Delaware | 001-13293 | 23-2874736 | ||
(State or other jurisdiction of incorporation) | (Commission File No.) | (I.R.S. Employer Identification No.) |
THE HILLMAN COMPANIES, INC. | ||||
Dated: | March 20, 2019 | By: | /s/ Robert O. Kraft | |
Robert O. Kraft | ||||
Title: | Chief Financial Officer |
Exhibit Number | Description of Exhibit
|
Press Release of The Hillman Companies, Inc., dated March 20, 2019. | |
• | Net sales increased 34.0% to $276.6 million compared to prior year net sales of $206.4 million |
• | Loss from operations was $2.6 million compared to the prior year income from operations of $1.4 million |
• | Loss before income taxes was $35.2 million compared to the prior year loss before taxes of $14.7 million |
• | Adjusted EBITDA1 increased 46.6% to $43.1 million compared to the prior year Adjusted EBITDA1 of $29.4 million |
• | Net sales increased 16.2% to $974.2 million compared to prior year net sales of $838.4 million |
• | Income from operations was $26.8 million compared to the prior year income from operations of $37.0 million |
• | Loss before income taxes was $67.6 million compared to the prior year loss before taxes of $26.3 million |
• | Adjusted EBITDA1 increased 10.1% to $146.0 million compared to the prior year Adjusted EBITDA1 of $132.6 million |
• | Net working capital (current assets minus current liabilities) was $280.0 million at December 29, 2018 compared to $191.0 million at December 30, 2017 |
Thirteen Weeks Ended December 29, 2018 | Thirteen Weeks Ended December 30, 2017 | Year Ended December 29, 2018 | Year Ended December 30, 2017 | ||||||||||||
Net sales | $ | 276,587 | $ | 206,374 | $ | 974,175 | $ | 838,368 | |||||||
Cost of sales (exclusive of depreciation and amortization shown separately below) | 163,947 | 114,402 | 537,885 | 455,717 | |||||||||||
Selling, general and administrative expenses | 87,096 | 70,953 | 320,543 | 274,044 | |||||||||||
Depreciation | 15,580 | 8,543 | 46,060 | 34,016 | |||||||||||
Amortization | 14,700 | 9,667 | 44,572 | 38,109 | |||||||||||
Management fees to related party | 150 | 129 | 546 | 519 | |||||||||||
Other (income) expense | (2,328 | ) | 1,281 | (2,267 | ) | (1,022 | ) | ||||||||
Income (loss) from operations | (2,558 | ) | 1,399 | 26,836 | 36,985 | ||||||||||
Interest expense, net | 26,491 | 13,058 | 70,545 | 51,018 | |||||||||||
Interest expense on junior subordinated debentures | 3,152 | 3,152 | 12,608 | 12,608 | |||||||||||
Investment income on trust common securities | (94 | ) | (94 | ) | (378 | ) | (378 | ) | |||||||
Refinancing costs | 3,090 | — | 11,632 | — | |||||||||||
Loss before income taxes | (35,197 | ) | (14,717 | ) | (67,571 | ) | (26,263 | ) | |||||||
Income tax (benefit) expense | (112 | ) | (80,152 | ) | 2,070 | (84,911 | ) | ||||||||
Net (loss) income | $ | (35,085 | ) | $ | 65,435 | $ | (69,641 | ) | $ | 58,648 | |||||
Net (loss) income from above | $ | (35,085 | ) | $ | 65,435 | $ | (69,641 | ) | $ | 58,648 | |||||
Other comprehensive income: | |||||||||||||||
Foreign currency translation adjustments | (7,161 | ) | (2,189 | ) | (11,053 | ) | 7,845 | ||||||||
Total other comprehensive (loss) income | (7,161 | ) | (2,189 | ) | (11,053 | ) | 7,845 | ||||||||
Comprehensive (loss) income | $ | (42,246 | ) | $ | 63,246 | $ | (80,694 | ) | $ | 66,493 |
December 29, 2018 | December 30, 2017 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 28,234 | $ | 9,937 | |||
Accounts receivable, net of allowances of $846 ($1,121 - 2017) | 110,799 | 78,994 | |||||
Inventories, net | 320,281 | 219,479 | |||||
Other current assets | 18,727 | 11,850 | |||||
Total current assets | 478,041 | 320,260 | |||||
Property and equipment, net of accumulated depreciation of $131,169 ($98,674 - 2017) | 208,279 | 153,143 | |||||
Goodwill | 803,847 | 620,503 | |||||
Other intangibles, net of accumulated amortization of $176,677 ($132,659 - 2017) | 930,525 | 693,195 | |||||
Other assets | 10,778 | 12,116 | |||||
Total assets | $ | 2,431,470 | $ | 1,799,217 | |||
LIABILITIES AND STOCKHOLDER'S EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 135,059 | $ | 74,051 | |||
Current portion of debt and capital lease obligations | 10,985 | 5,706 | |||||
Accrued expenses: | |||||||
Salaries and wages | 9,881 | 9,784 | |||||
Pricing allowances | 5,404 | 5,908 | |||||
Income and other taxes | 3,325 | 4,146 | |||||
Interest | 15,423 | 9,717 | |||||
Other accrued expenses | 17,941 | 19,911 | |||||
Total current liabilities | 198,018 | 129,223 | |||||
Long-term debt | 1,586,084 | 989,674 | |||||
Deferred income taxes, net | 200,696 | 145,728 | |||||
Other non-current liabilities | 7,565 | 7,189 | |||||
Total liabilities | 1,992,363 | 1,271,814 | |||||
Commitments and Contingencies (Note 15) | — | — | |||||
Stockholder's Equity: | |||||||
Preferred stock, $.01 par, 5,000 shares authorized, none issued and outstanding at December 29, 2018 and December 30, 2017 | — | — | |||||
