Delaware (State or other jurisdiction of incorporation) | 333-05978 (Commission File Number) | 58-2502320 (I.R.S. Employer Identification Number) |
303 Research Drive, Suite 400 Norcross, GA 30092 (Address of principal executive offices, including zip code) |
Exhibit No. | Description | |
99.1 | Press Release of Euramax Holdings, Inc. dated March 29, 2013, reporting Euramax Holdings, Inc.'s financial results for the fourth quarter and full year 2012. |
EURAMAX HOLDINGS, INC. | |||
By: | /s/ R. Scott Vansant | ||
Name: R. Scott Vansant | |||
Title: Vice President and Chief Financial Officer | |||
Exhibit No. | Description | |
99.1 | Press Release dated March 29, 2013. |
• | Net sales for 2012 decreased $(96.6) million, or (10.3)%, to $837.1 million compared to $933.7 million for 2011. Net sales declines for our European operating segments comprised $63.3 million of the overall sales decline, including an approximately $16.8 million as a result of the weakening of foreign currencies, primarily the euro and British pound sterling, against the U.S. dollar during 2012. The economic crisis in Europe significantly impacted demand in our end markets in 2012, as many architectural and industrial projects were delayed, or curtailed. In addition, low consumer confidence and economic uncertainty negatively impacted the RV and transportation markets in Europe. In the U.S., modest recovery was evident in an overall increase in demand from customers served by our Commercial Products segment, primarily for roofing and siding sold in the post frame construction markets and for products sold to original equipment manufacturers in the RV and transportation markets. Demand in our U.S. Residential Products segment was negatively impacted by mild winter weather in the first quarter of 2012 followed by severe drought conditions. Net sales in our U.S. segments were also negatively impacted by lower selling prices necessitated by decreases in raw material costs. |
• | Income from operations for 2012 increased $1.1 million, or 10.7%, to $11.4 million compared to $10.3 million for 2011. Improved operating results in our U.S. operating segments, totaling $6.8 million, and a reduction in other operating charges recorded in our corporate overhead costs of approximately $3.3 million, were partially offset by a decline in our European operating segments of approximately $9.0 million. |
◦ | Income from operations for our U.S. operating segments improved $6.8 million, or 47.6%, from $14.3 million for 2011 to $21.1 million for 2012. This improvement in operating income is primarily the result of organizational initiatives which simplified the U.S. operating structure and consolidated operations at certain plant locations during 2011. These initiatives combined with higher demand in the post frame construction, RV and transportation markets resulted in a significant improvement in operating income. Declines in other operating charges from $1.9 million for 2011 to $0.9 for 2012, represented approximately $1.0 million of the improvement in our U.S. operating income. These charges primarily relate to one time costs incurred as a result of plant closures, reorganizational activities, and other cost savings initiatives. Income from operations also improved approximately $1.2 million as a result of charges recorded in 2011 related to the early withdrawal from a multiemployer pension plan, as no significant similar charges were incurred during 2012. |
◦ | The significant improvement in operating income for our U.S. segments was offset by declines in operating income for our European operating segments. Income from operations for our European operating segments declined $9.0 million, or 77.6%, over the prior year. Lower sales volumes was the primary driver of the decline in operating income in the current year. Additionally, the Company incurred approximately $3.9 million of severance and relocation costs during 2012, primarily related to the Company's decision to consolidate three operating facilities in the U.K. into one operating facility, which is expected to be completed during the first quarter of 2013. |
