Exhibit 99.1
Investor Contact: Jeremy Friedman
Executive Vice President and Chief Financial Officer
978 570 6900
Jeremy.friedman@accellent.com
FOR IMMEDIATE RELEASE
Accellent Inc. Announces First Quarter 2010 Results
Wilmington, MA (May 13, 2010) – Accellent Inc. (the “Company”), a wholly owned subsidiary of Accellent Holdings Corp. (“Accellent”), today announced results for its fiscal first quarter ended March 31, 2010.
“First quarter revenue increased 10.8% sequentially to $122.7 million reflecting our selling efforts and improving economic conditions. In addition, we completed the refinancing of our term loan and entered into a new asset based revolving credit facility during the quarter thus extending our debt maturity to 2013,” said Jeremy Friedman, Executive Vice President and Chief Financial Officer of Accellent. “In a recovering, yet still challenging, economic environment, we continue to drive improvements that we expect will yield sustainable growth in profitability.”
“The focus on improving sales and operations effectiveness at Accellent continues,” said Kenneth W. Freeman, Executive Chairman and Acting Chief Executive Officer. “Don Spence joins Accellent as President and CEO later this month, and we anticipate a seamless transition of responsibilities.”
First Quarter 2010 Financial Results
Net sales decreased 2.9% to $122.7 million in the first quarter of 2010 compared with $126.3 million in the first quarter of 2009. Income from operations was $14.6 million in the first quarter of 2010, compared to $15.4 million in the first quarter of 2009. Our net loss was $7.8 million in the first quarter of 2010, compared with net income of $0.6 million in the first quarter of 2009. The net loss in 2010 included $5.8 million of costs associated with the refinancing of the company’s term loan during the quarter.
Adjusted EBITDA for the first quarter of 2010 was $24.7 million, or 20.2% of net sales, compared to Adjusted EBITDA of $26.7 million, or 21.2% of net sales, in the first quarter of 2009.
Reconciliations of non-GAAP financial measures to GAAP financial measures are provided in the financial information accompanying this press release.
Conference Call
Kenneth W. Freeman, Executive Chairman and Acting Chief Executive Officer, and Jeremy Friedman, Executive Vice President and Chief Financial Officer will discuss first quarter 2010 results in a conference call scheduled for today, May 13, 2010 at 4:30 p.m. Eastern Time. The teleconference can be accessed live on the Internet through the Investor Relations section of the Accellent website atwww.accellent.com or by calling (866) 700-7477 pass code 27313150. Please visit the website or dial in 10 to 15 minutes prior to the beginning of the call to download and install any necessary audio software. A replay of the conference call will be available viawww.accellent.com or by telephone at (888) 286-8010 pass code 12865051 until May 20, 2010.
About Accellent
Accellent provides fully integrated outsourced manufacturing and engineering services to the medical device industry in the cardiology, endoscopy, and orthopaedic markets. Accellent has broad capabilities in design and engineering services, precision component fabrication, finished device assembly and complete supply chain management solutions. These capabilities enhance customers’ speed to market and return on investment by allowing them to refocus internal resources more efficiently. For more information, please visit www.accellent.com.
Forward-Looking Statements
This press release includes “forward looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934, as amended. All statements included herein, other than statements of historical fact, may constitute forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Important factors that could cause actual results to differ materially from the Company’s expectations are disclosed in the risk factors contained in the Company’s Form 10-K for the year ended December 31, 2009 filed with the Securities and Exchange Commission on March 31, 2010. All forward-looking statements are expressly qualified in their entirety by such risk factors.
Accellent Inc.
Consolidated Condensed Statements of Operations
(in thousands)
(unaudited)
| Three Months Ended March 31, 2010 | Three Months Ended March 31, 2009 | |||||||
Net sales | $ | 122,680 | $ | 126,349 | ||||
Cost of sales (exclusive of amortization) | 90,405 | 91,465 | ||||||
Gross profit | 32,275 | 34,884 | ||||||
Selling, general and administrative expenses | 13,251 | 13,715 | ||||||
Research and development expenses | 679 | 679 | ||||||
Restructuring charges | — | 1,337 | ||||||
Amortization of intangible assets | 3,735 | 3,735 | ||||||
Loss on disposal of property and equipment | — | 40 | ||||||
Total operating expenses | 17,665 | 19,506 | ||||||
Income from operations | 14,610 | 15,378 | ||||||
Interest expense, net | (17,424 | ) | (15,002 | ) | ||||
Loss on debt extinguishment | (5,791 | ) | — | |||||
Other income, net | 2,267 | 956 | ||||||
(Loss) income before income taxes | (6,338 | ) | 1,332 | |||||
Provision for income taxes | 1,481 | 723 | ||||||
Net (loss) income | $ | (7,819 | ) | $ | 609 | |||
Accellent Inc.
