Exhibit 99.1
Alliance Laundry Holdings LLC Reports 3rd Quarter 2007 Earnings
RIPON, Wis.--(BUSINESS WIRE)--Nov. 15, 2007--Alliance Laundry
Holdings LLC announced today results for the three and nine months
ended September 30, 2007.
Net revenues for the quarter ended September 30, 2007 increased
$18.3 million, or 19.2%, to $113.4 million from $95.1 million for the
quarter ended September 30, 2006. Our net income for the quarter ended
September 30, 2007 was $1.2 million as compared to a net loss of $4.0
million for the quarter ended September 30, 2006. Adjusted EBITDA (see
"About Non-GAAP Financial Measures" below) for the quarter ended
September 30, 2007 increased $1.3 million to $16.4 million from $15.1
million for the quarter ended September 30, 2006.
The overall net revenue increase of $18.3 million was attributable
to higher commercial laundry revenues of $14.4 million, higher
consumer laundry revenue of $0.3 million, higher service parts revenue
of $0.5 million, higher CLD Acquisition related sales of $1.9 million
from European operations and lower worldwide sales eliminations of
$1.2 million.
Net revenues for the nine months ended September 30, 2007
increased $73.4 million, or 28.9%, to $326.9 million from $253.5
million for the nine months ended September 30, 2006. Our net income
for the nine months ended September 30, 2007 was $5.4 million as
compared to a net loss of $7.3 million for the nine months ended
September 30, 2006. Adjusted EBITDA (see "About Non-GAAP Financial
Measures" below) for the twelve month period ended September 30, 2007
was $66.8 million.
In announcing the Company's results, CEO Thomas F. L'Esperance
said, "We are extremely pleased with our top line performance for the
quarter and nine months. Although results have been adversely affected
by significantly higher material costs, our third quarter earnings
reflected significant improvement from increased sales in our base
business revenue for North America and continued strong performance
for international sales and CLD Europe."
L'Esperance concluded, "Based on progress to date, we anticipate
that our operational strategies and modest improvements in material
costs in the U.S. will position us for a strong finish 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 three and nine months ended September 30, 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/A for
the year ended December 31, 2006.
Financial information for Alliance Laundry Holdings LLC for the
three and nine months ended September 30, 2007.
ALLIANCE LAUNDRY HOLDINGS LLC
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands)
December 31,
September 30, 2006
2007 (Restated)
------------- -------------
Assets
Current assets:
Cash and cash equivalents $ 10,613 $ 11,221
Accounts receivable, net 26,737 24,523
Inventories, net 61,400 51,915
Beneficial interests in securitized
accounts receivable 28,579 28,641
Deferred income tax asset, net 2,729 3,202
Prepaid expenses and other 3,187 4,804
------------- -------------
Total current assets 133,245 124,306
Notes receivable, net 3,528 4,018
Property, plant and equipment, net 71,924 73,789
Goodwill 183,078 180,269
Beneficial interests in securitized
financial assets 20,138 18,055
Deferred income tax asset, net 10,677 10,677
Debt issuance costs, net 8,703 10,318
Intangible assets, net 148,857 152,890
------------- -------------
Total assets $ 580,150 $ 574,322
============= =============
Liabilities and Member(s)' Equity
Current liabilities:
Current portion of long-term debt and
capital lease obligations $ 230 $ 526
Revolving credit facility - -
Accounts payable 34,802 27,636
Deferred income tax liability, net - 216
Other current liabilities 34,710 37,085
------------- -------------
Total current liabilities 69,742 65,463
Long-term debt and capital lease
obligations:
Senior credit facility 215,000 224,000
Senior subordinated notes 149,500 149,430
Other long-term debt and capital lease
obligations 2,140 2,159
Deferred income tax liability, net 6,502 6,137
Other long-term liabilities 10,693 10,742
------------- -------------
Total liabilities 453,577 457,931
Commitments and contingencies
Member(s)' equity 126,573 116,391
------------- -------------
Total liabilities and member(s)'
equity $ 580,150 $ 574,322
============= =============
ALLIANCE LAUNDRY HOLDINGS LLC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands)
Three Months Ended Nine Months Ended
------------------- ---------------------
September
30,
September September September 2006
30, 30, 30,
2007 2006 2007 (Restated)
--------- --------- --------- -----------
Net revenues:
Equipment and service parts $111,396 $92,529 $320,856 $ 248,738
Equipment financing, net 1,981 2,601 6,013 4,802
--------- --------- --------- -----------
