.6
Nissan 3.8 4.0
Volkswagen, Audi 2.7 2.8
Hyundai 1.9 2.1
Mercedes Benz 1.3 1.6
Kia 1.3 1.3
Other 0.7 0.4
Three months ended
March 31,
2016 2015
Revenue geographic mix
California 23.0 % 22.2 %
Oregon 16.8 16.8
Texas 14.0 15.7
New Jersey 13.9 13.7
Montana 6.3 5.8
Washington 5.4 5.1
Alaska 4.7 5.1
Nevada 3.2 3.2
New York 3.0 2.7
Idaho 2.8 3.1
Iowa 2.5 2.8
Hawaii 2.0 1.4
North Dakota 1.2 1.5
New Mexico 0.9 0.9
Massachusetts 0.3 --
As of March 31, 2016
Current store count mix # of stores % of total
Chrysler 27 19.6 %
Honda, Acura 21 15.2
Toyota, Lexus 20 14.5
General Motors 16 11.6
BMW, Mini 11 8.0
Subaru 8 5.8
Volkswagen, Audi 8 5.8
Ford 7 5.1
Nissan 6 4.3
Hyundai 4 2.9
Mercedes Benz 4 2.9
Other 6 4.3
Lithia Motors, Inc.
Consolidated Balance Sheets (Unaudited)
(In thousands)
March 31, 2016 December 31, 2015
Cash and cash equivalents $ 21,559 $ 45,008
Trade receivables, net 286,292 308,462
Inventories, net 1,541,085 1,470,987
Other current assets 50,473 54,408
Total current assets $ 1,899,409 $ 1,878,865
Property and equipment, net 882,405 876,660
Goodwill 213,934 213,220
Franchise value 161,668 157,699
Other non-current assets 110,202 100,855
Total assets $ 3,267,618 $ 3,227,299
Floor plan notes payable $ 55,836 $ 48,083
Floor plan notes payable: non trade 1,296,751 1,265,872
Current maturities of long-term debt 33,721 38,891
Trade payables 78,250 70,871
Accrued liabilities 179,145 167,108
Total current liabilities $ 1,643,703 $ 1,590,825
Long-term debt 595,663 606,463
Deferred revenue 70,066 66,734
Deferred income taxes 59,134 53,129
Other long-term liabilities 84,375 81,984
Total liabilities $ 2,452,941 $ 2,399,135
Class A common stock 213,699 258,410
Class B common stock 219 316
Additional paid-in capital 34,866 38,822
Accumulated other comprehensive loss (114 ) (277 )
Retained earnings 566,007 530,893
Total liabilities & stockholders' equity $ 3,267,618 $ 3,227,299
Lithia Motors, Inc.
Summarized Cash Flow from Operations (Unaudited)
(In thousands)
Three Months Ended
March 31,
2016 2015
Net income $ 40,270 $ 40,653
Adjustments to reconcile net income to net cash provided by operating activities:
Asset impairments 3,498 4,130
Depreciation and amortization 11,663 9,726
Stock-based compensation 3,149 2,727
Gain on disposal of assets (3,391 ) 8
Gain on sale of franchise (1,087 ) (3,349 )
Deferred income taxes 10,261 3,863
Excess tax benefit from share-based payment arrangements (4,379 ) (4,733 )
(Increase) decrease:
Trade receivables, net 25,564 7,569
Inventories (73,744 ) (39,460 )
Other assets (4,705 ) (2,078 )
Increase (decrease):
Floor plan notes payable, net 7,753 1,092
Trade payables 920 6,799
Accrued liabilities 13,425 4,444
Other long-term liabilities and deferred revenue 5,396 6,838
Net cash provided by operating activities $ 34,593 $ 38,229
Lithia Motors, Inc.
Reconciliation of Non-GAAP Cash Flow from Operations (Unaudited)
(In thousands)
Three Months Ended
March 31,
Net cash provided by operating activities 2016 2015
As reported $ 34,593 $ 38,229
Floor plan notes payable, non-trade, net 38,626 (21,984 )
Adjusted $ 73,219 $ 16,245
Lithia Motors, Inc.
Reconciliation of Certain Non-GAAP Financial Measures (Unaudited)
(In thousands, except for per share data)
Three Months Ended March 31, 2016
As reported Disposal gain on sale of store Equity investment fair value adjustment Legal reserve adjustment Adjusted
Asset impairments $ 3,498 $ -- $ (3,498 ) $ -- $ --
Selling, general and administrative 219,106 1,087 -- (1,906 ) 218,287
Income from operations 72,916 (1,087 ) 3,498 1,906 77,233
Other expense, net (1,526 ) -- 2,066 -- 540
Income before income taxes $ 60,021 $ (1,087 ) $ 5,564 $ 1,906 $ 66,404
Income tax expense (19,751 ) 426 (5,945 ) (747 ) (26,017 )
Net income $ 40,270 $ (661 ) $ (381 ) $ 1,159 $ 40,387
Diluted earnings per share $ 1.55 $ (0.03 ) $ (0.01 ) $ 0.04 $ 1.55
Diluted share count 25,973
Three Months Ended March 31, 2015
As reported Disposal gain on sale of store Equity investment fair value adjustment Adjusted
Asset impairments $ 4,130 -- $ (4,130 ) $ --
Selling, general and administrative 191,618 3,349 -- 194,967
Income from operations 67,901 (3,349 ) 4,130 68,682
Other expense, net (368 ) -- 1,732 1,364
Income before income taxes $ 58,056 (3,349 ) $ 5,862 $ 60,569
Income tax expense (17,403 ) 1,004 (7,250 ) (23,649 )
Net income $ 40,653 (2,345 ) $ (1,388 ) $ 36,920
Diluted earnings per share $ 1.53 (0.09 ) $ (0.05 ) $ 1.39
Diluted share count 26,519
Contact:
John North
VP Finance and Chief Accounting Officer
(541) 618-5748
Newell Brands Announces Strong First Quarter Results
Accelerated Growth and Earnings Momentum
Jarden Transaction Completed
Provides 2016 Newell Brands Guidance
First Quarter 2016 Executive Summary
5.6 percent core sales growth, with core growth in all five business segments and all four regions; 4.0 percent net sales growth to $1.31 billion compared to $1.26 billion in the prior year
100 basis point increase in normalized operating margin compared to the prior year, while simultaneously increasing advertising and promotion investment by 40 basis points; 170 basis point increase in reported operating margin compared to the prior year
$0.40 normalized earnings per share compared to $0.36 in the prior year, an 11.1 percent increase despite a negative impact from foreign currency of $0.04 per share; normalized earnings per share increased 17.6 percent excluding the prior year $0.02 contribution from Venezuelan operations
$0.15 reported earnings per share compared to $0.20 in the prior year, a 25.0 percent decline attributable to interest and other expenses incurred in connection with the Jarden Corporation (“Jarden”) transaction, including costs associated with $8 billion in notes placed prior to the closing of the transaction on April 15, 2016
Operating cash flow was a use of $270.9 million compared to a use of $154.3 million in the prior year reflecting divestiture-related tax payments, Jarden transaction-related payments and an increase in annual incentive compensation payments related to strong 2015 results
Successfully completed $8 billion public debt offering with weighted average effective interest rate of 4.38% and weighted average maturity of 12.8 years
Newell Brands’ guidance for the twelve months ending December 31, 2016 is 3 to 4 percent core sales growth and normalized EPS of $2.75 to $2.90 at a full year weighted average diluted share count of approximately 430 million shares
Business Wire Newell Brands Inc.
7 hours ago
????
ATLANTA--(BUSINESS WIRE)--
Newell Brands Inc. (NWL) announced its first quarter 2016 financial results today.
“We are extremely pleased with our growth and financial results this quarter,” said Newell Brands Chief Executive Officer Michael Polk. “The Newell playbook, which couples increased innovation activity together with increased brand investment, delivered 5.6 percent core sales growth as we continue to win market share, particularly in our fastest growing channels. Simultaneously, we increased operating margins and drove over eleven percent normalized EPS growth. Importantly, our performance was broad-based with core sales growth in all five business segments and in all four regions."
“We delivered these strong results while completing the most transformative transaction in our history. The new Newell Brands more than doubles our size in key strategic retailers, channels and geographies. We expect scale to enable accelerated growth over time through broadened channel cross-sell, accelerated international deployment and strengthened category leadership as we extend the best capabilities from both companies across the full portfolio. Our growth acceleration will be fueled by working to make the new company leaner and more efficient and by focusing our investments on the businesses with the greatest potential. We expect to unlock the financial capacity for growth and margin development through delivery of at least $500 million in cost synergies and $300 million in Project Renewal savings over the next three to four years. We remain fully committed and are on track to reach our target leverage ratio of 3.0 to 3.5 times within two to three years. With the transaction now complete, we have begun our work and are energized by this unique opportunity to create extraordinary value for our shareholders through the creation of Newell Brands.”
First Quarter 2016 Operating Results
Core sales grew 5.6 percent, with growth in all five segments and all four regions.
Net sales grew 4.0 percent to $1.31 billion compared with $1.26 billion in the prior year. Net sales benefited from a 240 basis point net contribution from acquisitions and planned and completed divestitures, but were adversely affected by a 230 basis point negative impact from foreign currency and a 170 basis point negative impact from the deconsolidation of Venezuelan operations as of December 31, 2015.
Normalized gross margin was 38.6 percent, a 20 basis point decline versus prior year, as the negative impact of foreign currency, mix from the deconsolidation of Venezuela, and mix from acquisitions was only partially offset by the benefits of productivity, input cost deflation and pricing.
Reported gross margin was 38.5 percent compared with 38.6 percent in the prior year.
First quarter normalized operating margin increased 100 basis points to 13.1 percent of sales, despite a 40 basis point increase in advertising and promotion investment. Normalized operating income increased 12.6 percent to $171.8 million compared with $152.6 million in the prior year.
Reported operating margin increased 170 basis points to 9.5 percent of sales. Operating income increased 27.7 percent to $125.4 million compared with $98.2 million in the prior year.
The normalized tax rate was 27.2 percent, unchanged from the prior year. The reported tax rate for the quarter was 21.9 percent, compared with 27.9 percent in the prior year.
Normalized net income increased 11.0 percent to $107.7 million compared with $97.0 million in the prior year. Normalized diluted earnings per share increased 11.1 percent to $0.40 compared with $0.36 in the prior year. The improvement in normalized diluted earnings per share was attributable to increased core sales, strong operating margin improvement as a result of reduced overhead expenses and the positive impact of fewer outstanding shares, which more than offset an increase in advertising and promotion support, negative foreign currency impact and the absence of income from Venezuelan operations.
Reported net income decreased 25.1 percent to $40.5 million compared with $54.1 million in the prior year. Reported diluted earnings per share decreased 25.0 percent to $0.15 compared with $0.20 in the prior year. In addition to the factors cited in the explanation of normalized diluted earnings per share, reported diluted earnings per share were negatively impacted by $49.9 million in interest expense and other acquisition-related costs incurred prior to the closing of the Jarden acquisition offset by lower restructuring and other Project Renewal costs.
Operating cash flow was a use of $270.9 million compared with a use of $154.3 million in the prior year period, reflecting a $58.0 million tax payment associated with the gain on the sale of Endicia, a $92.1 million payment associated with pre-issuance interest rate hedge positions taken in advance of the company’s recent $8 billion public debt placement, $12.0 million of payments for acquisition and integration related fees and $31.8 million in higher management incentive payments for strong 2015 performance, which were partially offset by the absence of the prior year voluntary pension contribution of $70 million.
A reconciliation of the “as reported” results to “normalized” results is included in the appendix.
First Quarter 2016 Operating Segment Results
Writing net sales increased 10.8 percent to $378.8 million, with strong core sales growth and the benefit of the Elmer’s acquisition partially offset by the deconsolidation of Venezuelan operations and negative impact of foreign currency. Writing core sales increased 8.8 percent, driven by double-digit core growth in North America and Latin America attributable to strong innovation, including the North American launch of Paper Mate InkJoy Gel Pens, increased advertising and promotion support and pricing. Normalized operating income was $86.2 million compared with $83.0 million in the prior year. Normalized operating margin was 22.8 percent compared with 24.3 percent in the prior year as pricing, productivity and cost management were more than offset by increased advertising and promotion spending and the negative mix impact of both the deconsolidation of Venezuela and the Elmer’s acquisition.
Home Solutions net sales increased 2.1 percent to $372.1 million. Core sales increased 3.6 percent, attributable to continued strong Beverage growth and the introduction of Rubbermaid FreshWorks and Rubbermaid Fasten&Go, partially offset by continued contraction of the lower margin Rubbermaid Consumer Storage business. Normalized operating income was $38.0 million versus $38.6 million in the prior year. Normalized operating margin was 10.2 percent of sales compared to 10.6 percent in the prior year as the positive mix effect of Rubbermaid Food Storage and input cost deflation were more than offset by higher advertising and promotion expenses to support new product launches.
Tools net sales declined 0.4 percent to $179.7 million, driven by a 440 basis point negative impact due to foreign currency. Core sales grew 4.0 percent with strong growth in North America, Europe and Asia Pacific partially offset by continued weakness in Brazil. Normalized operating income was $19.4 million versus $22.2 million in the prior year. Normalized operating margin was 10.8 percent of sales compared with 12.3 percent of sales in the prior year. The normalized operating margin contraction was primarily driven by continuing growth- and negative foreign currency- related challenges in Brazil partially offset by productivity and pricing.
Commercial Products net sales declined 5.8 percent to $174.5 million, driven by the divestiture of the Rubbermaid medical cart business in August 2015 and the negative impact of foreign currency. Core sales increased 0.9 percent due primarily to good growth in EMEA offset by timing-related declines in North America. Normalized operating income was $22.6 million compared to $17.6 million in the prior year. Normalized operating margin was 13.0 percent of sales compared with 9.5 percent of sales in the prior year. The increase in normalized operating margin reflects the benefits of productivity, pricing and input cost deflation.
Baby & Parenting net sales increased 9.2 percent to $209.8 million. Core sales grew 9.3 percent, driven by strong car seat and mobility innovation by Graco, Aprica and Baby Jogger. Normalized operating income was $23.1 million compared to $12.3 million in the prior year. Normalized operating margin was 11.0 percent of sales compared with 6.4 percent of sales in the prior year. The normalized operating margin improvement was due to strong volume growth, the positive product mix effect of Baby Jogger and Aprica growth and the timing of advertising and promotion spending in support of innovation.
Outlook for the Twelve Months Ending December 31, 2016
Newell Brands provided 2016 full year core sales growth and normalized EPS guidance metrics to reflect the Jarden transaction that was completed on April 15, 2016. The company currently projects financial metrics as follows:
2016 Full Year Guidance
Core sales growth 3.0% to 4.0%
Normalized EPS $2.75 to $2.90
As of April 15, 2016, Newell Brands core sales will include pro forma core sales associated with the Jarden transaction as if the combination occurred April 15, 2015. Core sales excludes the impact of foreign currency, all acquisitions until their first anniversary and all planned and completed divestitures (which includes the deconsolidation of Venezuela), but includes the negative impact of planned product line exits. The company’s core sales growth guidance assumes legacy Newell Rubbermaid core sales growth of 4 to 5 percent and legacy Jarden core sales growth of 2 to 4 percent, which includes the negative impact of planned product line exits. Jarden core sales growth of 2 to 4 percent is roughly in line with Jarden’s pre-transaction long term “organic growth” target of 3 to 5 percent. Newell Brands expects to exit product lines with annual sales of $250 million to $300 million across both legacy businesses over the next two to three years.
For the full year 2016, Newell Brands expects normalized EPS of $2.75 to $2.90 assuming a 2016 weighted average diluted share count of approximately 430 million shares. The company’s normalized EPS guidance range assumes a share count for Newell Brands of approximately 497 million shares from April 15, 2016 onward, which given the transaction completion date will result in Newell Brands 2016 full year weighted average diluted share count of approximately 430 million shares. Beginning with the second quarter of 2016, the company will exclude the amortization of intangible assets associated with acquisitions (including the Jarden acquisition) from its calculation of normalized EPS. The company expects the effective tax rate for 2016 to be 29 to 30 percent.
Conference Call
The company’s first quarter 2016 earnings conference call will be held today, April 29, 2016, at 8:30 a.m. ET. A link to the webcast is provided under Events & Presentations in the Investor Relations section of Newell Brands’ website at www.newellbrands.com. A webcast replay and a supporting slide presentation will be made available in the Investor Relations section on the company’s website under Quarterly Earnings.
Non-GAAP Financial Measures
This release contains non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission and includes a reconciliation of these non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with GAAP.
The company uses certain non-GAAP financial measures that are included in this press release and the additional financial information both in explaining its results to stockholders and the investment community and in its internal evaluation and management of its businesses. The company’s management believes that these non-GAAP financial measures and the information they provide are useful to investors since these measures (a) permit investors to view the company’s performance using the same tools that management uses to evaluate the company’s past performance, reportable business segments and prospects for future performance and (b) determine certain elements of management’s incentive compensation.
The company’s management believes that core sales provides a more complete understanding of underlying sales trends by providing sales on a consistent basis as it excludes the impacts of acquisitions (other than the Jarden acquisition, which will be included in core sales on a pro forma basis starting in the second quarter of 2016), planned or completed divestitures, the deconsolidation of the company’s Venezuelan operations and changes in foreign currency from year-over-year comparisons. As reflected in the Currency Analysis, the effect of foreign currency on reported sales is determined by applying a fixed exchange rate, calculated as the 12-month average in the prior year, to the current and prior year local currency sales amounts (excluding acquisitions and planned and completed divestitures), with the difference in these two amounts being the increase or decrease in core sales, and the difference between the change in as reported sales and the change in constant currency sales reported as the currency impact. The company’s management believes that “normalized” gross margin, “normalized” SG&A expense, “normalized” operating income, “normalized” earnings per share, “normalized” interest and “normalized” tax rates, which exclude restructuring and other expenses and one-time and other events such as costs related to certain product recalls, the extinguishment of debt, certain tax benefits and charges, impairment charges, pension settlement charges, discontinued operations, costs related to the acquisition, integration and financing of acquired businesses, amortization of intangible assets associated with acquisitions (beginning in the second quarter of 2016), advisory costs for process transformation and optimization initiatives, costs of personnel dedicated to integration activities and transformation initiatives under Project Renewal and certain other items, are useful because they provide investors with a meaningful perspective on the current underlying performance of the company’s core ongoing operations.
The company determines the tax effect of the items excluded from normalized diluted earnings per share by applying the estimated effective rate for the applicable jurisdiction in which the pre-tax items were incurred, and for which realization of the resulting tax benefit, if any, is expected. In certain situations in which an item excluded from normalized results impacts income tax expense, the company uses a “with” and “without” approach to determine normalized income tax expense.
While the company believes that these non-GAAP financial measures are useful in evaluating the company’s performance, this information should be considered as supplemental in nature and not as a substitute for or superior to the related financial information prepared in accordance with GAAP. Additionally, these non-GAAP financial measures may differ from similar measures presented by other companies.
About Newell Brands
Newell Brands (NWL) is a leading global consumer goods company with a strong portfolio of well-known brands, including Paper Mate®, Sharpie®, Dymo®, EXPO®, Parker®, Elmer’s®, Coleman®, Jostens®, Marmot®, Rawlings®, Irwin®, Lenox®, Oster®, Sunbeam®, FoodSaver®, Mr. Coffee®, Rubbermaid Commercial Products®, Graco®, Baby Jogger®, NUK®, Calphalon®, Rubbermaid®, Contigo®, First Alert®, Waddington and Yankee Candle®. Driven by a sharp focus on the consumer, leading investment in innovation and brands, and a performance-driven culture, Newell Brands helps consumers achieve more where they live, learn, work and play.
This press release and additional information about Newell Brands are available on the company’s website, www.newellbrands.com.
Caution Concerning Forward-Looking Statements
Statements in this press release that are not historical in nature constitute forward-looking statements. These forward-looking statements relate to information or assumptions about the effects of sales, income, earnings per share, operating income, operating margin or gross margin improvements or declines, Project Renewal, capital and other expenditures, cash flow, dividends, restructuring and other project costs, costs and cost savings, inflation or deflation, particularly with respect to commodities such as oil and resin, debt ratings, changes in exchange rates, expected benefits and financial results from the Jarden transaction and other recently completed acquisitions and planned divestitures and management's plans, projections and objectives for future operations and performance. These statements are accompanied by words such as "anticipate," "expect," "project," "will," "believe," "estimate" and similar expressions. Actual results could differ materially from those expressed or implied in the forward-looking statements. Important factors that could cause actual results to differ materially from those suggested by the forward-looking statements include, but are not limited to, our dependence on the strength of retail, commercial and industrial sectors of the economy in light of the continuation or escalation of the global economic slowdown or regional sovereign debt issues; currency fluctuations; competition with other manufacturers and distributors of consumer products; major retailers' strong bargaining power and consolidation of our retail customers; changes in the prices of raw materials and sourced products and our ability to obtain raw materials and sourced products in a timely manner from suppliers; our ability to develop innovative new products and to develop, maintain and strengthen our end-user brands, including the ability to realize anticipated benefits of increased advertising and promotion spend; product liability, product recalls or regulatory actions; our ability to expeditiously close facilities and move operations while managing foreign regulations and other impediments; a failure of one of our key information technology systems or related controls; our ability to attract, retain and motivate key employees; future events that could adversely affect the value of our assets and require impairment charges; our ability to improve productivity and streamline operations; changes to our credit ratings; significant increases in the funding obligations related to our pension plans due to declining asset values, declining interest rates or otherwise; the imposition of tax liabilities greater than our provisions for such matters; the risks inherent in our foreign operations, including exchange controls and pricing restrictions; our ability to complete planned divestitures; our ability to successfully integrate acquired businesses, including the recently acquired Jarden business; our ability to realize the expected benefits and financial results from our recently acquired businesses and planned divestitures; and those factors listed in our most recently filed Annual Report on Form 10-K filed with the Securities and Exchange Commission. Changes in such assumptions or factors could produce significantly different results. The information contained in this news release is as of the date indicated. The company assumes no obligation to update any forward-looking statements contained in this news release as a result of new information or future events or developments.
Newell Brands Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in millions, except per share data)
Three Months Ended March 31,
YOY
2016 2015 % Change
Net sales $ 1,314.9 $ 1,264.0 4.0 %
Cost of products sold 809.3 776.5
GROSS MARGIN 505.6 487.5 3.7 %
% of sales 38.5 % 38.6 %
Selling, general & administrative expenses
362.5 362.0 0.1 %
% of sales 27.6 % 28.6 %
Restructuring costs 17.7 27.3
OPERATING INCOME 125.4 98.2 27.7 %
% of sales 9.5 % 7.8 %
Nonoperating expenses:
Interest expense, net 29.4 19.2
Loss on termination of credit facility 45.9 -
Other (income) expense, net (1.5 ) 0.1
73.8 19.3 282.4 %
INCOME BEFORE INCOME TAXES 51.6 78.9 (34.6 )%
% of sales 3.9 % 6.2 %
Income taxes 11.3 22.0 (48.6 )%
Effective rate 21.9 % 27.9 %
NET INCOME FROM CONTINUING OPERATIONS 40.3 56.9 (29.2 )%
% of sales 3.1 % 4.5 %
Income (loss) from discontinued operations, net of tax 0.2 (2.8 )
NET INCOME $ 40.5 $ 54.1 (25.1 )%
3.1 % 4.3 %
EARNINGS PER SHARE:
Basic
Income from continuing operations $ 0.15 $ 0.21
Income (loss) from discontinued operations $ - $ (0.01 )
Net income $ 0.15 $ 0.20
Diluted
Income from continuing operations $ 0.15 $ 0.21
Income (loss) from discontinued operations $ - $ (0.01 )
Net income $ 0.15 $ 0.20
AVERAGE SHARES OUTSTANDING:
Basic 268.7 270.5
Diluted 270.1 272.7
Newell Brands Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in millions)
March 31, March 31,
Assets: 2016 2015
Cash and cash equivalents $ 8,180.9 $ 215.4
Accounts receivable, net 1,187.7 1,053.2
Inventories, net 875.2 852.3
Prepaid expenses and other 146.0 179.2
Assets held for sale 102.8 -
Total Current Assets 10,492.6 2,300.1
Property, plant and equipment, net 624.5 563.3
Goodwill 2,801.6 2,474.6
Other intangible assets, net 1,085.9 877.2
Other assets 331.9 268.7
Total Assets $ 15,336.5 $ 6,483.9
Liabilities and Stockholders' Equity:
Accounts payable $ 660.8 $ 615.6
Accrued compensation 98.7 99.8
Other accrued liabilities 613.2 586.3
Short-term debt 762.8 733.9
Current portion of long-term debt 5.9 6.5
Liabilities held for sale 44.7 -
Total Current Liabilities 2,186.1 2,042.1
Long-term debt 10,619.1
2,078.7
Deferred income taxes 203.9 127.9
Other noncurrent liabilities 548.7 536.2
Stockholders' Equity - Parent 1,775.2 1,695.5
Stockholders' Equity - Noncontrolling Interests 3.5 3.5
Total Stockholders' Equity 1,778.7 1,699.0
Total Liabilities and Stockholders' Equity $ 15,336.5 $
6,483.9
Newell Brands Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in millions)
Three Months Ended March 31,
2016 2015
Operating Activities:
Net income $ 40.5 $ 54.1
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization 42.8 42.2
Net gain from sale of discontinued operations, including impairments (0.9 ) -
Loss on termination of credit facility 45.9 -
Non-cash restructuring costs 0.3 -
Deferred income taxes 7.0 17.9
Stock-based compensation expense 9.9 6.8
Other, net 4.8 5.5
Changes in operating assets and liabilities, excluding the effects of acquisitions and divestitures:
Accounts receivable 69.7 170.0
Inventories (141.5 ) (164.8 )
Accounts payable 11.1 (38.7 )
Accrued liabilities and other (360.5 ) (247.3 )
Net cash used in operating activities $ (270.9 ) $ (154.3 )
Investing Activities:
Proceeds from sale of discontinued operations and noncurrent assets $ 2.6 $ 4.0
Acquisitions and acquisition-related activity (21.0 ) (2.0 )
Capital expenditures (51.6 ) (50.9 )
Other - (0.2 )
Net cash used in investing activities $ (70.0 ) $ (49.1 )
Financing Activities:
Net short-term borrowings $ 378.7 $ 343.4
Proceeds from issuance of debt, net of debt issuance costs 7,931.2 -
Repurchase and retirement of shares of common stock - (73.6 )
Cash dividends (53.3 ) (53.2 )
Excess tax benefits related to stock-based compensation 9.5 15.2
Equity compensation activity and other (18.0 ) (13.6 )
Net cash provided by financing activities $ 8,248.1 $ 218.2
Currency rate effect on cash and cash equivalents $ (1.1 ) $ 1.2
Increase in cash and cash equivalents $ 7,906.1 $ 16.0
Cash and cash equivalents at beginning of period 274.8 199.4
Cash and cash equivalents at end of period $ 8,180.9 $ 215.4
Newell Brands Inc.
Financial Worksheet - Segment Reporting
(In Millions)
2016 2015
Reconciliation (1,2,3) Reconciliation (1,2,4,5) Year-over-year changes
Reported Excluded Normalized Operating Reported Excluded Normalized Operating Net Sales Normalized OI
Net Sales OI Items OI Margin Net Sales OI Items OI Margin $ % $ %
Q1:
Writing $ 378.8 $ 83.8 $ 2.4 $ 86.2 22.8 % $ 341.8 $ 82.4 $ 0.6 $ 83.0 24.3 % $ 37.0 10.8 % $ 3.2 3.9 %
Home Solutions 372.1 36.1 1.9 38.0 10.2 % 364.5 38.5 0.1 38.6 10.6 % 7.6 2.1 % (0.6 ) (1.6 )%
Tools 179.7 18.7 0.7 19.4 10.8 % 180.4 22.2 - 22.2 12.3 % (0.7 ) (0.4 )% (2.8 ) (12.6 )%
Commercial Products 174.5 22.4 0.2 22.6 13.0 % 185.2 17.0 0.6 17.6 9.5 % (10.7 ) (5.8 )% 5.0 28.4 %
Baby & Parenting 209.8 23.1 - 23.1 11.0 % 192.1 0.5 11.8 12.3 6.4 % 17.7 9.2 % 10.8 87.8 %
Restructuring Costs - (17.7 ) 17.7 - - (27.3 ) 27.3 - - -
Corporate - (41.0 ) 23.5 (17.5 ) - (35.1 ) 14.0 (21.1 ) - 3.6 17.1 %
Total $ 1,314.9 $ 125.4 $ 46.4 $ 171.8 13.1 % $ 1,264.0 $ 98.2 $ 54.4 $ 152.6 12.1 % $ 50.9 4.0 % $ 19.2 12.6 %
(1) Excluded items include project-related costs and restructuring costs associated with Project Renewal. Project-related costs of $15.0 million and $11.1 million of restructuring costs incurred during 2016 relate to Project Renewal. For 2015, project-related costs of $14.9 million and restructuring costs of $27.3 million relate to Project Renewal.
(2) Normalized operating income for 2016 excludes $6.6 million of integration-related restructuring costs associated with Ignite Holdings, LLC and Elmer's. Normalized operating income also excludes $12.7 million of acquisition and integration costs primarily associated with Jarden. Home Solutions normalized operating income for 2015 excludes $0.1 million of acquisition and integration costs associated with the acquisitions of Ignite Holdings, LLC and bubba brands, and Baby & Parenting normalized operating income for 2015 excludes $1.6 million of costs associated with the acquisition of Baby Jogger.
(3) Home Solutions normalized operating income for 2016 excludes $1.0 million of costs associated with the planned divestiture of Décor.
(4) Baby & Parenting normalized operating income for 2015 excludes charges of $10.2 million relating to the Graco product recall.
(5) Writing normalized operating income for 2015 excludes charges of $0.3 million associated with Venezuelan inventory resulting from changes in the exchange rate for the Venezuelan Bolivar.
Newell Brands Inc.
RECONCILIATION OF GAAP AND NON-GAAP INFORMATION
CERTAIN LINE ITEMS
(in millions, except per share data)
Three Months Ended March 31, 2016
GAAP Measure Project Renewal Costs (1) Acquisition Non-GAAP Measure
Advisory Personnel Other Restructuring Divestiture and integration Discontinued Percentage
Reported costs costs costs costs costs (2) costs (3) operations (4) Normalized* of Sales
Cost of products sold $ 809.3 $ (0.2 ) $ (1.5 ) $ (0.4 ) $ - $ - $ - $ - $ 807.2 61.4 %
Gross margin $ 505.6 $ 0.2 $ 1.5 $ 0.4 $ - $ - $ - $ - $ 507.7 38.6 %
Selling, general & administrative expenses $ 362.5 $ (5.1 ) $ (6.1 ) $ (1.7 ) $ - $ (1.0 ) $ (12.7 ) $ - $ 335.9 25.5 %
Operating income $ 125.4 $ 5.3 $ 7.6 $ 2.1 $ 11.1 $ 1.0 $ 19.3 $ - $ 171.8 13.1 %
Non-operating expenses $ 73.8 $ - $ - $ - $ - $ - $ (49.9 ) $ - $ 23.9
Income before income taxes $ 51.6 $ 5.3 $ 7.6 $ 2.1 $ 11.1 $ 1.0 $ 69.2 $ - $ 147.9
Income taxes (7) $ 11.3 $ 1.5 $ 2.2 $ 0.6 $ 4.2 $ 0.3 $ 20.1 $ - $ 40.2
Net income from continuing operations $ 40.3 $ 3.8 $ 5.4 $ 1.5 $ 6.9 $ 0.7 $ 49.1 $ - $ 107.7
Net income $ 40.5 $ 3.8 $ 5.4 $ 1.5 $ 6.9 $ 0.7 $ 49.1 $ (0.2 ) $ 107.7
Diluted earnings per share** $ 0.15 $ 0.01 $ 0.02 $ 0.01 $ 0.03 $ 0.00 $ 0.18 $ (0.00 ) $ 0.40
Three Months Ended March 31, 2015
GAAP Measure Project Renewal Costs (1) Inventory charge from Acquisition Non-GAAP Measure
Product Advisory Personnel Other Restructuring the devaluation of the and integration Discontinued Percentage
Reported recall costs (5) costs costs costs costs Venezuelan Bolivar (6) costs (3) operations (4) Normalized* of Sales
Cost of products sold $ 776.5 $ - $ - $ (0.2 ) $ (1.0 ) $ - $ (0.3 ) $ (1.5 ) $ - $ 773.5 61.2 %
Gross margin $ 487.5 $ - $ - $ 0.2 $ 1.0 $ - $ 0.3 $ 1.5 $ - $ 490.5 38.8 %
Selling, general & administrative expenses $ 362.0 $ (10.2 ) $ (10.6 ) $ (2.3 ) $ (0.8 ) $ - $ - $ (0.2 ) $ - $ 337.9 26.7 %
Operating income $ 98.2 $ 10.2 $ 10.6 $ 2.5 $ 1.8 $ 27.3 $ 0.3 $ 1.7 $ - $ 152.6 12.1 %
Income before income taxes $ 78.9 $ 10.2 $ 10.6 $ 2.5 $ 1.8 $ 27.3 $ 0.3 $ 1.7 $ - $ 133.3
Income taxes (7) $ 22.0 $ 3.3 $ 3.4 $ 0.8 $ 0.6 $ 5.5 $ 0.1 $ 0.6 $ - $ 36.3
Net income from continuing operations $ 56.9 $ 6.9 $ 7.2 $ 1.7 $ 1.2 $ 21.8 $ 0.2 $ 1.1 $ - $ 97.0
Net income $ 54.1 $ 6.9 $ 7.2 $ 1.7 $ 1.2 $ 21.8 $ 0.2 $ 1.1 $ 2.8 $ 97.0
Diluted earnings per share** $ 0.20 $ 0.03 $ 0.03 $ 0.01 $ 0.00 $ 0.08 $ 0.00 $ 0.00 $ 0.01 $ 0.36
.
