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8-K - FORM 8-K - KAYDON CORP | k50134e8vk.htm |
EX-99.2 - EX-99.2 - KAYDON CORP | k50134exv99w2.htm |
Exhibit 99.1
News From:
|
For Immediate Release: | |
Kaydon Corporation
|
Global Engineered Solutions |
KAYDON CORPORATION REPORTS FOURTH QUARTER
AND FULL YEAR 2010 RESULTS
AND FULL YEAR 2010 RESULTS
Ann Arbor, Michigan February 25, 2011
Kaydon Corporation (NYSE:KDN) today announced its results for the fourth fiscal quarter and
full year ended December 31, 2010.
Consolidated Results
Sales in the fourth fiscal quarter of 2010 were $105.0 million, compared to sales of $108.9
million in the fourth quarter of 2009.
Operating income was $17.1 million in the fourth quarter of 2010, compared to $18.0 million in
the fourth quarter of 2009. The fourth quarter of 2010 included $1.4 million of net costs
associated with due diligence efforts for acquisitions and a previously announced manufacturing
consolidation program, partially offset by a small gain associated with the curtailment of certain
postretirement benefits, while the fourth quarter of 2009 included gains of $1.3 million associated
with the curtailment of postretirement benefits. Adjusting for these items, operating income was
$18.5 million in the fourth quarter of 2010, compared to $16.7 million in the fourth quarter of
2009.
Net income for the fourth quarter of 2010 was $11.3 million, compared to net income of $11.4
million in the fourth quarter of 2009. Diluted earnings per share equaled $.34 in the fourth
quarter of 2010 and 2009. Adjusting for the items noted above, net income was $12.2 million, or
$.37 per share on a diluted basis, in the fourth quarter of 2010 compared to $10.6 million, or $.31
per share on a diluted basis, in the fourth quarter of 2009.
EBITDA equaled $24.6 million, or 23.5 percent of sales, during the fourth quarter of 2010,
compared to $25.6 million, also 23.5 percent of sales, during the fourth quarter of 2009. EBITDA
comparisons are also affected by the items noted above. Adjusting for these items, EBITDA was
$25.7 million, or 24.5 percent of sales, in the fourth quarter of 2010, compared to $24.3 million,
or 22.3 percent of sales, in the fourth quarter of 2009.
1
The fourth quarter 2010 effective tax rate was 34.1 percent compared to 36.7 percent in the
2009 fourth quarter, due to the full availability of the Domestic Manufacturing Deduction and the
planned permanent reinvestment of earnings of certain international operations.
Full year 2010 sales totaled $464.0 million compared to $441.1 million for full year 2009.
Sales growth in our core industrial businesses more than offset lower sales to our wind energy and
military end markets. Full year 2010 diluted earnings per share totaled $1.67 per share compared
to $1.37 per share in full year 2009. Adjusting for the items noted above, full year 2010 diluted
earnings per share totaled $1.76 per share compared to $1.22 per share in full year 2009.
This press release includes certain non-GAAP measures, including EBITDA, free cash flow, and
as adjusted operating income, EBITDA, net income, and earnings per share diluted. Readers
should refer to the attached Reconciliation of Non-GAAP Measures exhibit for the reconciliations of
the applicable GAAP measures to the non-GAAP measures presented.
Management Commentary
James OLeary, Chairman and Chief Executive Officer commented, We are pleased with 2010 as we
delivered solid results for both the full year and the most recent quarter. We were well
positioned to benefit from a still strengthening industrial environment while effectively managing
the long anticipated, public policy-driven moderation in both our renewable energy and military
businesses. Through the fourth quarter, and continuing thus far into 2011, we see continued
evidence, both tangible and anecdotal, of further improvement in most of our industrial businesses,
notably in the heavy equipment, industrial machinery, medical and semiconductor markets. This
strength will help offset moderation in wind energy, as the renewable energy business awaits the
substantive energy policy required for sustained growth, and the expected decline of certain
military programs, which had been in a ramp up mode in the prior year.
Both sales and orders from our industrial end markets increased over 20 percent in the fourth
quarter of 2010. With increased order and quotation activity in traditionally later cycle sectors,
such as heavy equipment and industrial machinery, we should continue to see strengthening in
shipments as the year progresses.
