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8-K - CURRENT REPORT OF MATERIAL EVENTS OR CORPORATE CHANGES - Nexeo Solutions Holdings, LLCa14-19297_18k.htm

Exhibit 99.1

 

Nexeo Solutions Holdings, LLC

Management Adjusted EBITDA Reconciliation

(in thousands)

 

 

 

Q4FY13

 

Q1FY14

 

Q2FY14

 

Q3 FY14

 

LTM
Q3 FY14

 

Pro Forma
6/30/2014
LTM (1)

 

Net Income (Loss) Attributable to Nexeo Solutions

 

$

6,965

 

$

(12,846

)

$

1,353

 

$

7,337

 

$

2,809

 

$

10,094

 

Net Income (Loss) Attributable to Noncontrolling Interest

 

1,031

 

1,656

 

(168

)

(115

)

2,404

 

2,404

 

Interest

 

13,836

 

14,282

 

15,653

 

17,134

 

60,905

 

63,557

 

Taxes

 

1,869

 

2,419

 

983

 

859

 

6,130

 

5,806

 

Depreciation and Amortization

 

10,550

 

11,657

 

14,483

 

14,712

 

51,402

 

53,104

 

EBITDA

 

34,251

 

17,168

 

32,304

 

39,927

 

123,650

 

134,965

 

Management add-backs (2)

 

9,476

 

4,992

 

4,127

 

5,077

 

23,672

 

26,415

 

Foreign exchange (gains) losses, net (3)

 

(510

)

110

 

1,635

 

(293

)

942

 

875

 

Management fees (4)

 

1,164

 

1,272

 

1,384

 

1,196

 

5,016

 

5,016

 

Compensation expense related to management equity plan (non-cash)

 

291

 

281

 

264

 

264

 

1,100

 

1,100

 

Transaction and other one-time items (5)

 

1,958

 

4,662

 

4,409

 

(50

)

10,979

 

16,243

 

Management Adjusted EBITDA

 

$

46,630

 

$

28,485

 

$

44,123

 

$

46,121

 

$

165,359

 

$

184,614

 

 


(1)              Effective December 1, 2013, the Company acquired 100% of the outstanding shares of Chemical Specialists and Development, Inc. (“CSD”), and substantially all of the assets of STX Freight Company (“STX”) and ST Laboratories Group, LLC (“ST Laboratories”), two related businesses of CSD (collectively, the “CSD Acquisition”). Effective April 1, 2014, the Company acquired 100% of the outstanding shares of Archway Sales, Inc., a Missouri corporation (“Archway”), and substantially all of the assets of JACAAB, LLC, a related business of Archway, (“JACAAB” and together, the “Archway Acquisition”). On July 1, 2014, the Company sold its North American composites operations (the “Composites Sale”). Pro forma Management Adjusted EBITDA for the twelve months ended June 30, 2014 reflects (i) the full contribution of CSD, STX and ST Laboratories, (ii) the full contribution of Archway and JACAAB and (iii) the impact of the Composites Sale reflected as discontinued operations. The pro forma financial information was derived from unaudited financial statements and information of (i) Archway and JACAAB, (ii) CSD, STX and ST Laboratories and (iii) the Company’s North American composites operations, each for the twelve months ended June 30, 2014. Pro forma results are not necessarily indicative of either future results of operations or results that might have been achieved had the acquisitions and the disposition been completed at the beginning of the period.

(2)              Management adjustments associated with integration, transition, restructuring and transformational activities.

(3)              Includes net realized and unrealized foreign exchange gains and losses.

(4)              Management, monitoring, consulting and leverage fees, per the agreement with TPG Capital, L.P. (“TPG”).

(5)              Professional and transaction costs related to the CSD Acquisition, the Archway Acquisition, the Composites Sale, other potential acquisitions and other one-time items. Includes insurance recoveries of $3,731 recognized during Q3 FY14 related to the final settlement of the Company’s claims associated with the fire at the Garland facility that occurred in November 2012. These recoveries offset operating costs incurred to date in connection with this incident.

 

Non-GAAP Financial Measure and Related Information

 

The above table contains non-GAAP financial measures as such term is defined in Regulation G under the rules of the Securities and Exchange Commission. While we believe these non-GAAP financial measures are useful in evaluating the Company, this information should be considered as supplemental in nature and not as a substitute for or superior to the related financial information prepared in accordance with GAAP. Further, these non-GAAP financial measures may differ from similarly titled measures presented by other companies. In addition, Management Adjusted EBITDA is not intended to be a measure of free cash flow for management’s discretionary use, as it does not include certain cash requirements such as interest payments, tax payments and debt service requirements. Moreover, Management Adjusted EBITDA as presented for financial reporting purposes herein, although similar, is not the same as similar terms in the applicable covenants in our ABL Facility, Term Loan Facility or our senior subordinated notes.