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 May 14, 2015, reporting Euramax Holdings, Inc.'s financial results for the first quarter 2015. |
EURAMAX HOLDINGS, INC. | |||
Date: May 14, 2015 | By: | /s/ Mary S. Cullin | |
Name: Mary S. Cullin | |||
Title: Senior Vice President, Chief Financial Officer and Treasurer | |||
• | Net sales, operating loss, and Adjusted EBITDA for the first quarter of 2015 were $185.6 million, $3.3 million, and $6.6 million, respectively. |
• | Net sales, excluding the negative impact of foreign currency fluctuations, improved $27.2 million, or 16.0%, over the first quarter of 2014. |
• | Consolidated Adjusted EBITDA for the first quarter increased $2.2 million, or 50.0%, versus the prior year quarter. Excluding the negative impact of foreign currency fluctuations, Adjusted EBITDA improved $3.3 million, or 75.0%. |
• | On a consolidated basis, loss from operations improved $1.7 million, or 34.0%, when compared to the $5.0 million loss reported in 2014. |
• | In the Company's U.S. operating segments, net sales and operating income improved 18.4% and 82.5%, respectively, compared to the prior year. |
• | Net sales increased $15.7 million, or 9.2%, to $185.6 million in the first quarter of 2015 compared to $169.9 million in the first quarter of 2014. The weakening of the British pound sterling and euro against the U.S. dollar resulted in an approximate $11.5 million decrease in net sales during the quarter. Excluding the impact of foreign currency fluctuations, net sales increased $27.2 million, or 16.0%, over the prior year quarter. |
◦ | Net sales in the Company's U.S. segments improved $19.0 million, or 18.4%, compared to the first quarter of 2014. Net sales in our U.S. Residential Products segment improved as a result of higher demand from distributors, home improvement retailers and other retailers for our roof drainage, roof edge and related products and from higher demand from contractors for our vinyl window and patio offerings during the first quarter of 2015 compared to the first quarter of 2014. Net sales in the Company's U.S. Commercial Products Segment also improved as a result of increased demand from OEMs in the RV market and distributors and contractors in the post frame construction market. Net sales increases were partially offset by a decline in demand in the architectural construction market. |
◦ | Total net sales for our European segments declined $3.3 million, or 5.0%, compared to the first quarter of 2014. Foreign currency translation resulted in an approximate $11.5 million decrease in net sales during the first quarter of 2015 as a result of the weakening of the euro and British pound sterling against the U.S. dollar. Excluding the impact of foreign exchange, net sales increased $8.2 million, or 12.3%, over the prior year quarter. Net sales improvement, excluding the impact of foreign exchange, resulted primarily from ongoing business development initiatives in emerging markets and from higher demand from OEMs in the holiday home market in the UK. |
• | Loss from operations improved $1.7 million, or 34.0%, to $3.3 million in the first quarter of 2015 compared to $5.0 million for the first quarter of 2014. Foreign currency translation negatively impacted our loss from operations by $0.4 million. Excluding the impact of foreign exchange, our loss from operations improved $2.1 million, or 42.0% compared to the first quarter of 2014. |
◦ | In the Company's U.S. segments, operating income improved $5.2 million, or 82.5%, compared to the prior year. This improvement is primarily related to higher sales volumes and to the ongoing execution of the Company’s operating initiatives. These initiatives led to lower selling and general costs in the current quarter substantially related to work force rationalization and sales force optimization implemented in the second half of 2014. |
◦ | 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. Operating income for our European segments declined $1.7 million, or 47.2%, over the prior year. Foreign currency translation negatively impacted income from operations for the Company's European segments by approximately $0.4 million. Additionally, operating income was negatively impacted by a non-recurring $1.2 million loss related to the write off of specific receivables due to the bankruptcy of a customer in the UK during the first quarter of 2015. |
◦ | Higher corporate non-allocated costs resulted in a reduction to operating income of $1.8 million primarily related to a retention compensation program for certain key executives and ongoing consulting services, among other items. |
• | Adjusted EBITDA is a significant operating measure used by the Company to measure its operating performance and liquidity. Adjusted EBITDA was $6.6 million in the first quarter of 2015 compared to $4.4 million in the first quarter of 2014, an increase of $2.2 million, or 50.0%. Excluding the impact of foreign exchange, Adjusted EBITDA improved $3.3 million, or 75.0%, compared to the prior year quarter. |
