Earnings Announcement
Denver, Colorado
APRIL 27 th, 2006
FOR IMMEDIATE RELEASE
First Quarter diluted earnings per share $0.43
(after special charges of $0.05 per share)
MacDermid, Incorporated a worldwide manufacturer of proprietary specialty chemical products and materials for the electronics, metal finishing and printing industries (NYSE: MRD) today announced financial results for the first quarter ended March 31, 2006.
Sales of $ 200.4 million were $30.1 million higher, a 17.7% increase over the same period in 2005. Autotype added $24.6 million. Sales were strong in Advanced Surface Finishing reflecting demand in Asia, and share gain in North America. Foreign currency was unfavorable by $5.8 million. Sales in constant dollars increased by 21.9%.
Diluted earnings per share of $0.43 were 13.2% higher than the $0.38 per share from operations in 2005. Adding back the $0.05 in special charges results in underlying earnings of $.48 a share, up 26.3% from the prior year.
Special charges in the quarter included:
| | $1.9 million to recognize costs for the investigation of a potential acquisition. |
| | $0.6 million non-cash cumulative currency translation adjustment (CTA) arising from the liquidation of a dormant subsidiary. This expense is included in operating expenses as part of the loss on disposal of assets. |
These expenses reduced earnings by $0.05 per share
In addition there were offsetting expenses and income including restructuring charges of $1.5 million which were largely offset by a contingent environmental reserve that arose some years ago upon the disposal of a subsidiary and which expired at the end of March 2006. Also, in the quarter a small equipment business in North America was sold. Included in operating expenses, as part of the loss on disposal of assets, is an amount of $1.7 million arising from this disposal. An offsetting $1.9 million tax reduction arose from the sale. This reduction in tax caused our reported tax rate to be 27.2% for the quarter, whereas our effective tax rate from operations was 33.7% for the quarter (32.5% in 2005). The net affect of this transaction was an after tax gain of $0.2 million.
These expenses reduced Operating Profit by $4.1 million.
Owner Earnings, a measure of free cash flow (defined below and shown in BOLD in the attached Condensed Consolidated Summary of Cash Flows), were a negative $0.9 million for the quarter ended March 31 2006, the same as for the prior year.
The reason for this is primarily the increase in the investment in working capital as shown in the cash flow statement. Cash retained as of March 31, 2006 is $ 83.0 million.
Dan Leever Chairman and CEO said “One must be careful about extrapolating one successful quarter to a trend. Nevertheless, there were encouraging signs this quarter. Operating profit before special charges was up by 16.9%. ASF had a great quarter. Asia revenues were excellent and we finally began to see the result of the share gain effort in North America. ColorSpan continues to prosper. Autotype built on a strong fourth quarter with an even better first quarter adding $0.05 per share. Cost synergies will begin to show as the year progresses. The quarter included several negatives including order pattern and front end loaded R&D expenses in Printing Solutions. We expect these items to improve as the year progresses. The North American packaging printing business continues to suffer. We are working diligently on turning this business around.”
As part of the current quarterly review of our financial statements with our new audit firm, we determined that the method we used to translate foreign currency for our overseas Goodwill and Other Intangible assets was incorrect. The March 2006 Balance Sheet reflects a correction of the method used. Readers are requested to read the footnote to the attached March 31, 2006 Condensed Consolidated Balance Sheet for more information on this correction.
Note:
Owner Earnings is calculated as Net Cash flows provided by operating activities (GAAP definition) less net capital expenditures. EBITDA comprises Earnings before Interest, Taxation, Depreciation and Amortization. This press release and additional financial information together with our reconciliation of GAAP to Non-GAAP numbers are available on our website.
Website: http://www.macdermid.com
MacDermid, Incorporated
NYSE - MRD
CUSIP 554273 10 2
April 27th, 2006
This report and other Corporation reports and statements describe many of the positive factors affecting the Corporation’s future business prospects. Investors should also be aware of factors that could have a negative impact on those prospects. These include political, economic or other conditions such as currency exchange rates, inflation rates, recessionary or expansive trends, taxes and regulations and laws affecting the business; competitive products, advertising, promotional and pricing activity; the degree of acceptance of new product introductions in the marketplace; technical difficulties which may arise with new product introductions; and the difficulty of forecasting sales at certain times in certain markets.
