Attached files
| file | filename |
|---|---|
| 8-K - PRESS RELEASE COVER - FRANKLIN ELECTRIC CO INC | pressreleasecoverq3.htm |
Exhibit
Index
EXHIBIT
NO. (99) Press release, dated October 3, 2009 issued by Franklin Electric Co.,
Inc.
EXHIBIT
99
ADDITIONAL
EXHIBITS
Press
Release
For
Immediate Release For Further Information
Refer
to: John J. Haines
260-824-2900
FRANKLIN
ELECTRIC ANNOUNCES THIRD QUARTER RESULTS
Bluffton, Indiana – October 26,
2009 - Franklin Electric Co., Inc. (NASDAQ:FELE) reported diluted
earnings per share of $0.37 for the third quarter 2009, a decrease of 50 percent
compared to 2008 third quarter earnings per share of $0.74. Earnings per share
before restructuring charges were $0.40, a decrease of 46 percent compared to
the prior year. Third quarter 2009 sales were $166.0 million, a decrease of 23
percent compared to 2008 third quarter sales of $215.8 million.
Scott
Trumbull, Franklin Chairman and Chief Executive commented:
“Water
Systems, which represents over 80 percent of our sales, reported a 12 percent
increase in operating income before restructuring charges compared to the third
quarter 2008 and improved operating income margins before restructuring charges
by 320 basis points compared to the prior year. We were encouraged
that the rate of sales decline in Water Systems has abated sequentially each
quarter this year and based on trade association data we are confident that we
are gaining share in our most important pumping systems markets. We
are also encouraged with our improved cash flow. Cash flow from
operations increased by $60.5 million compared to the first nine months of 2008;
and net debt has been reduced from $141 million at the end of the third quarter
last year to $81 million at the end of the third quarter 2009.
Our third
quarter 2009 earnings decline was entirely attributable to the $15 million
operating earnings decline in Fueling Systems. During the third
quarter last year our Fueling business achieved record earnings on surging sales
in California as station owners purchased our products in order to comply with
the state’s vapor control regulations. With approximately 85 percent
of the California conversion complete, Fueling Systems sales were significantly
lower this year.”
- 1
-
Key Performance
Indicators:
|
Earnings
and Earnings Per Share
|
||||||||||||||||||||||||
|
Before
and After Restructuring Expense
|
For the Third Quarter
|
For
the First Nine Months
|
||||||||||||||||||||||
|
(in
millions except Earnings Per Share)
|
2008
|
2009
|
Change
|
2008
|
2009
|
Change
|
||||||||||||||||||
|
Net
Income attributable to FE Co.,Inc.
|
$ | 17.3 | $ | 8.6 | -50 | % | $ | 40.7 | $ | 18.3 | -55 | % | ||||||||||||
|
Restructuring
Expense (Before Tax)
|
$ | - | $ | 1.0 | $ | 0.1 | $ | 5.6 | ||||||||||||||||
|
Actual
tax rate
|
33.6 | % | 32.0 | % | 34.3 | % | 32.4 | % | ||||||||||||||||
|
Restructuring
Charges, net of tax
|
$ | - | $ | 0.7 | $ | 0.1 | $ | 3.8 | ||||||||||||||||
|
Average
Fully Diluted Shares Outstanding
|
23.3 | 23.4 | 0 | % | 23.2 | 23.3 | 0 | % | ||||||||||||||||
|
Fully
Diluted Earnings Per Share Reported
|
$ | 0.74 | $ | 0.37 | -50 | % | $ | 1.75 | $ | 0.79 | -55 | % | ||||||||||||
|
Restructuring
Expense Per Share, net of tax
|
$ | - | $ | 0.03 | $ | - | $ | 0.16 | ||||||||||||||||
|
Fully
Diluted Earnings Per Share Before Restructuring Expense
|
$ | 0.74 | $ | 0.40 | -46 | % | $ | 1.75 | $ | 0.95 | -46 | % | ||||||||||||
|
Net
Sales
|
For
the Third Quarter
|
For
