Forterra Announces Second Quarter 2017 Results
(Thomson Reuters ONE) -
* Residential and Commercial Outlook Remains Strong
* Excessive Rainfall Negatively Impacted Shipments
* Closed the Sale of U.S. Concrete and Steel Pressure Pipe Assets
IRVING, Texas, Aug. 10, 2017 (GLOBE NEWSWIRE) -- Forterra, Inc. ("Forterra" or
the "Company") (NASDAQ:FRTA), a leading manufacturer of water and drainage
infrastructure pipe and products in the United States and Eastern Canada, today
announced results for the quarter ended June 30, 2017.
Second Quarter 2017 Results
Second quarter 2017 net sales increased to $436.7 million, compared to $381.7
million in the prior year quarter, driven mainly by acquisitions that
contributed $56.1 million. Net sales were negatively impacted by Tropical Storm
Cindy, excessive rainfall events around the country and a decline in average
sales prices of products sold. Net income for the quarter was $(11.2) million,
or $(0.18) per share, compared to net income of $36.7 million, or $0.70 per
share, in the prior year quarter. Adjusted net income1 was $(1.3) million in
the second quarter of 2017 compared to Adjusted net income1 of $43.4 million in
the prior year quarter. Adjusted EBITDA1 for the second quarter was $46.5
million compared to $74.0 million in the prior year quarter.
Forterra CEO Jeff Bradley commented, "Our financial results this quarter were
lower than we expected, reflecting the impact of weather, unanticipated
competitive pricing pressure in certain areas and higher costs of goods sold.
We continue to aggressively pursue price increases and growth of higher margin
products, and we have positive momentum on this front heading into the second
half of 2017. I remain enthusiastic about the longer term growth prospects for
the Company."
Drainage Pipe & Products ("Drainage") net sales increased to $221.5 million,
compared to $192.2 million in the prior year quarter, due to $27.7 million of
net sales from acquisitions. Drainage gross profit was $43.1 million compared
to $48.1 million in the prior year quarter, primarily due to a decline in
average sales prices due to increased competition in certain regions as well as
higher cost of goods sold. Cost of goods sold increased due to higher labor
costs in tight labor markets, freight and raw materials costs. Second quarter
2017 Drainage EBITDA2 and Adjusted EBITDA1 were $40.1 million and $40.5 million,
respectively, compared to $47.1 million and $48.3 million, respectively, in the
prior year quarter.
Water Pipe & Products ("Water") net sales increased to $215.2 million, compared
to $189.2 million in the prior year quarter, due to the acquisition in the
second quarter of 2016 of U.S. Pipe, which provided an additional $28.4 million
of net sales. Second quarter 2017 Water EBITDA2 and Adjusted EBITDA1decreased
to $17.9 million and $29.6 million, respectively, compared to $32.5 million and
$41.7 million, respectively, in the prior year quarter, due to lower gross
profit. Water gross profit was $33.3 million compared to $35.2 million in the
prior year quarter. The ductile iron pipe portion of the Water segment was
impacted by lower average sales prices due to increased competition and higher
scrap prices that reduced gross margin for the quarter. In the concrete and
steel pressure pipe portion of the Water segment, net sales increased modestly
with higher sales in the U.S., partially offset by a decline in net sales in
Canada. The higher U.S. concrete and steel pressure pipe net sales was driven
by deliveries on a large project that had been delayed from the fourth quarter
of 2016 and the first quarter of 2017. U.S. concrete and steel pressure pipe
gross profit declined due primarily to lower average sales prices. In Canada,
the higher sales and gross margin from concrete and steel pressure pipe in the
prior year quarter were driven primarily by a large multi-year project that was
completed in the fourth quarter of 2016.
Second quarter 2017 results were impacted by higher SG&A costs. The increase in
SG&A was due primarily to higher professional fees associated with the
previously announced cost savings initiatives and Sarbanes-Oxley compliance
work. Bradley explained, "We have invested significantly in cost-cutting
initiatives, integration of acquisitions and SOX compliance, and I expect that
these costs will be substantially behind us as we head into 2018."
