COMMERCIAL BARGE LINE CO - FORM 8-K - February 4, 2011

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EX-99.1 - EX-99.1 - COMMERCIAL BARGE LINE COc62800exv99w1.htm
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): February 3, 2011
 
COMMERCIAL BARGE LINE COMPANY
(Exact Name of Registrant as Specified in Charter)
 
         
Delaware   333-124454-12   03-0552365
         
(State or other jurisdiction of
incorporation or organization) 		  (Commission File Number)   (I.R.S. Employer
Identification No.)
     
1701 E. Market Street, Jeffersonville, Indiana   47130
(Address of principal executive offices)   (Zip Code)
(812) 288-0100
(Registrant’s telephone number, including area code)
Former name or former address, if changed since last report: N/A
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 

 

 

Item 7.01   Regulation FD Disclosure.
     On February 3, 2011, American Commercial Lines Inc., the parent company of Commercial Barge Line Company, issued a press release announcing the commencement by its direct parent, ACL I Corporation (“ACL Corp”), of a private placement of $225 million in aggregate principal amount of ACL Corp’s Senior PIK Toggle Notes due 2016 (the “Notes Offering”). The Notes Offering is being conducted pursuant to a confidential offering memorandum in a private placement under Rule 144A and Regulation S of the Securities Act of 1933, as amended. A copy of the press release is furnished as Exhibit 99.1 hereto and incorporated by reference herein.
     The information contained in this report shall not constitute an offer to sell or a solicitation of an offer to purchase any notes and shall not constitute an offer, solicitation or sale in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful.
     The information contained in this Item 7.01 is being furnished and shall not be deemed “filed” with the Securities and Exchange Commission or otherwise incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
     Commercial Barge Line Company is also hereby furnishing the following information regarding its business. References to the “Company” below refer to ACL Corp together with its subsidiaries.
Preliminary Results for Year Ended December 31, 2010
          Based upon currently available information, the Company estimates that for the year ended December 31, 2010 its: (i) consolidated revenue was in the range of $728 million to $732 million, reflecting estimated revenues from its transportation and services in the range of $639 million to $643 million and estimated revenues from manufacturing in the range of $88 million to $92 million; (ii) consolidated income from continuing operations was in the range of $(1) million to $(5) million; (iii) consolidated EBITDA from continuing operations was in the range of $96 million to $100 million; and (iv) Adjusted EBITDA was in the range of $128 million to $132 million. Additionally, as of December 31, 2010, the Company’s external manufacturing sales backlog was approximately $102.4 million of contracted revenue. This preliminary information, which has been prepared by and is the responsibility of the Company’s management, is based on additional data becoming available and the finalization of customary closing procedures for the three-month period and year ended December 31, 2010. Actual results could be materially different from the Company’s estimates. In addition, Ernst & Young LLP, the Company’s independent public accounting firm, has not performed any procedures with respect to the financial information for the three- and twelve-month periods ended December 31, 2010, nor have they expressed any opinion or other form of assurance with respect to the estimated ranges presented above or their achievability.
          The following table reconciles the Company’s estimated net income to its estimates of EBITDA and Adjusted EBITDA for the year ended December 31, 2010 based upon the midpoint of the ranges set forth above.
         
    Year Ended
    December 31, 2010
    (in millions)
Net income (loss) from continuing operations
  $ (3.0 )
Interest, net
    34.0  
Non-cash debt retirement costs
    14.0  
Income taxes
    6.0  
Depreciation and amortization
    47.0  
 
        
EBITDA(1)
    98.0  
 
        
Equity based compensation(2)
    8.0  
Acquisition costs(3)
    11.0  
Compensation cost savings(4)
    10.0  
Public company costs(5)
    2.0  
Restructuring charges(6)
    1.0  
 
        
Adjusted EBITDA(1)
  $ 130.0  
 
        

 

 

 
(1) EBITDA consists of earnings before interest, taxes, depreciation and amortization and debt retirement expenses. Adjusted EBITDA consists of EBITDA and eliminates the impact of certain non-cash, nonrecurring or other items that are included in net income and EBITDA that we do not consider indicative of the Company’s ongoing operating performance after the acquisition of the Company by certain private investment funds controlled by Platinum Equity, LLC (the “Acquisition”).
 
  EBITDA and Adjusted EBITDA are not calculated or presented in accordance with United States generally accepted accounting principles (“U.S. GAAP”) and other companies in the Company’s industry may calculate EBITDA and Adjusted EBITDA differently than the Company. As a result, these financial measures have limitations as analytical and comparative tools and you should not consider these items in isolation, or as a substitute for analysis of the Company’s results as reported under U.S. GAAP. EBITDA and Adjusted EBITDA should not be considered as measures of discretionary cash available to the Company to invest in the growth of our business. In calculating these financial measures, the Company makes certain adjustments that are based on assumptions and estimates that may prove to have been inaccurate. In addition, in evaluating these financial measures, you should be aware that in the future the Company may incur expenses similar to those eliminated in this presentation. This presentation of EBITDA and Adjusted EBITDA should not be construed as an inference that the Company’s future results will be unaffected by unusual or non-recurring items.
 