MacDermid, Incorporated | |
Condensed Consolidated Summary of Earnings | |
| (Unaudited) | |
| $ in thousands, except share and per share amounts | |
| | | | | | |
| | | Three Months Ended | |
| | | Mar 31st | | Mar 31st | |
| | | 2006 | | 2005 | |
| | | | | | |
| Proprietary sales | | $ | 191,717 | | $ | 160,185 | |
| Other sales | | | 8,641 | | | 10,062 | |
| Total net sales | | $ | 200,358 | | $ | 170,247 | |
| Gross margin | | | 88,471 | | | 77,653 | |
| GM % | | | 44.2 | % | | 45.6 | % |
| | | | | | | | |
| Selling, technical and administrative | | | 51,104 | | | 46,670 | |
| Research and development | | | 7,304 | | | 6,532 | |
| Consulting fees for investigation of acquisition | | | 1,913 | | | 0 | |
| Loss on Disposal of Assets | | | 2,224 | | | 0 | |
| Restructuring | | | 1,482 | | | 0 | |
| Total Operating Expenses | | | 64,027 | | | 53,202 | |
| | | | | | | | |
| Operating profit | | | 24,444 | | | 24,451 | |
| | | | | | | | |
| Other income (expense), net | | | (367 | ) | | 30 | |
| Interest (expense), net | | | (5,838 | ) | | (7,022 | ) |
| | | | | | | | |
| Earnings before income taxes | | | 18,239 | | | 17,459 | |
| Income tax (expense) | | | (4,961 | ) | | (5,674 | ) |
| Net earnings | | $ | 13,278 | | $ | 11,785 | |
| | | | | | | | |
| Diluted earnings per share | | $ | 0.43 | | $ | 0.38 | |
| | | | | | | | |
| Diluted average common shares outstanding | | | 31,065,191 | | | 30,809,620 | |
| | | | | | | | |
| |
Sales and Margins by Region | |
| | | | | | |
The data presented in this table is on a non-GAAP basis. | |
The reconciliation to GAAP numbers appears at the foot of this table | |
| | | | | | |
| $ in thousands | |
| | | | | | |
| | | Three Months Ended | |
| | | Mar 31st | | Mar 31st | |
| | | 2006 | | 2005 | |
| | | | | | |
Americas | | | | | |
| Total net sales | | $ | 78,177 | | $ | 67,492 | |
| Operating profit | | $ | 8,489 | | $ | 8,975 | |
| OP % | | | 10.9 | % | | 13.3 | % |
| | | | | | | | |
| | | | | | | | |
Europe | | | | | | | |
| Total net sales | | $ | 71,224 | | $ | 62,510 | |
| Operating profit | | $ | 9,495 | | $ | 8,717 | |
| OP % | | | 13.3 | % | | 13.9 | % |
| | | | | | | | |
| | | | | | | | |
Asia | | | | | | | |
| Total net sales | | $ | 50,957 | | $ | 40,245 | |
| Operating profit | | $ | 10,597 | | $ | 6,759 | |
| OP % | | | 20.8 | % | | 16.8 | % |
| | | | | | | | |
Consolidated Total | | | | | | | |
| Total net sales | | $ | 200,358 | | $ | 170,247 | |
| Operating profit | | $ | 28,581 | | $ | 24,451 | |
| OP % | | | 14.3 | % | | 14.4 | % |
| | | | | | | | |
| | | | | | | | |
MacDermid, Incorporated |
Sales and Margins by Group |
| $ in thousands |
| | | | | | | | |
| Three Months Ended | | |
| March 31st | | | March 31st | |
| | | | 2006 | | | 2005 | |
| | | | | | | | |
Advanced Surface Finishing | | | | | | | |
| Total net sales | | $ | 117,161 | | $ | 99,141 | |
| Operating profit | | $ | 20,123 | | $ | 14,135 | |
