EXHIBIT 99.1
AMES TRUE TEMPER REPORTS THIRD QUARTER RESULTS
NET SALES INCREASE 2.5 PERCENT
CAMP HILL, Pennsylvania, August 5, 2005 - ATT Holding Co., parent of Ames True
Temper, Inc., reported today the results of the Company's fiscal third quarter
ended June 25, 2005.
Third Quarter Results (13-week period ended June 25, 2005)
Net sales for the fiscal 2005-third quarter were $144.8 million, a 2.5 percent
increase over $141.3 million for the comparable period in fiscal 2004. Net
income was $3.6 million for the third quarter of fiscal 2005, compared to $9.7
million in the third quarter of fiscal 2004. Adjusted EBITDA (which is
reconciled to net income on the attached table) for the fiscal 2005-third
quarter was $17.0 million, compared to $20.2 million for the fiscal 2004-third
quarter.
Year-to-Date Results (39-week period ended June 25, 2005)
Net sales for the 39 weeks ended June 25, 2005 were $360.6 million, a 1.5
percent increase over $355.4 million for the 39 weeks ended June 27, 2004. Net
income was $2.7 million for the 39 weeks ended June 25, 2005, compared to $19.4
million for the 39 weeks ended June 27, 2004. Adjusted EBITDA (which is
reconciled to net income on the attached table) for the 39 weeks ended June 25,
2005 was $39.9 million, compared to $48.0 million for the 39 weeks ended June
27, 2004.
"We are very pleased with our sales for this quarter. We had a very slow start
to the spring selling season, but finished the quarter very strong," said Rich
Dell, President and CEO. "We did an excellent job managing our working capital,
especially inventory. This enabled us to better control our outstanding balance
on the revolving loan." Dell noted that subsequent to the quarter end the
Company fully repaid the amounts due under the Company's revolving credit
facility.
"While commodity costs are still putting significant pressure on our margins, we
continue to explore cost saving measures. After the quarter ended, we finalized
our fourth joint venture agreement in China," noted Dell. "This agreement
provides us with another source of product components and is structured
similarly to our existing joint ventures."
The Company originally announced guidance for net sales for its fiscal 2005 to
range from $450 million to $460 million, with adjusted EBITDA of $46 to $50
million. The Company has not altered the guidance, but did note that the full
year results are expected to be at the low end of the previously reported
guidance.
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.
CONTACT: Eric Aumen, Director, Investor Relations and Public Reporting,
+1-717-730-2933, investor@amestruetemper.com, for Ames True Temper, Inc.
ATT HOLDING CO.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
PREDECESSOR
-----------
JUNE 25, JUNE 27, SEPTEMBER 25,
2005 2004 2004
--------- --------- ---------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 1,494 $ 903 $ 1,250
Trade receivables, net 95,854 91,872 57,904
Inventories 86,407 95,788 98,217
Deferred taxes 3,929 7,449 4,387
Other current assets 6,846 5,051 6,289
--------- --------- ---------
Total current assets 194,530 201,063 168,047
Property, plant and equipment, net 61,402 29,185 63,677
Pension asset 673 22,803 247
Intangibles, net 81,203 13,178 82,291
Goodwill 158,321 10,225 156,563
Other noncurrent assets 12,012 3,457 12,412
--------- --------- ---------
Total assets $ 508,141 $ 279,911 $ 483,237
========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $ 38,186 $ 39,376 $ 28,926
Accrued expenses and other current liabilities 37,062 27,172 30,278
Revolving loan 2,900 30,321 6,300
Current portion of long-term debt -- 11,387 1,400
--------- --------- ---------
Total current liabilities 78,148 108,256 66,904
Deferred taxes 23,749 13,608 26,010
Long-term debt 299,299 49,635 288,600
Other liabilities 12,153 4,694 10,334
--------- --------- ---------
Total liabilities 413,349 176,193 391,848
Stockholders' equity:
Preferred stock -- -- --
Common stock -- -- --
Additional paid-in capital 110,500 63,544 110,500
Predecessor basis adjustment (13,539) -- (13,539)
Retained (deficit) earnings (5,088) 37,501 (7,820)
Accumulated other comprehensive income 3,084 2,674 2,248
--------- --------- ---------
94,957 103,719 91,389
Treasury stock, at cost (165) (1) --
--------- --------- ---------
Total stockholders' equity 94,792 103,718 91,389
--------- --------- ---------
Total liabilities and stockholders' equity $ 508,141 $ 279,911 $ 483,237
========= ========= =========
</TABLE>
ATT HOLDING CO.
