Attached files
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8-K - POOL CORPORATION 2009 EARNINGS 8-K - POOL CORP | pool2009er8k.htm |
Exhibit
99.1
FOR
IMMEDIATE RELEASE
POOL
CORPORATION REPORTS FISCAL 2009 RESULTS
Highlights include:
·
|
Record
annual cash flow from operations of
$113.3 million
|
·
|
Decrease
in total debt of $79.1 million
|
·
|
2010
EPS guidance of $1.00 to $1.15
|
______________________
COVINGTON, LA. (February
18, 2010) – Pool Corporation (NASDAQ/GSM:POOL) today announced
fourth quarter and full year 2009 results.
“The
Company’s 2009 results reflect our ability to capitalize on our financial and
operational strengths and provide evidence of our resiliency given the most
difficult external market environment ever faced by our industry. We
achieved many of our 2009 objectives by focusing on disciplined pricing and
purchasing strategies (driving record gross margin), rebalancing inventories and
improving working capital management (leading to record cash flow from
operations) and controlling costs relative to our current sales
levels. We believe that we realized continued market share gains,
which we attribute to our high service levels coupled with industry leading
programs and initiatives that include the expansion of category offerings in
tile and replacement parts. These improvements, along with recent
trends indicating increased stability in many external factors that have
adversely impacted new construction and replacement activity over the past
several years, provide us with confidence heading into 2010,” said
Manuel Perez de la Mesa, President and CEO.
Net sales
for the year ended December 31, 2009 decreased 14% to $1.54 billion, compared to
$1.78 billion in 2008. Base business sales declined 15%, reflecting
the prolonged impact of lower pool and irrigation construction activity, greater
deferred discretionary replacement activity and unfavorable weather and currency
fluctuations. These reductions were partially offset by an increase
in certain maintenance and repair product sales, inflationary price increases
passed through the supply chain and sales from regulatory changes.
Gross
profit for the year ended December 31, 2009 decreased 13% to $449.7 million from
$515.2 million in 2008. Gross profit as a percentage of net sales
(gross margin) increased 30 basis points to 29.2% in 2009 despite negative
pressures from the competitive pricing environment.
Selling
and administrative expenses (operating expenses) for 2009 decreased 10% to
$361.3 million from $399.8 million in 2008. This decrease
reflects the impact of cost control initiatives, including lower payroll
related, variable and discretionary expenses, and reduced delivery and vehicle
operating costs. Included in these results were $1.4 million of non-cash
charges in the second half of 2009 related to the closure and consolidation of
certain sales centers between September and December 2009.
Operating
income for the year declined 23% to $88.4 million from $115.5 million in the
comparable 2008 period. Operating income as a percentage of net sales
(operating margin) decreased to 5.7% in 2009, compared to 6.4% in
2008. Adjusted EBITDA (as defined in the addendum to this release)
was $107.9 million in 2009 compared to $135.7 million in
2008. Interest expense, net declined $9.2 million compared to
2008 due primarily to a 41% decrease in interest expense, which reflects lower
average borrowings and a lower weighted average effective interest rate, and
$1.8 million of foreign currency transaction gains.
As the
Company reported in its third quarter results, it recognized a
$26.5 million equity loss related to its pro rata share of Latham
Acquisition Corporation’s (LAC) non-cash goodwill and other intangible asset
impairment charge. Since the Company’s pro rata share exceeded the
$26.5 million recorded value of the investment in LAC as of
September 1, 2009, the recognized loss reflected the full write-off of
the investment. Prior to this, the Company had recognized an equity
loss of $2.2 million related to its share of LAC’s loss from ongoing
operations for the eight months ended August 2009. In total, the
Company recognized an equity loss of $28.7 million for LAC in
2009. This compares to an equity loss of $1.7 million recognized
in fiscal 2008. LAC filed for bankruptcy in December 2009 and its
Plan of Reorganization was approved by the United States Bankruptcy Court for
the District of Delaware in January 2010, allowing it to emerge from
bankruptcy. As of the date of the approval, the Company no longer has
an equity interest in LAC and will not recognize any impact related to LAC’s
future earnings or losses.
Earnings
per share for 2009 was $0.39 per diluted share on net income of
$19.2 million for the year, compared to earnings per share of $1.17 per
diluted share on net income of $57.0 million in 2008. Excluding
the impact of LAC’s non-cash impairment charge and the non-cash charges related
to facility closings, adjusted earnings per diluted share for 2009 was $0.95 on
adjusted net income of $46.5 million. (See the reconciliation of non-GAAP
to GAAP measures in the addendum to this release).
