EAGAN, MN — March 23, 2012 /PRNewswire/ -- Norcraft Companies, L.P. (Norcraft) reported financial results for the fourth quarter and fiscal year ended December 31, 2011.

FINANCIAL RESULTS

Fourth Quarter of Fiscal 2011 Compared with Fourth Quarter of Fiscal 2010

Net sales increased $1.7 million, or 2.8%, from $60.7 million for the fourth quarter of 2010 compared to $62.4 million for the same quarter of 2011. Income from operations was flat at $3.8 million for the fourth quarter of 2010 and 2011. Net loss increased $1.9 million, or 121.1%, from $1.5 million for the fourth quarter of 2010 to $3.4 million in the same quarter of 2011.

Adjusted EBITDA (as defined in the attached table) was $7.1 million for the fourth quarter of 2010 compared to $7.2 million for the same quarter of 2011.

Fiscal 2011 Compared with Fiscal 2010

Net sales increased $6.7 million, or 2.6%, from $262.6 million for fiscal 2010 compared to $269.3 million for fiscal 2011. Income from operations decreased by $2.4 million, or 9.4%, from $24.7 million for fiscal 2010 compared to $22.3 million for fiscal 2011. Net income (loss) decreased $6.9 million, or 216.9%, from net income $3.2 million for fiscal 2010 to a net loss of $3.7 million in fiscal 2011.

Adjusted EBITDA (as defined in the attached table) was $38.0 million for fiscal 2010 compared to $35.8 million for fiscal 2011.

"The soft industry demand caused by difficult economic conditions persisted through 2011, and we anticipate 2012 will also be very challenging.  While we are optimistic about the longer-term recovery and growth in the new home construction and home improvement markets, the timing and strength of such recovery remain extremely difficult to predict with certainty.  As a result, we plan to continue introducing new products and programs to compete in this difficult market," commented President and CEO, Mark Buller.

CONFERENCE CALL

Norcraft has scheduled a conference call on Wednesday, March 28, 2012 at 10:00 a.m. Eastern Time. To participate, dial 888-339-2688 and use the pass code 54284143. A telephonic replay will be available by calling 888-286-8010 and using pass code 69769532.

GENERAL

Norcraft Companies is a leader in manufacturing, assembling and finishing kitchen and bathroom cabinetry in the U.S. 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 Sheet

(dollar amounts in thousands)

(unaudited)

ASSETS

December 31,  

2011

2010

Current assets:

Cash and cash equivalents

$      24,185

$      28,657

Trade accounts receivable, net

20,092

17,982

Inventories

17,503

17,363

Prepaid and other current assets

1,835

1,558

Total current assets

63,615

65,560

Property, plant and equipment, net

27,434

30,199

Other assets:

Goodwill

88,479

88,483

Intangible assets, net

77,732

76,379

Display cabinets, net

5,842

5,016

Other

568

754

Total other assets

172,621

170,632

Total assets

$    263,670

$    266,391

LIABILITIES AND MEMBER'S EQUITY

Current liabilities:

Accounts payable

$         6,566

$        7,678

Accrued expenses

13,775

16,200

Total current liabilities

20,341

23,878

Long-term debt

240,000

180,000

Unamortized premium (discount) on bonds payable

166

(2,414)

Other liabilities

108

153

Commitments and contingencies

-

-

Member's equity

3,055

64,774

Total liabilities and member's equity

$    263,670

$    266,391

Norcraft Companies, L.P.

Consolidated Statement of Operations

(dollar amounts in thousands)

(unaudited)

Three Months Ended

December 31,

Year Ended

December 31,

2011

2010

2011

2010

Net sales

$      62,362

$      60,691

$    269,305

$    262,568

Cost of sales

45,630

45,013

195,853

187,482

Gross profit

16,732

15,678

73,452

75,086

Selling, general and

administrative expenses

12,956

11,934

51,099

50,402

Income from operations

3,776

3,744

22,353

24,684

Other expense:

Interest expense, net

6,443

5,014

23,549

20,091

Amortization of deferred

financing costs

788

348

2,454

1,376

Other, net

(22)

(65)

81

26

Total other expense

7,209

5,297

26,084

21,493

Net income (loss)

$     (3,433)

$     (1,553)

$     (3,731)

$      3,191

Norcraft Companies, L.P.

Consolidated Statement of Cash Flows

(dollar amounts in thousands)

2011

2010

Cash flows from operating activities:

Net income (loss)

$          (3,731)

$             3,191

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization of property, plant and equipment    

4,935

5,720

Amortization:

Customer relationships

4,467

4,467

Deferred financing costs

2,454

1,376

Display cabinets

4,005

4,142

Discount amortization/accreted interest

180

489

Provision for uncollectible accounts receivable

236

589

Provision for obsolete and excess inventory

(280)

(115)

Provision for warranty claims

3,143

2,771

Stock compensation expense

183

181

Loss (gain) on disposal of assets

8

(33)

Change in operating assets and liabilities:

Trade accounts receivable

(2,442)

(450)

Inventories

99

(804)

Prepaid expenses

(276)

48

Other assets

183

(655)

Accounts payable and accrued expenses

(6,421)

(727)

Net cash provided by operating activities

6,743

20,190

Cash flows from investing activities:

Proceeds from sale of property and equipment

20

49

Purchase of property, plant and equipment

(2,586)

(2,705)

Additions to display cabinets

(4,831)

(3,764)

Net cash used in investing activities

( 7,397)

( 6,420)

Cash flows from financing activities:

Borrowings on senior secured second lien notes payable

62,400

-

Payment of financing costs

(8,274)

(882)

Repurchase of notes payable

-

-

Proceeds from issuance of member interests

139

124

Distributions to member

(58,015)

(1,104)

Net cash used in financing activities

(3,750)

(1,862)

Effect of exchange rates on cash and cash equivalents

(68)

18

Net increase (decrease) in cash and cash equivalents

(4,472)

11,926

Cash and cash equivalents, beginning of the period

28,657

16,731

Cash and cash equivalents, end of period

$            24,185

$          28,657

Supplemental disclosure of cash flow information:

Cash paid during the period for interest

$            24,502

$          19,562

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 a sales tax refund in the second quarter of 2010. 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. Neither 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 income statement or cash flow statement data prepared in accordance with U.S. GAAP. Our calculations 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

December 31,

Year Ended

December 31,

2011

2010

2011

2010

Net income (loss)

$      (3,433)

$      (1,553)

$       (3,731)

$         3,191

(1)

Interest expense, net

6,443

5,014

23,549

20,091

Depreciation

1,161

1,303

4,935

5,720

Amortization of deferred financing costs

788

348

2,454

1,376

Amortization of customer relationships

1,117

1,116

4,467

4,467

Display cabinet amortization

1,117

932

4,005

4,142

State taxes

(17)

(67)

87

25

EBITDA

$        7,176

$        7,093

$      35,766

$      39,012

Sales tax refund

-

-

-

(1,010)

(1)

Adjusted EBITDA

$        7,176

$        7,093

$      35,766

$      38,002

(1) Net income (loss) during the year ended December 31, 2010 included a sales tax refund in the amount of $1.0 million which increased net income and correspondingly increased EBITDA, but the effect has been backed out for adjusted EBITDA.

SOURCE Norcraft Companies, L.P.

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