Net revenues 113,377 95,130 326,869 253,540
Cost of sales 86,479 74,257 244,380 196,162
--------- --------- --------- -----------
Gross profit 26,898 20,873 82,489 57,378
--------- --------- --------- -----------
Selling, general and
administrative expense 15,728 13,010 47,761 36,837
Securitization, impairment
and other costs 32 1,647 782 5,571
--------- --------- --------- -----------
Total operating expenses 15,760 14,657 48,543 42,408
--------- --------- --------- -----------
Operating income 11,138 6,216 33,946 14,970
Interest expense 9,410 9,591 25,871 22,833
Other expense, net - 120 - 480
--------- --------- --------- -----------
Income (loss) before taxes 1,728 (3,495) 8,075 (8,343)
Provision (benefit) for
income taxes 523 532 2,631 (1,050)
--------- --------- --------- -----------
Net income (loss) $ 1,205 $(4,027) $ 5,444 $ (7,293)
========= ========= ========= ===========
ALLIANCE LAUNDRY HOLDINGS LLC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
Nine Months Ended
----------------------------
September 30,
September 30, 2006
2007 (Restated)
------------- -------------
Cash flows from operating activities:
Net income (loss) $ 5,444 $ (7,293)
Adjustments to reconcile net income
(loss) to net cash
provided by operating activities:
Depreciation and amortization 14,222 16,420
Non-cash interest expense 719 316
Non-cash executive unit compensation 2,706 1,215
Non-cash trademark impairment - 1,400
Non-cash inventory expense - 2,726
Deferred income taxes 160 (1,584)
Loss on sale of property, plant and
equipment 70 175
Changes in assets and liabilities:
Accounts receivable (1,912) 5,383
Inventories (8,875) (13,722)
Other assets (228) (3,768)
Accounts payable 6,561 3,126
Other liabilities (5,657) (2,076)
------------- -------------
Net cash provided by operating
activities 13,210 2,318
------------- -------------
Cash flows used in investing activities:
Additions to property, plant and
equipment (5,931) (4,046)
Acquisition of businesses, net of cash
acquired - (77,933)
Proceeds on disposition of assets 1,178 1,129
------------- -------------
Net cash used in investing activities (4,753) (80,850)
------------- -------------
Cash flows (used in) provided by
financing activities:
Principal payments on long-term debt (9,428) (8,023)
Net increase in revolving line of credit
borrowings - 6,000
Proceeds from senior term loan - 60,000
Issuance of common stock - 23,493
Repurchase of common stock - (30)
Debt financing costs - (1,334)
------------- -------------
Net cash (used in) provided by
financing activities (9,428) 80,106
------------- -------------
Effect of exchange rate changes on cash
and cash equivalents 363 549
------------- -------------
(Decrease) increase in cash and cash
equivalents (608) 2,123
Cash and cash equivalents at beginning of
period 11,221 5,075
------------- -------------
Cash and cash equivalents at end of
period $ 10,613 $ 7,198
============= =============
Supplemental disclosure of cash flow
information:
Cash paid for interest $ 25,488 $ 23,878
Cash paid for income taxes 1,442 79
Reconciliation of Net income (loss) to EBITDA and Adjusted EBITDA,
and reconciliation of Adjusted EBITDA to Net Cash Provided by (Used
in) Operating Activities for the Three and Nine Months Ended September
30, 2007 (Dollars in Thousands):
Three Months
Three Months Ended
Ended September 30,
September 30, 2006
2007 (Restated)
------------- -------------
Net income (loss) $ 1,205 $ (4,027)
Provision for income taxes 523 532
Interest expense 9,410 9,591
Depreciation and amortization (a) 4,851 5,177
Non-cash interest income included in
amortization above (544) (732)
------------- -------------
EBITDA 15,445 10,541
Finance program adjustments (b) (595) (1,150)
Other non-recurring charges (c) 668 2,815
Other non-cash charges (d) 902 2,777
Other expense (e) - 120
------------- -------------
Adjusted EBITDA 16,420 15,103
Interest expense (9,410) (9,591)
Non-cash interest income included
in amortization above 544 732
Other non-cash interest 377 843
Finance program adjustments (b) 595 1,150
Other non-recurring charges (c) (668) (2,815)
Deferred taxes (636) (534)
Loss on sale of property, plant and
equipment 50 44
Other expense - (109)
Changes in assets and liabilities (6,629) (1,609)
------------- -------------
Net cash provided by operating activities $ 643 $ 3,214
============= =============
(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 September
30, 2007 consist of $0.6 million of investigatory and audit
costs related to the restatements which are included in the
selling, general and administrative expense line of our
condensed consolidated statements of operations and
$0.1million 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
condensed consolidated statements of operations.
