EAGAN, Minn., Nov. 10, 2010 -- Norcraft Holdings, L.P. (Holdings) and Norcraft Companies, L.P. (Norcraft) today reported financial results for the third quarter ended September 30, 2010. The financial results for Holdings include the accounts of its wholly-owned subsidiary, Norcraft. Holdings reflects the obligations under its $118.0 million 9 3/4% senior discount notes due 2012.
In December 2009, Norcraft and its wholly-owned subsidiary, Norcraft Finance Corp., issued $180.0 million principal amount of 10 1/2% senior secured second lien notes that are due in December 2015. The proceeds of these senior secured second lien notes were used to redeem $148.0 million principal amount of outstanding 9% senior subordinated notes that were due in 2011 issued by Norcraft and Norcraft Finance Corp.
A portion of the proceeds, together with cash on hand, was distributed by Norcraft to Holdings and used to repurchase $64.3 million principal amount of the 9 3/4% senior discount notes due 2012. This repurchase of the 9 3/4% senior discount notes resulted in a loss from debt extinguishment of $1.6 million. Other than the remaining $53.7 million of the 9 3/4% senior discount notes, cash, related deferred issuance costs, related interest and amortization expense and related debt extinguishment loss, all other assets, liabilities, income, expenses and cash flows presented for all periods represent those of Norcraft.
Third Quarter of Fiscal 2010 Compared with Third Quarter of Fiscal 2009
Net sales increased $1.2 million, or 2.0%, from $64.7 million for the third quarter of 2009 to $65.9 million for the same quarter of 2010. Income from operations decreased $1.2 million, or 14.6%, from $8.3 million for the third quarter of 2009 to $7.1 million for the same quarter of 2010. Net income for Holdings decreased $1.3 million, from $1.7 million for the third quarter of 2009 to $0.4 million in the same quarter of 2010. Net income for Norcraft decreased $3.0 million, from $4.7 million for the third quarter of 2009 to $1.7 million for the same quarter of 2010.
Adjusted EBITDA (a non-GAAP measure and defined in the attached table) was $10.8 million for the third quarter of 2010 compared to $11.1 million for the same quarter of 2009.
"While 2010 started out strong, the expiration of the first-time home-buyer's tax credit and other factors lead to disappointing incoming orders during the last half of the year. We expect these challenging conditions to persist through 2010 and into 2011. Our efforts to cut costs and introduce new products and sales programs continue as a result of these market conditions," commented President and CEO, Mark Buller.
Norcraft Companies is a leader in manufacturing, assembling and finishing kitchen and bathroom cabinetry in the United States. We provide our customers with a single source for a broad range of high-quality cabinetry, including stock, semi-custom and custom cabinets. Our cabinets are manufactured in both framed and full access construction. We market our products through six brands: Mid Continent Cabinetry, Norcraft Cabinetry, UltraCraft, StarMark, Fieldstone and Brookwood.
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