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. 8, 2002 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, 2002. Net revenues for the quarters ended June 30, 2002 and June 30, 2001 were both $68.1 million. Net income for the quarter ended June 30, 2002 increased $6.5 million to $5.3 million as compared to a net loss of $1.2 million for the same period last year. 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.
a. 1. Nonrecurrent; as, the costs of a layoff are considered as a nonrecurring expense s>. and plant relocation RELOCATION, Scotch law, contracts. To let again to renew a lease, is called a relocation. 2. When a tenant holds over after the expiration of his lease, with the consent of his landlord, this will amount to a relocation. costs for the second quarter of 2002 was $15.2 million compared with EBITDA before plant relocation costs of $13.7 million for the second quarter of 2001. Net revenues for the six months ended June 30, 2002 decreased $2.9 million, or 2.2%, to $127.9 million from $130.8 million for the six months ended June 30, 2001. Net income for the six months ended June 30, 2002 increased $11.3 million to $9.0 million as compared to a net loss of $2.3 million for the same period last year. Earnings before interest, taxes, depreciation and amortization (EBITDA) before nonrecurring and plant relocation costs for the six months ended June 30, 2001 was $28.4 million compared with EBITDA before plant relocation costs of $26.2 million for the six months ended June 30, 2001. The Company entered into an 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 restated credit agreement dated as of August 2, 2002 which establish new Term Loan and Revolving Credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. Facilities. The new Term Loan Facility, in the amount of $193.0 million, extends the facilities expiration date Expiration Date The day on which an options or futures contract is no longer valid and, therefore, ceases to exist. Notes: The expiration date for all listed stock options in the U.S. from May 5, 2005 to August 6, 2007. The new Revolving Credit Facility, in the amount of $45.0 million, extends the facility termination date termination date, n See expiration date. from May 5, 2003 to August 6, 2007. The new credit facilities credit facilities npl → facilidades fpl de crédito credit facilities npl → facilités fpl de paiement credit facilities continue to be subject to certain financial ratios and tests, similar to those included in the prior facilities. 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, Alliance's 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. stated, "Despite the continued slow economy, the Company increased year over year EBITDA before nonrecurring and plant relocation costs by $1.5 million, or 10.9%, for the second quarter. We are extremely pleased with the current year's financial performance as well as the new credit agreement which results in improved liquidity for the Company." "We will continue to focus on free cash flow, with an emphasis on working capital management and improved factory performance to help offset the continued soft demand," said L'Esperance. With the exception of the reported actual results, the information presented herein contains predictions, estimates and other 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 Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934, as amended, including, without limitation, statements that include the words "continued" 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, 2001. 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. 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, 2002.
ALLIANCE LAUNDRY HOLDINGS LLC
CONDENSED STATEMENTS OF OPERATIONS
(in thousands)
Three Months Ended Six Months Ended
--------------------- ---------------------
June 30, June 30, June 30, June 30,
2002 2001 2002 2001
---------- ---------- ---------- ----------
(Unaudited) (Unaudited)
Net revenues:
Commercial laundry..... $ 59,023 $ 59,534 $ 110,063 $ 112,709
Service parts.......... 9,047 8,612 17,855 18,103
---------- ---------- ---------- ----------
68,070 68,146 127,918 130,812
