Alliance Laundry Holdings LLC Reports 2nd Quarter Earnings.Business Editors RIPON Ripon, town (1991 pop. 11,952), North Yorkshire, N England, on the Ure River. It is a market town with foundries, varnish and paint factories, tanneries, and breweries. Ripon is famous as an old cathedral city where monasteries have stood since the 7th cent. , Wis adv. 1. Certainly; really; indeed. v. t. 1. To think; to suppose; to imagine; - used chiefly in the first person sing. present tense, I wis. See the Note under Ywis. .--(BUSINESS WIRE)--Aug. 7, 2003 Alliance Laundry Laundry can be:
Before industrialization Holdings LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control announced today results for the quarter and six months ended June June: see month. 30, 2003. Net revenues for the quarter ended June 30, 2003 increased $3.0 million, or 4.5%, to $71.1 million from $68.1 million for the quarter ended June 30, 2002. Net income for the quarter ended June 30, 2003 decreased $1.3 million to net income of $4.0 million as compared to a net income of $5.3 million for the quarter ended June 30, 2002. Earnings Before Interest, Taxes, Depreciation and Amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
The overall revenue increase for the second quarter of $3.0 million was primarily due to higher commercial laundry revenue of $3.2 million, which was partially offset by lower service parts revenue of $0.2 million. The decrease in net income for the second quarter of $1.3 million was primarily due to higher selling, general and administrative expense of $0.4 million and higher interest expense of $1.1 million. Interest expense in the second quarter includes an unfavorable non-cash adjustment of $1.0 million to reflect changes in the fair value of an interest rate swap Interest Rate Swap A deal between banks or companies where borrowers switch floating-rate loans for fixed rate loans in another country. These can be either the same or different currencies. agreement which was entered into in the fourth quarter of 2002. The decrease in EBITDA of $0.6 million for the second quarter of 2003 was largely due to higher selling, general and administrative expenses for the quarter. The increase in selling, general and administrative expenses was primarily due to higher pension and fringe benefit fringe benefit Any nonwage payment or benefit granted to employees by employers. Examples include pension plans, profit-sharing programs, vacation pay, and company-paid life, health, and unemployment insurance. costs of $0.4 million. Net revenues for the six months ended June 30, 2003 increased $4.4 million, or 3.4%, to $132.3 million from $127.9 million for the six months ended June 30, 2002. Net income for the six months ended June 30, 2003 was $5.2 million as compared to a net income of $9.0 million for the six months ended June 30, 2002. Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA")(a) for the six months ended June 30, 2003 was $25.2 million as compared to EBITDA of $27.8 million for the six months ended June 30, 2002. In announcing the Company's results today, Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Thomas (language) Thomas - A language compatible with the language Dylan(TM). Thomas is NOT Dylan(TM). The first public release of a translator to Scheme by Matt Birkholz, Jim Miller, and Ron Weiss, written at Digital Equipment Corporation's Cambridge Research Laboratory runs F. L'Esperance said, "We are extremely pleased with our year over year net revenue growth of 4.5% for the second quarter of 2003. North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. equipment revenue continues to be slightly ahead of last year with a very strong international performance for the second quarter." "We will continue to focus on free cash flow, with an emphasis on working capital management and improved net revenue growth to help offset higher pension, medical and material costs," said L'Esperance. Alliance Laundry Holdings LLC, headquartered in Ripon, Wisconsin Ripon is a city in Fond du Lac County, Wisconsin, United States. As of the 2000 census, the city population was 6,828. The city is located within the Town of Ripon. History Founding , is a leading manufacturer of commercial laundry products and provider of services for laundromats, multi-housing laundries, on-premise laundries and drycleaners worldwide. The Company offers a full line of washers and dryers for light commercial use as well as large frontloading washers, heavy duty tumbler dryers, and presses and finishing equipment for heavy commercial use. The Company's products are sold under four well known brand names: Speed Queen, UniMac, Huebsch and Ajax. (a) Non-GAAP Financial Measures In addition to disclosing financial results that are determined 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 (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ), the Company also discloses EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization), which is a non-GAAP measure. Management believes that providing this additional information is useful to investors regarding the Company's ability to meet debt service, capital expenditures and working capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. and to better assess and understand operating performance. The Company does not intend for the information to be considered in isolation or as a substitute for GAAP measures. Other companies may define EBITDA differently. A reconciliation of EBITDA to net income is provided under the heading Selected Financial Data of this press release. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. for 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. 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 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. , and Section 21E of the Securities Act of 1934, as amended, including, without limitation, statements that include the words "continues" and "improved" or similar expressions and statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc growth or performance objectives. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of the Company to differ materially from those expressed or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. by such forward-looking statements. Although the Company believes that its plans, intentions and expectations reflected in such forward-looking statements are based on reasonable assumptions, it 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 the 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 the Company's products abroad; market acceptance of new and enhanced versions of the Company's products; the impact of substantial leverage and debt service on the Company 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 Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December December: see month. 31, 2002. Financial information for Alliance Laundry Holdings LLC appears on the next two pages, followed by management's discussion and analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial of financial condition and results of operations for the quarter and six months ended June 30, 2003.
