UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 31, 2013
AXIALL CORPORATION
(Exact name of registrant as specified in its charter)
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Delaware |
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1-09753 |
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58-1563799 |
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(State or other jurisdiction of incorporation) |
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(Commission File Number) |
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(IRS Employer Identification No.) |
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115 Perimeter Center Place, Suite 460, Atlanta, GA |
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30346 |
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(Address of principal executive offices) |
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(Zip Code) |
Registrant’s telephone number, including area code: (770) 395 - 4500
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2 (b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c))
Item 2.02 Results of Operations and Financial Condition.
On July 31, 2013, Axiall Corporation issued a press release announcing financial results for the second quarter of 2013, and other matters described in the press release. A copy of the press release is furnished herewith as Exhibit 99.1, and is incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
The information set forth in item 2.02 above is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
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Number |
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Exhibit |
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99.1 |
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Press Release, dated July 31, 2013. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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AXIALL CORPORATION | |
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By: |
/s/ Gregory C. Thompson |
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Name: Gregory C. Thompson. | |
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Title: Chief Financial Officer | |
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Date: July 31, 2013 |
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Exhibit 99.1
Axiall Reports Second-Quarter 2013 Results
ATLANTA — July 31, 2013 — Axiall Corporation (NYSE: AXLL) today announced financial results for the quarter ended June 30, 2013.
Axiall reported net sales of $1.3 billion for the second quarter of 2013, compared to net sales of $867.7 million for the second quarter of 2012. The company reported Net income attributable to Axiall of $72.8 million, or $1.03 per diluted share, for the second quarter of 2013, compared to Net income attributable to Axiall of $13.6 million, or $0.39 per diluted share, for the second quarter of 2012. The company reported Adjusted Net Income of $84.0 million, and Adjusted Earnings per Share of $1.19, for the second quarter of 2013, compared to Adjusted Net Income of $17.7 million, and Adjusted Earnings per Share of $0.51, for the second quarter of 2012. The company reported Adjusted EBITDA of $197.9 million for the second quarter of 2013, compared to Adjusted EBITDA of $54.3 million for the same quarter in the prior year.
The financial results announced today include the results of the merged company since the January 28, 2013 merger.
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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(In millions, except per share data) |
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2013 |
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2012 |
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2013 |
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2012 |
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Net income attributable to Axiall |
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$ |
72.8 |
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$ |
13.6 |
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$ |
69.3 |
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$ |
48.9 |
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Pretax charges (benefits): |
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| ||||
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Fair value of inventory — purchase accounting |
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3.2 |
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— |
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13.4 |
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— |
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Merger related and other, net |
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3.5 |
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6.6 |
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15.5 |
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11.6 |
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Costs to attain Merger synergies |
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11.3 |
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— |
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12.0 |
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— |
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Gain on sale of assets |
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— |
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— |
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— |
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(17.4 |
) | ||||
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Gain on acquisition of controlling interests |
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— |
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— |
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(23.5 |
) |
— |
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Loss on redemption and other debt costs |
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— |
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— |
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78.5 |
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— |
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Total pretax charge (benefit) |
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18.0 |
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6.6 |
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95.9 |
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(5.8 |
) | ||||
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Provision for (benefit from) taxes related to these items |
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6.8 |
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2.5 |
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36.1 |
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(2.2 |
) | ||||
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After tax effect of above items |
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11.2 |
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4.1 |
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59.8 |
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(3.6 |
) | ||||
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Adjusted Net Income |
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$ |
84.0 |
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$ |
17.7 |
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$ |
129.1 |
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$ |
45.3 |
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Diluted earnings per share attributable to Axiall |
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$ |
1.03 |
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$ |
0.39 |
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$ |
1.06 |
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$ |
1.40 |
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Adjusted earnings per share |
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$ |
1.19 |
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$ |
0.51 |
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$ |
1.98 |
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$ |
1.30 |
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Adjusted EBITDA |
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$ |
197.9 |
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$ |
54.3 |
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$ |
331.3 |
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$ |
129.8 |
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“We are pleased to complete the first full quarter as Axiall. We have made significant progress integrating the organizations and building on our complementary assets while maintaining a steady focus on safety and execution.” said Paul Carrico, president and chief executive officer. “We are on track to achieve our synergy targets of a $60 million run rate by year end 2013 and $115 million run rate by the end of 2014.”