On the
balance sheet, total net receivables decreased 17% compared to
December 31, 2008 due primarily to lower fourth quarter sales and a
shift toward more cash sales resulting from tighter credit
terms. Inventory levels were $355.5 million at
December 31, 2009 compared to $405.9 million at
December 31, 2008. Excluding approximately
$8.0 million of inventory related to the October 2009 acquisition of
General Pool and Spa Supply, inventories decreased 14% year over year due to
successful inventory rebalancing efforts. Total debt outstanding at
December 31, 2009 was $248.7 million, down from $327.8 million at
December 31, 2008.
Cash
provided by operations increased $20.0 million to $113.3 million in 2009
compared to 2008. In January 2009, the Company paid
$30.0 million for its deferred third and fourth quarter 2008 federal income
tax payments. The Company also paid $26.0 million in 2009 for
its third and fourth quarter 2009 estimated taxes. Cash from
operations improved $76.0 million in 2009 excluding this $56.0 million
combined impact of timing differences related to 2008 and 2009 estimated federal
income tax payments. This improvement is due to focused management of
working capital.
Net sales
for the seasonally slow fourth quarter decreased 11% to $231.0 million from
$259.0 million in the comparable 2008 period. Base business
sales declined 13% in the quarter compared to the same period in
2008. Gross margin decreased 10 basis points to 29.0% in the
fourth quarter of 2009 from 29.1% for the same period last year.
Operating
loss for the fourth quarter of 2009 was $21.8 million compared to
$15.3 million in the same period of the previous year. Interest
expense, net declined $3.5 million due primarily to a 43.0% decrease in
interest expense and $1.5 million of foreign currency transaction
gains.
Loss per
diluted share for the fourth quarter of 2009 was $0.28 on a net loss of
$13.6 million, compared to a loss of $0.31 per diluted share on a net loss
of $14.8 million in the comparable 2008 period. Excluding the
impact of the non-cash charges, the adjusted fourth quarter loss per share was
$0.27 per diluted share.
“Looking
ahead, we are encouraged by indications that the downward economic trends of the
past several years are moderating and that sales levels should once again
benefit from long-term industry growth dynamics. We believe there is
potential for significant sales recovery over the next several years, driven in
part by pent-up demand for replacement and retrofit activity that has been
deferred due to recent market conditions. We also anticipate that new
pool and irrigation construction activities will gradually begin to return to
more normalized levels, even though it may be 2011 before we see growth in this
segment of the market. Based on current trends including the
unfavorable weather conditions during the first six weeks of 2010, we project
2010 earnings of $1.00 to $1.15 per diluted share. This range
includes our expectation for a higher seasonal loss per diluted share in the
first quarter of 2010 compared to the same period in 2009, with gradually
improving year on year comparisons as 2010 progresses. Our
experienced and dedicated team is ready to leverage our unique industry position
that we have established over the years to grow earnings once again,” said
Perez de la Mesa.
Pool
Corporation is the largest wholesale distributor of swimming pool and related
backyard products. Currently, POOL operates over 280 sales centers in
North America and Europe, through which it distributes more than 100,000
national brand and private label products to roughly 70,000 wholesale
customers. For more information about POOL, please visit www.poolcorp.com.
2
This news
release includes “forward-looking” statements that involve risk and
uncertainties that are generally identifiable through the use of words such as
“believe,” “expect,” “intend,” “plan,” “estimate,” “project” and similar
expressions and include projections of earnings. The forward-looking
statements in this release are made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. Forward-looking
statements speak only as of the date of this release, and we undertake no
obligation to update or revise such statements to reflect new circumstances or
unanticipated events as they occur. Actual results may differ
materially due to a variety of factors, including changes in the economy and the
housing market, the sensitivity of our business to weather conditions, our
ability to maintain favorable relationships with suppliers and manufacturers,
competition from other leisure product alternatives and mass merchants and other
risks detailed in POOL’s Form 10-Q for the quarter ended
September 30, 2009 filed with the Securities and Exchange
Commission.
CONTACT:
Craig K.