-- Other non-recurring charges for the quarter ended September
30, 2006 relate to a periodic accrual of $0.3 million under a
one time retention bonus agreement with certain management
employees, $0.9 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 condensed consolidated statements of
operations and $1.6 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 condensed consolidated statements of operations.
(d) Other non-cash charges are described as follows:
-- Other non-cash charges for the quarter ended September 30,
2007 consist of $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 condensed consolidated
statements of operations.
-- Other non-cash charges for the quarter ended September 30,
2006 are comprised of $2.7 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 condensed consolidated statements of operations, and
$0.1 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 condensed consolidated statements of operations.
(e) Other expense is described as follows:
-- Other expense for the nine months ended September 30, 2006
relates to $0.1 million of a mark to market loss related to
two foreign exchange hedge agreements. The agreements were
entered to control the foreign exchange risk associated with
the initial acquisition price of CLD. The foreign exchange
hedges are included in the other expense, net line of our
condensed consolidated statements of operations.
Nine Months Ended
----------------------------
September 30,
September 30, 2006
2007 (Restated)
------------- -------------
Net income (loss) $ 5,444 $ (7,293)
Provision (benefit) for income taxes 2,631 (1,050)
Interest expense 25,871 22,833
Depreciation and amortization (a) 14,222 16,422
Non-cash interest income included in
amortization above (1,615) (1,654)
------------- -------------
EBITDA 46,553 29,258
Finance program adjustments (b) (1,494) (306)
Other non-recurring charges (c) 2,136 7,687
Other non-cash charges (d) 2,706 5,328
Other expense (e) - 480
------------- -------------
Adjusted EBITDA 49,901 42,447
Interest expense (25,871) (22,833)
Non-cash interest income included in
amortization above 1,615 1,654
Other non-cash interest 719 316
Finance program adjustments (b) 1,494 306
Other non-recurring charges (c) (2,136) (7,687)
Deferred taxes (2,471) (535)
Loss on sale of property, plant and
equipment 70 175
Other expense - (468)
Changes in assets and liabilities (10,111) (11,057)
------------- -------------
Net cash provided by operating activities $ 13,210 $ 2,318
============= =============
(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 nine months ended
September 30, 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, $1.2 million of investigatory and audit costs
related to the restatements which are included in the selling,
general and administrative expense line of our condensed
consolidated statements of operations and $0.7 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 condensed consolidated
statements of operations.
-- Other non-recurring charges for the nine months ended
September 30, 2006 relate to a periodic accrual of $0.9
million under a one time retention bonus agreement with
certain management employees, $2.6 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 condensed consolidated
statements of operations and $4.2 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 condensed consolidated statements of
operations.
(d) Other non-cash charges are described as follows:
-- Other non-cash charges for the nine months ended September 30,
2007 relate to $2.7 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 condensed consolidated statements of operations.
-- Other non-cash charges for the nine months ended September 30,
2006 relate to $2.7 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 condensed consolidated statements of operations, $1.2
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
condensed 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 securitization, impairment and other costs line of our
condensed consolidated statements of operations.
(e) Other expense is described as follows:
-- Other expense for the nine months ended September 30, 2006
relates to $0.5 million of a mark to market loss related to
two foreign exchange hedge agreements. The agreements were
entered to control the foreign exchange risk associated with
the initial acquisition price of CLD. The foreign exchange
hedges are included in the other expense, net line of our
condensed consolidated statements of operations.
CONTACT: Alliance Laundry Holdings LLC
Bruce P. Rounds, CFO
920-748-1634