Chlorovinyls
In the Chlorovinyls segment, second quarter 2013 net sales were $801.8 million compared to $339.8 million during the second quarter of 2012. The increase in net sales was primarily driven by the sales contributed by the merged business as well as higher resin sales prices and volumes. The segment posted Adjusted EBITDA of $177.6 million in the second quarter of 2013, compared to Adjusted EBITDA of $45.8 million for the same quarter in the prior year. The $131.8 million increase in Adjusted EBITDA was primarily due to the contribution from the merged business.
Building Products
In the Building Products segment, net sales were $244.5 million for the second quarter of 2013, compared to $252.4 million recorded for the same quarter in the prior year. The net sales decrease was driven by lower sales prices in Canada, on flat sales volume. The segment’s Adjusted EBITDA was $28.2 million for the second quarter of 2013, compared to $24.5 million of Adjusted EBITDA during the same quarter of the prior year. The $3.7 million increase was primarily due to lower conversion costs and lower selling, general and administrative costs.
Aromatics
In the Aromatics segment, net sales decreased to $226.5 million for the second quarter of 2013 from $275.5 million for the second quarter of 2012, due primarily to lower sales volumes for cumene, partially offset by higher sales prices for all products. During the second quarter of 2013, the segment recorded Adjusted EBITDA of $4.6 million, compared to Adjusted EBITDA of negative $2.0 million during the same quarter in 2012. The improvement was primarily due to a smaller inventory holding loss in the second quarter of 2013, partially offset by lower sales volumes.
Conference Call
The company will discuss second-quarter financial results and business developments via conference call and webcast on Thursday, August 1, at 10:00 a.m. Eastern time. To access the company’s second-quarter conference call, please dial (877) 312-5406 (domestic) or (706) 679-9856 (international). Playbacks will be available from 11:00 a.m. Eastern time on Thursday, August 1, until 11:59 p.m. Eastern time on Wednesday, August 15. Playback numbers are (855) 859-2056 or (800) 585-8367. The conference call ID number is 23458796.
About Axiall
Axiall Corporation is a leading integrated chemicals and building products company. It is an international manufacturer of chlor-alkali and derivatives, chlorovinyls and aromatics products including chlorine, caustic soda, vinyl chloride monomer, chlorinated solvents, calcium hypochlorite, ethylene dichloride, muriatic acid, phosgene derivatives, polyvinyl chloride, vinyl compounds, acetone, cumene and phenol. It also manufactures vinyl-based building and home improvement products that are marketed under Royal Building Products, Celect, Zuri, Korflo, Overture, S4S and Exterior Portfolio brands, including window and door profiles, mouldings, siding, pipe and pipe fittings,
and decking. Axiall, headquartered in Atlanta, Georgia, has manufacturing facilities located throughout North America and in Asia to provide industry-leading materials and services to customers. For more information, visit www.axiall.com.
