Exhibit 99.1
Alliance Laundry Holdings LLC Reports 2006 Sales and Earnings
RIPON, Wis.--(BUSINESS WIRE)--March 22, 2007--Alliance Laundry
Holdings LLC announced today results for the year ended December 31,
2006.
Net revenues for full year 2006 increased $48.8 million, or 15.4%,
to $366.1 million from $317.3 million for the full year 2005. Net loss
for 2006 was $1.8 million as compared to a net loss of $29.1 million
for 2005. Adjusted EBITDA (see "About Non-GAAP Financial Measures"
below) for 2006 was $63.2 million compared with Adjusted EBITDA of
$60.4 million for 2005.
On July 14, 2006 we completed the acquisition of substantially all
of Laundry System Group NV's Commercial Laundry Division ("CLD")
operations which manufacturers and markets commercial laundry products
similar to Alliance Laundry Systems LLC ("Alliance"). CLD's European
headquarters is in Wevelgem, Belgium, and it has manufacturing
facilities in Belgium and sales offices in Belgium, Norway and Spain
("European Operations"). CLD also had manufacturing facilities and
sales offices in the United States which have been consolidated into
Alliance's operations. The results of operations acquired in the CLD
acquisition have been included in our results since the date of the
acquisition.
The overall net revenue increase for the year ended 2006 versus
2005 of $48.8 million was attributable to $16.1 million of higher
commercial laundry revenues, $4.4 million of higher consumer laundry
revenue, $5.2 million of higher service parts revenue and European
Operations revenues of $36.5 million, partially offset by $13.4
million of worldwide sales eliminations.
In announcing the Company's results, CEO and President Thomas F.
L'Esperance said, "We are extremely pleased with the progress made in
2006. We closed a very complicated acquisition in July. The Marianna
transition to Ripon for washer-extractor production was completed in
the third quarter. The consolidation of the acquired U.S. operations
is substantially complete. Additionally, the equipment and tooling for
the acquired IPH washer-extractors product line is currently being
transferred to Ripon from an LSG facility. The IPH transfer will
complete all U.S. acquisition related projects. The Belgium operation
required no project work and is performing very well."
L'Esperance concluded, "Based on progress to date, we anticipate
that the CLD acquisition and our consolidation efforts in the U.S.
will position us for improved profitability in 2007."
About Non-GAAP Financial Measures
In addition to disclosing financial results that are determined in
accordance with generally accepted accounting principles (GAAP), we
also disclose EBITDA and Adjusted EBITDA, which are non-GAAP measures.
We have presented EBITDA and Adjusted EBITDA because certain covenants
in our Senior Credit Facility are tied to ratios based on these
measures. "EBITDA" represents net income (loss) before interest
expense, income tax (provision) benefit and depreciation and
amortization, and "Adjusted EBITDA" (as defined under the Senior
Credit Facility) is EBITDA as further adjusted to exclude, among other
things, certain non-recurring expenses and other non-recurring
non-cash charges. EBITDA and Adjusted EBITDA do not represent, and
should not be considered, an alternative to net income or cash flow
from operations, as determined by GAAP, and our calculations thereof
may not be comparable to similarly entitled measures reported by other
companies. Our Senior Credit Facility requires us to satisfy specified
financial ratios and tests, including a maximum of total debt to
Adjusted EBITDA and a minimum Adjusted EBITDA to cash interest
expense. To the extent that we fail to maintain either of these ratios
within the limits set forth in the Senior Credit Facility, our ability
to access amounts available under our Revolving Credit Facility would
be limited, our liquidity would be adversely affected and our
obligations under the Senior Credit Facility could be accelerated. In
addition, any such acceleration would constitute an event of default
under the indenture governing the Senior Subordinated Notes (the
"Notes Indenture"), and such an event of default under the Notes
Indenture could lead to an acceleration of our obligations under the
Senior Subordinated Notes. A reconciliation of EBITDA and Adjusted
EBITDA with the most directly comparable GAAP measure is included
below for the twelve months ended December 31, 2006 along with the
components of EBITDA and Adjusted EBITDA.