(2)   Reflects exclusion of non-cash equity-based incentive compensation expense
 
(3)   Reflects one-time legal and advisory costs associated with the December 2010 merger.
 
(4)   Reflects an estimated $10.0 million in cash bonus payments accrued during 2010 that would not have been accrued had the 2011 executive bonus structure that is expected to be implemented in connection with the December 2010 merger been in effect during 2010.
 
(5)   Reflects exclusion of certain costs associated with being a company with publicly traded equity that the Company believes can be internalized by its existing management team, including investor relations expenses, internal audit expenses, board of director expenses and estimated incremental audit fee expenses.
 
(6)   Reflects restructuring costs, primarily related to severance and lease buyout costs.
          The Company also announced that it has received an independent appraisal of its fleet. The estimated fair market value of its fleet reflected in the December 2010 appraisal report is approximately $1.1 billion. Net forced liquidation value was $821.8 million.
Selected Summary and Unaudited Pro Forma Consolidated Financial Data
         
    As of
Pro Forma Financial Data(a):
 
September 30, 2010
 
Cash and cash equivalents
    $10,341  
Total assets
    $367  
Total secured debt
    $393,000  
Total debt
    $643,000  
 
The following table reconciles net income to EBITDA and Adjusted EBITDA on an historical basis:
 
                                                 
                Last Twelve
 		 
          Nine Months
 		    Months Ended
 		 
   
Years Ended December 31,
   
Ended September 30,
   
September 30,
 
   
2009
   
2008
   
2007
   
2010
   
2009
   
2010
 
                (in thousands)              
 
Net income (loss) from continuing operations
    $(2,028 )     $47,383       $44,367       $222       $(16,179 )     $14,373  
Adjustments from continuing operations:
                                               
Interest income
     (66 )     (148 )     (161 )      (1 )      (12 )     (55 )
Interest expense
    40,932       26,829       20,578       29,434       30,803       39,563  
Debt retirement expenses
    17,659       2,379       23,938       —       17,659       —  
Depreciation and amortization
    52,475       50,446       49,371       35,118       39,515       48,078  
Taxes
    (1,148 )     27,243       21,855       1,089       (9,149 )     9,090  
                                                 
EBITDA from continuing operations
    107,824       154,132       159,948       65,862       62,637       111,049  
                                                 
Equity based compensation(b)
    8,164       9,284       6,846       3,094       6,672       4,586  
Compensation cost savings(c)
    —       —       —       5,400       —       5,400  
Public company costs(d)
    2,500       2,500       2,500       1,900       1,900       2,500  
Restructuring charges(e)
    5,830       870       783       612       4,231       2,211  
                                                 
Adjusted EBITDA
    $124,318       $166,786       $170,077       $76,868       $75,440       $125,746  
                                                 
 
 
(a) The pro forma financial information gives effect to the Acquisition, the Notes Offering and, in each case, the incurrence of indebtedness in connection therewith. This information does not include the effect of purchase accounting related to the Acquisition, including the write-up of the value of certain assets and liabilities, including the write-up of our indebtedness.
 
(b) Reflects exclusion of non-cash equity-based incentive compensation expense.
 
(c) Reflects an estimated $5.4 million reduction in cash bonus payments accrued during the nine months ended September 30, 2010 that would have resulted had the 2011 executive bonus structure that is expected to be implemented in connection with the Acquisition been in effect during 2010.
 
(d) Reflects exclusion of certain costs associated with being a company with publicly traded equity that the Company believes can be internalized by its existing management team, including investor relations expenses, internal audit expenses, board of director expenses and estimated incremental audit fee expenses.
 
(e) Reflects restructuring costs, primarily related to the closure of the Company’s Houston office and related severance charges.
Item 9.01.   Financial Statements and Exhibits.
     (d) Exhibits
     
Exhibit No.   Description
 
    
99.1
  Press Release, dated February 3, 2011.

 

 

SIGNATURE
     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
         
  COMMERCIAL BARGE LINE COMPANY
 		  
Date: February 3, 2011  By:   /s/ Thomas R. Pilholski    
    Thomas R. Pilholski   
    Senior Vice President, Chief Financial Officer   
 

 

 

EXHIBIT INDEX
     
Exhibit No.   Description
 
    
99.1
  Press Release, dated February 3, 2011.

 

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