Cautionary Statements About Forward-Looking Information
This press release contains certain statements relating to future events and our intentions, beliefs, expectations, and predictions for the future. Any such statements other than statements of historical fact are forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. Words or phrases such as “anticipate,” “believe,” “plan,” “estimate,” “project,” “may,” “will,” “intend,” “target,” “expect,” “would” or “could” (including the negative variations thereof) or similar terminology used in connection with any discussion of future plans, actions or events generally identify forward-looking statements. These statements relate to, among other things, our outlook for future periods, global demand for our products, pricing trends and market forces within the chemical and building products industries, expected benefits of the merger with the PPG chemicals business, integration plans, the expected cost advantage of natural gas in North America and the expected duration of any such cost advantage and other statements of expectations concerning matters that are not historical facts. These statements are based on the current expectations of our management. There are a number of risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements included in this press release. These risks and uncertainties include, among other things: (i) a material adverse change, event or occurrence affecting Axiall or the newly acquired chemicals business; (ii) the ability of Axiall to successfully integrate the businesses of the chemicals business formerly owned by PPG with which Axiall has merged, which may result in the combined company not operating as effectively and efficiently as expected; (iii) the possibility that the merger and related transactions may involve other unexpected costs, liabilities or delays; and (iv) uncertainties regarding future prices, industry capacity levels and demand for Axiall’s products, raw materials and energy costs and availability, feedstock availability and prices, changes in governmental and environmental regulations, the adoption of new laws or regulations that may make it more difficult or expensive to operate Axiall’s businesses or manufacture its products, Axiall’s ability to generate sufficient cash flows from its business after the merger, future economic conditions in the specific industries to which its products are sold, and global economic conditions.
In light of these risks, uncertainties, assumptions, and factors, the forward-looking events discussed in this press release may not occur. Other unknown or unpredictable factors could also have a material adverse effect on Axiall’s actual future results, performance, or achievements. For a further discussion of these and other risks and uncertainties applicable to Axiall and its business, see Axiall’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012, and subsequent filings with the SEC. As a result of the foregoing, readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Axiall does not undertake, and expressly disclaims, any duty to update any forward-looking statement whether as a result of new information, future events, or changes in its expectations, except as required by law.
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CONTACTS: |
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Investor Relations |
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Media |
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Martin Jarosick |
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Alan Chapple |
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770-395-4524 |
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770-395-4538 |
AXIALL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
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June 30, |
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December 31, |
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(In millions, except share data) |
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2013 |
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2012 |
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Assets: |
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Cash and cash equivalents |
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$ |
44.3 |
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$ |
200.3 |
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Receivables, net of allowance for doubtful accounts of $ 4.6 million and $4.5 million at June 30, 2013 and December 31, 2012, respectively. |
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702.9 |
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314.9 |
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Inventories |
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428.9 |
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288.4 |
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Prepaid expenses and other |
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50.7 |
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14.7 |
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Deferred income taxes |
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9.1 |
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21.1 |
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Total current assets |
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1,235.9 |
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839.4 |
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Property, plant and equipment, net |
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1,644.2 |
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637.7 |
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Goodwill |
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1,657.9 |
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217.2 |
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Intangible assets, net |
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1,227.2 |
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43.4 |
| ||
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Other assets, net |
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84.6 |
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63.6 |
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Total assets |
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$ |
5,849.8 |
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$ |
1,801.3 |
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Liabilities and Equity: |
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|
|
|
| ||
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Current portion of long-term debt |
|
$ |
42.3 |
|
$ |
— |
|
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Accounts payable |
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351.4 |
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211.2 |
| ||
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Interest payable |
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16.8 |
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18.9 |
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Income taxes payable |
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7.9 |
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15.1 |
| ||
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Accrued compensation |
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47.7 |
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44.7 |
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Current deferred tax liability |