Our performance in fiscal 2010 demonstrated the benefits of market leadership in well
diversified end markets. During 2010, we generated the highest annual operating cash flow in
Kaydons long history. Structural cost reductions made during the Great Recession, together with
strong positioning in attractive industrial end markets, have produced consistent, solid results
during both the worst recession in over a generation and a recovery that has thus far been below
standard by many measures. Our ability to maximize free cash flow during this period has allowed
us to return cash to our shareholders in the form of enhanced dividends and increased share
repurchases while reinvesting in our business, both organically and through acquisition as
illustrated by todays announced agreement to acquire HAHN-Gasfedern GmbH.
2
Segment Results and Review
Friction Control Products sales in the fourth quarter of 2010 were $61.5 million, compared to
$72.9 million in the 2009 fourth quarter. The decline, which we anticipated, was attributable to
lower wind energy and military sales. Wind energy sales were $12.5 million in the fourth quarter
of 2010 compared to $21.3 million in the fourth quarter of 2009. Fourth quarter 2010 sales to
non-wind markets totaled $49.1 million compared to $51.6 million in the fourth quarter of 2009, as
growth in sales to our industrial markets were offset by the anticipated wind down of a major
military program.
Fourth quarter 2010 Friction Control Products operating income totaled $11.8
million, compared to $12.7 million in the prior fourth quarter. Fourth quarter 2010 included $0.7
million in costs associated with a previously discussed manufacturing consolidation program. An
improved mix, weighted more heavily towards industrial end markets, offset the margin decline from
lower volume from wind energy and military sales.
Velocity Control Products sales in the fourth quarter of 2010 were $14.9 million, compared to
$11.8 million in the fourth quarter of 2009. Operating income for this segment totaled $2.8
million in the fourth quarter of 2010, compared to $1.3 million earned in the fourth quarter of
2009, due to improved sales.
Other Industrial Products sales equaled $28.5 million in the fourth quarter of 2010, compared
to $24.2 million in the prior year fourth quarter. Operating income equaled $3.5 million in the
fourth quarter of 2010, compared to operating income of $3.1 million in the fourth quarter of 2009,
due to improved sales.
Order Activity
Orders were $100.8 million in the fourth quarter of 2010, compared to $77.2 million in the
fourth quarter of 2009. Wind energy orders were $8.6 million in the fourth quarter of 2010,
compared to $0.9 million in the fourth quarter of 2009. Full year 2010 non-wind orders have
exceeded sales with a book-to-bill ratio of 1.02. Full year 2010 wind energy orders were $71.9
million, compared to $49.3 million in the full year of 2009. Backlog at December 31, 2010 was
$200.9 million, compared to $205.0 million at October 2, 2010, and $218.5 million at December 31,
2009.
Financial Position and Free Cash Flow
Free cash flow, a non-GAAP measure defined by the Company, was $23.4 million in the fourth
quarter of 2010, compared to $19.7 million in the fourth quarter of 2009. For the full year of
2010, net cash generated from operating activities was a record $93.9 million, compared to
$66.2 million in the full year of 2009, while full year 2010 free cash flow totaled a record
$78.6 million compared to $55.4 million in the full year of 2009.
3
On October 4, 2010, the Company paid common stock dividends of $.19 per share or an aggregate
of $6.4 million. For the full year of 2010, the Company paid common stock dividends of $24.5
million. During the fourth quarter of 2010 the Company repurchased 500,500 shares of common stock
for $18.3 million. For the full year of 2010, the Company repurchased 741,754 shares for $27.0
million. In aggregate, the Company returned $51.5 million to its shareholders in 2010 while
investing almost $20 million in capital expenditures and growth programs to further enhance the
long term value of our businesses.
As of December 31, 2010, the Company had unrestricted cash totaling $286.6 million. During
the third quarter of 2010 the Company entered into a $250 million senior revolving credit facility
with a syndicate of banks which provides for borrowings by the Company for working capital and
other general corporate purposes, including acquisitions. The Company had no borrowing against
this facility and no other debt outstanding as of December 31, 2010.