Bradley continued, "While our outlook for the third quarter of 2017 reflects a
more challenging market environment than we had previously expected, I am
confident that we are taking the right steps to improve our top line growth,
lower our costs and increase our operating efficiency. We have made significant
progress on our cost-cutting initiatives that I expect will materially lower our
costs in 2018 and beyond."
Completion of Sale of U.S. Concrete and Steel Pressure Pipe Assets
The Company closed its previously announced sale of its U.S. concrete and steel
pressure pipe assets on July 31, 2017 and used proceeds of $23.2 million to
partially pay down the balance outstanding on its $300 million asset-based
revolving credit facility (the "Revolver"). The transaction, which allowed
Forterra to exit a business with unfavorable market dynamics in the U.S., is
expected to be immediately accretive to Forterra's earnings, margins and cash
flows. Forterra also acquired assets relating to a Drainage facility in Conroe,
Texas as a part of the transaction, which will bolster Forterra's position in
the large and growing Houston Drainage market. The assets sold contributed
EBITDA2 and Adjusted EBITDA1 of $(8.6) million and $(1.1) million, respectively,
on net sales of $34.2 million in Q2 2017, compared to EBITDA2 and Adjusted
EBITDA1 of $7.3 million and $1.3 million, respectively, on net sales of $23.1
million in Q2 2016. For the six months ended June 30, 2017 and June 30, 2016
and full year 2016, the assets sold generated EBITDA2 of $(13.9) million, $9.2
million, and $4.8 million, respectively, and Adjusted EBITDA1 of $(6.6) million,
$3.3 million, and $1.4 million, respectively, on net sales of $61.9 million,
$53.1 million, and $99.7 million, respectively.
Balance Sheet and Liquidity
At June 30, 2017, the Company had cash of $22.0 million and total borrowings
under its credit agreements of $1.32 billion. Availability under the Revolver as
of June 30, 2017 was $204.3 million. Including the benefit of the net proceeds
from the sale of the U.S. concrete and steel pressure pipe business and
anticipated positive cash flows from working capital in the second half of
2017, Forterra expects to end the year with no borrowings outstanding under the
Revolver while maintaining a cash surplus heading into the seasonal increase in
working capital in Q1 2018. The Company anticipates that maintenance capital
expenditures will be approximately 2.5% of net sales for 2017 with no major
growth capital expenditures planned through the end of 2017. Since June
30, 2017, including the application of proceeds from U.S. concrete and steel
pressure pipe assets, the Company has repaid $55.0 million on the Revolver, and
the outstanding balance on the Revolver was $25.0 million on August 9, 2017.
Financial Outlook
The Company expects that the average sales prices in both segments in the third
quarter of 2017 will be similar to the averages in the third quarter of 2016.
However, the Company expects higher costs, including labor, freight and raw
materials costs in the Drainage segment and scrap costs in the Water segment,
will negatively impact margins as compared to the same period in the prior
year. The Company also expects that the earnings contribution of the Canadian
concrete and steel pressure pipe portion of the Water segment in the third
quarter of 2017 will be negatively impacted by lower anticipated net sales as
compared to the third quarter of 2016, consistent with the year over year trend
from the second quarter of 2016 to the second quarter of 2017. The Company
expects that costs in the Corporate segment in the third quarter of 2017 will be
in line with costs in the first quarter of 2017, reflecting lower professional
fees as compared to the second quarter of 2017. The Company expects that net
income for the third quarter of 2017 will range from $1.0 million to $7.0
million and Adjusted EBITDA1 will range from $55.0 million to $65.0 million.
The Company anticipates that the factors influencing expectations for the third
quarter of 2017 will also impact results in the fourth quarter of 2017. The
Company expects that EBITDA and Adjusted EBITDA margins in the third quarter of
2017 will be lower than the third quarter of 2016 levels, which were 16.5% and
18.2%, respectively. The Company will reevaluate whether or not to provide
guidance beyond the third quarter of 2017 prior to reporting results for the
third quarter of 2017 and will continue to reevaluate on an ongoing basis. The
decision to provide guidance for the third quarter of 2017 was based on the
significantly lower expectations for the Company for the third quarter of 2017
and the balance of the year.