ALLIANCE LAUNDRY HOLDINGS LLC
CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30, December 31,
------------ ------------
2003 2002
------------ ------------
Assets (unaudited)
Current assets:
Cash $4,756 $7,339
Cash-restricted - 99
Accounts receivable, net 10,082 5,834
Inventories, net 25,975 25,697
Beneficial interests in securitized
accounts receivable 20,461 19,864
Prepaid expenses and other 3,004 2,954
------------ ------------
Total current assets 64,278 61,787
Notes receivable, net 10,696 11,166
Property, plant and equipment, net 37,021 39,096
Goodwill, net 55,414 55,414
Beneficial interests in securitized financial
assets 23,604 21,483
Debt issuance costs, net 8,633 9,654
Other assets 1,654 1,010
------------ ------------
Total assets $201,300 $199,610
============ ============
Liabilities and Members' Deficit
Current liabilities:
Current portion of long-term debt $9,695 $9,971
Revolving credit facility 5,000 -
Accounts payable 11,392 13,797
Other current liabilities 21,792 21,638
------------ ------------
Total current liabilities 47,879 45,406
Long-term debt:
Senior credit facility 163,546 173,266
Senior subordinated notes 110,000 110,000
Junior subordinated note 22,113 20,312
Other long-term debt 906 1,028
Other long-term liabilities 11,160 10,338
------------ ------------
Total liabilities 355,604 360,350
Mandatorily redeemable preferred equity 6,000 6,000
Members' deficit (160,304) (166,740)
------------ ------------
Total liabilities and members' deficit $201,300 $199,610
============ ============
ALLIANCE LAUNDRY HOLDINGS LLC
CONSOLIDATED STATEMENTS OF INCOME
(in thousands)
Three Months Ended Six Months Ended
------------------- -------------------
June 30, June 30, June 30, June 30,
2003 2002 2003 2002
--------- --------- --------- ---------
(unaudited) (unaudited)
Net revenues:
Commercial laundry $62,273 $59,023 $113,654 $110,063
Service parts 8,859 9,047 18,639 17,855
--------- --------- --------- ---------
71,132 68,070 132,293 127,918
Cost of sales 50,343 48,028 94,417 90,821
--------- --------- --------- ---------
Gross profit 20,789 20,042 37,876 37,097
Selling, general and
administrative expense 8,182 7,763 16,399 14,749
Securitization and other
costs - - - -
--------- --------- --------- ---------
Total operating expense 8,182 7,763 16,399 14,749
--------- --------- --------- ---------
Operating income 12,607 12,279 21,477 22,348
Interest expense 7,720 6,565 15,405 12,924
Loss from early
extinguishment of debt - - - -
Abandoned Canadian public
offering costs - 430 - 430
Other income (expense), net (797) 8 (797) 33
--------- --------- --------- ---------
Income before taxes 4,090 5,292 5,275 9,027
Provision for income taxes 43 36 43 36
--------- --------- --------- ---------
Net income $4,047 $5,256 $5,232 $8,991
========= ========= ========= =========
ALLIANCE LAUNDRY HOLDINGS LLC
SELECTED FINANCIAL DATA
(in thousands)
Three Months Ended Six Months Ended
------------------- -------------------
June 30, June 30, June 30, June 30,
2003 2002 2003 2002
--------- --------- --------- ---------
Other Operating Data: (Unaudited) (Unaudited)
EBITDA (1) $14,050 $14,714 $25,216 $27,795
EBITDA before infrequently
occurring and plant
relocation costs 14,856 15,233 26,022 28,357
Depreciation and
amortization (2) 2,750 3,532 5,557 7,156
Non-cash interest expense
included in amortization
above (2) 510 675 1,021 1,312
Infrequently occurring
costs (3) 806 430 806 430
Plant relocation costs
included in administrative
expense - 89 - 132
Capital Expenditures 1,217 665 2,351 1,182
EBITDA is reconciled to net
income as follows:
Income (loss) before taxes $4,090 $5,292 $5,275 $9,027
add: Interest expense 7,720 6,565 15,405 12,924
add: Depreciation and
amortization 2,750 3,532 5,557 7,156