the First Nine Months
|
||||||||||||||||||||||
|
(in
millions)
|
Water
|
Fueling
|
Consolidated
|
Water
|
Fueling
|
Consolidated
|
||||||||||||||||||
|
Sales
for 2008
|
$ | 154.6 | $ | 61.2 | $ | 215.8 | $ | 448.7 | $ | 144.8 | $ | 593.5 | ||||||||||||
|
Acquisitions
|
$ | 6.5 | $ | - | $ | 6.5 | $ | 18.9 | $ | - | $ | 18.9 | ||||||||||||
|
Foreign
Exchange
|
$ | (5.4 | ) | $ | (0.1 | ) | $ | (5.5 | ) | $ | (26.9 | ) | $ | (0.9 | ) | $ | (27.8 | ) | ||||||
|
Organic
Change
|
$ | (18.3 | ) | $ | (32.5 | ) | $ | (50.8 | ) | $ | (54.4 | ) | $ | (49.1 | ) | $ | (103.5 | ) | ||||||
|
Sales
for 2009
|
$ | 137.4 | $ | 28.6 | $ | 166.0 | $ | 386.3 | $ | 94.8 | $ | 481.1 | ||||||||||||
- 2
-
|
Operating
Income and Margin Percentages
|
||||||||||||||||||||||||||||||||
|
Before
and After Restructuring Expense
|
||||||||||||||||||||||||||||||||
|
(in
millions)
|
For the Third Quarter 2009
|
For the First Nine Months 2009
|
||||||||||||||||||||||||||||||
|
Water
|
Fueling
|
Corporate
|
Consolidated
|
Water
|
Fueling
|
Corporate
|
Consolidated
|
|||||||||||||||||||||||||
|
Reported
Operating Income
|
$ | 20.8 | $ | 3.9 | $ | (9.2 | ) | $ | 15.5 | $ | 45.9 | $ | 15.8 | $ | (27.6 | ) | $ | 34.1 | ||||||||||||||
|
Restructuring
Expense
|
$ | 0.2 | $ | 0.1 | $ | 0.7 | $ | 1.0 | $ | 4.5 | $ | 0.2 | $ | 0.9 | $ | 5.6 | ||||||||||||||||
|
Operating
Income before Restructuring Expense
|
$ | 21.0 | $ | 4.0 | $ | (8.5 | ) | $ | 16.5 | $ | 50.4 | $ | 16.0 | $ | (26.7 | ) | $ | 39.7 | ||||||||||||||
|
%
Operating Income To Net Sales
|
15.1 | % | 13.6 | % | 9.3 | % | 11.9 | % | 16.7 | % | 7.1 | % | ||||||||||||||||||||
|
%
Operating Income Before Restructuring Expense To Net Sales
|
15.3 | % | 14.0 | % | 9.9 | % | 13.0 | % | 16.9 | % | 8.3 | % | ||||||||||||||||||||
|
For the third Quarter 2008
|
For the First Nine Months 2008
|
|||||||||||||||||||||||||||||||
|
Water
|
Fueling
|
Corporate
|
Consolidated
|
Water
|
Fueling
|
Corporate
|
Consolidated
|
|||||||||||||||||||||||||
|
Reported
Operating Income
|
$ | 18.7 | $ | 19.3 | $ | (10.4 | ) | $ | 27.6 | $ | 60.3 | $ | 39.2 | $ | (30.4 | ) | $ | 69.1 | ||||||||||||||
|
Restructuring
Expense
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||
|
Operating
Income before Restructuring Expense
|
$ | 18.7 | $ | 19.3 | $ | (10.4 | ) | $ | 27.6 | $ | 60.3 | $ | 39.2 | $ | (30.4 | ) | $ | 69.1 | ||||||||||||||
|
%
Operating Income To Net Sales
|
12.1 | % | 31.5 | % | 12.8 | % | 13.4 | % | 27.1 | % | 11.6 | % | ||||||||||||||||||||
|
%
Operating Income Before Restructuring Expense To Net Sales
|
12.1 | % | 31.5 | % | 12.8 | % | 13.4 | % | 27.1 | % | 11.6 | % | ||||||||||||||||||||
Water Systems
During
the third quarter 2009, Water Systems revenues declined by $17.2 million or
about 11 percent overall from the third quarter of 2008. The organic sales
decline, excluding foreign currency translation and acquisitions, was $18.3
million or about 12 percent. International Water Systems sales,
excluding currency translation and acquisitions, declined by $4.6 million or
about 6 percent compared to the third quarter of 2008. Sales
improvements before the impact of foreign exchange and acquisitions in both the
Latin America and Asia Pacific regions were not enough to offset declines in
Europe and Southern Africa. As the table below indicates, the rate of
Water Systems sales decline continued to abate during the third quarter compared
to the first and second quarters of this year:
% Change
in Water
Segment
Sales
2009 vs.