Given the lower expectations for the balance of 2017, the Company is reassessing
the timetable to achieve the previously announced target of a 400 basis point
increase in income from operations, EBITDA and Adjusted EBITDA as a percentage
of sales as compared to full-year 2016. While the Company expects to see the
benefit of its initiatives in 2018 and beyond and believes that there are
further opportunities to reduce its costs and increase margins, the increased
market uncertainty, as reflected in the lower expectations for full year 2017,
reduces the Company's visibility to achieving the previously communicated margin
expansion by 2019.
Asset Impairment
As of June 30, 2017, the Company determined that the assets and liabilities
associated with its now-sold U.S. concrete and steel pressure pipe assets met
the criteria required to be classified as held for sale, and therefore are
carried at fair value less selling costs. An analysis indicated that the
carrying value of the long-lived assets held for sale exceeded the fair value
less costs to sell, and as a result, a pre-tax impairment charge of $7.5 million
was recorded within impairment and exit charges for the three and six month
periods ended June 30, 2017.
During the second quarter of 2017, the Company performed interim goodwill
impairment testing of the Canadian concrete and steel pressure pipe reporting
unit after identifying indicators it was more-likely-than-not that the reporting
unit's carrying value was in excess of its fair value. As a result of the
interim impairment testing, the Company determined that the carrying value of
the reporting unit's goodwill was fully impaired and a goodwill impairment
charge of $3.0 million was recorded.
Conference Call and Webcast Information
Forterra will host a conference call to review second quarter 2017 results on
August 10, 2017 at 8:30 a.m. Eastern Time (7:30 a.m. Central Time). The dial-in
number for the call is 574-990-1396 or toll free 844-498-0572. The participant
passcode is 58439727. Please dial in at least five minutes prior to the call to
register. The call may also be accessed via a webcast which, along with the
supplemental presentation that will be referenced during the call, are available
on the Investors section of the Company's website at http://forterrabp.com. A
replay of the conference call and archive of the webcast along with the
supplemental materials will be available for 30 days under the Investor section
of the Company's website.
About Forterra
Forterra is a leading manufacturer of water and drainage pipe and products in
the U.S. and Eastern Canada for a variety of water-related infrastructure
applications, including water transmission, distribution, drainage and
stormwater management. Based in Irving, Texas, Forterra's product breadth and
significant scale help make it a one-stop shop for water related pipe and
products, and a preferred supplier to a wide variety of customers, including
contractors, distributors and municipalities. For more information on Forterra,
visit http://forterrabp.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Forward-looking statements may be
identified by the use of words such as "anticipate", "believe", "expect",
"estimate", "plan", "outlook", and "project" and other similar expressions that
predict or indicate future events or trends or that are not statements of
historical matters. Forward-looking statements should not be read as a guarantee
of future performance or results, and will not necessarily be accurate
indications of the times at, or by, which such performance or results will be
achieved. Forward- looking statements are based on historical information
available at the time the statements are made and are based on management's
reasonable belief or expectations with respect to future events, and are subject
to risks and uncertainties, many of which are beyond the Company's control, that
could cause actual performance or results to differ materially from the belief
or expectations expressed in or suggested by the forward-looking statements.
Forward-looking statements speak only as of the date on which they are made and
the Company undertakes no obligation to update any forward-looking statement to
reflect future events, developments or otherwise, except as may be required by
applicable law. Investors are referred to the Company's filings with the
Securities and Exchange Commission, including its Annual Report on Form 10-K,
for additional information regarding the risks and uncertainties that may cause
actual results to differ materially from those expressed in any forward-looking
statement.
1 Adjusted net income, Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP
measures. See the financial schedules at the end of this press release for how
we define these measures, a discussion of why we believe they are useful and
reconciliation thereof to the most directly comparable GAAP financial measures.
2 For purposes of evaluating segment profit, the Company's chief operating
decision maker reviews EBITDA as a basis for making the decisions to allocate
resources and assess performance.