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— |
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— |
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Other accrued current liabilities |
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113.6 |
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61.2 |
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Total current liabilities |
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579.7 |
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351.1 |
| ||
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Long-term debt, excluding the current portion of long-term debt |
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1,396.5 |
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448.1 |
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Lease financing obligation |
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106.3 |
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112.3 |
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Deferred income taxes |
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771.7 |
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177.9 |
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Pensions and other postretirement benefits |
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329.1 |
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48.3 |
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Other non-current liabilities |
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127.6 |
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60.1 |
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Total liabilities |
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3,310.9 |
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1,197.8 |
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Commitments and contingencies |
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Equity: |
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Preferred stock—$0.01 par value; 75,000,000 shares authorized; no shares issued |
|
— |
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— |
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Common stock—$0.01 par value; shares authorized: 200,000,000 and 100,000,000 at June 30, 2013 and December 31, 2012, respectively; issued and outstanding: 69,874,568 and 34,546,767 at June 30, 2013 and December 31, 2012, respectively. |
|
0.7 |
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0.3 |
| ||
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Additional paid-in capital |
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2,264.2 |
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487.1 |
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Retained earnings |
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196.1 |
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138.0 |
| ||
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Accumulated other comprehensive loss, net of tax |
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(39.7 |
) |
(21.9 |
) | ||
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Total Axiall stockholders’ equity |
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2,421.3 |
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603.5 |
| ||
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Noncontrolling interest |
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117.6 |
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— |
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Total equity |
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2,538.9 |
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603.5 |
| ||
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Total liabilities and equity |
|
$ |
5,849.8 |
|
$ |
1,801.3 |
|
AXIALL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
|
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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(In millions, except per share data) |
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2013 |
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2012 |
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2013 |
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2012 |
| ||||
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Net sales |
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$ |
1,272.8 |
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$ |
867.7 |
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$ |
2,334.0 |
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$ |
1,727.6 |
|
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Operating costs and expenses: |
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|
|
|
|
|
|
|
| ||||
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Cost of sales |
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1,041.7 |
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780.9 |
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1,940.7 |
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1,537.3 |
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Selling, general and administrative expenses |
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97.7 |
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51.8 |
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176.0 |
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99.5 |
| ||||
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Transaction related costs and other, net |
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8.8 |
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6.6 |
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21.5 |
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11.6 |
| ||||
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Gain on sale of assets, net |
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— |
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— |
|
— |
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(17.4 |
) | ||||
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Total operating costs and expenses |
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1,148.2 |
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839.3 |
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2,138.2 |
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1,631.0 |
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Operating income |
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124.6 |
|
28.4 |
|
195.8 |
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96.6 |
| ||||
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Interest expense, net |
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(19.4 |
) |
(14.5 |
) |
(37.7 |
) |
(28.9 |
) | ||||
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Foreign exchange gain (loss) |
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0.3 |
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(0.3 |
) |
0.4 |
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(0.4 |
) | ||||
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Loss on redemption and other debt costs |
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— |
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— |
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(78.5 |
) |
— |
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Gain on acquisition of controlling interest |
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— |
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— |
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23.5 |
