Ames True Temper Reports First Quarter Results14 February 2007
ATT Holding Co., parent of Ames True Temper, Inc., reported today the results of the Company's fiscal first quarter ended December 30, 2006.
First Quarter Results (13-week Period Ended December 30, 2006)
Net sales for the thirteen-week first quarter ended December 30, 2006 were $84.9 million, a 4.1 percent decrease over $88.5 million for the thirteen-week first quarter ended December 31, 2005. Net loss for the first quarter of fiscal 2007 was $9.2 million, compared to a net loss of $3.2 million for the first quarter of fiscal 2006. Adjusted EBITDA (which is reconciled to net income on the attached table) for the first quarter of fiscal 2007 was $7.4 million compared to adjusted EBITDA for the first quarter of fiscal 2006 of $7.8 million.
"First quarter revenue was down slightly from prior year as a result of the mild winter in many of the major metropolitan areas across the U.S. and Canada and negative comp store sales reported by most major customers. The lack of snow contributed to weak retail demand at all major retailers for our snow products versus prior year," said Rich Dell, President and CEO. "However, we are pleased with the progress made on the integration of the UnionTools acquisition and all facets of the integration are on target."
Ames True Temper, Inc. is a leading North American manufacturer and marketer of non-powered lawn and garden tools and accessories.
Forward-Looking Statements
This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact are "forward-looking statements" for purposes of federal and state securities laws. Forward-looking statements may include the words "may," "will," "plans," "estimates," "anticipates," "believes," "expects," "intends" and similar expressions. Although Ames believes that such statements are based on reasonable assumptions, these forward-looking statements are subject to numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those projected or assumed in its forward-looking statements. These factors, risks and uncertainties include, among others, the following:
* The Company's liquidity and capital resources;
* Sales levels to existing and new customers;
* Increased concentration of its customers;
* Seasonality and adverse weather conditions;
* Competitive pressures and trends;
* Changing consumer preferences;
* New product and customer initiatives;
* Risks relating to foreign sourcing, foreign operations and availability
of raw materials;
* The Company's ability to successfully consummate and integrate
acquisitions; and
* General economic conditions.
The Company's actual results, performance or achievements could differ materially from those expressed in, or implied by, the forward-looking statements. The Company can give no assurances that any of the events anticipated by the forward-looking statements will occur or, if any of them do, what impact they will have on its results of operations and financial condition. The Company does not intend, and undertakes no obligation, to update any forward-looking statement.
ATT Holding Co.
Consolidated Balance Sheets
(In thousands)
December 30, September 30,
2006 2006
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $4,912 $5,638
Restricted cash 2,081 2,081
Trade receivables, net 52,113 66,418
Inventories 170,317 141,239
Deferred income taxes 9,920 8,521
Prepaid expenses and other current
assets 6,379 6,673
Total current assets 245,722 230,570
Property, plant and equipment,
net 71,145 72,680
Intangibles, net 77,822 78,450
Goodwill 56,600 58,359
Other noncurrent assets 14,943 15,720
Total assets $466,232 $455,779
Liabilities and stockholders' deficit
Current liabilities:
Trade accounts payable $50,961 $39,773
Accrued interest payable 10,247 7,325
Accrued expenses and other
current liabilities 26,543 30,131
Revolving loan 79,448 66,608
Current portion of long-term
debt 531 528
Total current liabilities 167,730 144,365
Deferred income taxes 26,142 26,325
Long-term debt 300,905 301,012
Accrued retirement benefits 7,538 7,812
Other liabilities 5,471 6,992
Total liabilities 507,786 486,506
Stockholders' deficit:
Preferred stock - -
Common stock - -
Additional paid-in capital 110,500 110,500
Predecessor basis adjustment (13,539) (13,539)
Retained deficit (146,773) (137,597)
Accumulated other comprehensive
income 8,258 9,909
Total stockholders' deficit (41,554) (30,727)
Total liabilities and
stockholders' deficit $466,232 $455,779
ATT Holding Co.
Condensed Consolidated Statements of Net Loss
(In thousands)
Thirteen weeks Thirteen weeks
ended ended
December 30, 2006 December 31, 2005
(Unaudited)
Net sales $84,942 100.0% $88,531 100.0%
Cost of goods sold 62,615 73.7% 67,289 76.0%
Gross profit 22,327 26.3% 21,242 24.0%
Selling, general, and
administrative expenses 20,702 24.4% 17,879 20.2%
Loss on disposal of fixed
assets 535 0.6% 113 0.1%
Amortization of intangible
assets 373 0.4% 448 0.5%
Operating income 717 0.8% 2,802 3.2%
Interest expense 8,622 10.2% 7,379 8.3%
Other expense 129 0.2% 74 0.1%
Loss before income taxes (8,034) -9.5% (4,651) -5.3%
Income tax expense (benefit) 1,142 1.3% (1,441) -1.6%
Net loss $(9,176) -10.8% $(3,210) -3.6%
ATT Holding Co.
Reconciliation of Net Loss to Adjusted EBITDA
(In thousands)
Thirteen weeks Thirteen weeks
ended ended
December 30, 2006 December 31, 2005
(Unaudited)
Net loss $(9,176) $(3,210)
Depreciation of property, plant and
equipment 3,890 2,652
Amortization of intangible assets 373 448
Other expense 129 74
Loss on disposal of fixed assets 535 113
Interest expense 8,622 7,379
Income tax expense (benefit) 1,142 (1,441)
EBITDA (a) 5,515 6,015
Adjustments to EBITDA
Cost savings initiatives (b) 840 888
ERP expenses (c) 26 75
One-time costs for new long handle
tool distribution (d) 114 -
Equity sponsor fees and other
expenses (e) 841 822
Impairment charges (f) 52 -
Adjusted EBITDA (a) $7,388 $7,800
(a) "EBITDA" is calculated as net loss before income tax expense
(benefit), interest expense, other (income) expense and loss (gain) on
disposal of fixed assets plus depreciation and amortization. Adjusted
EBITDA is EBITDA adjusted as indicated below. Adjusted EBITDA is not
intended to represent cash flow from operations as defined by GAAP and
should not be used as an alternative to net income as an indicator of
operating performance or to cash flow as a measure of liquidity. EBITDA
and Adjusted EBITDA are a basis upon which our management assesses
financial performance and covenants in our senior credit facility are
tied to ratios based on this measure. While EBITDA and Adjusted EBITDA
are frequently used as a measure of operations and the ability to meet
debt service requirements, they are not necessarily comparable to other
similarly titled captions of other companies due to potential
inconsistencies in the method of calculation.
(b) Represents expenses associated with non-recurring cash restructuring
charges and cost savings initiatives, primarily plant closure and plant
start-up costs.
(c) Consists of non-capitalizable expenses associated with the
implementation of a new ERP system.
(d) Represents allowable addbacks for one-time set up expenses associated
with new long handle tool business at one or more primary customers.
(e) Consists of management fees paid to private equity sponsor (Castle
Harlan), transaction fees associated with acquisitions, non-cash (income)
expense related to our pension plan and non-cash charges recorded in
accordance with SFAS 13 due to the expensing of escalating rent on a
straight-line basis.
(f) Consists of impairment charges related to property and certain
equipment at a closed manufacturing facility.
Source: prnewswire
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