Mar 3, 2010 (GlobeNewswire via COMTEX News Network) --
Achieves annual operating cash flow of $59.4 million
Reports signs of improved demand in early cycle portion of the business
BRAINTREE, Mass., March 3, 2010 (GLOBE NEWSWIRE) -- Altra Holdings, Inc. (Nasdaq:AIMC), a leading global supplier of clutch brakes, couplings, gearing, belted drives and power transmission components, today announced unaudited financial results for the fourth quarter and full year ended December 31, 2009.
Financial Highlights
-- Fourth-quarter net sales declined 22.9% to $111.7 million compared with
the prior year fourth quarter. The decline compares favorably to a 34.3%
year-over-year decline reported in the third quarter.
-- Fourth-quarter net loss was $0.10 per share compared with a loss of
$0.81 per share in the prior-year period. Prior-year results were
negatively impacted by a non-cash goodwill impairment charge. Non-GAAP
recurring diluted earnings per share were $0.14 for the fourth quarter
compared with $0.34 in the prior year. (See reconciliation to GAAP
amount below).
-- Operating cash flow for the full year was a record $59.4 million, an
increase of 31.7% when compared with the prior year.
-- Total debt decreased by $43.3 million, or 16.4%, during 2009.
-- The Company successfully completed the refinancing of its outstanding
notes during the fourth quarter, issuing new Senior Secured Notes with a
maturity date extending to 2016.
-- Company issues 2010 guidance.
Management Comments
"We reported a 6.7 percentage point sequential growth in net sales for the fourth quarter and order rates continued to improve as demand increased from our distributors and early cycle OEM customers," said Carl Christenson, President and CEO. "Our team continued to deliver a sequential improvement in operating results as we achieved non-GAAP recurring diluted earnings per share of $0.14 for the fourth quarter compared with $0.06 in the third quarter."
Financial Results
Net sales for the fourth quarter of 2009 decreased 22.9% to $111.7 million from $144.8 million in the prior-year period. Net sales for the full year ended December 31, 2009 decreased 28.7% to $452.8 million from $635.3 million in 2008.
For the fourth quarter of 2009, the Company reported a net loss of $2.6 million, or $0.10 per diluted share. The results were
negatively affected by the cost of refinancing the Company's Senior Secured Notes as well as restructuring charges, but were partially offset by a discrete tax benefit related to the amendment of prior-year tax returns. This compares with a net loss of $20.7 million, or $0.81 per diluted share, in the prior-year fourth quarter. The prior-year fourth quarter included a non-cash goodwill impairment charge, restructuring charges, fixed asset impairment charges and an other post employment benefit plan (OPEB) settlement gain. Excluding these items in both periods, non-GAAP recurring diluted earnings per share were $0.14 in the fourth quarter of 2009 compared with $0.34 in the prior-year period (see reconciliation table below).
The Company reported a net loss of $2.3 million, or $0.09 per share, for full year 2009 compared with net income of $6.5 million, or $0.25 per diluted share,
for 2008. The full year 2009 results were negatively affected by the cost of refinancing the Company's Senior Secured Notes, inventory adjustments related to the economic downturn and restructuring charges, partially offset by a discrete tax benefit related to the amendment of prior-year tax returns and an OPEB settlement gain. Excluding these items, non-GAAP recurring diluted earnings per share were $0.33. Full-year 2008 net income included a non-cash goodwill impairment charge, restructuring charges, fixed asset impairment charges and an OPEB settlement gain. Excluding these items, full-year non-GAAP recurring diluted earnings per share was $1.45 in the prior year.
Income from operations for the fourth quarter of 2009 was $9.0 million compared with a loss of $15.6 million in the prior-year fourth quarter. Excluding restructuring charges of $1.9 million, fourth-quarter income
from operations was $10.9 million, or 9.8% of sales.
Other income was $0.3 million and $3.4 million for the fourth quarter of 2009 and 2008, respectively. Prior-year other income was driven mainly by favorable foreign currency gains.
Cash and cash equivalents were $51.5 million at December 31, 2009, essentially flat with $52.1 million at December 31, 2008.
Business Outlook
"While 2009 was a difficult year from a financial perspective, we took actions that we believe will benefit Altra for the long-term," continued Christenson. "In 2010, we will be working on growth initiatives; however, we will continue to focus on what is in our control such as driving cash flow, executing on plant consolidations and maintaining a reduced cost base. To drive operating performance and market share gains, we will invest in innovation and new product development."