Condensed Consolidated Statements of Operations
(in thousands)
Three months ended Six months ended
June 30, June 30,
2017 2016 2017 2016
------------------------- ------------------------
(unaudited) (unaudited)
Net sales $ 436,685 $ 381,723 $ 774,987 $ 568,719
Cost of goods sold 361,089 298,632 660,424 449,937
------------------------- ------------------------
Gross profit 75,596 83,091 114,563 118,782
Selling, general &
administrative expenses (67,297 ) (57,060 ) (132,598 ) (90,721 )
Impairment and exit charges (11,376 ) (23 ) (11,811 ) (23 )
Earnings from equity method
investee 3,342 3,565 6,513 4,868
Other operating income, net 2,010 2,116 3,243 3,344
------------------------- ------------------------
(73,321 ) (51,402 ) (134,653 ) (82,532 )
------------------------- ------------------------
Income (loss) from
operations 2,275 31,689 (20,090 ) 36,250
Other income (expenses)
Interest expense (17,078 ) (24,839 ) (30,620 ) (42,129 )
Other income (expense), net - (1,177 ) - (1,177 )
------------------------- ------------------------
Income (loss) before income
taxes (14,803 ) 5,673 (50,710 ) (7,056 )
Income tax benefit 3,630 26,173 16,994 36,740
------------------------- ------------------------
Income (loss) from
continuing operations (11,173 ) 31,846 (33,716 ) 29,684
Discontinued operations, net
of tax - 4,843 - 3,069
------------------------- ------------------------
Net income (loss) $ (11,173 ) $ 36,689 $ (33,716 ) $ 32,753
------------------------- ------------------------
Condensed Consolidated Balance Sheets
(in thousands, except share data)
June 30, December 31,
2017 2016
--------------- --------------
ASSETS (unaudited)
Current assets
Cash and cash equivalents $ 22,024 $ 40,024
Receivables, net 240,058 201,481
Inventories 287,300 279,502
Prepaid expenses 7,363 6,417
Other current assets 18,885 5,179
Current assets held for sale 77,244 -
--------------- --------------
Total current assets 652,874 532,603
--------------- --------------
Non-current assets
Property, plant and equipment, net 432,477 452,914
Goodwill 508,474 491,447
Intangible assets, net 256,362 281,598
Investment in equity method investee 56,499 55,236
Other long-term assets 12,072 10,988
Non-current assets held for sale 18,585 -
--------------- --------------
Total assets $ 1,937,343 $ 1,824,786
--------------- --------------
LIABILITIES AND EQUITY
Current liabilities
Trade payables $ 125,372 $ 134,059
Accrued liabilities 59,293 82,165
Deferred revenue 10,329 20,797
Current portion of long-term debt 12,510 10,500
Current liabilities held for sale 21,564 -
--------------- --------------
Total current liabilities 229,068 247,521
--------------- --------------
Non-current liabilities
Senior term loan 1,183,809 990,483
Revolving credit facility 76,471 95,064
Deferred tax liabilities 87,267 100,550
Deferred gain on sale-leaseback 76,982 78,215
Other long-term liabilities 27,039 23,253
Long-term TRA Payable 156,783 156,783
--------------- --------------
Total liabilities 1,837,419 1,691,869
--------------- --------------
Commitments and Contingencies
Equity
Common stock, $0.001 par value, 64,165,557 and
63,924,124, shares issued and outstanding,
respectively and 190,000,000 shares authorized 18 18
Additional paid-in-capital 229,711 228,316
Accumulated other comprehensive loss (5,697 ) (5,025 )
Retained deficit (124,108 ) (90,392 )
--------------- --------------
Total shareholders' equity 99,924 132,917
--------------- --------------
Total liabilities and shareholders' equity $ 1,937,343 $ 1,824,786
--------------- --------------
Condensed Consolidated Statements of Cash Flows
(in thousands)
Six months ended
June 30,
2017 2016
------------- ------------
CASH FLOWS FROM OPERATING ACTIVITIES (unaudited) (unaudited)
Net Income (loss) $ (33,716 ) $ 32,753
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation & amortization expense 58,305 40,420
Loss (gain) on disposal of property, plant and
equipment 1,194 (1,217 )
Amortization of debt discount and issuance costs 3,994 3,760
Impairment charges 10,551 -
Earnings from equity method investee (6,513 ) (4,868 )
Distributions from equity method investee 5,250 4,500
Unrealized (gain) loss on derivative instruments,
net (1,326 ) 1,026
Provision (recoveries) for doubtful accounts 1,398 360
Deferred taxes (12,112 ) (38,376 )
Deferred rent 1,122 -
Other non-cash items 571 54
Change in assets and liabilities:
Receivables, net (70,062 ) (47,321 )
Inventories (49,458 ) 6,940
Other assets (8,190 ) (10,917 )
Accounts payable and accrued liabilities (21,031 ) (1,841 )