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
PREDECESSOR
---------------------
THIRTEEN WEEKS THIRTEEN WEEKS
ENDED ENDED
JUNE 25, 2005 JUNE 27, 2004
-----------------------------------------------
Net sales $ 144,780 100.0% $ 141,342 100.0%
Cost of goods sold 109,931 75.9% 102,029 72.2%
--------------------- ---------------------
Gross profit 34,849 24.1% 39,313 27.8%
Selling, general, and administrative expense 21,425 14.8% 21,687 15.3%
Gain on disposal of fixed assets (59) 0.0% (4,791) -3.4%
Amortization of intangible assets 447 0.3% 1,085 0.8%
Special Charges -- 0.0% 784 0.6%
--------------------- ---------------------
Operating income 13,036 9.0% 20,548 14.5%
Interest expense 7,590 5.2% 2,574 1.8%
Other expense 305 0.2% 141 0.1%
--------------------- ---------------------
Income before taxes 5,141 3.6% 17,833 12.6%
Income tax expense 1,531 1.1% 8,142 5.8%
--------------------- ---------------------
Net income $ 3,610 2.5% $ 9,691 6.9%
===================== =====================
</TABLE>
ATT HOLDING CO.
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(IN THOUSANDS)
<TABLE>
PREDECESSOR
----------------------
THIRTY-NINE WEEKS THIRTY-NINE WEEKS
ENDED ENDED
JUNE 25, 2005 JUNE 27, 2004
--------------------- ---------------------
(unaudited)
Net sales $ 360,632 100.0% $ 355,443 100.0%
Cost of goods sold 271,650 75.3% 256,248 72.1%
--------------------- ---------------------
Gross profit 88,982 24.7% 99,195 27.9%
Selling, general, and administrative expense 58,976 16.4% 58,808 16.5%
Gain on disposal of fixed assets (104) 0.0% (4,786) -1.3%
Amortization of intangible assets 1,307 0.4% 3,303 0.9%
Special Charges -- 0.0% 799 0.2%
--------------------- ---------------------
Operating income 28,803 8.0% 41,071 11.6%
Interest expense 24,777 6.9% 7,563 2.1%
Other expense 83 0.0% 199 0.1%
--------------------- ---------------------
Income before taxes 3,943 1.1% 33,309 9.4%
Income tax expense 1,211 0.3% 13,928 3.9%
--------------------- ---------------------
Net income $ 2,732 0.8% $ 19,381 5.5%
===================== =====================
</TABLE>
ATT HOLDING CO.
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
PREDECESSOR
----------------------
FIFTY-TWO WEEKS FIFTY-TWO WEEKS
ENDED ENDED
JUNE 25, 2005 JUNE 27, 2004
---------------------- ----------------------
Net sales $ 443,676 100.0% $ 438,541 100.0%
Cost of goods sold 344,659 77.7% 316,065 72.1%
---------------------- ----------------------
Gross profit 99,017 22.3% 122,476 27.9%
Selling, general, and administrative expense 75,548 17.0% 74,761 17.0%
Gain on disposal of fixed assets (111) 0.0% (5,405) -1.2%
Special Charges (12) 0.0% 3,303 0.8%
Amortization of intangible assets 1,784 0.4% 1,862 0.4%
---------------------- ----------------------
Operating income 21,808 4.9% 47,955 10.9%
Interest expense 30,676 6.9% 10,062 2.3%
Other expense (income) 47 0.0% (101) 0.0%
---------------------- ----------------------
(Loss) income before taxes (8,915) -2.0% 37,994 8.7%
Income tax (benefit) expense (3,827) -0.9% 15,840 3.6%
---------------------- ----------------------
Net (loss) income $ (5,088) -1.1% $ 22,154 5.1%
====================== ======================
</TABLE>
ATT HOLDING CO.
