EAGAN, Minn. - Norcraft Companies, L.P. (Norcraft) today reports financial results for the third quarter ended September 30, 2013.
FINANCIAL RESULTS
Third Quarter of Fiscal 2013 Compared with Third Quarter of Fiscal 2012
Net sales increased $17.7 million, or 24.0%, from $73.9 million for the third quarter of 2012 to $91.6 million for the same quarter of 2013. Income from operations increased $2.3 million, or 50.8%, from $4.7 million for the third quarter of 2012 to $7.0 million for the same quarter of 2013. Net loss decreased $2.3 million from $2.6 million for the third quarter of 2012 to $0.3 million for the same quarter of 2013.
Adjusted EBITDA (a non-GAAP measure defined in the attached table) was $11.3 million for the third quarter of 2013 compared to $8.0 million for the same quarter of 2012.
GENERAL
Norcraft Companies is a leading manufacturer of kitchen and bathroom cabinetry in the U.S. and 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.
|
Norcraft Companies, L.P. Consolidated Balance Sheets (dollar amounts in thousands) |
||||||||||||
| September 30, | December 31, | |||||||||||
| 2013 | 2012 | |||||||||||
| (unaudited) | ||||||||||||
| ASSETS | ||||||||||||
| Current assets: | ||||||||||||
| Cash and cash equivalents | $ | 38,205 | $ | 23,019 | ||||||||
| Trade accounts receivable, net | 26,379 | 20,264 | ||||||||||
| Inventories | 23,647 | 19,760 | ||||||||||
| Prepaid and other current assets | 2,340 | 2,220 | ||||||||||
| Total current assets | 90,571 | 65,263 | ||||||||||
| Non-current assets: | ||||||||||||
| Property, plant and equipment, net | 25,377 | 25,961 | ||||||||||
| Goodwill | 88,476 | 88,484 | ||||||||||
| Intangible assets, net | 64,458 | 70,148 | ||||||||||
| Display cabinets, net | 5,779 | 6,019 | ||||||||||
| Other assets | 68 | 268 | ||||||||||
| Total non-current assets | 184,158 | 190,880 | ||||||||||
| Total assets | $ | 274,729 | $ | 256,143 | ||||||||
| LIABILITIES AND MEMBER’S EQUITY (DEFICIT) | ||||||||||||
| Current liabilities: | ||||||||||||
| Accounts payable | $ | 14,274 | $ | 7,133 | ||||||||
| Accrued expenses | 26,460 | 14,893 | ||||||||||
| Total current liabilities | 40,734 | 22,026 | ||||||||||
| Non-current liabilities: | ||||||||||||
| Long-term debt | 240,000 | 240,000 | ||||||||||
| Unamortized premium on bonds payable | 97 | 127 | ||||||||||
| Other liabilities | 57 | 48 | ||||||||||
| Total non-current liabilities | 240,154 | 240,175 | ||||||||||
| Total liabilities | 280,888 | 262,201 | ||||||||||
| Commitments and contingencies | — | — | ||||||||||
| Member’s equity (deficit): | ||||||||||||
| Member’s equity (deficit) | (7,478 | ) | (7,686 | ) | ||||||||
| Accumulated other comprehensive income | 1,319 | 1,628 | ||||||||||
| Total member’s equity (deficit) | (6,159 | ) | (6,058 | ) | ||||||||
| Total liabilities and member’s equity (deficit) | $ | 274,729 | $ | 256,143 | ||||||||
|
Norcraft Companies, L.P. Consolidated Statements of Comprehensive Loss (dollar amounts in thousands) (unaudited) |
|||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | ||||||||||||||||
| Net sales | $ | 91,570 | $ | 73,863 | $ | 259,202 | $ | 217,550 | |||||||||||
| Cost of sales | 67,708 | 55,360 | 191,340 | 160,679 | |||||||||||||||
| Gross profit | 23,862 | 18,503 | 67,862 | 56,871 | |||||||||||||||
| Selling, general and administrative expenses | 16,844 | 13,849 | 45,875 | 40,729 | |||||||||||||||
| Income from operations | 7,018 | 4,654 | 21,987 | 16,142 | |||||||||||||||
| Other expense: | |||||||||||||||||||
| Interest expense, net | 6,478 | 6,461 | 19,395 | 19,372 | |||||||||||||||
| Amortization of deferred financing costs | 780 | 780 | 2,340 | 2,340 | |||||||||||||||
| Other expense, net | 17 | 10 | 29 | 61 | |||||||||||||||
| Total other expense | 7,275 | 7,251 | 21,764 | 21,773 | |||||||||||||||
| Net income (loss) | (257 | ) | (2,597 | ) | 223 | (5,631 | ) | ||||||||||||
| Other comprehensive income (loss): | |||||||||||||||||||
| Foreign currency translation adjustment | 198 | 500 | (309 | ) | 440 | ||||||||||||||
| Total other comprehensive income (loss) | 198 | 500 | (309 | ) | 440 | ||||||||||||||
| Comprehensive loss | $ | (59 | ) | $ | (2,097 | ) | $ | (86 | ) | $ | (5,191 | ) | |||||||
|
Norcraft Companies, L.P. Consolidated Statement of Cash Flows (dollar amounts in thousands) (unaudited) |
|||||||||||
| Nine Months Ended | |||||||||||
| September 30, | |||||||||||
| 2013 | 2012 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income (loss) | $ | 223 | $ | (5,631 | ) | ||||||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization of property, plant and equipment | 3,302 | 3,562 | |||||||||
| Amortization: | |||||||||||
| Customer relationships | 3,350 | 3,350 | |||||||||
| Deferred financing costs | 2,340 | 2,340 | |||||||||
| Display cabinets | 3,159 | 3,053 | |||||||||
| Discount amortization/accreted interest | (30 | ) | (29 | ) | |||||||
