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 26, 2015, reporting Euramax Holdings, Inc.'s financial results for the fourth quarter and full year 2014. |
EURAMAX HOLDINGS, INC. | |||
By: | /s/ Mary S. Cullin | ||
Name: Mary S. Cullin | |||
Title: Senior Vice President, Chief Financial Officer and Treasurer | |||
• | Net sales, operating income, and Adjusted EBITDA for the fourth quarter were $211.9 million, $2.3 million, and $12.3 million, respectively. |
• | Net sales, operating income, and Adjusted EBITDA for the year ended December 31, 2014 were $854.7 million, $18.6 million, and $58.4 million, respectively. |
• | Consolidated Adjusted EBITDA for the fourth quarter increased 68.5% versus the prior year period. |
• | Consolidated Adjusted EBITDA for the full year 2014 increased 9.4% versus the prior year period. |
• | In the Company's U.S. operating segments, operating income improved $5.9 million, or 43.7%, compared to the prior year. |
• | Despite the overall end market challenges, operating income for our European segments improved $7.6 million, or 181%, over the prior year. |
• | On a consolidated basis, the Company reported 2014 operating income of $18.6 million representing an increase of $11.6 million, or a 165.7% improvement, when compared to the $7.0 million reported in 2013. |
• | Net sales for 2014 increased $28.0 million, or 3.4%, to $854.7 million compared to $826.7 million for 2013. |
◦ | Net sales improvements were primarily the result of better performance in the Company's U.S. business segments. Specifically, end market demand for our roof drainage and roofing accessory products from our distribution customers and from contractors for our vinyl window and patio offerings resulted in higher net sales for the Company's Residential business. For our U.S. Commercial Products segment, improved revenue levels in the post frame construction markets and from OEMs in both the RV and transportation markets resulted in higher net sales which were partially offset by a decline in demand in the architectural construction markets we serve. |
◦ | Net sales for the Company's European operating segments continued to be negatively impacted by certain economic conditions and reduced consumer confidence primarily in the transportation end markets we serve. Declines in the transportation markets were partially offset by higher volumes in high-end architectural markets and RV markets. Foreign currency translation resulted in an approximate $4.5 million increase in net sales during 2014 primarily as a result of the strengthening of the euro against the U.S. dollar on average compared to 2013. |
• | On a consolidated basis, income (loss) from operations for 2014 was $18.6 million, an increase of $11.6 million, or a 165.7% improvement, when compared to $7.0 million reported in 2013. |
◦ | In the Company's U.S. segments, operating income improved $5.9 million, or 43.7%, compared to the prior year. This improvement is primarily related to execution of the Company’s operating initiatives and higher sales volumes for the year-ended December 31, 2014 compared to the prior year. These initiatives led to lower selling and general costs in the current year substantially related to work force rationalization and sales force optimization which were implemented in the second half of 2014. Lower depreciation and amortization expense also contributed to the improvement in income from operations over the prior year. |
◦ | In Europe, the Company's end markets continue to be negatively impacted by economic uncertainty and reduced consumer confidence, primarily in the RV and transportation end markets we serve. Despite the overall end market challenges, operating income for our European segments improved $7.6 million, or 181.0%, over the prior year. This improvement in operating income is the result of continued emphasis on various initiatives including product profitability, business development initiatives in emerging markets and actions taken to reduce operating costs and improve efficiency. |