Hubbard
985.801.5117
craig.hubbard@poolcorp.com
3
POOL
CORPORATION
Consolidated
Statements of Income
(Unaudited)
(In
thousands, except per share data)
Three
Months Ended
|
Year
Ended
|
|||||||||||
December
31,
|
December
31,
|
|||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||
Net
sales
|
$
|
231,032
|
$
|
258,966
|
$
|
1,539,794
|
$
|
1,783,683
|
||||
Cost
of sales
|
163,963
|
183,644
|
1,090,070
|
1,268,455
|
||||||||
Gross
profit
|
67,069
|
75,322
|
449,724
|
515,228
|
||||||||
Percent
|
29.0
|
%
|
29.1
|
%
|
29.2
|
%
|
28.9
|
%
|
||||
Selling
and administrative expenses
|
88,845
|
90,650
|
361,284
|
399,752
|
||||||||
Operating
income (loss)
|
(21,776
|
)
|
(15,328
|
)
|
88,440
|
115,476
|
||||||
Percent
|
(9.4
|
)%
|
(5.9
|
)%
|
5.7
|
%
|
6.4
|
%
|
||||
Interest
expense, net
|
686
|
(1)
|
4,212
|
9,667
|
(1)
|
18,912
|
||||||
Income
before income taxes and equity earnings (loss)
|
(22,462
|
)
|
(19,540
|
)
|
78,773
|
96,564
|
||||||
Provision
for income taxes
|
(8,829
|
)
|
(7,486
|
)
|
30,957
|
37,911
|
||||||
Equity
earnings (loss) in unconsolidated investments, net
|
27
|
(2,741
|
)
|
(28,614
|
)
|
(1,697
|
)
|
|||||
Net
income (loss)
|
$
|
(13,606
|
)
|
$
|
(14,795
|
)
|
$
|
19,202
|
$
|
56,956
|
||
Earnings
(loss) per share:
|
||||||||||||
Basic
|
$
|
(0.28
|
)
|
$
|
(0.31
|
)
|
$
|
0.39
|
$
|
1.19
|
||
Diluted
|
$
|
(0.28
|
)
|
$
|
(0.31
|
)
|
$
|
0.39
|
$
|
1.17
|
(2)
|
|
Weighted
average shares outstanding:
|
||||||||||||
Basic
|
48,965
|
48,044
|
(2)
|
48,649
|
47,861
|
(2)
|
||||||
Diluted
|
48,965
|
48,044
|
(2)
|
49,049
|
48,488
|
(2)
|
||||||
Cash
dividends declared per common share
|
$
|
0.13
|
$
|
0.13
|
$
|
0.52
|
$
|
0.51
|
(1) Interest expense, net includes realized foreign currency
transaction gains of $1.5 million and $1.8 million for the quarter and
year ended December 31, 2009, respectively.
(2) As adjusted for the
adoption of Accounting Standards Codification
260-10-45-61A.
4
POOL
CORPORATION
Condensed
Consolidated Balance Sheets
(Unaudited)
(In
thousands)
December
31,
|
December
31,
|
Change
|
|||||||||||
2009
|
2008
|
$
|
% | ||||||||||
Assets
|
|||||||||||||
Current
assets:
|
|||||||||||||
Cash
and cash equivalents
|
$
|
15,843
|
$
|
15,762
|
$
|
81
|
1
|
%
|
|||||
Receivables,
net
|
96,364
|
16,311
|
80,053
|
>100
|
|||||||||
Receivables
pledged under receivables facility
|
—
|
99,273
|
(99,273
|
)
|
(100
|
)
|
|||||||
Product
inventories, net
|
355,528
|
405,914
|
(50,386
|
)
|
(12
|
)
|
|||||||
Prepaid
expenses and other current assets
|
12,901
|
7,676
|
5,225
|
68
|
|||||||||
Deferred
income taxes
|
10,681
|
11,908
|
(1,227
|
)
|
(10
|
)
|
|||||||
Total
current assets
|
491,317
|
556,844
|
(65,527
|
)
|
(12
|
)
|
|||||||
Property
and equipment, net
|
31,432
|
33,048
|
(1,616
|
)
|
(5
|
)
|
|||||||
Goodwill
|
176,923
|
169,569
|
7,354
|
4
|
|||||||||
Other
intangible assets, net
|
13,917
|
13,339
|
578
|
4
|
|||||||||
Equity
interest investments
|
1,006
|
31,157
|
(30,151
|
)
|
(97
|
)
|
|||||||
Other
assets, net
|
31,275
|
26,949
|
4,326
|
16
|
|||||||||
Total
assets
|
$
|
745,870
|
$
|
830,906
|
$
|
(85,036
|
)
|
(10
|
)%
|
||||
Liabilities
and stockholders’ equity
|
|||||||||||||
Current
liabilities:
|
|||||||||||||
Accounts
payable
|
$
|
178,391
|
$
|
173,688