Cost of sales............ 48,028 51,184 90,821 97,826
---------- ---------- ---------- ----------
Gross profit............. 20,042 16,962 37,097 32,986
Selling, general and
administrative expense.. 7,763 7,619 14,749 15,090
Nonrecurring costs....... 430 - 430 -
---------- ---------- ---------- ----------
Total operating expense.. 8,193 7,619 15,179 15,090
---------- ---------- ---------- ----------
Operating income..... 11,849 9,343 21,918 17,896
Interest expense......... 6,565 8,536 12,924 18,209
Other income, net........ 8 34 33 80
---------- ---------- ---------- ----------
Income (loss)
before taxes........ 5,292 841 9,027 (233)
Provision for
income taxes............ 36 22 36 22
---------- ---------- ---------- ----------
Net income (loss) before
cumulative effect of
accounting change.... 5,256 819 8,991 (255)
Cumulative effect of change
in accounting principle. - 2,043 - 2,043
---------- ---------- ---------- ----------
Net income (loss).... $ 5,256 $ (1,224) $ 8,991 $ (2,298)
========== ========== ========== ==========
ALLIANCE LAUNDRY HOLDINGS LLC
OTHER OPERATING DATA
(in thousands)
Three Months Ended Six Months Ended
--------------------- ---------------------
June 30, June 30, June 30, June 30,
2002 2001 2002 2001
---------- ---------- ---------- ----------
(Unaudited) (Unaudited)
EBITDA(1) $ 14,714 $ 12,958 $ 27,795 $ 25,112
EBITDA(1) before
nonrecurring costs and
plant relocation costs $ 15,233 $ 13,740 $ 28,357 $ 26,224
Depreciation and
amortization (2) $ 3,532 $ 4,208 $ 7,156 $ 8,390
Non-cash interest expense
included in
amortization above (2) $ 675 $ 627 $ 1,312 $ 1,254
Restructuring and
nonrecurring costs $ 430 $ - $ 430 $ -
Plant relocation costs
included in
administrative expense $ 89 $ 782 $ 132 $ 1,112
Capital Expenditures $ 665 $ 1,799 $ 1,182 $ 3,141
(1)"EBITDA", as presented, represents income before taxes plus
depreciation, amortization and interest expense.
(2) Depreciation and amortization amounts for 2001 and 2000 include
amortization of deferred financing costs included in interest
expense.
ALLIANCE LAUNDRY HOLDINGS LLC
CONDENSED BALANCE SHEETS
(in thousands)
June 30, December 31,
2002 2002
-------------- --------------
Assets (Unaudited)
Current assets:
Cash............................... $ 7,678 $ 5,659
Cash-restricted.................... 742 439
Accounts receivable, net........... 15,923 10,440
Inventories, net................... 26,279 29,862
Prepaid expenses and other......... 10,224 10,093
-------------- --------------
Total current assets............. 60,846 56,493
Notes receivable, net................ 10,107 8,512
Property, plant and equipment, net... 42,379 46,909
Goodwill, net........................ 55,414 55,414
Beneficial interests in
securitized financial assets........ 29,434 28,227
Debt issuance costs, net............. 6,551 7,863
Other assets......................... 334 353
-------------- --------------
Total assets..................... $ 205,065 $ 203,771
============== ==============
Liabilities and Members' Deficit
Current liabilities:
Current portion of long-term debt.. $ 1,183 $ 1,212
Revolving credit facility.......... - -
Accounts payable................... 11,092 12,194
Other current liabilities.......... 18,530 20,539
-------------- --------------
Total current liabilities....... 30,805 33,945
Long-term debt:
Senior credit facility............. 187,051 194,018
Senior subordinated notes.......... 110,000 110,000
Junior subordinated note........... 18,582 17,069
Other long-term debt............... 1,147 1,265
Other long-term liabilities.......... 1,731 1,682
-------------- --------------
Total liabilities............... 349,316 357,979
Mandatorily redeemable
preferred equity.................... 6,000 6,000
Members' deficit..................... (150,251) (160,208)
-------------- --------------
Total liabilities and
members' deficit............... $ 205,065 $ 203,771
============== ==============
Management's Discussion and Analysis of Financial Condition and Results of Operations for the Quarter and Six Months Ended June 30, 2002. 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, 2002 and for the periods ended June 30, 2002 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, 2001.