2008
1st
Quarter (16.3%)
2nd
Quarter (14.5%)
3rd
Quarter (11.1%)
- 3
-
Water
Systems operating income before restructuring expenses increased $2.3 million,
or 12 percent, in the third quarter 2009 compared to the same period of
2008. The Water Systems operating margin percent before restructuring
expenses improved by 320 basis points compared to prior year. This
margin improvement is the result of raw material costs reductions, reduced price
promotional activity, fixed cost reductions and the start-up of expanded
production operations in our Linares, Mexico facility.
Fueling
Systems
Fueling
Systems sales declined by $32.6 million or about 53 percent during the third
quarter of 2009 compared to the same period in the prior year. The decline was
primarily caused by reduced sales of the Company’s vapor recovery products in
the State of California.
In
California, we estimate that there are approximately 1,800 stations out of the
total 10,600 stations in the state that have yet to comply with the
mandate. However, we believe that many station owners are waiting to
assess the State’s policy on enforcing major fines for non-compliance and we
also believe that some station owners are having difficulty arranging
financing. As a result, it is difficult for us to predict with
certainty what percentage of the remaining stations will ultimately comply and
when they will do so.
Operating
margin percentage before restructuring expenses in Fueling Systems was 14.0
percent of sales in the third quarter 2009 compared to 31.5 percent of sales in
the third quarter 2008, primarily attributable to lost leverage on fixed
manufacturing, selling, general and administrative (“SG&A”) expenses from
lower sales volumes.
Overall
The
Company’s consolidated gross profit was $50.2 million for the third quarter of
2009, down $16.2 million from $66.5 million in the third quarter of 2008.
The gross profit was significantly impacted by the decline in Fueling
Systems sales in the third quarter. However, due to the expansion of Water
Systems gross profit margin in the quarter, overall gross profit margin only
declined by 50 basis points to 30.3 percent.
During
the third quarter 2009, SG&A expenses decreased by $5.1 million or 13
percent compared to prior year, consistent with management’s fixed cost
reduction initiatives started in the fourth quarter of 2008. Research
Development & Engineering spending was increased during the quarter by 3
percent and was increased by 5 percent year to date compared to prior year, as
the Company continues to maintain an active new product development
effort. SG&A expenditures for Corporate related
administrative expenses declined by 19 percent in the third quarter 2009
compared to 2008.
- 4
-
Restructuring
expenses for the third quarter of 2009 were approximately $1.0 million and
reduced diluted earnings per share by approximately $0.03. Restructuring
expenses include asset impairments, severance expenses and manufacturing
equipment relocation costs.
The
Company incurred $0.5 in foreign exchange losses in the third quarter 2009
versus foreign exchange gains of $0.4 in the third quarter
2008. These losses were primarily attributable to valuation
differences between the Czech crown to the euro and the South African rand,
Mexican peso and Canadian dollar to the U.S. dollar.
The
Company generated $88.3 million in cash from operations in the first three
quarters of 2009 compared to $27.8 in the first three quarters of 2008. Lower
inventory balances have contributed $40.0 million of additional cash in the
first three quarters of 2009 compared to the same period of 2008. The
Company has no outstanding balance on its revolving debt agreement compared to
$40.0 million outstanding at the end of the third quarter 2008. The Company
expects to have no revolver debt balance at the end of this fiscal
year.