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
THIRTEEN WEEKS THIRTEEN WEEKS
ENDED ENDED
JUNE 25, 2005 JUNE 27, 2004
------------- --------------
Net income $ 3,610 $ 9,691
Depreciation of property, plant and equipment 2,665 2,063
Amortization of intangible assets 447 1,085
Other expense 305 141
Gain on disposal of fixed assets (59) (4,791)
Interest expense 7,590 2,574
Income taxes 1,531 8,142
-------- --------
EBITDA (a) 16,089 18,905
Adjustments to EBITDA
Equity sponsor fees and other expenses (b) 948 1,273
-------- --------
Adjusted EBITDA (a) $ 17,037 $ 20,178
======== ========
</TABLE>
(a) "EBITDA" is calculated as net (loss) income before income tax expense,
interest expense, other expense (income) and gain on disposal of fixed assets
plus depreciation and amortization. Adjusted EBITDA is EBITDA adjusted for
management fees, and non-recurring items. 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 is a basis upon which
our management assesses financial performance and covenants in our new 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) Consists of management fees paid to private equity sponsor (Castle Harlan
subsequent to June 27, 2004 and Wind Point Partners prior thereto), transaction
fees associated with acquisitions, fees paid to lenders under our previous
revolving loan facility primarily related to the unused portion thereof (in
fiscal 2004), 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.
ATT HOLDING CO.
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
THIRTY-NINE WEEKS THIRTY-NINE WEEKS
ENDED ENDED
JUNE 25, 2005 JUNE 27, 2004
----------------- ----------------
Net income $ 2,732 $ 19,381
Depreciation of property, plant and equipment 7,380 5,953
Amortization of intangible assets 1,307 3,303
Other expense 83 199
Gain on disposal of fixed assets (104) (4,786)
Interest expense 24,777 7,563
Income taxes 1,211 13,928
-------- --------
EBITDA (a) 37,386 45,541
Adjustments to EBITDA
Inventory write-up (b) -- 90
Equity sponsor fees and other expenses (c) 2,466 2,348
-------- --------
Adjusted EBITDA (a) $ 39,852 $ 47,979
======== ========
</TABLE>
(a) "EBITDA" is calculated as net (loss) income before income tax expense,
interest expense, other expense (income) and gain on disposal of fixed assets
plus depreciation and amortization. Adjusted EBITDA is EBITDA adjusted for
management fees, and non-recurring items. 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 is a basis upon which
our management assesses financial performance and covenants in our new 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) The Company adjusted inventory to fair market value for each acquisition.
These amounts represent additional costs of goods sold as a result of these
adjustments.
(c) Consists of management fees paid to private equity sponsor (Castle Harlan
subsequent to June 27, 2004 and Wind Point Partners prior thereto), transaction
fees associated with acquisitions, fees paid to lenders under our previous
revolving loan facility primarily related to the unused portion thereof (in
fiscal 2004), 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.
ATT HOLDING CO.
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
PREDECESSOR
---------------
FIFTY-TWO WEEKS FIFTY-TWO WEEKS
ENDED ENDED
JUNE 25, 2005 JUNE 27, 2004
--------------- ---------------
Net income $ (5,088) $ 22,154
Depreciation of property, plant and equipment 10,006 6,879
Amortization of intangible assets 1,784 4,366
Other expense (income) 47 (101)
Gain on disposal of fixed assets (111) (5,405)
Interest expense 30,676 10,062
Income taxes (3,827) 15,840
-------- --------
EBITDA (a) 33,487 53,795
Adjustments to EBITDA
Inventory write-up (b) 10,069 429
Equity sponsor fees and other expenses (c) 3,011 2,963
-------- --------
Adjusted EBITDA (a) $ 46,567 $ 57,187
======== ========
</TABLE>
(a) "EBITDA" is calculated as net income before income tax expense, interest
expense, other income and 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) The Company adjusted inventory to fair market value for each acquisition.
These amounts represent additional costs of goods sold as a result of these
adjustments.
(c) Consists of management fees paid to private equity sponsor (Castle Harlan
subsequent to June 27, 2004 and Wind Point Partners prior thereto), transaction
fees associated with acquisitions, fees paid to lenders under our previous
revolving loan facility primarily related to the unused portion thereof (in
fiscal 2004), 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.
