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| 8-K - FORM 8-K - NORCRAFT COMPANIES LP | q420128k.htm |
NEWS RELEASE Exhibit 99.1FOR IMMEDIATE RELEASE
Contact: Leigh E. Ginter
Chief Financial Officer
leigh.ginter@norcraftcompanies.com
(651) 234-3315
NORCRAFT COMPANIES, L.P.
REPORTS FOURTH QUARTER AND FISCAL 2012 RESULTS
March 26, 2013 – Eagan, Minnesota --- Norcraft Companies, L.P. (Norcraft) today reported financial results for the fourth quarter and fiscal year ended December 31, 2012.
FINANCIAL RESULTS
Fourth Quarter of Fiscal 2012 Compared with Fourth Quarter of Fiscal 2011
Net sales increased $8.8 million, or 14.2%, from $62.4 million for the fourth quarter of 2011 compared to $71.2 million for the same quarter of 2012. Income from operations decreased $0.6 million, or 14.7%, from $3.8 million for the fourth quarter of 2011 compared to $3.2 million for the same quarter of 2012. Net loss increased $0.5 million, or 14.4%, from $3.4 million for the fourth quarter of 2011 to $3.9 million in the same quarter of 2012.
EBITDA (as defined in the attached table) was $7.2 million for the fourth quarter of 2011 compared to $6.6 million for the same quarter of 2012.
Fiscal 2012 Compared with Fiscal 2011
Net sales increased $19.5 million, or 7.2%, from $269.3 million for fiscal 2011 compared to $288.8 million for fiscal 2012. Income from operations decreased by $3.0 million, or 13.4%, from $22.3 million for fiscal 2011 compared to $19.3 million for fiscal 2012. Net loss increased $5.9 million, or 156.2%, from $3.7 million for fiscal 2011 to $9.6 million in fiscal 2012.
EBITDA (as defined in the attached table) was $35.8 million for fiscal 2011 compared to $32.7 million for fiscal 2012.
“We are encouraged by the growth we have seen in our industry and the economy; the impact of which can be seen in our sales. But, with the competitiveness of the industry, much of the discounting and sales promotions have continued and our margins were negatively impacted. We are currently carefully adjusting our pricing, promotional activities and costs and expect future margins to improve along with sales,” commented President and CEO, Mark Buller.
CONFERENCE CALL
Norcraft has scheduled a conference call on Thursday, March 28, 2013 at 10:00 a.m. Eastern Time. To participate, dial 877-352-9693 and use the conference ID number 25872414. A telephonic replay will be available by calling 855-859-2056 and using the conference ID number 25872414.
GENERAL
Norcraft Companies is a leader in manufacturing, assembling and finishing kitchen and bathroom cabinetry in the U.S. and parts of Canada. We provide our customers with a single source for a broad range of high-quality cabinetry, including stock, semi-custom and custom cabinets manufactured in both framed and frameless, or full access construction. We market our products through seven main brands: Mid Continent Cabinetry, Norcraft Cabinetry, UltraCraft, StarMark Cabinetry, Fieldstone Cabinetry, Brookwood and Urban Effects.
-Selected Financial Data Tables Follow-
Norcraft Companies, L.P.
Consolidated Balance Sheets
(dollar amounts in thousands)
(unaudited)
ASSETS | December 31, | |||||||
2012 | 2011 | |||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 23,019 | $ | 24,185 | ||||
Trade accounts receivable, net | 20,264 | 20,092 | ||||||
Inventories | 19,760 | 17,503 | ||||||
Prepaid and other current assets | 2,220 | 1,835 | ||||||
Total current assets | 65,263 | 63,615 | ||||||
Non-current assets: | ||||||||
Property, plant and equipment, net | 25,961 | 27,434 | ||||||
Goodwill | 88,484 | 88,479 | ||||||
Intangible assets, net | 70,148 | 77,732 | ||||||
Display cabinets, net | 6,019 | 5,842 | ||||||
Other assets | 268 | 568 | ||||||
Total non-current assets | 190,880 | 200,055 | ||||||
Total assets | $ | 256,143 | $ | 263,670 | ||||
LIABILITIES AND MEMBER’S EQUITY (DEFICIT) | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 7,133 | $ | 6,566 | ||||
Accrued expenses | 14,893 | 13,775 | ||||||
Total current liabilities | 22,026 | 20,341 | ||||||
Non-current liabilities: | ||||||||
Long-term debt | 240,000 | 240,000 | ||||||
Unamortized premium on bonds payable | 127 | 166 | ||||||
Other liabilities | 48 | 108 | ||||||
Total non-current liabilities | 240,175 | 240,274 | ||||||
Total liabilities | 262,201 | 260,615 | ||||||
Commitments and contingencies | - | - | ||||||
Member's equity (deficit): | ||||||||
Member’s equity (deficit) | (7,686 | ) | 1,646 | |||||
Accumulated other comprehensive income | 1,628 | 1,409 | ||||||
Total member's equity (deficit) | (6,058 | ) | 3,055 | |||||
Total liabilities and member’s equity (deficit) | $ | 256,143 | $ | 263,670 | ||||
Norcraft Companies, L.P.