The
Company believes that internally generated funds and existing credit
arrangements provide sufficient liquidity to meet current commitments and
service existing debt. At the end of the third quarter 2009, the Company’s key
debt covenant ratio of gross debt divided by earnings before interest, taxes,
depreciation and amortization (EBITDA) was 2.1 compared to the current covenant
limit per the debt agreement of 3.0 and compared to 1.9 at the end of the third
quarter 2008. The Company’s revolving loan agreement with its banks is in place
until the end of 2011 and the Company has no scheduled principal payments on its
long term debt until 2015.
Commenting
on the Company’s outlook, Mr. Trumbull added:
“We
believe Water Systems sales during the fourth quarter will be modestly higher
than prior year. At this sales level, Water Systems operating income
margin before restructuring charges should also exceed prior year during the
fourth quarter. It is difficult for us to predict sales in Fueling
Systems for the quarter since they will be influenced by the degree to which
California station owners believe the State will enforce significant fines for
failure to comply with the January 1, 2010 installation deadline as well as the
degree to which station owners are able to arrange
financing. Last year during the fourth quarter Fueling
Systems sales other than those related to the California initiative were about
$27 million and we believe they will be 5 percent to 10 percent less this year
due to the reduction in overall commercial construction activity in the United
States and the lack of availability of credit to small business.
In
summary, Water Systems contribution margin has continued to improve
significantly and company wide we have reduced year to date fixed spending by
about $15 million compared to prior year, despite increasing our RD&E
spending. We continue to invest in exciting new product initiatives
in both our Water and Fueling businesses. While facing unprecedented
declines in end market demand, we have evidence that our share of key markets is
increasing. In addition we have reduced our production
levels and lowered inventories across our Company by about 20 percent since the
beginning of the year. Year to date we have generated $88.3 million
cash flow from operations and our balance sheet continues to
strengthen. We believe that Franklin Electric is well positioned to
achieve significant operating leverage as our markets increase from the current
depressed levels.”
- 5
-
Additionally,
on Friday, October 23, the Board of Directors of Franklin Electric declared a
quarterly cash dividend of twelve and one half cents per share payable November
25, 2009 to shareowners of record on November 12, 2009.
A
conference call to review earnings and other developments in the business will
commence at 5:00pm EDT.
The third
quarter 2009 earnings call will be available via a live webcast. The webcast
will be available in a listen only mode by going to:
http://investor.shareholder.com/media/eventdetail.cfm?mediaid=38921&c=FELE&mediakey=78DCA87080528F7ED6EF761724D3758F&e=0
You can
add this webcast into your MS-Outlook calendar by clicking on the following
link:
http://apps.shareholder.com/PNWOutlook/t.aspx?m=38921&k=4282FF46
If you
intend to ask questions during the call, please dial in using 877-718-5101 for
domestic calls and 719-325-4780 for international calls.
A replay
of the conference call will be available Monday October 26, 2009 at 7 pm EDT
through midnight EST on Sunday November 1, 2009, by dialing 888-203-1112 for
domestic calls and 719-457-0820 for international calls. The replay passcode is
4367976.
Franklin
Electric is a global leader in the production and marketing of systems and
components for the movement of water and automotive fuels. Recognized as a
technical leader in its specialties, Franklin Electric serves customers around
the world in residential, commercial, agricultural, industrial, municipal, and
fueling applications.
The
Company presents the non-GAAP financial measures of net income before
restructuring expense, net income per share before restructuring expense,
operating income before restructuring expense and percent operating income
before restructuring expense to net sales because the Company believes the
information helps investors understand underlying trends in the Company's
business more easily. The differences between these measures and the most
comparable GAAP measures are reconciled in the tables above.