less: Non-cash interest
expense included in
amortization above 510 675 1,021 1,312
--------- --------- --------- ---------
EBITDA $14,050 $14,714 $25,216 $27,795
add: Infrequently occurring
items (3) 806 430 806 430
add: Plant relocation costs
included in administrative
expense - 89 - 132
--------- --------- --------- ---------
EBITDA before infrequently
occurring and plant
relocation costs $14,856 $15,233 $26,022 $28,357
========= ========= ========= =========
(1) "EBITDA", as presented, represents income before taxes plus
depreciation, amortization and interest expense.
(2) Depreciation and amortization amounts include amortization of
deferred financing costs included in interest expense.
(3) 2003 includes the ALSA lawsuit settlement while 2002 relates to
costs associated with an abandoned Canadian public offering.
Management's Discussion and Analysis of Financial Condition and Results of Operations for the Quarter and Six Months Ended June 30, 2003. OVERVIEW The Company believes it is the leading designer, manufacturer and marketer of stand-alone (jargon) stand-alone - Capable of operating without other programs, libraries, computers, hardware, networks, etc. Exactly what is absent is presumed to be obvious from context. "We only run Windows on stand-alone PCs because it's too dangerous to run it on networked ones." commercial laundry equipment in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and a leader worldwide. Under the well-known well-known adj. 1. Widely known; familiar or famous: a well-known performer. 2. Fully known: well-known facts. brand names of Speed Queen, UniMac, Huebsch and Ajax, the Company produces a full line of commercial washing machines (storage) washing machine - An old-style 14-inch hard disk in a floor-standing cabinet. So called because of the size of the cabinet and the "top-loading" access to the media packs - and, of course, they were always set on "spin cycle". and dryers with load capacities from 16 to 250 pounds as well as presses and finishing equipment. The Company's commercial products are sold to four distinct customer groups: (i) laundromats; (ii) multi-housing laundries, consisting primarily of common laundry facilities in apartment buildings, universities and military installations; (iii) on-premise laundries, consisting primarily of in-house In-house In the context of general equities, keeping an activity within the firm. For example, rather than go to the marketplace and sell a security for a client to anyone, an attempt is made to find a buyer to complete the transaction with the firm. laundry facilities of hotels, hospitals, nursing homes and prisons; and (iv) drycleaners. The unaudited financial statements as of June 30, 2003 and for the periods ended June 30, 2003 present the consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: financial position and results of operations of Alliance Laundry Holdings LLC (the "Company"), including its wholly-owned direct and indirect subsidiaries, Alliance Laundry Systems LLC and Alliance Laundry Corporation. This discussion and analysis should be read in conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with the Financial Statements and Notes thereto there·to adv. 1. To that, this, or it. 2. Archaic In addition to that; furthermore. thereto Adverb Formal 1. to that or it 2. included in this report and in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations set forth in the Company's Annual Report on Form 10-K (file no. 333-56857) filed with the Securities and Exchange Commission, which includes the audited financial position and operating results of the Company as of and for the year ended December 31, 2002.
RESULTS OF OPERATIONS
Quarter Ended June 30, 2003 Compared to the Quarter Ended June 30,
2002.