| OP % | | | 17.2 | % | | 14.3 | % |
| | | | | | | | |
Printing Solutions | | | | | | | |
| Total net sales | | $ | 83,198 | | $ | 71,106 | |
| Operating profit | | $ | 8,458 | | $ | 10,316 | |
| OP % | | | 10.2 | % | | 14.5 | % |
| | | | | | | | |
Consolidated Total | | | | | | | |
| Total net sales | | $ | 200,359 | | $ | 170,247 | |
| Operating profit as reported - GAAP | | $ | 24,444 | | $ | 24,451 | |
| Add back consulting fees for investigation of acquisition | | $ | 1,913 | | $ | - | |
| Add back loss on disposal of asset | | $ | 2,224 | | $ | - | |
| Operating profit before non-operating costs | | $ | 28,581 | | $ | 24,451 | |
| | | | | | | | |
| OP % | | | 14.3 | % | | 14.4 | % |
| | | | | | | | |
MacDermid, Incorporated | |
Condensed Consolidated Balance Sheets | |
| $ in thousands | |
| | | | |
| | | Mar 31st | |
| | | 2006 | |
| | | (Unaudited) | |
| | | | |
| Cash and cash equivalents | | $ | 83,037 | |
| Accounts receivable, net | | | 163,469 | |
| Inventories, net | | | 105,969 | |
| Other current assets | | | 25,694 | |
| Current Assets | | | 378,169 | |
| | | | | |
| Property, plant & equipment, net | | | 120,755 | |
| Goodwill | | | 244,491 | |
| Intangibles, net | | | 41,989 | |
| Other Assets | | | 52,361 | |
| | | | | |
| Total assets | | $ | 837,765 | |
| | | | | |
| | | | | |
| Payables and accruals | | $ | 147,419 | |
| Short-term debt | | | 2,392 | |
| Current Liabilities | | | 149,811 | |
| | | | | |
| Long-term debt | | | 300,986 | |
| Other long-term liabilities | | | 27,760 | |
| Total Liabilities | | | 478,557 | |
| | | | | |
| Shareholders' equity | | | 359,208 | |
| | | | | |
| Total liabilities & shareholders' equity | | $ | 837,765 | |
| | | | | |
| Debt to total capital | | | 46 | % |
Footnote to Balance Sheet
The March 2006 balance sheet reflects a correction of the method used to translate the foreign currency for our overseas Goodwill and Other Intangible Assets. In prior periods we used the foreign currency rates at the time of the acquisition that gave rise to these assets. For subsequent reporting periods we should have used current exchange rates at the end of each period.
We have changed our method following a review of our quarterly financial statements with our new auditors.
The March 2006 Balance Sheet includes an increase in Goodwill of $9.2 million and an increase in Other Intangibles of $1.0 million and a corresponding increase in Equity, Other Comprehensive Income, of $10.2 million compared with the methodology used in prior periods.
We are reviewing, with our auditors, the affect on prior years in order to determine if any adjustment is required to prior period Balance Sheets. The effect of this adjustment is likely to be larger in earlier periods when the US dollar was weaker.
This adjustment has no effect on our Earnings per Share, Owner Earnings or tangible net worth.
