Altra Industrial Motion
Apr 27, 2012

Altra Holdings Reports Record Sales With a 20% Year-Over-Year Sales Increase in First Quarter 2012

BRAINTREE, Mass., April 27, 2012 (GLOBE NEWSWIRE) -- Altra Holdings, Inc. (Nasdaq:AIMC), a leading global supplier of electromechanical power transmission and motion control products, today announced unaudited financial results for the first quarter ended March 31, 2012.

Financial Highlights

Management Comments

"We executed well on our growth strategy during the quarter and achieved top- and bottom-line financial results that exceeded our guidance," said Carl Christenson, President and CEO. "Our 20% year-over-year revenue increase resulted in a record sales quarter. Excluding acquisitions, we grew 4%, driven primarily by strength in North America and Asia, which was partially offset by weaker than expected demand in Europe. Demand was particularly strong in our energy end market. We continue to be pleased with our Bauer acquisition, have completed integration, and have now shifted our focus to profit improvement and capitalizing on sales synergies. 

Business Outlook

"Based on what we are seeing in our markets, we expect that our second quarter results should be very similar to our performance in the first quarter, and we are maintaining our guidance for the full year," said Christenson. "As we continue through fiscal 2012, we will execute on our organic growth strategy by developing new products that target key markets and are in direct alignment with our customers' needs; expanding our presence in underpenetrated geographic markets; complementing organic growth with strategic, bolt-on acquisitions; and enhancing operational performance and maintaining a sharp focus on cost management to gain the most leverage out of every incremental sales dollar. We look forward to reporting record financial results for full year 2012."

Altra is maintaining its guidance for full year 2012. The Company is forecasting sales in the range of $740 to $760 million and non-GAAP adjusted diluted EPS of $1.50 to $1.60. Altra expects its tax rate for the full year to be approximately 31% to 33%, before discrete items, capital expenditures in the range of $30 to $35 million, and depreciation and amortization in the range of $27 to $30 million.

The Company will host an investor conference call to discuss its unaudited first-quarter financial results today, April 27, 2012, at 9:00 AM ET. The public is invited to listen to the conference call by dialing (877) 407-8293 domestically or (201) 689-8349 for international access and asking to participate in the ALTRA conference call. A live webcast of the call will be available in the "Investor Relations" section of www.altramotion.com. Individuals may download charts that will be used during the call at www.altramotion.com under "Events & Presentations" in the "Investor Relations" section. The charts will be available after earnings are released. A replay of the recorded conference call will be available at the conclusion of the call on April 27, through midnight on May 4, 2012. To listen to the replay, dial (877) 660-6853 domestically or (201) 612-7415 for international access (dial account #364 then replay ID # 392909). A webcast replay also will be available at www.altramotion.com.

  Altra Holdings, Inc.  
         
     
Consolidated Statements of Income Data: Quarter Ended  
In Thousands of Dollars, except per share amounts March 31, 2012   April 2, 2011  
   (unaudited)     (unaudited)   
         
Net sales  $ 192,385    $ 159,847  
Cost of sales 135,712   112,012  
Gross profit  $ 56,673    $ 47,835  
Gross profit as a percent of net sales 29.5%   29.9%  
Selling, general & administrative expenses  31,997    25,516  
Research and development expenses  3,027    2,317  
Income from operations  $ 21,649    $ 20,002  
Income from operations as a percent of net sales 11.3%   12.5%  
Interest expense, net  5,774    5,163  
Other non-operating (income) expense, net  225    (286)  
         
Income before income taxes  $ 15,650    $ 15,125  
Provision for income taxes  5,134    4,403  
Income tax rate 32.8%   29.1%  
Net income   $ 10,516    $ 10,722  
         
Weighted Average common shares outstanding        
Basic  26,606   26,487  
Diluted 26,660   26,608  
         
Net income per share        
Basic  0.40    0.40  
Diluted  $ 0.39    $ 0.40  
         
Reconciliation of Non-GAAP Adjusted Income From Operations:        
         
Income from operations  $ 21,649    $ 20,002  
         
Acquisition related costs  190    1,146  
Non-GAAP adjusted income from operations  $ 21,839    $ 21,148  
         
Reconciliation of Non-GAAP Adjusted Net Income:        
         
Net income   $ 10,516    $ 10,722  
         
Acquisition related costs  190    1,146  
Tax impact of above adjustments  (60)  (1)  (370)  (2)
Tax benefit from discrete items  --     (590)  
Non-GAAP adjusted net income  $ 10,646    $ 10,908  
         