Other assets & liabilities (6,021 ) 8,361
------------- ------------
NET CASH USED IN OPERATING ACTIVITIES (126,044 ) (6,366 )
------------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment (30,024 ) (16,340 )
Assets and liabilities acquired, business
combinations, net (35,380 ) (841,861 )
------------- ------------
NET CASH USED IN INVESTING ACTIVITIES (65,404 ) (858,201 )
------------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale-leaseback - 216,280
Deferred transaction costs on failed sale-
leaseback - (6,492 )
Payment of debt issuance costs (2,498 ) (6,896 )
Payments on Senior and Junior Term Loans (5,753 ) (2,191 )
Proceeds from Senior and Junior Term Loans, net 200,000 548,400
Proceeds from Revolver 194,000 106,611
Payments on Revolver (213,000 ) (55,173 )
Proceeds from settlement of derivatives - 6,546
Capital contribution from parent - 402,127
Payments for return of contributed capital - (347,344 )
Other financing activities (110 ) -
------------- ------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 172,639 861,868
------------- ------------
Effect of exchange rate changes on cash 809 926
------------- ------------
Net change in cash and cash equivalents (18,000 ) (1,773 )
Cash and cash equivalents, beginning of period 40,024 43,590
------------- ------------
Cash and cash equivalents, end of period $ 22,024 $ 41,817
------------- ------------
SUPPLEMENTAL DISCLOSURES:
Cash interest paid 26,465 26,915
Income taxes paid 25,882 -
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING DISCLOSURES:
Fair value changes of derivatives recorded in OCI,
net of tax (1,908 ) (1,427 )
Additional Statistics (unaudited)
Reconciliation of Non-GAAP Measures
In addition to our results calculated under generally accepted accounting
principles in the United States ("GAAP"), in this earnings release we also
present adjusted net income, adjusted EBITDA and adjusted EBITDA margin.
Adjusted net income, adjusted EBITDA and adjusted EBITDA margin are non-GAAP
measures and have been presented in this earnings release as supplemental
measures of financial performance that are not required by, or presented in
accordance with GAAP. We calculate adjusted net income as net income (loss)
after adjusting for (earnings)/loss from discontinued operations, impairment and
restructuring charges, (gains)/losses on the sale of property, plant and
equipment and certain other income and expenses, such as transaction costs, and
costs associated with disposed sites and including normalized income tax expense
for the adjustments to net income (loss). We calculate adjusted EBITDA as net
income (loss) before (earnings)/loss from discontinued operations, interest
expense, income tax benefit (expense), depreciation and amortization and before
impairment and restructuring charges, (gains)/losses on the sale of property,
plant and equipment and certain other income and expenses, such as transaction
costs, and costs associated with disposed sites. Adjusted EBITDA margin
represents adjusted EBITDA as a percentage of net sales.
Adjusted net income, adjusted EBITDA and adjusted EBITDA margin are presented in
this earnings release because they are important metrics used by management as
one of the means by which it assesses our financial performance. Adjusted net
income, adjusted EBITDA and adjusted EBITDA margin are also frequently used by
analysts, investors and other interested parties to evaluate companies in our
industry. We use adjusted net income, adjusted EBITDA and adjusted EBITDA
margin as supplements to GAAP measures of performance to evaluate the
effectiveness of our business strategies, to make budgeting decisions, to
allocate resources and to compare our performance relative to our peers.
Adjusted net income, adjusted EBITDA and adjusted EBITDA margin are also
important measures for assessing our operating results and evaluating each
operating segment's performance on a consistent basis, by excluding the impacts
of depreciation, amortization, income tax expense, interest expense and other
items not indicative of ongoing operating performance. Additionally, these
measures, when used in conjunction with related GAAP financial measures, provide
investors with additional financial analytical framework which management uses,
in addition to historical operating results, as the basis for financial,
operational and planning decisions and present measurements that third parties
have indicated are useful in assessing the Company and its results of
operations.
