Elah Holdings Inc fka RELYQ (ELLH)

[Enterprising Investor]

Real Industry Reports Fiscal 2016 First Quarter Results (5/10/16)

Company to host conference call on May 11, 2016, at 11:00 a.m. EDT

SHERMAN OAKS, Calif.--(BUSINESS WIRE)--Real Industry, Inc. (NASDAQ:RELY) (“Real Industry” or the “Company”) today reported financial results for its fiscal first quarter ended March 31, 2016.

First Quarter 2016 Highlights

• Revenues increased to $309.4 million from $300.5 million sequentially in the fiscal 2015 fourth quarter

• Segment Adjusted EBITDA of $18.3 million, up from $17.1 million sequentially in the fiscal 2015 fourth quarter

• Consolidated liquidity remained strong at nearly $99 million at quarter end, of which approximately $78 million relates to Real Alloy

Management Commentary

Craig Bouchard, Real Industry’s Chairman and CEO, stated, “We were pleased with first quarter 2016. The Real Alloy managers and our talented employees continued their strong performance, exceeding budgeted adjusted EBITDA for the quarter. Highlights included steady performance in North America across customer segments and superior results from our plants in Germany serving the auto sector. The Lean and Six Sigma initiatives completed during the quarter continued our streak of productivity improvements, while scrap spreads remained relatively stable.

“We are happy to announce that the Transition Services Agreement (TSA) executed with Aleris was successfully concluded in early Q2. We finished this massive carve-out exercise ahead of budget and enhanced our results further with material Six Sigma improvements connected with the TSA. From this point forward, Real Alloy operates on its own management, IT, operational and customer platforms.

“The adjusted EBITDA for the Real Alloy business improved from the fourth quarter of 2015 and was comparable to the Company's performance in the first quarter of 2015 when the market itself was strong. Our team did a great job in Q1, and the second quarter has also gone well for Real Alloy. Our outlook for 2016 remains positive.

“At the parent company, we are seeing opportunities we like. The current marketplace provides the opportunity to acquire valuable assets at very reasonable multiples.”

First Quarter 2016 Results

Real Industry reported revenues of $309.4 million in the first quarter of 2016. Real Alloy invoiced an aggregate 292,200 metric tons during the period. This compared to $137.8 million in revenues in the first quarter of 2015, which included approximately one month of performance from Real Alloy following the closing of the acquisition from Aleris in February 2015. Compared to the 2015 fourth quarter, volumes increased 1.0%, which was in line with expectations.

Adjusted EBITDA at Real Alloy was $18.3 million in the first quarter of 2016, or $63 per ton, which compares to $59 per ton in the fourth quarter of 2015. Gross profit was $16.6 million, and gross margin was 5.5% in the first quarter, compared to 7.8% in the fiscal 2015 fourth quarter. The decrease in gross margin was primarily a result of a $3.8 million correction in depreciation expense in the first quarter related to under-reported depreciation expense in the fourth quarter of 2015. Of the correction, $3.7 million is recorded in cost of goods sold and $0.1 million is recorded in SG&A. Adjusting for the impact of purchase accounting, which increased cost of goods sold, and adjusting the $3.7 million correction in depreciation expense in cost of goods sold by shifting it out of the 2016 first quarter and into the fourth quarter of 2015, gross margin would have been higher by 1.3 percentage points in the first quarter of 2016 and lower by 1.3 percentage points in the fourth quarter of 2015.

Operating costs in corporate and other were $3.3 million during the quarter, a $0.2 million increase from the first quarter of 2015, as a result of higher share-based compensation, and a slight decrease compared to the fiscal 2015 fourth quarter.

Real Industry reported net loss attributable to the Company of $10.1 million in the first quarter of 2016, or a loss of $0.38 per share.

Balance Sheet and Liquidity

At March 31, 2016, Real Industry’s cash and cash equivalents were $37.0 million, total debt was $328.7 million, and stockholders’ equity was $134.8 million. The Company’s total liquidity was $98.7 million at March 31, 2016, of which $78.2 million relates to Real Alloy.

Conference Call and Webcast Information

The Company will host a conference call at 11:00 a.m. EDT on Wednesday, May 11, 2016, during which management will discuss the results of operations for the first quarter ended March 31, 2016.

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

Participants may also access the live call via webcast at http://realindustryinc.equisolvewebcast.com/q1-2016. The webcast will be archived and accessible for approximately 30 days.

A replay will be available shortly after the call on the investor relations section of the Company’s website, www.realindustryinc.com, and will remain available for 90 days.

About Real Industry, Inc.

Real Industry is a North America-based holding company seeking to take significant ownership stakes in large, well-managed and consistently profitable businesses concentrated primarily in the United States industrial and commercial marketplace. Real Industry has significant capital resources, and federal net operating loss tax carryforwards of more than $870 million. For more information about Real Industry, visit its corporate website at www.realindustryinc.com.

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http://www.businesswire.com/news/home/20160510006970/en/Real-Industry-Reports-Fiscal-2016-Quarter-Results