"Inventory levels at our customers and channel partners are now in line with current demand, and we continue to see order rates for our businesses exceed shipments. While we believe most of our key end markets have stabilized and we anticipate modest growth in early cycle markets in 2010 the later cycle portions of our businesses will likely remain challenging for the next couple of quarters," said Christenson. "We expect the net effect of all factors influencing our top line to lead to a modest improvement in sales in 2010 when compared with 2009," concluded Christenson.
While the Company anticipates modest revenue growth in 2010, it is projecting a significant increase in non-GAAP recurring EPS due to the full year effect of cost reductions implemented in 2009. The Company is forecasting 2010 sales in the range of $450 million to $465 million and non-GAAP recurring EPS of $0.55
to $0.60 for the full year. Free cash flow is projected to be $20 million to $25 million. The Company expects capital expenditures of approximately $12 million, depreciation and amortization in the range of $22 to $23 million and a tax rate of approximately 35.0%.
Altra Holdings, Inc.
Consolidated Statements of Operations
Data: Quarter Ended Year Ended
------------------------------- ------------------------------
In Thousands of Dollars, except per share December December December December
amounts 31, 2009 31, 2008 31, 2009 31, 2008
----------- ----------- ----------- ----------
(Unaudited) (Unaudited) (Unaudited)
Net sales $ 111,663 $ 144,813 $ 452,846 $ 635,336
Cost of sales 78,875 102,727 329,825 449,244
----------- ----------- ----------- ----------
Gross profit $ 32,788 $ 42,086 $ 123,021 $ 186,092
Gross profit as a percent of net sales 29.4% 29.1% 27.2% 29.3%
Selling, general & administrative expenses 20,146 22,562 81,117 99,185
Research and development expenses 1,692 1,429 6,261 6,589
Goodwill impairment -- 31,810 -- 31,810
Other post employment benefit plan
settlement gain -- (649) (1,467) (925)
Restructuring expense 1,926 1,161 7,286 2,310
Loss on disposal of assets 29 1,391 545 1,584
----------- ----------- ----------- ----------
Income from operations $ 8,995 $ (15,618) $ 29,279 $ 45,539
Income from operations as a percent of
net sales 8.1% -10.8% 6.5% 7.2%
Interest expense, net 14,097 5,883 32,976 28,339
Other non-operating expense (income), net (267) (3,362) 981 (6,249)
----------- ----------- ----------- ----------
Income from continuing operations before
income taxes $ (4,835) $ (18,139) $ (4,678) $ 23,449
Provision (Benefit) for income taxes (2,221) 2,604 (2,364) 16,731
----------- ----------- ----------- ----------
Income tax rate 45.9% -14.4% 50.5% 71.4%
Net income (loss) from continuing
operations (2,614) (20,743) (2,314) 6,718
Net loss from discontinued operations, net
of taxes of $43 for the year ended
December 31, 2008 -- -- -- (224)
----------- ----------- ----------- ----------
Net income (loss) $ (2,614) $ (20,743) $ (2,314) $ 6,494
=========== =========== =========== ==========
Weighted Average common shares outstanding
Basic 26,050 25,549 25,945 25,496
Diluted 26,050 25,549 25,945 26,095
Earnings per share - Basic
Net income (loss) from continuing
operations $ (0.10) $ (0.81) $ (0.09) $ 0.26
Net loss from discontinued operations -- -- -- (0.01)
----------- ----------- ----------- ----------
Net income (loss) $ (0.10) $ (0.81) $ (0.09) $ 0.25
Earnings per share - Diluted
Net income (loss) from continuing
operations $ (0.10) $ (0.81) $ (0.09) $ 0.26
Net loss from discontinued operations -- -- -- (0.01)
----------- ----------- ----------- ----------
Net income (loss) $ (0.10) $ (0.81) $ (0.09) $ 0.25
Reconciliation of Recurring Net Income:
Net income (loss) from continuing
operations $ (2,614) $ (20,743) $ (2,314) $ 6,718
Restructuring charges 1,926 1,161 7,286 2,310
Inventory adjustment due to economic
downturn -- -- 2,215 --
Net discount/premium & deferred financing
expense on redeemed debt 8,913 -- 9,414 1,686
Other post employment benefit plan
settlement gain -- (649) (1,467) (925)
Non-cash goodwill impairment charge -- 31,810 31,810
Gain on the sale of securities -- -- -- (216)
Loss on the sale of asset -- 1,277 225 1,277
Tax impact of above adjustments (4,119) (1) (4,059) (2) (6,305) (3) (4,854) (4)
Tax benefit from amending prior year tax
returns (383) -- (383) --
----------- ----------- ----------- ----------
Recurring net income $ 3,723 $ 8,797 $ 8,671 $ 37,806
=========== =========== =========== ==========
Recurring diluted earnings per share $ 0.14 $ 0.34 $ 0.33 $ 1.45
=========== =========== =========== ==========
(1) - tax impact is calculated by multiplying the estimated effective tax rate for the period
of 38% by the above items
(2) - tax impact is calculated by multiplying the estimated effective tax rate for the period
of 35% by the above items, excluding the goodwill impairment charge which had a tax impact
of 11%.