| |
Condensed Consolidated Summary of Cash Flows | |
| (Unaudited) | |
| $ in thousands | |
| | | | | | |
| | | | | | |
| | | Three Months Ended | |
| | | Mar 31st | | Mar 31st | |
| | | 2006 | | 2005 | |
| | | | | | |
| | | | | | |
| Net earnings | | $ | 13,278 | | $ | 11,785 | |
| | | | | | | | |
| Depreciation | | | 4,897 | | | 3,846 | |
| Amortization | | | 1,452 | | | 891 | |
| Provision for bad debt | | | 463 | | | 517 | |
| Stock compensation expense | | | 752 | | | 2,177 | |
| Defered Income Taxes | | | 3,072 | | | 163 | |
| Restructuring Charges | | | 1,482 | | | - | |
| Working capital changes | | | (24,825 | ) | | (17,356 | ) |
| Cash from operations | | | 571 | | | 2,023 | |
| | | | | | | | |
| Capital spending | | | (1,562 | ) | | (3,006 | ) |
| Proceeds from asset disposal | | | 79 | | | 16 | |
| | | | | | | | |
Owner earnings** | | | (912 | ) | | (967 | ) |
| | | | | | | | |
| Acquisition of business | | | (33 | ) | | - | |
| Dividends paid | | | (1,836 | ) | | (1,212 | ) |
| Increase/(decrease) in debt | | | 1,571 | | | (62 | ) |
| Treasury shares | | | 26 | | | 33 | |
| Other | | | 3,289 | | | (1,880 | ) |
| | | | | | | | |
| Increase/(decrease) cash | | $ | 2,105 | | $ | 4,088 | ) |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| **Note: Pro forma owner earnings | | | | | | | |
| adjusted for semi-annual bond interest | | $ | 6,900 | | $ | 6,900 | |
| payments would have been as follows: | | $ | 5,988 | | $ | 5,933 | |
| | | | | | | | |
| | | | | | | | |
MacDermid, Inc. | | | | | | | | | | | | | | | | | | | | | | | | | |
Regulation G: GAAP to Non-GAAP Reconciliation | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
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Gross Profit Before Special Charges (a) | | | | | | | | | | | | | | | | Year | | | | | | Year | | Year | |
| (In thousands) | | | | | | | | | | | | | | | | Ended | | | | | | Ended | | Ended | |
| | | Mar-04 | | Jun-04 | | Sep-04 | | Dec-04 | | Mar-05 | | Jun-05 | | Sep-05 | | Dec-02 | | Dec-05 | | Mar-06 | | Dec-04 | | Dec-05 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Sales as reported | | $ | 162,012 | | $ | 165,053 | | $ | 161,585 | | $ | 172,135 | | $ | 170,247 | | $ | 178,281 | | $ | 193,260 | | $ | 611,490 | | $ | 196,255 | | $ | 200,358 | | $ | 660,785 | | $ | 738,043 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Gross Profit as reported | | $ | 77,526 | | $ | 78,074 | | $ | 76,375 | | $ | 81,266 | | $ | 77,653 | | $ | 80,026 | | $ | 83,282 | | $ | 274,478 | | $ | 83,771 | | $ | 88,471 | | $ | 313,241 | | $ | 324,732 | |
| Add: Special Charges | | | - | | | - | | | - | | | - | | | - | | | 117 | | | 654 | | | 3,211 | | | 293 | | | | | | - | | | 1,064 | |
| Gross Profit Before Special Charges | | $ | 77,526 | | $ | 78,074 | | $ | 76,375 | | $ | 81,266 | | $ | 77,653 | | $ | 80,143 | | $ | 83,936 | | $ | 277,689 | | $ | 84,064 | | $ | 88,471 | | $ | 313,241 | | $ | 325,796 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| GP % Before Special Charges | | | 47.9 | % | | 47.3 | % | | 47.3 | % | | 47.2 | % | | 45.6 | % | | 45.0 | % | | 43.4 | % | | 45.4 | % | | 42.8 | % | | 44.2 | % | | 47.4 | % | | 44.1 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating Profit Before Amortization and Special Charges (a) | | | | | | | | | | | | | | | | | | | | | | | | Year | | | | | | | | | Year | | | Year | |
| (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | Ended | | | | | | | | | Ended | | | Ended | |