* Normalized results are financial measures that are not in accordance with GAAP and exclude the above normalized adjustments. See below for a discussion of each of these adjustments.
**Totals may not add due to rounding.
(1) Costs associated with Project Renewal during the three months ended March 31, 2016 include $15.0 million of project-related costs and $11.1 million of restructuring costs. Project-related costs include advisory and consultancy costs, compensation and related costs of personnel dedicated to transformation projects, and other project-related costs. Costs associated with Project Renewal during the three months ended March 31, 2015 include $14.9 million of project-related costs and $27.3 million of restructuring costs.
(2) During the three months ended March 31, 2016, the Company recognized $1.0 million of costs associated with the planned divestiture of Décor.
(3) During the three months ended March 31, 2016, the Company incurred $19.3 million of costs (including $6.6 million of restructuring costs) associated with the acquisition and integration of Elmer's, Ignite Holdings, LLC, and Jarden. In addition, the Company recognized a $45.9 million loss associated with the termination of the Jarden Bridge Facility and $4.0 million of interest costs associated with borrowing arrangements for the Jarden transaction. During the three months ended March 31, 2015, the Company incurred $1.7 million of acquisition and integration costs associated with the acquisitions of Ignite Holdings, bubba brands and Baby Jogger.
(4) During the three months ended March 31, 2016, the Company recognized net income of $0.2 million in discontinued operations. During the three months ended March 31, 2015, the Company recognized a net loss of $2.8 million in discontinued operations, which primarily relates to the results of operations of Endicia and certain Culinary businesses.
(5) During the three months ended March 31, 2015, the Company recognized costs of $10.2 million associated with the Graco product recall.
(6) During the three months ended March 31, 2015, the Company recognized an increase of $0.3 million in cost of products sold resulting from increased costs of inventory due to changes in the exchange rate for the Venezuelan Bolivar.
(7) The Company determined the tax effect of the items excluded from normalized results by applying the estimated effective rate for the applicable jurisdiction in which the pre-tax items were incurred, and for which realization of the resulting tax benefit, if any, is expected. In certain situations in which an item excluded from normalized results impacts income tax expense, the Company uses a "with" and "without" approach to determine normalized income tax expense.
Newell Brands Inc.
Three Months Ended March 31, 2016
In Millions
Currency Analysis
By Segment
Net Sales, As Reported Core
Sales (1)
Year-Over-Year
Less Less Constant Inc. (Dec.) Excl.
Increase (Decrease)
Increase Planned Less 2016 Planned 2015 Currency Planned Divest. & Currency Excluding Including Currency Planned Core Sales
2016 2015 (Decrease) 2016 Divestitures (2) Acquisitions Core Sales 2015 Divestitures (2) Core Sales Inc. (Dec.) Acquisitions Impact Currency Currency Impact Acquisitions Divestitures (2) Growth (1)
Writing $ 378.8 $ 341.8 $ 37.0 $ 387.8 $ - $ 44.9 $ 342.9 $ 336.0 $ 20.9 $ 315.1 $ 51.8 $ 27.8 $ (14.8 ) 15.4 % 10.8 % (4.6 )% 13.4 % (6.8 )% 8.8 %
Home Solutions 372.1 364.5 7.6 374.6 74.6 - 300.0 363.6 74.1 289.5 11.0 10.5 (3.4 ) 3.0 % 2.1 % (0.9 )% 0.0 % (0.6 )% 3.6 %
Tools 179.7 180.4 (0.7 ) 183.6 - - 183.6 176.6 - 176.6 7.0 7.0 (7.7 ) 4.0 % (0.4 )% (4.4 )% 0.0 % 0.0 % 4.0 %
Commercial Products 174.5 185.2 (10.7 ) 176.0 - - 176.0 184.2 9.8 174.4 (8.2 ) 1.6 (2.5 ) (4.5 )% (5.8 )% (1.3 )% 0.0 % (5.4 )% 0.9 %
Baby & Parenting 209.8 192.1 17.7 209.2 - - 209.2 191.4 - 191.4 17.8 17.8 (0.1 ) 9.3 % 9.2 % (0.1 )% 0.0 % 0.0 % 9.3 %
Total Company $ 1,314.9 $ 1,264.0 $ 50.9 $ 1,331.2 $ 74.6 $ 44.9 $ 1,211.7 $ 1,251.8 $ 104.8 $ 1,147.0 $ 79.4 $ 64.7 $ (28.5 ) 6.3 % 4.0 % (2.3 )% 3.6 % (2.9 )% 5.6 %
Win Bigger Businesses Core Sales Growth (3) $ 708.7 $ 700.9 $ 7.8 $ 721.9 $ - $ - $ 721.9 $ 692.1 $ 20.2 $ 671.9 $ 29.8 $ 50.0 $ (22.0 ) 4.3 % 1.1 % (3.2 )% 0.0 % (3.1 )% 7.4 %
By Geography
United States $ 995.9 $ 917.2 $ 78.7 $ 995.9 $ 73.1 $ 41.1 $ 881.7 $ 917.2 $ 81.0 $ 836.2 $ 78.7 $ 45.5 $ - 8.6 % 8.6 % 0.0 % 4.5 % (1.3 )% 5.4 %
Canada 48.2 46.2 2.0 52.4 1.5 3.8 47.1 44.8 2.9 41.9 7.6 5.2 (5.6 ) 17.0 % 4.3 % (12.7 )% 8.5 % (3.9 )% 12.4 %
Total North America 1,044.1 963.4 80.7 1,048.3 74.6 44.9 928.8 962.0 83.9 878.1 86.3 50.7 (5.6 ) 9.0 % 8.4 % (0.6 )% 4.7 % (1.5 )% 5.8 %
Europe, Middle East and Africa 127.6 127.6 - 129.6 - - 129.6 125.1 - 125.1 4.5 4.5 (4.5 ) 3.6 % 0.0 % (3.6 )% 0.0 % 0.0 % 3.6 %
Latin America 55.8 89.4 (33.6 ) 65.3 - - 65.3 82.8 20.9 61.9 (17.5 ) 3.4 (16.1 ) (21.1 )% (37.6 )% (16.5 )% 0.0 % (26.6 )% 5.5 %
Asia Pacific 87.4 83.6 3.8 88.0 - - 88.0 81.9 - 81.9 6.1 6.1 (2.3 ) 7.4 % 4.5 % (2.9 )% 0.0 % (0.0 )% 7.4 %
Total International 270.8 300.6 (29.8 ) 282.9 - - 282.9 289.8 20.9 268.9 (6.9 ) 14.0 (22.9 ) (2.4 )% (9.9 )% (7.5 )% 0.0 % (7.6 )% 5.2 %
Total Company $ 1,314.9 $ 1,264.0 $ 50.9 $ 1,331.2 $ 74.6 $ 44.9 $ 1,211.7 $ 1,251.8 $ 104.8 $ 1,147.0 $ 79.4 $ 64.7 $ (28.5 ) 6.3 % 4.0 % (2.3 )% 3.6 % (2.9 )% 5.6 %
(1) "Core Sales" is determined by applying a fixed exchange rate, calculated as the 12-month average in 2015, to the current and prior year local currency sales amounts, with the difference between the change in "As Reported" sales and the change in "Core Sales" reported in the table as "Currency Impact". Core Sales Growth excludes the impact of currency, acquisitions and planned and actual divestitures from the period the intent to divest is determined through the date of sale.
(2) Actual and planned divestitures represent the Rubbermaid medical cart business, which the Company divested in August 2015; the Levolor and Kirsch window coverings brands ("Décor"), which the Company plans to divest in 2016; and, the Company's Venezuela operations, which the Company deconsolidated as of December 31, 2015.
(3) Win Bigger businesses include Writing & Creative Expression, which is included in the Writing segment, Tools, Commercial Products (excluding Medical) and Food & Beverage, which is included in the Home Solutions segment.
Legacy Newell Rubbermaid
Twelve Months Ended December 31, 2015
In Millions
Net Sales, As Reported Core
Sales (1)
Year-Over-Year
Less Less Constant Inc. (Dec.) Excl.
Increase (Decrease)
Increase Planned Less 2015 Planned 2014 Currency Planned Divest. & Currency Excluding Including Currency Planned Core Sales
2015 2014 (Decrease) 2015 Divestitures (2) Acquisitions Core Sales 2014 Divestitures (2) Core Sales Inc. (Dec.) Acquisitions Impact Currency Currency Impact Acquisitions Divestitures (2) Growth (1)
Total Company $ 5,915.7 $ 5,727.0 $ 188.7 $ 6,255.8 $ 178.1 $ 272.1 $ 5,805.6 $ 5,736.1 $ 233.1 $ 5,503.0 $ 519.7 $ 302.6 $ (331.0 ) 9.1 % 3.3 % (5.8 )% 4.7 % (1.1 )% 5.5 %
Total Company excl. Venezuela $ 5,787.1 $ 5,648.5 $ 138.6 $ 6,082.0 $ 178.1 $ 272.1 $ 5,631.8 $ 5,654.9 $ 233.1 $ 5,421.8 $ 427.1 $ 210.0 $ (288.5 ) 7.6 % 2.5 % (5.1 )% 4.8 % (1.1 )% 3.9 %
(1) "Core Sales" is determined by applying a fixed exchange rate, calculated as the 12-month average in 2014, to the current and prior year local currency sales amounts, with the difference between the change in "As Reported" sales and the change in "Core Sales" reported in the table as "Currency Impact". Core Sales Growth excludes the impact of currency, acquisitions and planned and actual divestitures from the period the intent to divest is determined through the date of sale.
(2) Actual and planned divestitures represent the Rubbermaid medical cart business on a year-to-date basis and Levolor and Kirsch window coverings brands ("Décor") for the third quarter and fourth quarter.
Newell Brands Inc.
Reconciliation of Normalized EPS Guidance
December 31, 2016
Year Ending
December 31, 2016
Diluted earnings per share $ 1.45 to $ 1.60
Project Renewal and Project Lean restructuring and other costs $ 0.35 to $ 0.45
Integration costs to drive synergies $ 0.10 to $ 0.15
Estimated gain on sale of Décor $ (0.25 ) to $ (0.35 )
Jarden transaction-related costs $ 0.20 to $ 0.30
Acquisition-related amortization* and inventory step-up $ 0.75 to $ 0.95
Normalized earnings per share $ 2.75 to $ 2.90
* Represents amortization of acquisition-related intangibles beginning in the second quarter of 2016.
Newell Brands Inc.
Reconciliation of Core Sales Growth
Year Ending December 31, 2016
Year Ending
December 31, 2016
Core Sales Growth, pro forma (1) 3.0 % to 4.0 %
Currency (1.0 %) to (2.0 %)
Acquisitions, net of divestitures (2) 6.0 % to 7.0 %
Venezuela deconsolidation (1.0 %)
Net Sales Growth, pro forma (1) 7.0 % to 8.0 %
(1) Pro forma as if the Jarden transaction was completed in April 2015.
(2) Acquisitions, net of divestitures represents estimated sales of The Waddington Group, Inc., Jostens, Inc. and Elmer's Products, Inc. until the one year anniversary of their respective dates of acquisition, net of the impacts of the divestiture of the Rubbermaid medical cart business in August 2015 and the planned divestiture of the Levolor and Kirsch window coverings brands ("Décor") in 2016.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160429005229/en/
Contact:
Newell Brands Inc.
Investor Contact:
Nancy O’Donnell, +1-770-418-7723
Vice President, Investor Relations
nancy.odonnell@newellco.com
or
Media Contacts :
Racquel White, +1-770-418-7643
Vice President, Global Communications
racquel.white@newellco.com
or
Weber Shandwick
Liz Cohen, +1-212-445-8044
liz.cohen@webershandwick.com
6:36 am Newell Brands beats by $0.02, beats on revs; guides FY16 EPS above consensus (NWL) :
Reports Q1 (Mar) earnings of $0.40 per share, $0.02 better than the Capital IQ Consensus of $0.38; revenues rose 4.0% year/year to $1.31 bln vs the $1.3 bln Capital IQ Consensus. 100 basis point increase in normalized operating margin compared to the prior year, while simultaneously increasing advertising and promotion investment by 40 basis points; 170 basis point increase in reported operating margin compared to the prior year.
Co issues guidance for FY16, sees EPS of $2.75-2.90 vs. $2.60 Capital IQ Consensus Estimate; sees FY16 revs of +3-4% to ~$1.35-1.37 bln, may not be comparable to $13.42 bln Capital IQ Consensus Estimate. As of April 15, 2016, Newell Brands core sales will include pro forma core sales associated with the Jarden transaction as if the combination occurred April 15, 2015. Core sales excludes the impact of foreign currency, all acquisitions until their first anniversary and all planned and completed divestitures (which includes the deconsolidation of Venezuela), but includes the negative impact of planned product line exits.
6:36 am Newell Brands beats by $0.02, beats on revs; guides FY16 EPS above consensus (NWL) :
Reports Q1 (Mar) earnings of $0.40 per share, $0.02 better than the Capital IQ Consensus of $0.38; revenues rose 4.0% year/year to $1.31 bln vs the $1.3 bln Capital IQ Consensus. 100 basis point increase in normalized operating margin compared to the prior year, while simultaneously increasing advertising and promotion investment by 40 basis points; 170 basis point increase in reported operating margin compared to the prior year.
Co issues guidance for FY16, sees EPS of $2.75-2.90 vs. $2.60 Capital IQ Consensus Estimate; sees FY16 revs of +3-4% to ~$1.35-1.37 bln, may not be comparable to $13.42 bln Capital IQ Consensus Estimate. As of April 15, 2016, Newell Brands core sales will include pro forma core sales associated with the Jarden transaction as if the combination occurred April 15, 2015. Core sales excludes the impact of foreign currency, all acquisitions until their first anniversary and all planned and completed divestitures (which includes the deconsolidation of Venezuela), but includes the negative impact of planned product line exits.
KKR & Co. L.P. Reports First Quarter 2016 Results
Business Wire KKR & Co. L.P.
April 25, 2016 6:30 AM
????
NEW YORK--(BUSINESS WIRE)--
KKR & Co. L.P. (KKR) today reported its first quarter 2016 results.
This Smart News Release features multimedia. View the full release here: http://www.businesswire.com/news/home/20160425005372/en/
KKR has issued a presentation of its first quarter 2016 results, which can be viewed at http://ir.kkr.com/kkr_ir/kkr_events.cfm.
A conference call to discuss KKR’s financial results will be held on Monday, April 25, 2016 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 Investor Center section of KKR’s website. A slide presentation containing supplemental commentary will be referenced on the call and may also be accessed through this website in advance of the call.
A replay of the live broadcast will be available on KKR’s website or by dialing (855) 859-2056 (U.S. callers) or +1 (404) 537-3406 (non-U.S. callers), pass code 86559359, beginning approximately two hours after the broadcast.
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ABOUT KKR
KKR is a leading global investment firm that manages investments across multiple asset classes including private equity, energy, infrastructure, real estate, credit and hedge funds. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and driving growth and value creation at the asset level. KKR invests its own capital
AZZ Inc. Reports Record Financial Results for Fiscal Year 2016
Full Year Fiscal 2016 EPS of $2.96 on a Reported Basis, or $3.08 on an Adjusted Basis
Annual Revenues of $903.2 million, up $86.5 million or 10.6% over Fiscal 2015
Annual Cash Flow from Operations up $25.4 million or 21.5% Compared to Prior Year
Company Announces Fiscal Year 2017 Revenue and Earnings Guidance Range
PR Newswire AZZ Inc.
April 21, 2016 6:30 AM
????
FORT WORTH, Texas, April 21, 2016 /PRNewswire/ -- AZZ Inc. (AZZ), a global provider of galvanizing services, welding solutions, specialty electrical equipment and highly engineered services, today announced financial results for the three and twelve-month periods ended February 29, 2016.
Fourth Quarter and Fiscal Year Results
Revenues for the fourth quarter were $217.6 million compared to $182.3 million for the same quarter last year, an increase of 19.4 percent. Net income for the fourth quarter was $16.1 million, or $0.62 per diluted share, compared to net income of $16.3 million, or $0.63 per diluted share, for last year's fourth fiscal quarter.
For the twelve-month period, the Company reported revenues of $903.2 million compared to $816.7 million for the comparable period last year, an increase of 10.6 percent. Net income for the twelve months was $76.8 million, or $2.96 per diluted share, compared to $64.9 million, or $2.52 per diluted share in the comparable period of last year.
Earnings for the full year of fiscal 2016 were negatively impacted by $0.12 per share from the costs related to attorney fees and the fourth quarter resolution of a commercial lawsuit, and charges taken in the fourth quarter related to rectifying incorrect matching payments made to the employee benefit plans of certain employees in prior years. Earnings for the fourth quarter of Fiscal 2016 were impacted by $0.10 per share from the issues described above. Details are covered in the Non-GAAP Disclosure Table.
Bookings for fiscal 2016 were $905.1 million, compared to $824.3 million for the prior year, an increase of 9.8 percent. Backlog at the end of the 2016 fiscal year was $334.5 million compared to backlog at the end of the prior year of $332.6 million. Incoming orders for the year were $905.1 million while revenues for the year totaled $903.2 million, resulting in a book to bill ratio of 100 percent. Of the backlog of $334.5 million, 31.8 percent is expected to be delivered outside of the U.S.
Energy Segment
Revenues for the Energy Segment for the fourth quarter of fiscal 2016 were $117.0 million as compared to $97.2 million for the same quarter last year, growing by 20.4 percent. Operating income for the segmentincreased 29.2 percent to $12.7 million compared to $9.8 million in the same period last year. Operating margins for the fourth quarter were 10.8 percent for the quarter as compared to 10.1 percent in the prior year period. For full year fiscal 2016, revenues increased 9.3 percent to $500.8 million and operating income increased 51.1 percent to $58.5 million compared to $458.3 million and $38.7 million respectively, in the prior year period. Operating margins for the 2016 fiscal year were 11.7 percent as compared to 8.4 percent in the prior fiscal year, as a result of increased net sales, improved pricing, and better operational execution overall.
Galvanizing Segment
Revenues for the Company's Galvanizing Segment for the fourth quarter of fiscal 2016 were $100.6 million, compared to the $85.1 million in the same period last year, an increase of 18.2 percent. Operating income was $23.1 million as compared to $20.3 million in the prior period, an increase of 13.5 percent. Operating margins for the fourth quarter were 22.9 percent, compared to 23.9 percent in the same period last year and up sequentially from the third quarter of fiscal 2016 margins of 22.8%. For full year fiscal 2016, revenues increased 12.3 percent to $402.4 million and operating income increased 7.0 percent to $94.8 million compared to $358.3 million and $88.6 million respectively, for the prior fiscal year. Operating margins for the 2016 fiscal year were 23.6 percent compared to 24.7 percent in the prior fiscal year.
Management Discussion
Tom Ferguson, president and chief executive officer of AZZ Inc., commented, "I am pleased with the financial performance achieved during the quarter and the full fiscal year. Our performance for the year resulted in record annual revenues, higher consolidated margins and strong cash flow, despite mixed conditions in our markets during the year. Fiscal Year 2016 was AZZ's 29th consecutive year of profitability, a testament to all the employees of AZZ."
Mr. Ferguson, continued, "As I noted on the third quarter earnings call, we saw improving operational performance and efficiencies in the Energy segment, as well as better deployment of technology, and good performance from our sales team, all driving growth in revenue and margins. In Galvanizing, we continue to see growth from acquisitions as well as from continuing innovations to our current customer-centered offerings. Although we continue to see a slight negative impact on a couple of our businesses due to lower oil prices and reduced rig count, we see a number of opportunities for growth in many of our served markets, especially in domestic utilities, and bridge and highway. I am also happy to report that the recently acquired PEI (Power Equipment Inc.) and Alpha Galvanizing are both off to a good start, and that our U.S. Galvanizing plants acquired earlier in the year tracked nicely during the fourth quarter toward reaching expected margins during fiscal 2017. We remain focused on leveraging our sales teams across our Energy businesses in North America; aggressively expanding internationally; driving operational excellence and growing our Galvanizing business, both organically and with targeted acquisitions."
Mr. Ferguson, continued, "The continued success of AZZ is due to the hard work, dedication, and the operational excellence displayed by our employees every day. I greatly appreciate their ongoing efforts. The Energy leadership team has made significant progress in accomplishing a number of strategic initiatives, which bolsters our confidence for continued growth in the coming years. The Galvanizing leadership team continues to excel and demonstrates both discipline and focus on providing our customers with industry leading service and support. We have a solid and balanced portfolio of products and innovative technologies; a respected position within our core markets; and loyal customers due to our commitment to superior service and quality products."
Announces Fiscal Year 2017 Guidance
Mr. Ferguson, concluded, " I am confident that fiscal 2017 will be a solid year and we are issuing management's guidance for fiscal 2017 EPS in the range of $3.15 to $3.45 per diluted share and revenues to be in the range of $930 million to $970 million. Our guidance reflects our estimates given the current challenging global market conditions, quarterly seasonality, our expected increase in realized tax rates, and our plans for organic growth through product innovation, and growth provided by our recently acquired businesses" said Mr. Ferguson.
Conference Call
AZZ Inc. will conduct a conference call to review the financial results for the fourth quarter and fiscal year 2016 at 11:00 A.M. ET on Thursday, April 21, 2016. Interested parties can access the conference call by dialing (844) 855-9499 or (412) 317-5497 (international). The call will be webcast via the Internet at http://www.azz.com/investor-relations. A replay of the call will be available for three days at (877) 344-7529 or (412) 317-0088 (international), confirmation #10083713, or for 30 days at http://www.azz.com/investor-relations.
About AZZ Inc.
AZZ Inc. is a global provider of galvanizing services, welding solutions, specialty electrical equipment and highly engineered services to the markets of power generation, transmission, distribution and industrial in protecting metal and electrical systems used to build and enhance the world's infrastructure. AZZ Galvanizing is a leading provider of metal finishing solutions for corrosion protection, including hot dip galvanizing to the North American steel fabrication industry. AZZ Energy is dedicated to delivering safe and reliable transmission of power from generation sources to end customers, and automated weld overlay solutions for corrosion and erosion mitigation to critical infrastructure in the energy markets worldwide.
Safe Harbor Statement
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 political stability and economic conditions of the various markets that AZZ serves, foreign and domestic, customer requested delays of shipments, acquisition opportunities, currency exchange rates, adequacy of financing, and availability of experienced management and 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 29, 2016 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:
Paul Fehlman, Senior Vice President - Finance and CFO
AZZ incorporated 817-810-0095
Internet: www.azz.com
Lytham Partners 602-889-9700
Joe Dorame, Robert Blum or Joe Diaz
Internet: www.lythampartners.com
---Financial tables on the following page---
AZZ Inc.
Condensed Consolidated Statement of Income
(in thousands, except per share data)
Three Months Ended
Twelve Months Ended
February 29, 2016
February 28, 2015
February 29, 2016
February 28, 2015
(unaudited)
(unaudited)
Net Sales
$
217,611
$
182,311
$
903,192
$
816,687
Costs of Sales
162,757
134,879
673,081
610,991
Gross Margin
54,854
47,432
230,111
205,696
Selling, General and Administrative
28,278
24,339
107,823
98,871
Operating Income
26,576
23,093
122,288
106,825
Interest Expense
3,543
4,030
15,155
16,561
Net (Gain) Loss on Sales or Insurance Settlement of Property, Plant and Equipment
138
(1,330)
(327)
(2,525)
Other (Income) expense, net
2,264
1,350
3,092
2,659
Income before income taxes
20,631
19,043
104,368
90,130
Income Tax Expense
4,555
2,759
27,578
25,187
Net Income
$
16,076
$
16,284
$
76,790
$
64,943
Net Income Per Share
Basic
$
0.62
$
0.63
$
2.98
$
2.53
Diluted
$
0.62
$
0.63
$
2.96
$
2.52
Diluted average shares outstanding
25,988
25,794
25,937
25,778
Segment Reporting
(in thousands)
Three Months Ended
Twelve Months Ended
February 29, 2016
February 28, 2015
February 29, 2016
February 28, 2015
(unaudited)
(unaudited)
Net Sales:
Energy
$
117,043
$
97,206
$
500,830
$
458,339
Galvanizing
100,568
85,105
402,362
358,348
$
217,611
$
182,311
$
903,192
$
816,687
Segment Operating Income (Loss):
Energy
$
12,664
$
9,805
$
58,471
$
38,703
Galvanizing
23,077
20,337
94,766
88,562
Corporate
(9,165)
(7,049)
(30,949)
(20,440)
Total Segment Operating Income
$
26,576
$
23,093
$
122,288
$
106,825
Condensed Consolidated Balance Sheet
(in thousands)
February 29, 2016
February 28, 2015
Assets:
Current Assets
$
309,334
$
298,634
Net Property, Plant and Equipment
226,333
196,583
Other Assets, Net
447,704
441,697
Total Assets
$
983,371
$
936,914
Liabilities and Shareholders' Equity:
Current Liabilities
$
148,405
$
149,142
Long Term Debt Due After One Year
303,790
315,982
Other Liabilities
49,960
51,738
Shareholders' Equity
481,216
420,052
Total Liabilities and Shareholders' Equity
$
983,371
$
936,914
Condensed Consolidated Statements of Cash Flows
(in thousands)
Twelve Months Ended
February 29, 2016
February 28, 2015
Net cash provided by operating activities
$
143,589
$
118,157
Net cash used in investing activities
(99,308)
(39,565)
Net cash used in financing activities
(25,323)
(82,414)
Effect of exchange rate changes on cash
(1,294)
(1,216)
Net increase (decrease) in cash and cash equivalents
$
17,664
$
(5,038)
Cash and cash equivalents at beginning of period
22,527
27,565
Cash and cash equivalents at end of period
$
40,191
$
22,527
Non-GAAP Disclosure
Adjusted Earnings Per Share
Adjusted Earnings Per Share
In addition to reporting financial results in accordance with GAAP, AZZ has provided adjusted earnings per share, which is a non-GAAP measures. Management believes that the presentation of these measures provides investors with greater transparency comparison of operating results across reporting periods.
The following table provides a reconciliation for the three and twelve-month periods ended February 29, 2016 between adjusted earnings per diluted share and earnings per diluted share calculated in accordance with GAAP which is shown net of tax:
Three Months Ended
Twelve Months Ended
February 29, 2016
(in thousands, except per share data)
Diluted Earnings Per Share (GAAP)
$
0.62
$
2.96
Adjustments (Net of Tax):
Commercial Lawsuit - Remove costs incurred related to defending and resolving a commercial lawsuit
0.08
0.10
401K Matching - Remove costs incurred to rectify 401K matching error in prior years
0.02
0.02
Adjusted Diluted Earnings Per Share (Non-GAAP)
$
0.72
$
3.08
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/azz-inc-reports-record-financial-results-for-fiscal-year-2016-300255163.html
Netflix beats 1Q profit forecasts
Netflix tops 1Q net income expectations, misses revenue forecasts
Associated Press
18 hours ago
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One Simple Thing Diabetics Should Be Doing (watch) The Blood Sugar Secret Sponsored ?
LOS GATOS, Calif. (AP) _ Netflix Inc. (NFLX) on Monday reported first-quarter earnings of $27.7 million.
The Los Gatos, California-based company said it had profit of 6 cents per share.
The results beat Wall Street expectations. The average estimate of 15 analysts surveyed by Zacks Investment Research was for earnings of 3 cents per share.
The Internet video service posted revenue of $1.96 billion in the period, missing Street forecasts. Thirteen analysts surveyed by Zacks expected $1.97 billion.
Netflix shares have decreased 5 percent since the beginning of the year, while the Standard & Poor's 500 index has increased slightly more than 2 percent. In the final minutes of trading on Monday, shares hit $108.65, an increase of 35 percent in the last 12 months.
_____
This story was generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on NFLX at http://www.zacks.com/ap/NFLX
The "Street" has TZOO coming in at .11 for the quarter that should be reported on or about April 17, 2016! All post's welcome! The "Good Dr's In"!
The "Street has TZOO coming in at .11 for the quarter that should be reported on or about April 17, 2016! All post's welcome! The "Good Dr's In"!
Sentiment: Strong Buy
Sonic Same-Store Sales Grow 6.5% for the Quarter Ending February 29
Two Year Winter Quarter Cumulative Sales Growth Totals 18%
Business Wire Sonic Corp.
March 29, 2016 4:05 PM
????
OKLAHOMA CITY--(BUSINESS WIRE)--
Sonic Corp. (SONC), the nation’s largest chain of drive-in restaurants, today announced results for its second fiscal quarter ended February 29, 2016.
Key highlights of the company’s second quarter of fiscal year 2016 included:
Net income per diluted share increased 57% to $0.22 compared with $0.14 in the same period prior year; adjusted net income per diluted share increased 38% to $0.18 compared with adjusted net income per diluted share of $0.13 in the prior-year period;
System same-store sales increased 6.5%, consisting of a 6.5% same-store sales increase at franchise drive-ins and an increase of 6.3% at company drive-ins;
Company drive-in margins improved by 60 basis points;
Five new franchise drive-ins opened; and
The company purchased 0.9 million outstanding shares.
"Our business continues to perform at an exceptional level, generating 6.5% same-store sales growth for the system while lapping our strongest same-store sales comparison in ten years,” said Cliff Hudson, Sonic Corp. CEO. “Continued strength in core menu items, combined with highly effective limited-time-offer and value-based promotions, allowed us to increase market share in a highly competitive environment. The combination of sales leverage and a favorable commodity cost environment helped to generate another quarter of solid margin improvement at the drive-in level.
“As we look to sustain our recent momentum, we continue to invest aggressively in our people and technology initiatives, which we believe will further differentiate the experience we provide to our consumers," continued Hudson. "And we are pleased to have repurchased 2.7 million shares in the first half of 2016, representing 5.2% of shares outstanding. We remain confident in the ability of our multi-layered growth strategy to increase EPS through same-store sales growth, improved margins, increased royalty revenues, accelerated new drive-in development and the deployment of free cash flow1.”
Same-Store Sales
For the second fiscal quarter ended February 29, 2016, system same-store sales increased 6.5%, which was comprised of a 6.5% same-store sales increase at franchise drive-ins and an increase of 6.3% at company drive-ins.
Financial Overview
For the second fiscal quarter of 2016, the company’s net income increased to $10.8 million or $0.22 per diluted share compared with net income of $7.7 million or $0.14 per diluted share in the same period in the prior year. Excluding the items outlined below, net income and net income per diluted share increased 29% and 38%, respectively.
The following analysis of non-GAAP adjustments is intended to supplement the presentation of the company’s financial results in accordance with GAAP. The company believes that the presentation of this analysis provides useful information to investors and management regarding the underlying business trends and the performance of the company’s ongoing operations and is helpful for period-to-period and company-to-company comparisons, which management believes will assist investors in analyzing the financial results of the company and predicting future performance.
Three months ended Three months ended
February 29, 2016 February 28, 2015
Net Diluted Net Diluted Net Income Diluted EPS
Income EPS Income EPS $ Change % Change $ Change % Change
Reported – GAAP $ 10,819 $ 0.22 $ 7,662 $ 0.14 $ 3,157 41 % $ 0.08 57 %
After-tax gain on sale of real estate (1,211 ) (0.03 ) - -
Retroactive benefit of Work Opportunity Tax Credit and resolution of tax matters (585 ) (0.01 ) (666 ) (0.01 )
Adjusted - Non-GAAP $ 9,023 $ 0.18 $ 6,996 $ 0.13 $ 2,027 29 % $ 0.05 38 %
For the first six months of fiscal year 2016, net income totaled $23.3 million or $0.46 per diluted share compared with net income of $17.7 million or $0.32 per diluted share for the same period in 2015. Excluding the items outlined below, net income and net income per diluted share increased 26% and 35%, respectively.