About Alliance Laundry Holdings LLC
Alliance Laundry Holdings LLC is the parent company of Alliance
Laundry Systems LLC (www.comlaundry.com), a leading North American
manufacturer of commercial laundry products and provider of services
for laundromats, multi-housing laundries and on-premise laundries.
Alliance offers a full line of washers and dryers for light commercial
use as well as large frontloading washers, heavy duty tumbler dryers
and finishing equipment for heavy commercial use. The Company's
products are sold under the well known brand names Speed Queen(R),
UniMac(R), Huebsch(R), IPSO(R) and Cissell(R).
Safe Harbor for Forward-Looking Statements
With the exception of the reported actual results, this press
release contains predictions, estimates and other 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. Such forward-looking statements involve known and unknown
risks, uncertainties and other factors that may cause actual results,
performance or achievements of our business to differ materially from
those expressed or implied by such forward-looking statements.
Although we believe that our plans, intentions and expectations
reflected in such forward-looking statements are based on reasonable
assumptions, we can give no assurance that such plans, intentions,
expectations, objectives or goals will be achieved. Important factors
that could cause actual results to differ materially from those
included in forward-looking statements include: impact of competition;
continued sales to key customers; possible fluctuations in the cost of
raw materials and components; possible fluctuations in currency
exchange rates, which affect the competitiveness of our products
abroad; possible fluctuation in interest rates, which affects our
earnings and cash flows; the impact of substantial leverage and debt
service on us; possible loss of suppliers; risks related to our asset
backed facilities; dependence on key personnel; labor relations;
potential liability for environmental, health and safety matters;
potential future legal proceedings and litigation; and other risks
listed from time to time in the Company's reports, including, but not
limited to the Company's most recent Annual Report on Form 10-K for
the year ended December 31, 2006.
Financial information for Alliance Laundry Holdings LLC appears on
the next six pages for the years ended December 31, 2006 and 2005.
ALLIANCE LAUNDRY HOLDINGS LLC
CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31, December 31,
2006 2005
------------ ------------
Assets
Current assets:
Cash and cash equivalents $11,221 $5,075
Accounts receivable (net of allowance for
doubtful accounts of $949 and $104 at
December 31, 2006 and 2005,
respectively) 24,523 9,056
Inventories, net 49,746 29,050
Beneficial interests in securitized
accounts receivable 28,641 22,327
Deferred income tax asset, net 3,656 433
Prepaid expenses and other 4,684 2,139
------------ ------------
Total current assets 122,471 68,080
Notes receivable, net 4,018 6,131
Property, plant and equipment, net 73,789 66,869
Goodwill 180,778 139,903
Beneficial interests in securitized
financial assets 18,055 16,939
Deferred income tax asset, net 9,177 8,932
Debt issuance costs, net 10,318 11,172
Intangible assets, net 153,108 145,433
------------ ------------
Total assets $571,714 $463,459
============ ============
Liabilities and Member(s)' Equity
Current liabilities:
Current portion of long-term debt and
capital lease obligations $526 $-
Revolving credit facility - -
Accounts payable 21,438 7,866
Deferred income tax liability, net 216 -
Other current liabilities 37,087 26,500
------------ ------------
Total current liabilities 59,267 34,366
Long-term debt and capital lease
obligations:
Senior credit facility 224,000 177,000
Senior subordinated notes 149,430 149,336
Other long-term debt and capital lease
obligations 2,159 -
Deferred income tax liability, net 6,939 -
Other long-term liabilities 11,935 8,924
------------ ------------
Total liabilities 453,730 369,626
Commitments and contingencies
Member(s)' equity 117,984 93,833
------------ ------------
Total liabilities and member(s)' equity $571,714 $463,459