Non-GAAP adjusted diluted earnings per share  $ 0.40    $ 0.41  
         
(1) - tax impact is calculated by multiplying the estimated effective tax rate for the period of 31.7% by the above items
(2) - tax impact is calculated by multiplying the estimated effective tax rate for the period of 32.3% by the above items
   
   
Consolidated Balance Sheets  
In Thousands of Dollars March 31, 2012 December 31, 2011
   (unaudited)   
Assets:    
Current Assets    
Cash and cash equivalents  79,946  92,515
Trade Receivables, net  110,451  91,859
Inventories  127,112  125,970
Deferred income taxes  5,856  5,856
Income tax receivable  4,197  7,299
Prepaid expenses and other current assets  8,893  7,141
Total current assets  336,455  330,640
Property, plant and equipment, net  128,424  123,464
Intangible assets, net  76,251  77,108
Goodwill  84,597  83,799
Deferred income taxes  1,649  1,614
Other non-current assets, net  13,147  13,360
Total assets  $ 640,523  $ 629,985
     
Liabilities and stockholders' equity    
Current liabilities    
Accounts payable  47,349  52,768
Accrued payroll  17,079  19,734
Accruals and other current liabilities  33,533  28,798
Deferred income taxes  123  118
Current portion of long-term debt  1,109  688
Total current liabilities  99,193  102,106
Long-term debt, less current portion and net of unaccreted discount   260,512  263,361
Deferred income taxes  35,916  35,798
Pension liabilities  12,673  12,896
Other post retirement benefits  278  296
Long-term taxes payable  6,324  6,227
Other long-term liabilities  705  905
Total stockholders' equity  224,922  208,396
Total liabilities and stockholders' equity  $ 640,523  $ 629,985
   
   
Consolidated Statement of Cash Flows: Year to Date Ended
In Thousands of Dollars
 
March 31,
2012
April 2,
2011
  (unaudited) (unaudited)
Cash flows from operating activities    
Net income   $ 10,516  $ 10,722
Adjustments to reconcile net income to net cash flows:    
Depreciation   4,983  4,054
Amortization of intangible assets  1,663  1,364
Amortization of deferred financing costs  329  329
Loss on foreign currency, net  34  51
Accretion of debt discount, net  784  300
Stock based compensation  784  700
Changes in assets and liabilities:    
Trade receivables  (20,229)  (20,402)
Inventories  440  (3,508)
Accounts payable and accrued liabilities  652  2,070
Other current assets and liabilities  (1,612)  (2,643)
Other operating assets and liabilities  (606)  (337)
Net cash used in operating activities  (2,262)  (7,300)
Cash flows from investing activities    
Purchase of property, plant and equipment  (8,237)  (2,754)
Net cash used in investing activities  (8,237)  (2,754)
Cash flows from financing activities    
Payment of debt issuance costs   --  (3,404)
Proceeds from issuance of Convertible Notes  --  85,000
Redemption of Variable Rate Demand Revenue Bonds related to the San Marcos facility  (3,000)  --
Shares repurchased for tax withholdings  (51)  (62)
Payment on mortgages  (127)  (131)
Payments on capital leases  (136)  (186)
Net cash (used in) provided by financing activities  (3,314)  81,217
Effect of exchange rate changes on cash and cash equivalents  1,244  1,636
Net change in cash and cash equivalents  (12,569)  72,799
Cash and cash equivalents at beginning of year  92,515  72,723
Cash and cash equivalents at end of period  $ 79,946  $ 145,522
     
Reconciliation to free cash flow:    
Net cash used in operating activities  (2,262)  (7,300)
Purchase of property, plant and equipment  (8,237)  (2,754)
     
Free cash flow  $ (10,499)  $ (10,054)

About Altra Holdings

Altra Holdings, Inc., through its wholly-owned subsidiary Altra Industrial Motion, Inc., is a leading multinational designer, producer and marketer of a wide range of mechanical power transmission products. The Company brings together strong brands covering over 40 product lines with production facilities in eight countries and sales coverage in over 70 countries. Our leading brands include Boston Gear, Warner Electric, TB Wood's, Formsprag Clutch, Ameridrives Couplings, Industrial Clutch, Kilian Manufacturing, Marland Clutch, Nuttall Gear, Stieber Clutch, Wichita Clutch, Twiflex Limited, Bibby Transmissions, Matrix International, Inertia Dynamics, Huco Dynatork, Warner Linear and Bauer Gear Motor.