Six months ended Six months ended
February 29, 2016 February 28, 2015
Net Diluted Net Diluted Net Income Diluted EPS
Income EPS Income EPS $ Change % Change $ Change % Change
Reported – GAAP $ 23,277 $ 0.46 $ 17,747 $ 0.32 $ 5,530 31 % $ 0.14 44 %
After-tax gain on sale of real estate (1,211) (0.03) - -
Retroactive benefit of Work Opportunity Tax Credit and resolution of tax matters (585) (0.01) (666) (0.01)
Adjusted - Non-GAAP $ 21,481 $ 0.42 $ 17,081 $ 0.31 $ 4,400 26 % $ 0.11 35 %
Fiscal Year 2016 Outlook
While the macroeconomic environment may impact results, the company is revising its outlook for adjusted earnings per share growth for fiscal year 2016 from 16% to 20% to 20% to 25%. The outlook for fiscal 2016 anticipates the following elements:
4% to 6% same-store sales growth for the system;
Royalty revenue growth from same-store sales improvements and new unit development;
50 to 60 new franchise drive-in openings;
Drive-in-level margin improvement between 50 to 60 basis points, depending upon the degree of same-store sales growth at company drive-ins;
Selling, general and administrative expenses of approximately $84.0 million to $85.0 million reflecting increased investment in human resources and technology to support brand initiatives;
Depreciation and amortization expense of $45.0 million to $46.0 million as a result of capital investment in fiscal 2016;
Capital expenditures of $35 million to $40 million;
Free cash flow of approximately $75 million to $80 million;
An income tax rate between 36.0% to 37.0%;
The planned repurchase of $126 million of stock across the fiscal year; and
An expected quarterly cash dividend of $0.11 per share.
1 Free cash flow is defined as net income plus depreciation, amortization and stock compensation expenses, less capital expenditures.
Earnings Conference Call
The company will host a conference call to review financial results at 5:00 PM ET this evening. The conference call can be accessed live over the phone by dialing (888) 438-5448 or (719) 325-2491 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 8155461. The replay will be available until Tuesday, April 5, 2016. 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 drive-in restaurant chain serving more than 3 million customers every day. Nearly 90 percent of SONIC's 3,500 drive-in locations are owned and operated by local business men and women. For more than 60 years, SONIC has delighted guests with signature menu items, more than 1.3 million drink combinations and friendly service by iconic Carhops. To learn more about Sonic Corp. (NASDAQ/NM: SONC), please visit sonicdrivein.com or follow us on Facebook and Twitter.
This press release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements reflect management’s expectations regarding future events and operating performance and speak only as of the date hereof. These forward-looking statements involve a number of risks and uncertainties. Factors that could cause actual results to differ materially from those expressed in, or underlying, these forward-looking statements are detailed in the company’s annual and quarterly report filings with the Securities and Exchange Commission. The company undertakes no obligation to publicly release revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unforeseen events, except as required to be reported under the rules and regulations of the Securities and Exchange Commission.
The tables that follow provide information regarding the number of company drive-ins, franchise drive-ins and system drive-ins in operation as of the end of the periods indicated. In addition, these tables provide information regarding franchise sales, system growth in sales, and both franchise and system average drive-in sales and change in same-store sales. System information includes both company and franchise drive-in information, which we believe is useful in analyzing the growth of our brand. While we do not record franchise drive-in sales as revenues, we believe this information is important in understanding our financial performance since we calculate and record franchise royalties based on a percentage of franchise sales. This information also is indicative of the financial health of our franchisees.
SONC-F
SONIC CORP.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
Three months ended Six months ended
February 29, February 28, February 29, February 28,
2016 2015 2016 2015
Revenues:
Company Drive-In sales $ 95,313 $ 92,309 $ 199,196 $ 192,447
Franchise Drive-Ins:
Franchise royalties and fees 36,047 32,407 75,969 70,671
Lease revenue 1,399 979 2,991 2,044
Other 401 524 807 913
Total revenues 133,160 126,219 278,963 266,075
Costs and expenses:
Company Drive-Ins:
Food and packaging 26,213 25,828 55,159 54,401
Payroll and other employee benefits 35,359 33,880 71,723 69,151
Other operating expenses, exclusive of
depreciation and amortization included below 20,100 19,924 43,008 42,529
Total cost of Company Drive-In sales 81,672 79,632 169,890 166,081
Selling, general and administrative 20,785 18,138 41,725 36,926
Depreciation and amortization 11,057 11,539 22,056 23,199
Other operating (income) expense, net (2,566 ) (81 ) (2,965 ) 340
Total costs and expenses 110,948 109,228 230,706 226,546
Income from operations 22,212 16,991 48,257 39,529
Interest expense 6,467 6,318 12,689 12,599
Interest income (105 ) (97 ) (205 ) (199 )
Net interest expense 6,362 6,221 12,484 12,400
Income before income taxes 15,850 10,770 35,773 27,129
Provision for income taxes 5,031 3,108 12,496 9,382
Net income $ 10,819 $ 7,662 $ 23,277 $ 17,747
Basic income per share $ 0.22 $ 0.14 $ 0.47 $ 0.33
Diluted income per share $ 0.22 $ 0.14 $ 0.46 $ 0.32
Weighted average basic shares 48,977 53,171 49,599 53,226
Weighted average diluted shares 49,988 54,660 50,656 54,744
SONIC CORP.
Unaudited Supplemental Information
Three months ended Six months ended
February 29, February 28, February 29, February 28,
2016 2015 2016 2015
Drive-Ins in Operation
Company:
Total at beginning of period 382 389 387 391
Opened - - - 1
Acquired from (sold to) franchisees (7 ) 3 (9 ) 1
Closed (net of re-openings) - - (3 ) (1 )
Total at end of period 375 392 375 392
Franchise:
Total at beginning of period 3,147 3,128 3,139 3,127
Opened 5 4 18 16
Acquired from (sold to) the company 7 (3 ) 9 (1 )
Closed (net of re-openings) (6 ) (13 ) (13 ) (26 )
Total at end of period 3,153 3,116 3,153 3,116
System-wide:
Total at beginning of period 3,529 3,517 3,526 3,518
Opened 5 4 18 17
Closed (net of re-openings) (6 ) (13 ) (16 ) (27 )
Total at end of period 3,528 3,508 3,528 3,508
Three months ended Six months ended
February 29, February 28, February 29, February 28,
2016 2015 2016 2015
($ in thousands) ($ in thousands)
Sales Analysis
Company Drive-Ins:
Total sales $ 95,313 $ 92,309 $ 199,196 $ 192,447
Average drive-in sales 253 237 522 496
Change in same-store sales 6.3 % 11.2 % 5.3 % 9.5 %
Franchised Drive-Ins:
Total sales $ 886,313 $ 818,601 $ 1,854,828 $ 1,732,254
Average drive-in sales 283 267 593 561
Change in same-store sales 6.5 % 11.5 % 5.9 % 9.8 %
System-wide:
Change in total sales 7.8 % 12.8 % 6.7 % 10.9 %
Average drive-in sales $ 280 $ 264 $ 585 $ 554
Change in same-store sales 6.5 % 11.5 % 5.9 % 9.8 %
Note: Change in same-store sales based on restaurants open for a minimum of 15 months.
SONIC CORP.
Unaudited Supplemental Information
Three months ended Six months ended
February 29, February 28, February 29, February 28,
2016 2015 2016 2015
(In thousands) (In thousands)
Revenues
Company Drive-In sales $ 95,313 $ 92,309 $ 199,196 $ 192,447
Franchise Drive-Ins:
Franchise royalties 35,807 32,236 75,269 69,012
Franchise fees 240 171 700 1,659
Lease revenue 1,399 979 2,991 2,044
Other 401 524 807 913
Total revenues $ 133,160 $ 126,219 $ 278,963 $ 266,075
Three months ended Six months ended
February 29, February 28, February 29, February 28,
2016 2015 2016 2015
Margin Analysis (percentage of Company Drive-In sales)
Company Drive-Ins:
Food and packaging 27.5 % 28.0 % 27.7 % 28.3 %
Payroll and employee benefits 37.1 36.7 36.0 35.9
Other operating expenses 21.1 21.6 21.6 22.1
Cost of Company Drive-In sales 85.7 % 86.3 % 85.3 % 86.3 %
February 29, August 31,
2016 2015
(In thousands)
Selected Balance Sheet Data
Cash and cash equivalents $ 36,106 $ 27,191
Current assets 85,024 85,438
Property, equipment and capital leases, net 411,226 421,406
Total assets $ 606,747 $ 620,024
Current liabilities, including capital lease obligations and
long-term debt due within one year $ 69,484 $ 87,821
Obligations under capital leases due after one year 19,493 20,763
Long-term debt due after one year 484,863 428,238
Total liabilities 639,967 602,591
Stockholders' equity (deficit) $ (33,220 ) $ 17,433
View source version on businesswire.com: http://www.businesswire.com/news/home/20160329006484/en/
Contact:
Sonic Corp.
Corey Horsch, 405-225-4800
Vice President of Investor Relations and Treasurer
4:39 pm Sonic beats by $0.02, beats on revs; raises FY16 guidance above consensus; finances debt repurchase with new debt offeringBriefing.com (Tue, Mar 29)
4:39 pm Sonic beats by $0.02, beats on revs; raises FY16 guidance above consensus; finances debt repurchase with new debt offeringBriefing.com (Tue, Mar 29)
4:39 pm Sonic beats by $0.02, beats on revs; raises FY16 guidance above consensus; finances debt repurchase with new debt offeringBriefing.com (Tue, Mar 29)
The "Street has AZZ coming in at .70 for the quarter that should be reported on or about April 20, 2016!
All post's welcome!
The "Good Dr's In"!
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The "Street has AZZ coming in at .70 for the quarter that should be reported on or about April 20, 2016!
All post's welcome!
The "Good Dr's In"!
<eom>
The "Street has AZZ coming in at .70 for the quarter that should be reported on or about April 20, 2016!
All post's welcome!
The "Good Dr's In"!
<eom>
The Toro Company Reports Record First Quarter Results
First quarter sales increase 2.6 percent to a record $486.4 million
Net earnings per share for the first quarter up 29.6 percent to a record $0.70
Company is well positioned as it enters key selling season
Full-year earnings guidance raised
Business Wire The Toro Company
February 18, 2016 8:30 AM
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BLOOMINGTON, Minn.--(BUSINESS WIRE)--
The Toro Company (TTC) today reported net earnings of $39.3 million, or $0.70 per share, on a net sales increase of 2.6 percent to $486.4 million for its first quarter ended January 29, 2016. In the comparable fiscal 2015 period, the company delivered net earnings of $31.0 million, or $0.54 per share, on net sales of $474.2 million.
“We are very encouraged by the positive start to the fiscal year, delivering record results for the first quarter,” said Michael J. Hoffman, Toro’s chairman and chief executive officer. “Our residential business benefitted from strong demand for zero-turn riding mowers. Strong sales of our landscape contractor equipment, increased demand for our specialty construction equipment and higher sales of golf irrigation products also contributed to the positive start to the fiscal year.”
“With an ongoing focus on innovation, we are excited about our new product lineup across our businesses for fiscal 2016. Most recently, our new golf equipment and irrigation products received a positive reception at the Golf Industry Show in San Diego, California last week. New products such as the Workman® light-duty vehicle and the enhanced product offerings for our INFINITY® Series golf sprinkler were well received by those attending the show. We were also pleased by the excitement surrounding our new product offerings at the 2016 Sports Turf Managers Show that also took place in San Diego, California. Similarly, in the days ahead, the team will be busy preparing for the upcoming Rental Show in the end of February, where we expect to see positive opportunities
Wynn Resorts, Limited Reports Fourth Quarter and Year End 2015 Results
Business Wire Wynn Resorts, Limited
February 11, 2016 4:10 PM
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LAS VEGAS--(BUSINESS WIRE)--
Wynn Resorts, Limited (Nasdaq: WYNN) today reported financial results for the fourth quarter and year ended December 31, 2015.
Net revenues for the fourth quarter of 2015 were $946.9 million, compared to $1,138.0 million in the fourth quarter of 2014. The decline was the result of a 27.0% net revenue decrease from our Macau Operations, partially offset by a 3.8% increase in net revenues from our Las Vegas Operations. Adjusted property EBITDA (1) was $287.5 million for the fourth quarter of 2015, an 18.4% decrease from $352.5 million in the fourth quarter of 2014.
For the full year, net revenues were $4,075.9 million in 2015, down 25.0% from $5,433.7 million in 2014. Adjusted property EBITDA declined 33.1% to $1,185.8 million in 2015. Adjusted property EBITDA in 2015 decreased 43.7% to $708.6 million at our Macau Operations and 7.4% to $477.2 million at our Las Vegas Operations.
On a US GAAP basis, net income attributable to Wynn Resorts, Limited for the fourth quarter of 2015 was $87.2 million, or $0.86 per diluted share, compared to $109.3 million, or $1.07 per diluted share, in the fourth quarter of 2014.
Adjusted net income attributable to Wynn Resorts, Limited (2) in the fourth quarter of 2015 was $104.1 million, or $1.03 per diluted share, compared to $122.4 million, or $1.20 per diluted share, in the fourth quarter of 2014.
Wynn Resorts, Limited also announced today that the Company has approved a cash dividend for the quarter of $0.50 per common share. This dividend will be payable on March 2, 2016, to stockholders of record on February 23, 2016.
Macau Operations
In the fourth quarter of 2015, net revenues were $555.7 million, a 27.0% decrease from the $761.2 million generated in the fourth quarter of 2014. Adjusted property EBITDA in the fourth quarter of 2015 was $160.1 million, down 33.6% from $241.2 million in the fourth quarter of 2014.
Table games turnover in the VIP segment was $13.0 billion for the fourth quarter of 2015, a 36.9% decrease from $20.7 billion in the fourth quarter of 2014. VIP table games win as a percentage of turnover (calculated before commissions) for the quarter was 2.60%, below the expected range of 2.7% to 3.0% and below the 2.80% experienced in the fourth quarter of 2014. The average number of VIP tables decreased to 192 units in the fourth quarter of 2015 from 244 units in the prior year's fourth quarter.
Commencing in the second quarter of 2015, the Company included the amount of cash that is deposited in a gaming table's drop box plus cash chips purchased at the casino cage in the calculation of table drop in accordance with standard Macau industry practice. Table drop in the mass market segment was $1,185.5 million in the fourth quarter of 2015, down 10.9% from the 2014 fourth quarter. Table games win in the mass market segment decreased by 8.2% to $228.6 million in the fourth quarter of 2015. The mass market win percentage of 19.3% in the fourth quarter of 2015 increased from the 18.7% experienced in the fourth quarter of 2014.
Slot machine handle for the fourth quarter of 2015 declined 4.7% from the 2014 period to $1,069.3 million, and slot win decreased by 9.8% to $50.4 million.
For the fourth quarter of 2015, total non-casino revenues, before promotional allowances, decreased 21.2% during the quarter to $75.6 million. We achieved an average daily rate ("ADR") of $323, down 2.7% compared to the $332 in the 2014 fourth quarter. Occupancy at Wynn Macau was 96.3%, down from 98.6% in the prior-year period. Revenue per available room ("REVPAR") decreased 5.2% to $311 in the 2015 quarter from $328 in last year’s fourth quarter.
Las Vegas Operations
In the fourth quarter of 2015, net revenues were $391.2 million, a 3.8% increase from $376.8 million in the fourth quarter of 2014. Adjusted property EBITDA in the fourth quarter of 2015 was $127.4 million, up 14.5% from $111.2 million in the fourth quarter of 2014.
Net casino revenues in the fourth quarter of 2015 were flat at $170.9 million, compared to the fourth quarter of 2014 at $171.0 million. Table games drop of $485.7 million was down 24.0% from $639.0 million in the 2014 quarter. Table games win percentage was 28.7%, above the property’s expected range of 21% to 25% and above the 24.0% in the 2014 quarter. Slot machine handle of $730.7 million was 5.1% below the $769.8 million in the comparable period of 2014, and slot win was up 11.0% to $52.6 million.
For the fourth quarter of 2015, total non-casino revenues, before promotional allowances, increased 2.7% from the fourth quarter of 2014 to $263.0 million.
Room revenues increased 6.7% to $101.9 million during the quarter, versus $95.5 million in the fourth quarter of 2014. Occupancy decreased to 81.1% from 82.1% and ADR increased 7.7% to $292 from $271. REVPAR was $237 in the 2015 fourth quarter, 6.8% above the $222 reported in the prior-year quarter.
Food and beverage revenues in the fourth quarter of 2015 were $101.1 million, down 2.1% compared to the 2014 fourth quarter. Entertainment, retail and other revenues increased 4.5% to $60.0 million.
Wynn Palace Project in Macau
The Company is currently constructing Wynn Palace, a fully integrated resort featuring a 1,700-room hotel, a performance lake, and a wide range of amenities, including meeting, retail, food-and-beverage, and gaming space, in the Cotai area of Macau. In July 2013, we signed a $2.6 billion guaranteed maximum price (GMP) contract for the project’s construction. The total project budget, including construction costs, capitalized interest, pre-opening expenses, land costs and financing fees, is approximately $4.1 billion.
During the fourth quarter of 2015, we invested approximately $433.4 million in our Cotai project, taking the total investment to date to $3.5 billion.
Wynn Project in Massachusetts
In November 2014, we were awarded a gaming license to develop and construct an integrated resort in Everett, Massachusetts, adjacent to Boston. The resort will be located on a 33-acre site along the Mystic River. The resort will contain a hotel, a waterfront boardwalk, meeting space, a casino, a spa, retail offerings, and food-and-beverage outlets. During the fourth quarter of 2015, we began site remediation, site preparation and pre-construction activities.
Balance Sheet and Other
Our cash and cash equivalents and investment securities at December 31, 2015 totaled $2.3 billion.
Total debt outstanding at the end of the quarter was $9.2 billion, including $4.1 billion of Wynn Macau debt, $3.2 billion of Wynn Las Vegas debt and $1.9 billion of debt at the parent company and other.
During the 2015 year-end close process, the Company identified a $33.8 million decrease in the fair value of the Redemption Note, resulting in an increase to net income attributable to Wynn Resorts, Limited of $22.4 million that should have been recorded during the three months ended September 30, 2015. While the Company determined these amounts were immaterial, considering both quantitative and qualitative factors, it has elected to revise the amounts in the three months ended September 30, 2015, and will include disclosure of the adjustments in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. These non-cash amounts do not affect the Consolidated Statements of Operations for the year ended December 31, 2015 or adjusted property EBITDA, adjusted net income attributable to Wynn Resorts, Limited or adjusted net income per diluted share for the three months ended September 30, 2015 and December 31, 2015.
Conference Call Information
The Company will hold a conference call to discuss its results on February 11, 2016 at 1:30 p.m. PT (4:30 p.m. ET). Interested parties are invited to join the call by accessing a live audio webcast at http://www.wynnresorts.com.
Forward-looking Statements
This release contains forward-looking statements regarding operating trends and future results of operations. Such forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those we express in these forward-looking statements, including, but not limited to, our dependence on existing management, results of regulatory or enforcement actions and probity investigations, pending or future legal proceedings, uncertainties over the development and success of new gaming and resort properties, adverse tourism trends, general global macroeconomic conditions, changes in gaming laws or regulations, volatility and weakness in world-wide credit and financial markets, and our substantial indebtedness and leverage. Additional information concerning potential factors that could affect the Company’s financial results is included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 and the Company’s other periodic reports filed with the Securities and Exchange Commission. The Company is under no obligation to (and expressly disclaims any such obligation to) update or revise its forward-looking statements as a result of new information, future events or otherwise.
Non-GAAP Financial Measures
(1) “Adjusted property EBITDA” is net income before interest, taxes, depreciation and amortization, pre-opening costs, property charges and other, management and license fees, corporate expenses and other, intercompany golf course and water rights leases, stock-based compensation, loss on extinguishment of debt, change in interest rate swap fair value, change in Redemption Note fair value and other non-operating income and expenses, and includes equity in income from unconsolidated affiliates. Adjusted property EBITDA is presented exclusively as a supplemental disclosure because management believes that it is widely used to measure the performance, and as a basis for valuation, of gaming companies. Management uses adjusted property EBITDA as a measure of the operating performance of its segments and to compare the operating performance of its properties with those of its competitors. The Company also presents adjusted property EBITDA because it is used by some investors as a way to measure a company’s ability to incur and service debt, make capital expenditures and meet working capital requirements. Gaming companies have historically reported EBITDA as a supplement to financial measures in accordance with U.S. generally accepted accounting principles (“GAAP”). In order to view the operations of their casinos on a more stand-alone basis, gaming companies, including Wynn Resorts, Limited, have historically excluded from their EBITDA calculations pre-opening expenses, property charges, corporate expenses and stock-based compensation, that do not relate to the management of specific casino properties. However, adjusted property EBITDA should not be considered as an alternative to operating income as an indicator of the Company’s performance, as an alternative to cash flows from operating activities as a measure of liquidity, or as an alternative to any other measure determined in accordance with GAAP. Unlike net income, adjusted property EBITDA does not include depreciation or interest expense and therefore does not reflect current or future capital expenditures or the cost of capital. The Company has significant uses of cash flows, including capital expenditures, interest payments, debt principal repayments, taxes and other non-recurring charges, which are not reflected in adjusted property EBITDA. Also, Wynn Resorts’ calculation of adjusted property EBITDA may be different from the calculation methods used by other companies and, therefore, comparability may be limited.
(2) "Adjusted net income attributable to Wynn Resorts, Limited" is net income before pre-opening costs, loss on extinguishment of debt, change in interest rate swap fair value, change in Redemption Note fair value, and property charges and other, net of noncontrolling interest and taxes in respective jurisdictions. Adjusted net income attributable to Wynn Resorts, Limited and adjusted net income attributable to Wynn Resorts, Limited per diluted share (“adjusted EPS”) are presented as supplemental disclosures because management believes that these non-GAAP financial measures are widely used to measure the performance, and as a principal basis for valuation, of gaming companies. These measures are used by management and/or evaluated by some investors, in addition to income and EPS computed in accordance with GAAP, as an additional basis for assessing period-to-period results of our business. Adjusted net income attributable to Wynn Resorts, Limited and adjusted net income attributable to Wynn Resorts, Limited per diluted share may be different from the calculation methods used by other companies and, therefore, comparability may be limited.
The Company has included schedules in the tables that accompany this release that reconcile (i) net income attributable to Wynn Resorts, Limited to adjusted net income attributable to Wynn Resorts, Limited, (ii) operating income to adjusted property EBITDA, and (iii) adjusted property EBITDA to net income attributable to Wynn Resorts, Limited.
WYNN RESORTS, LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
(unaudited)
Three Months Ended December 31, Twelve Months Ended December 31,
2015 2014 2015 2014
Operating revenues:
Casino $ 692,098 $ 884,664 $ 2,932,419 $ 4,274,221
Rooms 133,073 129,197 538,500 542,762
Food and beverage 119,768 128,025 597,080 604,701
Entertainment, retail and other 85,779 94,770 350,622 401,181
Gross revenues 1,030,718 1,236,656 4,418,621 5,822,865
Less: promotional allowances (83,816 ) (98,681 ) (342,738 ) (389,204 )
Net revenues 946,902 1,137,975 4,075,883 5,433,661
Operating costs and expenses:
Casino 426,932 554,583 1,862,687 2,667,013
Rooms 37,446 36,099 149,009 148,338
Food and beverage 72,727 70,353 361,246 337,206
Entertainment, retail and other 38,878 38,729 157,432 163,754
General and administrative 112,247 125,833 464,793 492,464
Provision (benefit) for doubtful accounts (2,151 ) 4,649 11,115 3,906
Pre-opening costs 25,190 15,354 77,623 30,146
Depreciation and amortization 77,201 80,082 322,629 314,119
Property charges and other 6,572 (3,237 ) 10,535 10,437
Total operating costs and expenses
795,042 922,445 3,417,069 4,167,383
Operating income 151,860 215,530 658,814 1,266,278
Other income (expense):
Interest income 2,574 4,369 7,229 20,441
Interest expense, net of capitalized interest (73,608 ) (78,993 ) (300,906 ) (315,062 )
Change in swap fair value 1,710 (2,942 ) (5,300 ) (4,393 )
Decrease in Redemption Note fair value 4,553 — 52,041 —
Loss on extinguishment of debt — (2,213 ) (126,004 ) (9,569 )
Equity in income from unconsolidated affiliates 1,755 176 1,823 1,349
Other (240 ) 223 1,550 (182 )
Other income (expense), net (63,256 ) (79,380 ) (369,567 ) (307,416 )
Income before income taxes 88,604 136,150 289,247 958,862
Benefit (provision) for income taxes 16,190 12,043 (7,723 ) 3,782
Net income 104,794 148,193 281,524 962,644
Less: net income attributable to noncontrolling interests
(17,573 ) (38,847 ) (86,234 ) (231,090 )
Net income attributable to Wynn Resorts, Limited $ 87,221 $ 109,346 $ 195,290 $ 731,554
Basic and diluted income per common share:
Net income attributable to Wynn Resorts, Limited:
Basic $ 0.86 $ 1.08 $ 1.93 $ 7.25
Diluted $ 0.86 $ 1.07 $ 1.92 $ 7.18
Weighted average common shares outstanding:
Basic 101,200 101,010 101,163 100,927
Diluted 101,459 101,935 101,671 101,931
Dividends declared per common share $ 0.50 $ 2.50 $ 3.00 $ 6.25
WYNN RESORTS, LIMITED AND SUBSIDIARIES
RECONCILIATION OF NET INCOME ATTRIBUTABLE TO WYNN RESORTS, LIMITED
TO ADJUSTED NET INCOME ATTRIBUTABLE TO WYNN RESORTS, LIMITED
(in thousands, except per share data)
(unaudited)
Three Months Ended December 31, Twelve Months Ended December 31,
2015 2014 2015 2014
Net income attributable to Wynn Resorts, Limited $ 87,221 $ 109,346 $ 195,290 $ 731,554
Pre-opening costs, net 19,395 11,927 62,305 22,613
Loss on extinguishment of debt, net — 1,826 125,434 7,894
Change in swap fair value, net (1,234 ) 2,124 3,826 3,175
Decrease in Redemption Note fair value, net (3,756 ) — (42,934 ) —
Property charges and other, net 2,458 (2,778 ) 5,701 7,039
Adjusted net income attributable to Wynn Resorts, Limited (2) $ 104,084 $ 122,445 $ 349,622 $ 772,275
Adjusted net income attributable to Wynn Resorts, Limited per diluted share $ 1.03 $ 1.20 $ 3.44 $ 7.58
Weighted average common shares outstanding - diluted 101,459 101,935 101,671 101,931
WYNN RESORTS, LIMITED AND SUBSIDIARIES
RECONCILIATION OF OPERATING INCOME TO ADJUSTED PROPERTY EBITDA
AND ADJUSTED PROPERTY EBITDA TO NET INCOME ATTRIBUTABLE TO WYNN RESORTS, LIMITED
(in thousands)
(unaudited)
Three Months Ended December 31, 2015
Macau
Operations
Las Vegas
Operations
Corporate
and Other
Total
Operating income $ 78,912 $ 60,072 $ 12,876 $ 151,860
Pre-opening costs 20,830 — 4,360 25,190
Depreciation and amortization 29,064 45,277 2,860 77,201
Property charges and other 1,983 2,260 2,329 6,572
Management and license fees 20,970 12,377 (33,347 ) —
Corporate expenses and other 4,755 4,922 7,116 16,793
Stock-based compensation 3,554 720 3,806 8,080
Equity in income from unconsolidated affiliates — 1,755 — 1,755
Adjusted Property EBITDA(1) $ 160,068 $ 127,383 $ — $ 287,451
Three Months Ended December 31, 2014
Macau
Operations
Las Vegas
Operations
Corporate
and Other
Total
Operating income $ 157,608 $ 51,619 $ 6,303 $ 215,530
Pre-opening costs 7,164 4,250 3,940 15,354
Depreciation and amortization 32,814 45,530 1,738 80,082
Property charges and other 1,042 (4,279 ) — (3,237 )
Management and license fees 29,576 5,660 (35,236 ) —
Corporate expenses and other 6,936 6,862 14,315 28,113
Stock-based compensation 6,084 1,569 8,787 16,440
Equity in income from unconsolidated affiliates — 23 153 176
Adjusted Property EBITDA(1) $ 241,224 $ 111,234 $ — $ 352,458
Three Months Ended December 31,
2015 2014
Adjusted Property EBITDA(1) $ 287,451 $ 352,458
Pre-opening costs (25,190 ) (15,354 )
Depreciation and amortization (77,201 ) (80,082 )
Property charges and other (6,572 ) 3,237
Corporate expenses and other (16,793 ) (28,113 )
Stock-based compensation (8,080 ) (16,440 )
Interest income 2,574 4,369
Interest expense, net of capitalized interest (73,608 ) (78,993 )
Change in swap fair value 1,710 (2,942 )
Decrease in Redemption Note fair value 4,553 —
Loss on extinguishment of debt — (2,213 )
Other (240 ) 223
Benefit for income taxes 16,190 12,043
Net income 104,794 148,193
Less: net income attributable to noncontrolling interests (17,573 ) (38,847 )
Net income attributable to Wynn Resorts, Limited $ 87,221 $ 109,346
WYNN RESORTS, LIMITED AND SUBSIDIARIES
RECONCILIATION OF OPERATING INCOME TO ADJUSTED PROPERTY EBITDA
AND ADJUSTED PROPERTY EBITDA TO NET INCOME ATTRIBUTABLE TO WYNN RESORTS, LIMITED
(in thousands)
(unaudited)
Twelve Months Ended December 31, 2015
Macau
Operations
Las Vegas
Operations
Corporate
and Other
Total
Operating income $ 386,255 $ 218,866 $ 53,693 $ 658,814
Pre-opening costs 55,058 — 22,565 77,623
Depreciation and amortization 130,565 181,981 10,083 322,629
Property charges and other 4,568 3,480 2,487 10,535
Management and license fees 94,271 46,835 (141,106 ) —
Corporate expenses and other 22,206 21,469 32,404 76,079
Stock-based compensation 15,700 2,792 19,794 38,286
Equity in income from unconsolidated affiliates — 1,743 80 1,823
Adjusted Property EBITDA(1) $ 708,623 $ 477,166 $ — $ 1,185,789
Twelve Months Ended December 31, 2014
Macau
Operations
Las Vegas
Operations
Corporate
and Other
Total
Operating income $ 895,176 $ 270,489 $ 100,613 $ 1,266,278
Pre-opening costs 21,956 4,250 3,940 30,146
Depreciation and amortization 128,428 179,394 6,297 314,119
Property charges and other 15,352 (4,915 ) — 10,437
Management and license fees 148,039 24,580 (172,619 ) —
Corporate expenses and other 36,207 36,621 38,967 111,795
Stock-based compensation 12,924 4,342 21,888 39,154
Equity in income from unconsolidated affiliates — 435 914 1,349
Adjusted Property EBITDA(1) $ 1,258,082 $ 515,196 $ — $ 1,773,278
Twelve Months Ended December 31,
2015 2014
Adjusted Property EBITDA(1) $ 1,185,789 $ 1,773,278
Pre-opening costs (77,623 ) (30,146 )
Depreciation and amortization (322,629 ) (314,119 )
Property charges and other (10,535 ) (10,437 )
Corporate expenses and other (76,079 ) (111,795 )
Stock-based compensation (38,286 ) (39,154 )
Interest income 7,229 20,441
Interest expense, net of capitalized interest (300,906 ) (315,062 )
Change in swap fair value (5,300 ) (4,393 )
Decrease in Redemption Note fair value 52,041 —
Loss on extinguishment of debt (126,004 ) (9,569 )
Other 1,550 (182 )
Benefit (provision) for income taxes (7,723 ) 3,782
Net income 281,524 962,644
Less: net income attributable to noncontrolling interests (86,234 ) (231,090 )
Net income attributable to Wynn Resorts, Limited $ 195,290 $ 731,554
WYNN RESORTS, LIMITED AND SUBSIDIARIES
SUPPLEMENTAL DATA SCHEDULE
(dollars in thousands, except for win per unit per day, ADR and REVPAR)
Three Months Ended December 31, Twelve Months Ended December 31,
2015 2014 2015 2014
Macau Operations:
VIP
Average number of table games 192 244 230 259
VIP turnover $ 13,033,946 $ 20,653,190 $ 57,917,060 $ 108,077,342
Table games win $ 339,033 $ 578,898 $ 1,659,683 $ 3,051,046
VIP win as a % of turnover 2.60 % 2.80 % 2.87 % 2.82 %
Table games win per unit per day (a) $ 19,159 $ 25,807 $ 19,785 $ 32,258
Mass market
Average number of table games 249 202 228 202
Table drop (b) $ 1,185,535 $ 1,330,694 $ 4,857,804 $ 5,517,382
Table games win $ 228,581 $ 249,021 $ 951,458 $ 1,187,997
Table games win % 19.3 % 18.7 % 19.6 % 21.5 %
Table games win per unit per day (a) $ 9,965 $ 13,434 $ 11,431 $ 16,154
Average number of slot machines 737 666 708 679
Slot machine handle $ 1,069,297 $ 1,122,510 $ 3,961,115 $ 5,415,127
Slot machine win $ 50,373 $ 55,860 $ 191,164 $ 264,763
Slot machine win per unit per day (c) $ 743 $ 912 $ 740 $ 1,068
Room statistics
Occupancy 96.3 % 98.6 % 96.5 % 98.4 %
ADR (d) $ 323 $ 332 $ 323 $ 333
REVPAR (e) $ 311 $ 328 $ 312 $ 327
Las Vegas Operations:
Average number of table games 228 231 232 232
Table drop (b) $ 485,652 $ 639,028 $ 2,060,189 $ 2,556,452
Table games win $ 139,273 $ 153,247 $ 490,920 $ 623,968
Table games win % 28.7 % 24.0 % 23.8 % 24.4 %
Table games win per unit per day (a) $ 6,651 $ 7,226 $ 5,786 $ 7,354
Average number of slot machines 1,882 1,864 1,866 1,858
Slot machine handle $ 730,733 $ 769,765 $ 2,969,327 $ 3,008,563
Slot machine win $ 52,585 $ 47,380 $ 206,626 $ 186,458
Slot machine win per unit per day (c) $ 304 $ 276 $ 303 $ 275
Room statistics
Occupancy 81.1 % 82.1 % 85.2 % 86.9 %
ADR (d) $ 292 $ 271 $ 285 $ 274
REVPAR (e) $ 237 $ 222 $ 243 $ 238
(a) Table games win per unit per day is shown before discounts and commissions, as applicable.