(3) - tax impact is calculated by multiplying the estimated effective tax rate for the period
of 36% by the above items listed above.
(4) - tax impact is calculated by multiplying the estimated effective tax rate for the period
of 34% by the above items, excluding the goodwill impairment charge which had a tax impact
of 11%.
Consolidated Balance Sheets
December December
In Thousands of Dollars 31, 2009 31, 2008
(Unaudited)
Assets:
Current Assets
Cash and cash equivalents 51,497 52,073
Trade Receivables, net 52,855 68,803
Inventories 71,853 98,410
Deferred income taxes 9,265 8,032
Income tax receivable 4,754 2,581
Prepaid expenses and other
current assets 3,647 3,933
Assets held for sale -- 4,676
----------- ----------
Total current assets 193,871 238,508
Property, plant and
equipment, net 105,603 110,220
Intangible assets, net 74,905 79,339
Goodwill 78,832 77,497
Deferred income taxes 679 495
Other non-current assets,
net 11,309 7,525
----------- ----------
Total assets $ 465,199 $ 513,584
=========== ==========
Liabilities and
stockholders' equity
Current liabilities
Accounts payable 27,421 33,890
Accrued payroll 12,133 16,775
Accruals and other
liabilities 19,971 18,755
Deferred income taxes 7,275 6,906
Current portion of
long-term debt 1,059 3,391
----------- ----------
Total current liabilities 67,859 79,717
Long-term debt, less
current portion and net
of unaccreted discount
and premium 216,490 258,132
Deferred income taxes 21,051 23,336
Pension liabilities 9,862 11,854
Other post retirement
benefits 405 2,270
Long-term taxes payable 9,661 7,976
Other long-term
liabilities 928 1,434
----------- ----------
Total stockholders' equity 138,943 128,865
----------- ----------
Total liabilities and
stockholders' equity $ 465,199 $ 513,584
=========== ==========
Year ended
----------------------
December December
31, 2009 31, 2008
----------- ---------
(Unaudited)
Cash flows from operating activities
Net income (loss) $ (2,314) $ 6,494
Adjustments to reconcile net income (loss)
to net cash flows:
Depreciation 16,534 15,379
Amortization of intangible assets 5,538 5,689
Amortization and write-offs of deferred
loan costs 4,062 2,133
Loss (gain) on foreign currency, net 1,104 (5,049)
Accretion and write-off of debt discount
and premium 1,912 898
Loss on sale of Electronics Division -- 224
Goodwill impairment charges -- 31,810
Loss on disposal of fixed assets 2,891 1,584
Other post employment benefit plan
settlement gain (1,467) (925)
Stock based compensation 3,267 1,951
Provision for deferred taxes (1,804) 1,401
Changes in assets and liabilities:
Trade receivables 19,267 (933)
Inventories 28,180 (2,074)
Accounts payable and accrued liabilities (17,924) (13,268)
Other current assets and liabilities 376 1,269
Other operating assets and liabilities (234) (1,469)
----------- ---------
Net cash provided by operating activities 59,388 45,114
----------- ---------
Cash flows from investing activities
Purchase of property, plant and equipment (9,194) (19,289)
Proceeds from sale of Electronics Division -- 17,310
Payments for prior year acquisitions -- (1,708)
Net cash used in investing activities (9,194) (3,687)
----------- ---------
Cash flows from financing activities
Payments on 11 1/4% Senior Notes (4,950) (1,346)
Payments on 9% Senior Secured Notes (242,500) (27,500)
Payments on Revolving Credit Agreement (6,000) (1,723)
Payment of debt issuance costs (7,561) --
Proceeds from issuance of 8 1/8% Senior
Secured Notes 207,251 --
Proceeds from additional borrowings under
an existing mortgage 1,467 --
Shares repurchased for tax withholding (319) --
Payment on mortgages (584) (266)
Payment on capital leases (820) (925)
----------- ---------
Net cash used in financing activities (54,016) (31,760)
----------- ---------
Effect of exchange rate changes on cash
and cash equivalents 3,246 (3,401)
----------- ---------
Net change in cash and cash equivalents (576) 6,266
Cash and cash equivalents at beginning of
year 52,073 45,807
----------- ---------
Cash and cash equivalents at end of period $ 51,497 $ 52,073
=========== =========
Reconciliation to free cash flow:
Net cash provided by operating activities 59,388 45,114
Purchase of property, plant and equipment (9,194) (19,289)