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— |
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Income before income taxes |
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105.5 |
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13.6 |
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103.5 |
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67.3 |
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Provision for income taxes |
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31.8 |
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— |
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32.6 |
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18.4 |
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Consolidated net income |
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73.7 |
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13.6 |
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70.9 |
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48.9 |
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Less net income attributable to noncontrolling interest |
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0.9 |
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— |
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1.6 |
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— |
| ||||
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Net income attributable to Axiall |
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$ |
72.8 |
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$ |
13.6 |
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$ |
69.3 |
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$ |
48.9 |
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Earnings per share attributable to Axiall: |
|
|
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|
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|
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Basic |
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$ |
1.04 |
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$ |
0.39 |
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$ |
1.07 |
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$ |
1.41 |
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Diluted |
|
$ |
1.03 |
|
$ |
0.39 |
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$ |
1.06 |
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$ |
1.40 |
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|
|
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|
|
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|
|
|
| ||||
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Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
| ||||
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Basic |
|
69.9 |
|
34.4 |
|
64.6 |
|
34.3 |
| ||||
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Diluted |
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70.4 |
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34.6 |
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65.1 |
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34.5 |
| ||||
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|
|
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Dividends per common share |
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$ |
0.08 |
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$ |
0.08 |
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$ |
0.16 |
|
$ |
0.08 |
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AXIALL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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|
(In millions) |
|
2013 |
|
2012 |
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2013 |
|
2012 |
| ||||
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Cash flows from operating activities: |
|
|
|
|
|
|
|
|
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Consolidated net income |
|
$ |
73.7 |
|
$ |
13.6 |
|
$ |
70.9 |
|
$ |
48.9 |
|
|
Adjustments to reconcile consolidated net income to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
|
|
| ||||
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Depreciation |
|
38.4 |
|
21.4 |
|
67.8 |
|
41.3 |
| ||||
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Amortization |
|
19.6 |
|
1.0 |
|
32.5 |
|
3.7 |
| ||||
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Loss on redemption and other debt costs |
|
— |
|
— |
|
78.5 |
|
— |
| ||||
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Gain on acquisition of controlling interest |
|
— |
|
— |
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(23.5 |
) |
— |
| ||||
|
Gain on sale of assets |
|
— |
|
— |
|
— |
|
(17.4 |
) | ||||
|
Other non-cash items |
|
(11.8 |
) |
5.1 |
|
(0.1 |
) |
5.0 |
| ||||
|
Change in operating assets and liabilities, and other (excluding effects of acquisition) |
|
(49.9 |
) |
29.4 |
|
(260.9 |
) |
(96.4 |
) | ||||
|
Net cash provided by (used in) operating activities |
|
70.0 |
|
70.5 |
|
(34.8 |
) |
(14.9 |
) | ||||
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
| ||||
|
Capital expenditures |
|
(39.2 |
) |
(27.1 |
) |
(55.6 |
) |
(40.7 |
) | ||||
|
Proceeds from sale of assets |
|
— |
|
2.4 |
|
— |
|
21.7 |
| ||||
|
Cash acquired in acquisition |
|
— |
|
— |
|
26.7 |
|
— |
| ||||
|
Net cash used in investing activities |
|
(39.2 |
) |
(24.7 |
) |
(28.9 |
) |
(19.0 |
) | ||||
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
| ||||
|
Borrowings on ABL revolver |
|
179.8 |
|
94.3 |
|
402.5 |
|
183.4 |
| ||||
|
Repayments on ABL revolver |
|
(213.6 |
) |
(123.3 |
) |
(297.3 |
) |
(183.4 |
) | ||||
|
Issuance of long-term debt |
|
— |
|
— |
|
450.0 |
|
— |
| ||||
|
Long-term debt payments |
|
(0.7 |
) |
— |
|
(530.4 |
) |
— |
| ||||
|
Make-whole and other fees paid related to financing activities |
|
(0.6 |
) |
— |
|
(95.0 |
) |
— |
| ||||
|
Dividends paid |
|
(5.6 |
) |
— |
|
(5.6 |
) |
— |
| ||||
|
Distribution to noncontrolling interest |
|
(13.3 |
) |
— |
|
(13.3 |
) |
— |
| ||||
|
Excess tax benefits from share-based payment arrangements |
|
0.6 |
|
0.1 |
|
0.7 |
|
0.1 |
| ||||
|
Stock compensation plan activity |
|
(1.3 |
) |
(0.4 |
) |
(1.3 |
) |
(0.4 |
) | ||||
|
Net cash used in financing activities |
|
(54.7 |
) |
(29.3 |
) |
(89.7 |
) |
(0.3 |
) | ||||
|
Effect of exchange rate changes on cash and cash equivalents |
|
(1.0 |
) |
(0.1 |
) |
(2.6 |
) |
1.0 |
| ||||
|
Net change in cash and cash equivalents |
|
(24.9 |
) |
16.4 |
|
(156.0 |
) |
(33.2 |
) | ||||
|
Cash and cash equivalents at beginning of period |
|
69.2 |
|
39.0 |
|
200.3 |
|
88.6 |
| ||||
|
Cash and cash equivalents at end of period |
|
$ |
44.3 |
|
$ |
55.4 |
|
$ |
44.3 |
|
$ |
55.4 |
|
Significant non-cash transaction
On January 28, 2013 we acquired substantially all of the assets and liabilities of PPG Industries, Inc.’s (“PPG”) business relating to the production of chlorine, caustic soda and related chemicals, through a merger between a subsidiary of PPG and a subsidiary of the Company. The purchase price for these transactions was approximately $2.7 billion and consisted of: (i) the issuance of approximately 35.2 million shares of our common stock valued at approximately $1.8 billion; (ii) the assumption of $967.0 million of debt; and (iii) the assumption of certain other liabilities including pension and other postretirement obligations. See Note 2 to the unaudited condensed consolidated financial statements. The final purchase price is subject to a settlement with PPG related to the final working capital of the merged business as of the date of acquisition.
