EXHIBIT 99.1
Alliance Laundry Holdings LLC Reports 1st Quarter 2007 Earnings
RIPON, Wis.--(BUSINESS WIRE)--May 15, 2007--Alliance Laundry
Holdings LLC announced today results for the three months ended March
31, 2007.
Net revenues for the quarter ended March 31, 2007 increased $25.1
million, or 35.1%, to $96.5 million from $71.5 million for the quarter
ended March 31, 2006. Our net income for the quarter ended March 31,
2007 was $2.4 million as compared to a net loss of $1.5 million for
the quarter ended March 31, 2006. Adjusted EBITDA (see "About Non-GAAP
Financial Measures" below) for the quarter ended March 31, 2007
increased $3.2 million to $17.0 million from $13.8 million for the
quarter ended March 31, 2006.
The overall net revenue increase of $25.1 million was attributable
to higher commercial laundry revenues of $5.3 million, higher consumer
laundry revenue of $3.0 million, higher service parts revenue of $2.1
million and CLD Acquisition related sales of $21.0 million from the
European operations offset by $6.3 million of worldwide sales
eliminations. The increase in commercial laundry revenues includes
$2.6 million of net sales resulting from the acquisition of CLD's U.S.
operations, $1.1 million of higher North American commercial equipment
revenue, $0.7 million of higher international revenue, and $0.9
million of higher earnings from our off-balance sheet equipment
financing program.
Included in our net loss for the quarter ended March 31, 2006 was
a $1.4 million impairment charge related to a reduction in the value
of the Ajax trademark, with no similar impairment charge in the
quarter ended March 31, 2007. In addition, $1.1 million of our net
income for the quarter ended March 31, 2007 was related to our
European operations. The quarter ended March 31, 2006 does not include
the acquired European operations, which were acquired on July 14,
2006.
In announcing the Company's results, CEO and President Thomas F.
L'Esperance said, "We are pleased to report yet another solid quarter.
The CLD Acquisition was a significant contributor to both our revenue
and earnings growth for the quarter. We are also happy to announce
that our consolidation efforts for the CLD Acquisition are
substantially complete."
"We believe the CLD Acquisition has made us a stronger company in
both North America and Internationally and look forward to the
opportunities that this strategic acquisition presents as we work
together with the CLD team to execute our Company's growth and
customer one objectives," said L'Esperance.
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 three months ended March 31, 2007 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 designer,
manufacturer and marketer in North America of commercial laundry
equipment used in laundromats, multi-housing laundries and on-premise
laundries. Under the well-known brand names of Speed Queen(R),
UniMac(R), Huebsch(R), IPSO(R), and Cissell(R), we produce a full line
of commercial washing machines and dryers with load capacities from 12
to 200 pounds. We have been a leader in the North American stand-alone
commercial laundry equipment industry for more than ten years. With
the addition of our European operations and Alliance Laundry's export
sales to Europe, we believe that we are also a leader in the European
stand-alone commercial laundry equipment industry.
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 five pages for the three months ended March 31, 2007.
ALLIANCE LAUNDRY HOLDINGS LLC
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands)
March 31, December 31,
2007 2006
------------ ------------
Assets
Current assets:
Cash and cash equivalents $6,563 $11,221
Accounts receivable, net 24,731 24,523
Inventories, net 60,125 49,746
Beneficial interests in securitized
accounts receivable 23,633 28,641
Deferred income tax asset, net 2,963 3,656
Prepaid expenses and other 3,826 4,684
------------ ------------
Total current assets 121,841 122,471
Notes receivable, net 3,642 4,018
Property, plant and equipment, net 72,503 73,789
Goodwill 181,329 180,778
Beneficial interests in securitized
financial assets 18,544 18,055
Deferred income tax asset, net 9,177 9,177
Debt issuance costs, net 9,785 10,318
Intangible assets, net 151,616 153,108
------------ ------------
Total assets $568,437 $571,714
============ ============
Liabilities and Member(s)' Equity
Current liabilities:
Current portion of long-term debt and
capital lease obligations $438 $526
Revolving credit facility - -
Accounts payable 22,879 21,438
Deferred income tax liability, net 143 216
Other current liabilities 31,380 37,087
------------ ------------
Total current liabilities 54,840 59,267
Long-term debt and capital lease
obligations:
Senior credit facility 222,000 224,000
Senior subordinated notes 149,453 149,430
Other long-term debt and capital lease
obligations 2,136 2,159
Deferred income tax liability, net 6,998 6,939
Other long-term liabilities 11,765 11,935
------------ ------------
Total liabilities 447,192 453,730
Commitments and contingencies:
Member(s)' equity 121,245 117,984
------------ ------------
Total liabilities and member(s)' equity $568,437 $571,714
============ ============
ALLIANCE LAUNDRY HOLDINGS LLC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands)
Three Months Ended
--------------------------
March 31, March 31,
2007 2006
------------ ------------
Net revenues:
Equipment and service parts $94,171 $69,979
Equipment financing, net 2,371 1,500
------------ ------------
Net revenues 96,542 71,479
Cost of sales 68,440 52,916
------------ ------------
Gross profit 28,102 18,563
------------ ------------
Selling, general and administrative expense 15,517 12,497
Securitization, impairment and other costs 530 1,828