About Kaydon
Kaydon Corporation is a leading designer and manufacturer of custom engineered,
performance-critical products, supplying a broad and diverse group of alternative energy,
industrial, aerospace, medical and electronic equipment, and aftermarket customers.
Conference call information: At 11:00 a.m. Eastern time today, Kaydon will host a
fourth quarter and full year 2010 earnings conference call. The conference call can be accessed
telephonically in a listen-only mode by dialing 1-888-378-4361 and providing the following passcode
number: 800500. Participants are asked to dial in 10 minutes prior to the scheduled start time of
the call.
Alternatively, interested parties are invited to listen to the conference call on the
internet at:
http://w.on24.com/r.htm?e=279179&s=1&k=E7A03E2D34AE4A6773785D0F34B37021
or by logging on to the Kaydon Corporation website at: http://www.kaydon.com and accessing the
conference call at the Fourth Quarter and Full Year 2010 Conference Call icon.
To accommodate those that are unable to listen at the scheduled start time, a replay of the
conference call will be available telephonically beginning at 2:00 p.m. Eastern time today through
Friday, March 4, 2011 at 2:00 p.m. Eastern time. The replay is accessible by dialing 1-888-203-1112
and providing the following passcode number: 4594491.
Additionally, interested parties can access an archive of the conference call on the Kaydon
Corporation website at http://www.kaydon.com.
# # #
4
This press release contains forward-looking statements within the meaning of the Securities
Exchange Act of 1934 regarding the Companys plans, expectations, estimates and beliefs.
Forward-looking statements are typically identified by words such as believes, anticipates,
estimates, expects, intends, will, may, should, could, potential, projects,
approximately, and other similar expressions, including statements regarding general economic
conditions, competitive dynamics and the adequacy of capital resources. These forward-looking
statements may include, among other things, projections of the Companys financial performance,
anticipated growth, characterization of and the Companys ability to control contingent
liabilities, and anticipated trends in the Companys businesses. These statements are only
predictions, based on the Companys current expectations about future events. Although the Company
believes the expectations reflected in the forward-looking statements are reasonable, it cannot
guarantee future results, performance or achievements or that predictions or current expectations
will be accurate. These forward-looking statements involve risks and uncertainties that could
cause the Companys actual results, performance or achievements to differ materially from those
expressed or implied by the forward-looking statements.
In addition, the Company or persons acting on its behalf may from time to time
publish or communicate other items that could also be construed to be forward-looking statements.
Statements of this sort are or will be based on the Companys estimates, assumptions, and
projections and are subject to risks and uncertainties that could cause actual results to differ
materially from those included in the forward-looking statements. Kaydon does not undertake any
responsibility to update its forward-looking statements or risk factors to reflect future events or
circumstances except to the extent required by applicable law.
Certain non-GAAP measures are presented in this press release. These measures should be viewed
as supplemental data, rather than as substitutes or alternatives to the most comparable GAAP