(b) In Macau, table drop is the amount of cash that is deposited in a gaming table’s drop box plus cash chips purchased at the casino cage. In Las Vegas, table drop is the amount of cash and net markers issued that are deposited in a gaming table’s drop box.
(c) Slot machine win per unit per day is calculated as gross slot win minus progressive accruals and free play.
(d) ADR is average daily rate and is calculated by dividing total room revenue including the retail value of promotional allowances (less service charges, if any) by total rooms occupied including complimentary rooms.
(e) REVPAR is revenue per available room and is calculated by dividing total room revenue including the retail value of promotional allowances (less service charges, if any) by total rooms available.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160211006132/en/
Contact:
Wynn Resorts, Limited
Mark Strawn, 702-770-7555
Tupperware Brands Reports Fourth Quarter 2015 Results; Declares Regular Quarterly Dividend
- Fourth quarter sales up 2% in local currency+ and down 13% in dollars.
- GAAP diluted E.P.S. $1.15 versus $1.63 prior year, down 9% in local currency and down 29% in dollars. Adjusted*, diluted E.P.S. $1.35, down 1% in local currency and down 22% in dollars. Two cents below guidance range including an additional 5 cents negative impact from exchange rates versus October guidance.
- South America sales up 22% in local currency and down 17% in dollars, driven by Brazil, up 22% in local currency.
- Tupperware North America segment sales up 16% in local currency and up 6% in dollars. Both Tupperware Mexico, and United States and Canada up double-digits in local currency.
- Board of Directors declares quarterly dividend of 68 cents per share.
PR Newswire Tupperware Brands Corporation
January 27, 2016 7:00 AM
????
ORLANDO, Fla., Jan. 27, 2016 /PRNewswire/ -- (TUP) Tupperware Brands Corporation today announced fourth quarter 2015 operating results.
View photo
.Tupperware Brands Logo
Rick Goings, Chairman and CEO, commented, "We had a disappointing quarter as we lapped a tough comparison and continued to see an impact from economic and political headwinds in many of our units. While I don't want to take away from the strong performances in a number of units, our internal actions did not overcome the impact of worse than expected externals in some of our units."
Goings continued, "Given today's environment, we're making some defensive moves to allow us to perform financially and to play better offense in implementing our growth strategies. We remain confident the strong fundamentals of our business model coupled with these actions will set a path to success for our 3.1 million global sales force, our associates and for delivery of value to our shareholders."
Fourth Quarter Executive Summary
Fourth quarter 2015 net sales were $592.1 million up 2% in local currency and down 13% in dollars. Emerging markets**, accounting for 63% of sales, achieved a 4% increase in local currency. The most significant contributions to the fourth quarter growth were in Argentina, Brazil, China, and Tupperware Mexico. Established markets were down 1% in local currency, primarily from France and Italy, partially offset by good performance in Germany and Tupperware United States and Canada.
GAAP net income of $58.1 million, was down 29% versus prior year net income of $82.3 million. Excluding the impact of foreign currency rates on the comparison, adjusted net income was down 1% versus prior year. Adjusted diluted earnings per share of $1.35 was 2 cents below the October outlook range including an additional negative 5 cent impact versus 2014 compared with the guidance from changes in foreign exchange rates. Adjusted earnings per share was down 22% versus last year in dollars, including a negative 36 cent impact from changes in exchange rates on the comparison.
Total sales force of 3.1 million was up 5% versus prior year at the end of the quarter, and there were 2% more active sellers in the quarter, the third consecutive quarter with a year-over-year active seller increase.
Fourth Quarter Business Highlights
Europe: Strong increases by the two South African businesses and Germany, offset by France, Italy and Turkey
Segment sales were down 3% in local currency (down 18% in dollars).
Emerging markets were down 2% in local currency. Tupperware South Africa, up 14% and Avroy Shlain in South Africa, up 16% both with higher active sellers, offset by Turkey, down 25% from lower productivity including impacts related to the external environment.
Established markets were down 3% in local currency. Germany, up 9%, was offset by France, down 11% and Italy, down 15%.
Asia Pacific: China up double-digits offset by results in Indonesia, Korea, and Malaysia/Singapore
Sales for the segment were down 3% in local currency (down 13% in dollars).
Emerging Markets were down 4% in local currency. China, up 18% was offset by Indonesia, down 4%, Malaysia/Singapore, down 13%, and Korea, down 21% from lapping business to business sales from last year.
Established markets were down 1% in local currency compared with prior year. Nutrimetics Australia and New Zealand, up 10% on higher sales force activity, offset by Tupperware Japan, down 14%.
Tupperware North America: Both Tupperware Mexico and Tupperware United States and Canada leveraged strong fundamentals, growing segment sales in local currency by 16%
Segment sales up 16% in local currency (up 6% in dollars). Tupperware Mexico sales up 25% on higher activity and productivity. Sales force size up 7% compared with prior year.
Tupperware United States and Canada local currency sales were up 10% on a double-digit increase in active sellers. Sales force size closed 16% above prior year.
Beauty North America: Segment sales were down 6% in local currency (down 19% in dollars)
BeautiControl local currency sales down 13% from lower sales force activity in light of sales force compensation changes in the second quarter.
Fuller Mexico sales were down 4% in local currency from the prior year reflecting lower sales force additions and activity. Total sales force size down 3% at the end of the year.
South America: Leveraged 5% larger sales force for higher volume along with inflation driven price increases
Segment sales up 22% in local currency (down 17% in dollars), driven by increases in Argentina and Brazil. Brazil was up 22% in local currency, reflecting higher volume from a large sales force size advantage and some pricing.
Argentina was up 48% in local currency, primarily due to inflation related higher prices.
Segment's active sales force was up 1%. The 21 point difference between the local currency sales and active seller comparisons primarily reflected the higher prices throughout the segment as well as improved productivity and a mix shift toward Brazil that has a larger than average order size.
2016 Outlook (Unaudited)
Based on current business trends and foreign currency rates, the Company's first quarter and fiscal 2016 full year guidance is provided below.
Company Level
13 Weeks Ending
13 Weeks
53 Weeks Ending
52 Weeks
Mar 26, 2016
Ended
Dec 31, 2016
Ended
Low
High
Mar 28, 2015
Low
High
Dec 26, 2015
USD Sales Growth vs Prior Year
(12)%
(10)
%
(12)
%
(6)
%
(4)
%
(12)
%
GAAP EPS
$0.74
$0.79
$0.59
$3.81
$3.91
$3.69
GAAP Pre-Tax ROS
9.7
%
10.2
%
7.1
%
11.9
%
12.0
%
11.4
%
Local Currency+ Sales Growth vs Prior Year
1
%
3
%
3
%
3
%
5
%
4
%
EPS Excluding Items*
$0.81
$0.86
$1.02
$4.07
$4.17
$4.37
Pre-Tax ROS Excluding Items*
10.7
%
11.1
%
11.8
%
12.8
%
12.9
%
12.8
%
FX Impact on EPS Comparison (a)
($0.23)
($0.23)
($0.58)
($0.58)
(a)
Impact of changes in foreign currency versus prior year are updated monthly and posted at: Tupperware Brands Foreign Exchange Translation Impact Update.
Full Year 2016
Fiscal year includes a 53rd week estimated to have a positive impact on the year-over-year comparison of 1 point.
Tax rate excluding items is expected to be 25.5%, and 24.8% on a U.S. GAAP basis.
Excludes land sales that may occur.
Segment Level
For the full year, sales in local currency are expected to be about even in Europe and Beauty North America, up low-single digit in Asia Pacific, up 6-8% in Tupperware North America and to increase in the mid-to-high teens in South America.
Pre-tax profit in each segment in local currency is expected to improve by about 25% of incremental sales in local currency.
Dividend Declaration
The Company's Board of Directors declared today the Company's regular quarterly dividend. The dividend declared was 68 cents per share, even with the previous quarter. It is payable on April 4, 2016 to shareholders of record as of March 18, 2016.
* See Non-GAAP Financial Measures Reconciliation Schedules.
** The Company classifies Established Market Units as those operating in Western Europe, including Scandinavia, the United States, Canada, Australia and Japan and its remaining units as Emerging Market Units.
+ Local currency changes are measured by comparing current year results with those of the prior year translated at the current year's foreign exchange rates.
Fourth Quarter Earnings Conference Call
Tupperware Brands will conduct a conference call today, Wednesday, January 27, 2016, at 8:30 am Eastern time. The conference call will be webcast and accessible, along with a copy of this news release, on www.tupperwarebrands.com.
Tupperware Brands Corporation, through an independent sales force of 3.1 million, is the leading global marketer of innovative, premium products across multiple brands utilizing a relationship based selling method. Product brands and categories include design-centric preparation, storage and serving solutions for the kitchen and home through the Tupperware brand and beauty and personal care products through the Avroy Shlain, BeautiControl, Fuller Cosmetics, NaturCare, Nutrimetics, and Nuvo brands.
The Company's stock is listed on the New York Stock Exchange (TUP). Statements contained in this release, which are not historical fact and use predictive words such as "outlook", "guidance", "expects" or "target" are forward-looking statements. These statements involve risks and uncertainties that include recruiting and activity of the Company's independent sales forces relating to governmental actions and otherwise, the success of new product introductions and promotional programs, governmental approvals of materials for use in food containers and beauty and personal care products, the success of buyers in obtaining financing or attracting tenants for commercial and residential developments, the effects of economic and political conditions generally and foreign exchange risk in particular and other risks detailed in the Company's periodic reports as filed in accordance with the Securities Exchange Act of 1934 as amended.
The Company updates each month the impact of changes in foreign exchange rates versus the prior year, posting it on, Tupperware Brands Foreign Exchange Translation Impact Update. Other than updating for changes in foreign currency exchange rates, the Company does not intend to update forward-looking information, except through its quarterly earnings releases, unless it expects diluted earnings per share for the current quarter, excluding items impacting comparability and changes versus its guidance of the impact of changes in foreign exchange rates, to be significantly below its previous guidance.
Non-GAAP Financial Measures
The Company has utilized non-GAAP financial measures in this release, which are provided to assist readers' understanding of the Company's results of operations. These amounts, identified as items impacting comparability, at times materially impact the comparability of the Company's results of operations. The adjusted information is intended to be indicative of Tupperware Brands' primary operations, and to assist readers in evaluating performance and analyzing trends across periods. These results should be considered in addition to, not as a substitute for, results reported in accordance with GAAP.
The non-GAAP financial measures exclude gains from the sale of property, plant and equipment and insurance settlements related to casualty losses, inventory obsolescence in conjunction with decisions to exit or significantly restructure businesses, asset retirement obligations, re-engineering and fixed asset impairment charges and beginning in 2015 pension settlements. While the Company is engaged in a multi-year program to sell land adjacent to its Orlando, Florida headquarters, and also disposes of other excess land and facilities periodically, these activities are not part of the Company's primary business operations. Additionally, amounts recognized in any given period are not indicative of amounts that may be recognized in any particular future period. For this reason, these amounts are excluded as indicated. The Company excludes significant charges related to casualty losses caused by significant weather events, fires or similar circumstances. It also excludes any related gains resulting from the settlement of associated insurance claims. While these types of events can and do recur periodically, they are excluded from indicated financial information due to their distinction from ongoing business operations, inherent volatility and impact on the comparability of earnings across quarters. Also, the Company periodically records exit costs accounted for using the applicable accounting guidance for exit or disposal cost obligations and other amounts related to rationalizing its supply chain operations and other restructuring activities, including upon liquidation of operations in a country the recognition in income of amounts previously recorded in equity as a cumulative translation adjustment, and pension settlements, and believes these amounts are similarly volatile and impact the comparability of earnings across quarters. Therefore, they are also excluded from indicated financial information to provide what the Company believes represents a useful measure for analysis and predictive purposes.
The Company believes that excluding from reported financial information costs incurred in connection with a significant change in its capital structure that is of a nature that would be expected to recur sporadically, also provides a useful measure for analysis and predictive purposes. The Venezuelan government over the last several years has severely restricted the ability to translate bolivars into U.S. dollars and has mandated at various levels the exchange rate for U.S. dollars. Due to the sporadic timing and magnitude of changes in the mandated exchange rates, the Company's non-GAAP measures exclude for analysis and predictive purposes, the impact from devaluations on the bolivar denominated net monetary assets and other balance sheet positions that impact near term income since they appear in the income statement at the exchange rate at which they were originally translated rather than the exchange rate at which current operating activity is being translated, as well as gains from obtaining U.S. dollars at exchange rates more favorable than those at which the bolivars were last recorded.
The Company has also elected to present financial measures excluding the impact of amortizing the purchase accounting carrying value of certain definite-lived intangible assets, primarily the value of its Fuller trade name recorded in connection with the Company's December 2005 acquisition of the direct selling businesses of Sara Lee Corporation. The amortization expense related to these assets will continue for several years. Similarly, in connection with its evaluation of the carrying value of acquired intangible assets and goodwill, the Company has periodically recognized impairment charges. The Company believes that these types of non-cash charges will not be representative in any single reporting period of amounts recorded in prior reporting periods or expected to be recorded in future reporting periods. Therefore, they are excluded from indicated financial information to also provide a useful measure for analysis and predictive purposes.
As the impact of changes in exchange rates is an important factor in understanding period-to-period comparisons, the Company believes the presentation of results on a local currency basis, in addition to reported results, helps improve readers' ability to understand the Company's operating results and evaluate performance in comparison with prior periods. The Company presents local currency information that compares results between periods as if current period exchange rates had been the exchange rates in the prior period. This includes the translation impact on sales and earnings from currency devaluations. The Company uses results on a local currency basis as one measure to evaluate performance. The Company generally refers to such amounts as calculated on a local currency basis, as restated or excluding the impact of foreign currency. These results should be considered in addition to, not as a substitute for, results reported in accordance with GAAP. Results on a local currency basis may not be comparable to similarly titled measures used by other companies and are not measures of performance presented in accordance with GAAP.
In information included with this release, the Company has referred to Adjusted EBITDA and a Debt/Adjusted EBITDA ratio, which are non-GAAP financial measures used in the Company's credit agreement. The Company uses these measures in its capital allocation decision process and in discussions with investors, analysts and other interested parties and therefore believes it is useful to disclose this amount and ratio. The Company's calculation of these measures is in accordance with its credit agreement, and is set forth in the reconciliation from GAAP amounts in an attachment to this release; however, the reader is cautioned that other companies define these measures in different ways, and consequently they will likely not be comparable with similarly labeled amounts disclosed by others.
TUPPERWARE BRANDS CORPORATION
FOURTH QUARTER SALES STATISTICS*
(UNAUDITED)
All Units
Reported
Sales
Inc/(Dec)%
Restated+
Sales
Inc/(Dec)%
Active
Sales
Force
Inc/(Dec)
vs. Q4 '14
%
Total
Sales
Force
Inc/(Dec)
vs. Q4 '14
%
Europe
(18)
(3)
100,876
8
a
708,486
7
Asia Pacific
(13)
(3)
252,183
(1)
1,123,389
4
b
TW North America
6
16
114,498
20
393,143
9
d
Beauty North America
(19)
(6)
211,465
(5)
430,757
(4)
South America
(17)
22
109,255
1
e
420,116
5
Total All Units
(13)
2
788,277
2
3,075,891
5
Emerging Market Units
Europe
(23)
(2)
69,407
12
a
517,755
10
Asia Pacific
(13)
(4)
214,831
(2)
996,937
4
b
TW North America
5
25
102,218
21
293,477
7
d
Beauty North America
(20)
(4)
188,767
(5)
370,442
(3)
South America
(17)
22
109,255
1
e
420,116
5
Total Emerging Market Units
(14)
4
684,478
2
2,598,727
5
Established Market Units
Europe
(16)
(3)
31,469
(1)
190,731
2
Asia Pacific
(13)
(1)
37,352
6
c
126,452
6
TW North America
6
10
12,280
12
99,666
16
Beauty North America
(14)
(13)
22,698
(11)
60,315
(10)
South America
—
—
—
—
—
—
Total Established Market Units
(10)
(1)
103,799
—
477,164
4
* Sales force statistics as collected by the Company and, in some cases, provided by distributors and sales force. The Company classifies Established Market Units as those operating in Western Europe, including Scandinavia, the United States, Canada, Australia and Japan, and its remaining units as Emerging Market Units. Active Sales Force is defined as the average number of people ordering in each cycle over the course of the quarter, and Total Sales Force is defined as the number of sales force members of the units as of the end of the quarter.
+ Local currency, or restated, changes are measured by comparing current year results with those of the prior year translated at the current year's foreign exchange rates.
Notes
a The decrease in local currency sales in Europe, despite an active seller increase, reflected the curtailment of shipments to Egypt due to slow collections and currency controls. It also reflected, in Turkey, the timing of a promoted period, the nature of activity driving programs used, and smaller order sizes in light of qualifications used and the external environment.
b The decrease in active sellers, despite a total seller increase in Asia Pacific emerging markets, reflected most significantly a larger advantage in total than active sellers in the Philippines. There were good sales force additions in the quarter in the Philippines, which impacted the active seller comparison as this group is onboarded into the business. As well, there was some impact on supply to outer islands due to government restrictions related to the Asia Pacific Economic Cooperation conference held in the country. Based on its model, the Philippine business has an outsized impact on the active seller comparison in relation to its sales.
c More active sellers with lower sales in Asia Pacific established markets primarily reflected a mix shift in the quarter toward the segment's beauty businesses that have lower than average order sizes.
d The larger increase in active sellers compared with total sellers in Tupperware North America emerging markets reflected good results under Tupperware Mexico's onboarding approach, along with its product and promotional programs to spur activity.
e The much higher local currency sales increase in South America, compared with the increase in active sellers, primarily reflected price increases throughout the segment and increased productivity in Brazil, as well as a mix shift away from Venezuela that has a lower than average order size and toward Brazil that has a larger than average order size.
TUPPERWARE BRANDS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(In millions, except per share data)
13 Weeks Ended
52 Weeks Ended
Dec 26,
2015
Dec 27,
2014
Dec 26,
2015
Dec 27,
2014
Net sales
$
592.1
$
679.9
$
2,283.8
$
2,606.1
Cost of products sold
191.2
227.5
744.4
884.0
Gross margin
400.9
452.4
1,539.4
1,722.1
Delivery, sales and administrative expense
305.6
331.3
1,217.6
1,346.1
Re-engineering and impairment charges
2.3
2.7
20.3
11.0
Gains on disposal of assets
0.3
0.4
13.7
2.7
Operating income
93.3
118.8
315.2
367.7
Interest income
0.9
1.0
2.4
3.0
Interest expense
11.0
10.6
47.6
46.5
Other expense (income), net
1.5
(0.3)
10.1
26.0
Income before income taxes
81.7
109.5
259.9
298.2
Provision for income taxes
23.6
27.2
74.1
83.8
Net income
$
58.1
$
82.3
$
185.8
$
214.4
Net income per common share:
Basic earnings per share
$
1.16
$
1.65
$
3.72
$
4.28
Diluted earnings per share
$
1.15
$
1.63
$
3.69
$
4.20
TUPPERWARE BRANDS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(In millions, except per share data)
13 Weeks Ended
Reported
Restated*
Foreign
52 Weeks Ended
Reported
Restated*
Foreign
Dec 26,
2015
Dec 27,
2014
%
%
Exchange
Dec 26,
2015
Dec 27,
2014
%
%
Exchange
Inc (Dec)
Inc (Dec)
Impact*
Inc (Dec)
Inc (Dec)
Impact*
Net Sales:
Europe
$
159.7
$
194.0
(18)
(3)
$
(29.9)
$
604.9
$
730.3
(17)
—
$
(125.3)
Asia Pacific
200.7
230.2
(13)
(3)
(23.0)
779.0
849.9
(8)
1
(81.3)
TW North America
95.5
90.4
6
16
(8.0)
353.7
349.9
1
11
(30.4)
Beauty North America
57.7
70.9
(19)
(6)
(9.3)
240.0
290.9
(17)
(6)
(35.9)
South America
78.5
94.4
(17)
22
(30.2)
306.2
385.1
(20)
25
(140.2)
$
592.1
$
679.9
(13)
2
$
(100.4)
$
2,283.8
$
2,606.1
(12)
4
$
(413.1)
Segment profit (loss):
Europe
$
31.7
$
43.7
(27)
(14)
$
(6.5)
$
93.3
$
118.2
(21)
(5)
$
(19.6)
Asia Pacific
51.2
58.2
(12)
(2)
(5.9)
175.0
191.0
(8)
1
(17.7)
TW North America
18.9
18.9
—
13
(2.2)
67.4
68.3
(1)
12
(8.3)
Beauty North America
(0.9)
0.2
—
(7)
(0.9)
2.3
1.3
82
+
(4.6)
South America
16.7
18.5
(10)
39
(6.4)
46.5
27.1
71
+
(33.8)
117.6
139.5
(16)
—
(21.9)
384.5
405.9
(5)
20
(84.0)
Unallocated expenses
(23.8)
(18.1)
33
21
(1.7)
(72.8)
(55.9)
31
15
(7.7)
Gains on disposal of assets
0.3
0.4
(29)
(29)
—
13.7
2.7
+
+
—
Re-engineering and impairment charges
(2.3)
(2.7)
(16)
(16)
—
(20.3)
(11.0)
84
84
—
Interest expense, net
(10.1)
(9.6)
5
5
—
(45.2)
(43.5)
4
4
—
Income before taxes
81.7
109.5
(25)
(5)
(23.6)
259.9
298.2
(13)
26
(91.7)
Provision for income taxes
23.6
27.2
(13)
10
(5.8)
74.1
83.8
(12)
21
(22.4)
Net income
$
58.1
$
82.3
(29)
(10)
$
(17.8)
$
185.8
$
214.4
(13)
28
$
(69.3)
Net income per common share (diluted)
$
1.15
$
1.63
(29)
(9)
$
(0.36)
$
3.69
$
4.20
(12)
30
$
(1.36)
Weighted average number of diluted shares
50.5
50.6
50.4
51.0
* 2015 actual compared with 2014 translated at 2015 exchange rates
+ Greater than 100% increase
TUPPERWARE BRANDS CORPORATION
NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
(In millions, except per share data)
13 Weeks Ended Dec 26, 2015
13 Weeks Ended Dec 27, 2014
Reported
Adj's
Excl Adj's
Reported
Adj's
Excl Adj's
Segment profit (loss):
Europe
$
31.7
$
0.5
a,b
$
32.2
$
43.7
$
—
$
43.7
Asia Pacific
51.2
1.0
a,b
52.2
58.2
0.7
a
58.9
TW North America
18.9
0.4
b
19.3
18.9
—
18.9
Beauty North America
(0.9)
2.0
a,b
1.1
0.2
2.1
a,e
2.3
South America
16.7
1.9
a,c
18.6
18.5
0.4
a,c
18.9
117.6
5.8
123.4
139.5
3.2
142.7
Unallocated expenses
(23.8)
—
(23.8)
(18.1)
—
(18.1)
Gains on disposal of assets
0.3
(0.3)
d
—
0.4
(0.4)
—
Re-engineering and impairment charges
(2.3)
2.3
e
—
(2.7)
2.7
e
—
Interest expense, net
(10.1)
—
(10.1)
(9.6)
—
(9.6)
Income before taxes
81.7
7.8
89.5
109.5
5.5
115.0
Provision for income taxes
23.6
(2.5)
f
21.1
27.2
1.0
f
28.2
Net income
$
58.1
$
10.3
$
68.4
$
82.3
$
4.5
$
86.8
Net income per common share (diluted)
$
1.15
$
0.20
$
1.35
$
1.63
$
0.09
$
1.72
52 Weeks Ended Dec 26, 2015
52 Weeks Ended Dec 27, 2014
Reported
Adj's
Excl Adj's
Reported
Adj's
Excl Adj's
Segment profit:
Europe
$
93.3
$
0.5
a,b
$
93.8
$
118.2
$
0.1
a
$
118.3
Asia Pacific
175.0
2.9
a,b
177.9
191.0
3.1
a,e
194.1
TW North America
67.4
0.4
b
67.8
68.3
—
68.3
Beauty North America
2.3
7.4
a,b
9.7
1.3
10.5
a,e
11.8
South America
46.5
15.4
a,c
61.9
27.1
43.0
a,c
70.1
384.5
26.6
411.1
405.9
56.7
462.6
Unallocated expenses
(72.8)
—
(72.8)
(55.9)
—
(55.9)
Gains on disposal of assets
13.7
(13.7)
d
—
2.7
(2.7)
d
—
Re-engineering and impairment charges
(20.3)
20.3
e
—
(11.0)
11.0
e
—
Interest expense, net
(45.2)
—
(45.2)
(43.5)
—
(43.5)
Income before taxes
259.9
33.2
293.1
298.2
65.0
363.2
Provision for income taxes
74.1
(1.5)
f
72.6
83.8
4.8
f
88.6
Net income
$
185.8
$
34.7
$
220.5
$
214.4
$
60.2
$
274.6
Net income per common share (diluted)
$
3.69
$
0.68
$
4.37
$
4.20
$
1.18
$
5.38
a Amortization of intangibles of acquired beauty units.
b Pension settlement costs.
c As a result of step devaluations in the Venezuelan bolivar from 6.3 bolivars per U.S. dollar to 10.8, 50 and 172 bolivars per U.S dollar as of the end of March 2014, June 2014 and January 2015 and the ongoing devaluation to 199 bolivars per U.S. dollar as of the end of December 2015, the Company had negative impacts of $1.8 million and $14.9 million in the fourth quarter and December year-to-date periods of 2015 and $0.2 million and $42.4 million in the fourth quarter and December year-to-date periods of 2014. These amounts related to expense from re-measuring bolivar denominated net monetary assets at the lower exchange rates at the times of devaluations, along with the impact of recording in income amounts on the balance sheet when the devaluations occurred, primarily inventory, at the exchange rates at the time the amounts were purchased, rather than the exchange rates in use when they were included in income. Also includes, in the December year-to-date period of 2014, $5.6 million the Company received for approximately 51 million bolivars at an average exchange rate of 9.1 bolivars per U.S. dollar, which generated an exchange gain of $4.6 million.
d Gains on disposal of assets is primarily from transactions related to land held near the Orlando, FL headquarters.
e In both years, re-engineering and impairment charges were primarily related to severance costs incurred for headcount reduction in several of the Company's operations in connection with changes in its management and organizational structures. Also included in the year-to-date amounts were a $13.5 million fixed asset impairment in Venezuela in 2015, and in 2014, costs related to the decision to cease operating the Armand Dupree business in the United States, the Nutrimetics business in Thailand and a manufacturing plant in India.
f Provision for income taxes represents the net tax impact of adjusted amounts.
See note regarding non-GAAP financial measures in the attached press release.
TUPPERWARE BRANDS CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
(In millions)
52 Weeks Ended
52 Weeks Ended
December 26,
2015
December 27,
2014
Operating Activities:
Net cash provided by operating activities
$
227.2
$
284.1
Investing Activities:
Capital expenditures
(62.6)
(69.4)
Proceeds from disposal of property, plant & equipment
18.0
7.1
Net cash used in investing activities
(44.6)
(62.3)
Financing Activities:
Dividend payments to shareholders
(138.0)
(135.5)
Repurchase of common stock
(1.5)
(92.3)
Repayment of long-term debt and capital lease obligations
(2.6)
(3.0)
Net change in short-term debt
(36.4)
(2.2)
Debt issuance costs
(0.7)
—
Proceeds from exercise of stock options
16.1
15.7
Excess tax benefits from share-based payment arrangements
6.0
6.3
Net cash used in financing activities
(157.1)
(211.0)
Effect of exchange rate changes on cash and cash equivalents
(22.7)
(61.1)
Net change in cash and cash equivalents
2.8
(50.3)
Cash and cash equivalents at beginning of year
77.0
127.3
Cash and cash equivalents at end of period
$
79.8
$
77.0
TUPPERWARE BRANDS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In millions)
Dec 26,
2015
Dec 27,
2014
Assets:
Cash and cash equivalents
$
79.8
$
77.0
Other current assets
463.9
557.5
Total current assets
543.7
634.5
Property, plant and equipment, net
255.6
290.3
Other assets
785.6
855.2
Total assets
$
1,584.9
$
1,780.0
Liabilities and Shareholders' Equity:
Short-term borrowings and current portion of long-term debt
$
162.5
$
221.4
Accounts payable and other current liabilities
439.9
523.9
Total current liabilities
602.4
745.3
Long-term debt
608.2
612.1
Other liabilities
211.6
236.8
Total shareholders' equity
162.7
185.8
Total liabilities and shareholders' equity
$
1,584.9
$
1,780.0
TUPPERWARE BRANDS CORPORATION
NON-GAAP FINANCIAL MEASURES OUTLOOK RECONCILIATION SCHEDULE
January 27, 2016
(UNAUDITED)
First Quarter
First Quarter
(In millions, except per share data)
2015 Actual
2016 Outlook
Range
Low
High
Income before income taxes
$
41.2
$
50.0
$
53.4
Income tax
$
11.7
$
12.3
$
13.2
Effective Rate
28
%
25
%
25
%
Net Income (GAAP)
$
29.5
$
37.7
$
40.2
% change from prior year
28
%
36
%
Adjustments(1):
Gains on disposal of assets
(0.6)
—
—
Re-engineering and impairment charges
16.2
2.5
2.5
Net impact of Venezuelan bolivar devaluations
9.3
—
—
Acquired intangible asset amortization
2.7
2.6
2.6
Income tax(2)
(5.9)
(1.8)
(1.8)
Net Income (adjusted)
$
51.2
$
41.0
$
43.5
Exchange rate impact(3)
(11.1)
—
—
Net Income (adjusted and 2015 restated for currency changes)
$
40.1
$
41.0
$
43.5
% change from prior year
2
%
8
%
Net income (GAAP) per common share (diluted)
$
0.59
$
0.74
$
0.79
% change from prior year
25
%
34
%
Net Income (adjusted) per common share (diluted)
$
1.02
$
0.81
$
0.86
Net Income (adjusted & restated) per common share (diluted)
$
0.79
$
0.81
$
0.86
% change from prior year
3
%
9
%
Average number of diluted shares (millions)
50.3
50.6
50.6
(1) Refer to Non-GAAP Financial Measures section of attached release for description of the general nature of adjustment items
(2) Represents income tax impact of adjustments on an item-by-item basis
(3) Difference between 2015 actual and 2015 translated at current currency exchange rates
TUPPERWARE BRANDS CORPORATION
NON-GAAP FINANCIAL MEASURES OUTLOOK RECONCILIATION SCHEDULE
January 27, 2016
(UNAUDITED)
Full Year
Full Year
(In millions, except per share data)
2015 Actual
2016 Outlook
Range
Low
High
Income before income taxes
$
259.9
$
256.1
$
262.9
Income tax
$
74.1
$
63.4
$
65.1
Effective Rate
29
%
25
%
25
%
Net Income (GAAP)
$
185.8
$
192.7
$
197.8
% change from prior year
4
%
6
%
Adjustments(1):
Gains on disposal of assets
$
(13.7)
$
—
$
—
Re-engineering, impairments and pension settlements
21.8
10.0
10.0
Net impact of Venezuelan bolivar devaluations
14.9
—
—
Acquired intangible asset amortization
10.2
10.3
10.3
Income tax(2)
1.5
(7.0)
(7.1)
Net Income (adjusted)
$
220.5
$
206.0
$
211.0
Exchange rate impact(3)
(29.3)
—
—
Net Income (adjusted and 2015 restated for currency changes)
$
191.2
$
206.0
$
211.0
% change from prior year
8
%
10
%
Net income (GAAP) per common share (diluted)
$
3.69
$
3.81
$
3.91
% change from prior year
3
%
6
%
Net Income (adjusted) per common share (diluted)
$
4.37
$
4.07
$
4.17
Net Income (adjusted & restated) per common share (diluted)
$
3.79
$
4.07
$
4.17
% change from prior year
7
%
10
%
Average number of diluted shares (millions)
50.4
50.6
50.6
(1) Refer to Non-GAAP Financial Measures section of attached release for description of the general nature of adjustment items
(2) Represents income tax impact of adjustments on an item-by-item basis
(3) Difference between 2015 actual and 2015 translated at current currency exchange rates
TUPPERWARE BRANDS CORPORATION
ADJUSTED EBITDA AND DEBT/ADJUSTED EBITDA*
(UNAUDITED)
As of and for the four quarters ended
December 26,
2015
Adjusted EBITDA:
Net income
$
185.8
Add:
Depreciation and amortization
62.4
Gross interest expense
47.6
Provision for income taxes
74.1
Pretax non-cash re-engineering and impairment charges
13.5
Equity compensation
20.0
Deduct:
Gains on land sales, insurance recoveries, etc.