Common stock, $.01 par, 5,000 shares authorized, issued and outstanding at December 29, 2018 and December 30, 2017 | — | — | |||||
Additional paid-in capital | 549,528 | 551,518 | |||||
Retained earnings (accumulated deficit) | (72,831 | ) | 2,422 | ||||
Accumulated other comprehensive loss | (37,590 | ) | (26,537 | ) | |||
Total stockholder's equity | 439,107 | 527,403 | |||||
Total liabilities and stockholder's equity | $ | 2,431,470 | $ | 1,799,217 |
Year Ended December 29, 2018 | Year Ended December 30, 2017 | ||||||
Cash flows from operating activities: | |||||||
Net income (loss) | $ | (69,641 | ) | $ | 58,648 | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||
Depreciation and amortization | 90,632 | 72,125 | |||||
(Gain) loss on dispositions of property and equipment | (5,988 | ) | 1,140 | ||||
Impairment of long lived assets | 837 | 1,569 | |||||
Deferred income taxes | 394 | (85,874 | ) | ||||
Deferred financing and original issue discount amortization | 2,455 | 2,530 | |||||
Loss on debt restructuring | 11,632 | — | |||||
Stock-based compensation expense | 1,590 | 2,484 | |||||
Gain on disposition of Australia assets | — | (638 | ) | ||||
Other non-cash interest and change in value of interest rate swap | 607 | (1,481 | ) | ||||
Changes in operating items: | |||||||
Accounts receivable | 7,934 | (2,777 | ) | ||||
Inventories | (68,978 | ) | 13,800 | ||||
Other assets | (1,496 | ) | 517 | ||||
Accounts payable | 41,092 | 9,305 | |||||
Other accrued liabilities | (3,523 | ) | 11,562 | ||||
Net cash provided by operating activities | 7,547 | 82,910 | |||||
Cash flows from investing activities: | |||||||
Acquisitions of businesses, net of cash acquired | (500,989 | ) | (47,188 | ) | |||
Capital expenditures | (71,621 | ) | (51,410 | ) | |||
Other investing activities | — | (1,500 | ) | ||||
Net cash used for investing activities | (572,610 | ) | (100,098 | ) | |||
Cash flows from financing activities: | |||||||
Borrowings on senior term loans, net of discount | 1,050,050 | — | |||||
Repayments of senior term loans | (532,488 | ) | (5,500 | ) | |||
Borrowings of revolving credit loans | 165,550 | 35,500 | |||||
Repayments of revolving credit loans | (76,850 | ) | (16,000 | ) | |||
Financing fees | (20,520 | ) | — | ||||
Principal payments under capitalized lease obligations | (235 | ) | (124 | ) | |||
Dividend to Holdco | (3,780 | ) | — | ||||
Proceeds from exercise of stock options | 200 | — | |||||
Proceeds from sale of Holdco stock | — | 500 | |||||
Net cash provided by financing activities | 581,927 | 14,376 | |||||
Effect of exchange rate changes on cash | 1,433 | (1,357 | ) | ||||
Net increase (decrease) in cash and cash equivalents | 18,297 | (4,169 | ) | ||||
Cash and cash equivalents at beginning of period | 9,937 | 14,106 | |||||
Cash and cash equivalents at end of period | $ | 28,234 | $ | 9,937 |
Thirteen Weeks Ended | Year Ended | ||||||||||||
December 29, | December 30, | December 29, | December 30, | ||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||
Net income (loss) | $ | (35,085 | ) | $ | 65,435 | $ | (69,641 | ) | $ | 58,648 | |||
Income tax provision (benefit) | (112 | ) | (80,152 | ) | 2,070 | (84,911 | ) | ||||||
Interest expense, net | 26,491 | 13,058 | 70,545 | 51,018 | |||||||||
Interest expense on junior subordinated debentures | 3,152 | 3,152 | 12,608 | 12,608 | |||||||||
Investment income on trust common securities | (94 | ) | (94 | ) | (378 | ) | (378 | ) | |||||
Depreciation | 15,580 | 8,543 | 46,060 | 34,016 | |||||||||
Amortization | 14,700 | 9,667 | 44,572 | 38,109 | |||||||||
EBITDA | 24,632 | 19,609 | 105,836 | 109,110 | |||||||||
Stock compensation expense | 371 | 459 | 1,590 | 2,484 | |||||||||
Management fees | 150 | 129 | 546 | 519 | |||||||||
Acquisition and integration expense | 5,180 | 881 | 12,358 | 934 | |||||||||
Canada Restructuring (1) | 5,587 | — | 8,261 | — | |||||||||
Restructuring and other costs (2) | 1,528 | 8,833 | 9,016 | 14,794 | |||||||||
Refinancing costs | 3,090 | — | 11,632 | — | |||||||||
Anti-dumping duties | 300 | — | (3,829 | ) | 6,274 | ||||||||
Mark-to-market adjustment on interest rate swaps | 2,284 | (497 | ) | 607 | (1,481 | ) | |||||||
Adjusted EBITDA | $ | 43,122 | $ | 29,414 | $ | 146,017 | $ | 132,634 |
1. | Includes charges related to a restructuring plan announced in our Canada segment in 2018, including facility consolidation, stock keeping unit rationalization, severance, sale of property and equipment, and charges relating to exiting certain lines of business. |
2. | Includes restructuring and other costs associated with the implementation of a new pricing program, cost associated with implementing our ERP system in Canada, costs to relocate our distribution center in Edmonton, Canada, costs associated with relocating our distribution center in Dallas, Texas, and start up costs for the hub facility located on the U.S. West Coast. |