◦ | These improvements in North America and Europe were partially offset by a $1.9 million decline in income from operations in corporate non-allocated costs primarily related to consulting services during the executive transition period, reversal of the long term incentive plan recorded in 2013 partially offset by a decline in stock compensation costs during 2014, among other items. |
• | Adjusted EBITDA is a significant operating measure used by the Company to measure its operating performance and liquidity. Adjusted EBITDA for the year ended December 31, 2014 was $58.4 million compared to $53.4 million for 2013 a $5.0 million, or 9.4%, increase. See "GAAP versus Non-GAAP Presentation" and the related GAAP reconciliation attached to this release. |
December 31, 2014 | December 31, 2013 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 2,074 | $ | 8,977 | |||
Accounts receivable, less allowances of $1,522 and $2,235 in 2014 and 2013, respectively | 80,329 | 73,996 | |||||
Inventories, net | 106,385 | 89,760 | |||||
Income taxes receivable | 1,734 | 982 | |||||
Deferred income taxes | 426 | 580 | |||||
Other current assets | 7,009 | 7,008 | |||||
Total current assets | 197,957 | 181,303 | |||||
Property, plant, and equipment, net | 111,164 | 130,114 | |||||
Goodwill | 190,158 | 204,053 | |||||
Customer relationships, net | 26,315 | 40,631 | |||||
Other intangible assets, net | 6,495 | 7,073 | |||||
Deferred income taxes | — | 87 | |||||
Other assets | 4,687 | 8,712 | |||||
Total assets | $ | 536,776 | $ | 571,973 | |||
LIABILITIES AND SHAREHOLDERS’ (DEFICIT) EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable, including cash overdrafts of $13,955 at December 31, 2014 | $ | 78,846 | $ | 57,262 | |||
Accrued expenses | 25,509 | 26,366 | |||||
Accrued interest payable | 12,912 | 9,020 | |||||
Deferred income taxes | 895 | 605 | |||||
Current portion of long-term debt | 4,663 | — | |||||
Total current liabilities | 122,825 | 93,253 | |||||
Long-term debt | 534,852 | 535,396 | |||||
Deferred income taxes | 15,894 | 18,980 | |||||
Other liabilities | 36,311 | 32,907 | |||||
Total liabilities | 709,882 | 680,536 | |||||
Shareholder's (deficit) equity | |||||||
Common stock | 196 | 195 | |||||
Additional paid-in capital | 724,562 | 724,071 | |||||
Accumulated loss | (903,029 | ) | (843,750 | ) | |||
Accumulated other comprehensive income | 5,165 | 10,921 | |||||
Total shareholders' (deficit) equity | (173,106 | ) | (108,563 | ) | |||
Total liabilities and shareholders' (deficit) equity | $ | 536,776 | $ | 571,973 |
Three months ended | Twelve months ended | ||||||||||||||
December 31, 2014 | December 31, 2013 | December 31, 2014 | December 31, 2013 | ||||||||||||
Net sales | $ | 211,909 | $ | 196,431 | $ | 854,745 | $ | 826,672 | |||||||
Costs and expenses: | |||||||||||||||
Cost of goods sold (excluding depreciation and amortization) | 183,540 | 171,539 | 725,748 | 699,962 | |||||||||||
Selling and general (excluding depreciation and amortization) | 16,241 | 15,661 | 71,620 | 75,428 | |||||||||||
Depreciation and amortization | 7,833 | 9,542 | 32,428 | 35,099 | |||||||||||
Other operating charges | 2,002 | 3,810 | 6,359 | 9,165 | |||||||||||
Income (loss) from operations | 2,293 | (4,121 | ) | 18,590 | 7,018 | ||||||||||
Interest expense | (13,944 | ) | (12,821 | ) | (55,518 | ) | (54,078 | ) | |||||||
Other (loss) income, net | (8,777 | ) | 3,343 | (23,153 | ) | 7,404 | |||||||||
Loss before income taxes | (20,428 | ) | (13,599 | ) | (60,081 | ) | (39,656 | ) | |||||||
(Benefit from) provision for income taxes | 57 | (2,117 | ) | (802 | ) | (14,761 | ) | ||||||||
Net loss | $ | (20,485 | ) | $ | (11,482 | ) | $ | (59,279 | ) | $ | (24,895 | ) |
Year Ended | |||||||
December 31, 2014 | December 31, 2013 | ||||||
Net cash used in operating activities | $ | (3,670 | ) | $ | (10,315 | ) | |
Investing activities: | |||||||
Proceeds from sale of assets | 785 | 2,346 | |||||
Capital expenditures | (7,333 | ) | (10,742 | ) | |||
Net cash used in investing activities | (6,548 | ) | (8,396 | ) | |||
Financing activities: | |||||||