============ ============
ALLIANCE LAUNDRY HOLDINGS LLC
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(in thousands)
January 28, January 1,
Year Ended 2005 through 2005 through Year Ended
December 31, December 31, January 27, December 31,
2006 2005 2005 2004
------------ ------------ ------------ ------------
Successor Successor Predecessor Predecessor
Net revenues:
Equipment and
service parts $359,755 $287,705 $20,303 $274,887
Equipment
financing, net 6,313 8,940 380 6,100
------------ ------------ ------------ ------------
Net revenues 366,068 296,645 20,683 280,987
Cost of sales 278,370 225,706 15,585 199,010
------------ ------------ ------------ ------------
Gross profit 87,698 70,939 5,098 81,977
------------ ------------ ------------ ------------
Selling, general
and
administrative
expenses 52,303 38,632 3,829 39,879
Securitization,
impairment and
other costs 7,150 10,009 - -
Transaction costs
associated with
sale of business - - 18,790 -
------------ ------------ ------------ ------------
Total operating
expenses 59,453 48,641 22,619 39,879
------------ ------------ ------------ ------------
Operating
income (loss) 28,245 22,298 (17,521) 42,098
Interest expense 31,177 24,117 995 25,439
Loss from early
extinguishment of
debt - - 9,867 -
Costs related to
abandoned public
offerings - - - 4,823
Other (expense)
income, net (417) - - -
------------ ------------ ------------ ------------
(Loss) income
before taxes (3,349) (1,819) (28,383) 11,836
(Benefit)
provision for
income taxes (1,532) (1,158) 9 71
------------ ------------ ------------ ------------
Net (loss)
income $(1,817) $(661) $(28,392) $11,765
============ ============ ============ ============
ALLIANCE LAUNDRY HOLDINGS LLC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
January 28, January 1,
Year Ended 2005 through 2005 through Year Ended
December 31, December 31, January 27, December 31,
2006 2005 2005 2004
------------ ------------ ------------ ------------
Successor Successor Predecessor Predecessor
Cash flows from
operating
activities:
Net (loss) income $(1,817) $(661) $(28,392) $11,765
Adjustments to
reconcile net
(loss) income to
cash provided by
operating
activities:
Depreciation
and
amortization 21,790 20,187 526 9,695
Non-cash
interest
(income)
expense 424 (933) 351 4,415
Non-cash
executive unit
compensation 1,120 1,120 1,089 5,579
Non-cash
intangible
impairment 2,431 1,767 - -
Non-cash debt
financing
write-off - - 5,751 -
Non-cash
inventory
expense 3,193 6,246 - -
Deferred income
taxes (2,739) (1,158) - -
Loss on sale of
property,
plant and
equipment 175 48 - 42
Changes in
assets and
liabilities:
Accounts
receivable 9,975 (2,889) (556) 3,546
Inventories (2,896) (456) (1,833) (546)
Other assets (9,517) 246 101 344
Accounts
payable 204 (22,828) 19,076 339
Other
liabilities 563 5,939 (2,732) (299)
------------ ------------ ------------ ------------
Net cash
provided by
(used in)
operating
activities 22,906 6,628 (6,619) 34,880
------------ ------------ ------------ ------------
Cash flows from
investing
activities:
Additions to
property, plant
and equipment (6,150) (4,229) (188) (4,166)
Acquisition of
businesses, net
of cash acquired (82,308) - - -
Proceeds on
disposition of
assets 1,421 4 - 65
------------ ------------ ------------ ------------
Net cash used
in investing
activities (87,037) (4,225) (188) (4,101)
------------ ------------ ------------ ------------
Cash flows used in
financing
activities:
Principal
payments on
long-term debt (13,123) (23,000) 1 (27,245)
Net increase in
revolving line
of credit
borrowings - - - -
Proceeds from
promissory notes 1,000 - - -
Proceeds from
senior term loan 60,000 200,000 - -
Proceeds from
senior
subordinate
notes - 149,250 - -
Repayment of
long-term debt - (275,920) - -
Issuance of
common stock 23,493 117,000 - -
Repurchase of
common stock (50) - - -
Distribution to
old unitholders - (154,658) - -
Debt financing
costs (1,335) (13,230) - -
Cash paid for
capitalized
offering related
costs - (1,364) - -
Net proceeds -
management note - - (71) -
------------ ------------ ------------ ------------
Net cash
provided by
(used in)
