Advanced Glassfiber Yarns LLC Announces Year End 2001 Earnings.Business Editors AIKEN Aiken, city (1990 pop. 19,872), seat of Aiken co., W S.C.; inc. 1835. A resort and polo center and a training area for Thoroughbreds, Aiken has apparel, printing and publishing, drug, and chemical industries. , S.C.--(BUSINESS WIRE)--March 26, 2002 Advanced Glassfiber Yarns LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control announced today that net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the quarter ended December December: see month. 31, 2001 decreased $36.9 million, or 52.5%, to $33.4 million as compared to $70.3 million for the quarter ended December 31, 2000 and net sales for the year ended December 31, 2001 decreased $72.0 million, or 25.9% to $206.3 million as compared to $278.3 million for the year ended December 31, 2000. Had the Euro exchange rate versus the US dollar not declined by 3.0% year to year, 2001 net sales would have been $1.8 million higher. The benefit of price increases implemented earlier during 2001 have been more than offset by a 29% decline in volumes sold during the year. This decrease in demand reflects a global economic downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. and inventory corrections, which were particularly severe in the electronics and industrial markets. Sales to the electronics markets in 2001 were down $49.4 million, or 50.0%, over the prior year and sales to the industrial market in 2001 were down $16.2 million, or 22.7%, over the prior year. While the Company cannot provide any assurances, the electronics market is expected to improve in 2002, primarily driven by the telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. and personal computer segments. Further, the Company believes that it has reached the bottom of the cycle in the fourth quarter as evidenced by a modest up-turn in sales in the first quarter of 2002. In response to these market conditions, the Company reduced production schedules and focused on operating cost reductions and working capital management. Since May 2001, the Company has reduced its production workforce through furloughs by 36% as compared to January January: see month. 2001. In December 2001, the Company temporarily shutdown shut·down n. A cessation of operations or activity, as at a factory. shutdown Noun the closing of a factory, shop, or other business Verb shut down the Huntingdon
The act of contracting or reducing operations of a company in the hope of bringing it financial or operational stability. This management technique is often used when a company has grown too fast and is unable to effectively manage its operations. by the Company's key weaving weaving, the art of forming a fabric by interlacing at right angles two or more sets of yarn or other material. It is one of the most ancient fundamental arts, as indicated by archaeological evidence. customers. In addition to the furlough fur·lough n. 1. a. A leave of absence or vacation, especially one granted to a member of the armed forces. b. A usually temporary layoff from work. c. of production employees, in the fourth quarter the Company reduced the number of salaried positions in order to cut costs in future periods. Gross profit decreased to 25.7% of net sales for the year ended December 31, 2001 from 25.8% in the year ended December 31, 2000. Excluding the impact of changes in the exchange rate of European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. currencies, gross profit in the year 2001 would have been 25.9%. The under-absorption of fixed costs fixed costs, n.pl the costs that do not change to meet fluctuations in enrollment or in use of services (e.g., salaries, rent, business license fees, and depreciation). , primarily due to increasing under-utilization of capacity during the year, was partially offset by continued improvement in manufacturing performance and cost reduction efforts, as well as the previously mentioned price increases. Selling, general and administrative expenses increased to 6.9% of net sales for the year ended December 31, 2001 as compared to 5.9% of net sales for the year ended December 31, 2000. This increase is strictly driven by the decrease in net sales. When expressed as an absolute value, expenses for the year ended December 31, 2001 dropped $2.1 million as compared to the year ended December 31, 2000. The decrease in absolute value is attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the implementation of cost containment cost containment, n the features of a dental benefits program or of the administration of the program designed to reduce or eliminate certain charges to the plan. measures such as the elimination of the profit sharing profit sharing, arrangement by which employees receive, in addition to their wages, a share of the net profits of a business. The purpose is to give them an incentive to increase their output through enhanced morale, less wasteful use of materials, better care of and incentive compensations as well as the reduction in the salaried workforce. As a result of the aforementioned a·fore·men·tioned adj. Mentioned previously. n. The one or ones mentioned previously. aforementioned Adjective mentioned before Adj. 1. factors, and a restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of $2.4 million associated with the production and salaried workforce reduction, operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. decreased $19.5 million to $24.6 million, or 11.9% of net sales, for the year ended December 31, 2001 from $44.1 million, or 15.8% of net sales, for the year ended December 31, 2000. Adjusted 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 for the quarter ended December 31, 2001 decreased $15.3 million, or 79.7%, to $3.9 million from $19.2 million for the quarter ended December 31, 2000 and for the year ended December 31, 2001 decreased $19.7 million, or 26.8%, to $53.9 million from $73.6 million for the year ended December 31, 