Net borrowings on European Credit Facilities | 4,663 | — | |||||
Net (borrowings) repayments on ABL Credit Facility | (1,137 | ) | 18,270 | ||||
Deferred financing fees | (88 | ) | (175 | ) | |||
Net cash provided by financing activities | 3,438 | 18,095 | |||||
Effect of exchange rate changes on cash | (123 | ) | (431 | ) | |||
Net decrease in cash and cash equivalents | (6,903 | ) | (1,047 | ) | |||
Cash and cash equivalents at beginning of year | 8,977 | 10,024 | |||||
Cash and cash equivalents at end of year | $ | 2,074 | $ | 8,977 |
Three months ended | Twelve months ended | ||||||||||||||
December 31, 2014 | December 31, 2013 | December 31, 2014 | December 31, 2013 | ||||||||||||
Net loss | $ | (20,485 | ) | $ | (11,482 | ) | $ | (59,279 | ) | $ | (24,895 | ) | |||
Add: | |||||||||||||||
Interest expense | 13,944 | 12,821 | 55,518 | 54,078 | |||||||||||
Depreciation and amortization | 7,833 | 9,542 | 32,428 | 35,099 | |||||||||||
(Benefit from) provision for income taxes | 57 | (2,117) | (802) | (14,761) | |||||||||||
Adjustments: | |||||||||||||||
Other loss (income), net (a) | 8,777 | (3,343) | 23,153 | (7,404) | |||||||||||
Non-recurring executive consulting (b) | 430 | — | 1,862 | — | |||||||||||
Severance, plant closure, relocation and one-time compensation costs | 717 | 1,154 | 3,868 | 5,903 | |||||||||||
Asset write-offs and impairments (c) | 809 | 1,121 | 809 | 1,121 | |||||||||||
Non-recurring consulting, legal and professional fees | 84 | 43 | 346 | 89 | |||||||||||
Stock compensation expense | 119 | (37) | 491 | 2,208 | |||||||||||
Long term incentive plan (d) | — | (2,406) | — | (1,604) | |||||||||||
Transition services agreement expense (e) | — | 2,000 | — | 2,000 | |||||||||||
Loss on asset held for sale (f) | — | — | — | 1,594 | |||||||||||
Adjusted EBITDA (g) | $ | 12,285 | $ | 7,296 | $ | 58,394 | $ | 53,428 |
(a) | Other income, net for the three months ended December 31, 2014 is primarily comprised of translation losses on intercompany obligations of approximately $9.1 million, offset by gains of $0.4 million on forward foreign currency contracts. Other income, net for the three months ended December 31, 2013 is primarily composed of translation gains on intercompany obligations of $3.5 million, offset by losses of $0.2 million on forward foreign currency contracts. |
(b) | Non-recurring executive consulting for the three months and year ended December 31, 2014 include fees and expenses incurred for the engagement of Huron Consulting during the executive transition period. |
(c) | Asset writeoffs and impairments for the year ended December 31, 2013 includes a $1.1 million impairment of capitalized software costs as a result of the decision to abandon the implementation of an Enterprise Resource Planning System that did not align with the Company's relocation and consolidation activities. Asset writeoffs and impairments for the year and three months ended December 31, 2014 includes an $809 thousand writeoff of assets recognized in prior periods in North America. |
(d) | The Company determined that as of December 31, 2013, the liability related to the Long Term Incentive Plan (the "Plan") no longer met the probability threshold required by generally accepted accounting principles for recognition in the financial statements. As a result, previously recorded compensation expense of $2.4 million was reversed within selling, general, and administrative expenses during the fourth quarter of 2013. |
(e) | Transition services agreement expense for the three months and year ended December 31, 2013, include expenses incurred related to the resignation of the Company's chief executive officer in November 2013. |
(f) | Loss on assets held for sale for the year ended December 31, 2013 includes the sale of land and buildings as part of restructuring activities in the European Engineered Products segment related to the consolidation and relocation of multiple plant facilities into one location. |
(g) | 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 for the Company’s Notes. |