measures.
Contact:
|
James OLeary Chairman and Chief Executive Officer (734) 680-2025 Peter C. DeChants Senior Vice President and Chief Financial Officer (734) 680-2009 |
READ IT ON THE WEB http://www.kaydon.com |
5
KAYDON CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
Fourth Quarter Ended | Full Year Ended | |||||||||||||||
December 31, | December 31, | December 31, | December 31, | |||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Net sales |
$ | 104,963,000 | $ | 108,855,000 | $ | 463,988,000 | $ | 441,145,000 | ||||||||
Cost of sales |
66,430,000 | 71,167,000 | 299,363,000 | 297,280,000 | ||||||||||||
Gross profit |
38,533,000 | 37,688,000 | 164,625,000 | 143,865,000 | ||||||||||||
Selling, general and administrative expenses |
21,428,000 | 19,727,000 | 83,006,000 | 72,527,000 | ||||||||||||
Operating income |
17,105,000 | 17,961,000 | 81,619,000 | 71,338,000 | ||||||||||||
Interest expense |
(98,000 | ) | (62,000 | ) | (231,000 | ) | (247,000 | ) | ||||||||
Interest income |
171,000 | 108,000 | 486,000 | 537,000 | ||||||||||||
Income before income taxes |
17,178,000 | 18,007,000 | 81,874,000 | 71,628,000 | ||||||||||||
Provision for income taxes |
5,864,000 | 6,601,000 | 25,829,000 | 25,672,000 | ||||||||||||
Net income |
$ | 11,314,000 | $ | 11,406,000 | $ | 56,045,000 | $ | 45,956,000 | ||||||||
Earnings per share: |
||||||||||||||||
Basic |
$ | 0.34 | $ | 0.34 | $ | 1.67 | $ | 1.37 | ||||||||
Diluted |
$ | 0.34 | $ | 0.34 | $ | 1.67 | $ | 1.37 | ||||||||
Dividends declared per share |
$ | 0.19 | $ | 0.18 | $ | 0.74 | $ | 0.70 | ||||||||
KAYDON CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
CONSOLIDATED CONDENSED BALANCE SHEETS
December 31, | December 31, | |||||||
2010 | 2009 | |||||||
Assets: |
||||||||
Cash and cash equivalents |
$ | 286,648,000 | $ | 262,403,000 | ||||
Accounts receivable, net |
76,010,000 | 77,977,000 | ||||||
Inventories, net |
88,253,000 | 88,796,000 | ||||||
Other current assets |
16,384,000 | 16,601,000 | ||||||
Total current assets |
467,295,000 | 445,777,000 | ||||||
Property, plant and equipment, net |
169,597,000 | 175,716,000 | ||||||
Goodwill, net |
143,428,000 | 143,891,000 | ||||||
Other intangible assets, net |
18,047,000 | 21,552,000 | ||||||
Other assets |
2,965,000 | 1,008,000 | ||||||
Total assets |
$ | 801,332,000 | $ | 787,944,000 | ||||
Liabilities and Shareholders Equity: |
||||||||
Accounts payable |
$ | 16,944,000 | $ | 21,353,000 | ||||
Accrued expenses |
36,085,000 | 26,731,000 | ||||||
Total current liabilities |
53,029,000 | 48,084,000 | ||||||
Long-term liabilities |
39,165,000 | 39,895,000 | ||||||
Shareholders equity |
709,138,000 | 699,965,000 | ||||||
Total liabilities and shareholders equity |
$ | 801,332,000 | $ | 787,944,000 | ||||
KAYDON CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
Fourth Quarter Ended | Full Year Ended | |||||||||||||||
December 31, | December 31, | December 31, | December 31, | |||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Cash flows from operating activities: |
||||||||||||||||
Net income |
$ | 11,314,000 | $ | 11,406,000 | $ | 56,045,000 | $ | 45,956,000 | ||||||||
Adjustments
to reconcile net income to net cash from operating activities: |
||||||||||||||||
Depreciation |
5,280,000 | 5,201,000 | 20,925,000 | 19,836,000 | ||||||||||||
Amortization of intangible assets |
872,000 | 1,072,000 | 3,585,000 | 4,283,000 | ||||||||||||
Amortization of stock awards |
1,037,000 | 1,017,000 | 4,035,000 | 4,121,000 | ||||||||||||
Stock option compensation expense |
323,000 | 319,000 | 1,314,000 | 1,300,000 | ||||||||||||