Adjusted net income, adjusted EBITDA and adjusted EBITDA margin have certain
limitations. Adjusted net income and adjusted EBITDA should not be considered as
alternatives to consolidated net income, and in the case of our segment results,
adjusted EBITDA should not be considered an alternative to EBITDA, which the
CODM reviews for purposes of evaluating segment profit, or in the case of any of
the non-GAAP measures, as a substitute for any other measure of financial
performance calculated in accordance with GAAP. Similarly, adjusted EBITDA
margin should not be considered as an alternative to gross margin or any other
margin calculated in accordance with GAAP. These measures also should not be
construed as an inference that our future results will be unaffected by unusual
or nonrecurring items for which these non-GAAP measures make adjustments.
Additionally, adjusted net income, adjusted EBITDA and adjusted EBITDA margin
are not intended to be liquidity measures because of certain limitations such
as: (i) they do not reflect our cash outlays for capital expenditures or future
contractual commitments; (ii) they do not reflect changes in, or cash
requirements for, working capital; (iii) they do not reflect interest expense,
or the cash requirements necessary to service interest, or principal payments,
on indebtedness; (iv) they do not reflect income tax expense or the tax
necessary to pay income taxes; and (v) although depreciation and amortization
are non-cash charges, the assets being depreciated and amortized will often have
to be replaced in the future, and these non-GAAP measures do not reflect cash
requirements for such replacements.
Other companies, including other companies in our industry, may not use such
measures or may calculate one or more of the measures differently than as
presented in this earnings release, limiting their usefulness as a comparative
measure. In evaluating adjusted net income, adjusted EBITDA and adjusted EBITDA
margin, you should be aware that in the future we will incur expenses that are
the same as or similar to some of the adjustments made in the calculations below
and the presentation of adjusted net income, adjusted EBITDA and adjusted EBITDA
margin should not be construed to mean that our future results will be
unaffected by such adjustments. Management compensates for these limitations by
using adjusted net income, adjusted EBITDA and adjusted EBITDA margin as
supplemental financial metrics and in conjunction with results prepared in
accordance with GAAP.
Reconciliation of net income (loss) to adjusted net income (loss)
(in thousands)
Three months ended June
30,
2017 2016
------------- ------------
(unaudited) (unaudited)
Net income (loss) $ (11,173 ) $ 36,689
Loss from discontinued operations, net - (4,843 )
(Gain) loss on sale of property, plant & equipment,
net1 420 (368 )
Impairment and exit charges2 11,376 23
Transaction costs3 2,679 7,152
Inventory step-up impacting margin4 338 11,465
Costs associated with disposed sites5 - 99
Non-cash compensation7 887 -
Tax impact of net income adjustments8 (5,809 ) (6,797 )
------------- ------------
Adjusted net income (loss) $ (1,282 ) $ 43,420
------------- ------------
Six months ended June 30,
2017 2016
------------- ------------
(unaudited) (unaudited)
Net income (loss) $ (33,716 ) $ 32,753
Loss from discontinued operations, net - (3,069 )
(Gain) loss on sale of property, plant & equipment,
net1 1,194 (370 )
Impairment and exit charges2 11,811 23
Transaction costs3 4,738 11,089
Inventory step-up impacting margin4 1,757 12,515
Costs associated with disposed sites5 - 188
Other (gains) expenses6 (538 ) -
Non-cash compensation7 1,244 -
Tax impact of net income adjustments8 (7,476 ) (8,675 )
------------- ------------
Adjusted net income (loss) $ (20,986 ) $ 44,454
------------- ------------
1 (Gain) loss on sale of property, plant and equipment, primarily related to
the disposition of manufacturing facilities.
2 Impairment of goodwill and long-lived assets and other exit charges.
3 Legal, valuation, accounting, advisory and other costs related to business
combinations and other transactions.
4 Effect of the purchase accounting step-up in the value of inventory to fair
value recognized in cost of goods sold as a result of business combinations.
5 Results of operations of our disposed roof tile business and other disposed
sites for the periods presented, net of specific items for which adjustments are
separately made elsewhere in the calculation of adjusted net income (loss)
presented herein.