• | Adjusted EBITDA is a significant operating measure used by the Company to measure its operating performance and liquidity. Adjusted EBITDA was $56.4 million for 2012 compared to $62.1 million for 2011. Adjusted for the impact of pro forma items, Pro Forma Adjusted EBITDA was $61.5 million for 2012 compared to $63.5 million for 2011. |
December 31, 2012 | December 30, 2011 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 10,024 | $ | 14,327 | |||
Accounts receivable, less allowances of $2,751 and $4,391 in 2012 and 2011, respectively | 73,876 | 83,234 | |||||
Inventories, net | 89,294 | 83,396 | |||||
Income taxes receivable | 1,527 | 697 | |||||
Deferred income taxes | 907 | 1,906 | |||||
Other current assets | 4,789 | 4,336 | |||||
Total current assets | 180,417 | 187,896 | |||||
Property, plant, and equipment, net | 141,208 | 146,549 | |||||
Goodwill | 199,375 | 196,686 | |||||
Customer relationships, net | 54,589 | 69,636 | |||||
Other intangible assets, net | 7,475 | 8,148 | |||||
Deferred income taxes | 68 | 6 | |||||
Other assets | 11,290 | 10,325 | |||||
Total assets | $ | 594,422 | $ | 619,246 | |||
LIABILITIES AND SHAREHOLDERS’ (DEFICIT) EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 55,883 | $ | 54,329 | |||
Accrued expenses | 30,667 | 33,425 | |||||
Accrued interest payable | 9,017 | 8,886 | |||||
Deferred income taxes | 847 | 891 | |||||
Total current liabilities | 96,414 | 97,531 | |||||
Long-term debt | 516,674 | 507,988 | |||||
Deferred income taxes | 20,419 | 21,501 | |||||
Other liabilities | 46,907 | 45,519 | |||||
Total liabilities | 680,414 | 672,539 | |||||
Current liabilities: | |||||||
Common stock | 189 | 185 | |||||
Additional paid-in capital | 721,869 | 718,837 | |||||
Accumulated loss | (818,855 | ) | (782,087 | ) | |||
Accumulated other comprehensive income | 10,805 | 9,772 | |||||
Total shareholders' (deficit) equity | (85,992 | ) | (53,293 | ) | |||
Total liabilities and shareholders' (deficit) equity | $ | 594,422 | $ | 619,246 |
Three months ended | Twelve months ended | ||||||||||||||
December 31, 2012 | December 30, 2011 | December 31, 2012 | December 30, 2011 | ||||||||||||
Net sales | $ | 195,492 | $ | 219,661 | $ | 837,140 | $ | 933,678 | |||||||
Costs and expenses: | |||||||||||||||
Cost of goods sold (excluding depreciation and amortization) | 166,788 | 189,789 | 701,045 | 785,165 | |||||||||||
Selling and general (excluding depreciation and amortization) | 19,069 | 20,523 | 83,492 | 91,421 | |||||||||||
Depreciation and amortization | 8,846 | 9,130 | 34,784 | 37,194 | |||||||||||
Other operating charges | 3,823 | 3,082 | 6,425 | 8,404 | |||||||||||
Multiemployer pension withdrawal expense | — | — | 39 | 1,200 | |||||||||||
Income (loss) from operations | (3,034 | ) | (2,863 | ) | 11,355 | 10,294 | |||||||||
Interest expense | (14,067 | ) | (13,457 | ) | (54,858 | ) | (55,579 | ) | |||||||
Other income (loss), net | 4,337 | (5,205 | ) | 5,012 | (14,117 | ) | |||||||||
Loss before income taxes | (12,764 | ) | (21,525 | ) | (38,491 | ) | (59,402 | ) | |||||||
(Benefit) provision for income taxes | (883 | ) | 3,690 | (1,723 | ) | 3,315 | |||||||||
Net Loss | $ | (11,881 | ) | $ | (25,215 | ) | $ | (36,768 | ) | $ | (62,717 | ) |
Year Ended | |||||||
December 31, 2012 | December 30, 2011 | ||||||
Net cash provided by operating activities | $ | 3,985 | $ | 18,596 | |||
Investing activities: | |||||||
Purchase of a business, net of cash acquired | (6,445 | ) | — | ||||
Proceeds from sale of assets | 1,321 | 434 | |||||
Capital expenditures | (7,140 | ) | (10,151 | ) | |||
Net cash used in investing activities | (12,264 | ) | (9,717 | ) | |||
Financing activities: | |||||||
Net borrowings on ABL Credit Facility | 8,280 | 10,205 | |||||
Net repayments on First Lien Credit Facility | — | (412,028 | ) | ||||
Borrowings under Senior Secured Notes | — | 375,000 | |||||
