Ames True Temper Reports First Quarter Fiscal 2010 Results
CAMP HILL, Pa., Feb. 12 /PRNewswire/ -- ATT Holding Co., parent of Ames True Temper, Inc., reported today the results of the thirteen week period ended January 2, 2010 (Q1 2010).
First Quarter Fiscal 2010 Results
Net sales for Q1 2010 were $86.4 million, a 6.4% decrease over $92.3 million in Q1 2009 (thirteen week period ended December 27, 2008). Net income for Q1 2010 was $1.4 million, compared to a net loss of $10.2 million for Q1 2009. Adjusted EBITDA (which is reconciled to net income (loss) on the attached table) for Q1 2010 was $15.7 million compared to $17.7 million for Q1 2009.
Borrowings outstanding under our revolving credit facility were $18.3 million at January 2, 2010, a decrease of $46.3 million from $64.6 million at December 27, 2008. Availability under our revolving credit facility was $55.1 million at January 2, 2010.
Ames True Temper, Inc. is a global provider of non-powered landscaping products that make work easier for homeowners and professionals.
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 the Company 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:
* We depend on a small number of customers for a significant portion of our business;
* Our results of operations may be adversely impacted by macroeconomic events;
* Reliance on third party suppliers and manufacturers may impair our ability to meet customer demands;
* If we are unable to obtain raw materials for our products at favorable prices it could adversely impact our operating performance;
* We are subject to risks associated with our foreign operations;
* We are subject to risks associated with our operations in China;
* Unseasonable weather could have a negative impact on our business and financial results;
* Our lawn and garden sales are highly seasonal which could impact our cash flow and operating results;
* Our industry is highly competitive and we may not be able to compete successfully;
* Further consolidation in the retail industry may adversely affect our profitability;
* A failure to successfully introduce new products could result in a reduction in sales and floor space at retailers that carry our products;
* The products that we manufacture could expose us to product liability claims;
* Our ability to pay our debt or seek alternative financing may be adversely impacted;
* Environmental health and safety laws, ordinances, and regulations impose risks and costs on us;
* We depend on the service of key individuals, the loss of any of which could materially harm our business;
* Unionized employees could strike or participate in a work stoppage;
* We may be required to record impairment charges for goodwill, indefinite-lived intangible assets and other long-lived assets; and
* We may not be able to acquire complementary lawn and garden product manufacturers or brands; in addition, our acquisition strategy may negatively impact our operating results, divert management's attention from operating our core business, and expose us to other risks.
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 or described in the forward-looking statements will occur or, if any of them do, what impact they will have on the business, results of operations and financial condition. The Company does not intend, and undertakes no obligation, to update any forward-looking statement.
ATT Holding Co.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
January 2, October 3,
2010 2009
---- ----
Assets
Current assets:
Cash and cash equivalents $41,308 $33,609
Trade receivables, net 43,188 42,449
Inventories 106,379 90,305
Prepaid expenses and other current assets 6,042 6,315
----- -----
Total current assets 196,917 172,678
Property, plant and equipment, net 42,063 44,239
Intangibles, net 53,580 53,681
Goodwill 57,971 57,494
Other noncurrent assets 5,922 6,531
----- -----
Total assets $356,453 $334,623
======== ========
Liabilities and stockholder's deficit
Current liabilities:
Trade accounts payable $34,701 $18,214
Accrued interest payable 9,101 5,392
Accrued expenses and other current
liabilities 23,540 26,642
Revolving loan 18,293 17,500
Current portion of long-term debt and
capital lease obligations 374 489
--- ---
Total current liabilities 86,009 68,237
Deferred income taxes 14,034 13,672
Long-term debt 299,886 299,791
Accrued retirement benefits 51,907 51,836
Other liabilities 12,156 12,661
------ ------
Total liabilities 463,992 446,197
Commitments and contingencies
Stockholder's deficit:
Total stockholder's deficit (107,539) (111,574)
-------- --------
Total liabilities and stockholder's deficit $356,453 $334,623
======== ========
ATT Holding Co.
Condensed Consolidated Statements of Operations
(In thousands)
(Unaudited)
Thirteen week Thirteen week
period ended period ended
January 2, 2010 December 27, 2008
--------------- -----------------
Net sales $86,399 100.0% $92,334 100.0%
Cost of goods sold 59,228 68.6% 64,449 69.8%
------ ---- ------ ----
Gross profit 27,171 31.4% 27,885 30.2%
Selling, general and administrative
expenses 15,897 18.4% 17,798 19.3%
(Gain) loss on disposal property,
plant and equipment (65) -0.1% 32 0.0%
Amortization of intangible assets 304 0.4% 305 0.3%
Impairment charges - 0.0% 476 0.5%
--- --- --- ---
Operating income 11,035 12.8% 9,274 10.0%
Interest expense 6,821 7.9% 7,971 8.6%
Other expense 1,200 1.4% 11,363 12.3%
----- --- ------ ----
Income (loss) before income taxes 3,014 3.5% (10,060) -10.9%
Income tax expense 1,655 1.9% 178 0.2%
----- --- --- ---
Net income (loss) $1,359 1.6% $(10,238) -11.1%
====== === ======== =====
ATT Holding Co.
Reconciliation of Net Income (Loss) to Adjusted EBITDA
(In thousands)
(Unaudited)
Thirteen week Thirteen week
period ended period ended
January 2, 2010 December 27, 2008
--------------- -----------------
Net income (loss) $1,359 $(10,238)
Depreciation of property, plant and
equipment 3,358 3,887
Amortization of intangible assets 304 305
Interest expense 6,821 7,971
Income tax expense 1,655 178
----- ---
EBITDA (a) 13,497 2,103
Adjustments to EBITDA
Equity sponsor fees and other expenses (b) 1,228 190
Impairment charges (c) - 476
(Gain) loss on disposal of fixed
assets (d) (65) 32
Unrealized losses (e) 1,007 14,915
----- ------
Adjusted EBITDA (a) $15,667 $17,716
======= =======
(a) "EBITDA" is calculated as net income (loss) plus income tax expense,
interest expense, depreciation and amortization. "Adjusted EBITDA" is
EBITDA adjusted as indicated below. EBITDA and Adjusted EBITDA are
not intended to represent cash flow from operations as defined by U.S.
GAAP and should not be used as an alternative to net income (loss) 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
Revolving Loan are tied to ratios based on this measure. During Q3
2009, Adjusted EBITDA as defined by our Revolving Loan was amended to
exclude non-recurring gains. Accordingly, non-recurring gains are
presented as adjustments to EBITDA. 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) Consists of management fees paid to our private equity sponsor (Castle
Harlan), non-cash (income) expense related to our postretirement plans
and non-cash charges recorded in accordance with lease accounting
standards due to the expensing of escalating rent on a straight-line
basis.
(c) Consists of impairment charges related to a write-down of available
for sale assets to fair value as a result of real estate market
conditions during that time.
(d) Consists of gains and losses on the disposition of property, plant and
equipment.
(e) Q1 2010 loss consists primarily of an unrealized foreign currency loss
on a U.S. dollar denominated intercompany note issued by a Canadian
subsidiary and an unrealized foreign currency loss on foreign currency
forward contracts. Q1 2009 consists primarily of an unrealized foreign
currency loss on the intercompany note.
SOURCE Ames True Temper, Inc.
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