AXIALL CORPORATION AND SUBSIDIARIES
SEGMENT INFORMATION
(Unaudited)
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
| ||||||||
|
(Dollars in millions) |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
| ||||
|
Sales |
|
|
|
|
|
|
|
|
| ||||
|
Chlorovinyls products |
|
$ |
801.8 |
|
$ |
339.8 |
|
$ |
1,416.3 |
|
$ |
669.3 |
|
|
Building products |
|
244.5 |
|
252.4 |
|
406.7 |
|
439.6 |
| ||||
|
Aromatics products |
|
226.5 |
|
275.5 |
|
511.0 |
|
618.7 |
| ||||
|
Net sales |
|
$ |
1,272.8 |
|
$ |
867.7 |
|
$ |
2,334.0 |
|
$ |
1,727.6 |
|
|
Operating income |
|
|
|
|
|
|
|
|
| ||||
|
Chlorovinyls products |
|
$ |
118.2 |
|
$ |
34.5 |
|
$ |
209.4 |
|
$ |
86.4 |
|
|
Building products |
|
19.6 |
|
15.4 |
|
5.8 |
|
9.0 |
| ||||
|
Aromatics products |
|
4.3 |
|
(2.4 |
) |
17.3 |
|
35.2 |
| ||||
|
Unallocated corporate |
|
(17.5 |
) |
(19.1 |
) |
(36.7 |
) |
(34.0 |
) | ||||
|
Total operating income |
|
$ |
124.6 |
|
$ |
28.4 |
|
$ |
195.8 |
|
$ |
96.6 |
|
Reconciliation of Non-GAAP Financial Measures
Axiall has supplemented its financial statements prepared in accordance with GAAP that are set forth in this press release (the “Financial Statements”) with three non-GAAP financial measures: (i) Adjusted Net Income; (ii) Adjusted Earnings per Share; and (iii) Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization, cash and non-cash restructuring charges and certain other charges, if any, related to financial restructuring and business improvement initiatives, gains or losses on redemption and other debt costs, and sales of certain assets, certain purchase accounting and certain non-income tax reserve adjustments, professional fees related to a previously disclosed and withdrawn unsolicited offer and the merger with PPG’s chemicals business (the “Merger”), costs to attain Merger synergies, goodwill, intangibles, and other long-lived asset impairments, and interest expense related to the OMERS lease-financing transaction).
Adjusted Net Income is defined as Net income attributable to Axiall excluding adjustments for tax effected cash and non-cash restructuring charges and certain other charges, if any, related to financial restructuring and business improvement initiatives, gains or losses on redemption and other debt costs, and sales of certain assets, certain purchase accounting and certain non-income tax reserve adjustments, professional fees related to a previously disclosed and withdrawn unsolicited offer and the Merger, costs to attain Merger synergies, goodwill, intangibles, and other long-lived asset impairments. Adjusted Earnings per Share is calculated using Adjusted Net Income rather than consolidated net income in accordance with GAAP and applying the two-class earnings per share method.
Axiall has supplemented the Financial Statements with Adjusted Net Income and Adjusted Earnings per Share because investors commonly use financial measures such as Adjusted Net Income and Adjusted Earnings per Share as a component of performance and valuation analysis for companies, such as Axiall, that recently have engaged in transactions that result in non-recurring pre-tax charges or benefits that have a significant impact on the calculation of net income pursuant to GAAP, in order to approximate the amount of net income that such a company would have achieved absent those non-recurring, transaction related charges or benefits. In addition, Axiall has supplemented the Financial Statements with Adjusted Net Income and Adjusted Earnings per Share because we believe these financial measures will be helpful to investors in approximating what Axiall’s net income would have been absent the impact of certain non-recurring, pre-tax charges and benefits related to the Merger, the company’s issuance of its 4.875 Notes and the Tender Offer and related redemption of its 9 percent notes. Axiall has supplemented the Financial Statements with Adjusted EBITDA because investors commonly use Adjusted EBITDA as a main component of valuation analysis of cyclical companies such as Axiall.