The following table sets forth the Company's historical net revenues
for the periods indicated:
Quarter Ended
-------------------------------
June 30, 2003 June 30, 2002
--------------- ---------------
(Dollars in millions)
Net revenues:
Commercial laundry $62.2 $59.0
Service parts 8.9 9.1
--------------- ---------------
$71.1 $68.1
=============== ===============
The following table sets forth certain condensed historical financial
data for the Company expressed as a percentage of net revenues for
each of the periods indicated:
Quarter Ended
-------------------------------
June 30, 2003 June 30, 2002
--------------- ---------------
Net revenues 100.0% 100.0%
Cost of sales 70.8% 70.6%
Gross profit 29.2% 29.4%
Selling, general and administrative
expense 11.5% 11.4%
Operating income 17.7% 18.0%
Net income 5.7% 7.7%
Net revenues. Net revenues for the quarter ended June 30, 2003 increased $3.0 million, or 4.5%, to $71.1 million from $68.1 million for the quarter ended June 30, 2002. This increase was primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to higher commercial laundry revenue of $3.2 million which was partially offset by lower service parts revenue of $0.2 million. The increase in commercial laundry revenue was due primarily to higher North American equipment revenue of $2.1 million and higher international revenue of $1.0 million. Revenue for North America was higher to coin-operated Adj. 1. coin-operated - of devices that do not operate without the prior insertion of one or more coins; "a coin-operated telephone" coin-operated adj [machine] → que funciona con monedas laundry and multi-housing laundry customers. Revenue for international was higher to customers in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). and Asia.Gross profit. Gross profit for the quarter ended June 30, 2003 increased $0.8 million, or 3.7%, to $20.8 million from $20.0 million for the quarter ended June 30, 2002. This increase was primarily attributable to margins associated with the higher sales volume, lower depreciation expense and a recent price increase, which were partially offset by unfavorable exchange rates related to foreign purchases of manufacturing components, unfavorable product mix related to sales to drycleaning customers and higher medical and utility costs. Gross profit as a percentage of net revenues decreased to 29.2% for the quarter ended June 30, 2003 from 29.4% for the quarter ended June 30, 2002. This 0.2% decrease was primarily attributable to the customer mix and medical and utility costs discussed above. Selling, general and administrative expense. Selling, general and administrative expenses for the quarter ended June 30, 2003 increased $0.4 million, or 5.4%, to $8.2 million from $7.8 million for the quarter ended June 30, 2002. The increase in selling, general and administrative expenses was primarily due to higher pension and fringe benefit costs of $0.4 million. Selling, general and administrative expenses as a percentage of net revenues increased to 11.5% for the quarter ended June 30, 2003 from 11.4% for the quarter ended June 30, 2002. 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. . As a result of the foregoing, operating income for the quarter ended June 30, 2003 increased $0.3 million, or 2.7%, to $12.6 million from $12.3 million for the quarter ended June 30, 2002. Operating income as a percentage of net revenues decreased to 17.7% for the quarter ended June 30, 2003 from 18.0% for the quarter ended June 30, 2002. Interest expense. Interest expense for the quarter ended June 30, 2003 increased $1.1 million, or 17.6%, to $7.7 million from $6.6 million for the quarter ended June 30, 2002. Interest expense in 2003 includes an unfavorable non-cash adjustment of $1.0 million to reflect changes in the fair values of an interest rate swap agreement which was entered into in the fourth quarter of 2002. Other income (expense), net. Other expense for the quarter ended June 30, 2003 was $0.8 million. The 2003 costs were associated with the settlement of a lawsuit lawsuit: see procedure; tort. against a former subsidiary of the Company in Argentina Argentina (ärjəntē`nə, Span. ärhāntē`nä), officially Argentine Republic, republic (2005 est. pop. 39,538,000), 1,072,157 sq mi (2,776,889 sq km), S South America. . Net income. As a result of the foregoing, net income for the quarter ended June 30, 2003 decreased $1.3 million to net income of $4.0 million as compared to a net income of $5.3 million for the quarter ended June 30, 2002. Net income as a percentage of net revenues decreased to 5.7% for the quarter ended June 30, 2003 from 7.7% for the quarter ended June 30, 2002.
Six Months Ended June 30, 2003 Compared to the Six Months Ended
June 30, 2002.