Consolidated Statements of Comprehensive Loss
(dollar amounts in thousands)
(unaudited)
Three months ended December 31, | Year Ended December 31, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Net sales | $ | 71,232 | $ | 62,362 | $ | 288,782 | $ | 269,305 | |||||||
Cost of sales | 54,595 | 45,630 | 215,274 | 195,853 | |||||||||||
Gross profit | 16,637 | 16,732 | 73,508 | 73,452 | |||||||||||
Selling, general and administrative expenses | 13,415 | 12,956 | 54,144 | 51,099 | |||||||||||
Income from operations | 3,222 | 3,776 | 19,364 | 22,353 | |||||||||||
Other expense: | |||||||||||||||
Interest expense, net | 6,447 | 6,443 | 25,819 | 23,549 | |||||||||||
Amortization of deferred financing costs | 780 | 788 | 3,120 | 2,454 | |||||||||||
Other expense, net | (77) | (22) | (16) | 81 | |||||||||||
Total other expense | 7,150 | 7,209 | 28,923 | 26,084 | |||||||||||
Net loss | (3,928) | (3,433) | (9,559) | (3,731) | |||||||||||
Other comprehensive income (loss): | |||||||||||||||
Foreign currency translation adjustment | (221 | ) | 87 | 219 | (295 | ) | |||||||||
Total other comprehensive income (loss) | (221 | ) | 87 | 219 | (295 | ) | |||||||||
Comprehensive loss | $ | (4,149 | ) | $ | (3,346 | ) | $ | (9,340 | ) | $ | (4,026 | ) | |||
Norcraft Companies, L.P.
Consolidated Statement of Cash Flows
(dollar amounts in thousands)
Year Ended December 31, | |||||||
2012 | 2011 | ||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (9,559 | ) | $ | (3,731 | ) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
Depreciation and amortization of property, plant and equipment | 4,723 | 4,935 | |||||
Amortization: | |||||||
Customer relationships | 4,467 | 4,467 | |||||
Deferred financing costs | 3,120 | 2,454 | |||||
Display cabinets | 4,113 | 4,005 | |||||
Discount amortization/accreted interest | (39 | ) | 180 | ||||
Provision for uncollectible accounts receivable | 168 | 236 | |||||
Provision for obsolete and excess inventory | 377 | (280 | ) | ||||
Provision for warranty claims | 3,071 | 3,143 | |||||
Stock compensation expense | 187 | 183 | |||||
Loss (gain) on disposal of assets | (2 | ) | 8 | ||||
Change in operating assets and liabilities: | |||||||
Trade accounts receivable | (257 | ) | (2,442 | ) | |||
Inventories | (2,597 | ) | 99 | ||||
Prepaid expenses | (385 | ) | (276 | ) | |||
Other assets | 301 | 183 | |||||
Accounts payable and accrued expenses | (1,482 | ) | (6,421 | ) | |||
Net cash provided by operating activities | 6,206 | 6,743 | |||||
Cash flows from investing activities: | |||||||
Proceeds from sale of property and equipment | 13 | 20 | |||||
Purchase of property, plant and equipment | (3,135 | ) | (2,586 | ) | |||
Additions to display cabinets | (4,290 | ) | (4,831 | ) | |||
Net cash used in investing activities | (7,412 | ) | (7,397 | ) | |||
Cash flows from financing activities: | |||||||
Borrowings on senior secured second lien notes payable | — | 62,400 | |||||
Payment of financing costs | (3 | ) | (8,274 | ) | |||
Proceeds from issuance of member interests | 50 | 139 | |||||
Distributions to member | (10 | ) | (58,015 | ) | |||
Net cash provided by (used in) financing activities | 37 | (3,750 | ) | ||||
Effect of exchange rates on cash and cash equivalents | 3 | (68 | ) | ||||
Net increase (decrease) in cash and cash equivalents | (1,166 | ) | (4,472 | ) | |||
Cash and cash equivalents, beginning of the period | 24,185 | 28,657 | |||||
Cash and cash equivalents, end of period | $ | 23,019 | $ | 24,185 | |||
Supplemental disclosure of cash flow information: | |||||||
Cash paid during the period for interest | $ | 25,433 | $ | 24,502 | |||
Norcraft Companies, L.P.