|
$
|
4,703
|
3
|
%
|
|||||
Accrued
expenses and other current liabilities
|
33,886
|
61,701
|
(27,815
|
)
|
(45
|
)
|
|||||||
Short-term
financing
|
—
|
20,792
|
(20,792
|
)
|
(100
|
)
|
|||||||
Current
portion of long-term debt and other long-term liabilities
|
48,236
|
6,111
|
42,125
|
>100
|
|||||||||
Total
current liabilities
|
260,513
|
262,292
|
(1,779
|
)
|
(1
|
)
|
|||||||
Deferred
income taxes
|
24,691
|
20,032
|
4,659
|
23
|
|||||||||
Long-term
debt
|
200,700
|
301,000
|
(100,300
|
)
|
(33
|
)
|
|||||||
Other
long-term liabilities
|
7,779
|
5,848
|
1,931
|
33
|
|||||||||
Total
liabilities
|
493,683
|
589,172
|
(95,489
|
)
|
(16
|
)
|
|||||||
Total
stockholders’ equity
|
252,187
|
241,734
|
10,453
|
4
|
|||||||||
Total
liabilities and stockholders’ equity
|
$
|
745,870
|
$
|
830,906
|
$
|
(85,036
|
)
|
(10
|
)%
|
1.
|
In
August 2009, the Company’s accounts receivable securitization
facility terminated and was not
replaced.
|
2.
|
The
allowance for doubtful accounts was $11.4 million at December
31, 2009 and $13.7 million at
December 31, 2008.
|
3.
|
The
inventory reserve was $7.8 million at December 31, 2009 and
$8.4 million at
December 31, 2008.
|
5
POOL
CORPORATION
Condensed
Consolidated Statements of Cash Flows
(Unaudited)
(In
thousands)
Year
Ended
|
|||||||||
December
31,
|
|||||||||
2009
|
2008
|
Change
|
|||||||
Operating
activities
|
|||||||||
Net
income
|
$
|
19,202
|
$
|
56,956
|
$
|
(37,754
|
)
|
||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
|||||||||
Depreciation
|
9,091
|
9,732
|
(641
|
)
|
|||||
Amortization
|
2,454
|
3,722
|
(1,268
|
)
|
|||||
Share-based
compensation
|
6,429
|
6,709
|
(280
|
)
|
|||||
Excess
tax benefits from share-based compensation
|
(2,408
|
)
|
(4,538
|
)
|
2,130
|
||||
Equity
loss in unconsolidated investments
|
30,036
|
2,800
|
27,236
|
||||||
Gain
on foreign currency transactions
|
(1,846
|
)
|
—
|
(1,846
|
)
|
||||
Goodwill
impairment
|
310
|
440
|
(130
|
)
|
|||||
Other
|
(2,869
|
)
|
4,463
|
(7,332
|
)
|
||||
Changes
in operating assets and liabilities, net of effects of
acquisitions:
|
|||||||||
Receivables
|
25,441
|
26,350
|
(909
|
)
|
|||||
Product
inventories
|
56,676
|
(11,098
|
)
|
67,774
|
|||||
Accounts
payable
|
(1,815
|
)
|
(24,916
|
)
|
23,101
|
||||
Other
current assets and liabilities
|
(27,451
|
)
|
22,662
|
(50,113
|
)
|
||||
Net
cash provided by operating activities
|
113,250
|
93,282
|
19,968
|
||||||
Investing
activities
|
|||||||||
Acquisition
of businesses, net of cash acquired
|
(10,937
|
)
|
(35,466
|
)
|
24,529
|
||||
Divestiture
of business
|
—
|
1,165
|
(1,165
|
)
|
|||||
Purchase
of property and equipment, net of sale proceeds
|
(7,168
|
)
|
(7,003
|
)
|
(165
|
)
|
|||
Net
cash used in investing activities
|
(18,105
|
)
|
(41,304
|
)
|
23,199
|
||||
Financing
activities
|
|||||||||
Proceeds
from revolving line of credit
|
446,937
|
370,948
|
75,989
|
||||||
Payments
on revolving line of credit
|
(499,237
|
)
|
(343,473
|
)
|
(155,764
|
)
|
|||
Proceeds
from asset-backed financing
|
57,000
|
83,335
|
(26,335
|
)
|
|||||
Payments
on asset-backed financing
|
(77,792
|
)
|
(130,870
|
)
|
53,078
|
||||
Payments
on long-term debt and other long-term liabilities
|
(6,157
|
)
|
(3,171
|
)
|
(2,986
|
)
|
|||
Payments