6 Other (gains) losses, such as gain on insurance proceeds related to the
destruction of property.
7 Non-cash equity based compensation expense.
8 Assumes a normalized tax rate of 37% applied to the adjustments to net
income.
Reconciliation of net income (loss) to Adjusted EBITDA
(in thousands)
Three months ended June
30,
2017 2016
------------- -----------
unaudited unaudited
Net income (loss) $ (11,173 ) $ 36,689
Loss from discontinued operations, net - (4,843 )
Interest expense 17,078 24,839
Depreciation and amortization 28,501 25,136
Income tax benefit (3,630 ) (26,173 )
------------- -----------
EBITDA 30,776 55,648
------------- -----------
(Gain) loss on sale of property, plant & equipment,
net1 420 (368 )
Impairment and exit charges2 11,376 23
Transaction costs3 2,679 7,152
Inventory step-up impacting margin4 338 11,465
Costs associated with disposed sites5 - 99
Non-cash compensation6 887 -
------------- -----------
Adjusted EBITDA $ 46,476 $ 74,019
Adjusted EBITDA margin 10.6 % 19.4 %
Gross profit 75,596 83,091
Gross profit margin 17.3 % 21.8 %
Six months ended June
30,
2017 2016
------------- -----------
unaudited unaudited
Net income (loss) $ (33,716 ) $ 32,753
Loss from discontinued operations, net - (3,069 )
Interest expense 30,620 42,129
Depreciation and amortization 58,305 36,428
Income tax benefit (16,994 ) (36,740 )
------------- -----------
EBITDA 38,215 71,501
------------- -----------
(Gain) loss on sale of property, plant & equipment,
net1 1,194 (370 )
Impairment and exit charges2 11,811 23
Transaction costs3 4,738 11,089
Inventory step-up impacting margin4 1,757 12,515
Costs associated with disposed sites5 - 188
Non-cash compensation6 1,244 -
Other (gains) expenses7 (538 ) -
------------- -----------
Adjusted EBITDA $ 58,421 $ 94,946
Adjusted EBITDA margin 7.5 % 16.7 %
Gross profit 114,563 118,782
Gross profit margin 14.8 % 20.9 %
1 (Gain) loss on sale of property, plant and equipment, primarily related to
the disposition of manufacturing facilities.
2 Impairment of goodwill and long-lived assets and other exit charges.
3 Legal, valuation, accounting, advisory and other costs related to business
combinations and other transactions.
4 Effect of the purchase accounting step-up in the value of inventory to fair
value recognized in cost of goods sold as a result of business combinations.
5 Results of operations of our disposed roof tile business and other disposed
sites for the periods presented, net of specific items for which adjustments are
separately made elsewhere in the calculation of adjusted EBITDA presented
herein.
6 Non-cash equity compensation expense.
7 Other (gains) losses, such as gain on insurance proceeds related to the
destruction of property.
Reconciliation of segment EBITDA to segment Adjusted EBITDA
(in thousands)
Three months
ended June Drainage Pipe Water Pipe & Corporate and
30, 2017 & Products Products Other Total
---------------- --------------- ---------------- -----------
EBITDA $ 40,079 $ 17,913 $ (27,216 ) $ 30,776
---------------- --------------- ---------------- -----------
(Gain) loss on
sale of property,
plant &
equipment, net1 77 293 50 420
Impairment and
exit charges2 (14 ) 11,390 - 11,376
Transaction
costs3 - - 2,679 2,679
Inventory step-up
impacting margin4 338 - - 338
Non-cash
compensation7 28 18 841 887
---------------- --------------- ---------------- -----------
Adjusted EBITDA $ 40,508 $ 29,614 $ (23,646 ) $ 46,476
---------------- --------------- ---------------- -----------
Three months
ended June Drainage Pipe Water Pipe & Corporate and
30, 2016 & Products Products Other Total
---------------- ---------------- ----------------- -----------
EBITDA $ 47,085 $ 32,464 $ (23,901 ) $ 55,648
---------------- ---------------- ----------------- -----------
(Gain) loss on
sale of
property, plant
& equipment,
net1 243 (1,458 ) 847 (368 )