Reconciliation of Net Loss to EBITDA
(dollar amounts in thousands)
EBITDA is net loss before interest expense, income tax expense, depreciation and amortization. We believe EBITDA is useful to investors in evaluating our operating performance compared to that of other companies in our industry, as its calculation eliminates the effects of financing, income taxes and the accounting effects of capital spending, as these items may vary for different companies for reasons unrelated to overall operating performance. We also believe this financial metric provides information relevant to investors regarding our ability to service and/or incur debt. EBITDA is not a presentation made in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). Accordingly, when analyzing our operating performance, investors should not consider EBITDA in isolation or as a substitute for net loss, cash flows from operating activities or other income statement or cash flow statement data prepared in accordance with U.S. GAAP. Our calculation of EBITDA is not necessarily comparable to those of other similarly titled measures reported by other companies. The calculation of EBITDA is shown below:
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Net loss | $ | (3,928 | ) | $ | (3,433 | ) | $ | (9,559 | ) | $ | (3,731 | ) | ||||
Interest expense, net | 6,447 | 6,443 | 25,819 | 23,549 | ||||||||||||
Depreciation | 1,161 | 1,161 | 4,723 | 4,935 | ||||||||||||
Amortization of deferred financing costs | 780 | 788 | 3,120 | 2,454 | ||||||||||||
Amortization of customer relationships | 1,117 | 1,117 | 4,467 | 4,467 | ||||||||||||
Display cabinet amortization | 1,060 | 1,117 | 4,113 | 4,005 | ||||||||||||
State taxes | (79 | ) | (17 | ) | (26 | ) | 87 | |||||||||
EBITDA | $ | 6,558 | $ | 7,176 | $ | 32,657 | $ | 35,766 | ||||||||
FORWARD LOOKING STATEMENTS AND INFORMATION
Statements in this press release regarding activities, events or developments that management expects, believes or anticipates will or may occur in the future are forward looking statements. Forward looking statements may give management’s current expectations and projections relating to the financial condition, results of operations, plans, objectives, future performance and business of the company. You can identify these statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as ‘‘anticipate,’’ ‘‘estimate,’’ ‘‘expect,’’ ‘‘project,’’ ‘‘intend,’’ ‘‘plan,’’ ‘‘believe’’ and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events.
These forward looking statements are based on management’s expectations and beliefs concerning future events affecting the company. They are subject to uncertainties and factors relating to the company’s operations and business environment, all of which are difficult to predict and many of which are beyond the company’s control. Although management believes that the expectations reflected in its forward looking statements are reasonable, management does not know whether its expectations will prove correct. Such expectations can be affected by inaccurate assumptions that management might make or by known or unknown risks and uncertainties. Many factors that could cause actual results to differ materially from these forward looking statements including, but not limited to, the risks outlined under Part I, Item 1A, “Risk Factors,’’ in the Annual Report on Form 10-K filed by the company with the Securities and Exchange Commission.
Because of these factors, investors should not place undue reliance on any of these forward looking statements. Further, any forward looking statement speaks only as of the date on which it is made and, except as required by law, the company undertakes no obligation to update any forward looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of anticipated or unanticipated events or circumstances.