Excess tax benefits from stock-based compensation |
| (113,000 | ) | (186,000 | ) | (52,000 | ) | |||||||||
Deferred financing fees |
97,000 | 62,000 | 231,000 | 248,000 | ||||||||||||
Non-cash postretirement benefits curtailment gain |
(385,000 | ) | (1,308,000 | ) | (3,451,000 | ) | (7,613,000 | ) | ||||||||
Net change
in receivables, inventories and trade payables |
7,116,000 | 4,167,000 | (2,417,000 | ) | (2,577,000 | ) | ||||||||||
Contributions to qualified pension plans |
(657,000 | ) | | (2,271,000 | ) | (14,846,000 | ) | |||||||||
Net change in other assets and liabilities |
2,478,000 | 231,000 | 16,054,000 | 15,525,000 | ||||||||||||
Net cash from operating activities |
27,475,000 | 22,054,000 | 93,864,000 | 66,181,000 | ||||||||||||
Cash flows from investing activities: |
||||||||||||||||
Capital expenditures |
(4,117,000 | ) | (2,401,000 | ) | (15,397,000 | ) | (11,986,000 | ) | ||||||||
Dispositions of property, plant and equipment |
34,000 | 43,000 | 141,000 | 1,229,000 | ||||||||||||
Proceeds from sales of investments |
| 1,082,000 | | 5,145,000 | ||||||||||||
Net cash used in investing activities |
(4,083,000 | ) | (1,276,000 | ) | (15,256,000 | ) | (5,612,000 | ) | ||||||||
Cash flows from financing activities: |
||||||||||||||||
Cash dividends paid |
(6,356,000 | ) | (6,043,000 | ) | (24,477,000 | ) | (23,207,000 | ) | ||||||||
Purchase of treasury stock |
(18,254,000 | ) | | (27,043,000 | ) | (8,871,000 | ) | |||||||||
Credit facility issuance costs |
(13,000 | ) | | (1,948,000 | ) | | ||||||||||
Excess tax benefits from stock-based compensation |
| 113,000 | 186,000 | 52,000 | ||||||||||||
Proceeds from exercise of stock options |
49,000 | | 153,000 | 24,000 | ||||||||||||
Net cash used in financing activities |
(24,574,000 | ) | (5,930,000 | ) | (53,129,000 | ) | (32,002,000 | ) | ||||||||
Effect of
exchange rate changes on cash and cash equivalents |
(972,000 | ) | (286,000 | ) | (1,234,000 | ) | 838,000 | |||||||||
Net increase (decrease) in cash and cash equivalents |
(2,154,000 | ) | 14,562,000 | 24,245,000 | 29,405,000 | |||||||||||
Cash and cash equivalents Beginning of period |
288,802,000 | 247,841,000 | 262,403,000 | 232,998,000 | ||||||||||||
Cash and cash equivalents End of period |
$ | 286,648,000 | $ | 262,403,000 | $ | 286,648,000 | $ | 262,403,000 | ||||||||
KAYDON CORPORATION
EARNINGS PER SHARE
EARNINGS PER SHARE
Fourth Quarter Ended | Full Year Ended | |||||||||||||||
December 31, | December 31, | December 31, | December 31, | |||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Earnings per share Basic |
||||||||||||||||
Net income |
$ | 11,314,000 | $ | 11,406,000 | $ | 56,045,000 | $ | 45,956,000 | ||||||||
Less: Net earnings allocated to participating
securities Basic |
(119,000 | ) | (124,000 | ) | (602,000 | ) | (527,000 | ) | ||||||||
Income available to common shareholders Basic |
$ | 11,195,000 | $ | 11,282,000 | $ | 55,443,000 | $ | 45,429,000 | ||||||||
Weighted average common shares outstanding Basic |
32,935,000 | 33,226,000 | 33,112,000 | 33,250,000 | ||||||||||||
Earnings per share Basic |
$ | 0.34 | $ | 0.34 | $ | 1.67 | $ | 1.37 | ||||||||
Earnings per share Diluted |
||||||||||||||||
Net income |
$ | 11,314,000 | $ | 11,406,000 | $ | 56,045,000 | $ | 45,956,000 | ||||||||
Less: Net earnings allocated to participating
securities Diluted |
(119,000 | ) | (124,000 | ) | (602,000 | ) | (527,000 | ) | ||||||||
Income available to common shareholders Diluted |
$ | 11,195,000 | $ | 11,282,000 | $ | 55,443,000 | $ | 45,429,000 | ||||||||
Weighted average common shares outstanding Diluted |