(13.7)
Total Adjusted EBITDA
$
389.7
Consolidated total debt
$
770.7
Divided by adjusted EBITDA
389.7
Debt to Adjusted EBITDA Ratio
1.98
a
* Amounts and calculations are based on the definitions and provisions of the Company's $600 million Credit Agreement dated September 11, 2013, as amended and restated ("Credit Agreement") and, where applicable, are based on the trailing four quarter amounts. "Adjusted EBITDA" is calculated as defined for "Consolidated EBITDA" in the Credit Agreement.
a There is a $28.3 million impact on adjusted EBITDA from the Venezuelan fixed asset impairment and bolivar devaluations occurring in the four quarters ended December 26, 2015 that increased the debt to adjusted EBITDA ratio by 0.13.
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The "Street" has PG coming in at .69 for the quarter that should be reported on or about April 25, 2016! All post's welcome! The "Good Dr's In"!
The "Street" has PG coming in at .85 for the quarter that should be reported on or about April 25, 2016! All post's welcome! The "Good Dr's In"!
The "Street has PG coming in at .85 for the quarter that should be reported on or about April 25, 2016! All post's welcome! The "Good Dr's In"!
Macau Operations
In the fourth quarter of 2015, net revenues were $555.7 million, a 27.0% decrease from the $761.2 million generated in the fourth quarter of 2014. Adjusted property EBITDA in the fourth quarter of 2015 was $160.1 million, down 33.6% from $241.2 million in the fourth quarter of 2014.
Table games turnover in the VIP segment was $13.0 billion for the fourth quarter of 2015, a 36.9% decrease from $20.7 billion in the fourth quarter of 2014. VIP table games win as a percentage of turnover (calculated before commissions) for the quarter was 2.60%, below the expected range of 2.7% to 3.0% and below the 2.80% experienced in the fourth quarter of 2014. The average number of VIP tables decreased to 192 units in the fourth quarter of 2015 from 244 units in the prior year's fourth quarter.
Commencing in the second quarter of 2015, the Company included the amount of cash that is deposited in a gaming table's drop box plus cash chips purchased at the casino cage in the calculation of table drop in accordance with standard Macau industry practice. Table drop in the mass market segment was $1,185.5 million in the fourth quarter of 2015, down 10.9% from the 2014 fourth quarter. Table games win in the mass market segment decreased by 8.2% to $228.6 million in the fourth quarter of 2015. The mass market win percentage of 19.3% in the fourth quarter of 2015 increased from the 18.7% experienced in the fourth quarter of 2014.
Slot machine handle for the fourth quarter of 2015 declined 4.7% from the 2014 period to $1,069.3 million, and slot win decreased by 9.8% to $50.4 million.
For the fourth quarter of 2015, total non-casino revenues, before promotional allowances, decreased 21.2% during the quarter to $75.6 million. We achieved an average daily rate ("ADR") of $323, down 2.7% compared to the $332 in the 2014 fourth quarter. Occupancy at Wynn Macau was 96.3%, down from 98.6% in the prior-year period. Revenue per available room ("REVPAR") decreased 5.2% to $311 in the 2015 quarter from $328 in last year’s fourth quarter.
Stanley Black & Decker Reports 4Q 2015 Results
PR Newswire Stanley Black & Decker
January 28, 2016 6:00 AM
????
NEW BRITAIN, Conn., Jan. 28, 2016 /PRNewswire/ -- Stanley Black & Decker (SWK) today announced full year and fourth quarter 2015 financial results.
Full Year Revenues Totaled $11.2 Billion Reflecting 6% Organic Growth Offset By 7% Currency Impact
Full Year Operating Margin Rate Expanded 90 Basis Points To 14.2%
Full Year Diluted GAAP EPS Was $5.92, Up 10% From 2014 As Strong Operational Performance More Than Offset $220 Million Of Currency Headwinds
2015 Free Cash Flow Of $871 Million; Working Capital Turns Maintained At 9.2
4Q'15 Revenues Totaled $2.8 Billion With 1% Organic Growth
4Q'15 Operating Margin Rate Expanded 100 Basis Points To 14.2%
4Q'15 Diluted GAAP EPS Was $1.78, Up 30% From 4Q'14 As Solid Operational Performance Combined With Lower Tax, Share Count And Restructuring More Than Offset $50 Million Of Currency Headwinds
Expect 2016 Full Year Diluted EPS Of $6.00 To $6.20 On A GAAP Basis And Free Cash Flow Conversion Of Approximately 100%
4Q'15 Key Points:
Net sales for the quarter were $2.8 billion, down 5% versus prior year, as price (+1%) was more than offset by currency (-6%).
Gross margin rate for the quarter was 35.6%, up from prior year 35.2% as price, productivity, cost actions and commodity deflation more than offset unfavorable currency.
SG&A expenses were 21.5% of sales compared to 22.1% in 4Q'14 reflecting tight cost management.
Operating margin rate was 14.2% compared to 13.2% in 4Q'14, as actions to improve profitability more than offset $50 million of unfavorable currency.
Restructuring charges for the quarter were $3.7 million compared to $24.4 million in 4Q'14.
Tax rate was 12.7% compared to the 4Q'14 rate of 17.6% as a result of adjustments to tax positions relating to undistributed foreign earnings and the impact of certain net operating losses that have become realizable.
Average diluted shares outstanding for the quarter were 150.0 million versus 160.0 million a year ago, reflecting the impact of share actions.
Working capital turns for the quarter were 9.2 consistent with 4Q'14 as lower organic growth in the quarter constrained the potential for year over year working capital turns improvement.
Stanley Black & Decker's Chairman and CEO, John F. Lundgren, commented, "We are pleased with our full year financial results, having achieved 6% organic growth and 10% earnings per share growth amidst a very challenging operating environment. By maintaining our focus on innovation and controlling key operational levers such as price, cost and product mix, we delivered noteworthy operating leverage despite significant foreign currency headwinds. We concluded 2015 with a solid fourth quarter, expanding margins, generating significant free cash flow and posting positive organic growth in the face of ongoing weakness in some key markets.
"As we look forward, we believe we are well positioned to manage through a continued difficult environment by leveraging our world-class franchises and brands to deliver solid organic growth and strong free cash flow while maintaining our disciplined and shareholder friendly approach to capital allocation."
4Q'15 Segment Results
($ in M)
4Q'15 Segment Results
Sales
Profit
Profit
Rate
Tools & Storage
$1,831
$303.9
16.6%
Security
$538
$68.8
12.8%
Industrial
$477
$85.5
17.9%
Tools & Storage net sales decreased 3% versus 4Q'14 as volume (+2%) and price (+1%) were more than offset by unfavorable currency (-6%). All regions posted organic growth with North America +3%, Europe +6%, and the emerging markets +1%. The U.S. construction tool market remained healthy and new products and brand extensions generated share gains in North America despite downward pressure in the industrial channels and Canada. Solid commercial momentum continued in Europe as share gains from new products and an expanded retail footprint produced another quarter of above-market organic growth. Organic growth within the emerging markets remained positive reflecting the favorable impact of pricing and the continued success of our mid-price-point product releases amidst a series of challenging end markets, including Brazil, Russia and China. Overall Tools & Storage segment profit rate was 16.6%, up from the 4Q'14 rate of 16.0%, as volume leverage, price, productivity, cost management and lower commodity prices more than offset currency pressures.
Security net sales decreased 9% versus 4Q'14 as price (+1%) was more than offset by lower volumes (-5%) and currency (-5%). Higher installation revenues in a number of countries and a stable recurring revenue portfolio resulted in Europe posting organic growth of 3%, Europe's fifth consecutive quarter of flat or positive organic growth. Order rates in Europe were again strong, up double-digits, while recurring revenue attrition remained solidly within the target range of 10-12%. North America's organic revenues declined 6% due primarily to lower volumes within the commercial electronic security business as 4Q'14 benefited from a large retail installation. Similar to Europe, orders within the North American commercial electronic security business were strong. Emerging markets organic revenues declined due to the ongoing relatively weak market conditions in China. Overall Security segment profit rate was 12.8%, up 100 basis points versus prior year, primarily due to improved operating performance within Europe. The segment profit rate improved 90 basis points sequentially as a result of continued margin expansion within Europe and improved operating performance in the North America business.
Industrial net sales decreased 7% versus 4Q'14 as price (+1%) was more than offset by lower volumes (-2%) and currency (-6%). Engineered Fastening's organic revenues declined 3% as strong global automotive revenues were more than offset by lower electronics and industrial volumes. Infrastructure organic revenues were up 2% as increased Oil & Gas volumes from higher North American on-shore pipeline project activity more than offset lower Hydraulic Tools volumes due to a difficult scrap steel market. Overall Industrial segment profit rate was 17.9%, up 210 basis points from the 4Q'14 rate, as productivity gains and cost control, particularly within Engineered Fastening, more than offset the impacts of currency and lower Hydraulic Tools volumes.
President and Chief Operating Officer, James M. Loree, commented, "Our Tools & Storage team delivered 3% organic growth for the quarter, buoyed by continued strength within North American and European retail channels, despite tough comparables and significant headwinds from a weak industrial end market and within the emerging markets. With respect to the latter, the success of our mid-price point products combined with strong pricing actions allowed us to outperform underlying market growth. The 8% organic growth in Tools & Storage for the year is a testament to the strength and momentum of this world class franchise. Also noteworthy was Engineered Fastening's ability to drive outsized organic growth within automotive and generate margin expansion in the quarter despite overall lower volumes. Our Security business demonstrated another quarter of forward progress. Europe delivered positive organic growth, year-over-year margin improvement with margins approaching 10%, strong order rates and attrition at targeted levels for the quarter. Our focus within Security North America remains squarely on improving field productivity where we took another step forward in the quarter evidenced by sequential margin improvement."
2016 Outlook
Donald Allan Jr., Senior Vice President and CFO, commented, "2015 was a strong year in terms of operational execution and 2016 will require a similar effort as we expect continued challenging macroeconomic conditions. Maintaining our focus on operational excellence, and making smart investments to support organic growth while proactively mitigating significant currency headwinds position us to deliver approximately 3% organic growth and EPS of $6.00 - $6.20 (up approximately 3% at the mid-point) in 2016."
The following summarizes key 2016 planning assumptions:
Organic growth of approximately 3% (approximately +$0.45 to $0.50 EPS)
Commodity deflation, cost actions and productivity (approximately +$0.45 to $0.50 EPS)
Lower average share count, including approximately $300 million of share repurchases in 2016 (approximately +$0.13 EPS)
Foreign exchange headwinds of approximately $170 - $190 million (approximately - $0.85 to $0.95 EPS)
Restructuring charges and the tax rate will be relatively consistent with 2015 levels
Free cash flow conversion approximating 100%
Mr. Allan added, "Our 2016 outlook maintains the key elements from our three year financial outlook presented in May 2015, namely above market organic growth, operational efficiency, EPS expansion and improved cash flow return on investment, while incorporating today's global growth and foreign exchange outlook. In addition, we remain committed to our long-term capital allocation plan of returning approximately 50% of free cash flow to shareholders through dividends and opportunistic share repurchases and deploying the balance towards acquisitions."
The Company will host a conference call with investors today, January 28, 2016 at 8:00 am ET. A slide presentation which will accompany the call will be available at www.stanleyblackanddecker.com and will remain available after the call.
You can also access the slides via the Stanley Black & Decker Investor Relations iPad & iPhone app from the Apple App Store by searching for "SWK Investor Relations."
The call will be accessible by telephone within the U.S. at (877) 930-8285, from outside the U.S. at +1 (253) 336-8297, and via the Internet at www.stanleyblackanddecker.com. To participate, please register on the web site at least fifteen minutes prior to the call and download and install any necessary audio software. Please use the conference identification number 19339634. A replay will also be available two hours after the call and can be accessed at (855) 859-2056 or +1 (404) 537-3406 using the passcode 19339634. The replay will also be available as a podcast within 24 hours and can be accessed on our website and via iTunes.
Stanley Black & Decker, an S&P 500 company, is a diversified global provider of hand tools, power tools and related accessories, mechanical access solutions and electronic security solutions, healthcare solutions, engineered fastening systems, and more. Learn more at www.stanleyblackanddecker.com.
Contact:
Greg Waybright
Vice President, Investor & Government Relations
greg.waybright@sbdinc.com
(860) 827-3833
View photo
.Stanley Black & Decker. (PRNewsFoto/Stanley Black & Decker)
These results reflect the Company's continuing operations. In 4Q'14, the Company classified the results of the Security segment's Spain and Italy operations as held for sale based on management's intention to sell these operations. In July 2015, the Company completed the sale of these operations. The operating results of Security Spain and Italy have been reported as discontinued operations for 2014 and through the date of sale for 2015. In 3Q'13, the Company classified two small businesses within the Security and Industrial segments as held for sale based on management's intention to sell these businesses; these businesses were sold during 2014. The operating results of these businesses have been reported as discontinued operations through the date of sale for 2014. Total sales reported as discontinued operations were $39.4 million and $118.4 million for 2015 and 2014, respectively, and $25.2 million for 4Q'14.
In the first quarter of 2015, the Company combined the Construction & Do-It-Yourself ("CDIY") business with certain complementary elements of the Industrial and Automotive Repair ("IAR") and Healthcare businesses (formerly part of the Industrial and Security segments, respectively) to form one Tools & Storage business. As a result of this change, the legacy CDIY segment was renamed Tools & Storage. The Company recast segment net sales and profit for 2014 to align with this change in organizational structure. There is no impact to the consolidated financial statements of the Company as a result of this change.
Organic sales growth is defined as total sales growth less the sales of companies acquired in the past twelve months and any foreign currency impacts. Operating margin is defined as sales less cost of sales and selling, general and administrative expenses. Management uses operating margin and its percentage of net sales as key measures to assess the performance of the Company as a whole, as well as the related measures at the segment level. Free cash flow is defined as cash flow from operations less capital and software expenditures. Management considers free cash flow an important indicator of its liquidity, as well as its ability to fund future growth and to provide a return to the shareowners. Free cash flow does not include deductions for mandatory debt service, other borrowing activity, discretionary dividends on the Company's common stock and business acquisitions, among other items. Normalized free cash flow, as reconciled from the associated GAAP measures on page 10 for 4Q'15 and 4Q'14 is considered a meaningful pro forma metric to aid the understanding of the Company's cash flow performance aside from the material impact of M&A-related payments and charges. Free cash flow conversion is defined as free cash flow divided by net income.
CAUTIONARY STATEMENTS
Under the Private Securities Litigation Reform Act of 1995
Statements in this press release that are not historical, including but not limited to those regarding the Company's ability to: (i) achieve full year 2016 EPS of $6.00 - $6.20 on a GAAP basis (including restructuring charges relatively consistent with 2015 levels); (ii) generate free cash flow conversion approximating 100%; (iii) improve the Company's cash flow return on investment; and (iv) over the long term, return approximately 50% of free cash flow to shareholders through dividends and opportunistic share repurchases while deploying the balance towards acquisitions (collectively, the "Results"); are "forward looking statements" and subject to risk and uncertainty.
The Company's ability to deliver the Results as described above is based on current expectations and involves inherent risks and uncertainties, including factors listed below and other factors that could delay, divert, or change any of them, and could cause actual outcomes and results to differ materially from current expectations. In addition to the risks, uncertainties and other factors discussed in this press release, the risks, uncertainties and other factors that could cause or contribute to actual results differing materially from those expressed or implied in the forward looking statements include, without limitation, those set forth under Item 1A Risk Factors of the Company's Annual Report on Form 10-K and any material changes thereto set forth in any subsequent Quarterly Reports on Form 10-Q, or those contained in the Company's other filings with the Securities and Exchange Commission, and those set forth below.
The Company's ability to deliver the Results is dependent, or based, upon: (i) the Company's ability to increase working capital turns during 2016; (ii) the Company's ability to deliver organic growth of approximately 3% in 2016; (iii) the Company's ability to generate approximately $0.45 to $0.50 of EPS through cost actions, commodity deflation and productivity; (iv) foreign exchange headwinds of approximately $170 - $190 million in 2016; (v) the Company's ability to achieve a tax rate relatively consistent with the 2015 tax rate; (vi) the Company's ability to keep restructuring charges relatively consistent with 2015 levels; (vii) the Company's ability to identify and close on appropriate acquisition opportunities within desired timeframes at reasonable cost; (viii) successful integration of existing and any newly acquired businesses and formation of new business platforms; (ix) the continued acceptance of technologies used in the Company's products and services; (x) the Company's ability to manage existing Sonitrol franchisee and Mac Tools relationships; (xi) the Company's ability to minimize costs associated with any sale or discontinuance of a business or product line, including any severance, restructuring, legal or other costs; (xii) the proceeds realized with respect to any business or product line disposals; (xiii) the extent of any asset impairments with respect to any businesses or product lines that are sold or discontinued; (xiv) the success of the Company's efforts to manage freight costs, steel and other commodity costs as well as capital expenditures; (xv) the Company's ability to sustain or increase prices in order to, among other things, offset or mitigate the impact of steel, freight, energy, non-ferrous commodity and other commodity costs and any inflation increases and/or currency impacts; (xvi) the Company's ability to generate free cash flow and maintain a strong debt to capital ratio; (xvii) the Company's ability to identify and effectively execute productivity improvements and cost reductions, while minimizing any associated restructuring charges; (xviii) the Company's ability to obtain favorable settlement of tax audits; (xix) the ability of the Company to generate earnings sufficient to realize future income tax benefits during periods when temporary differences become deductible, including realizing tax credit carry forward amounts within the allowable carry forward periods; (xx) the continued ability of the Company to access credit markets under satisfactory terms; (xxi) the Company's ability to negotiate satisfactory price and payment terms under which the Company buys and sells goods, services, materials and products; (xxii) the Company's ability to successfully develop, market and achieve sales from new products and services; and (xxiii) the availability of cash to complete approximately $300 million of share repurchases over the course of the year when conditions are right.
The Company's ability to deliver the Results is also dependent upon: (i) the success of the Company's marketing and sales efforts, including the ability to develop and market new and innovative products at the right price points in both existing and new markets; (ii) the ability of the Company to maintain or improve production rates in the Company's manufacturing facilities, respond to significant changes in product demand and fulfill demand for new and existing products; (iii) the Company's ability to continue improvements in working capital through effective management of accounts receivable and inventory levels; (iv) the ability to continue successfully managing and defending claims and litigation; (v) the success of the Company's efforts to mitigate any adverse earnings impact resulting from increases generated by, for example, increases in the cost of energy or significant Chinese Renminbi, Canadian Dollar, Euro, British Pound, Brazilian Real or other currency fluctuations; (vi) the geographic distribution of the Company's earnings; (vii) the commitment to and success of the Stanley Fulfillment System; and (viii) successful implementation with expected results of cost reduction programs.
The Company's ability to achieve the Results will also be affected by external factors. These external factors include: challenging global geopolitical and macroeconomic environment; the economic environment of emerging markets, particularly Latin America, Russia, China and Turkey; pricing pressure and other changes within competitive markets; the continued consolidation of customers particularly in consumer channels; inventory management pressures on the Company's customers; the impact the tightened credit markets may have on the Company or its customers or suppliers; the extent to which the Company has to write off accounts receivable or assets or experiences supply chain disruptions in connection with bankruptcy filings by customers or suppliers; increasing competition; changes in laws, regulations and policies that affect the Company, including, but not limited to trade, monetary, tax and fiscal policies and laws; the timing and extent of any inflation or deflation; the impact of poor weather conditions on sales; currency exchange fluctuations; the impact of dollar/foreign currency exchange and interest rates on the competitiveness of products and the Company's debt program; the strength of the U.S. and European economies; the extent to which world-wide markets associated with homebuilding and remodeling stabilize and rebound; the impact of events that cause or may cause disruption in the Company's supply, manufacturing, distribution and sales networks such as war, terrorist activities, and political unrest; and recessionary or expansive trends in the economies of the world in which the Company operates. The Company undertakes no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date hereof.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, Millions of Dollars Except Per Share Amounts)
FOURTH QUARTER
YEAR TO DATE
2015
2014
2015
2014
NET SALES
$ 2,845.4
$ 2,982.5
$ 11,171.8
$ 11,338.6
COSTS AND EXPENSES
Cost of sales
1,831.2
1,931.4
7,099.8
7,235.9
Gross margin
1,014.2
1,051.1
4,072.0
4,102.7
% of Net Sales
35.6%
35.2%
36.4%
36.2%
Selling, general and administrative
610.6
658.3
2,486.4
2,595.9
% of Net Sales
21.5%
22.1%
22.3%
22.9%
Operating margin
403.6
392.8
1,585.6
1,506.8
% of Net Sales
14.2%
13.2%
14.2%
13.3%
Other - net
53.8
60.5
222.0
239.6
Restructuring charges
3.7
24.4
47.6
18.8
Income from operations
346.1
307.9
1,316.0
1,248.4
Interest - net
39.7
42.2
165.2
163.6
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
306.4
265.7
1,150.8
1,084.8
Income taxes on continuing operations
39.1
46.7
248.6
227.1
NET EARNINGS FROM CONTINUING OPERATIONS
267.3
219.0
902.2
857.7
Less: net earnings (loss) attributable to non-controlling interests
0.1
(0.3)
(1.6)
0.5
NET EARNINGS FROM CONTINUING OPERATIONS ATTRIBUTABLE
TO COMMON SHAREOWNERS
267.2
219.3
903.8
857.2
NET LOSS FROM DISCONTINUED OPERATIONS
(1.7)
(73.5)
(20.1)
(96.3)
NET EARNINGS ATTRIBUTABLE TO COMMON SHAREOWNERS
$ 265.5
$ 145.8
$ 883.7
$ 760.9
BASIC EARNINGS (LOSS) PER SHARE OF COMMON STOCK
Continuing operations
$ 1.83
$ 1.41
$ 6.10
$ 5.49
Discontinued operations
(0.01)
(0.47)
(0.14)
(0.62)
Total basic earnings per share of common stock
$ 1.82
$ 0.94
$ 5.96
$ 4.87
DILUTED EARNINGS (LOSS) PER SHARE OF COMMON STOCK
Continuing operations
$ 1.78
$ 1.37
$ 5.92
$ 5.37
Discontinued operations
(0.01)
(0.46)
(0.13)
(0.60)
Total diluted earnings per share of common stock
$ 1.77
$ 0.91
$ 5.79
$ 4.76
DIVIDENDS PER SHARE
$ 0.55
$ 0.52
$ 2.14
$ 2.04
AVERAGE SHARES OUTSTANDING (in thousands)
Basic
145,908
155,799
148,234
156,090
Diluted
150,020
160,013
152,706
159,737
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, Millions of Dollars)
January 2,
January 3,
2016
2015
ASSETS
Cash and cash equivalents
$ 465.4
$ 496.6
Accounts and notes receivable, net
1,331.8
1,396.7
Inventories, net
1,526.4
1,562.7
Assets held for sale
-
29.5
Other current assets
338.5
463.3
Total current assets
3,662.1
3,948.8
Property, plant and equipment, net
1,450.2
1,454.1
Goodwill and other intangibles, net
9,625.8
10,027.2
Other assets
570.4
419.0
Total assets
$ 15,308.5
$ 15,849.1
LIABILITIES AND SHAREOWNERS' EQUITY
Short-term borrowings
$ 7.6
$ 7.5
Accounts payable
1,533.1
1,579.2
Accrued expenses
1,261.9
1,221.9
Liabilities held for sale
-
23.4
Total current liabilities
2,802.6
2,832.0
Long-term debt
3,836.6
3,839.8
Other long-term liabilities
2,810.1
2,665.4
Stanley Black & Decker, Inc. shareowners' equity
5,811.6
6,429.1
Non-controlling interests' equity
47.6
82.8
Total liabilities and equity
$ 15,308.5
$ 15,849.1
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
SUMMARY OF CASH FLOW ACTIVITY
(Unaudited, Millions of Dollars)
FOURTH QUARTER
YEAR TO DATE
2015
2014
2015
2014
OPERATING ACTIVITIES
Net earnings from continuing operations
$ 267.3
$ 219.0
$ 902.2
$ 857.7
Net loss from discontinued operations
(1.7)
(73.5)
(20.1)
(96.3)
Depreciation and amortization
105.6
112.4
414.0
449.8
Changes in working capital1
503.5
433.2
(98.0)
(9.8)
Other
(46.5)
70.5
(15.8)
94.5
Net cash provided by operating activities
828.2
761.6
1,182.3
1,295.9
INVESTING AND FINANCING ACTIVITIES
Capital and software expenditures
(131.3)
(111.6)
(311.4)
(291.0)
Proceeds from issuances of common stock
79.5
20.3
163.5
71.3
Net short-term (repayments) borrowings
(449.6)
(424.8)
1.2
(391.0)
Net investment hedge settlements
25.5
3.6
137.7
(61.4)
Cash dividends on common stock
(80.7)
(80.8)
(319.9)
(321.3)
Purchases of common stock for treasury
(9.7)
(7.5)
(649.8)
(28.2)
Acquisitions, net of cash acquired
(33.6)
-
(51.1)
(3.2)
Payments on long-term debt
-
(45.7)
(16.1)
(46.6)
Effect of exchange rate changes on cash
(52.1)
(84.0)
(132.9)
(147.1)
Other
(4.1)
(21.3)
(34.7)
(77.0)
Net cash used in investing and financing activities
(656.1)
(751.8)
(1,213.5)
(1,295.5)
Increase (Decrease) in Cash and Cash Equivalents
172.1
9.8
(31.2)
0.4
Cash and Cash Equivalents, Beginning of Period
293.3
486.8
496.6
496.2
Cash and Cash Equivalents, End of Period
$ 465.4
$ 496.6
$ 465.4
$ 496.6
Free Cash Flow Computation2
Operating cash flow
$ 828.2
$ 761.6
$ 1,182.3
$ 1,295.9
Less: capital and software expenditures
(131.3)
(111.6)
(311.4)
(291.0)
Free cash flow (before dividends)
$ 696.9
$ 650.0
$ 870.9
$ 1,004.9
Merger & Acquisition-related charges and payments4
14.6
36.1
83.3
152.2
Free cash flow, normalized (before dividends)3
$ 711.5
$ 686.1
$ 954.2
$ 1,157.1
1
Working capital is comprised of accounts receivable, inventory, accounts payable and deferred revenue.
2,3
Free cash flow is defined as cash flow from operations less capital and software expenditures. Management considers free cash flow an important measure of its liquidity, as well as its ability to fund future growth and to provide a return to the shareowners. Free cash flow does not include deductions for mandatory debt service, other borrowing activity, discretionary dividends on the Company's common stock and business acquisitions, among other items. Normalized free cash flow, as reconciled above, is considered a meaningful pro forma metric to aid the understanding of the Company's cash flow performance aside from the material impact of merger and acquisition-related activities.
4
Merger & Acquisition-related charges and payments relate primarily to the Black & Decker merger and Niscayah and Infastech acquisitions, including facility closure-related charges, employee-related charges and integration costs.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
BUSINESS SEGMENT INFORMATION
(Unaudited, Millions of Dollars)
FOURTH QUARTER
YEAR TO DATE
2015
2014
2015
2014
NET SALES
Tools & Storage
$ 1,830.9
$ 1,880.0
$ 7,140.7
$ 7,033.0
Security
538.0
589.9
2,092.9
2,261.2
Industrial
476.5
512.6
1,938.2
2,044.4
Total
$ 2,845.4
$ 2,982.5
$ 11,171.8
$ 11,338.6
SEGMENT PROFIT
Tools & Storage
$ 303.9
$ 300.6
$ 1,170.1
$ 1,074.4
Security
68.8
69.4
239.6
259.2
Industrial
85.5
80.9
339.9
350.6
Segment Profit
458.2
450.9
1,749.6
1,684.2
Corporate Overhead
(54.6)
(58.1)
(164.0)
(177.4)
Total
$ 403.6
$ 392.8
$ 1,585.6
$ 1,506.8
Segment Profit as a Percentage of Net Sales
Tools & Storage
16.6%
16.0%
16.4%
15.3%
Security
12.8%
11.8%
11.4%
11.5%
Industrial
17.9%
15.8%
17.5%
17.1%
Segment Profit
16.1%
15.1%
15.7%
14.9%
Corporate Overhead
(1.9%)
(1.9%)
(1.5%)
(1.6%)
Total
14.2%
13.2%
14.2%
13.3%
KKR & Co. L.P. Reports Fourth Quarter and Full Year 2015 Results
Business Wire KKR & Co. L.P.
February 11, 2016 6:45 AM
????
NEW YORK--(BUSINESS WIRE)--
KKR & Co. L.P. (KKR) today reported GAAP net income for the fourth quarter and full year 2015 of $32.3 million and $488.5 million, respectively.
For the full year 2015, After-tax Economic Net Income and After-tax Economic Net Income per adjusted unit were $1.0 billion and $1.21, respectively, compared to $1.5 billion and $1.84 for the full year 2014. After-tax Cash Earnings and After-tax Cash Earnings per adjusted unit eligible for distribution were $1.5 billion and $1.78, respectively, for the full year 2015 compared to $1.9 billion and $2.47 for the full year 2014. Return on equity and cash return on equity were 10% and 14%, respectively, for 2015.
For the quarter ended December 31, 2015, After-tax Economic Net Income and After-tax Economic Net Income per adjusted unit were $70.5 million and $0.08, respectively, compared to $46.0 million and $0.05 for the quarter ended December 31, 2014. After-tax Cash Earnings and After-tax Cash Earnings per adjusted unit eligible for distribution were $168.6 million and $0.21, respectively, for the quarter ended December 31, 2015 compared to $361.2 million and $0.44 for the quarter ended December 31, 2014.
Annual Highlights
For the full year 2015, KKR's private equity portfolio appreciated 14.2% and the investments on KKR's balance sheet appreciated 3.3% compared to the total return for the S&P 500 and MSCI World indices of 1.4% and -0.3%, respectively.
Book value per adjusted unit was $11.78 as of December 31, 2015 compared to $12.07 per adjusted unit as of December 31, 2014.
Assets Under Management and Fee Paying Assets Under Management were $120 billion and $92 billion, respectively, up 12% and 7% compared to December 31, 2014. (1)
Since the announcement of KKR's unit repurchase program on October 27, 2015, KKR has repurchased and canceled 17.5 million outstanding common units for $270 million. In addition, 1.7 million granted equity awards were canceled for approximately $27 million to satisfy tax obligations in connection with their vesting. In total, 19.2 million common units have been retired on a fully-diluted basis over this period.
KKR's regular distribution per common unit of $0.16 was declared for the quarter ended December 31, 2015.
___________________________
“KKR delivered strong investment results in 2015 as our private equity portfolio appreciated 14.2%, outperforming the S&P 500 by over 1,200 basis points despite challenging markets,” said Henry R. Kravis and George R. Roberts, Co-Chairmen and Co-Chief Executive Officers of KKR. “We capitalized on attractive opportunities across our segments in the fourth quarter including record deployment within our Credit and Infrastructure businesses. Our ability to take advantage of volatile market environments stems from the long-dated capital entrusted to us by a growing base of limited partners across our diverse set of strategies. With $20 billion of new capital raised in 2015, we ended the year with record dry powder and over $10 billion of cash and investments on our balance sheet to invest as attractive opportunities arise.”
Note: Certain financial measures, including ENI, After-tax ENI, After-tax cash earnings, 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 C and D for a reconciliation of such measures to financial results prepared in accordance with GAAP.
(1) AUM and FPAUM reflect the inclusion of KKR's pro rata portion of AUM or FPAUM, as applicable, managed by other asset managers in which KKR holds a minority stake. In addition, AUM reflects the inclusion of capital commitments for which KKR is eligible to receive fees or carried interest upon deployment of capital. See "Notes to Reportable Segments" for the definitions of AUM and FPAUM.