------------ ------------
Total operating expenses 16,047 14,325
------------ ------------
Operating income 12,055 4,238
Interest expense 8,336 6,457
------------ ------------
Income (loss) before taxes 3,719 (2,219)
Provision (benefit) for income taxes 1,295 (705)
------------ ------------
Net income (loss) $2,424 $(1,514)
============ ============
ALLIANCE LAUNDRY HOLDINGS LLC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
Three Months Ended
--------------------------
March 31, March 31,
2007 2006
------------ ------------
Cash flows from operating activities:
Net income (loss) $2,424 $(1,514)
Adjustments to reconcile net income
(loss) to net cash provided by (used in)
operating activities:
Depreciation and amortization 4,621 5,867
Non-cash interest expense (income) 283 (368)
Non-cash executive unit compensation 940 1,285
Non-cash trademark impairment - 1,400
Deferred income taxes 586 (713)
Loss on sale of property, plant and
equipment 2 20
Changes in assets and liabilities:
Accounts receivable 113 (661)
Inventories (10,495) (11,466)
Other assets 5,582 1,889
Accounts payable 1,467 1,707
Other liabilities (5,354) (4,856)
------------ ------------
Net cash provided by (used in)
operating activities 169 (7,410)
------------ ------------
Cash flows used in investing activities:
Additions to property, plant and
equipment (2,024) (1,400)
Acquisition of businesses, net of cash
acquired (1,725) -
Proceeds on disposition of assets 1,078 26
------------ ------------
Net cash used in investing activities (2,671) (1,374)
------------ ------------
Cash flows (used in) provided by financing
activities:
Principal (payments on) proceeds from
long-term debt (2,132) 1,000
Net increase in revolving line of credit
borrowings - 3,000
------------ ------------
Net cash (used in) provided by
financing activities (2,132) 4,000
------------ ------------
------------ ------------
Effect of exchange rate changes on cash and
cash equivalents (24) -
------------ ------------
Decrease in cash and cash equivalents (4,658) (4,784)
Cash and cash equivalents at beginning of
period 11,221 5,075
------------ ------------
Cash and cash equivalents at end of period $6,563 $291
============ ============
Supplemental disclosure of cash flow
information:
Cash and cash equivalents paid for
interest $9,503 $9,702
Cash and cash equivalents paid for income
taxes 58 8
Reconciliation of Net (loss) income to EBITDA and Adjusted EBITDA,
and reconciliation of Adjusted EBITDA to Net Cash Provided by (Used
in) Operating Activities for the Three Ended March 31, 2007 (Dollars
in Thousands):
Three Months Ended
--------------------------
March 31, March 31,
2007 2006
------------ ------------
Net (loss) income $2,424 $(1,514)
Provision for income taxes 1,295 (705)
Interest expense 8,336 6,457
Depreciation and amortization (a) 4,621 5,867
Non-cash interest income included in
amortization above (533) (478)
------------ ------------
EBITDA 16,143 9,627
Finance program adjustments (b) (822) 94
Other non-recurring charges (c) 751 1,367
Other non-cash charges (d) 940 2,685
------------ ------------
Adjusted EBITDA 17,012 13,773
Interest expense (8,336) (6,457)
Non-cash interest income included in
amortization above 533 478
Other non-cash interest 283 (368)
Finance program adjustments (b) 822 (94)
Other non-recurring charges (c) (751) (1,367)
Deferred taxes (709) -
Loss on sale of property, plant and
equipment 2 20
Other expense - (8)
Changes in assets and liabilities (8,687) (13,387)
------------ ------------
Net cash provided by operating activities $169 $(7,410)
============ ============
(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
qualified special-purpose bankruptcy remote entities. 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 for the quarter ended March 31,
2007 relate to a periodic accrual of $0.1 million under the
one time retention bonus agreement with certain management
employees, $0.1 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
expense line of our consolidated statements of operations and
$0.6 million of costs associated with the closure of the
Marianna, Florida production facility which are included in
the impairment and other costs line of our consolidated
statements of operations.
-- Other non-recurring charges for the quarter ended March 31,
2006 relate to a periodic accrual of $0.3 million under a one
time retention bonus agreement with certain management
employees, $0.7 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
expense line of our consolidated statements of operations and
$0.4 million of costs associated with the closure of the
Marianna, Florida production facility which are included in
the impairment and other costs line of our consolidated
statements of operations.
(d) Other non-cash charges are described as follows:
-- Other non-cash charges for the quarter ended March 31, 2007
relate to $0.9 million of non-cash incentive compensation
expense related to management incentive stock options, which
is included in the selling, general and administrative expense
line of our consolidated statements of operations.
-- Other non-cash charges for the quarter ended March 31, 2006
relate to $1.3 million of non-cash incentive compensation
expense related to management incentive stock options, which
is included in the selling, general and administrative expense
line of our consolidated statements of operations and a $1.4
million non-cash impairment charge related to the Ajax
trademark, driven by the Company's decision to discontinue
sales of AJAX(R) products. The Ajax impairment is included in
the impairment and other costs line of our consolidated
statements of operations.
CONTACT: Alliance Laundry Holdings LLC
Bruce P. Rounds, CFO
920-748-1634