||||||||||||||||
Weighted average common shares outstanding Basic |
32,935,000 | 33,226,000 | 33,112,000 | 33,250,000 | ||||||||||||
Potential dilutive shares resulting from stock options |
22,000 | 23,000 | 25,000 | 17,000 | ||||||||||||
Weighted average common shares outstanding Diluted |
32,957,000 | 33,249,000 | 33,137,000 | 33,267,000 | ||||||||||||
Earnings per share Diluted |
$ | 0.34 | $ | 0.34 | $ | 1.67 | $ | 1.37 | ||||||||
KAYDON CORPORATION
Reportable Segment Information
(Amounts in thousands)
Reportable Segment Information
(Amounts in thousands)
Fourth Quarter Ended | Full Year Ended | |||||||||||||||
December 31, | December 31, | December 31, | December 31, | |||||||||||||
Net sales | 2010 | 2009 | 2010 | 2009 | ||||||||||||
Friction Control Products |
$ | 61,533 | $ | 72,929 | $ | 299,009 | $ | 296,420 | ||||||||
Velocity Control Products |
14,929 | 11,756 | 60,208 | 46,358 | ||||||||||||
Other Industrial Products |
28,501 | 24,170 | 104,771 | 98,367 | ||||||||||||
Total consolidated net sales |
$ | 104,963 | $ | 108,855 | $ | 463,988 | $ | 441,145 | ||||||||
Fourth Quarter Ended | Full Year Ended | |||||||||||||||
December 31, | December 31, | December 31, | December 31, | |||||||||||||
Operating income | 2010 | 2009 | 2010 | 2009 | ||||||||||||
Friction Control Products |
$ | 11,761 | $ | 12,681 | $ | 61,317 | $ | 50,314 | ||||||||
Velocity Control Products |
2,843 | 1,297 | 14,265 | 6,488 | ||||||||||||
Other Industrial Products |
3,515 | 3,069 | 9,031 | 8,536 | ||||||||||||
Total segment operating income |
18,119 | 17,047 | 84,613 | 65,338 | ||||||||||||
Items not allocated to segment operating income |
(1,014 | ) | 914 | (2,994 | ) | 6,000 | ||||||||||
Interest expense |
(98 | ) | (62 | ) | (231 | ) | (247 | ) | ||||||||
Interest income |
171 | 108 | 486 | 537 | ||||||||||||
Income before income taxes |
$ | 17,178 | $ | 18,007 | $ | 81,874 | $ | 71,628 | ||||||||
The Company has two reporting segments: Friction Control Products and Velocity Control Products.
The Companys remaining operating segments, which do not meet the quantitative thresholds for separate disclosure and do
not meet the criteria for aggregation with other operating segments to create an additional reporting segment, are combined
and disclosed as Other Industrial Products. The Companys Sealing Products operating segment no longer meets the
quantitative threshold for separate disclosure as a reporting segment and its results are shown in the Other Industrial
Products caption. Prior period results have been reclassified to conform to this presentation.
Kaydon Corporation
Reconciliation of Non-GAAP Measures
(Amounts in thousands)
Reconciliation of Non-GAAP Measures
(Amounts in thousands)
Fourth Quarter Ended | Full Year Ended | |||||||||||||||
December 31, | December 31, | December 31, | December 31, | |||||||||||||
Free cash flow, as defined (non-GAAP) | 2010 | 2009 | 2010 | 2009 | ||||||||||||
Net cash from operating activities (GAAP) |
$ | 27,475 | $ | 22,054 | $ | 93,864 | $ | 66,181 | ||||||||
Capital expenditures, net of dispositions |
(4,083 | ) | (2,358 | ) | (15,256 | ) | (10,757 | ) | ||||||||
Free cash flow, as defined (non-GAAP) |
$ | 23,392 | $ | 19,696 | $ | 78,608 | $ | 55,424 | ||||||||
Kaydons management believes free cash flow, as defined above and a non-GAAP measure, is an
important indicator of the Companys ability to generate excess cash above levels
required for capital investment to support future growth. However, it should be viewed as
supplemental data, rather than as a substitute or alternative to the
comparable GAAP measure.