RESULTS OF OPERATIONS
Quarter Ended June 30, 2002 Compared to the Quarter Ended June 30,
2001
The following table sets forth the Company's historical net revenues
for the periods indicated:
Quarter Ended
-------------------------------
June 30, June 30,
2002 2001
-------------- --------------
(Dollars in millions)
Net revenues:
Commercial laundry................. $ 59.0 $ 59.5
Service parts...................... 9.1 8.6
-------------- --------------
$ 68.1 $ 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, June 30,
2002 2001
-------------- --------------
Net revenues......................... 100.0% 100.0%
Cost of sales........................ 70.6% 75.1%
Gross profit......................... 29.4% 24.9%
Selling, general and
administrative expense.............. 11.4% 11.2%
Nonrecurring costs................... 0.6% -
Operating income..................... 17.4% 13.7%
Net income before cumulative
effect of accounting change....... 7.7% 1.2%
Net revenues. Net revenues for the quarters ended June 30, 2002 and June 30, 2001 were both $68.1 million. As compared to the prior year, commercial laundry revenue was $0.5 million lower while service parts revenue was $0.5 million higher. The decrease in commercial laundry revenue was due primarily to lower international revenue of $1.2 million, partially offset by higher North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. equipment revenue of $0.3 million and higher earnings from the Company's off-balance sheet equipment financing program of $0.4 million. Revenue from international customers was lower largely due to the discontinuance Cessation; ending; giving up. The discontinuance of a lawsuit, also known as a dismissal or a non-suit, is the voluntary or involuntary termination of an action. DISCONTINUANCE, pleading. A chasm or interruption in the pleading. 2. of sales to a foreign customer under a private label contract and lower sales to South Africa South Africa, Afrikaans Suid-Afrika, officially Republic of South Africa, republic (2005 est. pop. 44,344,000), 471,442 sq mi (1,221,037 sq km), S Africa. and Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. . Gross profit. Gross profit for the quarter ended June 30, 2002 increased $3.0 million, or 18.2%, to $20.0 million from $17.0 million for the quarter ended June 30, 2001. This increase was primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. manufacturing efficiencies, a recent price increase, the higher earnings from the Company's off-balance sheet equipment financing program and $0.5 million of favorable impact in 2002 resulting from a change in accounting principle whereby goodwill is no longer amortized. (See Note 3). Gross profit as a percentage of net revenues increased to 29.4% for the quarter ended June 30, 2002 from 24.9% for the quarter ended June 30, 2001. This 4.5% increase was primarily attributable to the manufacturing efficiencies, price increase, the higher earnings from the Company's off-balance sheet equipment financing program and accounting principle change. Selling, general and administrative expense. Selling, general and administrative expenses for the quarter ended June 30, 2002 increased $0.2 million, or 1.9%, to $7.8 million from $7.6 million for the quarter ended June 30, 2001. The increase in selling, general and administrative expenses was primarily due to higher independent development expenses of $0.4 million and higher pension expenses of $0.4 million which were partially offset by lower one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. expenses related to the relocation of Cincinnati, Ohio “Cincinnati” redirects here. For other uses, see Cincinnati (disambiguation). Cincinnati is a city in the U.S. state of Ohio and the county seat of Hamilton County. production lines to Marianna, Florida Marianna is a city in Jackson County, Florida, United States. The population was 6,230 at the 2000 census. As of 2004, the population recorded by the U.S. Census Bureau is 6,200 [1]. of $0.6 million. Selling, general and administrative expenses as a percentage of net revenues increased to 11.4% for the quarter ended June 30, 2002 from 11.2% for the quarter ended June 30, 2001. Nonrecurring costs. Nonrecurring costs for the six months ended June 30, 2002 were $0.4 million. The 2002 costs were due to the write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of costs incurred while pursuing an initial public offering through a 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. Income Trust in the second quarter. Due to market conditions, management determined that such a public offering would not be advantageous to the Company at such time. Nonrecurring costs as a percentage of net revenues were 0.6% for the six months 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, 2002 increased $2.5 million, or 26.8%, to $11.8 million from $9.3 million for the quarter ended June 30, 2001. Operating income as a percentage of net revenues increased to 