of capital lease obligations
|
—
|
(251
|
)
|
251
|
|||||
Payments
of deferred financing costs
|
(305
|
)
|
(56
|
)
|
(249
|
)
|
|||
Excess
tax benefits from share-based compensation
|
2,408
|
4,538
|
(2,130
|
)
|
|||||
Proceeds
from issuance of common stock under share-based compensation
plans
|
4,283
|
6,423
|
(2,140
|
)
|
|||||
Payments
of cash dividends
|
(25,310
|
)
|
(24,431
|
)
|
(879
|
)
|
|||
Purchases
of treasury stock
|
(1,171
|
)
|
(7,718
|
)
|
6,547
|
||||
Net
cash used in financing activities
|
(99,344
|
)
|
(44,726
|
)
|
(54,618
|
)
|
|||
Effect
of exchange rate changes on cash
|
4,280
|
(7,315
|
)
|
11,595
|
|||||
Change
in cash and cash equivalents
|
81
|
(63
|
)
|
144
|
|||||
Cash
and cash equivalents at beginning of period
|
15,762
|
15,825
|
(63
|
)
|
|||||
Cash
and cash equivalents at end of period
|
$
|
15,843
|
$
|
15,762
|
$
|
81
|
6
ADDENDUM
Base
Business
The
following table breaks out our consolidated results into the base business
component and the excluded components (sales centers excluded from base
business):
(Unaudited)
|
Base
Business
|
Excluded
|
Total
|
|||||||||||
(In
thousands)
|
Three
Months Ended
|
Three
Months Ended
|
Three
Months Ended
|
|||||||||||
December
31,
|
December
31,
|
December
31,
|
||||||||||||
2009
|
2008
|
2009
|
2008
|
2009
|
2008
|
|||||||||
Net
sales
|
$
|
224,810
|
$
|
257,657
|
$
|
6,222
|
$
|
1,309
|
$
|
231,032
|
$
|
258,966
|
||
Gross
profit
|
65,629
|
74,944
|
1,440
|
378
|
67,069
|
75,322
|
||||||||
Gross
margin
|
29.2
|
%
|
29.1
|
%
|
23.1
|
%
|
28.9
|
%
|
29.0
|
%
|
29.1
|
%
|
||
Operating
expenses
|
86,024
|
89,482
|
2,821
|
1,168
|
88,845
|
90,650
|
||||||||
Expenses
as a % of net sales
|
38.3
|
%
|
34.7
|
%
|
45.3
|
%
|
89.2
|
%
|
38.5
|
%
|
35.0
|
%
|
||
Operating
loss
|
(20,395
|
)
|
(14,538
|
)
|
(1,381
|
)
|
(790
|
)
|
(21,776
|
)
|
(15,328
|
)
|
||
Operating
margin
|
(9.1
|
)%
|
(5.6
|
)%
|
(22.2
|
)%
|
(60.4
|
)%
|
(9.4
|
)%
|
(5.9
|
)%
|
(Unaudited)
|
Base
Business
|
Excluded
|
Total
|
|||||||||||
(In
thousands)
|
Year
Ended
|
Year
Ended
|
Year
Ended
|
|||||||||||
December
31,
|
December
31,
|
December
31,
|
||||||||||||
2009
|
2008
|
2009
|
2008
|
2009
|
2008
|
|||||||||
Net
sales
|
$
|
1,482,686
|
$
|
1,737,465
|
$
|
57,108
|
$
|
46,218
|
$
|
1,539,794
|
$
|
1,783,683
|
||
Gross
profit
|
434,264
|
501,019
|
15,460
|
14,209
|
449,724
|
515,228
|
||||||||
Gross
margin
|
29.3
|
%
|
28.8
|
%
|
27.1
|
%
|
30.7
|
%
|
29.2
|
%
|
28.9
|
%
|
||
Operating
expenses
|
345,591
|
385,280
|
15,693
|
14,472
|
361,284
|
399,752
|
||||||||
Expenses
as a % of net sales
|
23.3
|
%
|
22.2
|
%
|
27.5
|
%
|
31.3
|
%
|
23.5
|
%
|
22.4
|
%
|
||
Operating
income (loss)
|
88,673
|
115,739
|
(233
|
)
|
(263
|
)
|
88,440
|
115,476
|
||||||
Operating
margin
|
6.0
|
%
|
6.7
|
%
|
(0.4
|
)%
|
(0.6
|
)%
|
5.7
|
%
|
6.4
|
%
|
We have
excluded the following acquisitions from base business for the periods
identified:
Acquired
|
Acquisition
Date
|
Net
Sales
Centers Acquired
|
Period
Excluded
|
|||
General
Pool & Spa Supply (GPS) (1)
|
October
2009
|
7
|
October–December
2009
|
|||
Proplas
Plasticos, S.L. (Proplas)
|
November
2008
|
0
|
January–December
2009 and November–December
2008
|
|||
National
Pool Tile (NPT) (2)
|
March
2008
|
8
|
January–May
2009 and March–May 2008