| Provision for uncollectible accounts receivable | 75 | 186 | |||||||||
| Provision for obsolete and excess inventories | 552 | (47 | ) | ||||||||
| Provision for warranty claims | 3,285 | 2,419 | |||||||||
| Stock compensation expense | 12 | 141 | |||||||||
| Gain on disposal of assets | (2 | ) | (3 | ) | |||||||
| Change in operating assets and liabilities: | |||||||||||
| Trade accounts receivable | (6,279 | ) | (3,766 | ) | |||||||
| Inventories | (4,495 | ) | (2,722 | ) | |||||||
| Prepaid expenses | (55 | ) | 363 | ||||||||
| Other assets | 198 | 268 | |||||||||
| Accounts payable and accrued expenses | 15,484 | 6,796 | |||||||||
| Net cash provided by operating activities | 21,119 | 10,280 | |||||||||
| Cash flows from investing activities: | |||||||||||
| Proceeds from sale of property, plant and equipment | 3 | 5 | |||||||||
| Purchase of property, plant and equipment | (2,894 | ) | (2,387 | ) | |||||||
| Additions to display cabinets | (2,919 | ) | (3,399 | ) | |||||||
| Net cash used in investing activities | (5,810 | ) | (5,781 | ) | |||||||
| Cash flows from financing activities: | |||||||||||
| Payment of financing costs | (67 | ) | (3 | ) | |||||||
| Proceeds from issuance of member interests | 3 | 50 | |||||||||
| Repurchase of member's interests | (30 | ) | — | ||||||||
| Distributions to member | — | (10 | ) | ||||||||
| Net cash provided by (used in) financing activities | (94 | ) | 37 | ||||||||
| Effect of exchange rates on cash and cash equivalents | (29 | ) | 26 | ||||||||
| Net increase in cash and cash equivalents | 15,186 | 4,562 | |||||||||
| Cash and cash equivalents, beginning of the period | 23,019 | 24,185 | |||||||||
| Cash and cash equivalents, end of period | $ | 38,205 | $ | 28,747 | |||||||
| Supplemental disclosure of cash flow information: | |||||||||||
| Cash paid during the period for interest | $ | 12,770 | $ | 12,776 | |||||||
| Supplemental schedule of non-cash investing and financing activities: | |||||||||||
| Deferred costs associated with contemplated initial public offering | $ | 927 | $ | — | |||||||
|
Norcraft Companies, L.P. Reconciliation of Net Income (Loss) to Adjusted EBITDA (dollar amounts in thousands) |
| EBITDA is net income (loss) before interest expense, income tax expense, depreciation and amortization. Adjusted EBITDA is EBITDA before the effect of restructuring costs associated with contemplated initial public offering in the third quarter of 2013. We believe EBITDA and Adjusted EBITDA are useful to investors in evaluating our operating performance compared to that of other companies in our industry, as their 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 these financial metrics provide information relevant to investors regarding our ability to service and/or incur debt. EBITDA nor Adjusted EBITDA is 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 or Adjusted EBITDA in isolation or as substitutes for net income (loss), cash flows from operating activities or other operation statement or cash flow statement data prepared in accordance with U.S. GAAP. Our calculation of EBITDA and Adjusted EBITDA are not necessarily comparable to those of other similarly titled measures reported by other companies. The calculations of EBITDA and Adjusted EBITDA are shown below: |
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
Twelve Months Ended September 30, |
|||||||||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | 2013 | |||||||||||||||||||||
| Net income (loss) | $ | (257 | ) |
(1) |
$ | (2,597 | ) | $ | 223 |
(1) |
$ | (5,631 | ) | $ | (3,705 | ) |
(1) |
||||||||
| Interest expense, net | 6,478 | 6,461 | 19,395 | 19,372 | 25,842 | ||||||||||||||||||||
| Depreciation | 1,084 | 1,195 | 3,302 | 3,562 | 4,463 | ||||||||||||||||||||
| Amortization of deferred financing costs | 780 | 780 | 2,340 | 2,340 | 3,120 | ||||||||||||||||||||
| Amortization of customer relationships | 1,117 | 1,117 | 3,350 | 3,350 | 4,467 | ||||||||||||||||||||
| Display cabinet amortization | 987 | 994 | 3,159 | 3,053 | 4,219 | ||||||||||||||||||||
| State taxes | 12 | 5 | 37 | 53 | (42 | ) | |||||||||||||||||||
| Non-GAAP EBITDA | $ | 10,201 | $ | 7,955 | $ | 31,806 | $ | 26,099 | $ | 38,364 | |||||||||||||||
| Restructuring costs associated with contemplated initial public offering | 1,055 |
(1) |
— | 1,055 |
(1) |
— | 1,055 |
(1) |
|||||||||||||||||
| Non-GAAP adjusted EBITDA | $ | 11,256 | $ | 7,955 | $ | 32,861 | $ | 26,099 | $ | 39,419 | |||||||||||||||
| (1) Net income (loss) during the three, nine and twelve months ended September 30, 2013 included the effect of the restructuring costs associated with contemplated initial public offering in the amount of $1.1 million which decreased net income (loss) and correspondingly decreased EBITDA, but the effect has been backed out for Adjusted EBITDA. |
Source: Norcraft Companies, L.P.
Have something to say? Share your thoughts with us in the comments below.