The following table sets forth the Company's historical net revenues
for the periods indicated:
Six Months Ended
-------------------------------
June 30, 2003 June 30, 2002
--------------- ---------------
(Dollars in millions)
Net revenues:
Commercial laundry $113.7 $110.1
Service parts 18.6 17.8
--------------- ---------------
$132.3 $127.9
=============== ===============
The following table sets forth certain condensed historical financial
data for the Company expressed as a percentage of net revenues for
each of the periods indicated:
Six Months Ended
-------------------------------
June 30, 2003 June 30, 2002
--------------- ---------------
Net revenues 100.0% 100.0%
Cost of sales 71.4% 71.0%
Gross profit 28.6% 29.0%
Selling, general and administrative
expense 12.4% 11.5%
Operating income 16.2% 17.5%
Net income 4.0% 7.0%
Net revenues. Net revenues for the six months ended June 30, 2003 increased $4.4 million, or 3.4%, to $132.3 million from $127.9 million for the six months ended June 30, 2002. This increase was primarily attributable to higher commercial laundry revenue of $3.6 million and higher service parts revenue of $0.8 million. The increase in commercial laundry revenue was due primarily to higher North American equipment revenue of $2.9 million and higher international revenue of $1.2 million, partially offset by lower earnings from the Company's off-balance sheet equipment financing program of $0.5 million. The increase in North American equipment revenues was primarily due to higher revenues from coin-operated laundry and multi-housing laundry customers partially offset by lower revenues from on-premise laundries. Revenue for international was higher to customers in Europe and Asia. Gross profit. Gross profit for the six months ended June 30, 2003 increased $0.8 million, or 2.1%, to $37.9 million from $37.1 million for the six months ended June 30, 2002. This increase was primarily attributable to margins associated with the higher sales volume, lower depreciation expense and a recent price increase, which were partially offset by unfavorable exchange rates related to foreign purchases of manufacturing components, unfavorable product mix related to sales to drycleaning customers and higher medical costs. Gross profit as a percentage of net revenues decreased to 28.6% for the six months ended June 30, 2003 from 29.0% for the six months ended June 30, 2002. Selling, general and administrative expense. Selling, general and administrative expenses for the six months ended June 30, 2003 increased $1.7 million, or 11.2%, to $16.4 million from $14.7 million for the six months ended June 30, 2002. The increase in selling, general and administrative expenses was primarily due to higher pension expense of $0.7 million, higher sales and marketing expenses of $0.4 million and higher costs related to the Company's information systems of $0.2 million. Selling, general and administrative expenses as a percentage of net revenues increased to 12.4% for the six months ended June 30, 2003 from 11.5% for the six months ended June 30, 2002. Operating income. As a result of the foregoing, operating income for the six months ended June 30, 2003 decreased $0.8 million, or 3.9%, to $21.5 million from $22.3 million for the six months ended June 30, 2002. Operating income as a percentage of net revenues decreased to 16.2% for the six months ended June 30, 2003 from 17.5% for the six months ended June 30, 2002. Interest expense. Interest expense for the six months ended June 30, 2003 increased $2.5 million, or 19.2%, to $15.4 million from $12.9 million for the six months ended June 30, 2002. Interest expense in 2003 included an unfavorable non-cash adjustment of $1.8 million to reflect changes in the fair values of an interest rate swap agreement. Interest expense in 2003 was also higher due to higher interest rates associated with the swap agreement and higher letter of credit rates within the Company's new Senior Credit Facility. Abandoned Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. public offering costs. In the second quarter of 2002 the Company wrote-off costs incurred while pursuing an initial public offering through a Canadian Income Trust. Due to market conditions, management determined that such a public offering would not be advantageous to the Company at that time. There were no similar costs in 2003. Other income (expense), net. Other expense for the six months ended June 30, 2003 was $0.8 million. The 2003 costs were associated with the settlement of a lawsuit against a former subsidiary of the Company in Argentina. Net income. As a result of the foregoing, net income for the six months ended June 30, 2003 decreased $3.8 million to net income of $5.2 million as compared to a net income of $9.0 million for the six months ended June 30, 2002. Net income as a percentage of net revenues decreased to 4.0% for the six months ended June 30, 2003 from 7.0% for the six months ended June 30, 2002. |
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