- 6
-
The
Company presents the non-GAAP measure gross debt to EBITDA ratio because
maintaining the ratio below 3.0 is an important covenant in the Company's
principal credit agreements that is closely monitored by management. A table
showing how EBITDA (earnings before interest, taxes, depreciation and
amortization) is derived from net income and the calculation of the ratio
follows the financial statements included in this press release.
|
“Safe Harbor” Statement under
the Private Securities Litigation Reform Act of 1995. Any
forward-looking statements contained herein, including those relating to
market conditions or the Company’s financial results, expense reductions,
profit margins, inventory levels, foreign currency translation rates,
liquidity expectations, business goals and sales growth, involve risks and
uncertainties, including but not limited to, risks and uncertainties with
respect to general economic and currency conditions, various conditions
specific to the Company’s business and industry, weather conditions, new
housing starts, market demand, competitive factors, changes in
distribution channels, supply constraints, technology factors, litigation,
government and regulatory actions, the Company’s accounting policies,
future trends, and other risks which are detailed in the Company’s
Securities and Exchange Commission filings, included in Item 1A of Part I
of the Company’s Annual Report on Form 10-K for the fiscal year ending
January 3, 2009 , Exhibit 99.1 attached thereto and in Item 1A of Part II
of the Company’s Quarterly Reports on Form 10-Q. These risks and
uncertainties may cause actual results to differ materially from those
indicated by the forward-looking statements. All forward-looking
statements made herein are based on information currently available, and
the Company assumes no obligation to update any forward-looking
statements.
|
- 7
-
|
FRANKLIN ELECTRIC CO., INC.
|
||||||||||||||||
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
||||||||||||||||
|
(Unaudited)
|
||||||||||||||||
|
(In
thousands, except per share amounts)
|
||||||||||||||||
|
Third
Quarter Ended
|
Nine
Months Ended
|
|||||||||||||||
|
Oct.
3,
|
Sept.
27,
|
Oct.
3,
|
Sept.
27,
|
|||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
Net
sales
|
$ | 166,007 | $ | 215,815 | $ | 481,082 | $ | 593,521 | ||||||||
|
Cost
of sales
|
115,764 | 149,347 | 338,479 | 410,877 | ||||||||||||
|
Gross
profit
|
50,243 | 66,468 | 142,603 | 182,644 | ||||||||||||
|
Selling,
general and administrative expenses
|
33,817 | 38,875 | 102,898 | 113,460 | ||||||||||||
|
Restructuring
expense
|
964 | - | 5,610 | 82 | ||||||||||||
|
Operating
income
|
15,462 | 27,593 | 34,095 | 69,102 | ||||||||||||
|
Interest
expense
|
(2,471 | ) | (2,684 | ) | (7,245 | ) | (8,088 | ) | ||||||||
|
Other
income
|
445 | 747 | 978 | 1,202 | ||||||||||||
|
Foreign
exchange gain/(loss)
|
(520 | ) | 436 | (143 | ) | 45 | ||||||||||
|
Income
before income taxes
|
12,916 | 26,092 | 27,685 | 62,261 | ||||||||||||
|
Income
taxes
|
4,094 | 8,711 | 8,801 | 21,153 | ||||||||||||
|
Net
income
|
8,822 | 17,381 | 18,884 | 41,108 | ||||||||||||
|
Less:
Net income attributable to noncontrolling interest
|
(190 | ) | (121 | ) | (579 | ) | (419 | ) | ||||||||
|
Net
income attributable to Franklin Electric Co., Inc.
|
$ | 8,632 | $ | 17,260 | $ | 18,305 | $ | 40,689 | ||||||||
|
|
||||||||||||||||
|
Net
income per share:
|
||||||||||||||||
|
Basic
|
$ | 0.37 | $ | 0.75 | $ | 0.79 | $ | 1.77 | ||||||||
|
Diluted
|
$ | 0.37 | $ | 0.74 | $ | 0.79 | $ | 1.75 | ||||||||
|
|
||||||||||||||||
|
Weighted
average shares and equivalent
|
||||||||||||||||
|
shares
outstanding:
|
||||||||||||||||
|
Basic
|
23,102 | 22,946 | 23,065 | 22,950 | ||||||||||||
|
Diluted
|
23,420 | 23,266 | 23,262 | 23,235 | ||||||||||||
- 8
-
|
FRANKLIN
ELECTRIC CO., INC.
|
||||||||
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
||||||||
|
(Unaudited)
|
||||||||
|
|
||||||||
|
(In
thousands)
|
Oct.
3,
|
Jan.
