AMPAM Reports Third Quarter Operating Results.Business Editors ROUND ROCK, Texas--(BUSINESS WIRE)--Nov. 8, 2001 American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Plumbing plumbing, piping systems inside buildings for water supply and sewage. The Romans had a highly developed plumbing system; water was brought to Rome by aqueducts and distributed to homes in lead pipes—hence the name plumbing from the Latin word plumbum & Mechanical Inc. ("AMPAM") today announced its operating results for the quarter and nine-month period ended Sept. 30, 2001. Third Quarter Results Revenue in the third quarter increased 8% to $157.7 million, versus $145.5 million for the comparable quarter in 2000. Revenue from start-ups was $6.3 million, a $4.6 million increase over the third quarter of 2000. Gross profit for the quarter was $26.3 million, versus $26.5 million for the same period in 2000. The decline in gross profit was primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to decreased margins. During the third quarter, start-ups generated gross profit of $0.7 million, an increase of $0.5 million over the same period in 2000. Gross margin for the quarter ended Sept. 30, 2001 was 16.7%, versus 18.2% reported during the same period in 2000. The decline in gross margin was primarily attributable to a more competitive market place and higher labor costs. General and administrative expenses for the third quarter were $15.8 million (10% of revenues), versus $11.4 million (8% of revenues) for the comparable period in 2000. The increase was attributable to increased volume, higher health and business insurance costs ($3.5 million) and expenditures of $1.5 million on certain of the Company's previously announced strategic initiatives, primarily start-ups, branding and warranty An assurance, promise, or guaranty by one party that a particular statement of fact is true and may be relied upon by the other party. Warranties are used in a variety of commercial situations. In many instances a business may voluntarily make a warranty. programs. Goodwill amortization was $1.4 million for both periods. Income from operations was $9.1 million for the period, versus $13.7 million in the third quarter of 2000. Interest expense for the third quarter of 2001 was $4.6 million, which is unchanged from the same period last year, and reflects increased levels of debt offset by lower interest rates. Both periods include approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $0.3 million of non-cash interest related to the amortization of debt offering expenses. At Sept. 30, 2001, borrowings under the Company's bank credit agreement were $71.5 million. Net income available to common shareholders for the third quarter totaled $1.9 million versus $4.3 million for the same period in 2000. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become (earnings before interest, taxes, depreciation, and amortization Earnings before interest, taxes, depreciation, and amortization (EBITDA) A financial measure defined as revenues less cost of goods sold and selling, general, and administrative expenses. ) totaled $12.1 million for the third quarter versus $16.6 million during the same period in 2000. Commenting on the third quarter results, David Baggett, President and Chief Financial Officer, stated, "Our volume of business remains strong, but the market place, in general, has become increasingly competitive, resulting in margin deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. . In response to this more competitive market place, we have altered medical benefits, postponed wage increases, frozen the hiring of administrative personnel, and delayed purchases of field equipment. We are continuing our efforts to improve margins by shifting our workforce to more profitable jobs, by pursuing a national purchasing strategy, and by implementing best practices to become more efficient." Nine-Month Results Revenue for the nine-months ended Sept. 30, 2001 increased 12% to $461.7 million, versus $412.3 million for the comparable period in 2000. Revenue from start-ups was $12.9 million, an increase of $11.2 million over 2000. Gross profit for the period was $77.0 million, up 2.4% when compared to $75.2 million in 2000. The increase in gross profit reflects higher volume and a $0.5 million increase generated by start-ups over 2000, offset by decreased margins. Gross margin for the nine-months ended Sept. 30, 2001 was 16.7%, versus 18.2% for the same period in 2000. This decline in gross margin is primarily attributable to a more competitive market place and higher material costs. General and administrative expenses for the first nine months of 2001 were $44.9 million (10% of revenues), versus $34.6 million (8% of revenues) for the comparable period in 2000. The increase in selling, general and administrative expenses was primarily due to higher health and business insurance costs of $6.0 million, and increased volume. Additionally, the Company incurred costs of approximately $3.7 million on certain previously announced strategic initiatives, primarily startups, branding and warranty programs. Goodwill amortization was $4.2 million for both periods. Income from operations was $27.9 million for nine months ended Sept. 30, 2001, versus $36.4 million for the nine months ended Sept. 30, 2000. Interest expense increased $0.3 million, reflecting increased levels of debt offset by lower interest rates. Net income available to common shareholders for the nine-months ended Sept. 30, 2001 totaled $6.0 million versus $11.1 million for the same period in 2000. EBITDA totaled $37.0 million for the period versus $45.0 million in 2000. 2001 Updated Guidance The following statements are based on the current expectations of the Company. These statements are forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. and actual results may differ materially as described in the last paragraph below. David Baggett, President and Chief Financial Officer, commented, "Although our backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. at the end of the third quarter was $232 million, we anticipate continued margin pressures in this weak economy to result in decreased earnings in the fourth quarter." AMPAM continues to estimate 2001 revenues at approximately $610 million. EBITDA for fiscal 2001 is now estimated to be approximately $46 to $47 million ($9 to $10 million for the fourth quarter). Free cash flows (defined as earnings plus depreciation less capital expenditures) should approximate ap·prox·i·mate v. To bring together, as cut edges of tissue. adj. 1. Relating to the contact surfaces, either proximal or distal, of two adjacent teeth; proximate. 2. Close together. $8 to $10 million. Capital expenditures for the year should approximate $8 million. Headquartered in Round Rock, Texas, AMPAM is America's No. 1 choice for residential plumbing, heating and cooling. AMPAM also provides commercial plumbing and mechanical contracting services. AMPAM will host a conference call to discuss its results on Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , Nov. 9 at 9:00 am Central Standard Time. To participate in the call, dial 800/289-0730 ten minutes before the call is scheduled to begin and use access code 410836. A replay will be available approximately two hours after the conference call is completed and will be accessible for one week. To access the replay, dial 888/203-1112 and use access code 410836. This news release contains "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. . Although AMPAM believes that such statements are based on reasonable assumptions, it can give no assurance that its expectations will in fact occur. Important factors that could cause actual results to differ materially from those in the forward looking statements include, among other things, changes in national or regional economic conditions affecting the construction industry, our ability to integrate acquired businesses, federal and state regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. developments, AMPAM's financial leverage and the availability of skilled personnel, as well as other risk factors.