|
|||
Canswim
Pools
|
March
2008
|
1
|
January–May
2009 and March–May 2008
|
(1) We acquired 10 GPS sales centers and
have consolidated 3 of these with existing sales centers as of
December 31, 2009.
(2) We acquired 15 NPT sales centers and have
consolidated 7 of these with existing sales centers, including 4 in
March 2008, 2 in the third
quarter of 2008
and 1 in April 2009.
7
We
exclude the following sales centers from base business results for a period of
15 months:
·
|
acquired
sales centers (see table above);
|
·
|
existing
sales centers consolidated with acquired sales
centers;
|
·
|
closed
sales centers;
|
·
|
consolidated
sales centers in cases where we do not expect to maintain the majority of
the existing business; and
|
·
|
sales
centers opened in new markets.
|
As of
December 31, 2009, five closed sales centers (including one closed in 2009)
and one existing sales center that was consolidated with an acquired sales
center were excluded from base business.
The table
below summarizes the changes in our sales centers in 2009:
December
31, 2008
|
288
|
|
Acquired,
net of consolidations
|
7
|
|
Consolidated
|
(7
|
)
|
Closed
|
(1
|
)
|
December
31, 2009
|
287
|
We
generally allocate corporate overhead expenses to excluded sales centers on the
basis of their net sales as a percentage of total net sales. After 15
months of operations, we include acquired, consolidated and new market sales
centers in the base business calculation including the comparative prior year
period.
Since we
divested our pool liner manufacturing operation in France at the beginning of
April 2008, we have excluded these operations from base business for the
comparative three month period ended March 31, 2008.
Adjusted
Net Income (Loss) and Adjusted Earnings (Loss) Per Share
The table
below reconciles net income (loss) to adjusted net income (loss) and earnings
(loss) per diluted share to adjusted earnings (loss) per diluted
share. For comparability purposes, the adjusted 2009 amounts exclude
a one-time non-cash charge related to our investment in LAC and non-cash charges
related to facility closings.
(Unaudited)
|
Three
Months Ended
|
Year
Ended
|
|||||||||||
(In
thousands, except per share data)
|
December
31,
|
December
31,
|
|||||||||||
2009
|
2008
|
2009
|
2008
|
||||||||||
Net
income (loss)
|
$
|
(13,606
|
)
|
$
|
(14,795
|
)
|
$
|
19,202
|
$
|
56,956
|
|||
Add:
|
|||||||||||||
Equity
loss related to LAC’s impairment charge
|
—
|
—
|
26,472
|
—
|
|||||||||
Non-cash
charges related to facility closures, net of tax (1)
|
645
|
161
|
833
|
263
|
|||||||||
Adjusted
net income (loss)
|
$
|
(12,961
|
)
|
$
|
(14,634
|
)
|
$
|
46,507
|
|
$
|
57,219
|
||
Earnings
(loss) per diluted share
|
$
|
(0.28
|
)
|
$
|
(0.31
|
)
|
$
|
0.39
|
$
|
1.17
|
|||
Add:
|
|||||||||||||
Loss
per diluted share related to LAC’s impairment charge
|
—
|
—
|
0.54
|
—
|
|||||||||
Loss
per diluted share for non-cash charges related to facility
closures
|
0.01
|
0.01
|
(2)
|
0.02
|
0.01
|
||||||||
Adjusted
earnings (loss) per diluted share
|
$
|
(0.27
|
)
|
$
|
(0.30
|
)
|
$
|
0.95
|
|
$
|
1.18
|
(1) Tax related to the non-cash charges was $417, $104
, $539 and $170 for the three and twelve months ended Decemeber 31, 2009
and 2008, respectively.