GAAP RESULTS
GAAP net income (loss) for the quarter and year ended December 31, 2015, included net income (loss) attributable to KKR & Co. L.P. of $32.3 million and $488.5 million, respectively, and net income (loss) attributable to KKR & Co. L.P. per common unit of $0.07 and $1.01, respectively, on a diluted basis. For the quarter and year ended December 31, 2014, net income (loss) attributable to KKR & Co. L.P. was $(0.6) million and $477.6 million, respectively, and net income (loss) attributable to KKR & Co. L.P. per common unit was $0.00 and $1.16, respectively, on a diluted basis. The increase in both comparable periods was primarily due to an increase in KKR & Co. L.P.'s ownership percentage in the KKR business, and for the quarter ended December 31, 2015, an increase in income before taxes.
TOTAL REPORTABLE SEGMENT RESULTS
KEY FINANCIAL METRICS (UNAUDITED)
(Amounts in millions, except per adjusted unit amounts)
Quarter Ended Year Ended
December 31,
2015
December 31,
2014
%
Change
December 31,
2015
December 31,
2014
%
Change
Cash Earnings
Management, Monitoring and Transaction Fees, Net $ 337 $ 244 $ 1,142 $ 1,099
Realized Performance Income (Loss) 215 210 1,047 1,242
Realized Investment Income (Loss) (48 )
(1)
182 547 (1) 902
Total Cash Segment Revenues 504 636 (21 )% 2,736 3,243 (16 )%
Less: Total Cash Segment Expenses and Other 297 250 1,142 1,180
Less: Corporate and Local Income Taxes Paid 38 25 141 131
After-tax Cash Earnings $ 169
(1)
$ 361
(53
)%
$ 1,453
(1)
$ 1,932 (25 )%
After-tax Cash Earnings Per Adjusted Units
Eligible for Distribution
$ 0.21 $ 0.44 (52 )% $ 1.78 $ 2.47 (28 )%
Quarter Ended Year Ended
Economic Net Income (Loss)
December 31,
2015
December 31,
2014
%
Change
December 31,
2015
December 31,
2014
%
Change
Management, Monitoring and Transaction Fees, Net $ 337 $ 244 $ 1,142 $ 1,099
Performance Income (Loss) 327 256 1,210 1,352
Investment Income (Loss) (176 ) (143 ) 154 505
Total Segment Revenues 488 357 37 % 2,506 2,956 (15 )%
Less: Total Segment Expenses and Other 343 270 1,208 1,229
Economic Net Income (Loss) 145 87 67 % 1,298 1,727 (25 )%
Less: Equity-based Compensation 38 37 186 159
Pre-tax Economic Net Income (Loss) 107 50 114 % 1,112 1,568 (29 )%
Less: Provision for Income Tax (Benefit) 36 4 84 94
After-tax Economic Net Income (Loss) $ 71 $ 46 54 % $ 1,028 $ 1,474 (30 )%
After-tax Economic Net Income (Loss) Per
Adjusted Unit
$ 0.08 $ 0.05 60 % $ 1.21 $ 1.84 (34 )%
Book Value Per Unit
December 31, 2015 December 31, 2014
Book Value Per Outstanding Adjusted Unit $ 12.18 $ 12.48 (2 )%
Book Value Per Adjusted Unit $ 11.78 $ 12.07 (2 )%
Year Ended
December 31, 2015 December 31, 2014
Return on Equity 10% 16%
Cash Return on Equity 14% 21%
(1) Amount includes a $100.0 million realized loss on a segment basis relating to the write off of an investment which had previously been marked at zero on an unrealized basis. Accordingly, this write off had no impact on our Economic Net Income during the fourth quarter and full year of 2015.
TOTAL REPORTABLE SEGMENTS
Total segment revenues were $487.6 million for the quarter ended December 31, 2015, an increase of $130.1 million, compared to total segment revenues of $357.5 million for the quarter ended December 31, 2014. The increase was principally attributable to (i) a non-recurring increase in monitoring fees in our Private Markets segment, which increased segment revenues by $55.5 million net of associated fee credits, (ii) an increase in transaction fees primarily reflecting larger transaction sizes in both our Private Markets segment and Capital Markets segment and (iii) higher performance income from increased carried interest primarily reflecting more favorable performance in our carry earning Private Markets funds. These increases were partially offset by lower total investment income driven primarily by a lower level of net interest and dividends in the current period.
Total segment revenues were $2,505.9 million for the year ended December 31, 2015, a decrease of $449.7 million, compared to total segment revenues of $2,955.6 million for the year ended December 31, 2014. The decrease was principally attributable to (i) lower total investment income driven primarily by a lower level of realized and unrealized investment income which represented a net loss in the current year and (ii) lower performance income during the year reflecting a lower level of net carried interest in our Public Markets segment as well as a decrease in incentive fees.
ENI was $144.7 million for the quarter ended December 31, 2015, an increase of $58.1 million, compared to ENI of $86.6 million for the quarter ended December 31, 2014. The increase was primarily attributable to higher total segment revenues as described above partially offset by an increase in cash compensation and benefits resulting from the higher levels of management, monitoring and transaction fees.
ENI was $1,298.0 million for the year ended December 31, 2015, a decrease of $429.2 million, compared to ENI of $1,727.2 million for the year ended December 31, 2014. The decrease was primarily attributable to lower total segment revenues as described above.
AUM(1) was $119.5 billion as of December 31, 2015, an increase of $7.1 billion, compared to AUM of $112.4 billion as of September 30, 2015. The increase was primarily attributable to (i) an increase in our pro rata portion of AUM managed by other asset managers in which KKR holds a minority stake, primarily reflecting our long-term strategic partnership with Marshall Wace, (ii) an increase in the fair value of our private equity portfolio (our private equity portfolio appreciated by 4.8% and 14.2% for the quarter and year ended December 31, 2015, respectively) and (iii) new capital raised primarily in Special Situations Fund II, our hedge-fund-of-funds platform and our CLOs. These increases were partially offset by distributions to limited partners of our private equity funds arising from realizations and distributions and redemptions in our alternative credit funds and other separately managed accounts in our Public Markets segment.
FPAUM(1) was $91.7 billion as of December 31, 2015, an increase of $5.8 billion, compared to FPAUM of $85.9 billion as of September 30, 2015. The increase was primarily attributable to (i) an increase in our pro rata portion of FPAUM managed by other asset managers in which KKR holds a minority stake, primarily reflecting our long-term strategic partnership with Marshall Wace, (ii) new capital raised primarily in our hedge-fund-of-funds platform and our CLOs and (iii) capital invested across various investment strategies for which KKR was not eligible to receive a fee until deployment of such capital. These increases were partially offset by distributions to limited partners of our private equity funds arising from realizations and distributions and redemptions in our alternative credit funds and other separately managed accounts in our Public Markets segment.
CAPITAL AND LIQUIDITY
As of December 31, 2015, KKR had $1.3 billion of cash and short-term investments and $3.0 billion of outstanding debt and preferred share obligations on a total reportable segment basis. This includes KFN’s debt obligations of $657.3 million and KFN’s 7.375% Series A LLC preferred shares of $373.8 million, which are non-recourse to KKR beyond the assets of KFN. As of December 31, 2015, KKR had a $1.0 billion revolving credit facility, which was undrawn. In addition, KKR has a $500.0 million revolving credit facility for use in its capital markets business, which was undrawn as of December 31, 2015.
As of December 31, 2015, KKR’s portion of total uncalled commitments to its investment funds was $1.4 billion. See Exhibit B for details.
DISTRIBUTION
A distribution of $0.16 per common unit has been declared, which will be paid on March 8, 2016 to unitholders of record as of the close of business on February 22, 2016. Under KKR's distribution policy, KKR intends to make equal quarterly distributions to holders of common units in an amount of $0.16 per common unit per quarter.
The declaration and payment of any distributions are subject to the discretion of the board of directors of the general partner of KKR, and the terms of its limited partnership agreement. There can be no assurance that distributions will be made as intended or at all, that unitholders will receive sufficient distributions to satisfy payment of their tax liabilities as limited partners of KKR or that any particular distribution policy will be maintained.
(1) AUM and FPAUM reflect the inclusion of KKR's pro rata portion of AUM or FPAUM, as applicable, managed by other asset managers in which KKR holds a minority stake. In addition, AUM reflects the inclusion of capital commitments for which KKR is eligible to receive fees or carried interest upon deployment of capital. See "Notes to Reportable Segments" for the definitions of AUM and FPAUM.
SUPPLEMENTAL INFORMATION
A slide presentation containing supplemental commentary about the Company's financial results for the fiscal quarter and year ended December 31, 2015 may be accessed through the KKR Investor Relations section of the KKR website at http://ir.kkr.com/kkr_ir/kkr_events.cfm. The presentation will be referenced on the conference call discussed below.
CONFERENCE CALL
A conference call to discuss KKR's financial results will be held on Thursday, February 11, 2016 at 10:00 a.m. ET. 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 Investor Center section of KKR's website at http://ir.kkr.com/kkr_ir/kkr_events.cfm. A replay of the live broadcast will be available on KKR's website or by dialing (855) 859-2056 (U.S. callers) or +1 (404) 537-3406 (non-U.S. callers), pass code 38906590, 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.
2015 SCHEDULE K-1 DISTRIBUTION
The 2015 K-1 tax information is expected to be available by the end of March 2016. For the quickest access to your K-1, we encourage you to register for e-mail notification and electronic K-1 delivery at our dedicated website https://www.taxpackagesupport.com/kkr. Unitholders who do not register for electronic delivery will receive a hard copy K-1 with delivery expected in April 2016.
ABOUT KKR
KKR is a leading global investment firm that manages investments across multiple asset classes including private equity, energy, infrastructure, real estate, credit and hedge funds. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and driving growth and value creation at the asset level. KKR invests its own capital alongside its partners' capital and brings opportunities to others through its capital markets business. References to KKR’s investments may include the activities of its sponsored funds. For additional information about KKR & Co. L.P. (KKR), please visit KKR's website at www.kkr.com and on Twitter @KKR_Co.
FORWARD-LOOKING STATEMENTS
This release contains certain forward-looking statements, including the statements with respect to the strategic partnership with Marshall Wace LLP, the declaration and payment of distributions on common units of KKR and the timing, manner and volume of repurchases of common units pursuant to a repurchase program. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. The forward-looking statements are based on KKR’s beliefs, assumptions and expectations, taking into account all information currently available to it. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to KKR or are within its control. If a change occurs, KKR’s business, financial condition, liquidity and results of operations, including but not limited to AUM, FPAUM, ENI, ENI after taxes, after-tax cash earnings, equity invested and syndicated capital, uncalled commitments, cash and short-term investments, net realized investment income and book value, may vary materially from those expressed in the forward-looking statements. The following factors, among others, could cause actual results to vary from the forward-looking statements: the general volatility of the capital markets; failure to realize the benefits of or changes in KKR’s business strategies including the ability to realize the anticipated synergies from acquisitions or strategic partnerships; availability, terms and deployment of capital; availability of qualified personnel and expense of recruiting and retaining such personnel; changes in the asset management industry, interest rates or the general economy; underperformance of KKR's investments and decreased ability to raise funds; and the degree and nature of KKR’s competition. All forward looking statements speak only as of the date hereof. KKR does not undertake any obligation to update any forward-looking statements to reflect circumstances or events that occur after the date on which such statements were made except as required by law. In addition, KKR’s business strategy is focused on the long term and financial results are subject to significant volatility. Additional information about factors affecting KKR is available in KKR & Co. L.P.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014, filed with the SEC on February 27, 2015, quarterly reports on Form 10-Q for subsequent quarters and other filings with the SEC, which are available at www.sec.gov.
KKR
CONSOLIDATED STATEMENTS OF OPERATIONS (GAAP BASIS - UNAUDITED)
(Amounts in thousands, except common unit and per common unit amounts)
Quarter Ended Year Ended
December 31, 2015 December 31, 2014 December 31, 2015 December 31, 2014
Revenues
Fees and Other $ 307,923 $ 212,944 $ 1,043,768 $ 1,110,008
Expenses
Compensation and Benefits 306,942 253,661 1,180,591 1,263,852
Occupancy and Related Charges 17,295 15,596 65,683 62,564
General, Administrative and Other 200,858 363,904 624,951 869,651
Total Expenses 525,095 633,161 1,871,225 2,196,067
Investment Income (Loss)
Net Gains (Losses) from Investment Activities 1,197,879 535,943 4,672,627 4,778,232
Dividend Income 140,397 205,875 850,527 1,174,501
Interest Income 320,569 271,083 1,219,197 909,207
Interest Expense (170,282 ) (119,846 ) (573,226 ) (317,192 )
Total Investment Income (Loss) 1,488,563 893,055 6,169,125 6,544,748
Income (Loss) Before Taxes 1,271,391 472,838 5,341,668 5,458,689
Income Tax (Benefit) 27,341 6,524 66,636 63,669
Net Income (Loss) 1,244,050 466,314 5,275,032 5,395,020
Net Income (Loss) Attributable to
Redeemable Noncontrolling Interests 7,371 (4,707 ) (4,512 ) (3,341 )
Net Income (Loss) Attributable to
Noncontrolling Interests and Appropriated Capital 1,204,422 471,604 4,791,062 4,920,750
Net Income (Loss) Attributable to KKR & Co. L.P. $ 32,257 $ (583 ) $ 488,482 $ 477,611
Net Income (Loss) Attributable to KKR & Co. L.P. Per Common Unit
Basic $ 0.07 $ 0.00 $ 1.09 $ 1.25
Diluted (a) $ 0.07 $ 0.00 $ 1.01 $ 1.16
Weighted Average Common Units Outstanding
Basic 461,374,013 431,432,521 448,884,185 381,092,394
Diluted (a) 489,704,787 458,982,859 482,699,194 412,049,275
(a) KKR Holdings L.P. units have been excluded from the calculation of diluted earnings per common unit since the exchange of these units would not dilute KKR’s respective ownership interests in the KKR Group Partnerships.
KKR
STATEMENTS OF OPERATIONS AND OTHER SELECTED FINANCIAL INFORMATION
TOTAL REPORTABLE SEGMENTS (UNAUDITED)
(Amounts in thousands, except unit and per unit amounts)
Quarter Ended Year Ended
December 31, 2015 September 30, 2015 December 31, 2014 December 31, 2015 December 31, 2014
Segment Revenues
Management, Monitoring and Transaction Fees, Net
Management Fees $ 195,072 $ 181,780 $ 178,064 $ 732,033 $ 726,043
Monitoring Fees 94,128 24,964 38,738 264,643 135,160
Transaction Fees 107,320 61,437 53,292 364,994 459,677
Fee Credits (59,375 ) (23,293 ) (25,728 ) (219,620 ) (222,037 )
Total Management, Monitoring and Transaction Fees, Net 337,145 244,888 244,366 1,142,050 1,098,843
Performance Income
Realized Incentive Fees 7,209 880 11,301 19,647 47,807
Realized Carried Interest 207,211 265,291 198,597 1,027,154 1,193,661
Unrealized Carried Interest 112,388 (428,493 ) 46,120 163,545 110,133
Total Performance Income 326,808 (162,322 ) 256,018 1,210,346 1,351,601
Investment Income (Loss)
Net Realized Gains (Losses) (81,343 ) 61,439 62,219 337,023 628,403
Net Unrealized Gains (Losses) (128,765 ) (384,460 ) (324,416 ) (391,962 ) (396,425 )
Total Realized and Unrealized (210,108 ) (323,021 ) (262,197 ) (54,939 ) 231,978
Interest Income and Dividends 85,907 101,318 165,856 411,536 408,084
Interest Expense (52,174 ) (52,681 ) (46,531 ) (203,085 ) (134,909 )
Net Interest and Dividends 33,733 48,637 119,325 208,451 273,175
Total Investment Income (Loss) (176,375 ) (274,384 ) (142,872 ) 153,512 505,153
Total Segment Revenues 487,578 (191,818 ) 357,512 2,505,908 2,955,597
Segment Expenses
Compensation and Benefits
Cash Compensation and Benefits 121,036 87,680 86,035 409,992 380,581
Realized Performance Income Compensation 85,766 106,469 83,960 418,718 496,589
Unrealized Performance Income Compensation 45,351 (170,621 ) 21,508 66,927 49,459
Total Compensation and Benefits 252,153 23,528 191,503 895,637 926,629
Occupancy and Related Charges 16,666 15,720 14,383 62,657 57,787
Other Operating Expenses 68,978 52,081 61,685 233,618 229,069
Total Segment Expenses 337,797 91,329 267,571 1,191,912 1,213,485
Income (Loss) attributable to noncontrolling interests 5,100 2,902 3,349 16,007 14,946
Economic Net Income (Loss) (a) 144,681 (286,049 ) 86,592 1,297,989 1,727,166
Equity-based Compensation 37,376 48,252 36,607 186,346 158,927
Pre-tax Economic Net Income (Loss) (b) 107,305 (334,301 ) 49,985 1,111,643 1,568,239
Provision for Income Tax (Benefit) 36,797 (19,505 ) 3,951 83,363 94,223
After-tax Economic Net Income (Loss) (c) $ 70,508 $ (314,796 ) $ 46,034 $ 1,028,280 $ 1,474,016
After-tax Economic Net Income (Loss) Per Adjusted Unit $ 0.08 $ (0.37 ) $ 0.05 $ 1.21 $ 1.84
Weighted Average Adjusted Units (Fully Diluted Basis) (a) 852,446,702 851,704,303 838,067,975 851,099,066 800,247,988
Assets Under Management $ 119,544,300 $ 112,414,500 $ 107,119,300 $ 119,544,300 $ 107,119,300
Fee Paying Assets Under Management $ 91,720,500 $ 85,861,800 $ 85,857,200 $ 91,720,500 $ 85,857,200
Equity Invested and Syndicated Capital $ 2,192,100 $ 1,462,900 $ 2,343,900 $ 8,611,500 $ 12,818,100
Uncalled Commitments $ 29,457,100 $ 26,892,300 $ 21,113,700 $ 29,457,100 $ 21,113,700
Fee Related Earnings (d) $ 180,848 $ 127,523 $ 126,416 $ 610,496 $ 631,344
(a) See definitions for Economic Net Income (Loss) and adjusted units under "Notes to Reportable Segments."
(b) Represents Economic Net Income (Loss) after equity-based compensation.
(c) Represents Economic Net Income (Loss) after equity-based compensation and income taxes.
(d) See Exhibit A "Other Information" for the definition and calculation of Fee Related Earnings.
KKR
SCHEDULE OF SEGMENT REVENUES AND OTHER SELECTED FINANCIAL INFORMATION (UNAUDITED)
(Amounts in thousands)
PRIVATE MARKETS
Quarter Ended Year Ended
December 31, 2015 September 30, 2015 December 31, 2014 December 31, 2015 December 31, 2014
Segment Revenues
Management, Monitoring and Transaction Fees, Net
Management Fees $ 122,703 $ 118,250 $ 111,186 $ 465,575 $ 453,210
Monitoring Fees 94,128 24,964 38,738 264,643 135,160
Transaction Fees 40,000 17,732 8,480 144,652 214,612
Fee Credits (51,567 ) (20,266 ) (16,054 ) (195,025 ) (198,680 )
Total Management, Monitoring and Transaction Fees, Net 205,264 140,680 142,350 679,845 604,302
Performance Income
Realized Incentive Fees — — — — —
Realized Carried Interest 207,211 265,291 198,597 1,018,201 1,159,011
Unrealized Carried Interest 137,438 (394,126 ) 34,070 182,628 70,058
Total Performance Income 344,649 (128,835 ) 232,667 1,200,829 1,229,069
Investment Income (Loss)
Net Realized Gains (Losses) — — — — —
Net Unrealized Gains (Losses) — — — — —
Total Realized and Unrealized — — — — —
Interest Income and Dividends — — — — —
Interest Expense — — — — —
Net Interest and Dividends — — — — —
Total Investment Income (Loss) — — — — —
Total Segment Revenues $ 549,913 $ 11,845 $ 375,017 $ 1,880,674 $ 1,833,371
Assets Under Management $ 66,028,600 $ 66,776,600 $ 64,611,300 $ 66,028,600 $ 64,611,300
Fee Paying Assets Under Management $ 45,307,400 $ 46,399,800 $ 47,262,500 $ 45,307,400 $ 47,262,500
Equity Invested $ 1,355,300 $ 867,000 $ 828,000 $ 5,527,900 $ 7,223,400
Uncalled Commitments $ 22,766,300 $ 21,610,400 $ 18,272,400 $ 22,766,300 $ 18,272,400
PUBLIC MARKETS
Quarter Ended Year Ended
December 31, 2015 September 30, 2015 December 31, 2014 December 31, 2015 December 31, 2014
Segment Revenues
Management, Monitoring and Transaction Fees, Net
Management Fees $ 72,369 $ 63,530 $ 66,878 $ 266,458 $ 272,833
Monitoring Fees — — — — —
Transaction Fees 8,183 3,386 10,511 28,872 27,145
Fee Credits (7,808 ) (3,027 ) (9,674 ) (24,595 ) (23,357 )
Total Management, Monitoring and Transaction Fees, Net 72,744 63,889 67,715 270,735 276,621
Performance Income
Realized Incentive Fees 7,209 880 11,301 19,647 47,807
Realized Carried Interest — — — 8,953 34,650
Unrealized Carried Interest (25,050 ) (34,367 ) 12,050 (19,083 ) 40,075
Total Performance Income (17,841 ) (33,487 ) 23,351 9,517 122,532
Investment Income (Loss)
Net Realized Gains (Losses) — — — — —
Net Unrealized Gains (Losses) — — — — —
Total Realized and Unrealized — — — — —
Interest Income and Dividends — — — — —
Interest Expense — — — — —
Net Interest and Dividends — — — — —
Total Investment Income (Loss) — — — — —
Total Segment Revenues $ 54,903 $ 30,402 $ 91,066 $ 280,252 $ 399,153
Assets Under Management $ 53,515,700 $ 45,637,900 $ 42,508,000 $ 53,515,700 $ 42,508,000
Fee Paying Assets Under Management $ 46,413,100 $ 39,462,000 $ 38,594,700 $ 46,413,100 $ 38,594,700
Equity Invested $ 661,200 $ 583,400 $ 1,126,700 $ 2,214,700 $ 3,027,400
Uncalled Commitments $ 6,690,800 $ 5,281,900 $ 2,841,300 $ 6,690,800 $ 2,841,300
Gross Dollars Invested $ 1,742,600 $ 1,181,400 $ 1,545,600 $ 5,244,900 $ 4,425,600
KKR
SCHEDULE OF SEGMENT REVENUES AND OTHER SELECTED FINANCIAL INFORMATION (UNAUDITED)
(Amounts in thousands)
CAPITAL MARKETS
Quarter Ended Year Ended
December 31, 2015 September 30, 2015 December 31, 2014 December 31, 2015 December 31, 2014
Segment Revenues
Management, Monitoring and Transaction Fees, Net
Management Fees $ — $ — $ — $ — $ —
Monitoring Fees — — — — —
Transaction Fees 59,137 40,319 34,301 191,470 217,920
Fee Credits — — — — —
Total Management, Monitoring and Transaction Fees, Net 59,137 40,319 34,301 191,470 217,920
Performance Income
Realized Incentive Fees — — — — —
Realized Carried Interest — — — — —
Unrealized Carried Interest — — — — —
Total Performance Income — — — — —
Investment Income (Loss)
Net Realized Gains (Losses) — — — — —
Net Unrealized Gains (Losses) — — — — —
Total Realized and Unrealized — — — — —
Interest Income and Dividends — — — — —
Interest Expense — — — — —
Net Interest and Dividends — — — — —
Total Investment Income (Loss) — — — — —
Total Segment Revenues $ 59,137 $ 40,319 $ 34,301 $ 191,470 $ 217,920
Syndicated Capital $ 175,600 $ 12,500 $ 389,200 $ 868,900 $ 2,567,300
PRINCIPAL ACTIVITIES
Quarter Ended Year Ended
December 31, 2015 September 30, 2015 December 31, 2014 December 31, 2015 December 31, 2014
Segment Revenues
Management, Monitoring and Transaction Fees, Net
Management Fees $ — $ — $ — $ — $ —
Monitoring Fees — — — — —
Transaction Fees — — — — —
Fee Credits — — — — —
Total Management, Monitoring and Transaction Fees, Net — — — — —
Performance Income
Realized Incentive Fees — — — — —
Realized Carried Interest — — — — —
Unrealized Carried Interest — — — — —
Total Performance Income — — — — —
Investment Income (Loss)
Net Realized Gains (Losses)
(81,343
) 61,439 62,219 337,023 628,403
Net Unrealized Gains (Losses) (128,765 ) (384,460 ) (324,416 ) (391,962 ) (396,425 )
Total Realized and Unrealized (210,108 ) (323,021 ) (262,197 ) (54,939 ) 231,978
Interest Income and Dividends 85,907 101,318 165,856 411,536 408,084
Interest Expense (52,174 ) (52,681 ) (46,531 ) (203,085 ) (134,909 )
Net Interest and Dividends 33,733 48,637 119,325 208,451 273,175
Total Investment Income (Loss) (176,375 ) (274,384 ) (142,872 ) 153,512 505,153
Total Segment Revenues $ (176,375 ) $ (274,384 ) $ (142,872 ) $ 153,512 $ 505,153
KKR
BALANCE SHEET
TOTAL REPORTABLE SEGMENTS (UNAUDITED)
(Amounts in thousands, except per unit amounts)
As of As of
December 31, 2015 December 31, 2014
Cash and Short-term Investments $ 1,287,650 $ 1,121,385
Investments 8,958,089 (a) 9,807,606
Unrealized Carry 1,415,478 (b) 1,283,022 (b)
Other Assets 1,613,139 999,654
Corporate Real Estate 154,942 —
Total Assets $ 13,429,298 $ 13,211,667
Debt Obligations - KKR (ex-KFN) $ 2,000,000 $ 1,527,000
Debt Obligations - KFN 657,310 657,310
Preferred Shares - KFN 373,750 373,750
Other Liabilities 291,537 413,808
Total Liabilities 3,322,597 2,971,868
Noncontrolling Interests 127,472 121,574
Book Value $ 9,979,229 $ 10,118,225
Book Value Per Outstanding Adjusted Unit $ 12.18 $ 12.48
Book Value Per Adjusted Unit $ 11.78 $ 12.07
(a) See schedule of investments that follows on the next page.
As of As of
(b) Unrealized Carry
December 31, 2015 December 31, 2014
Private Markets $ 1,340,556 $ 1,196,633
Public Markets 74,922 86,389
Total $ 1,415,478 $ 1,283,022
KKR
SCHEDULE OF INVESTMENTS*
TOTAL REPORTABLE SEGMENTS (UNAUDITED)
(Amounts in thousands, except percentage amounts)
As of December 31, 2015
Investments Cost Fair
Value
Fair Value as a
Percentage of
Total Investments
Private Equity Co-Investments $ 2,250,079 $ 3,036,805 33.9 %
Private Equity Funds 786,043 1,020,953 11.4 %
Private Equity Total 3,036,122 4,057,758 45.3 %
Energy 977,213 580,680 6.5 %
Real Estate 793,068 846,266 9.4 %
Infrastructure 183,347 191,181 2.1 %
Real Assets Total 1,953,628 1,618,127 18.0 %
Special Situations 894,344 788,123 8.8 %
Direct Lending 65,802 66,827 0.8 %
Mezzanine 63,559 64,090 0.7 %
Alternative Credit Total 1,023,705 919,040 10.3 %
CLOs (a) 1,330,450 921,509 10.3 %
Liquid Credit 189,280 184,825 2.1 %
Specialty Finance 297,756 234,467 2.6 %
Credit Total 2,841,191 2,259,841 25.3 %
Other 1,090,008 1,022,363 11.4 %
Total Investments $ 8,920,949 $ 8,958,089 100.0 %
As of December 31, 2015
Significant Investments: (b) Cost Fair
Value Fair Value as a
Percentage of
Total Investments
First Data Corporation (NYSE: FDC)
$ 1,061,332 $ 1,266,196 14.1 %
Walgreens Boots Alliance (NASDAQ: WBA)
222,533 748,688 8.4 %
WMI Holdings Corp. (NASDAQ: WMIH)
221,127 311,270 3.5 %
Oil & Gas Royalties Investment
118,640 173,800 1.9 %
HCA Holdings, Inc. (NYSE: HCA)
29,455 169,332 1.9 %
Total Significant Investments 1,653,087 2,669,286 29.8 %
Other Investments 7,267,862 6,288,803 70.2 %
Total Investments $ 8,920,949 $ 8,958,089 100.0 %
* Investments is a term used solely for purposes of financial presentation of a portion of KKR’s balance sheet and includes majority investments in subsidiaries that operate KKR’s asset management and broker-dealer businesses, including the general partner interests of KKR’s investment funds.
(a) Includes approximately $104.2 million of CLOs that are not held for investment purposes and are held at cost.
(b) The significant investments include the top five investments (other than investments expected to be syndicated or transferred in connection with new fundraising) based on their fair market value as of December 31, 2015. The fairvalue figures include the co-investment and the limited partner and/or general partner interests held by KKR in the underlying investment, if applicable.
KKR
ASSETS UNDER MANAGEMENT* (UNAUDITED)
(Amounts in thousands)
Private
Markets
Segment
Public
Markets
Segment
Total
Reportable
Segments
First Quarter 2015
December 31, 2014 - As Reported $ 61,505,800 $ 37,106,700 $ 98,612,500
Net AUM of Strategic Partnerships (pro-rata based on ownership interest) — 2,810,800 2,810,800
Capital Commitments Excluded from AUM ("Shadow AUM") 3,105,500 2,590,500 5,696,000
December 31, 2014 - As Adjusted $ 64,611,300 $ 42,508,000 $ 107,119,300
New Capital Raised 1,570,500 2,324,600 3,895,100
Distributions (2,967,000 ) (1,900,800 ) (c) (4,867,800 )
Net Changes in Fee Base of Certain Funds (a) — (238,600 ) (238,600 )
Change in Value 2,009,500 (292,800 ) 1,716,700
March 31, 2015 $ 65,224,300 $ 42,400,400 $ 107,624,700
Second Quarter 2015
March 31, 2015 $ 65,224,300 $ 42,400,400 $ 107,624,700
New Capital Raised 3,468,900 4,374,700 7,843,600
Distributions (3,447,000 ) (1,485,400 ) (d) (4,932,400 )
Change in Value 3,294,100 642,700 3,936,800
June 30, 2015 $ 68,540,300 $ 45,932,400 $ 114,472,700
Third Quarter 2015
June 30, 2015 $ 68,540,300 $ 45,932,400 $ 114,472,700
New Capital Raised 1,583,800 2,444,700 4,028,500
Distributions (2,700,300 ) (1,861,300 ) (e) (4,561,600 )
Change in Value (647,200 ) (877,900 ) (1,525,100 )
September 30, 2015 $ 66,776,600 $ 45,637,900 $ 112,414,500
Fourth Quarter 2015
September 30, 2015 $ 66,776,600 $ 45,637,900 $ 112,414,500
New Capital Raised 327,000 3,782,300 4,109,300
Acquisitions — 6,010,800 (b) 6,010,800
Distributions (2,718,200 ) (1,713,900 ) (f) (4,432,100 )
Change in Value 1,643,200 (201,400 ) 1,441,800
December 31, 2015 $ 66,028,600 $ 53,515,700 $ 119,544,300
Full Year 2015
December 31, 2014 - As Adjusted $ 64,611,300 $ 42,508,000 $ 107,119,300
New Capital Raised 6,950,200 12,926,300 19,876,500
Acquisitions — 6,010,800 (b) 6,010,800
Distributions (11,832,500 ) (6,961,400 ) (g) (18,793,900 )
Net Changes in Fee Base of Certain Funds (a) — (238,600 ) (238,600 )
Change in Value 6,299,600 (729,400 ) 5,570,200
December 31, 2015 $ 66,028,600 $ 53,515,700 $ 119,544,300
* For the periods reported, AUM reflects the inclusion of capital commitments for which we are eligible to receive fees or carried interest upon deployment of capital and the inclusion of KKR's pro rata portion of AUM managed by other asset managers in which KKR holds a minority stake.
(a) Represents the impact of certain funds entering their post-investment period.
(b) Represents KKR's pro rata portion of AUM managed by Marshall Wace.
(c) Includes $705.4 million of redemptions by fund investors.
(d) Includes $563.8 million of redemptions by fund investors.
(e) Includes $696.3 million of redemptions by fund investors.
(f) Includes $908.0 million of redemptions by fund investors.
