Attached files
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| 8-K - FORM 8-K - NORCRAFT COMPANIES LP | d352081d8k.htm |
Exhibit 99.1
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NEWS RELEASE | |||
| FOR IMMEDIATE RELEASE
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| Contact: |
Leigh E. Ginter Chief Financial Officer leigh.ginter@norcraftcompanies.com (651) 234-3315 |
NORCRAFT COMPANIES, L.P.
REPORTS FIRST QUARTER 2012 RESULTS
May 8, 2012 – Eagan, Minnesota — Norcraft Companies, L.P. (Norcraft) today reports financial results for the first quarter ended March 31, 2012.
FINANCIAL RESULTS
First Quarter of Fiscal 2012 Compared with First Quarter of Fiscal 2011
Net sales increased $3.7 million, or 5.7%, from $64.2 million for the first quarter of 2011 to $67.9 million for the same quarter of 2012. Income from operations increased $0.5 million, or 11.7%, from $4.2 million for the first quarter of 2011 to $4.7 million for the same quarter of 2012. Net loss increased $1.3 million from $1.2 million for the first quarter of 2011 to $2.5 million for the same quarter of 2012.
Adjusted EBITDA (a non-GAAP measure and defined in the attached table) was $8.0 million for the first quarter of 2012 compared to $7.6 million for the same quarter of 2011.
“We are pleased with our results in the first quarter as we grew sales and profit more than expected. However, we anticipate the balance of 2012 will be very challenging in the highly competitive cabinet industry where consumers are continuing to be cautious about big- ticket purchases. As such, we will continue introducing new products and programs to compete in this difficult market,” commented President and CEO, Mark Buller.
CONFERENCE CALL
Norcraft has scheduled a conference call on Thursday, May 10, 2012 at 10:00 a.m. Eastern Time. To participate, dial 800-688-0796 and use the pass code 59023399. A telephonic replay will be available by calling 888-286-8010 and using pass code 85346851.
GENERAL
Norcraft Companies is a leader in manufacturing, assembling and finishing kitchen and bathroom cabinetry in the U.S. and parts of Canada. We provide our customers with a single source for a broad range of high-quality cabinetry, including stock, semi-custom and custom cabinets manufactured in both framed and frameless, or full access, construction. We market our products through six main brands: Mid Continent Cabinetry, Norcraft Cabinetry, UltraCraft, StarMark Cabinetry, Fieldstone Cabinetry and Brookwood.
-Selected Financial Data Tables Follow-
Norcraft Companies, L.P.
Consolidated Balance Sheet
(dollar amounts in thousands)
| March 31, 2012 (unaudited) |
December 31, 2011 |
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| ASSETS |
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| Current assets: |
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| Cash and cash equivalents |
$ | 28,730 | $ | 24,185 | ||||
| Trade accounts receivable, net |
22,867 | 20,092 | ||||||
| Inventories |
19,096 | 17,503 | ||||||
| Prepaid and other current assets |
1,567 | 1,835 | ||||||
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| Total current assets |
72,260 | 63,615 | ||||||
| Property, plant and equipment, net |
26,885 | 27,434 | ||||||
| Other assets: |
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| Goodwill |
88,485 | 88,479 | ||||||
| Intangible assets, net |
75,835 | 77,732 | ||||||
| Display cabinets, net |
5,959 | 5,842 | ||||||
| Other |
490 | 568 | ||||||
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| Total other assets |
170,769 | 172,621 | ||||||
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| Total assets |
$ | 269,914 | $ | 263,670 | ||||
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| LIABILITIES AND MEMBER’S EQUITY |
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| Current liabilities: |
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| Accounts payable |
$ | 9,357 | $ | 6,566 | ||||
| Accrued expenses |
19,495 | 13,775 | ||||||
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| Total current liabilities |
28,852 | 20,341 | ||||||
| Long-term debt |
240,000 | 240,000 | ||||||
| Unamortized premium on bonds payable |
156 | 166 | ||||||
| Other liabilities |
108 | 108 | ||||||
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| Total Liabilities |
269,116 | 260,615 | ||||||
| Commitments and contingencies |
— | — | ||||||
| Member’s equity (deficit) |
(834 | ) | 1,646 | |||||
| Accumulated other comprehensive income |
1,632 | 1,409 | ||||||
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| Member’s equity |
798 | 3,055 | ||||||
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| Total liabilities and member’s equity |
$ | 269,914 | $ | 263,670 | ||||
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Norcraft Companies, L.P.
Consolidated Statements of Operation
(dollar amounts in thousands)
(unaudited)
| Three Months
Ended March 31, |
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| 2012 | 2011 | |||||||
| Net sales |
$ | 67,862 | $ | 64,188 | ||||
| Cost of sales |
49,942 | 47,585 | ||||||
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| Gross profit |
17,920 | 16,603 | ||||||
| Selling, general and administrative expenses |
13,179 | 12,360 | ||||||
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| Income from operations |
4,741 | 4,243 | ||||||
| Other expense: |
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| Interest expense, net |
6,450 | 5,027 | ||||||
| Amortization of deferred financing costs |
780 | 370 | ||||||
| Other, net |
27 | 24 | ||||||
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| Total other expense |
7,257 | 5,421 | ||||||
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| Net loss |
(2,516 | ) | (1,178 | ) | ||||
| Other comprehensive income: |
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| Foreign currency translation adjustment |
223 | 262 | ||||||
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| Total other comprehensive income |
223 | 262 | ||||||
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| Comprehensive loss |
$ | (2,293 | ) | $ | (916 | ) | ||
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Norcraft Companies, L.P.