Adjusted Net Income, Adjusted Earnings per Share and Adjusted EBITDA, are not measurements of financial performance under GAAP and should not be considered as an alternative to net income, or GAAP diluted earnings per share, as a measure of performance or to cash provided by operating activities as a measure of liquidity. In addition, our calculation of Adjusted Net Income, Adjusted Earnings per Share and Adjusted EBITDA, may be different from the calculation used by other companies and, therefore, comparability may be limited. Reconciliations of these non-GAAP Financial measures to the most comparable GAAP measures are set forth in this press release.
Adjusted Earnings per share reconciliation
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
| ||||||||
|
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
| ||||
|
Diluted earnings per share attributable to Axiall |
|
$ |
1.03 |
|
$ |
0.39 |
|
$ |
1.06 |
|
$ |
1.40 |
|
|
Earnings (loss) per share related to adjustments between Net income attributable to Axiall and Adjusted Net Income |
|
$ |
0.16 |
|
$ |
0.12 |
|
$ |
0.92 |
|
$ |
(0.10 |
) |
|
Adjusted earnings per share |
|
$ |
1.19 |
|
$ |
0.51 |
|
$ |
1.98 |
|
$ |
1.30 |
|
Adjusted EBITDA Reconciliations
Three Months Ended June 30, 2013
|
(In millions) |
|
Chlorovinyls |
|
Building |
|
Aromatics |
|
Unallocated |
|
Total |
| |||||
|
Adjusted EBITDA |
|
$ |
177.6 |
|
$ |
28.2 |
|
$ |
4.6 |
|
$ |
(12.5 |
) |
$ |
197.9 |
|
|
Fair value of inventory - purchase accounting |
|
(3.2 |
) |
— |
|
— |
|
— |
|
(3.2 |
) | |||||
|
Costs to attain Merger synergies |
|
(7.5 |
)(a) |
— |
|
— |
|
(3.8 |
) |
(11.3 |
) | |||||
|
Depreciation and amortization |
|
(47.5 |
) |
(8.6 |
) |
(0.3 |
) |
(1.6 |
) |
(58.0 |
) | |||||
|
Interest expense, net |
|
— |
|
— |
|
— |
|
(19.4 |
) |
(19.4 |
) | |||||
|
Provision for income taxes |
|
— |
|
— |
|
— |
|
(31.8 |
) |
(31.8 |
) | |||||
|
Other |
|
(0.4 |
) |
— |
|
— |
|
(0.1 |
) |
(0.5 |
)(b) | |||||
|
Consolidated net income (c) |
|
$ |
119.0 |
|
$ |
19.6 |
|
$ |
4.3 |
|
$ |
(69.2 |
) |
$ |
73.7 |
|
(a) Includes $5.9 million of plant reliability improvement initiatives that are included in cost of sales on our condensed consolidated statements of income.
(b) Includes $3.5 million Merger related and other, net, offset by $1.2 million for debt cost amortization and $1.8 million of lease financing obligations interest.
(c) Earnings of our segments exclude interest income and expense, unallocated corporate expenses and general plant services, and provision for income taxes.
Three Months Ended June 30, 2012
|
(In millions) |
|
Chlorovinyls |
|
Building |
|
Aromatics |
|
Unallocated |
|
Total |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Adjusted EBITDA |
|
$ |
45.8 |
|
$ |
24.5 |
|
$ |
(2.0 |
) |
$ |
(14.0 |
) |
$ |
54.3 |
|
|
Depreciation and amortization |
|
(11.4 |
) |
(9.5 |
) |
(0.4 |
) |
(1.1 |
) |
(22.4 |
) | |||||
|
Interest expense, net |
|
— |
|
— |
|
— |
|
(14.5 |
) |
(14.5 |
) | |||||
|
Other |
|
0.1 |
|
0.4 |
|
— |
|
(4.3 |
) |
(3.8 |
)(a) | |||||
|
Consolidated net income (b) |
|
$ |
34.5 |
|
$ |
15.4 |
|
$ |
(2.4 |
) |
$ |
(33.9 |
) |
$ |
13.6 |
|
(a) Includes $6.6 million Merger related and other, net, offset by $1.0 million for debt cost amortization and $1.8 million of lease financing obligations interest.