Mar-04 | | | | | | Jun-04 | | | Sep-04 | | | Dec-04 | | | Mar-05 | | | Jun-05 | | | Sep-05 | | | Dec-02 | | | Dec-05 | | | Mar-06 | | | Dec-04 | | | Dec-05 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Sales per above | | $ | 162,012 | | $ | 165,053 | | $ | 161,585 | | $ | 172,135 | | $ | 170,247 | | $ | 178,281 | | $ | 193,260 | | $ | 611,490 | | $ | 196,255 | | $ | 200,358 | | $ | 660,785 | | $ | 738,043 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Earnings Before Interest and Taxes | | $ | 26,551 | | $ | 27,348 | | $ | 25,838 | | $ | 27,615 | | $ | 24,481 | | $ | 22,988 | | $ | 24,937 | | $ | 81,482 | | $ | 21,287 | | $ | 24,077 | | $ | 107,352 | | $ | 93,693 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Add: Other (Income) Expense | | | 258 | | | (697 | ) | | (92 | ) | | (1,411 | ) | | (30 | ) | | 620 | | | (799 | ) | | 2,651 | | | 249 | | | 367 | | | (1,942 | ) | | 40 | |
| Add: Special Charges | | | - | | | - | | | - | | | - | | | - | | | 502 | | | 1,731 | | | 6,177 | | | 2,094 | | | 4,137 | | | - | | | 4,327 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating Profit Before Special Charges | | $ | 26,809 | | $ | 26,651 | | $ | 25,746 | | $ | 26,204 | | $ | 24,451 | | $ | 24,110 | | $ | 25,869 | | $ | 90,310 | | $ | 23,630 | | $ | 28,581 | | $ | 105,410 | | $ | 98,060 | |
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| % OP Before Special Charges to Net Sales | | | 16.5 | % | | 16.1 | % | | 15.9 | % | | 15.2 | % | | 14.4 | % | | 13.5 | % | | 13.4 | % | | 14.8 | % | | 12.0 | % | | 14.3 | % | | 16.0 | % | | 13.3 | % |
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(a) "Gross Profit Before Special Charges" and "Operating Profit Special Charges" are not intended to represent Net Earnings as defined by Generally Accepted Accounting Principles. These measurements should not be used as an alternative to Net Earnings as an indicator of operating performance and may not be comparable to similarly titled measures used by other entities. Management believes that these measurements portray a meaningful measure of past operating performance and believes these measurements play an important factor toward the growth of shareholder value over time.
MacDermid, Inc. | | | | | | | | | | | | | | | | | | | | | | | | | |
Regulation G: GAAP to Non-GAAP Reconciliation | | | | | | | | | | | | | | | | | | | | | | | | | |
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EPS from Continuing Operations Before Special Charges & Stock Compensation (a) | | | | | | | | | | | | | | | | Year | | | | Year | | Year | | Year | |
| (In thousands, except share and per share amounts) | | | | | | | | | | | | | | | | Ended | | | | Ended | | Ended | | Ended | |
| | | Mar-04 | | Jun-04 | | Sep-04 | | Dec-04 | | Mar-05 | | Jun-05 | | Sep-05 | | Dec-02 | | Dec-05 | | Dec-03 | | Dec-04 | | Dec-05 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Income (Loss) as reported | | $ | 12,893 | | $ | 13,385 | | $ | 12,043 | | $ | 14,903 | | $ | 11,785 | | $ | 11,928 | | $ | 12,916 | | $ | 9,349 | | $ | 10,414 | | $ | 56,426 | | $ | 53,224 | | $ | 47,043 | |
| Deduct: Income (Loss) from Discontinued Ops, | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| net of income taxes | | | - | | | - | | | - | | | - | | | - | | | - | | | | | | (22,128 | ) | | | | | 5,592 | | | - | | | - | |
| Income (Loss) from Continuing Operations | | | 12,893 | | | 13,385 | | | 12,043 | | | 14,903 | | | 11,785 | | | 11,928 | | | 12,916 | | | 31,477 | | | 10,414 | | | 50,834 | | | 53,224 | | | 47,043 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Change in accounting method | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | (1,014 | ) | | - | | | - | |
| SFAS 150 gain on stock call option | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | (2,214 | ) | | - | | | - | |
| Cost of sales impact of acquisition inventory adj | | | - | | | - | | | - | | | - | | | | | | 117 | | | 654 | | | 983 | | | 293 | | | - | | | - | | | 1,064 | |
| Write-off of In process R&D | | | - | | | - | | | - | | | - | | | - | | | 385 | | | - | | | - | | | - | | | - | | | - | | | 385 | |