17.4% for the quarter ended June 30, 2002 from 13.7% for the quarter ended June 30, 2001. Interest expense. Interest expense for the quarter ended June 30, 2002 decreased $1.9 million, or 23.1%, to $6.6 million from $8.5 million for the quarter ended June 30, 2001. The second quarter of 2001 included an unfavorable non-cash adjustment of $0.3 million to reflect changes in the fair values of the Company's 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. agreements. Interest expense was also lower in 2002 as a result of a reduction in total debt outstanding of $21.0 million, or 6.2% since March of 2001, and also as a result of lower interest rates. Net income before cumulative effect of accounting change. As a result of the foregoing, net income before cumulative effect of accounting change for the quarter ended June 30, 2002 increased $4.5 million to $5.3 million from $0.8 million for the quarter ended June 30, 2001. Net income before cumulative effect of accounting change as a percentage of net revenues increased to 7.7% for the quarter ended June 30, 2002 from 1.2% for the quarter ended June 30, 2001. Cumulative effect of accounting change. Effective April 1, 2001, the Company adopted the provisions of Emerging Issues Task Force (EITF EITF Emerging Issues Task Force EITF Edinburgh International Television Festival EITF Europe International Taekwon-Do Federation ) Issue No. 99-20 "Recognition of Interest Income and Impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. on Purchased and Retained Beneficial Interests in Securitized securitized Of, related to, or being debt securities that are secured with assets. For example, mortgage purchase bonds are secured by mortgages that have been purchased with the bond issue's proceeds. Financial Assets Financial assets Claims on real assets. ." 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 the impairment provisions of EITF 99-20, upon adoption in 2001 the Company recognized a $2.0 million non-cash write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. of the Company's retained interests Retained interest (also colloquially known as a payout penalty) is future, currently unpaid, interest that some lenders add to the remaining principal of a loan to determine a payout figure in the event that the loan is terminated before the completion of the original term. in its securitization Securitization The process of creating a financial instrument by combining other financial assets and then marketing them to investors. Notes: Mortgage backed securities are a perfect example of securitization. May also be spelled as "securitisation. transactions. The impairment was primarily driven by faster prepayment Prepayment 1. The payment of a debt obligation prior to its due date. 2. The excess payment over a scheduled debt repayment amount. Notes: 1. Examples include deferred expenses such as rent and early loan repayments. 2. trends than had been anticipated at the time of sale. Net income (loss). As a result of the foregoing, net income (loss) for the quarter ended June 30, 2002 increased $6.5 million to net income of $5.3 million as compared to a net loss of $1.2 million for the quarter ended June 30, 2001. Net income (loss) as a percentage of net revenues increased to 7.7% for the quarter ended June 30, 2002 from (1.8%) for the quarter ended June 30, 2001.
Six Months Ended June 30, 2002 Compared to the Six Months Ended June
30, 2001
The following table sets forth the Company's historical net revenues
for the periods indicated:
Six Months Ended
-------------------------------
June 30, June 30,
2002 2001
-------------- --------------
(Dollars in millions)
Net revenues:
Commercial laundry................. $ 110.1 $ 112.7
Service parts...................... 17.8 18.1
-------------- --------------
$ 127.9 $ 130.8
============== ==============
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, June 30,
2002 2001
-------------- --------------
Net revenues......................... 100.0% 100.0%
Cost of sales........................ 71.0% 74.8%
Gross profit......................... 29.0% 25.2%
Selling, general and
administrative expense.............. 11.6% 11.5%
Nonrecurring costs................... 0.3% -
Operating income..................... 17.1% 13.7%
Net income (loss) before cumulative
effect of accounting change....... 7.0% (0.2%)