----------- ---------
Free cash flow $ 50,194 $ 25,825
=========== =========
The company will conduct an investor conference call on March 4, 2010 at 11:00 AM EST to discuss its unaudited 2009 fourth-quarter and full year financial results. The public is invited to listen to the conference call by dialing 877-302-0756 domestically or 502-719-4487 for international access, and asking to participate in Conference ID# ALTRA. Also the company has posted slides on its web site at http://www.altramotion.com in the Investor Relations Section in the Events & Presentations tab to help the participants better follow the discussion. A replay of the recorded conference call will be available until midnight on March 11, 2010. To listen to the replay, dial 800-752-3416 domestically or 712-432-9141 for international access.
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 and Warner Linear.
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 recurring diluted earnings per share, non-GAAP
recurring income from operations and non-GAAP recurring net income from continuing operations are each calculated using either net income from continuing operations or income from continuing operations that excludes premiums, discounts and interest expense associated with the extinguishment of debt, other post employment benefit plan settlement gains, restructuring costs, inventory adjustments due to the economic downturn and other income or charges that management does not consider to be directly related to the company's core operating performance. Non-GAAP recurring diluted earnings per share is calculated by dividing non-GAAP recurring net income by GAAP weighted average shares outstanding (diluted).
As used in this release and the accompanying slides posted on the company's website, non-GAAP free cash flow is calculated as cash flow from operating activities less capital
expenditures.
Altra believes that the presentation of non-GAAP recurring net income from continuing options, non-GAAP recurring income from operations, non-GAAP recurring 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.
Cautionary Statement Regarding 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 actual
results could differ materially from our expectations. These statements include, but may not be limited to, those comments regarding expectations related to the results of cost-reduction efforts, plant closings, new product developments, expected market share gains, improvement in sales and our ability to achieve those results, and our guidance relating to free cash flow, net sales, earnings per share, capital expenditures, and depreciation and amortization.
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) fluctuations in the costs of raw materials used in our products, (8) product liability claims, (9) work stoppages and other labor issues, (10) changes in employment, environmental, tax and other laws and changes in the enforcement of laws, (11) loss of key management and other personnel, (12) changes in pension and retirement liabilities, (13) risks associated with compliance with environmental laws, (14) the ability to successfully execute, manage and integrate key acquisitions and mergers, (15) failure to obtain or protect intellectual property rights, (16) risks associated with impairment of goodwill or intangibles assets, (17) failure of operating equipment or
information technology infrastructure, (18) risks associated with our debt leverage and operating covenants under our debt instruments, (19) risks associated with restrictions contained in our Senior Secured Notes, (20) risks associated with compliance with tax laws, (21) risks associated with the global recession and volatility and disruption in the global financial markets, (22) our ability to complete cost reduction actions and risks associated with such actions, (23) risks associated with implementation of our new ERP system, and (24) 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
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SOURCE: Altra Holdings, Inc.
CONTACT: Altra Holdings, Inc.
Christian Storch, Chief Financial Officer
781-917-0541
Christian.storch@altramotion.com
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