| Restructuring & Other Charges | | | | | | | | | | | | | | | | | | | | | 1,077 | | | | | | 1,801 | | | | | | | | | 2,878 | |
| Total Special Charges (Income) | | | - | | | - | | | - | | | - | | | - | | | 502 | | | 1,731 | | | 6,177 | | | 2,094 | | | (3,228 | ) | | - | | | 4,327 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| After Tax Effect of Special Charges (Income) | | | - | | | - | | | - | | | - | | | - | | | 356 | | | 1,238 | | | 4,429 | | | 1,516 | | | (2,520 | ) | | - | | | 3,110 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Income from Continuing Operations Before | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Tax Effected Special Charges | | $ | 12,893 | | $ | 13,385 | | $ | 12,043 | | $ | 14,903 | | $ | 11,785 | | $ | 12,284 | | $ | 14,154 | | $ | 35,906 | | $ | 11,930 | | $ | 48,314 | | $ | 53,224 | | $ | 50,153 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Stock Compensation Expense | | | 1,560 | | | 1,472 | | | 1,351 | | | 2,112 | | | 2,177 | | | 1,873 | | | 1,177 | | | 3,145 | | | 1,418 | | | 4,219 | | | 6,495 | | | 6,645 | |
| After Tax Effect Stock Compensation Expense | | | 1,061 | | | 1,001 | | | 905 | | | 1,415 | | | 1,361 | | | 1,330 | | | 842 | | | 2,255 | | | 1,027 | | | 2,869 | | | 4,382 | | | 4,560 | |
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| Net Income from Continuing Operations Before Tax | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Effected Special Charges & Stock Compensation | | $ | 13,954 | | $ | 14,386 | | $ | 12,948 | | $ | 16,318 | | $ | 13,146 | | $ | 13,614 | | $ | 14,996 | | $ | 38,161 | | $ | 12,957 | | $ | 51,183 | | $ | 57,606 | | $ | 54,713 | |
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| Earnings Per Share from Continuing Operations | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Before Tax Effected Special Charges | | $ | 0.42 | | $ | 0.43 | | $ | 0.39 | | $ | 0.48 | | $ | 0.38 | | $ | 0.40 | | $ | 0.46 | | $ | 1.11 | | $ | 0.39 | | $ | 1.55 | | $ | 1.72 | | $ | 1.62 | |
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| Earnings Per Share from Continuing Operations | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Before Tax Effected Special Charges and Stock | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Compensation | | $ | 0.45 | | $ | 0.46 | | $ | 0.42 | | $ | 0.53 | | $ | 0.43 | | $ | 0.44 | | $ | 0.49 | | $ | 1.18 | | $ | 0.42 | | $ | 1.63 | | $ | 1.86 | | $ | 1.77 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Diluted Average Common Shares Outstanding | | | 31,041,763 | | | 31,014,374 | | | 30,988,259 | | | 30,794,808 | | | 30,809,620 | | | 30,787,829 | | | 30,865,440 | | | 32,475,155 | | | 30,940,941 | | | 31,430,398 | | | 30,961,108 | | | 30,892,052 | |
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EBITDA from Continuing Operations Before Special Charges (a) (b) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | Year | | | | | | Year | | | Year | | | Year | |
| Ended | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Ended | | | Ended | | | Ended | |
Mar-04 | | | | | | Jun-04 | | | Sep-04 | | | Dec-04 | | | Mar-05 | | | Jun-05 | | | Sep-05 | | | Dec-02 | | | Dec-05 | | | Dec-03 | | | Dec-04 | | | Dec-05 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Earnings Before Interest and Taxes | | $ | 26,551 | | $ | 27,348 | | $ | 25,838 | | $ | 27,615 | | $ | 24,481 | | $ | 22,988 | | $ | 24,937 | | | #REF! | | $ | 21,287 | | | #REF! | | $ | 107,352 | | $ | 93,693 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| SFAS 150 gain on stock call option | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | (2,214 | ) | | - | | | - | |
| Cost of sales impact of acquisition inventory adj | | | - | | | - | | | - | | | - | | | - | | | 117 | | | 654 | | | 983 | | | 293 | | | - | | | - | | | 1,064 | |