Consolidated Statement of Cash Flows
(dollar amounts in thousands)
(unaudited)
| Three Months Ended March 31, |
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| 2012 | 2011 | |||||||
| Cash flows from operating activities: |
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| Net loss |
$ | (2,516 | ) | $ | (1,178 | ) | ||
| Adjustments to reconcile net loss to net cash provided by operating activities: |
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| Depreciation and amortization of property, plant and equipment |
1,157 | 1,286 | ||||||
| Amortization: |
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| Customer relationships |
1,117 | 1,117 | ||||||
| Deferred financing costs |
780 | 370 | ||||||
| Display cabinets |
1,019 | 948 | ||||||
| Discount amortization/accreted interest |
(10 | ) | 122 | |||||
| Provision for uncollectible accounts receivable |
(14 | ) | 11 | |||||
| Provision for obsolete and excess inventories |
69 | (96 | ) | |||||
| Provision for warranty claims |
757 | 666 | ||||||
| Stock compensation expense |
46 | 45 | ||||||
| Gain on disposal of assets |
(1 | ) | — | |||||
| Change in operating assets and liabilities: |
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| Trade accounts receivable |
(2,678 | ) | (3,980 | ) | ||||
| Inventories |
(1,625 | ) | (2,073 | ) | ||||
| Prepaid expenses |
269 | 57 | ||||||
| Other assets |
78 | 77 | ||||||
| Accounts payable and accrued expenses |
7,719 | 3,211 | ||||||
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| Net cash provided by operating activities |
6,167 | 583 | ||||||
| Cash flows from investing activities: |
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| Proceeds from sale of property and equipment |
2 | 4 | ||||||
| Purchase of property, plant and equipment |
(484 | ) | (755 | ) | ||||
| Additions to display cabinets |
(1,136 | ) | (1,289 | ) | ||||
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| Net cash used in investing activities |
(1,618 | ) | (2,040 | ) | ||||
| Cash flows from financing activities: |
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| Distributions to member |
(10 | ) | (2,618 | ) | ||||
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| Net cash used in financing activities |
(10 | ) | (2,618 | ) | ||||
| Effect of exchange rates on cash and cash equivalents |
6 | (38 | ) | |||||
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| Net increase in cash and cash equivalents |
4,545 | (4,113 | ) | |||||
| Cash and cash equivalents, beginning of the period |
24,185 | 28,657 | ||||||
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| Cash and cash equivalents, end of period |
$ | 28,730 | $ | 24,544 | ||||
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Norcraft Companies, L.P.
Reconciliation of Net Income to Adjusted EBITDA
(dollar amounts in thousands)
EBITDA is net loss before interest expense, income tax expense, depreciation and amortization. We believe EBITDA is useful to investors in evaluating our operating performance compared to that of other companies in our industry, as their calculation eliminates the effects of financing, income taxes and the accounting effects of capital spending, as these items may vary for different companies for reasons unrelated to overall operating performance. We also believe this financial metric provides information relevant to investors regarding our ability to service and/or incur debt. EBITDA is not a presentation made in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). Accordingly, when analyzing our operating performance, investors should not consider EBITDA in isolation or as a substitute for net loss, cash flows from operating activities or other operation statement or cash flow statement data prepared in accordance with U.S. GAAP. Our calculation of EBITDA is not necessarily comparable to those of other similarly titled measures reported by other companies. The calculation of EBITDA is shown below:
| Three Months
Ended March 31, |
Twelve Months Ended March 31, |
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| 2012 | 2011 | 2012 | ||||||||||
| Net loss |
$ | (2,516 | ) | $ | (1,178 | ) | $ | (5,069 | ) | |||
| Interest expense, net |
6,450 | 5,027 | 24,972 | |||||||||
| Depreciation |
1,157 | 1,286 | 4,806 | |||||||||
| Amortization of deferred financing costs |
780 | 370 | 2,864 | |||||||||
| Amortization of customer relationships |
1,117 | 1,117 | 4,467 | |||||||||
| Display cabinet amortization |
1,019 | 948 | 4,076 | |||||||||
| State taxes |
24 | 24 | 87 | |||||||||
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| Non-GAAP EBITDA |
$ | 8,031 | $ | 7,594 | $ | 36,203 | ||||||
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FORWARD LOOKING STATEMENTS AND INFORMATION
Statements in this press release regarding activities, events or developments that management expects, believes or anticipates will or may occur in the future are forward looking statements. Forward looking statements may give management’s current expectations and projections relating to the financial condition, results of operations, plans, objectives, future performance and business of the company. You can identify these statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events.
These forward looking statements are based on management’s expectations and beliefs concerning future events affecting the company. They are subject to uncertainties and factors relating to the company’s operations and business environment, all of which are difficult to predict and many of which are beyond the company’s control. Although management believes that the expectations reflected in its forward looking statements are reasonable, management does not know whether its expectations will prove correct. They can be affected by inaccurate assumptions that management might make or by known or unknown risks and uncertainties. Many factors that could cause actual results to differ materially from these forward looking statements include, but are not limited to, the risks outlined under Part I, Item 1A, “Risk Factors,” in the Annual Report on Form 10-K filed by the company with the Securities and Exchange Commission.
Because of these factors, investors should not place undue reliance on any of these forward looking statements. Further, any forward looking statement speaks only as of the date on which it is made and except as required by law the company undertake no obligation to update any forward looking statement to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances.