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| 8-K - 8-K - Jason Industries, Inc. | form8-kxq414earningsrelease.htm |
Jason Industries Reports Fourth Quarter and Full Year 2014 Results
Provides Fiscal 2015 Revenue and Adjusted EBITDA Outlook
Announces Warrant Repurchase Program
MILWAUKEE, February 24, 2015 -- Jason Industries, Inc. (NASDAQ: JASN) (NASDAQ: JASNW) (the “Company” or “Jason” or “we” or “our”), parent company to a global family of manufacturing leaders in the seating, finishing, components and automotive acoustics markets, today reported the following financial results for its fourth quarter and full year ended December 31, 2014:
Highlights:
• | Fourth quarter 2014 net sales of $164.2 million and fourth quarter Adjusted EBITDA of $18.9 million |
◦ | Seating segment Adjusted EBITDA grew 4.6% compared with the prior year quarter |
◦ | Finishing segment net sales increased 2.8% and Adjusted EBITDA increased 77.0% compared with the prior year quarter |
◦ | Acoustics segment net sales increased 2.5% compared with the prior year quarter, with Adjusted EBITDA as a percentage of net sales of 8.4% |
◦ | Components segment net sales decreased 11.6% compared with prior year quarter, with improved Adjusted EBITDA as a percentage of net sales of 17.9% compared with 16.1% in the fourth quarter of 2013 |
• | Full year 2014 net sales of $702.5 million and full year Adjusted EBITDA of $77.8 million |
◦ | Seating segment net sales grew by 4.0% compared with the prior year, with Adjusted EBITDA growth of 1.6% |
◦ | Finishing segment net sales increased by 4.0% compared with the prior year, with Adjusted EBITDA growth of 49.1% over the prior year to $26.3 million. Finishing segment Adjusted EBITDA as a percentage of net sales improved to 14.0% compared with 9.8% in 2013 |
◦ | Acoustics segment net sales grew 7.0% compared with the prior year |
◦ | Components segment smart meter volumes declined, resulting in segment sales of $124.3 million in 2014, a decrease of 4.9% compared with the prior year |
David Westgate, Jason’s Chief Executive Officer, commented, “In a transformational year for Jason we built the public company foundation to support our strategies of generating strong organic revenue growth, margin expansion, and attractive acquisitions. We are committed to using these strategies to drive shareholder value. While we are not satisfied with our full year 2014 results, we remained focused on our revenue growth initiatives, achieving organic revenue growth of 4% in our Finishing and Seating segments, and 7% in our Acoustics segment during 2014. Margin expansion initiatives in our Finishing segment resulted in significant Adjusted EBITDA growth of 49.1% over 2013, with Adjusted EBITDA margins growing from 9.8% to 14.0% in 2014, and we continue to see future growth ahead.”
Westgate continued, “During the fourth quarter our Acoustics segment successfully completed the transition of production from its Norwalk, Ohio facility to the expanded Battle Creek, Michigan facility and a new state-of-the-art facility in Warrensburg, Missouri. We continue to expect the Acoustics segment to return to Adjusted EBITDA margins in line with historical averages in the first quarter of 2015. In our Components segment, Adjusted EBITDA margin returned to more normalized levels as a result of cost countermeasures executed in the fourth quarter and continued strength in rail volumes.”
Fourth Quarter Financial Results:
On June 30, 2014, the Company completed its previously announced acquisition of Jason Partners Holdings Inc. (the “Predecessor”) (the “Business Combination”), at which point Jason, the Successor, became a new entity for financial reporting purposes. Accordingly, the consolidated financial statements of the Successor on or after June 30, 2014 are not comparable to the consolidated financial statements of the Predecessor prior to that date. However, for the readers’ convenience the Company has combined net sales and Adjusted EBITDA in the period June 30, 2014 through December 31, 2014 with Jason’s predecessor net sales and Adjusted EBITDA in the period January 1, 2014 through June 29, 2014. Net sales and Adjusted EBITDA were not significantly affected by acquisition accounting.
Net sales were $164.2 million for the fourth quarter of 2014, a decrease of $0.9 million, or 0.6%, compared with $165.1 million for the same period of 2013, reflecting increased net sales in the Acoustics, Finishing, and Seating segments offset by decreased net sales in the Components segment. For the full year, revenue was $702.5 million compared with $680.8 million in 2013, an increase of 3.2%.
During the fourth quarter of 2014, the Company reported a net loss of $4.2 million compared with a net loss of $2.7 million in the fourth quarter of 2013. Net loss during the fourth quarter of 2014 was impacted by incremental after-tax non-cash depreciation and amortization expense of $0.6 million and $1.3 million, respectively, resulting from fair value write-ups of assets in accounting for the Business Combination. Share-based compensation expense of $1.3 million related to new equity awards granted during 2014 and $0.7 million of incremental transaction-related costs, net of tax, unfavorably impacted net loss compared with the fourth quarter of 2013.
Adjusted EBITDA was $18.9 million in the fourth quarter of 2014, an increase of 11.2% compared with $17.0 million in the prior year quarter. The increase was primarily due to Adjusted EBITDA margin growth in the Finishing and Seating segments, partially offset by operational inefficiencies in the Acoustics segment related to the accelerated closure of the Norwalk facility in the fourth quarter of 2014.
At the end of the fourth quarter, cash and cash equivalents were $62.3 million, with approximately $45.0 million of availability on revolving credit facilities. Net debt to EBITDA on a trailing twelve month basis was 4.72x as of the end of the fourth quarter. The Company’s effective tax rate for the successor period in 2014 was 36.1%.
Fourth Quarter Segment Results:
Seating
Net sales of $34.6 million in the fourth quarter were 0.8% higher compared with the same period in 2013, principally driven by increases in volumes in motorcycle OEM and construction seats, partially offset by lower volumes of after-market motorcycle parts and accessories. Adjusted EBITDA increased 4.6% to $4.8 million compared with $4.6 million during the fourth quarter in 2013. The increase was primarily due to lower material and overhead costs.
Finishing
Finishing segment net sales of $45.7 million in the fourth quarter increased $1.2 million or 2.8% compared with the fourth quarter in 2013 due to improved pricing and increased volumes, partially offset by an unfavorable foreign currency impact of $2.1 million. Adjusted EBITDA increased to $7.0 million in the fourth quarter, compared to $4.0 million in the fourth quarter of 2013. Adjusted EBITDA was impacted by foreign currency, structural improvements in material pricing and productivity, as well as increased volumes during the fourth quarter of 2014.
Acoustics
Acoustics segment net sales in the fourth quarter were $54.8 million, an increase of 2.5% compared with the fourth quarter in 2013. The increase was driven by increased volumes and new platforms launched during the fourth quarter of 2014 as compared with the fourth quarter of 2013. Foreign currency translation negatively impacted net sales by approximately 1.1% in the fourth quarter as compared with the prior year quarter.
Adjusted EBITDA was $4.6 million in the fourth quarter of 2014 compared with $5.2 million in the prior year quarter. The decrease was caused partially by operational inefficiencies associated with the accelerated closure of the Acoustics segment manufacturing facility in Norwalk, Ohio and capacity expansion at the manufacturing facility in Battle Creek, Michigan, which were successfully completed during the fourth quarter. These operational inefficiencies negatively impacted Adjusted EBITDA by approximately $0.5 million and $7.0 million for the fourth quarter and full year in 2014, respectively. Adjusted EBITDA as a percentage of net sales improved 50 basis points to 8.4% in the fourth quarter compared with the third quarter of 2014 as the transition of production from Norwalk was completed during the quarter. Acoustics segment operating results are expected to return to historical levels in the first quarter of 2015.
The Acoustics segment also began production during the fourth quarter at its new manufacturing facility in Warrensburg, Missouri. The new 155,000 square foot facility continues to optimize the Acoustics operational footprint to bring our facilities closer to customers.
Components
Net sales in the Components segment in the fourth quarter were $29.0 million, compared with $32.8 million in the prior year quarter. The decrease in net sales was the result of a decline in volumes of smart utility meter components, as a significant customer continued to in-source component production in line with the Company’s expectations, partially offset by strong railcar component sales.
Fourth quarter Adjusted EBITDA was $5.2 million, compared with $5.3 million in the prior year period, and was impacted by lower net sales, partially offset by lower operating costs. Adjusted EBITDA as a percentage of net sales improved to 17.9% in the fourth quarter, compared with 3.5% in the third quarter of 2014 and 16.1% in the fourth quarter of 2013, resulting from improved mix with stronger sales of railcar components and lower operating costs.
Fiscal 2015 Outlook:
For fiscal 2015, Jason expects revenue growth in the range of 1 to 3 percent, with net sales in the range of $710 to $725 million and Adjusted EBITDA in the range of $84 to $90 million. On a constant currency basis, Jason expects revenue growth in the range of 4 to 6 percent. Our guidance is based on consistent currency rates during 2015 and does not include the impact of any future acquisitions.
Westgate commented, “We expect continued strong growth and margin expansion in 2015 resulting from leveraging the Jason Business System. This focus will result in organic and inorganic revenue growth and improved performance from operational excellence initiatives across our businesses. Product innovation and attractive customer value propositions will drive organic growth, including new underbody products in our Acoustics segment, new construction and agriculture products designed for global markets in our Seating segment, further market penetration in the rail and industrial industries in our Components business, and innovative product solutions in our Finishing segment. Our acquisition pipeline continues to build as we evaluate attractive opportunities for inorganic growth. We enter 2015 with strong momentum toward execution of our core strategies and building shareholder value.”
Warrant Repurchase Program:
The Company also announced that its Board of Directors approved a new warrant repurchase program. The program authorizes management to repurchase in the aggregate up to $5 million of the outstanding warrants to purchase common stock of Jason Industries. Repurchases may be made by the Company from time to time in open-market or privately-negotiated transactions as permitted by securities laws and other legal requirements, and subject to market conditions and other factors. The repurchase program does not obligate the Company to make repurchases at any specific time or situation. The repurchase program does not have an expiration date and may be amended or terminated by the Board of Directors at any time without prior notice.
Conference Call:
The Company will hold a conference call to discuss its fourth quarter results today at 10:00 a.m. Eastern time. A live webcast of the call may be accessed over the Internet from the Company’s Investor Relations website at investors.jasoninc.com. Participants should follow the instructions
provided on the website to download and install the necessary audio applications. The conference call is also available by dialing 877-407-3982 (domestic) or 201-493-6780 (international). Participants should ask for the Jason Industries fourth quarter earnings conference call.
A replay of the live conference call will be available beginning approximately one hour after the call. The replay will be available on the Company’s website or by dialing 877-870-5176 (domestic) or 858-384-5517 (international) and entering the replay passcode 13600811. The telephonic replay will be available until 11:59 pm (Eastern Time), March 3, 2015. The online replay will be available on the website immediately following the call.
About Jason Industries
The Company is the parent company to a global family of manufacturing leaders within the seating, finishing, components and automotive acoustics markets, including Assembled Products (Buffalo Grove, Ill.), Janesville Acoustics (Southfield, Mich.), Metalex (Libertyville, Ill.), Milsco (Milwaukee, Wis.), Osborn (Richmond, Ind. and Burgwald, Germany) and Sealeze (Richmond, Va.). All Jason companies utilize the Jason Business System, a collaborative manufacturing strategy applicable to a diverse group of companies that includes business principles and processes to ensure best-in-class results and collective strength. Headquartered in Milwaukee, Wis., Jason employs more than 4,000 individuals in 15 countries.
Forward Looking Statements
This press release may include “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “anticipate,” “believe,” “expect,” “estimate,” “plan,” “outlook,” and “project” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. Such forward-looking statements include projected financial information. Such forward-looking statements with respect to revenues, earnings, performance, strategies, prospects and other aspects of the Company’s businesses are based on current expectations that are subject to risks and uncertainties. A number of factors could cause actual results or outcomes to differ materially from those indicated by such forward-looking statements.
The forward-looking statements contained in this press release are based on assumptions that we have made in light of our industry experience and our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. As you review and consider this press release, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties (some of which are beyond our control) and assumptions. Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect our actual results and cause them to differ materially from those anticipated in the forward-looking statements.
More information on potential factors that could affect the Company’s financial condition and operating results is included in the “Risk Factors” section and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section included in the Company’s Quarterly Report on Form 10-Q for the quarter ended September 26, 2014, and in the Company’s other filings with the Securities and Exchange Commission. Any forward-looking statement made by us in this press release speaks only as of the date on which we make it. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.
Non-GAAP and Other Company Information
Included in this press release are certain non-GAAP financial measures designed to complement the financial information presented in accordance with generally accepted accounting principles in the United States of America because management believes such measures are useful to investors. Because the Company’s calculations of these measures may differ from similar measures used by other companies, you should be careful when comparing the Company’s non-GAAP financial measures to those of other companies. A reconciliation of non-GAAP financial measures to GAAP financial measures is included with the financial information in this press release.
EBITDA and Adjusted EBITDA - The Company defines EBITDA as net income (loss) before interest expense, provision (benefit) for income taxes, depreciation and amortization and (gain)/loss on disposal of property, plant and equipment. The Company defines Adjusted EBITDA as EBITDA, excluding the impact of operational restructuring charges and non-cash or non-operational losses or gains, including long-lived asset impairment charges, integration and other operational restructuring charges, transactional legal fees, other professional fees and special employee bonuses, Newcomerstown fire losses and gains, multiemployer pension plan withdrawal expense (gain), purchase accounting adjustments, sponsor fees and expenses, and non-cash share based compensation expense.
Management believes that Adjusted EBITDA provides a clear picture of the Company’s operating results by eliminating expenses and income that are not reflective of the underlying business performance. The Company uses this metric to facilitate a comparison of operating performance on a consistent basis from period to period and to analyze the factors and trends affecting its segments. The Company’s internal plans, budgets and forecasts use Adjusted EBITDA as a key metric and the Company uses this measure to evaluate its operating performance and segment operating performance and to determine the level of incentive compensation paid to its employees.
Contact Information
Investor Relations
Richard Zubek
investors@jasoninc.com
414.277.2007
Jason Industries, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts) (Unaudited)
Successor | Predecessor | |||||||||||||||||||
Three Months Ended | June 30, 2014 Through | January 1, 2014 Through | Three Months Ended | Year Ended | ||||||||||||||||
December 31, 2014 | December 31, 2014 | June 29, 2014 | December 31, 2013 | December 31, 2013 | ||||||||||||||||
Net sales | $ | 164,167 | $ | 325,335 | $ | 377,151 | $ | 165,113 | $ | 680,845 | ||||||||||
Cost of goods sold | 132,913 | 270,676 | 294,175 | 131,779 | 527,371 | |||||||||||||||
Gross profit | 31,254 | 54,659 | 82,976 | 33,334 | 153,474 | |||||||||||||||
Selling and administrative expenses | 27,102 | 57,183 | 54,974 | 28,808 | 108,889 | |||||||||||||||
Newcomerstown fire gain - net | — | — | — | — | (12,483 | ) | ||||||||||||||
Loss on disposals of property, plant and equipment - net | 57 | 57 | 338 | 48 | 22 | |||||||||||||||
Restructuring | 1,028 | 1,131 | 2,554 | 2,166 | 2,950 | |||||||||||||||
Transaction-related expenses | 1,129 | 2,533 | 27,783 | 58 | 1,073 | |||||||||||||||
Multiemployer pension plan withdrawal gain | — | — | — | — | (696 | ) | ||||||||||||||
Operating (loss) income | 1,938 | (6,245 | ) | (2,673 | ) | 2,254 | 53,719 | |||||||||||||
Interest expense | (8,363 | ) | (16,172 | ) | (7,301 | ) | (3,879 | ) | (20,716 | ) | ||||||||||
Equity income | 211 | 381 | 831 | 820 | 2,345 | |||||||||||||||
Gain from sale of joint ventures | — | — | 3,508 | — | — | |||||||||||||||
Gain from involuntary conversion of property, plant and equipment | — | — | — | — | 6,351 | |||||||||||||||
Other income - net | 110 | 167 | 107 | 458 | 636 | |||||||||||||||
(Loss) income before income taxes | (6,104 | ) | (21,869 | ) | (5,528 | ) | (347 | ) | 42,335 | |||||||||||
Tax (benefit) provision | (1,913 | ) | (7,889 | ) | (573 | ) | 2,372 | 18,247 | ||||||||||||
Net (loss) income | $ | (4,191 | ) | $ | (13,980 | ) | $ | (4,955 | ) | $ | (2,719 | ) | $ | 24,088 | ||||||
Less net loss attributable to noncontrolling interests | (708 | ) | (2,362 | ) | — | — | — | |||||||||||||
Net (loss) income attributable to Jason Industries | $ | (3,483 | ) | $ | (11,618 | ) | $ | (4,955 | ) | $ | (2,719 | ) | $ | 24,088 | ||||||
Accretion of preferred stock dividends and redemption premium | 900 | 1,810 | — | 254 | 2,405 | |||||||||||||||
Net (loss) income available to common shareholders of Jason Industries | $ | (4,383 | ) | $ | (13,428 | ) | $ | (4,955 | ) | $ | (2,973 | ) | $ | 21,683 | ||||||
Net (loss) income per share available to common shareholders of Jason Industries: | ||||||||||||||||||||
Basic and diluted | $ | (0.20 | ) | $ | (0.61 | ) | $ | (4,955 | ) | $ | (2,973 | ) | $ | 21,683 | ||||||
Weighted average number of common shares outstanding: | ||||||||||||||||||||
Basic and diluted | 21,991 | 21,991 | 1 | 1 | 1 | |||||||||||||||
Cash dividends paid per common share | $ | — | $ | — | $ | — | $ | — | $ | 43,055 | ||||||||||
Jason Industries, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except share and per share amounts) (Unaudited)
Successor | Predecessor | |||||||
December 31, 2014 | December 31, 2013 | |||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 62,279 | $ | 16,318 | ||||
Accounts receivable - net | 80,080 | 77,003 | ||||||
Inventories - net | 80,546 | 72,259 | ||||||
Deferred income taxes | 11,105 | 6,755 | ||||||
Investments in partially-owned affiliates held for sale | — | 8,211 | ||||||
Other current assets | 23,087 | 19,746 | ||||||
Total current assets | 257,097 | 200,292 | ||||||
Property, plant and equipment - net | 176,478 | 126,286 | ||||||
Goodwill | 156,106 | 34,198 | ||||||
Other intangible assets - net | 198,683 | 49,131 | ||||||
Other assets - net | 21,040 | 13,110 | ||||||
Total assets | $ | 809,404 | $ | 423,017 | ||||
Liabilities and Equity | ||||||||
Current liabilities | ||||||||
Current portion of long-term debt | $ | 5,375 | $ | 6,904 | ||||
Accounts payable | 57,704 | 58,042 | ||||||
Accrued compensation and employee benefits | 14,035 | 20,831 | ||||||
Accrued interest | 199 | 2,998 | ||||||
Other current liabilities | 21,759 | 23,548 | ||||||
Total current liabilities | 99,072 | 112,323 | ||||||
Long-term debt | 415,306 | 235,831 | ||||||
Deferred income taxes | 91,205 | 27,774 | ||||||
Other long-term liabilities | 21,146 | 16,617 | ||||||
Total liabilities | 626,729 | 392,545 | ||||||
Commitments and contingencies | ||||||||
Equity | ||||||||
Preferred stock, $0.0001 par value (5,000,000 shares authorized, 45,000 shares issued and outstanding at December 31, 2014) | $ | 45,000 | $ | — | ||||
Jason (Predecessor) common stock, $0.001 par value (1,000 shares authorized, 1,000 shares issued and outstanding at December 31, 2013) | — | — | ||||||
Jason Industries (Successor) common stock, $0.0001 par value (120,000,000 shares authorized, 21,990,666 shares issued and outstanding at December 31, 2014) | 2 | — | ||||||
Additional paid-in capital | 140,312 | 25,358 | ||||||
Retained (deficit) earnings | (21,539 | ) | 4,640 | |||||
Accumulated other comprehensive (loss) income | (12,065 | ) | 474 | |||||
Shareholders’ equity attributable to Jason Industries | 151,710 | 30,472 | ||||||
Noncontrolling interests | 30,965 | — | ||||||
Total equity | 182,675 | 30,472 | ||||||
Total liabilities and equity | $ | 809,404 | $ | 423,017 | ||||
Jason Industries, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands) (Unaudited)
Successor | Predecessor | |||||||||||
June 30, 2014 Through | January 1, 2014 Through | Year Ended | ||||||||||
December 31, 2014 | June 29, 2014 | December 31, 2013 | ||||||||||
Cash flows from operating activities | ||||||||||||
Net (loss) income | $ | (13,980 | ) | $ | (4,955 | ) | $ | 24,088 | ||||
Adjustments to reconcile net (loss) income to net cash (used) provided by operating activities: | ||||||||||||
Depreciation | 13,180 | 10,125 | 21,581 | |||||||||
Amortization of intangible assets | 7,195 | 2,727 | 5,424 | |||||||||
Amortization of deferred financing costs and debt discount | 1,508 | 426 | 935 | |||||||||
Write-off of deferred financing costs due to debt extinguishment | — | — | 1,423 | |||||||||
Multiemployer pension plan withdrawal expense (gain) | — | — | (696 | ) | ||||||||
Equity income, net of dividends | (381 | ) | (831 | ) | (1,345 | ) | ||||||
Deferred income taxes | (9,784 | ) | (5,156 | ) | 4,597 | |||||||
Loss on disposals of property, plant and equipment - net | 57 | 338 | 22 | |||||||||
Gain from sale of joint ventures | — | (3,508 | ) | — | ||||||||
Gain from involuntary conversion of property, plant and equipment | — | — | (6,351 | ) | ||||||||
Non-cash stock compensation | 4,129 | 7,661 | 195 | |||||||||
Net increase (decrease) in cash due to changes in: | ||||||||||||
Accounts receivable | 15,015 | (20,632 | ) | (6,628 | ) | |||||||
Inventories | 556 | (5,602 | ) | 333 | ||||||||
Insurance receivable | — | — | 2,634 | |||||||||
Other current assets | (5,067 | ) | (1,860 | ) | 504 | |||||||
Accounts payable | (7,332 | ) | 7,266 | 2,499 | ||||||||
Accrued compensation and employee benefits | (6,428 | ) | 5,535 | 451 | ||||||||
Accrued interest | 127 | (2,634 | ) | 2,849 | ||||||||
Liabilities related to fire | (212 | ) | (188 | ) | (776 | ) | ||||||
Accrued transaction costs | (9,821 | ) | 16,807 | — | ||||||||
Other - net | 3,632 | (1,278 | ) | 6,339 | ||||||||
Total adjustments | 6,374 | 9,196 | 33,990 | |||||||||
Net cash (used) provided by operating activities | (7,606 | ) | 4,241 | 58,078 | ||||||||
Successor | Predecessor | |||||||||||
June 30, 2014 Through | January 1, 2014 Through | Year Ended | ||||||||||
December 31, 2014 | June 29, 2014 | December 31, 2013 | ||||||||||
Cash flows from investing activities | ||||||||||||
Acquisition of Jason, net of cash acquired | (489,169 | ) | — | — | ||||||||
Proceeds from disposals of property, plant and equipment | 89 | 159 | 1,035 | |||||||||
Proceeds from sale of joint ventures | — | 11,500 | — | |||||||||
Insurance proceeds related to property, plant and equipment | — | — | 6,512 | |||||||||
Payments for property, plant and equipment | (15,359 | ) | (10,998 | ) | (25,609 | ) | ||||||
Acquisitions of patents | (121 | ) | (33 | ) | (161 | ) | ||||||
Other investing activities | (444 | ) | (490 | ) | — | |||||||
Net cash (used) provided by investing activities | (505,004 | ) | 138 | (18,223 | ) | |||||||
Cash flows from financing activities | ||||||||||||
Payment of capitalized debt issuance costs | (13,104 | ) | (444 | ) | (3,995 | ) | ||||||
Payments of deferred underwriters fees | (5,175 | ) | — | — | ||||||||
Redemption of redeemable common stock | (26,101 | ) | — | — | ||||||||
Proceeds on issuance of preferred stock | 45,000 | — | — | |||||||||
Payments of preferred stock issuance costs | (2,500 | ) | — | — | ||||||||
Warrant tender offer | (6,609 | ) | — | — | ||||||||
Payments of previous U.S. term loan | — | — | (178,534 | ) | ||||||||
Proceeds from 2013 U.S. term loan | — | — | 235,000 | |||||||||
Payments of 2013 U.S. term loan | — | (1,175 | ) | (5,563 | ) | |||||||
Proceeds from First Lien and Second Lien term loans | 412,477 | — | — | |||||||||
Payments of First Lien and Second Lien term loans | (775 | ) | — | — | ||||||||
Proceeds from U.S. revolving loans | — | 64,725 | 27,690 | |||||||||
Payments of U.S. revolving loans | — | (53,725 | ) | (27,690 | ) | |||||||
Proceeds from other long-term debt | 3,043 | 1,383 | 3,202 | |||||||||
Payments of other long-term debt | (4,644 | ) | (3,868 | ) | (11,882 | ) | ||||||
Payments of preferred stock redemptions | — | — | (48,415 | ) | ||||||||
Payments of preferred stock dividends | (910 | ) | — | — | ||||||||
Payments of common stock dividends | — | — | (43,055 | ) | ||||||||
Net cash provided (used) by financing activities | 400,702 | 6,896 | (53,242 | ) | ||||||||
Effect of exchange rate changes on cash and cash equivalents | (2,890 | ) | (122 | ) | 148 | |||||||
Net (decrease) increase in cash and cash equivalents | (114,798 | ) | 11,153 | (13,239 | ) | |||||||
Cash and cash equivalents, beginning of period | 177,077 | 16,318 | 29,557 | |||||||||
Cash and cash equivalents, end of period | $ | 62,279 | $ | 27,471 | $ | 16,318 | ||||||
Jason Industries, Inc.
Financial Results by Segment
(In thousands) (Unaudited)
Successor | Predecessor | Combined | Predecessor | |||||||||||||||||
Three months Ended | Year Ended | |||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||
(in thousands, except percentages) | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||
Seating | ||||||||||||||||||||
Net sales | $ | 34,648 | $ | 34,359 | $ | 171,911 | $ | 165,245 | ||||||||||||
Adjusted EBITDA | 4,769 | 4,558 | 26,005 | 25,601 | ||||||||||||||||
Adjusted EBITDA % of net sales | 13.8 | % | 13.3 | % | 15.1 | % | 15.5 | % | ||||||||||||
Finishing | ||||||||||||||||||||
Net sales | $ | 45,714 | $ | 44,484 | $ | 187,587 | $ | 180,406 | ||||||||||||
Adjusted EBITDA | 7,045 | 3,981 | 26,274 | 17,619 | ||||||||||||||||
Adjusted EBITDA % of net sales | 15.4 | % | 8.9 | % | 14.0 | % | 9.8 | % | ||||||||||||
Acoustics | ||||||||||||||||||||
Net sales | $ | 54,774 | $ | 53,429 | $ | 218,737 | $ | 204,494 | ||||||||||||
Adjusted EBITDA | 4,625 | 5,178 | 18,588 | 23,426 | ||||||||||||||||
Adjusted EBITDA % of net sales | 8.4 | % | 9.7 | % | 8.5 | % | 11.5 | % | ||||||||||||
Components | ||||||||||||||||||||
Net sales | $ | 29,031 | $ | 32,841 | $ | 124,251 | $ | 130,700 | ||||||||||||
Adjusted EBITDA | 5,206 | 5,271 | 17,245 | 22,898 | ||||||||||||||||
Adjusted EBITDA % of net sales | 17.9 | % | 16.1 | % | 13.9 | % | 17.5 | % | ||||||||||||
Corporate | ||||||||||||||||||||
Adjusted EBITDA | $ | (2,774 | ) | $ | (2,015 | ) | $ | (10,264 | ) | $ | (9,774 | ) | ||||||||
Consolidated | ||||||||||||||||||||
Net sales | $ | 164,167 | $ | 165,113 | $ | 702,486 | $ | 680,845 | ||||||||||||
Adjusted EBITDA | 18,871 | 16,973 | 77,848 | 79,770 | ||||||||||||||||
Adjusted EBITDA % of net sales | 11.5 | % | 10.3 | % | 11.1 | % | 11.7 | % | ||||||||||||
Jason Industries, Inc.
Quarterly Financial Information by Segment
(In thousands) (Unaudited)
Predecessor | Combined* | Successor | Combined* | |||||||||||||||||||||||||||||||||||||
1Q | 2Q | 3Q | 4Q | Full Year | 1Q | 2Q | 3Q | 4Q | Full Year | |||||||||||||||||||||||||||||||
2013 | 2013 | 2013 | 2013 | 2013 | 2014 | 2014 | 2014 | 2014 | 2014 | |||||||||||||||||||||||||||||||
Seating | ||||||||||||||||||||||||||||||||||||||||
Net sales | $ | 52,937 | $ | 44,476 | $ | 33,473 | $ | 34,359 | $ | 165,245 | $ | 52,291 | $ | 52,587 | $ | 32,385 | $ | 34,648 | $ | 171,911 | ||||||||||||||||||||
Adjusted EBITDA | 9,319 | 7,368 | 4,356 | 4,558 | 25,601 | 8,111 | 9,557 | 3,568 | 4,769 | 26,005 | ||||||||||||||||||||||||||||||
Adjusted EBITDA % net sales | 17.6 | % | 16.6 | % | 13.0 | % | 13.3 | % | 15.5 | % | 15.5 | % | 18.2 | % | 11.0 | % | 13.8 | % | 15.1 | % | ||||||||||||||||||||
Finishing | ||||||||||||||||||||||||||||||||||||||||
Net sales | $ | 45,061 | $ | 46,702 | $ | 44,159 | $ | 44,484 | $ | 180,406 | $ | 46,583 | $ | 50,109 | $ | 45,181 | $ | 45,714 | $ | 187,587 | ||||||||||||||||||||
Adjusted EBITDA | 4,416 | 4,622 | 4,600 | 3,981 | 17,619 | 6,003 | 7,529 | 5,697 | 7,045 | 26,274 | ||||||||||||||||||||||||||||||