American Plumbing and Mechanical Inc.
Consolidated Condensed Statements of Operations
(Unaudited)
(In thousands)
Three months ended Sept. 30,
------------------------------------------
2000 2001
------------------- ------------------
Revenues $ 145,460 $ 157,663
Cost of revenues
(including
depreciation) 118,944 131,388
------------------- ------------------
Gross profit 26,516 26,275
Selling, general and
administrative expenses 11,436 15,767
Goodwill amortization 1,411 1,410
------------------- ------------------
Income from operations 13,669 9,098
Interest expense (4,662) (4,642)
Other, net 250 127
------------------- ------------------
Income before provision
for income taxes and
extraordinary loss 9,257 4,583
Provision for income
taxes 4,271 2,378
------------------- ------------------
Income before
extraordinary loss 4,986 2,205
Extraordinary loss, net
of tax 344 --
Net income 4,642 2,205
------------------- ------------------
Preferred dividends 341 341
------------------- ------------------
Net income available to
common shareholders $ 4,301 $ 1,864
=================== ==================
EBITDA $ 16,624 $ 12,119
=================== ==================
Nine months ended Sept. 30,
------------------------------------------
2000 2001
------------------- ------------------
Revenues $ 412,276 $ 461,744
Cost of revenues
(including depreciation) 337,097 384,758
------------------- ------------------
Gross profit 75,179 76,986
Selling, general and
administrative expenses 34,624 44,883
Goodwill amortization 4,157 4,232
------------------- ------------------
Income from operations 36,398 27,871
Interest expense (13,745) (14,054)
Other, net 657 551
------------------- ------------------
Income before provision
for income taxes and
extraordinary loss 23,310 14,368
Provision for income
taxes 10,864 7,389
------------------- ------------------
Income before
extraordinary loss 12,446 6,979
Extraordinary loss, net
of tax 344 --
Net income 12,102 6,979
------------------- ------------------
Preferred dividends 1,023 1,023
------------------- ------------------
Net income available to
common shareholders $ 11,079 $ 5,956
=================== ==================
EBITDA $ 44,953 $ 37,024
=================== ==================
American Plumbing and Mechanical Inc.
Consolidated Condensed Balance Sheets
(Unaudited)
(In thousands)
Dec. 31, Sept. 30,
2000 2001
------------------- ------------------
Assets
Current Assets:
Cash and cash
equivalents $ 87 $ 1,364
Accounts receivable,
net 96,616 104,501
Inventories 8,678 10,952
Costs and estimated
earnings in excess of
billings on
uncompleted contracts 23,888 27,796
Prepaid expenses and
other current assets 3,083 3,234
------------------- ------------------
Total current assets 132,352 147,847
Property and equipment,
net 21,741 23,519
Goodwill and other non-
current assets 164,373 160,670
------------------- ------------------
Total assets 318,466 332,036
=================== ==================
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable and
accrued expenses 56,417 66,582
Accounts payable,
related parties,
including acquisition
consideration payable 3,920 --
Billings in excess of
costs and estimated
earnings on uncompleted
contracts 13,544 14,341
Current maturities of
capital lease
obligations 700 309
------------------- ------------------
Total current
liabilities $ 74,581 $ 81,232
Long-term liabilities
Long-term debt 165,225 166,757
Deferred income taxes 1,717 1,513
------------------- ------------------
Total liabilities 241,523 249,502
Commitments and Contingencies
Series A redeemable
preferred stock 13,635 13,635
Stockholders' equity 63,308 68,899
------------------- ------------------
Total liabilities and
stockholders' equity $ 318,466 $ 332,036
=================== ==================
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