03,
|
||||||
|
2009
|
2009
|
|||||||
|
ASSETS:
|
||||||||
|
|
||||||||
|
Cash
and equivalents
|
$ | 71,229 | $ | 46,934 | ||||
|
Receivables
|
75,287 | 68,048 | ||||||
|
Inventories
|
137,631 | 169,873 | ||||||
|
Other
current assets
|
28,238 | 32,805 | ||||||
|
Total
current assets
|
312,385 | 317,660 | ||||||
|
|
||||||||
|
Property,
plant and equipment, net
|
146,953 | 144,535 | ||||||
|
Goodwill
and other assets
|
255,158 | 231,862 | ||||||
|
Total
assets
|
$ | 714,496 | $ | 694,057 | ||||
|
LIABILITIES
AND EQUITY:
|
||||||||
|
|
||||||||
|
Accounts
payable
|
$ | 32,933 | $ | 24,505 | ||||
|
Accrued
liabilities
|
51,137 | 56,230 | ||||||
|
Current
maturities of long-term
|
||||||||
|
debt
and short-term borrowings
|
688 | 677 | ||||||
|
Total
current liabilities
|
84,758 | 81,412 | ||||||
|
Long-term
debt
|
151,776 | 185,528 | ||||||
|
Deferred
income taxes
|
6,945 | 4,161 | ||||||
|
Employee
benefit plan obligations
|
67,014 | 69,142 | ||||||
|
Other
long-term liabilities
|
7,865 | 3,707 | ||||||
|
Redeemable
noncontrolling interest
|
6,825 | - | ||||||
|
Equity
|
389,313 | 350,107 | ||||||
|
Total
liabilities and equity
|
$ | 714,496 | $ | 694,057 | ||||
- 9
-
|
FRANKLIN
ELECTRIC CO., INC.
|
||||||||
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
||||||||
|
(Unaudited)
|
||||||||
|
(In
thousands)
|
Oct.3,
|
Sept.
27,
|
||||||
|
2009
|
2008
|
|||||||
|
Cash
flows from operating activities:
|
||||||||
|
Net
income
|
$ | 18,884 | $ | 41,108 | ||||
|
Adjustments
to reconcile net income to net
|
||||||||
|
cash
flows from operating activities:
|
||||||||
|
Depreciation
and amortization
|
18,778 | 18,349 | ||||||
|
Stock
based compensation
|
4,189 | 2,940 | ||||||
|
Deferred
income taxes
|
1,493 | 1,814 | ||||||
|
Loss
on disposals of plant and equipment
|
2,940 | 76 | ||||||
|
Changes
in assets and liabilities:
|
||||||||
|
Receivables
|
3,196 | (31,132 | ) | |||||
|
Inventories
|
39,988 | (5,972 | ) | |||||
|
Accounts
payable and other accrued expenses
|
(1,706 | ) | 7,938 | |||||
|
Income
taxes, net
|
6,904 | 4,379 | ||||||
|
Excess
tax from share-based payment arrangements
|
(61 | ) | (804 | ) | ||||
|
Employee
benefit plans
|
(1,755 | ) | (3,479 | ) | ||||
|
Other,
net
|
(4,561 | ) | (7,395 | ) | ||||
|
Net
cash flows from operating activities
|
88,289 | 27,822 | ||||||
|
Cash
flows from investing activities:
|
||||||||
|
Additions
to property, plant and equipment
|
(8,215 | ) | (17,781 | ) | ||||
|
Proceeds
from sale of plant and equipment
|
64 | 10 | ||||||
|
Additions
to other assets
|
- | (749 | ) | |||||
|
Purchases
of securities
|
- | (9,000 | ) | |||||
|
Proceeds
from sale of securities
|
- | 9,000 | ||||||
|
Cash
paid for acquisitions, net of cash acquired
|
(16,767 | ) | (38,392 | ) | ||||
|
Net
cash flows from investing activities
|
(24,918 | ) | (56,912 | ) | ||||
|
Cash
flows from financing activities:
|
||||||||
|
Proceeds
from short-term debt
|
28,000 | 70,000 | ||||||
|
Repayment
of short-term debt
|
(63,000 | ) | (30,000 | ) | ||||
|
Repayment
of long-term debt
|
(734 | ) | (1,106 | ) | ||||
|
Proceeds
from issuance of common stock
|
282 | 3,127 | ||||||
|
Excess
tax from share-based payment arrangements
|
61 | 804 | ||||||
|
Purchases
of common stock
|
- | (7,813 | ) | |||||
|
Dividends
paid
|
(9,002 | ) | (8,494 | ) | ||||
|
Net
cash flows from financing activities
|
(44,393 | ) | 26,518 | |||||
|
Effect
of exchange rate changes on cash and equivalents
|
5,317 | (1,853 | ) | |||||
|
Net
change in cash and equivalents
|
24,295 | (4,425 | ) | |||||
|
Cash
and equivalents at beginning of period
|
46,934 | 65,252 | ||||||
|
Cash
and equivalents at end of period
|
$ | 71,229 | $ | 60,827 | ||||
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-
|
The
Company presents the non-GAAP measure gross debt to EBITDA ratio because
it is an important covenant in the Company's principal credit agreements
that is closely monitored by management. A table showing how EBITDA
(earnings before interest, taxes, depreciation and amortization) is
derived from net income and the calculation of the ratio follows the
financial statements included in this press release.