Net revenues. Net revenues for the six months ended June 30, 2002 decreased $2.9 million, or 2.2%, to $127.9 million from $130.8 million for the six months ended June 30, 2001. This decrease was primarily attributable to lower commercial laundry revenue of $2.6 million and lower service parts revenue of $0.3 million. The decrease in commercial laundry revenue was due primarily to lower North American equipment revenue of $1.0 million, lower international revenue of $1.4 million, and lower earnings from the Company's off-balance sheet equipment financing program of $0.2 million. The decrease in North American equipment revenues was primarily due to lower revenues from on-premise laundries partially offset by higher revenues from multi-housing laundries. Revenue from international customers was lower largely due to the discontinuance of sales to a foreign customer under a private label contract. Gross profit. Gross profit for the six months ended June 30, 2002 increased $4.1 million, or 12.5%, to $37.1 million from $33.0 million for the six months ended June 30, 2001. This increase was primarily attributable to favorable manufacturing efficiencies and $1.0 million of favorable impact in 2002 resulting from a change in accounting principle whereby goodwill is no longer amortized. (See Note 3). Gross profit as a percentage of net revenues increased to 29.0% for the six months ended June 30, 2002 from 25.2% for the six months ended June 30, 2001. Selling, general and administrative expense. Selling, general and administrative expenses for the six months ended June 30, 2002 decreased $0.4 million, or 2.3%, to $14.7 million from $15.1 million for the six months ended June 30, 2001. The decrease in selling, general and administrative expenses was primarily due to lower one-time expenses related primarily to the relocation of Cincinnati, Ohio production lines to Marianna, Florida of $0.8 million, and a lower loss on sales of qualified accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying of $0.4 million, partially offset by higher pension expense of $0.7 million and higher sales and marketing expenses of $0.3 million. Selling, general and administrative expenses as a percentage of net revenues increased to 11.6% for the six months ended June 30, 2002 from 11.5% for the six months ended June 30, 2001. Nonrecurring costs. Nonrecurring costs for the six months ended June 30, 2002 were $0.4 million. The 2002 costs were due to the write-off of costs incurred while pursuing an initial public offering through a Canadian Income Trust in the second quarter. Due to market conditions, management determined that such a public offering would not be advantageous to the Company at such time. Nonrecurring costs as a percentage of net revenues increased to 0.3% 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, 2002 increased $4.0 million, or 22.5%, to $21.9 million from $17.9 million for the six months ended June 30, 2001. Operating income as a percentage of net revenues increased to 17.1% for the six months ended June 30, 2002 from 13.7% for the six months ended June 30, 2001. Interest expense. Interest expense for the six months ended June 30, 2002 decreased $5.3 million, or 29.0%, to $12.9 million from $18.2 million for the six months ended June 30, 2001. Interest expense in 2002 includes a favorable non-cash adjustment of $0.9 million to reflect changes in the fair values of interest rate swap agreements which expired ex·pire v. ex·pired, ex·pir·ing, ex·pires v.intr. 1. To come to an end; terminate: My membership in the club has expired. 2. during the first quarter of 2002. Interest expense in 2001 included an unfavorable non-cash adjustment of $1.5 million related to these agreements. Interest expense was also lower in 2002 as a result of a reduction in total debt outstanding of $18.6 million, or 5.5% since December of 2001, and also as a result of lower interest rates. Net income (loss) before cumulative effect of accounting change. As a result of the foregoing, net income before cumulative effect of accounting change for the six months ended June 30, 2002 increased $9.3 million to net income before cumulative effect of accounting change of $9.0 million as compared to a net loss before cumulative effect of accounting change of $0.3 million for the six months ended June 30, 2001. Net income before cumulative effect of accounting change as a percentage of net revenues increased to 7.0% for the six months ended June 30, 2002 from (0.2%) for the six months ended June 30, 2001. Cumulative effect of accounting change. Effective April 1, 2002, the Company adopted the provisions of Emerging Issues Task Force (EITF) Issue No. 99-20 "Recognition of Interest Income and Impairment on Purchased and Retained Beneficial Interests in Securitized Financial Assets." In accordance with the impairment provisions of EITF 99-20, upon adoption in 2001 the Company recognized a $2.0 million non-cash write-down of the Company's retained interests in its securitization transactions. The impairment was primarily driven by faster prepayment trends than had been anticipated at the time of sale. Net income (loss). As a result of the foregoing, net income for the six months ended June 30, 2002 increased $11.3 million to net income of $9.0 million as compared to a net loss of $2.3 million for the six months ended June 30, 2001. Net income (loss) as a percentage of net revenues increased to 7.0% for the six months ended June 30, 2002 from (1.8%) for the six months ended June 30, 2001. |
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