2000. Adjusted EBITDA is defined as net income before interest expense, income taxes, depreciation, amortization and non-recurring, non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. as defined per the credit agreement. On December 14, 2001, the Company 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. its senior credit facility. The amendment primarily provides for less stringent financial covenants through March 31, 2002, to accommodate the anticipated financial performance. The Company is currently in compliance with the amended financial ratios and other covenants under its senior credit facility. However, based on the current level of operations, the Company cannot make assurances that it will continue to be in compliance with such ratios and other covenants commencing during the second quarter of 2002. If the Company defaults under its senior credit facility, the lenders may immediately accelerate repayment Repayment The act of paying back a debt. Notes: Everyone has to repay their debts eventually. See also: Debt, Defeasance, Loan of all amounts outstanding under the senior credit facility. In an effort to take a conservative position with respect to the Company's financial statements, all long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. financial debt has been reclassified as current in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting . Additionally, the Company has engaged Credit Suisse First Boston Credit Suisse First Boston was originally the trading name of the Financière Crédit Suisse-First Boston, a London-based 50-50 investment banking joint venture formed in 1978 between the First Boston Corporation and Credit Suisse. as its financial advisor to explore strategic alternatives including, but not limited to, restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). the Company's debt and negotiating with its lenders favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. amendments to the senior credit facility. Advanced Glassfiber Yarns, headquartered in Aiken, SC, is one of the largest global suppliers of glass yarns, which are a critical material used in a variety of electronic, industrial, construction and specialty A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. applications. Prior to and including September September: see month. 30, 1998, the Company was the glass yarns and specialty materials business of Owens Corning Owens Corning Corporation is the world's largest manufacturer of fiberglass and related products. It was formed in 1935 as a partnership between two major American glassworks, Corning Glass Works and Owens-Illinois. The company was spun off as a separate entity November 1, 1938. . Since September 30, 1998, Advanced Glassfiber Yarns has been a joint venture between Porcher Industries, S.A. and Owens Corning. Certain matters discussed in this press release, such as statements about the Company's future operations, sources of liquidity and financial condition, are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the federal securities laws. These statements are distinguished by use of the words "will," "expect," "intends" and words of similar meaning. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. Factors that could cause actual results to differ materially from current expectations include conditions in the electronics industry and the economy generally, the level of the Company's indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. , the availability of satisfactory financing, foreign currency fluctuations, and the other risks detailed in the Company's SEC quarterly and annual reports and in the Registration Statement on Form S-4 (SEC. File No. 333-72305). The financial information included herein is unaudited. In addition, the financial information does not include disclosures required under generally accepted accounting principles. The financial information reflects all adjustments that are, in the opinion of management, necessary to present a fair statement of the results for the interim periods.
ADVANCED GLASSFIBER YARNS LLC
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
December 31, December 31,
2001 2000
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 100 $ 4,054
Trade accounts receivable
less allowance of $1,102
and $1,770, respectively 13,392 29,981
Inventories 43,847 25,011
Other current assets 3,188 5,947
------------ -----------
Total current assets 60,527 64,993
------------ -----------
Net property, plant and equipment 142,191 148,438
Intangible assets, net 209,622 222,578
Other non-current assets 145 -
------------ -----------
Total assets $ 412,485 $ 436,009
============ ===========
LIABILITIES AND MEMBERSHIP INTEREST
Current liabilities:
Accounts payable $ 16,205 $ 29,181
Accrued liabilities 24,201 23,863
Current portion of long-term debt,
net of discount of $2,392 and
$ - (1) 330,441 14,670
------------ -----------
Total current liabilities 370,847 67,714
------------ -----------
Long-term debt, net of discount
of $- and $2,616, respectively - 314,916
Deferred distribution 11,435 6,681
Pension and other employee
benefit plans 25,753 22,947
Other non-current liabilities 413 -
----------- -----------
Total liabilities 408,448 412,258
----------- -----------
Commitments and contingencies - -
Membership interest 4,037 23,751
----------- -----------
Total liabilities and membership
interest $ 412,485 $ 436,009
=========== ===========
(1) Absent the covenant modification dated December 14, 2001, the
Company would have been in violation of certain covenants of its
senior credit facility and senior subordinated notes. Because this
modification is valid only through March 31, 2002 and in order to
comply with Generally Accepted Accounting Principles, all financial
debt has been reclassified as current, despite the fact that the
Company is currently in negotiations with its senior lenders and is
reviewing alternative financing and strategic options to reduce the
Company's overall leverage.