Borrowings under Senior Unsecured Notes | — | 19,812 | |||||
Debt issuance costs | (34 | ) | (10,623 | ) | |||
Net cash provided by (used in) financing activities | 8,246 | (17,634 | ) | ||||
Effect of exchange rate changes on cash | (4,270 | ) | (1,820 | ) | |||
Net decrease in cash and cash equivalents | (4,303 | ) | (10,575 | ) | |||
Cash and cash equivalents at beginning of year | 14,327 | 24,902 | |||||
Cash and cash equivalents at end of year | $ | 10,024 | $ | 14,327 |
Three months ended | Twelve months ended | ||||||||||||||
December 31, 2012 | December 30, 2011 | December 31, 2012 | December 30, 2011 | ||||||||||||
Net loss | $ | (11,881 | ) | $ | (25,215 | ) | $ | (36,768 | ) | $ | (62,717 | ) | |||
Add: | |||||||||||||||
Provision (benefit) for income taxes | (883) | 3,690 | (1,723) | 3,315 | |||||||||||
Interest expense | 14,067 | 13,457 | 54,858 | 55,579 | |||||||||||
Depreciation and amortization (a) | 8,846 | 9,294 | 35,280 | 37,866 | |||||||||||
Adjustments: | |||||||||||||||
Other (income) loss, net (b) | (4,337) | 5,205 | (5,012) | 14,117 | |||||||||||
Debt offering and refinancing fees (c) | — | 391 | — | 2,904 | |||||||||||
Stock compensation expense | 755 | 1,090 | 3,036 | 3,050 | |||||||||||
Acquisition-related costs | 65 | — | 292 | — | |||||||||||
Long term incentive plan | (836) | 421 | 277 | 1,326 | |||||||||||
Multiemployer pension withdrawal | — | — | 39 | 1,200 | |||||||||||
Severance, relocation and one-time compensation costs | 3,337 | 1,451 | 4,920 | 3,684 | |||||||||||
Facility closures, relocation and optimization costs | 152 | 5 | 199 | 581 | |||||||||||
Non-recurring consulting, legal and professional fees | 269 | 1,239 | 1,014 | 1,239 | |||||||||||
Adjusted EBITDA (d) | $ | 9,554 | $ | 11,028 | $ | 56,412 | $ | 62,144 |
(a) | Includes amortization attributable to royalty payments under a five‑year minimum purchase agreement entered into in connection with our acquisition of a product line in 2005, which is being recognized in net sales. The royalty agreement was fully amortized as of September 28, 2012. |
(b) | Other income for the three months ended December 31, 2012 is primarily comprised of translation gains on intercompany obligations of $4.6 million. Other income for the year ended December 31, 2012 includes a $0.5 million gain on the sale of assets related to the exit of our RV door product line and translation gains on intercompany obligations of $4.9 million. |
(c) | Debt offering and refinancing fees include indirect tax consulting and legal fees related to the Company’s debt offering and other financing transactions and certain legal and professional fees incurred for capital market activities. |
(d) | Adjusted EBITDA excludes certain pro forma adjustments allowable under the definition of Consolidated Cash Flow used in calculating the Fixed Charge Coverage Ratio and Secured Debt Ratio under the Indenture to the Company’s Notes. We have prepared a reconciliation of Adjusted EBITDA to Pro Forma Adjusted EBITDA in the following table. |
Year Ended | ||||||||
December 31, 2012 | December 30, 2011 | |||||||
Adjusted EBITDA | $ | 56,412 | $ | 62,144 | ||||
Pro Forma Adjustments: | ||||||||
Legal, professional and consulting fees | 1,663 | 695 | ||||||
Cost savings from restructuring activities | 1,574 | 1,440 | ||||||
Pro Forma impact of acquisitions and exit activities (a) | 1,165 | — | ||||||
Cost incurred as a result of supply disruptions | 635 | — | ||||||
Contributions to pension plans in excess of net periodic pension cost (b) | (19 | ) | (800 | ) | ||||
Pro Forma Adjusted EBITDA | $ | 61,430 | $ | 63,479 |
(a) | Primarily comprised of Pro Forma impacts totaling approximately $1.2 million on adjusted EBITDA as if the acquisition of Cleveland Tubing, Inc. had occurred on the first day of the Company's fiscal year. |
(b) | These amounts represent cash contributions to defined benefit pension plans in the U.S. and UK in excess of net periodic pension cost recognized during the fiscal year. |