EAGAN, Minn., Norcraft Companies, L.P. (Norcraft) today reports financial results for the third quarter ended September 30, 2012.

FINANCIAL RESULTS

Third Quarter of Fiscal 2012 Compared with Third Quarter of Fiscal 2011

Net sales increased $6.2 million, or 9.1%, from $67.7 million for the third quarter of 2011 to $73.9 million for the same quarter of 2012. Income from operations decreased $1.9 million, or 29.4%, from $6.6 million for the third quarter of 2011 to $4.7 million for the same quarter of 2012. Net loss increased $1.9 million from $0.7 million for the third quarter of 2011 to $2.6 million for the same quarter of 2012.

EBITDA (a non-GAAP measure defined in the attached table) was $8.0 million for the third quarter of 2012 compared to $9.9 million for the same quarter of 2011.

"While we are disappointed with our results, our sales and the cabinet industry did experience some growth recently. Our industry continues to be highly competitive, with significant discounting and sales promotions. However, we are optimistic about these early signs of recovery in the new home construction and home improvement markets and our ability to leverage the growth into improved profitability. As such, we continue to introduce new products and cost reduction initiatives," commented President and CEO, Mark Buller.

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 six main brands: Mid Continent Cabinetry, Norcraft Cabinetry, UltraCraft, StarMark Cabinetry, Fieldstone Cabinetry and Brookwood.

Selected Financial Data Tables Follow-

 

Norcraft Companies, L.P.

Consolidated Balance Sheets

(dollar amounts in thousands)

 

 ASSETS

September 30,

 2012

(unaudited)

December 31,

 2011

 

Current assets:

Cash and cash equivalents

$      28,747

$        24,185

Trade accounts receivable, net

23,825

20,092

Inventories

20,345

17,503

Prepaid and other current assets

1,474

1,835

Total current assets

74,391

63,615

Non-current assets:

Property, plant and equipment, net

26,502

27,434

Goodwill

88,490

88,479

Intangible assets, net

72,045

77,732

Display cabinets, net

6,188

5,842

Other assets

301

568

Total non-current assets

193,526

200,055

Total assets

$    267,917

$     263,670

LIABILITIES AND MEMBER'S EQUITY (DEFICIT)

Current liabilities:

Accounts payable

$        9,025

$          6,566

Accrued expenses

20,592

13,775

Total current liabilities

29,617

20,341

Non-current liabilities:

Long-term debt

240,000

240,000

Unamortized premium on bonds payable

137

166

Other liabilities

118

108

Total non-current liabilities

240,255

240,274

Total liabilities

269,872

260,615

Commitments and contingencies

-

-

Member's equity (deficit):

Member's equity (deficit)

(3,804)

1,646

Accumulated other comprehensive income

1,849

1,409

Total member's equity (deficit)

(1,955)

3,055

Total liabilities and member's equity (deficit)

$     267,917

$      263,670

 

 

 

 

Norcraft Companies, L.P.

Consolidated Statements of Comprehensive Loss

(dollar amounts in thousands)

(unaudited)

 

Three Months Ended

September 30,

Nine Months Ended

September 30,

2012

2011

2012

2011

Net sales

$  73,863

$  67,718

$ 217,550

$ 206,943

Cost of sales

55,360

48,815

160,679

150,223

Gross profit

18,503

18,903

56,871

56,720

Selling, general and administrative expenses

13,849

12,313

40,729

38,143

Income from operations

4,654

6,590

16,142

18,577

Interest expense, net

6,461

6,451

19,372

17,106

Amortization of deferred financing costs

780

795

2,340

1,666

Other expense, net

10

51

61

103

Total other expense

7,251

7,297

21,773

18,875

Net loss

(2,597)

(707)

(5,631)

(298)

Other comprehensive income (loss):

Foreign currency translation adjustment

500

(566)

440

(382)

Total other comprehensive income (loss)

500

(566)

440

(382)

Comprehensive loss

$  (2,097)

$ (1,273)

$  (5,191)

$     (680)

Norcraft Companies, L.P.

Consolidated Statement of Cash Flows

(dollar amounts in thousands)

(unaudited)

Nine Months Ended

September 30,

2012

2011

Cash flows from operating activities:

Net loss

$          (5,631)

$           (298)

Adjustments to reconcile net loss to net cash provided by operating

activities:

Depreciation and amortization of property, plant and equipment

3,562

3,774

Amortization:

Customer relationships

3,350

3,350

Deferred financing costs

2,340

1,666

Display cabinets

3,053

2,888

Discount amortization/accreted interest

(29)

190

Provision for uncollectible accounts receivable

186

69

Provision for obsolete and excess inventories

(47)

32

Provision for warranty claims

2,419

2,284

Stock compensation expense

141

136

Gain on disposal of assets

(3)

-

Change in operating assets and liabilities:

Trade accounts receivable

(3,766)

(6,113)

Inventories

(2,722)

(1,444)

Prepaid expenses

363

369

Other assets

268

162

Accounts payable and accrued expenses

6,796

3,471

Net cash provided by operating activities

10,280

10,536

Cash flows from investing activities:

Proceeds from sale of property and equipment

5

6

Purchase of property, plant and equipment

(2,387)

(1,720)

Additions to display cabinets

(3,399)

(3,707)

Net cash used in investing activities

(5,781)

(5,421)

Cash flows from financing activities:

Borrowings on senior secured second lien notes payable

-

62,400

Payment of financing costs

(3)

(8,159)

Proceeds from issuance of member interests

50

89

Distributions to member

(10)

(58,015)

Net cash provided by (used in) financing activities

37

(3,685)

Effect of exchange rates on cash and cash equivalents

26

(112)

Net increase in cash and cash equivalents

4,562

1,318

Cash and cash equivalents, beginning of the period

24,185

28,657

Cash and cash equivalents, end of period

$         28,747

$       29,975

 

Three Months Ended September 30,

Nine Months Ended

September 30,

Twelve Months Ended

September 30,

2012

2011

2012

2011

2012

Net loss

$ (2,597)

$   (707)

$ (5,631)

$    (298)

$    (9,064)

Interest expense, net

6,461

6,451

19,372

17,106

25,815

Depreciation

1,195

1,217

3,562

3,774

4,723

Amortization of deferred financing costs

780

795

2,340

1,666

3,128

Amortization of customer relationships

1,117

1,116

3,350

3,350

4,467

Display cabinet amortization

994

926

3,053

2,888

4,170

State taxes

5

56

53

104

36

Non-GAAP EBITDA

$  7,955

$  9,854

$  26,099

$28,590

$    33,275

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