(b) Earnings of our segments exclude interest income and expense, unallocated corporate expenses and general plant services, and provision for income taxes.
Six Months Ended June 30, 2013
|
(In millions) |
|
Chlorovinyls |
|
Building |
|
Aromatics |
|
Unallocated |
|
Total |
| |||||
|
Adjusted EBITDA |
|
$ |
311.8 |
|
$ |
25.7 |
|
$ |
17.8 |
|
$ |
(24.0 |
) |
$ |
331.3 |
|
|
Fair value of inventory - purchase accounting |
|
(13.4 |
) |
— |
|
— |
|
— |
|
(13.4 |
) | |||||
|
Costs to attain Merger synergies |
|
(8.2 |
)(a) |
— |
|
— |
|
(3.8 |
) |
(12.0 |
) | |||||
|
Depreciation and amortization |
|
(79.0 |
) |
(17.4 |
) |
(0.6 |
) |
(3.3 |
) |
(100.3 |
) | |||||
|
Interest expense, net |
|
— |
|
— |
|
— |
|
(37.7 |
) |
(37.7 |
) | |||||
|
Gain on acquisition of controlling interest |
|
23.5 |
|
— |
|
— |
|
— |
|
23.5 |
| |||||
|
Loss on redemption and other debt cost, net |
|
— |
|
— |
|
— |
|
(78.5 |
) |
(78.5 |
) | |||||
|
Provision for income taxes |
|
— |
|
— |
|
— |
|
(32.6 |
) |
(32.6 |
) | |||||
|
Other |
|
(1.0 |
) |
(2.4 |
) |
0.1 |
|
(6.1 |
) |
(9.4 |
)(b) | |||||
|
Consolidated net income (c) |
|
$ |
233.7 |
|
$ |
5.9 |
|
$ |
17.3 |
|
$ |
(186.0 |
) |
$ |
70.9 |
|
(a) Includes $5.9 million of plant reliability improvement initiatives that are included in cost of sales on our condensed consolidated statements of income.
(b) Includes $15.5 million Merger related and other, net, offset by $2.4 million for debt cost amortization and $3.6 million of lease financing obligations interest.
(c) Earnings of our segments exclude interest income and expense, unallocated corporate expenses and general plant services, and provision for income taxes.
Six Months Ended June 30, 2012
|
(In millions) |
|
Chlorovinyls |
|
Building |
|
Aromatics |
|
Unallocated |
|
Total |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Adjusted EBITDA |
|
$ |
91.5 |
|
$ |
27.8 |
|
$ |
35.9 |
|
$ |
(25.4 |
) |
$ |
129.8 |
|
|
Depreciation and amortization |
|
(22.5 |
) |
(19.5 |
) |
(0.8 |
) |
(2.2 |
) |
(45.0 |
) | |||||
|
Interest expense, net |
|
— |
|
— |
|
— |
|
(28.9 |
) |
(28.9 |
) | |||||
|
Provision for income taxes |
|
— |
|
— |
|
— |
|
(18.4 |
) |
(18.4 |
) | |||||
|
Other |
|
17.4 |
(a) |
0.7 |
|
0.1 |
|
(6.7 |
) |
11.5 |
(b) | |||||
|
Consolidated net income (c) |
|
$ |
86.4 |
|
$ |
9.0 |
|
$ |
35.2 |
|
$ |
(81.6 |
) |
$ |
48.9 |
|
(a) $17.4 million relates to gain on sale of assets.
(b) Includes $11.6 million Merger related and other, net, offset by $2.0 million for debt cost amortization and $3.7 million of lease financing obligations interest.
(c) Earnings of our segments exclude interest income and expense, unallocated corporate expenses and general plant services, and provision for income taxes.
###