(2) The per
diluted share impact for non-cash charges related to facility closures in the
fourth quarter of 2008 has been rounded up to reflect the change
in
total adjusted loss per diluted share of $0.01, which is calculated by dividing
adjusted net loss by diluted weighted average shares for this
period.
8
Adjusted
EBITDA
We define
Adjusted EBITDA as net income or net loss plus interest expense, income taxes,
depreciation, amortization, share-based compensation, goodwill and other
non-cash impairments and equity earnings or loss in unconsolidated investments,
net of income taxes. Adjusted EBITDA is not a measure of cash flow or
liquidity as determined by generally accepted accounting principles
(GAAP). We have included Adjusted EBITDA as a supplemental disclosure
because we believe that it is widely used by our investors, industry analysts
and others as a useful supplemental liquidity measure in conjunction with cash
flows provided by or used in operating activities to help investors
understand our ability to provide cash flows to fund growth, service debt and
pay dividends as well as compare our cash flow generating capacity from year to
year.
We
believe Adjusted EBITDA should be considered in addition to, not as a substitute
for, operating income or loss, net income or loss, cash flows provided by or
used in operating, investing and financing activities or other income statement
or cash flow statement line items reported in accordance with GAAP. Other
companies may calculate Adjusted EBITDA differently than we do, which may limit
its usefulness as a comparative measure.
The table
below presents a reconciliation of net income to Adjusted EBITDA.
(Unaudited)
|
Year
Ended December 31,
|
|||||
(In
thousands)
|
2009
|
2008
|
||||
Net
income
|
$
|
19,202
|
$
|
56,956
|
||
Add:
|
||||||
Interest
expense, net (1)
|
11,513
|
18,912
|
||||
Provision
for income taxes
|
30,957
|
37,911
|
||||
Share-based
compensation
|
6,429
|
6,709
|
||||
Goodwill
impairment
|
310
|
440
|
||||
Equity
loss in unconsolidated investments, net of tax (2)
|
28,614
|
1,697
|
||||
Depreciation
|
9,091
|
9,732
|
||||
Amortization
(3)
|
1,787
|
3,356
|
||||
Adjusted
EBITDA
|
$
|
107,903
|
$
|
135,713
|
(1) Excludes foreign currency transaction gains of $1.8
million in 2009.
(2) Tax related to our equity loss is disclosed
as Income tax benefit on equity loss in the table below.
(3) Excludes amortization of deferred finance charges of $667
for 2009 and $366 for 2008.
The table
below presents a reconciliation of Adjusted EBITDA to net cash provided by
operating activities. Please see page 6 for our Condensed
Consolidated Statements of Cash Flows.
(Unaudited)
|
Year
Ended December 31,
|
|||||
(In
thousands)
|
2009
|
2008
|
||||
Adjusted
EBITDA
|
$
|
107,903
|
$
|
135,713
|
||
Add:
|
||||||
Interest
expense, net (1)
|
(10,846
|
)
|
(18,546
|
)
|
||
Provision
for income taxes
|
(30,957
|
)
|
(37,911
|
)
|
||
Foreign
currency transaction gains
|
(1,846
|
)
|
—
|
|||
Income
tax benefit on equity loss
|
1,422
|
1,103
|
||||
Excess
tax benefits on share-based compensation
|
(2,408
|
)
|
(4,538
|
)
|
||
Other
|
(2,869
|
)
|
4,463
|
|||
Change
in operating assets and liabilities
|
52,851
|
12,998
|
||||
Net
cash provided by operating activities
|
$
|
113,250
|
$
|
93,282
|
(1) Excludes amortization of deferred financing costs of $667
for 2009 and $366 for 2008. This is a
non-cash expense included in interest expense, net on the Consolidated
Statements of Income. Also excludes foreign currency transaction gains of
$1.8 million in 2009.
9