The Altra Holdings, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4038

* Discussion of Non-GAAP Financial Measures

As used in this release and the accompanying slides posted on the Company's website, non-GAAP adjusted diluted earnings per share, non-GAAP adjusted income from operations and non-GAAP adjusted net income are each calculated using either net income or income from operations that excludes acquisition related costs, discrete tax items and other income or charges that management does not consider to be directly related to the Company's core operating performance. Non-GAAP adjusted diluted earnings per share is calculated by dividing non-GAAP adjusted net income by GAAP weighted average shares outstanding (diluted). Non-GAAP free cash flow is calculated by deducting purchases of property, plant and equipment from new cash provided by operating activities.

Altra believes that the presentation of non-GAAP adjusted net income, non-GAAP adjusted income from operations, non-GAAP adjusted diluted earnings per share and non-GAAP free cash flow provides important supplemental information to management and investors regarding financial and business trends relating to the Company's financial condition and results of operations.

Forward-Looking Statements

All statements, other than statements of historical fact included in this release are forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, any statement that may predict, forecast, indicate or imply future results, performance, achievements or events. Forward-looking statements can generally be identified by phrases such as "believes," "expects," "potential," "continues," "may," "should," "seeks," "predicts," "anticipates," "intends," "projects," "estimates," "plans," "could," "designed", "should be," and other similar expressions that denote expectations of future or conditional events rather than statements of fact. Forward-looking statements also may relate to strategies, plans and objectives for, and potential results of, future operations, financial results, financial condition, business prospects, growth strategy and liquidity, and are based upon financial data, market assumptions and management's current business plans and beliefs or current estimates of future results or trends available only as of the time the statements are made, which may become out of date or incomplete. Forward-looking statements are inherently uncertain, and investors must recognize that events could differ significantly from our expectations. These statements include, but may not be limited to, our expectations regarding the market share and our penetration of new high-growth markets and geographies, our expectations regarding the development of new products, our expectations for our relative performance levels in the first and second quarters of 2012, our expectations relating to enhancing operational performance and cost management, our  positioning in our end markets and our opportunities for long-term growth, the integration of Bauer and related profit improvement and sales synergies, the demand signs in our end markets, our expectations regarding the second quarter of  2012, our 2012 guidance including sales, EPS, capital expenditures, depreciation and amortization, and tax rates, and the execution of our growth strategy. 

In addition to the risks and uncertainties noted in this release, there are certain factors that could cause actual results to differ materially from those anticipated by some of the statements made. These include: (1) competitive pressures, (2) changes in economic conditions in the United States and abroad and the cyclical nature of our markets, (3) loss of distributors, (4) the ability to develop new products and respond to customer needs, (5) risks associated with international operations, including currency risks, (6) accuracy of estimated forecasts of OEM customers and the impact of the current global economic environment on our customers, (7) risks associated with a disruption to our supply chain, (8) fluctuations in the costs of raw materials used in our products, (9) product liability claims, (10) work stoppages and other labor issues, (11) changes in employment, environmental, tax and other laws and changes in the enforcement of laws, (12) loss of key management and other personnel, (13) changes in pension and retirement liabilities, (14) risks associated with compliance with environmental laws, (15) the ability to successfully execute, manage and integrate key acquisitions and mergers, (16) failure to obtain or protect intellectual property rights, (17) risks associated with impairment of goodwill or intangibles assets, (18) failure of operating equipment or information technology infrastructure, (19) risks associated with our debt leverage and operating covenants under our debt instruments, (20) risks associated with restrictions contained in our Senior Secured Notes and Convertible Notes, (21) risks associated with compliance with tax laws, (22) risks associated with the global recession and volatility and disruption in the global financial markets,  (23) risks associated with implementation of our new ERP system, (24) risks associated with the Bauer acquisition and integration, (25) risks associated with the Company's planned investment in a new manufacturing facility in China, and (26) other risks, uncertainties and other factors described in the Company's quarterly reports on Form 10-Q and annual reports on Form 10-K and in the Company's other filings with the U.S. Securities and Exchange Commission (SEC) or in materials incorporated therein by reference. Except as required by applicable law, Altra Holdings, Inc. does not intend to, update or alter its forward looking statements, whether as a result of new information, future events or otherwise. AIMC-E

CONTACT: Altra Holdings, Inc.

         Christian Storch, Chief Financial Officer

         781-917-0541

         Christian.storch@altramotion.com

Altra Holdings, Inc.

Source: Altra Holdings, Inc.

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