ADVANCED GLASSFIBER YARNS LLC
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands)
For the Three Months For the Years
Ended December 31, Ended December 31,
------------------------------------------------
2001 2000 2001 2000
-------------------- --------------------
(unaudited)
Net sales $ 33,443 $ 70,274 $206,302 $278,288
Cost of goods sold 29,829 52,127 153,339 206,403
-------- -------- -------- --------
Gross profit 3,614 18,147 52,963 71,885
Selling, general and
administrative expenses 3,125 4,097 14,290 16,407
Amortization 2,746 2,855 11,607 11,420
Restructuring charge 2,448 - 2,448 -
-------- -------- -------- --------
Operating
income (loss) (4,705) 11,195 24,618 44,058
Interest expense 8,355 8,479 33,243 35,449
Other income, net (92) (1,511) (931) (3,577)
-------- -------- -------- --------
Income (loss)
before taxes
and extraordinary
item (12,968) 4,227 (7,694) 12,186
Income tax expense
(benefit) (44) (65) 55 93
-------- -------- -------- --------
Net income
(loss) $(12,924) $ 4,292 $ (7,749) $ 12,093
======== ======== ======== ========
Other data:
Adjusted EBITDA (1) $ 3,893 $ 19,213 $ 53,910 $ 73,628
(1) Adjusted EBITDA is defined as net income before interest
expense, income taxes, depreciation, amortization expense and
non-recurring, non-cash charges as defined per the credit
agreement.
ADVANCED GLASSFIBER YARNS LLC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
For the Years
Ended December 31,
2001 2000
Cash flows from operating activities:
Net Income (loss) $ (7,749) $ 12,093
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation 14,754 14,573
Amortization of debt issuance costs 1,888 1,747
Amortization of goodwill and other
intangibles 11,604 11,420
Amortization of discount on notes 225 204
Alloy depletion 1,728 1,224
Changes in assets and liabilities:
Trade accounts receivable, net 16,510 3,450
Inventories (18,836) 1,802
Other assets 3,220 (5,306)
Accounts payable (10,275) 5,385
Accrued liabilities (3,381) 500
Pension and post-retirement 2,806 1,151
------------- ------------
Net cash provided by
operating activities 12,494 48,243
------------- ------------
Cash flows from investing activities:
Purchase of property, plant and
equipment (15,042) (19,760)
Proceeds from sale of fixed assets 1,513 3,915
Other (47) (83)
------------- ------------
Net cash used in
investing activities (13,576) (15,928)
------------- ------------
Cash flows from financing activities:
Proceeds from (payment on)
revolving credit facility, net 15,300 (200)
Payments on capital lease (102) (92)
Payments on term loans (14,568) (30,179)
Distribution to Owens Corning (4,033) (3,979)
Proceeds from interest rate swap 1,118 -
Debt issuance costs (513) -
------------- ------------
Net cash used in
financing activities (2,798) (34,450)
------------- ------------
Effect of exchange rate on cash (74) (34)
------------- ------------
Net decrease in cash and cash
equivalents (3,954) (2,169)
------------- ------------
Cash and cash equivalents,
beginning of period 4,054 6,223
------------- ------------
Cash and cash equivalents,
end of period $ 100 $ 4,054
============= ============
Supplemental disclosure of
cash flow information:
Cash paid for interest $ 30,431 $ 32,982
============= ============
Supplemental disclosure of non-cash
financing/investing activities:
Decrease in fair value of
derivatives $ 518 $ -
============= ============
Non-cash disposal of fixed assets $ - $ 630
============= ============
Decrease in fair value of
interest rate swap $ 4,404 $ -
============= ============
Decrease in property and
equipment financed in accrueds $ (2,696) $ (2,582)
============= ============
Deferred Distribution $ 3,979 $ 4,357
============= ============
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