financing
activities 69,985 (1,922) (70) (27,245)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Effect of exchange
rate changes on
cash and cash
equivalents 292 - - -
------------ ------------ ------------ ------------
Increase (decrease)
in cash 6,146 481 (6,877) 3,534
Cash at beginning
of period 5,075 4,594 11,471 7,937
------------ ------------ ------------ ------------
Cash at end of
period $11,221 $5,075 $4,594 $11,471
============ ============ ============ ============
Supplemental
disclosure of cash
flow information:
Cash paid for
interest $28,642 $19,699 $1,133 $21,876
Cash paid for
income taxes $687 $55 $9 $71
Reconciliation of Net Loss to EBITDA and Adjusted EBITDA, and
reconciliation of Adjusted EBITDA to Net Cash Provided by (Used in)
Operating Activities for the Twelve Months Ended December 31, 2006
(Dollars in Thousands):
Year January 28, January 1, Year
Ended 2005 through 2005 through Ended
December 31, December 31, January 27, December 31,
2006 2005 2005 2005
------------ ------------ ------------ ------------
Successor Successor Predecessor Combined
Net loss $(1,817) $(661) $(28,392) $(29,053)
(Benefit)
provision for
income taxes (1,532) (1,158) 9 (1,149)
Interest expense 31,177 24,117 995 25,112
Depreciation and
amortization (a) 21,790 20,187 526 20,713
Non-cash interest
income included
in amortization
above (2,189) (2,058) - (2,058)
------------ ------------ ------------ ------------
EBITDA 47,429 40,427 (26,862) 13,565
Finance program
adjustments (b) (306) (1,879) 31 (1,848)
Other non-
recurring charges
(c) 8,868 9,734 28,657 38,391
Other non-cash
charges (d) 6,744 9,133 1,089 10,222
Other expense (e) 480 - - -
Management fees
paid to
affiliates of
Bain - - 83 83
------------ ------------ ------------ ------------
Adjusted EBITDA 63,215 57,415 2,998 60,413
Interest expense (31,177) (24,117) (995) (25,112)
Non-cash interest
income included
in amortization
above 2,189 2,058 - 2,058
Other non-cash
interest 424 (933) 351 (582)
Finance program
adjustments (b) 306 1,879 (31) 1,848
Other non-
recurring charges
(c) (8,868) (9,734) (28,657) (38,391)
Non-cash debt
financing write-
off - - 5,751 5,751
Deferred taxes (1,207) - (9) (9)
Loss on sale of
property, plant
and equipment 175 48 - 48
Other expense (e) (480) - (83) (83)
Changes in assets
and liabilities (1,671) (19,988) 14,056 (5,932)
------------ ------------ ------------ ------------
Net cash provided
by (used in)
operating
activities $22,906 $6,628 $(6,619) $9
============ ============ ============ ============
(a) Depreciation and amortization amounts include amortization of
deferred financing costs included in interest expense.
(b) We currently operate an off-balance sheet commercial equipment
finance program in which newly originated equipment loans are sold to
a qualified special-purpose bankruptcy remote entity. In accordance
with GAAP, we are required to record gains/losses on the sale of these
equipment based promissory notes. In calculating Adjusted EBITDA,
management determines the cash impact of net interest income on these
notes. The finance program adjustments are the difference between GAAP
basis revenues (as prescribed by SFAS No. 125/140) and cash basis
revenues.
(c) Other non-recurring charges are described as follows:
-- Other non-recurring charges in 2006 consist of $4.7 million of
costs associated with the closure of the Marianna, Florida
production facility which are included in the securitization,
impairment and other costs line of our Consolidated Statements
of Income (Loss), $3.0 million of costs related to the
transfer of the Marianna, Florida product lines to Ripon,
Wisconsin which are included in the selling, general and
administrative expenses line of our Consolidated Statements of
Income (Loss) and a periodic accrual of $1.2 million under the
one time retention bonus agreement with certain management
employees. Under the retention bonus agreements, the
executives are entitled to receive special retention bonus
awards upon the second anniversary of the closing date of the
Alliance Acquisition, subject generally to their continued
employment with Alliance Laundry through such date.