|
||||||||||||||||
|
EBITDA
reconciliation to net income (unaudited)
|
For
LTM ended
|
|||||||||||||||
|
(in
Million US$)
|
Third
Quarter
|
|||||||||||||||
|
2008
|
2009
|
|||||||||||||||
|
Net
income (as reported)
|
$ | 46.2 | $ | 21.7 | ||||||||||||
|
Depreciation
and amortization
|
$ | 24.0 | $ | 24.7 | ||||||||||||
|
Interest
expense, net
|
$ | 10.5 | $ | 10.1 | ||||||||||||
|
Provision
for income taxes
|
$ | 24.3 | $ | 10.5 | ||||||||||||
|
Estimated
EBITDA for acquisitions (a)
|
$ | 1.0 | $ | 1.0 | ||||||||||||
|
Add-back
for certain costs (b)
|
$ | 3.1 | ||||||||||||||
|
Earnings
before interest, taxes, depreciation and amortization
(EBITDA)
|
$ | 106.0 | $ | 71.1 | ||||||||||||
|
Total
debt (as reported)
|
$ | 201.8 | $ | 152.5 | ||||||||||||
|
Total
debt divided by EBITDA
|
1.9 | 2.1 | ||||||||||||||
|
(a)
For 2008, includes impact of Monarch, Pump Brands, and Industrias
Schneider acquisitions. For 2009, includes impact of Vertical
acquisition.
|
||||||||||||||||
|
(b)
In 2009, the Company agreed with the lenders that certain of the
restructuring costs will be added back to the EBITDA
calculation.
|
||||||||||||||||
|
Calculation
of LTM (last twelve months)
|
Depreciation
|
Interest
|
Provision
for
|
|||||||||||||
|
Net Income
|
& Amortization
|
Expense
|
Income Taxes
|
|||||||||||||
|
Full
year 2007
|
$ | 28.7 | $ | 20.4 | $ | 8.1 | $ | 15.4 | ||||||||
|
less:
First 9 mos 2007
|
$ | 23.2 | $ | 14.7 | $ | 5.7 | $ | 12.3 | ||||||||
|
add:
First 9 mos 2008
|
$ | 40.7 | $ | 18.3 | $ | 8.1 | $ | 21.2 | ||||||||
|
LTM
|
$ | 46.2 | $ | 24.0 | $ | 10.5 | $ | 24.3 | ||||||||
|
Full
year 2008
|
$ | 44.1 | $ | 24.2 | $ | 11.0 | $ | 22.9 | ||||||||
|
less:
First 9 mos 2008
|
$ | 40.7 | $ | 18.3 | $ | 8.1 | $ | 21.2 | ||||||||
|
add:
First 9 mos 2009
|
$ | 18.3 | $ | 18.8 | $ | 7.2 | $ | 8.8 | ||||||||
|
LTM
|
$ | 21.7 | $ | 24.7 | $ | 10.1 | $ | 10.5 | ||||||||
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