April 3, 2015 | December 31, 2014 | ||||||
ASSETS | (unaudited) | ||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 1,868 | $ | 2,074 | |||
Accounts receivable, less allowances of $1,268 and $1,522, respectively | 88,357 | 80,329 | |||||
Inventories, net | 110,648 | 106,385 | |||||
Income taxes receivable | 1,897 | 1,734 | |||||
Deferred income taxes | 424 | 426 | |||||
Other current assets | 7,750 | 7,009 | |||||
Total current assets | 210,944 | 197,957 | |||||
Property, plant and equipment, net | 104,037 | 111,164 | |||||
Goodwill | 180,659 | 190,158 | |||||
Customer relationships, net | 22,754 | 26,315 | |||||
Other intangible assets, net | 6,365 | 6,495 | |||||
Deferred income taxes | 179 | — | |||||
Other assets | 3,924 | 4,687 | |||||
Total assets | $ | 528,862 | $ | 536,776 | |||
LIABILITIES AND SHAREHOLDERS’ DEFICIT | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 83,772 | $ | 78,846 | |||
Accrued expenses and other current liabilities | 25,065 | 25,509 | |||||
Accrued interest payable | 85 | 12,912 | |||||
Current portion of long-term debt | 450,012 | 4,663 | |||||
Deferred income taxes | 811 | 895 | |||||
Total current liabilities | 559,745 | 122,825 | |||||
Long-term debt | 124,408 | 534,852 | |||||
Deferred income taxes | 14,073 | 15,894 | |||||
Other liabilities | 34,711 | 36,311 | |||||
Total liabilities | 732,937 | 709,882 | |||||
Shareholders’ deficit: | |||||||
Common stock | 196 | 196 | |||||
Additional paid-in capital | 724,661 | 724,562 | |||||
Accumulated loss | (934,440 | ) | (903,029 | ) | |||
Accumulated other comprehensive income | 5,508 | 5,165 | |||||
Total shareholders’ deficit | (204,075 | ) | (173,106 | ) | |||
Total liabilities and shareholders’ deficit | $ | 528,862 | $ | 536,776 |
Three months ended | |||||||
April 3, 2015 | March 28, 2014 | ||||||
Net sales | $ | 185,599 | $ | 169,904 | |||
Costs and expenses: | |||||||
Cost of goods sold (excluding depreciation and amortization) | 160,587 | 146,971 | |||||
Selling and general (excluding depreciation and amortization) | 18,537 | 18,776 | |||||
Depreciation and amortization | 7,499 | 8,202 | |||||
Other operating charges | 2,263 | 965 | |||||
Loss from operations | (3,287 | ) | (5,010 | ) | |||
Interest expense | (13,934 | ) | (13,765 | ) | |||
Other (loss) income, net | (15,465 | ) | 196 | ||||
Loss before income taxes | (32,686 | ) | (18,579 | ) | |||
(Benefit from) provision for income taxes | (1,275 | ) | 693 | ||||
Net loss | $ | (31,411 | ) | $ | (19,272 | ) |
Three months ended | |||||||
April 3, 2015 | March 28, 2014 | ||||||
Net cash used in operating activities | $ | (32,470 | ) | $ | (3,886 | ) | |
Cash flows from investing activities: | |||||||
Proceeds from sales of assets | 43 | 43 | |||||
Capital expenditures | (2,109 | ) | (1,488 | ) | |||
Net cash used in investing activities | (2,066 | ) | (1,445 | ) | |||
Cash flows from financing activities: | |||||||
Net borrowings (repayments) on ABL Credit Facility | 24,207 | (13,756 | ) | ||||
Net borrowings on European Credit Facilities | 10,523 | 14,657 | |||||
Changes in cash overdrafts | — | 236 | |||||
Debt issuance costs | — | (88 | ) | ||||
Net cash provided by financing activities | 34,730 | 1,049 | |||||
Effect of exchange rate changes on cash | (400 | ) | (297 | ) | |||
Net decrease in cash and cash equivalents | (206 | ) | (4,579 | ) | |||
Cash and cash equivalents at beginning of period | 2,074 | 8,977 | |||||
Cash and cash equivalents at end of period | $ | 1,868 | $ | 4,398 |
Three months ended | |||||||
April 3, 2015 | March 28, 2014 | ||||||
Net loss | $ | (31,411 | ) | $ | (19,272 | ) | |
Add: | |||||||
Interest expense | 13,934 | 13,765 | |||||
Depreciation and amortization | 7,499 | 8,202 | |||||
(Benefit from) provision for income taxes | (1,275 | ) | 693 | ||||
Adjustments: | |||||||
Other loss (income), net (a) | 15,465 | (196 | ) | ||||
Retention costs | 1,018 | — | |||||
Plant closure, severance, relocation and one-time compensation costs | 566 | 764 | |||||
Non-recurring executive consulting | 425 | 222 | |||||
Non-recurring consulting, legal and professional fees | 291 | 140 | |||||
Stock compensation expense | 99 | 121 | |||||
Adjusted EBITDA | $ | 6,611 | $ | 4,439 |
(a) | Other loss, net for the three months ended April 3, 2015 is primarily comprised of translation losses on intercompany obligations due to the weakening of the euro compared to the U.S. dollar totaling $16.2 million, offset by gains of $0.8 million on forward foreign currency contracts. Other income, net for the three months ended March 28, 2014 consisted primarily of translation gains on intercompany obligations due to the strengthening of the euro compared to the U.S. dollar totaling $0.2 million. |