Fourth Quarter Ended | Full Year Ended | |||||||||||||||
December 31, | December 31, | December 31, | December 31, | |||||||||||||
EBITDA, as defined (non-GAAP) | 2010 | 2009 | 2010 | 2009 | ||||||||||||
Net income (GAAP) |
$ | 11,314 | $ | 11,406 | $ | 56,045 | $ | 45,956 | ||||||||
Net interest (income)/expense |
(73 | ) | (46 | ) | (255 | ) | (290 | ) | ||||||||
Provision for income taxes |
5,864 | 6,601 | 25,829 | 25,672 | ||||||||||||
Depreciation and amortization of intangible assets |
6,152 | 6,273 | 24,510 | 24,119 | ||||||||||||
Stock-based compensation expense (1) |
1,360 | 1,336 | 5,349 | 5,421 | ||||||||||||
EBITDA, as defined (non-GAAP) |
$ | 24,617 | $ | 25,570 | $ | 111,478 | $ | 100,878 | ||||||||
(1) | Includes non-cash stock amortization expense and non-cash stock option expense. |
Kaydons management believes EBITDA, as defined above and a non-GAAP measure, is a determinant of
the Companys capacity to access additional senior capital to enhance
future profit growth and cash flow growth. In addition, EBITDA is widely used by financial
analysts and investors, and is utilized in measuring compliance with financial
covenants in the Companys credit agreement. Also, EBITDA is the metric used to determine
payments under the Companys annual incentive compensation program
for senior managers. However, EBITDA, as defined, should be viewed as supplemental data, rather
than as a substitute or alternative to the comparable GAAP measure.
Fourth Quarter Ended | Full Year Ended | |||||||||||||||
December 31, | December 31, | December 31, | December 31, | |||||||||||||
Operating income, as adjusted | 2010 | 2009 | 2010 | 2009 | ||||||||||||
Operating income (GAAP) |
$ | 17,105 | $ | 17,961 | $ | 81,619 | $ | 71,338 | ||||||||
Manufacturing consolidation costs |
740 | | 3,665 | | ||||||||||||
Due diligence costs |
1,027 | | 3,989 | 197 | ||||||||||||
Benefit plan curtailment (gains) |
(385 | ) | (1,308 | ) | (3,451 | ) | (7,613 | ) | ||||||||
Operating income, as adjusted (non-GAAP) |
$ | 18,487 | $ | 16,653 | $ | 85,822 | $ | 63,922 | ||||||||
EBITDA, as adjusted | ||||||||||||||||
EBITDA, as defined above (non-GAAP) |
$ | 24,617 | $ | 25,570 | $ | 111,478 | $ | 100,878 | ||||||||
Manufacturing consolidation costs, net of depreciation |
435 | | 2,531 | | ||||||||||||
Due diligence costs |
1,027 | | 3,989 | 197 | ||||||||||||
Benefit plan curtailment (gains) |
(385 | ) | (1,308 | ) | (3,451 | ) | (7,613 | ) | ||||||||
EBITDA, as adjusted (non-GAAP) |
$ | 25,694 | $ | 24,262 | $ | 114,547 | $ | 93,462 | ||||||||
Net income, as adjusted | ||||||||||||||||
Net income (GAAP) |
$ | 11,314 | $ | 11,406 | $ | 56,045 | $ | 45,956 | ||||||||
Manufacturing consolidation costs (2) |
487 | | 2,514 | | ||||||||||||
Due diligence costs (2) |
676 | | 2,690 | 128 | ||||||||||||
Benefit plan curtailment (gains) (2) |
(253 | ) | (829 | ) | (2,330 | ) | (4,903 | ) | ||||||||
Net income, as adjusted (non-GAAP) (2) |
$ | 12,224 | $ | 10,577 | $ | 58,919 | $ | 41,181 | ||||||||
(2) | Taxed at effective tax rate for each quarter |
Earnings per share - diluted, as adjusted | ||||||||||||||||
Earnings per share Diluted (GAAP) |
$ | 0.34 | $ | 0.34 | $ | 1.67 | $ | 1.37 | ||||||||
Manufacturing consolidation costs |
0.01 | | 0.08 | | ||||||||||||
Due diligence costs |
0.02 | | 0.08 | | ||||||||||||
Benefit plan curtailment (gains) |
(0.01 | ) | (0.03 | ) | (0.07 | ) | (0.15 | ) | ||||||||
Earnings per share Diluted, as adjusted (non-GAAP) |
$ | 0.37 | $ | 0.31 | $ | 1.76 | $ | 1.22 | ||||||||
Kaydons management believes that certain non-GAAP measures of operating income, as adjusted,
EBITDA, as adjusted, net income, as adjusted, and earnings per
share diluted, as adjusted, provide investors with additional information to assess the Companys
financial performance by creating better comparative data year over year.
However, these measures should be viewed as supplemental data, rather than substitutes or
alternatives to the comparable GAAP measures.