Impairment and
exit charges2 - 23 - 23
Transaction
costs3 - 69 7,083 7,152
Inventory step-
up impacting
margin4 828 10,637 - 11,465
Costs
associated with
disposed sites5 99 - - 99
Other (gains)
expenses6 - - - -
---------------- ---------------- ----------------- -----------
Adjusted EBITDA $ 48,255 $ 41,735 $ (15,971 ) $ 74,019
---------------- ---------------- ----------------- -----------
Six months ended Drainage Pipe Water Pipe & Corporate and
June 30, 2017 & Products Products Other Total
---------------- --------------- ---------------- -----------
EBITDA $ 51,490 $ 35,025 $ (48,300 ) $ 38,215
---------------- --------------- ---------------- -----------
(Gain) loss on
sale of property,
plant &
equipment, net1 71 1,073 50 1,194
Impairment and
exit charges2 (14 ) 11,825 - 11,811
Transaction
costs3 - 4,738 4,738
Inventory step-up
impacting margin4 1,757 - - 1,757
Costs associated
with disposed
sites5 - - - -
Other (gains)
expenses6 - (538 ) - (538 )
Non-cash
compensation7 49 37 1,158 1,244
---------------- --------------- ---------------- -----------
Adjusted EBITDA $ 53,353 $ 47,422 $ (42,354 ) $ 58,421
---------------- --------------- ---------------- -----------
Six months
ended June Drainage Pipe Water Pipe & Corporate and
30, 2016 & Products Products Other Total
---------------- ---------------- ----------------- -----------
EBITDA $ 75,034 $ 36,617 $ (40,150 ) $ 71,501
---------------- ---------------- ----------------- -----------
(Gain) loss on
sale of
property, plant
& equipment,
net1 241 (1,458 ) 847 (370 )
Impairment and
exit charges2 - 23 - 23
Transaction
costs3 - 69 11,020 11,089
Inventory step-
up impacting
margin4 1,878 10,637 - 12,515
Costs
associated with
disposed sites5 188 - - 188
---------------- ---------------- ----------------- -----------
Adjusted EBITDA $ 77,341 $ 45,888 $ (28,283 ) $ 94,946
---------------- ---------------- ----------------- -----------
1 (Gain) loss on sale of property, plant and equipment, primarily related to
the disposition of manufacturing facilities.
2 Impairment of goodwill and long-lived assets and other exit charges.
3 Legal, valuation, accounting, advisory and other costs related to business
combinations and other transactions.
4 Effect of the purchase accounting step-up in the value of inventory to fair
value recognized in cost of goods sold as a result of business combinations.
5 Results of operations of our disposed roof tile business and other disposed
sites for the periods presented, net of specific items for which adjustments are
separately made elsewhere in the calculation of adjusted EBITDA presented
herein.
6 Other (gains) losses, such as gain on insurance proceeds related to the
destruction of property.
7 Non-cash equity compensation expense.
Reconciliation of Net Income to Adjusted EBITDA Guidance for Q3 2017
(in millions)
Q3 2017 EBITDA Guidance
Low High
-------------- ------------------
Net income $ 1 $ 7
Interest expense 16 16
Income tax expense 7 11
Depreciation and amortization 31 31
-------------- ------------------
Adjusted EBITDA $ 55 $ 65
-------------- ------------------
Company Contact Information:
Matt Brown
Executive Vice President and Chief Financial Officer
469-299-9113
IR(at)forterrabp.com
This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Forterra, Inc. via GlobeNewswire
Datum: 10.08.2017 - 12:00 Uhr
Sprache: Deutsch
News-ID 556097
Anzahl Zeichen: 53488
contact information:
Town:
Irving, TX
Kategorie:
Business News
Diese Pressemitteilung wurde bisher 161 mal aufgerufen.
Die Pressemitteilung mit dem Titel:
"Forterra Announces Second Quarter 2017 Results"
steht unter der journalistisch-redaktionellen Verantwortung von
Forterra, Inc. (Nachricht senden)
Beachten Sie bitte die weiteren Informationen zum Haftungsauschluß (gemäß TMG - TeleMedianGesetz) und dem Datenschutz (gemäß der DSGVO).