| Write-off of In Process R&D | | | - | | | - | | | - | | | - | | | - | | | 385 | | | | | | - | | | | | | - | | | - | | | 385 | |
| Restructuring & Other Charges | | | | | | | | | | | | | | | | | | �� | | | 1,077 | | | | | | 1,801 | | | | | | | | | 2,878 | |
| Total Special Charges | | | - | | | - | | | - | | | - | | | - | | | 502 | | | 1,731 | | | 6,177 | | | 2,094 | | | (2,214 | ) | | - | | | 4,327 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Amortization | | | 734 | | | 717 | | | 708 | | | 850 | | | 891 | | | 897 | | | 1,008 | | | #REF! | | | 1,561 | | | #REF! | | | 3,009 | | | 4,357 | |
| Depreciation | | | 4,125 | | | 3,989 | | | 3,897 | | | 4,137 | | | 3,846 | | | 3,771 | | | 4,592 | | | 16,363 | | | 4,829 | | | 15,793 | | | 16,148 | | | 17,038 | |
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| EBITDA from Continuing Operations Before | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Special Charges | | $ | 31,410 | | $ | 32,054 | | $ | 30,443 | | $ | 32,602 | | $ | 29,218 | | $ | 28,158 | | $ | 32,268 | | | #REF! | | $ | 29,771 | | | #REF! | | $ | 126,509 | | $ | 119,415 | |
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Owners Earnings (b) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | Year | | | | | | Year | | | Year | | | Year | |
| Ended | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Ended | | | Ended | | | Ended | |
Mar-04 | | | | | | Jun-04 | | | Sep-04 | | | Dec-04 | | | Mar-05 | | | Jun-05 | | | Sep-05 | | | Dec-02 | | | Dec-05 | | | Dec-03 | | | Dec-04 | | | Dec-05 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net cash flow provided by operating activities | | $ | 5,977 | | $ | 28,153 | | $ | 22,978 | | $ | 28,169 | | $ | 2,023 | | $ | 24,845 | | $ | 4,321 | | $ | 126,193 | | $ | 27,979 | | $ | 91,417 | | $ | 85,277 | | $ | 59,168 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Capital expenditures, net | | | 782 | | | 1,662 | | | 768 | | | 5,322 | | | 2,728 | | | 4,058 | | | 2,517 | | | 4,387 | | | 3,074 | | | 10,704 | | | 8,534 | | | 12,377 | |
| Owner Earnings | | $ | 5,195 | | $ | 26,491 | | $ | 22,210 | | $ | 22,847 | | | ($705 | ) | $ | 20,787 | | $ | 1,804 | | $ | 121,806 | | $ | 24,905 | | $ | 80,713 | | $ | 76,743 | | $ | 46,791 | |
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Adjustment for Bond Interest assumed to be paid quarterly | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Owner Earnings | | $ | 5,195 | | $ | 26,491 | | $ | 22,210 | | $ | 22,847 | | | ($705 | ) | $ | 20,787 | | $ | 1,804 | | $ | 121,806 | | $ | 24,905 | | $ | 80,713 | | $ | 76,743 | | $ | 46,791 | |
| Assumed if Bond Interest was paid quarterly | | | 6,900 | | | (6,900 | ) | | 6,900 | | | (6,900 | ) | | 6,900 | | | (6,900 | ) | | 6,900 | | | - | | | (6,900 | ) | | - | | | - | | | - | |
| Adjusted Owner Earnings | | $ | 12,095 | | $ | 19,591 | | $ | 29,110 | | $ | 15,947 | | $ | 6,195 | | $ | 13,887 | | $ | 8,704 | | $ | 121,806 | | $ | 18,005 | | $ | 80,713 | | $ | 76,743 | | $ | 46,791 | |
(a) "EPS from Continuing Operations Before Special Charges and Stock Compensation", "EBITDA from Continuing Operations Before Special Charges" and "Owners Earnings" are not
intended to represent Net Earnings (loss) or Net Cash Flow From Operating Activities as defined by Generally Accepted Accounting Principles. These measurements should not be used as an alternative to Net Earnings or Net Cash Flow From Operating Activities as an indicator of operating performance and may not be comparable to similarly titled measures used by other entities. Management believes that these measurements portray a meaningful measure of past operating performance and believes these measurements play an important factor toward the growth of shareholder value over time.