Adjusted EBITDA % net sales | 9.8 | % | 9.9 | % | 10.4 | % | 8.9 | % | 9.8 | % | 12.9 | % | 15.0 | % | 12.6 | % | 15.4 | % | 14.0 | % | ||||||||||||||||||||
Acoustics | ||||||||||||||||||||||||||||||||||||||||
Net sales | $ | 48,403 | $ | 53,903 | $ | 48,759 | $ | 53,429 | $ | 204,494 | $ | 53,007 | $ | 56,923 | $ | 54,033 | $ | 54,774 | $ | 218,737 | ||||||||||||||||||||
Adjusted EBITDA | 5,145 | 7,292 | 5,811 | 5,178 | 23,426 | 4,439 | 5,237 | 4,287 | 4,625 | 18,588 | ||||||||||||||||||||||||||||||
Adjusted EBITDA % net sales | 10.6 | % | 13.5 | % | 11.9 | % | 9.7 | % | 11.5 | % | 8.4 | % | 9.2 | % | 7.9 | % | 8.4 | % | 8.5 | % | ||||||||||||||||||||
Components | ||||||||||||||||||||||||||||||||||||||||
Net sales | $ | 33,268 | $ | 31,115 | $ | 33,476 | $ | 32,841 | $ | 130,700 | $ | 34,655 | $ | 30,996 | $ | 29,569 | $ | 29,031 | $ | 124,251 | ||||||||||||||||||||
Adjusted EBITDA | 5,395 | 5,563 | 6,669 | 5,271 | 22,898 | 6,539 | 4,474 | 1,026 | 5,206 | 17,245 | ||||||||||||||||||||||||||||||
Adjusted EBITDA % net sales | 16.2 | % | 17.9 | % | 19.9 | % | 16.1 | % | 17.5 | % | 18.9 | % | 14.4 | % | 3.5 | % | 17.9 | % | 13.9 | % | ||||||||||||||||||||
Corporate | ||||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | (2,072 | ) | $ | (2,553 | ) | $ | (3,134 | ) | $ | (2,015 | ) | $ | (9,774 | ) | $ | (2,964 | ) | $ | (3,037 | ) | $ | (1,489 | ) | $ | (2,774 | ) | $ | (10,264 | ) | ||||||||||
Consolidated | ||||||||||||||||||||||||||||||||||||||||
Net sales | $ | 179,669 | $ | 176,196 | $ | 159,867 | $ | 165,113 | $ | 680,845 | $ | 186,536 | $ | 190,615 | $ | 161,168 | $ | 164,167 | $ | 702,486 | ||||||||||||||||||||
Adjusted EBITDA | 22,203 | 22,292 | 18,302 | 16,973 | 79,770 | 22,128 | 23,760 | 13,089 | 18,871 | 77,848 | ||||||||||||||||||||||||||||||
Adjusted EBITDA % net sales | 12.4 | % | 12.7 | % | 11.4 | % | 10.3 | % | 11.7 | % | 11.9 | % | 12.5 | % | 8.1 | % | 11.5 | % | 11.1 | % | ||||||||||||||||||||
*Note: The application of acquisition accounting for the Business Combination significantly affected certain assets, liabilities, and expenses. As a result, financial information in the period June 30, 2014 through December 31, 2014 is not comparable to Jason’s predecessor financial information. Therefore, we did not combine certain financial information in the period June 30, 2014 through December 31, 2014 with Jason’s predecessor financial information in the period January 1, 2014 through June 29, 2014 for comparison to prior periods. We have combined our net sales and Adjusted EBITDA in (1) the period June 30, 2014 through September 26, 2014 with Jason’s predecessor net sales and Adjusted EBITDA in the period June 28, 2014 through June 29, 2014, which comprises Jason’s fiscal third quarter, and (2) in the period June 30, 2014 through December 31, 2014 with Jason’s predecessor net sales and Adjusted EBITDA in the period January 1, 2014 through June 29, 2014, which comprises Jason’s fiscal full year 2014. Net sales and Adjusted EBITDA were not affected by acquisition accounting.
Jason Industries, Inc.
Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA
(In thousands, unaudited)
Predecessor | Successor | |||||||||||||||||||||||||||||||||||||||
June 28, 2014 Through June 29, 2014 | June 30, 2014 Through September 26, 2014 | |||||||||||||||||||||||||||||||||||||||
1Q | 2Q | 3Q | 4Q | Full Year | 1Q | 2Q | 3Q | 3Q | 4Q | |||||||||||||||||||||||||||||||
2013 | 2013 | 2013 | 2013 | 2013 | 2014 | 2014 | 2014 | 2014 | 2014 | |||||||||||||||||||||||||||||||
Net income (loss) | $ | 2,641 | $ | 10,264 | $ | 13,902 | $ | (2,719 | ) | $ | 24,088 | $ | 7,735 | $ | 5,237 | $ | (17,928 | ) | $ | (9,789 | ) | $ | (4,191 | ) | ||||||||||||||||
Tax provision | 1,420 | 5,793 | 8,662 | 2,372 | 18,247 | 4,492 | 588 | (5,652 | ) | (5,976 | ) | (1,913 | ) | |||||||||||||||||||||||||||
Interest expense | 9,780 | 3,579 | 3,478 | 3,879 | 20,716 | 3,495 | 3,724 | 82 | 7,809 | 8,363 | ||||||||||||||||||||||||||||||
Depreciation and amortization | 6,720 | 6,360 | 6,756 | 7,169 | 27,005 | 6,324 | 6,528 | — | 10,377 | 9,998 | ||||||||||||||||||||||||||||||
Loss (gain) on disposals of fixed assets—net | 5 | 35 | (66 | ) | 48 | 22 | 123 | 215 | — | — | 57 | |||||||||||||||||||||||||||||
EBITDA | 20,566 | 26,031 | 32,732 | 10,749 | 90,078 | 22,169 | 16,292 | (23,498 | ) | 2,421 | 12,314 | |||||||||||||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||||||||||||||||||
Restructuring(1) | 72 | 100 | 612 | 2,166 | 2,950 | 647 | 1,907 | — | 103 | 1,028 | ||||||||||||||||||||||||||||||
Transaction-related expenses(2) | 17 | 998 | — | 58 | 1,073 | 1,541 | 3,233 | 23,009 | 1,404 | 1,129 | ||||||||||||||||||||||||||||||
Integration and other restructuring costs(3) | — | — | 15 | 1,024 | 1,039 | 993 | 2,047 | — | 7,587 | 2,334 | ||||||||||||||||||||||||||||||
2013 Refinancing Transactions - Advisory, legal, professional fees and special bonuses(4) | 1,477 | 217 | 76 | 3,161 | 4,931 | — | — | — | — | — | ||||||||||||||||||||||||||||||
Newcomerstown net Fire costs (income) and related items(5) | (208 | ) | (4,635 | ) | (13,991 | ) | — | (18,834 | ) | — | — | — | — | — | ||||||||||||||||||||||||||
Adjustment for non-discrete fire costs(6) | — | — | (1,419 | ) | — | (1,419 | ) | — | — | — | — | — | ||||||||||||||||||||||||||||
Multiemployer pension plan withdrawal expense (gain)(7) | — | (696 | ) | — | — | (696 | ) | — | — | — | — | — | ||||||||||||||||||||||||||||
Gain on claim settlement(8) | — | — | — | (455 | ) | (455 | ) | — | — | — | — | — | ||||||||||||||||||||||||||||
Sponsor fees(9) | 279 | 277 | 277 | 270 | 1,103 | 286 | 281 | — | — | — | ||||||||||||||||||||||||||||||
Gain from sale of joint ventures(10) | — | — | — | — | — | (3,508 | ) | — | — | — | — | |||||||||||||||||||||||||||||
Share-based compensation(11) | — | — | — | — | — | — | — | — | 2,063 | 2,066 | ||||||||||||||||||||||||||||||
Total adjustments | 1,637 | (3,739 | ) | (14,430 | ) | 6,224 | (10,308 | ) | (41 | ) | 7,468 | 23,009 | 11,157 | 6,557 | ||||||||||||||||||||||||||
Adjusted EBITDA | $ | 22,203 | $ | 22,292 | $ | 18,302 | $ | 16,973 | $ | 79,770 | $ | 22,128 | $ | 23,760 | $ | (489 | ) | $ | 13,578 | $ | 18,871 | |||||||||||||||||||
(1) | Restructuring includes costs associated with exit or disposal activities as defined by US GAAP related to facility consolidation, including one-time employee termination benefits, costs to close facilities and relocate employees, and costs to terminate contracts other than capital leases. During 2014, such costs relate to the closure of the Norwalk, Ohio facility. |
(2) | Transaction-related expenses primarily consist of professional service fees related to the Business Combination and other related transactions, as well as the Company’s acquisition and divestiture activities. |
(3) | Integration and other restructuring costs includes equipment move costs and incremental facility preparation and related costs incurred in connection with the closure of the Norwalk, Ohio facility and the start-up of a new Acoustics segment facility in Warrensburg, Missouri. Such costs are not included in restructuring for US GAAP purposes. During the period June 30, 2014 through December 31, 2014, integration and other restructuring costs includes $5.8 million of increased inventory costs recognized in cost of goods sold resulting from recording inventory at fair value in acquisition accounting for the Business Combination. |
(4) | Represents professional fees, expenses and special employee bonuses paid in connection with the 2013 Refinancing Transactions. |
(5) | Represents the net gain relating to incremental costs, operating inefficiencies, business interruption matters and involuntary conversions of equipment associated with the Newcomerstown Fire. |
(6) | Represents the non-discrete operating inefficiencies associated with the Newcomerstown Fire that were incurred in 2012 and recovered from the insurance carrier during 2013. |
(7) | Represents the expense (income) associated with the 2012 decision to withdraw from a union-sponsored and trusteed multiemployer pension plan at Morton. |
(8) | Represents the elimination of a one-time gain associated with the settlement of a contractual dispute related to the 2011 acquisition of Morton. |
(9) | Represents fees and expenses paid by Jason to Saw Mill Capital LLC and Falcon Investment Advisors, LLC under the Management Service Agreement dated September 21, 2010. |
(10) | Represents the gain on sale of the 50% equity interests in two joint ventures that was completed during the first quarter of 2014. |
(11) | Represents non-cash share based compensation expense for awards under the Company’s 2014 Omnibus Incentive Plan. |