Delaware | 1-36293 | 61-1718923 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S Employer Identification No.) |
12950 Worldgate Drive, Suite 700, Herndon, VA | 20170 | |
(Address of principal executive offices) | (Zip Code) |
(703) 480-3800 |
(Registrant's telephone number, including the area code) |
(d) | Exhibits. Press Release issued by Continental Building Products, Inc. dated November 8, 2018. |
Continental Building Products, Inc. | ||
November 8, 2018 | /s/ Timothy A. Power | |
Date | Timothy A. Power | |
Senior Vice President and General Counsel |
• | Earnings per share increased 75.9% to $0.51 |
• | Net income increased 69.0% to $18.6 million |
• | EBITDA1 increased 21.4% to $38.6 million |
• | Net sales increased 12.6% to $131.2 million |
• | Gross margin increased to 28.1% compared to 24.5% |
• | Deployed $7.3 million in capital investments |
• | Deployed $2.9 million to repurchase 76,600 shares of common stock |
• | SG&A is expected to be in the range of $39 - $40 million. |
• | Cost of goods sold inflation per unit compared to the prior year is expected to be in the range of 3.5% - 4% which is at the higher end of the previous range of 3% - 4%. We expect to partly offset this inflation by approximately $5 million of savings from high return capital projects. |
• | Total capital expenditures are expected to be in the range of $28 - $31 million |
◦ | Maintenance capital spending is expected to be in the range of $14 - $15 million |
◦ | High-return capital spending is expected to be in the range of $14 - $16 million |
• | Depreciation and amortization is expected to be in the range of $44 - $45 million which is at the higher end of the previous range of $43 - $45 million |
• | Effective tax rate is expected to be in the range of 21% - 22% |
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||
September 30, 2018 | September 30, 2017 | September 30, 2018 | September 30, 2017 | ||||||||||||
(in thousands, except share data and per share amounts) | |||||||||||||||
Net sales | $ | 131,234 | $ | 116,526 | $ | 387,304 | $ | 357,771 | |||||||
Costs, expenses and other income: | |||||||||||||||
Cost of goods sold | 94,306 | 87,952 | 279,185 | 267,393 | |||||||||||
Selling and administrative | 9,957 | 8,867 | 29,826 | 27,364 | |||||||||||
Total costs and operating expenses | 104,263 | 96,819 | 309,011 | 294,757 | |||||||||||
Operating income | 26,971 | 19,707 | 78,293 | 63,014 | |||||||||||
Other (expense)/income, net | (29 | ) | 146 | (256 | ) | (633 | ) | ||||||||
Interest expense, net | (2,549 | ) | (2,988 | ) | (7,963 | ) | (8,966 | ) | |||||||
Income before losses from equity method investment and provision for income taxes | 24,393 | 16,865 | 70,074 | 53,415 | |||||||||||
Losses from equity method investment | (393 | ) | (204 | ) | (1,148 | ) | (29 | ) | |||||||
Income before provision for income taxes | 24,000 | 16,661 | 68,926 | 53,386 | |||||||||||
Provision for income taxes | (5,436 | ) | (5,674 | ) | (14,821 | ) | (17,774 | ) | |||||||
Net income | $ | 18,564 | $ | 10,987 | $ | 54,105 | $ | 35,612 | |||||||
Net income per share: | |||||||||||||||
Basic | $ | 0.51 | $ | 0.29 | $ | 1.46 | $ | 0.91 | |||||||
Diluted | $ | 0.50 | $ | 0.29 | $ | 1.46 | $ | 0.91 | |||||||
Weighted average shares outstanding: | |||||||||||||||
Basic | 36,732,746 | 38,212,869 | 37,012,536 | 38,966,575 | |||||||||||
Diluted | 36,918,904 | 38,345,556 | 37,181,387 | 39,080,973 |
September 30, 2018 | December 31, 2017 | ||||||
(unaudited) | |||||||
(in thousands) | |||||||
Assets: | |||||||
Cash and cash equivalents | $ | 105,452 | $ | 72,521 | |||
Trade receivables, net | 39,597 | 38,769 | |||||
Inventories, net | 32,439 | 24,882 | |||||
Prepaid and other current assets | 11,605 | 11,267 | |||||
Total current assets | 189,093 | 147,439 | |||||
Property, plant and equipment, net | 290,670 | 294,003 | |||||
Customer relationships and other intangibles, net | 64,661 | 70,807 | |||||
Goodwill | 119,945 | 119,945 | |||||
Equity method investment | 8,194 | 9,263 | |||||
Debt issuance costs | 341 | 477 | |||||
Total Assets | $ | 672,904 | $ | 641,934 | |||
Liabilities and Shareholders' Equity: | |||||||
Liabilities: | |||||||
Accounts payable | $ | 32,253 | $ | 30,809 | |||
Accrued and other liabilities | 13,239 | 11,940 | |||||
Notes payable, current portion | 1,670 | 1,702 | |||||
Total current liabilities | 47,162 | 44,451 | |||||
Deferred taxes and other long-term liabilities | 15,392 | 15,847 | |||||
Notes payable, non-current portion | 262,400 | 263,610 | |||||
Total Liabilities | 324,954 | 323,908 | |||||
Shareholders' Equity: | |||||||
Undesignated preferred stock, par value $0.001 per share; 10,000,000 shares authorized, no shares issued and outstanding | — | — | |||||
Common stock, $0.001 par value per share; 190,000,000 shares authorized; 44,422,804 and 44,321,776 shares issued and 36,681,879 and 37,532,959 shares outstanding as of September 30, 2018 and December 31, 2017, respectively | 44 | 44 | |||||
Additional paid-in capital | 327,643 | 325,391 | |||||
Less: Treasury stock | (170,782 | ) | (143,357 | ) | |||
Accumulated other comprehensive loss | (1,656 | ) | (2,649 | ) | |||
Accumulated earnings | 192,701 | 138,597 | |||||
Total Shareholders' Equity | 347,950 | 318,026 | |||||
Total Liabilities and Shareholders' Equity | $ | 672,904 | $ | 641,934 |
For the Nine Months Ended | |||||||
September 30, 2018 | September 30, 2017 | ||||||
(in thousands) | |||||||
Cash flows from operating activities: | |||||||
Net income | $ | 54,105 | $ | 35,612 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 32,966 | 35,817 | |||||
Amortization of debt issuance costs and debt discount | 931 | 885 | |||||
Losses from equity method investment | 1,148 | 29 | |||||
Amortization of deferred gain on terminated swaps | (632 | ) | — | ||||
Loss on debt extinguishment | — | 686 | |||||
Share-based compensation | 2,459 | 2,101 | |||||
Deferred taxes | (457 | ) | 92 | ||||
Change in assets and liabilities: | |||||||
Trade receivables | (914 | ) | 1,420 | ||||
Inventories | (7,627 | ) | (872 | ) | |||
Prepaid expenses and other current assets | 1,264 | (350 | ) | ||||
Accounts payable | (52 | ) | (87 | ) | |||
Accrued and other current liabilities | 1,089 | 4 | |||||
Other long-term liabilities | (226 | ) | (245 | ) | |||
Net cash provided by operating activities | 84,054 | 75,092 | |||||
Cash flows from investing activities: | |||||||
Capital expenditures | (19,761 | ) | (14,077 | ) | |||
Software purchased or developed | (1,359 | ) | (183 | ) | |||
Proceeds from the sale of property, plant and equipment | 125 | — | |||||
Capital contributions to equity method investment | (548 | ) | (1,929 | ) | |||
Distributions from equity method investment | 468 | 641 | |||||
Net cash used in investing activities | (21,075 | ) | (15,548 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from exercise of stock options | 145 | 230 | |||||
Tax withholdings on share-based compensation | (547 | ) | (240 | ) | |||
Proceeds from debt refinancing | — | 273,625 | |||||
Disbursements for debt refinancing | — | (273,625 | ) | ||||
Payments of financing costs | — | (649 | ) | ||||
Principal payments for debt | (2,037 | ) | (2,052 | ) | |||
Payments to repurchase common stock | (27,425 | ) | (49,128 | ) | |||
Net cash used in financing activities | (29,864 | ) | (51,839 | ) | |||
Effect of foreign exchange rates on cash and cash equivalents | (184 | ) | 707 | ||||
Net change in cash and cash equivalents | 32,931 | 8,412 | |||||
Cash, beginning of period | 72,521 | 51,536 | |||||
Cash, end of period | $ | 105,452 | $ | 59,948 |
Reconciliation of Net Income to EBITDA | |||||||||||||||
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||
September 30, 2018 | September 30, 2017 | September 30, 2018 | September 30, 2017 | ||||||||||||
(unaudited, in thousands) | |||||||||||||||
Net income | $ | 18,564 | $ | 10,987 | $ | 54,105 | $ | 35,612 | |||||||
Adjustments: | |||||||||||||||
Other expense/(income), net | 29 | (146 | ) | 256 | 633 | ||||||||||
Interest expense, net | 2,549 | 2,988 | 7,963 | 8,966 | |||||||||||
Losses from equity method investment | 393 | 204 | 1,148 | 29 | |||||||||||
Provision for income taxes | 5,436 | 5,674 | 14,821 | 17,774 | |||||||||||
Depreciation and amortization | 11,580 | 12,057 | 32,966 | 35,817 | |||||||||||
EBITDA - Non-GAAP measure | $ | 38,551 | $ | 31,764 | $ | 111,259 | $ | 98,831 | |||||||
EBITDA Margin - EBITDA as a percentage of net sales - Non-GAAP measure | 29.4 | % | 27.3 | % | 28.7 | % | 27.6 | % |
Reconciliation of Net Income and Earnings Per Share to Adjusted Net Income and Adjusted Earnings Per Share | |||||||||||||||
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||
September 30, 2018 | September 30, 2017 | September 30, 2018 | September 30, 2017 | ||||||||||||
(unaudited, in thousands, except share data and per share amounts) | |||||||||||||||
Net income - GAAP measure | $ | 18,564 | $ | 10,987 | $ | 54,105 | $ | 35,612 | |||||||
Debt related expenses, net of tax (1) | — | — | — | 454 | |||||||||||
Adjusted net income - Non-GAAP measure | $ | 18,564 | $ | 10,987 | $ | 54,105 | $ | 36,066 | |||||||
Earnings per share - GAAP measure | $ | 0.51 | $ | 0.29 | $ | 1.46 | $ | 0.91 | |||||||
Debt related expenses, net of tax (1) | — | — | — | 0.02 | |||||||||||
Adjusted earnings per share - Non-GAAP measure | $ | 0.51 | $ | 0.29 | $ | 1.46 | $ | 0.93 |
(1) | Expenses related to debt repricing activities are shown net of income tax benefit of $0.2 million. |
Other Financial and Operating Data | |||||||||||||||
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||
September 30, 2018 | September 30, 2017 | September 30, 2018 | September 30, 2017 | ||||||||||||
(in thousands, except mill net) | |||||||||||||||
Capital expenditures and software purchased or developed | $ | 7,324 | $ | 6,057 | $ | 21,120 | $ | 14,260 | |||||||
Wallboard sales volume (million square feet) | 674 | 644 | 2,011 | 1,941 | |||||||||||
Mill net sales price (1) | $ | 155.43 | $ | 144.90 | $ | 153.70 | $ | 147.72 |
(1) | Mill net sales price represents average selling price per thousand square feet net of freight and delivery costs. |
Interim Volumes and Mill Net Prices | |||||||||||||||||||
For the Three Months Ended | |||||||||||||||||||
September 30, 2017 | December 31, 2017 | March 31, 2018 | June 30, 2018 | September 30, 2018 | |||||||||||||||
Volumes (million square feet) | 644 | 725 | 615 | 722 | 674 | ||||||||||||||
Mill net sales price (1) | $ | 144.90 | $ | 144.78 | $ | 151.60 | $ | 153.88 | $ | 155.43 |
(1) | Mill net sales price represents average selling price per thousand square feet net of freight and delivery costs. |
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