(g) Includes $2,873.5 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
First Quarter 2015
December 31, 2014 - As Reported $ 47,262,500 $ 35,783,900 $ 83,046,400
Net FPAUM of Strategic Partnerships (pro-rata based on ownership interest) — 2,810,800 2,810,800
December 31, 2014 - As Adjusted $ 47,262,500 $ 38,594,700 $ 85,857,200
New Capital Raised 1,320,500 2,277,200 3,597,700
Distributions (961,100 ) (1,638,600 ) (c) (2,599,700 )
Net Changes in Fee Base of Certain Funds (a) — (325,200 ) (325,200 )
Change in Value (460,000 ) (357,500 ) (817,500 )
March 31, 2015 $ 47,161,900 $ 38,550,600 $ 85,712,500
Second Quarter 2015
March 31, 2015 $ 47,161,900 $ 38,550,600 $ 85,712,500
New Capital Raised 1,310,500 2,249,200 3,559,700
Distributions (1,723,600 ) (1,293,900 ) (d) (3,017,500 )
Change in Value 196,900 429,300 626,200
June 30, 2015 $ 46,945,700 $ 39,935,200 $ 86,880,900
Third Quarter 2015
June 30, 2015 $ 46,945,700 $ 39,935,200 $ 86,880,900
New Capital Raised 1,042,700 1,944,500 2,987,200
Distributions (1,648,300 ) (1,776,100 ) (e) (3,424,400 )
Change in Value 59,700 (641,600 ) (581,900 )
September 30, 2015 $ 46,399,800 $ 39,462,000 $ 85,861,800
Fourth Quarter 2015
September 30, 2015 $ 46,399,800 $ 39,462,000 $ 85,861,800
New Capital Raised 222,400 2,741,500 2,963,900
Acquisitions — 6,010,800 (b) 6,010,800
Distributions (1,212,200 ) (1,620,700 ) (f) (2,832,900 )
Change in Value (102,600 ) (180,500 ) (283,100 )
December 31, 2015 $ 45,307,400 $ 46,413,100 $ 91,720,500
Full Year 2015
December 31, 2014 - As Adjusted $ 47,262,500 $ 38,594,700 $ 85,857,200
New Capital Raised 3,896,100 9,212,400 13,108,500
Acquisitions — 6,010,800 (b) 6,010,800
Distributions (5,545,200 ) (6,329,300 ) (g) (11,874,500 )
Net Changes in Fee Base of Certain Funds (a) — (325,200 ) (325,200 )
Change in Value (306,000 ) (750,300 ) (1,056,300 )
December 31, 2015 $ 45,307,400 $ 46,413,100 $ 91,720,500
* For the periods reported, FPAUM reflects the inclusion of KKR's pro rata portion of FPAUM managed by other asset managers in which KKR holds a minority stake.
(a) Represents the impact of certain funds entering their post-investment period.
(b) Represents KKR's pro rata portion of FPAUM managed by Marshall Wace.
(c) Includes $705.4 million of redemptions by fund investors.
(d) Includes $563.8 million of redemptions by fund investors.
(e) Includes $696.3 million of redemptions by fund investors.
(f) Includes $908.0 million of redemptions by fund investors.
(g) Includes $2,873.5 million of redemptions by fund investors.
KKR
INVESTMENT VEHICLE SUMMARY (a) (UNAUDITED)
As of December 31, 2015
(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
European Fund IV (b) 12/2014 12/2020 $ 3,468.0 $ 3,307.1 5.7% $ 160.9 $ — $ 160.9 $ 185.7
Asian Fund II (b) 4/2013 4/2019 5,825.0 3,979.3 1.3% 2,599.7 753.9 1,845.8 3,163.6
North America Fund XI (b) 9/2012 9/2018 8,718.4 3,704.0 2.9% 5,932.1 1,733.8 4,635.4 6,983.8
China Growth Fund 11/2010 11/2016 1,010.0 307.6 1.0% 702.4 283.4 544.4 713.4
E2 Investors (Annex Fund) 8/2009 11/2013 195.8 — 4.9% 195.8 195.7 18.1 10.3
European Fund III 3/2008 3/2014 6,121.8 812.1 4.6% 5,309.7 4,447.2 3,224.2 4,240.2
Asian Fund 7/2007 4/2013 3,983.3 129.5 2.5% 3,853.8 5,397.4 1,918.7 2,534.0
2006 Fund 9/2006 9/2012 17,642.2 525.6 2.1% 17,116.6 18,411.5 7,703.3 13,028.5
European Fund II 11/2005 10/2008 5,750.8 — 2.1% 5,750.8 6,611.1 825.0 2,003.2
Millennium Fund 12/2002 12/2008 6,000.0 — 2.5% 6,000.0 12,517.4 714.0 1,521.1
European Fund 12/1999 12/2005 3,085.4 — 3.2% 3,085.4 8,748.0 — 17.1
Total Private Equity Funds 61,800.7 12,765.2 50,707.2 59,099.4 21,589.8 34,400.9
Co-Investment Vehicles (b) Various Various 5,774.0 2,709.6 Various 3,137.4 2,511.0 2,118.0 2,865.8
Total Private Equity 67,574.7 15,474.8 53,844.6 61,610.4 23,707.8 37,266.7
Real Assets
Energy Income and Growth Fund 9/2013 9/2018 1,974.2 1,142.6 12.8% 831.6 143.9 757.1 544.3
Natural Resources Fund Various Various 887.4 2.9 Various 884.5 96.6 809.9 200.1
Global Energy Opportunities (b) Various Various 1,026.4 808.7 Various 252.7 55.0 144.8 124.7
Global Infrastructure Investors (b) 9/2011 10/2014 1,039.9 100.9 4.8% 967.0 216.4 847.8 972.7
Global Infrastructure Investors II (b) 10/2014 10/2020 3,028.3 2,685.7 4.1% 346.5 8.9 338.9 354.0
Infrastructure Co-Investments Various Various 1,125.0 — Various 1,125.0 377.9 1,124.4 1,520.1
Real Estate Partners Americas (b) 5/2013 12/2016 1,229.1 598.2 16.3% 777.5 314.5 630.5 740.7
Real Estate Partners Europe (b) 9/2015 (d) 591.3 591.3 10.9% — — — —
Real Assets 10,901.6 5,930.3 5,184.8 1,213.2 4,653.4 4,456.6
Unallocated Commitments 1,361.2 1,361.2 Various — — — —
Private Markets Total 79,837.5 22,766.3 59,029.4 62,823.6 28,361.2 41,723.3
Public Markets
Special Situations Fund 12/2012 1/2016 2,257.6 128.0 11.6% 2,129.6 257.6 2,129.6 2,205.6
Special Situations Fund II 12/2014 (c) 2,675.5 2,083.4 9.4% 592.1 — 592.1 452.4
Mezzanine Fund 3/2010 3/2015 1,022.8 150.6 4.4% 872.2 541.0 618.5 634.3
Lending Partners 12/2011 12/2014 460.2 90.5 15.2% 369.7 181.5 325.3 303.3
Lending Partners II 6/2014 6/2017 1,335.9 889.6 3.7% 446.3 26.4 446.3 475.7
Lending Partners Europe 3/2015 3/2018 780.1 763.6 5.2% 16.5 — 16.5 24.0
Other Alternative Credit Vehicles Various Various 5,157.2 2,585.1 Various 2,572.1 1,496.5 1,706.7 1,925.9
Public Markets Total 13,689.3 6,690.8 6,998.5 2,503.0 5,835.0 6,021.2
Grand Total $ 93,526.8 $ 29,457.1 $ 66,027.9 $ 65,326.6 $ 34,196.2 $ 47,744.5
_____________________________________________________________________________________________________________________
(a) Reflects investment vehicles for which KKR has the ability to earn carried interest.
(b) The “Invested” and “Realized” columns include the amounts of any realized investments that restored the unused capital commitments of the fund investors.
(c) Three years from final close.
(d) Four years from final close.
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.
Adjusted units are used as a measure of the total equity ownership of KKR that is held by KKR & Co. L.P. (including equity awards issued under the Equity Incentive Plan), KKR Holdings and other holders of securities exchangeable into common units of KKR & Co. L.P. 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, equity awards issued under the Equity Incentive Plan and other exchangeable securities had been exchanged for common units of KKR & Co. L.P.
After-tax cash earnings is used by management as a measure of the cash earnings of KKR. KKR believes this measure, which was formerly referred to as total distributable earnings, is useful to unitholders as it provides a supplemental measure to assess performance, excluding the impact of mark-to-market gains (losses). After-tax cash earnings excludes certain realized investment losses to the extent unrealized losses on these investments were recognized prior to the combination with KPE on October 1, 2009.
Assets under management ("AUM") represent the assets managed by KKR or by its strategic partners from which KKR is entitled to receive fees or a carried interest (either currently or upon deployment of capital) 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 strategic partnerships. 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; (ii) uncalled capital commitments from these funds, including uncalled capital commitments from which KKR is currently not earning management fees or carried interest; (iii) the fair value of investments in KKR's co-investment vehicles; (iv) the par value of outstanding CLOs (excluding CLOs wholly-owned by KKR); (vi) KKR's pro-rata portion of the AUM managed by strategic partnerships in which KKR holds a minority ownership interest and (vi) the fair value of other assets managed by KKR. The pro-rata portion of the AUM managed by strategic partnerships is calculated based on KKR’s percentage ownership interest in such entities multiplied by such entity’s respective AUM. 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.
Book value is a measure of the net assets of KKR’s reportable segments and is used by management primarily in assessing the unrealized value of KKR’s investment portfolio, including carried interest, as well as KKR’s overall liquidity position. We believe this measure is useful to unitholders as it provides additional insight into the assets and liabilities of KKR excluding the assets and liabilities that are allocated to noncontrolling interest holders. Book value differs from KKR & Co. L.P. partners’ capital on a GAAP basis primarily as a result of the exclusion of ownership interests attributable to KKR Holdings.
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.
Cash return on equity measures the amount of cash income generated as a percentage of capital invested in KKR’s business. Cash return on equity is calculated by dividing Cash Earnings on a trailing twelve-month basis by the average book value during the period.
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 carried interest and related carry pool allocations and investment income. ENI is comprised of total segment revenues less total segment expenses and 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 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 non-cash equity-based charges and other non-cash compensation charges borne by KKR Holdings or incurred under the Equity Incentive Plan and other securities that are exchangeable for common units of KKR & Co. L.P.; (v) the exclusion of certain non-recurring items; (vi) the exclusion of investment income (loss) relating to noncontrolling interests; and (vii) the exclusion of income taxes.
Equity invested is the aggregate amount of equity capital that has 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 investments among its investment funds and carry-yielding co-investment vehicles and replaces committed dollars invested. Such amounts include: (i) capital invested by fund investors and co-investors with respect to which KKR is entitled to a carried interest and (ii) capital invested by KKR’s investment funds, including investments made using investment financing arrangements.
Investments is a term used solely for purposes of financial presentation of a portion of KKR’s balance sheet and includes majority investments in subsidiaries that operate KKR’s asset management and broker-dealer businesses, including the general partner interests of KKR’s investment funds.
Fee paying AUM ("FPAUM") represents only those assets under management of KKR or its strategic partners from which KKR receives management fees. We believe this measure is useful to unitholders as it provides additional insight into the capital base upon which KKR earns management fees. 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 and commitments from which KKR does not receive a fee are excluded (i.e., assets and commitments with respect to which it receives only carried interest or is otherwise not currently receiving a fee) 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.
Gross dollars invested is the aggregate amount of capital that has been invested by all of KKR’s Public Markets investment vehicles in our private credit non-liquid strategies and is used as a measure of investment activity for a portion of KKR’s Public Markets segment in a given period. We believe this measure is useful to unitholders as it provides additional insight into KKR’s investment of capital across private credit non-liquid strategies for all the investment vehicles in the Public Markets segment. Such amounts include capital invested by fund investors and co-investors with respect to which KKR’s Public Markets business is entitled to a fee or carried interest.
Return on equity measures the amount of net income generated as a percentage of capital invested in KKR’s business. Return on equity is calculated by dividing After-tax Economic Net Income (Loss) on a trailing twelve-month basis by the average book value during the period.
Syndicated capital is generally the aggregate amount of capital in transactions originated by KKR and its investment funds and carry-yielding co-investment vehicles, which has been distributed to third parties in exchange for a fee. It does not include (i) capital invested in such transactions by KKR investment funds and carry-yielding co-investment vehicles, which is instead reported in equity invested and (ii) debt capital that is arranged as part of the acquisition financing of transactions originated by KKR investment funds. 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 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 to make future investments. Uncalled commitments are not reduced for investments completed using fund-level investment financing arrangements.
KKR
EXHIBIT A
OTHER FINANCIAL INFORMATION (UNAUDITED)
(Amounts in thousands)
Quarter Ended Year Ended
December 31, 2015 September 30, 2015 December 31, 2014 December 31, 2015 December 31, 2014
Fee Related Earnings
Total Management, Monitoring and Transaction Fees, Net $ 337,145 $ 244,888 $ 244,366 $ 1,142,050 $ 1,098,843
Less: Cash Compensation and Benefits 121,036 87,680 86,035 409,992 380,581
Less: Occupancy and Related Charges 16,666 15,720 14,383 62,657 57,787
Less: Other Operating expenses 68,978 52,081 61,685 233,618 229,069
Plus: Expenses of Principal Activities Segment 50,383 38,116 44,153 174,713 199,938
Fee Related Earnings (a) 180,848 127,523 126,416 610,496 631,344
Plus: Net Interest and Dividends 33,733 48,637 119,325 208,451 273,175
Plus: Depreciation and Amortization 3,775 3,745 3,830 15,319 15,782
Plus: Core Interest Expense 29,516 30,429 27,050 116,027 88,002
Less: Expenses of Principal Activities Segment 50,383 38,116 44,153 174,713 199,938
Fee and Yield EBITDA (b) 197,489 172,218 232,468 775,580 808,365
Plus: Realized Performance Income, net 128,654 159,702 125,938 628,083 744,879
Plus: Net Realized Gains (Losses) (81,343 ) 61,439 62,219 337,023 628,403
Total EBITDA $ 244,800 $ 393,359 $ 420,625 $ 1,740,686 $ 2,181,647
Core Interest Expense
GAAP Interest Expense $ 170,282 $ 151,554 $ 119,846 $ 573,226 $ 317,192
Less: Interest expense related to debt obligations from investment financing arrangements
118,108 98,873 73,315 370,141 182,283
Segment Interest Expense 52,174 52,681 46,531 203,085 134,909
Less: Interest Expense related to debt obligations from KFN and other 22,658 22,252 19,481 87,058 46,907
Core Interest Expense (c) $ 29,516 $ 30,429 $ 27,050 $ 116,027 $ 88,002
________________________________________________________________________________________________________________________________________________________
(a) Fee related earnings (“FRE”) is a measure of the operating earnings of KKR and its business segments before performance income, related performance income compensation and investment income. KKR believes this measure is useful to unitholders as it provides additional insight into the operating profitability of KKR's fee generating management companies and capital markets businesses.
(b) Fee and Yield EBITDA is used by management as another measure of the cash earnings of KKR and its business segments investment income. We believe this measure is also useful to unitholders as it provides insight into the amount of KKR’s cash earnings before the impact of interest expense, significant portions of which tend to be more recurring than realized carried interest and realized investment income from quarter to quarter.
(c) 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 investment funds, investment vehicles and principal investments and also excludes interest expense incurred by KFN. The financing arrangements excluded from core interest expense are not direct obligations of the general partners of KKR’s private equity funds or its management companies, and in the case of debt obligations of KFN are non-recourse to KKR beyond the assets of KFN. KKR believes 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, other noncontrolling interest holders and KFN. Additionally, we believe this measure is useful for analyzing KKR’s ability to service its debt obligations other than the debt obligations of KFN.
KKR
EXHIBIT B
KKR'S PORTION OF TOTAL UNCALLED COMMITMENTS TO ITS INVESTMENT FUNDS (UNAUDITED)
(Amounts in thousands)
Uncalled
Commitments
Private Markets
European Fund IV $ 184,700
Energy Income and Growth Fund 147,100
Global Infrastructure Investors II 110,900
North America Fund XI 100,500
Real Estate Partners Americas 97,300
European Fund III 66,300
Real Estate Partners Europe 64,700
Asian Fund II 50,900
2006 Fund 22,700
Co-Investment Vehicles 69,600
Other Private Markets Funds 10,600
Total Private Markets Commitments 925,300
Public Markets
Special Situations Fund 14,900
Special Situations Fund II 195,100
Mezzanine Fund 6,500
Lending Partners 13,900
Lending Partners II 33,300
Lending Partners Europe 39,600
Other Alternative Credit Vehicles 125,200
Total Public Markets Commitments 428,500
Total Uncalled Commitments $ 1,353,800
KKR
EXHIBIT C
RECONCILIATION OF NET INCOME (LOSS) ATTRIBUTABLE TO KKR & CO. L.P. PER COMMON UNIT - BASIC (GAAP BASIS)
TO AFTER TAX ENI PER ADJUSTED UNIT (UNAUDITED)
(Amounts in thousands, except common unit and per common unit amounts)
Quarter Ended
December 31, 2015 September 30, 2015 December 31, 2014
Net income (loss) attributable to KKR & Co. L.P. per common unit
- Basic
$ 0.07 $ (0.42 ) $ 0.00
Weighted Average Common Units Outstanding - Basic 461,374,013 452,165,697 431,432,521
Net income (loss) attributable to KKR & Co. L.P. 32,257 (190,588 ) (583 )
Plus: Net income (loss) attributable to noncontrolling
interests held by KKR Holdings L.P.
35,060 (166,078 ) (3,365 )
Plus: Non-cash equity-based charges 47,730 67,821 55,968
Plus: Amortization of intangibles and other, net 2,293 10,186 28,048
Plus: Income tax (benefit) 27,341 (7,390 ) 6,524
Economic Net Income (Loss) 144,681 (286,049 ) 86,592
Less: Equity-based compensation associated with the KKR & Co. L.P.
2010 equity incentive plan
37,376 48,252 36,607
Pre-tax Economic Net Income (Loss) 107,305 (334,301 ) 49,985
Less: Provision for income tax (benefit) 36,797 (19,505 ) 3,951
After-tax Economic Net Income (Loss) 70,508 (314,796 ) 46,034
Weighted Average Adjusted Units 852,446,702 851,704,303 838,067,975
After-tax Economic Net Income (Loss) Per Adjusted Unit $ 0.08 $ (0.37 ) $ 0.05
Year Ended
December 31, 2015 December 31, 2014
Net income (loss) attributable to KKR & Co. L.P. per common unit
- Basic
$ 1.09 $ 1.25
Weighted Average Common Units Outstanding - Basic 448,884,185 381,092,394
Net income (loss) attributable to KKR & Co. L.P. 488,482 477,611
Plus: Net income (loss) attributable to noncontrolling
interests held by KKR Holdings L.P.
433,693 585,135
Plus: Non-cash equity-based charges 261,579 310,403
Plus: Amortization of intangibles and other, net 47,599 290,348
Plus: Income tax (benefit) 66,636 63,669
Economic Net Income (Loss) 1,297,989 1,727,166
Less: Equity-based compensation associated with the KKR & Co. L.P.
2010 equity incentive plan
186,346 158,927
Pre-tax Economic Net Income (Loss) 1,111,643 1,568,239
Less: Provision for income tax (benefit) 83,363 94,223
After-tax Economic Net Income (Loss) 1,028,280 1,474,016
Weighted Average Adjusted Units 851,099,066 800,247,988
After-tax Economic Net Income (Loss) Per Adjusted Unit $ 1.21 $ 1.84
KKR
EXHIBIT C (CONTINUED)
RECONCILIATION OF NET INCOME (LOSS) ATTRIBUTABLE TO KKR & CO. L.P. (GAAP BASIS)
TO ECONOMIC NET INCOME (LOSS), FEE RELATED EARNINGS, FEE AND YIELD EBITDA, AFTER TAX CASH EARNINGS AND
TOTAL EBITDA (UNAUDITED)
(Amounts in thousands)
Quarter Ended
December 31, 2015 September 30, 2015 December 31, 2014
Net income (loss) attributable to KKR & Co. L.P. $ 32,257 $ (190,588 ) $ (583 )
Plus: Net income (loss) attributable to noncontrolling
interests held by KKR Holdings L.P.
35,060 (166,078 ) (3,365 )
Plus: Non-cash equity-based charges 47,730 67,821 55,968
Plus: Amortization of intangibles and other, net 2,293 10,186 28,048
Plus: Income tax (benefit) 27,341 (7,390 ) 6,524
Economic Net Income (Loss) 144,681 (286,049 ) 86,592
Plus: Income attributable to segment noncontrolling interests 5,100 2,902 3,349
Less: Total investment income (loss) (176,375 ) (274,384 ) (142,872 )
Less: Net performance income (loss) 195,691 (98,170 ) 150,550
Plus: Expenses of Principal Activities Segment 50,383 38,116 44,153
Fee Related Earnings 180,848 127,523 126,416
Plus: Net interest and dividends 33,733 48,637 119,325
Plus: Depreciation and amortization 3,775 3,745 3,830
Plus: Core interest expense 29,516 30,429 27,050
Less: Expenses of Principal Activities Segment 50,383 38,116 44,153
Fee and Yield EBITDA 197,489 172,218 232,468
Less: Depreciation and amortization 3,775 3,745 3,830
Less: Core interest expense 29,516 30,429 27,050
Plus: Realized performance income (loss), net 128,654 159,702 125,938
Plus: Net realized gains (losses) (81,343 ) 61,439 62,219
Less: Corporate and local income taxes paid 37,791 25,173 25,183
Less: Income attributable to segment noncontrolling interests 5,100 2,902 3,349
After-tax Cash Earnings 168,618 331,110 361,213
Plus: Depreciation and amortization 3,775 3,745 3,830
Plus: Core interest expense 29,516 30,429 27,050
Plus: Corporate and local income taxes paid 37,791 25,173 25,183
Plus: Income attributable to segment noncontrolling interests 5,100 2,902 3,349
Total EBITDA $ 244,800 $ 393,359 $ 420,625
Year Ended
December 31, 2015 December 31, 2014
Net income (loss) attributable to KKR & Co. L.P. $ 488,482 $ 477,611
Plus: Net income (loss) attributable to noncontrolling
interests held by KKR Holdings L.P.
433,693 585,135
Plus: Non-cash equity-based charges 261,579 310,403
Plus: Amortization of intangibles and other, net 47,599 290,348
Plus: Income tax (benefit) 66,636 63,669
Economic Net Income (Loss) 1,297,989 1,727,166
Plus: Income attributable to segment noncontrolling interests 16,007 14,946
Less: Total investment income (loss) 153,512 505,153
Less: Net performance income (loss) 724,701 805,553
Plus: Expenses of Principal Activities Segment 174,713 199,938
Fee Related Earnings 610,496 631,344
Plus: Net interest and dividends 208,451 273,175
Plus: Depreciation and amortization 15,319 15,782
Plus: Core interest expense 116,027 88,002
Less: Expenses of Principal Activities Segment 174,713 199,938
Fee and Yield EBITDA 775,580 808,365
Less: Depreciation and amortization 15,319 15,782
Less: Core interest expense 116,027 88,002
Plus: Realized performance income (loss), net 628,083 744,879
Plus: Net realized gains (losses) 337,023 628,403
Less: Corporate and local income taxes paid 140,677 131,081
Less: Income attributable to segment noncontrolling interests 16,007 14,946
After-tax Cash Earnings 1,452,656 1,931,836
Plus: Depreciation and amortization 15,319 15,782
Plus: Core interest expense 116,027 88,002
Plus: Corporate and local income taxes paid 140,677 131,081
Plus: Income attributable to segment noncontrolling interests 16,007 14,946
Total EBITDA $ 1,740,686 $ 2,181,647
KKR
EXHIBIT C (CONTINUED)
RECONCILIATION OF KKR & CO. L.P. PARTNERS' CAPITAL (GAAP BASIS)
TO BOOK VALUE AND BOOK VALUE PER ADJUSTED UNIT (UNAUDITED)
(Amounts in thousands, except common unit and per common unit amounts)
As of As of
December 31, 2015 December 31, 2014
KKR & Co. L.P. partners’ capital $ 5,547,182 $ 5,382,691
Noncontrolling interests held by KKR Holdings L.P. 4,347,153 4,661,679
Equity impact of KKR Management Holdings Corp. and other 84,894 73,855
Book value 9,979,229 10,118,225
Adjusted units 847,083,373 838,020,974
Book value per adjusted unit $ 11.78 $ 12.07
RECONCILIATION OF CASH AND CASH EQUIVALENTS (GAAP BASIS)
TO CASH AND SHORT-TERM INVESTMENTS (UNAUDITED)
(Amounts in thousands)
As of As of
December 31, 2015 December 31, 2014
Cash and cash equivalents $ 1,047,740 $ 918,080
Liquid short-term investments 239,910 203,305
Cash and short-term investments $ 1,287,650 $ 1,121,385
KKR
EXHIBIT D
RECONCILIATION OF WEIGHTED AVERAGE GAAP COMMON UNITS OUTSTANDING (UNAUDITED)
The following table provides a reconciliation of KKR's Weighted Average GAAP Common Units Outstanding to Weighted Average Adjusted Units:
Quarter Ended
December 31, 2015 September 30, 2015 December 31, 2014
Weighted Average GAAP Common Units Outstanding - Basic 461,374,013 452,165,697 431,432,521
Adjustments:
Weighted Average Unvested Common Units and Other Securities (a) 28,330,774 — (c) 27,550,338
Weighted Average GAAP Common Units Outstanding - Diluted 489,704,787 452,165,697 458,982,859
Adjustments:
Weighted Average KKR Holdings Units (b) 362,741,915 365,717,358 379,085,116
Weighted Average Unvested Common Units and Other Securities (a) — 33,821,248 (c) —
Weighted Average Adjusted Units 852,446,702 851,704,303 838,067,975
Year Ended
December 31, 2015 December 31, 2014
Weighted Average GAAP Common Units Outstanding - Basic 448,884,185 381,092,394
Adjustments:
Weighted Average Unvested Common Units and Other Securities (a) 33,815,009 30,956,881
Weighted Average GAAP Common Units Outstanding - Diluted 482,699,194 412,049,275
Adjustments:
Weighted Average KKR Holdings Units (b) 368,399,872 388,198,713
Weighted Average Adjusted Units 851,099,066 800,247,988
RECONCILIATION OF GAAP COMMON UNITS OUTSTANDING (UNAUDITED)
The following table provides a reconciliation of KKR's GAAP Common Units Outstanding to Adjusted Units, Adjusted Units Eligible for Distribution and
Outstanding Adjusted Units:
As of As of
December 31, 2015 December 31, 2014
GAAP Common Units Outstanding - Basic 457,834,875 433,330,540
Unvested Common Units and Other Securities (a) 27,901,910 27,493,685
GAAP Common Units Outstanding - Diluted 485,736,785 460,824,225
Adjustments:
KKR Holdings Units (b) 361,346,588 377,196,749
Adjusted Units 847,083,373 838,020,974
Adjustments:
Unvested Common Units and Unvested Other Securities (a) (24,060,289 ) (24,373,441 )
Adjusted Units Eligible for Distribution 823,023,084 813,647,533
Adjustments:
Vested Other Securities (3,841,621 ) (3,120,244 )
Outstanding Adjusted Units 819,181,463 810,527,289
______________________________________________________________________________________________________________________________________________________
(a) Represents equity awards granted under the KKR & Co. L.P. 2010 Equity Incentive Plan and other securities that are exchangeable into KKR & Co. L.P common units. The issuance of common units of KKR & Co. L.P. pursuant to such equity awards or other securities 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.
(c) Unvested common units and other securities are excluded from the calculation of diluted earnings per common unit on a GAAP basis because inclusion of such unvested common units and other securities would be anti-dilutive (decrease the loss per common unit).
View source version on businesswire.com: http://www.businesswire.com/news/home/20160211005372/en/
Contact:
Investor Relations:
Kohlberg Kravis Roberts & Co. L.P.
Craig Larson, +1-877-610-4910 (U.S.)
+1-212-230-9410
investor-relations@kkr.com
or
Media:
Kohlberg Kravis Roberts & Co. L.P.
Kristi Huller, +1-212-750-8300
media@kkr.com
The "Street has JAH coming in at 1.20 for the quarter that should be reported on or about February 10, 2016! All post's welcome! The "Good Dr's In"!
Nathan's Famous, Inc. Reports Third Quarter Results; Authorizes Increase In Share Buy-back Plan
PR Newswire Nathan's Famous, Inc.
February 5, 2016 8:30 AM
????
JERICHO, N.Y., Feb. 5, 2016 /PRNewswire/ -- Nathan's Famous, Inc. (NATH) today reported results for the third quarter of its 2016 fiscal year that ended December 27, 2015.
For the fiscal quarter ended December 27, 2015:
Income from operations increased by 17.8% to $4,435,000, as compared to $3,765,000 during the thirteen weeks ended December 28, 2014;
Adjusted EBITDA, as subsequently defined, increased by 12.6% to $4,932,000 as compared to $4,382,000 for the thirteen weeks ended December 28, 2014;
Net income was $432,000, as compared to $2,241,000 for the thirteen weeks ended December 28, 2014;
Earnings per diluted share were $0.10 per share, as compared to $0.49 per share for the thirteen weeks ended December 28, 2014; and
Revenues were $20,564,000, as compared to $22,315,000 during the thirteen weeks ended December 28, 2014.
For the thirty-nine weeks ended December 27, 2015:
Income from operations increased by 20.5% to $20,477,000, as compared to $16,991,000 during the thirty-nine weeks ended December 28, 2014;
Adjusted EBITDA, as subsequently defined, increased by 17.2% to $22,189,000 as compared to $18,936,000 for the thirty-nine weeks ended December 28, 2014;
Net income was $5,589,000, as compared to $10,166,000 for the thirty-nine weeks ended December 28, 2014;
Earnings per diluted share were $1.24 per share, as compared to $2.21 per share for the thirty-nine weeks ended December 28, 2014; and
Revenues were $81,837,000, as compared to $78,772,000 during the thirty-nine weeks ended December 28, 2014.
The Company reported the following:
License royalties increased by 12.8% to $15,406,000 during the thirty-nine weeks ended December 27, 2015, as compared to $13,652,000 during the thirty-nine weeks ended December 28, 2014. During the thirty-nine weeks ended December 27, 2015, total royalties earned under the John Morrell & Co., agreement increased by 14.2% to $14,091,000 as compared to $12,342,000 of royalties earned during the thirty-nine weeks ended December 28, 2014. The increase is substantially attributable to significant organic growth in our consumer packaged hot dog business as a result of more effective sales, marketing and promotional strategies.
Sales from the Branded Product Program, featuring the sale of Nathan's hot dogs to the foodservice industry, increased by 3.5% to $47,160,000 during the thirty-nine weeks ended December 27, 2015, as compared to sales of $45,568,000 during the thirty-nine weeks ended December 28, 2014. This increase was primarily attributable to a 5.1% increase in the volume of products sold partially offset by lower average selling prices on the portion of our business where the selling price is calculated based upon the market price for beef, which has significantly declined during the past six months.
Sales from Company-operated restaurants were $14,872,000 during the thirty-nine weeks ended December 27, 2015 as compared to $14,497,000 during the thirty-nine weeks ended December 28, 2014 driven primarily from higher sales at both Coney Island locations.
Revenues from franchise operations were $3,804,000 during the thirty-nine weeks ended December 27, 2015, as compared to $4,473,000 during the thirty-nine weeks ended December 28, 2014. Total franchise fee income was $388,000 during the thirty-nine weeks ended December 27, 2015 as compared to $879,000 during the thirty-nine weeks ended December 28, 2014, primarily due to less international development fees. Thirty-five new franchised units were opened during the thirty-nine weeks ended December 27, 2015, including 11 international locations, including locations in Russia and Costa Rica, and 16 Branded Menu Program outlets. Twenty-eight new franchised units were opened during the thirty-nine weeks ended December 28, 2014, including 10 international locations, including our first locations in Costa Rica and Malaysia and 14 Branded Menu Program outlets. We also recognized forfeited fees of $58,000 during the fiscal 2016 period and $120,000 during the fiscal 2015 period.
On March 10, 2015, Nathan's completed a financing of $135.0 million aggregate principal amount of Senior Secured Notes. Nathan's incurred interest expense, including amortized debt issuance costs, totaling $11,126,000 during the thirty-nine weeks ended December 27, 2015 on the Notes.
Nathan's also announced that its Board of Directors has authorized the purchase by Nathan's of up to an additional 200,000 shares of its common stock. Purchases may be made from time to time, depending on market conditions, in open market or privately negotiated transactions, at prices deemed appropriate by management. There is no set time limit on the repurchases. After giving effect to the increase in the number of shares, an aggregate 266,074 shares remain available for purchase under Nathan's stock buy-back program. To date, pursuant to prior share repurchase programs authorized by the Board of Directors, Nathan's has purchased a total of 4,921,557 shares of common stock at a cost of approximately $68,070,000.
Certain Non-GAAP Financial Information:
In addition to disclosing results that are determined in accordance with Generally Accepted Accounting Principles in the United States of America ("US GAAP"), the Company has provided EBITDA excluding (i) interest expense; (ii) provision for income taxes and (iii) depreciation and amortization expense. The Company has also provided Adjusted EBITDA excluding (i) stock-based compensation and (ii) amortization of bond premium on the Company's available-for sale investments that the Company believes will impact the comparability of its results of operations.