Reconciliation of Net (Loss) Income to EBITDA and Adjusted EBITDA
(in thousands)
(unaudited)
| Three Months Ended March 31, 2010 | Three Months Ended March 31, 2009 | |||||||
Net (loss) income | $ | (7,819 | ) | $ | 609 | |||
Interest expense, net | 17,424 | 15,002 | ||||||
Provision for income taxes | 1,481 | 723 | ||||||
Depreciation and amortization | 9,345 | 9,103 | ||||||
EBITDA (1) | $ | 20,431 | $ | 25,437 | ||||
Restructuring charges | — | 1,337 | ||||||
Stock-based compensation – employees | 16 | 88 | ||||||
Stock-based compensation – non-employees | 23 | 30 | ||||||
Employee severance and relocation | 305 | 431 | ||||||
Plant closure costs | 18 | — | ||||||
Currency transaction gain | (1,300 | ) | (1,104 | ) | ||||
(Gain) loss on derivative instruments | (909 | ) | 185 | |||||
Loss on sale of property and equipment | — | 40 | ||||||
Other taxes | 42 | — | ||||||
Loss on debt extinguishment | 5,791 | — | ||||||
Management fees to stockholder | 304 | 289 | ||||||
Adjusted EBITDA (1) | $ | 24,721 | $ | 26,733 | ||||
Accellent Inc.
Condensed Consolidated Balance Sheets
(In thousands)
(unaudited)
| March 31, 2010 | December 31, 2009 | |||||
Assets | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 43,659 | $ | 33,785 | ||
Accounts receivable, net | 53,957 | 44,815 | ||||
Inventory | 62,600 | 55,571 | ||||
Prepaid expenses and other current assets | 3,693 | 4,008 | ||||
Total current assets | 163,909 | 138,179 | ||||
Property, plant and equipment, net | 115,614 | 117,976 | ||||
Goodwill | 629,854 | 629,854 | ||||
Intangible assets, net | 175,831 | 179,566 | ||||
Deferred financing costs and other assets, net | 18,364 | 13,400 | ||||
Total assets | $ | 1,103,572 | $ | 1,078,975 | ||
Liabilities and Stockholder’s equity | ||||||
Current liabilities: | ||||||
Current portion of long-term debt | $ | 7 | $ | 7 | ||
Accounts payable | 27,593 | 23,910 | ||||
Accrued expenses and other current liabilities | 46,647 | 31,749 | ||||
Total current liabilities | 74,247 | 55,666 | ||||
Long-term debt | 700,591 | 684,650 | ||||
Other long-term liabilities | 32,100 | 32,143 | ||||
Total liabilities | 806,938 | 772,459 | ||||
Stockholder’s equity | 296,634 | 306,516 | ||||
Total liabilities and stockholder’s equity | $ | 1,103,572 | $ | 1,078,975 | ||
(1) EBITDA and Adjusted EBITDA presented in this press release are supplemental measures of our performance that are not required by, or presented in accordance with, GAAP. EBITDA and Adjusted EBITDA are not measurements of our financial performance under GAAP and should not be considered as alternatives to net loss or any other performance measures derived in accordance with GAAP, or as an alternative to cash flow from operating activities as a measure of our liquidity.
(2) EBITDA represents net income (loss) before net interest expense, income tax expense (benefit), depreciation and amortization. Adjusted EBITDA is defined as EBITDA further adjusted to give effect to unusual items, non-cash items, the pro forma effect of acquisitions as if they had taken place at the beginning of the periods presented. For the periods presented, Adjusted EBITDA includes adjustments for: restructuring and other related charges, impairment of goodwill and other intangible assets, gains and losses from derivative instruments, gains and losses on the sale of property, non-operating currency transaction losses, certain stock compensation related charges, severance, executive relocation, CEO search costs, non-cash consulting expenses and management fees.
(3) We believe that the presentation of EBITDA and Adjusted EBITDA is appropriate to provide additional information to investors. We also present EBITDA because we consider it an important supplemental measure of our performance and believe it is frequently used by securities analysts, investors and other interested parties in the evaluation of high yield issuers, many of which present EBITDA when reporting their results.