-- Other non-recurring charges for the period from January 1,
2005 through January 27, 2005 relate to seller transaction
costs of $18.8 million incurred as part of the business sale
and a loss on the early extinguishment of debt of $9.9
million. The seller transaction costs are primarily comprised
of transaction underwriting fees of $4.5 million, legal and
professional fees of $1.3 million, Bain and BRS advisory fees
of $6.8 million and a management sale bonus of $6.2 million.
The loss on early extinguishment of debt includes the
write-off of $5.8 million of unamortized deferred financing
costs associated with pre-Acquisition debt, which was paid off
as of the Acquisition date and $4.1 million of tender and call
premium costs associated with redeeming the 1998 Senior
Subordinated Notes.
-- Other non-recurring charges for the period from January 28,
2005 through December 31, 2005 relate to $8.1 million of costs
associated with establishing a new asset backed facility for
the sale of equipment notes and trade receivables, a periodic
accrual of $1.1 million under a one time retention bonus
agreement and $0.5 million of expenses relate to the closure
and transition of the Marianna, Florida facility. The
retention bonus agreements were entered into with certain
Company executives concurrent with the Acquisition and entitle
the executive to receive special retention bonus awards upon
the second anniversary of the closing date of the Acquisition,
subject generally to their continued employment with Alliance
Laundry through such date. The aggregate amount of retention
bonuses payable upon the two year anniversary of the sale date
under these agreements is approximately $2.3 million.
(d) Other non-cash charges are described as follows:
-- Other non-cash charges are comprised of $3.2 million of costs
associated with the inventory step-up to fair market value
recorded at the CLD Acquisition date, which are included in
the cost of sales line of our Consolidated Statements of
Income (Loss), a $1.4 million non-cash impairment charge
related to the Ajax trademark, which is included in the
securitization, impairment and other costs line of our
Consolidated Statements of Income (Loss), a $1.0 million
non-cash impairment charge related to the LSG customer
agreement, which is included in the securitization, impairment
and other costs line of our Consolidated Statements of Income
(Loss) and $1.1 million of non-cash incentive compensation
expense related to management incentive stock options, which
is included in the selling, general and administrative
expenses line of our Consolidated Statements of Income (Loss).
The Ajax impairment charges consist of a $1.4 million charge
in the quarter ending March 31, 2006, based on an asset
impairment test conducted pursuant to SFAS No. 142, "Goodwill
and Other Intangible Assets" resulting from the Company's
decision to discontinue sales of Ajax products and sell this
product line to a third party. The LSG customer agreement
impairment charges consist of a $1.0 million charge in the
quarter ending December 31, 2006, based on an asset impairment
test conducted pursuant to SFAS No. 142, "Goodwill and Other
Intangible Assets" resulting from the Company's CLD
Acquisition and the decision to replace the 2002 supply
agreement with LSG with a new supply agreement at
substantially lower volumes.
-- Non-cash charges for the period from January 1, 2005 through
January 27, 2005 relate to non-cash incentive compensation
expense resulting from the acceleration of vesting for
incentive units at the date of the Acquisition. These
incentive units were issued to our executives in 1998 and
2003.
-- Non-cash charges for the period from January 28, 2005 through
December 31, 2005 relate to $6.2 million associated with the
inventory step-up to fair market value recorded at the
Acquisition date, $1.7 million for an impairment charge
related to the Ajax trademark and $1.1 million of non-cash
incentive compensation expense resulting from an increase in
value and additional vesting of stock options granted to
certain of the Company's executive officers in 2005.
(e) Other expense is described as follows:
-- Other expense consists of $0.5 million of mark to market
losses for two foreign exchange hedge agreements entered to
control the foreign exchange risk associated with the initial
acquisition price of CLD, which is included in the other
expense line of our Consolidated Statements of Income (Loss).
CONTACT: Alliance Laundry Holdings LLC
Bruce P. Rounds, CFO, 920-748-1634