The Company believes that EBITDA and Adjusted EBITDA are useful to investors to assist in assessing and understanding the Company's operating performance and underlying trends in the Company's business because EBITDA and Adjusted EBITDA are (i) among the measures used by management in evaluating performance and (ii) are frequently used by securities analysts, investors and other interested parties as a common performance measure.
EBITDA and Adjusted EBITDA are not recognized terms under US GAAP and should not be viewed as alternatives to net income or other measures of financial performance or liquidity in conformity with US GAAP. Additionally, our definitions of EBITDA and Adjusted EBITDA may differ from other companies. Analysis of results and outlook on a non-US GAAP basis should be used as a complement to, and in conjunction with, data presented in accordance with US GAAP.
About Nathan's Famous
Nathan's currently distributes its products in 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, and nine foreign countries through its restaurant system, foodservice sales programs and product licensing activities. Last year, over 500 million Nathan's Famous hot dogs were sold. Nathan's was ranked #22 on the Forbes 2014 list of the Best Small Companies in America and was listed as the Best Small Company in New York State in October 2013. 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 include but are not limited to: the impact of our indebtedness, including the effect on our ability to fund working capital, operations and make new investments; economic; weather (including the impact on the supply of cattle), and change in the price of beef trimmings; our ability to pass on the cost of any price increases in beef and beef trimmings; legislative and business conditions; the collectibility of receivables; changes in consumer tastes; the status of our licensing and supply agreements, including the impact of our supply agreement for hot dogs with John Morrell & Co.; the ability to attract franchisees; the impact of the new minimum wage legislation on labor costs in New York State or other changes in labor laws, including regulations which could render a franchisor as a "joint employee" or the impact of our new union contract; our ability to attract competent restaurant and managerial personnel; the enforceability of international franchising agreements; the impact of changes in the economic relationship between the United States and Russia; and the future effects of any food borne illness; such as bovine spongiform encephalopathy, BSE and e coli; 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
Thirty-nine weeks ended
Dec. 27, 2015
Dec. 28, 2014
Dec. 27, 2015
Dec. 28, 2014
(unaudited)
(unaudited)
Total revenues
$ 20,564,000
$ 22,315,000
$ 81,837,000
$ 78,772,000
Income from operations (a)
$ 4,435,000
$ 3,765,000
$ 20,477,000
$ 16,991,000
Net income
$ 432,000
$ 2,241,000
$ 5,589,000
$ 10,166,000
Income per share:
Basic
$ 0.10
$ 0.50
$ 1.25
$ 2.27
Diluted
$ 0.10
$ 0.49
$ 1.24
$ 2.21
Weighted-average shares used in
computing income per share:
Basic
4,408,000
4,482,000
4,474,000
4,475,000
Diluted
4,444,000
4,603,000
4,504,000
4,596,000
(a)
Excludes interest expense, interest income, and other income, net.
Nathan's Famous, Inc. and Subsidiaries
Reconciliation of Net Income to EBITDA and Adjusted EBITDA
Thirteen weeks ended
Thirty-nine weeks ended
Dec. 27, 2015
Dec. 28, 2014
Dec. 27, 2015
Dec. 28, 2014
(unaudited)
(unaudited)
EBITDA
Net Income
$ 432,000
$ 2,241,000
$ 5,589,000
$ 10,166,000
Interest Expense
3,708,000
-0-
11,126,000
-0-
Provision for income taxes
316,000
1,562,000
3,886,000
7,027,000
Depreciation and amortization
303,000
298,000
975,000
985,000
EBITDA
$ 4,759,000
$ 4,101,000
$ 21,576,000
$ 18,178,000
Adjusted EBITDA
EBITDA
$ 4,759,000
$ 4,101,000
$ 21,576,000
$ 18,178,000
Stock-based compensation
173,000
228,000
549,000
629,000
Amortization of bond premium (b)
-0-
53,000
64,000
129,000
Adjusted EBITDA
$ 4,932,000
$ 4,382,000
$ 22,189,000
$ 18,936,000
(b)
Represents the premiums paid on our purchase of available-for-sale securities.
FOR: NATHAN'S FAMOUS, INC.
COMPANY Ronald G. DeVos, Vice President - Finance and CFO
CONTACT: (516) 338-8500 ext. 229
The "Street" has LAD coming in at 1.86 for the quarter that should be reported on or about February 24, 2016! All post's welcome! The "Good Dr's In"!
The "Street" has LAD coming in at 1.86 for the quarter that should be reported on or about February 24, 2016! All post's welcome! The "Good Dr's In"!
Clorox Reports 18 Percent EPS Growth in Q2; Raises Fiscal Year 2016 EPS Outlook
Marketwired The Clorox Company
February 4, 2016 6:30 AM
????
OAKLAND, CA--(Marketwired - February 04, 2016) - The Clorox Company (CLX) today reported flat sales and 18 percent growth in diluted net earnings per share (EPS) from continuing operations for its second quarter, which ended Dec. 31, 2015. On a currency-neutral basis, second-quarter sales grew 3 percent.
"Our strategy continues to drive profitable growth," said Chief Executive Officer Benno Dorer. "We delivered 18 percent earnings growth supported by strong operational execution and commodity tailwinds, helping to drive gross margin expansion. Importantly, we also delivered sales increases in each of our U.S. segments behind continued strong investments in our brands."
All results in this press release are reported on a continuing operations basis, unless otherwise stated. As previously announced, Corporación Clorox de Venezuela S.A. (Clorox Venezuela) discontinued operations effective Sept. 22, 2014. For the current and year-ago quarters, the results from Clorox Venezuela are included in discontinued operations in the company's financial statements. Some information in this release is reported on a non-GAAP basis. See "Non-GAAP Financial Information" below and the tables toward the end of this press release for more information and reconciliations of key second-quarter fiscal year 2016 and fiscal year 2015 results to the most directly comparable financial measures calculated in accordance with generally accepted accounting principles in the U.S. (GAAP).
Fiscal Second-Quarter Results
Following is a summary of key second-quarter results. All comparisons are with the second quarter of fiscal year 2015, unless otherwise stated.
* $1.14 diluted EPS (18% increase)
* 1% volume growth
* Flat sales
In the second quarter, Clorox delivered earnings from continuing operations of $151 million, or $1.14 diluted EPS, compared to $128 million, or 97 cents diluted EPS, in the year-ago quarter. Second-quarter diluted EPS results were driven largely by gross margin expansion.
In the second quarter, sales were flat, reflecting volume growth and the benefits of price increases, offset by 3 percentage points of unfavorable foreign currency exchange rates and higher trade promotion spending. On a currency-neutral basis, sales grew 3 percent. Volume for the second quarter increased 1 percent, reflecting gains in Home Care and Natural Personal Care, partially offset by decreases in Laundry and Water Filtration.
The company's second-quarter gross margin increased 210 basis points to 44.6 percent from 42.5 percent in the year-ago quarter, driven primarily by the benefits of favorable commodity costs, cost savings and price increases. These factors were partially offset by higher manufacturing and logistics costs and the impact of unfavorable foreign currency exchange rates.
"This was the highest second-quarter gross margin we've delivered in more than five years," said Chief Financial Officer Steve Robb. "Strong cost savings programs and operational efficiencies contributed to margin increases in each of our U.S. segments, enabling us to continue investing strongly in our business. Importantly, our Go Lean strategy for our International business is delivering results. We grew market share in the six months ending November 2015 and maintained margin in International despite foreign currency and inflation headwinds."
Year-to-date net cash provided by continuing operations was $178 million, compared with $267 million in the year-ago period. The year-over-year change reflects higher working capital, including higher performance-based employee incentive compensation payments related to the company's strong fiscal year 2015 results and higher tax payments. These factors were partially offset by higher earnings from continuing operations in the first half of fiscal year 2016 and $25 million in prior-period payments to settle interest-rate hedges related to the company's issuance of long-term debt. The company continues to anticipate free cash flow to be about 10 percent of sales in fiscal year 2016.
Key Segment Results
Following is a summary of key second-quarter results from continuing operations by reportable segment. All comparisons are with the second-quarter of fiscal year 2015, unless otherwise stated.
Cleaning
(Laundry, Home Care, Professional Products)
2% volume growth
2% sales growth
15% pretax earnings growth
Segment volume growth was driven by gains across a number of Home Care brands, including continued strength of Clorox® disinfecting wipes, which delivered double-digit growth. These factors were partially offset by decreased shipments in Laundry largely due to the impact of a February 2015 price increase on Clorox® bleach as well as volume decreases in Professional Products driven by a comparison to strong year-ago growth behind Ebola and Enterovirus concerns. Pretax earnings growth reflected higher sales and the benefits of favorable commodity costs and cost savings, partially offset by higher manufacturing and logistics costs.
Household
(Bags and Wraps, Charcoal, Cat Litter)
Flat volume
1% sales growth
31% pretax earnings growth
Segment volume results reflected gains in Bags & Wraps and Charcoal, offset by decreases in Cat Litter. Bags & Wraps volume growth reflected increases across several Glad® products, including continued strength of premium trash bags supported by the launch of new Glad® with Clorox® trash bags and distribution gains, following last year's launch of Glad® OdorShield® with Gain®. Higher shipments in Charcoal were driven by distribution gains and increased merchandising activity. Lower shipments in Cat Litter were due to continued competitive activity. Segment sales outpaced volume due to the benefit of a November 2014 price increase in Bags & Wraps and favorable mix from consumers trading up to premium trash bags, partially offset by higher trade promotion spending primarily in Bags & Wraps. Pretax earnings growth reflected the benefits of favorable commodity costs, higher sales and cost savings, partially offset by higher manufacturing and logistics costs.
Lifestyle
(Dressings and Sauces, Water Filtration, Natural Personal Care)
2% volume growth
2% sales growth
1% pretax earnings decrease
Segment volume growth was driven primarily by double-digit increases in Natural Personal Care, on top of double-digit growth in the year-ago quarter. Natural Personal Care's strong results were driven primarily by the launch of Burt's Bees® lip color products, a strong holiday program and ongoing strength in facial towelettes. These factors were partially offset by lower shipments in Water Filtration, driven by soft consumption following strong first-quarter shipments in the fiscal year. Pretax earnings decreased largely due to significant incremental demand-building investments to drive trial behind innovation, partially offset by stronger sales growth.
International
(All sales outside of the U.S.)
Flat volume
7% sales decrease (6% growth, currency-neutral basis)
8% pretax earnings decrease
Segment volume was flat largely due to the impact of price increases taken to offset inflationary pressures. Sales decreased primarily driven by the impact of unfavorable foreign currency exchange rates, partially offset by the benefits of price increases and favorable mix. On a currency neutral basis, sales grew 6 percent despite slowing economic growth in international markets. Pretax earnings decreased, reflecting lower sales and higher manufacturing and logistics costs, primarily driven by continued inflation. These factors were partially offset by the benefit of cost savings.
Clorox Updates Fiscal Year 2016 Outlook
Flat to 1% sales growth, or 3% to 4% growth, currency-neutral basis (unchanged)
50-75 basis points of EBIT margin expansion (raised)
$4.75 to $4.90 diluted EPS range (raised)
Clorox continues to anticipate delivering flat to 1 percent sales growth, which reflects about 3 points of incremental sales growth from product innovation for the fiscal year. The company's sales outlook also includes the impact from slowing international economies as well as 3 percentage points of impact from unfavorable foreign currency exchange rates, including the recent significant devaluation of the Argentine peso. The company continues to anticipate fiscal year sales to reflect an increase in trade promotion investments to address expected competitive activity in key categories.
Clorox now anticipates EBIT margin expansion in the range of 50 to 75 basis points, reflecting the benefits of favorable commodity costs, partially offset by higher inflation in international markets impacting manufacturing and logistics costs and selling and administrative expenses. The company's EBIT margin also reflects higher advertising and sales promotion investments in the U.S. to support product innovation, particularly in the second half of the fiscal year.
Clorox continues to anticipate its effective fiscal year 2016 tax rate to be between 34 percent and 35 percent.
Net of all these factors, Clorox now anticipates fiscal year 2016 diluted EPS from continuing operations in the range of $4.75 to $4.90 versus the company's previous outlook of $4.68 to $4.83.
For More Detailed Financial Information
Visit the company's Financial Reporting: Financial Results section of the company's website at TheCloroxCompany.com for the following:
Supplemental unaudited volume and sales growth information
Supplemental unaudited gross margin driver information
Supplemental unaudited reconciliation of certain non-GAAP financial information, including earnings from continuing operations before interest and taxes (EBIT) and earnings from continuing operations before interest, taxes, depreciation and amortization (EBITDA)
Supplemental unaudited balance sheet and cash flow information and free cash flow reconciliation
Supplemental price-change information
Note: Percentage and basis-point changes noted in this press release are calculated based on rounded numbers. Supplemental materials are available in the Investors: Financial Reporting: Financial Results section of the company's website at TheCloroxCompany.com.
The Clorox Company
The Clorox Company (CLX) is a leading multinational manufacturer and marketer of consumer and professional products with about 7,700 employees worldwide and fiscal year 2015 sales of $5.7 billion. Clorox markets some of the most trusted and recognized consumer brand names, including its namesake bleach and cleaning products; Pine-Sol® cleaners; Liquid Plumr® clog removers; Poett® home care products; Fresh Step® cat litter; Glad® bags, wraps and containers; Kingsford® charcoal; Hidden Valley® dressings and sauces; Brita® water-filtration products and Burt's Bees® natural personal care products. The company also markets brands for professional services, including Clorox Healthcare® and Clorox Commercial Solutions®. More than 80 percent of the company's sales are generated from brands that hold the No. 1 or No. 2 market share positions in their categories.
Clorox is a signatory of the United Nations Global Compact, a community of global leaders committed to sustainability. The company has been broadly recognized for its corporate responsibility (CR) efforts, including, most recently, two U.S. EPA Climate Leadership Awards for Excellence and inclusion among the top 40 companies on the 2015 Newsweek Green Rankings and CR magazine's 100 Best Corporate Citizens 2015 list. The Clorox Company and The Clorox Company Foundation contributed approximately $15 million in combined cash grants, product donations, cause marketing and employee volunteerism in the past fiscal year. For more information, visit TheCloroxCompany.com, the CR Matters Blog and follow the company on Twitter at @CloroxCo.
CLX-F
Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such forward-looking statements involve risks and uncertainties. Except for historical information, statements about future volumes, sales, foreign currencies, costs, cost savings, margins, earnings, earnings per share, diluted earnings per share, foreign currency exchange rates, cash flows, plans, objectives, expectations, growth, or profitability, are forward-looking statements based on management's estimates, assumptions and projections. Words such as "could," "may," "expects," "anticipates," "targets," "goals," "projects," "intends," "plans," "believes," "seeks," "estimates," and variations on such words, and similar expressions that reflect our current views with respect to future events and operational and financial performance, 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. 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 company's Annual Report on Form 10-K for the fiscal year ended June 30, 2015, as updated from time to time in the company's SEC filings. These factors include, but are not limited to: intense competition in the company's markets; worldwide, regional and local economic conditions and financial market volatility; the ability of the company to drive sales growth, increase price and market share, grow its product categories and achieve favorable product and geographic mix; risks related to international operations, including political instability; government-imposed price controls or other regulations; foreign currency exchange rate controls, including periodic changes in such controls, fluctuations and devaluations; labor claims, labor unrest and inflationary pressures, particularly in Argentina; and potential harm and liabilities from the use, storage and transportation of chlorine in certain international markets where chlorine is used in the production of bleach; risks related to the possibility of nationalization, expropriation of assets or other government action in foreign jurisdictions; risks related to the company's discontinuation of operations in Venezuela; volatility and increases in commodity costs such as resin, sodium hypochlorite and agricultural commodities, and increases in energy, transportation or other costs; supply disruptions and other risks inherent in reliance on a limited base of suppliers; the ability of the company to develop and introduce commercially successful products; dependence on key customers and risks related to customer consolidation and ordering patterns; costs resulting from government regulations; the ability of the company to successfully manage global, political, legal, tax and regulatory risks, including changes in regulatory or administrative activity; risks related to reliance on information technology systems, including potential security breaches, cyber-attacks or privacy breaches that result in the unauthorized disclosure of consumer, customer, employee or company information, or service interruptions; risks relating to acquisitions, new ventures and divestitures, and associated costs, including the potential for asset impairment charges related to, among others, intangible assets and goodwill; the success of the company's business strategies; the ability of the company to implement and generate anticipated cost savings and efficiencies; the impact of product liability claims, labor claims and other legal proceedings, including in foreign jurisdictions; the company's ability to attract and retain key personnel; the company's ability to maintain its business reputation and the reputation of its brands; environmental matters, including costs associated with the remediation of past contamination and the handling and/or transportation of hazardous substances; the impact of natural disasters, terrorism and other events beyond the company's control; the company's ability to maximize, assert and defend its intellectual property rights; any infringement or claimed infringement by the company of third-party intellectual property rights; the effect of the company's indebtedness and credit rating on its operations and financial results; the company's ability to maintain an effective system of internal controls; uncertainties relating to tax positions, tax disputes and changes in the company's tax rate; the accuracy of the company's estimates and assumptions on which its financial statement projections are based; the company's ability to pay and declare dividends or repurchase its stock in the future; and the impacts of potential stockholder activism.
The company's forward-looking statements in this press release are based on management's current views and assumptions regarding future events and speak only as of their dates. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by the federal securities laws.
Non-GAAP Financial Information
This press release contains non-GAAP financial information relating to sales growth, diluted EPS, EBIT and EBIT margin. The company has included reconciliations of these non-GAAP financial measures to the most directly comparable financial measure calculated in accordance with GAAP. See the end of this press release for these reconciliations.
The company disclosed these non-GAAP financial measures to supplement its consolidated financial statements presented in accordance with GAAP. These non-GAAP financial measures exclude certain items that are included in the company's results reported in accordance with GAAP, including income taxes, interest income, interest expense and foreign exchange impact. The exclusion of foreign exchange impact is also referred to as currency-neutral. 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 as they show currency-neutral sales comparisons. The company uses such financial measures in its budgeting process and as factors in determining compensation. 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 financial measures may not be the same as similar measures provided by other companies due to potential differences in methods of calculation and items being excluded. They should be read in connection with the company's consolidated financial statements presented in accordance with GAAP.
For recent presentations made by company management and other investor materials, visit Investor Events on the company's website.
Condensed Consolidated Statements of Earnings
(Unaudited)
Dollars in millions, except per share amounts
Three Months Ended Six Months Ended
12/31/2015 12/31/2014 12/31/2015 12/31/2014
Net sales $ 1,345 $ 1,345 $ 2,735 $ 2,697
Cost of products sold 745 773 1,510 1,547
Gross profit 600 572 1,225 1,150
Selling and administrative expenses 191 191 377 371
Advertising costs 126 127 249 248
Research and development costs 34 33 64 63
Interest expense 22 26 45 52
Other income, net (3 ) (2 ) (4 ) 1
Earnings from continuing operations before income taxes 230 197 494 415
Income taxes on continuing operations 79 69 170 142
Earnings from continuing operations 151 128 324 273
Earnings (losses) from discontinued operations, net of tax (2 ) (3 ) (3 ) (58 )
Net earnings $ 149 $ 125 $ 321 $ 215
Net earnings (losses) per share
Basic
Continuing operations $ 1.16 $ 0.98 $ 2.50 $ 2.10
Discontinued operations (0.01 ) (0.02 ) (0.02 ) (0.44 )
Basic net earnings per share $ 1.15 $ 0.96 $ 2.48 $ 1.66
Diluted
Continuing operations $ 1.14 $ 0.97 $ 2.46 $ 2.07
Discontinued operations (0.01 ) (0.02 ) (0.02 ) (0.44 )
Diluted net earnings per share $ 1.13 $ 0.95 $ 2.44 $ 1.63
Weighted average shares outstanding (in thousands)
Basic 129,543 130,555 129,349 129,933
Diluted 131,546 132,819 131,477 132,203
Reportable Segment Information
(Unaudited)
Dollars in millions
Net sales Earnings (losses) from continuing operations before income taxes
Three Months Ended Three Months Ended
12/31/2015 12/31/2014 % Change (1) 12/31/2015 12/31/2014 % Change (1)
Cleaning $ 457 $ 447 2 % $ 123 $ 107 15 %
Household 375 371 1 % 67 51 31 %
Lifestyle 251 246 2 % 72 73 -1 %
International 262 281 -7 % 22 24 -8 %
Corporate - - - (54 ) (58 ) -7 %
Total $ 1,345 $ 1,345 0 % $ 230 $ 197 17 %
Net sales Earnings (losses) from continuing operations before income taxes
Six Months Ended Six Months Ended
12/31/2015 12/31/2014 % Change (1) 12/31/2015 12/31/2014 % Change (1)
Cleaning $ 954 $ 917 4 % $ 272 $ 231 18 %
Household 786 763 3 % 149 103 45 %
Lifestyle 482 462 4 % 131 129 2 %
International 513 555 -8 % 54 50 8 %
Corporate - - - (112 ) (98 ) 14 %
Total $ 2,735 $ 2,697 1 % $ 494 $ 415 19 %
(1) Percentages based on rounded numbers.
Condensed Consolidated Balance Sheets
Dollars in millions
12/31/2015 6/30/2015 12/31/2014
(Unaudited) (Unaudited)
ASSETS
Current assets
Cash and cash equivalents $ 390 $ 382 $ 819
Receivables, net 474 519 473
Inventories, net 450 385 446
Other current assets 176 143 167
Total current assets 1,490 1,429 1,905
Property, plant and equipment, net 878 918 933
Goodwill 1,051 1,067 1,080
Trademarks, net 532 535 537
Other intangible assets, net 47 50 55
Other assets 177 165 164
Total assets $ 4,175 $ 4,164 $ 4,674
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Notes and loans payable $ 500 $ 95 $ 2
Current maturities of long-term debt - 300 875
Accounts payable 366 431 375
Accrued liabilities 492 548 492
Income taxes payable - 31 -
Total current liabilities 1,358 1,405 1,744
Long-term debt 1,796 1,796 1,795
Other liabilities 740 750 773
Deferred income taxes 83 95 81
Total liabilities 3,977 4,046 4,393
Stockholders' equity
Common stock 159 159 159
Additional paid-in capital 823 775 726
Retained earnings 2,042 1,923 1,757
Treasury shares (2,265 ) (2,237 ) (1,908 )
Accumulated other comprehensive net losses (561 ) (502 ) (453 )
Stockholders' equity 198 118 281
Total liabilities and stockholders' equity $ 4,175 $ 4,164 $ 4,674
The tables below present the reconciliation of non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with GAAP and other supplemental information. See "Non-GAAP Financial Information" above for further information regarding the company's use of non-GAAP financial measures.
The reconciliations below are on a continuing operations basis
Second-Quarter and Fiscal Year-to-Date Sales Growth Reconciliation
Q2 Fiscal 2016 Q2 Fiscal 2015 Q2 FYTD
Fiscal
2016 Q2 FYTD
Fiscal
2015
Total Sales Growth - GAAP 0.0 % 2.9 % 1.4 % 1.7 %
Less: Foreign exchange -2.7 % -2.8 % -2.8 % -2.4 %
Currency-Neutral Sales Growth - Non-GAAP 2.7 % 5.7 % 4.2 % 4.1 %
The reconciliations below for fiscal year 2015 are provided as a reference point for the fiscal year 2016 outlook.
Fiscal Year EBIT Margin(1) Reconciliation
Dollar in millions
FY
Fiscal
2015
Earnings from continuing operations $921
before income taxes - GAAP
Interest Income -$4
Interest Expense $100
EBIT (1) - non-GAAP $1,017
Net Sales $5,655
EBIT margin (1) - non-GAAP 18.0%
(1) EBIT represents earnings from continuing operations before interest and taxes. EBIT margin is the ratio of EBIT to net sales.
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.
Contact:
Media Relations
Aileen Zerrudo
(510) 271-3075
aileen.zerrudo@clorox.com
Kathryn Caulfield
(510) 271-7209
kathryn.caulfield@clorox.com
Investor Relations
Landon Dunn
(510) 271-7256
landon.dunn@clorox.com
Steve Austenfeld
(510) 271-2270
steve.austenfeld@clorox.com
Colgate Beats 4Q15 Earnings Estimates but Misses on Sales Again
Market Realist By Penny Morgan
4 hours ago
????
Colgate's 4Q15 Results: Earnings Bring Smiles but Sales Dwindle
Colgate’s 4Q15 financial results
Colgate-Palmolive (CL) released its 4Q15 earnings on January 29, 2016. The quarter ended on December 31, 2015. The company’s reported adjusted diluted EPS (or earnings per share) fell 3.9% to $0.73 per share in 4Q15 compared to $0.76 in 4Q14. Revenue was down 7.5% to $3.9 billion.
However, in 4Q15, Colgate-Palmolive came in ahead of consensus Wall Street analyst estimates on earnings after being in line with the estimates for three quarters in a row. Consensus estimates had projected an adjusted diluted EPS of $0.72.
Diluted EPS
On a currency-neutral basis and excluding the after-tax charges on special items including its 2012 restructuring program, its Venezuela accounting change, and other foreign competition charges, the diluted EPS increased by double digits.
Similarly, Procter & Gamble’s (PG) adjusted EPS fell 1.4% while core adjusted earnings per share increased 9% to $1.04 per share in 4Q15. Excluding the impact of currency exchange headwinds, currency-neutral core EPS increased 21% for the quarter. Adjusted EPS for Kimberly-Clark (KMB) also increased to $1.42 in 4Q15 compared to EPS from continuing operations of $1.35 in 4Q15. Clorox (CLX) is yet to announce its 4Q15 results.
Venezuela operations
During 4Q15, the company announced that it will no longer include the results of its Venezuelan operations in its consolidated financial statements. As a result of this change in accounting, Colgate recorded an after-tax charge of $1.1 billion, or $1.18 per diluted share, in 4Q15. This change reflected a significant decrease in the availability of US dollars and other government controls.
As a result, Colgate expects that the change in accounting for its Venezuelan operation will impact diluted EPS in 2016. The company expects diluted EPS to be negative $0.10 for 2016. Colgate makes up 0.7% of the iShares Global 100 ETF (IOO).
In the next article, we will look at Colgate’s revenue estimates and the components that accounted for the decrease in revenues in 4Q15.
Colgate Beats 4Q15 Earnings Estimates but Misses on Sales Again
Market Realist By Penny Morgan
4 hours ago
????
Colgate's 4Q15 Results: Earnings Bring Smiles but Sales Dwindle
Colgate’s 4Q15 financial results
Colgate-Palmolive (CL) released its 4Q15 earnings on January 29, 2016. The quarter ended on December 31, 2015. The company’s reported adjusted diluted EPS (or earnings per share) fell 3.9% to $0.73 per share in 4Q15 compared to $0.76 in 4Q14. Revenue was down 7.5% to $3.9 billion.
However, in 4Q15, Colgate-Palmolive came in ahead of consensus Wall Street analyst estimates on earnings after being in line with the estimates for three quarters in a row. Consensus estimates had projected an adjusted diluted EPS of $0.72.
Diluted EPS
On a currency-neutral basis and excluding the after-tax charges on special items including its 2012 restructuring program, its Venezuela accounting change, and other foreign competition charges, the diluted EPS increased by double digits.
Similarly, Procter & Gamble’s (PG) adjusted EPS fell 1.4% while core adjusted earnings per share increased 9% to $1.04 per share in 4Q15. Excluding the impact of currency exchange headwinds, currency-neutral core EPS increased 21% for the quarter. Adjusted EPS for Kimberly-Clark (KMB) also increased to $1.42 in 4Q15 compared to EPS from continuing operations of $1.35 in 4Q15. Clorox (CLX) is yet to announce its 4Q15 results.
Venezuela operations
During 4Q15, the company announced that it will no longer include the results of its Venezuelan operations in its consolidated financial statements. As a result of this change in accounting, Colgate recorded an after-tax charge of $1.1 billion, or $1.18 per diluted share, in 4Q15. This change reflected a significant decrease in the availability of US dollars and other government controls.
As a result, Colgate expects that the change in accounting for its Venezuelan operation will impact diluted EPS in 2016. The company expects diluted EPS to be negative $0.10 for 2016. Colgate makes up 0.7% of the iShares Global 100 ETF (IOO).
In the next article, we will look at Colgate’s revenue estimates and the components that accounted for the decrease in revenues in 4Q15.
7:02 am WisdomTree reports EPS in-line, beats on revs (WETF) :
Reports Q4 (Dec) earnings of $0.15 per share, in-line with the Capital IQ Consensus of $0.15; revenues rose 54.2% year/year to $76.5 mln vs the $74.59 mln Capital IQ Consensus.
"In challenging market conditions the benefit of the ETF structure becomes even more apparent. Against a backdrop of $125 billion in mutual fund outflows in 2015, the ETF industry enjoyed $232 billion in net inflows."
7:02 am WisdomTree reports EPS in-line, beats on revs (WETF) :
Reports Q4 (Dec) earnings of $0.15 per share, in-line with the Capital IQ Consensus of $0.15; revenues rose 54.2% year/year to $76.5 mln vs the $74.59 mln Capital IQ Consensus.
"In challenging market conditions the benefit of the ETF structure becomes even more apparent. Against a backdrop of $125 billion in mutual fund outflows in 2015, the ETF industry enjoyed $232 billion in net inflows."
7:02 am WisdomTree reports EPS in-line, beats on revs (WETF) :
Reports Q4 (Dec) earnings of $0.15 per share, in-line with the Capital IQ Consensus of $0.15; revenues rose 54.2% year/year to $76.5 mln vs the $74.59 mln Capital IQ Consensus.
"In challenging market conditions the benefit of the ETF structure becomes even more apparent. Against a backdrop of $125 billion in mutual fund outflows in 2015, the ETF industry enjoyed $232 billion in net inflows."
AZZ Inc. Acquires Assets of Nebraska-based Galvanizing Facility from Olson Industries, Inc.
AZZ strengthens capabilities to support galvanizing customers in Nebraska, Iowa and South Dakota markets
PR Newswire AZZ Inc.
February 1, 2016 6:30 AM
????
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6:44 am AZZ acquires assets of Nebraska-based Galvanizing Facility from Olson Industries; expect Nebraska plant to be accretive to earnings within the first year of operation Briefing.com 2 days 20 hrs ago
AZZ INC Files SEC form 8-K, Regulation FD Disclosure EDGAR Online 7 days ago
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FORT WORTH, Texas, Feb. 1, 2016 /PRNewswire/ -- AZZ Inc. (AZZ), a global provider of galvanizing services, welding solutions, specialty electrical equipment and highly engineered services to the power generation, transmission, distribution and industrial markets, announced today that it has acquired the assets of Alpha Galvanizing Inc., an Atkinson, Nebraska-based business unit of Olson Industries, Inc. Alpha Galvanizing has served steel fabrication customers that manufacture electrical utility poles, agricultural machinery and industrial manufacturing components since 1996.
The newly acquired Nebraska plant is located on a 12-acre site with a 19,500 square foot operating facility with a 46'L x 6'W x 8'D kettle. Alpha Galvanizing was founded to bring quality galvanizing services to the Nebraska market as well as to support Olson Industries' internal galvanizing demand. The new galvanizing plant will operate as AZZ Galvanizing–Nebraska and will complement AZZ's Midwestern locations in Minnesota and Denver, Colorado. This acquisition increases AZZ Galvanizing Services' network of hot-dip galvanizing plants to 43 sites in the United States and Canada.
Tim Pendley, senior vice president and chief operating officer of Galvanizing Services of AZZ Inc., commented, "We are pleased to enter a new galvanizing market in Nebraska with the acquisition of the assets of Alpha Galvanizing. Our goal is to continue to expand our geographic coverage by offering a broad portfolio of metal protection services, unmatched quality and superior customer service. From a geographic standpoint, the new AZZ Galvanizing-Nebraska is ideally located to support our Midwestern and Denver locations and their customers as needed. We anticipate the Nebraska plant will be accretive to earnings within the first year of operation."
About AZZ Inc.
AZZ Inc. is a global provider of galvanizing services, welding solutions, specialty electrical equipment and highly engineered services to the markets of power generation, transmission, distribution and industrial in protecting metal and electrical systems used to build and enhance the world's infrastructure. AZZ Galvanizing is a leading provider of metal finishing solutions for corrosion protection, including hot dip galvanizing to the North American steel fabrication industry. AZZ Energy is dedicated to delivering safe and reliable transmission of power from generation sources to end customers, and automated weld overlay solutions for corrosion and erosion mitigation to critical infrastructure in the energy markets worldwide.
Safe Harbor Statement
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 political stability and economic conditions of the various markets that AZZ serves, foreign and domestic, customer requested delays of shipments, acquisition opportunities, currency exchange rates, adequacy of financing, and availability of experienced management and 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, 2015 and other filings with the SEC, available for viewing on AZZ's website at http://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:
Paul Fehlman, Senior Vice President – Finance and CFO
AZZ Inc. 817-810-0095
Internet: www.azz.com
Joe Dorame, Robert Blum or Joe Diaz
Lytham Partners
602-889-9700
Internet: www.lythampartners.com