Alliance Laundry Holdings LLC Reports 3rd Quarter 2006 Earnings.RIPON, 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. . -- Alliance Laundry Holdings LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control announced today results for the three and nine months ended September 30, 2006. Net revenues for the quarter ended September 30, 2006 increased $16.7 million, or 21.4%, to $95.1 million from $78.4 million for the quarter ended September 30, 2005. Our net loss for the quarter ended September 30, 2006 was $4.0 million as compared to a net income of $3.4 million for the quarter ended September 30, 2005. 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 (see "About Non-GAAP Financial Measures" below) for the quarter ended September 30, 2006 increased $1.0 million to $15.1 million from $14.1 million for the quarter ended September 30, 2005. The overall net revenue increase of $16.7 million was attributable to higher commercial laundry revenues of $4.3 million, higher consumer laundry revenue of $1.6 million, higher service parts revenue of $2.2 million and CLD CLD Called CLD Cloud CLD Cleared CLD Chronic Lung Disease CLD Council for Learning Disabilities CLD Cooled CLD Chronic Liver Disease CLD Clear Direction Flag CLD Certified LabVIEW Developer CLD Causal Loop Diagram Acquisition related sales of $16.7 million from the European operations partially offset by $8.1 million of worldwide sales eliminations. Our net loss for the quarter ended September 30, 2006 included $2.5 million of costs related to the Marianna closure and transfer of production lines from our 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]. plant to our 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 plant; and another $2.7 million of non-cash costs associated with the inventory step-up to fair market value for inventories acquired as a result of the acquisition of Laundry System Group NV's Commercial Laundry Division ("CLD"), with no similar costs in the third quarter of 2005. Net revenues for the nine months ended September 30, 2006 increased $19.6 million, or 8.4%, to $253.5 million from $233.9 million for the nine months ended September 30, 2005. Our net loss for the nine months ended September 30, 2006 was $6.4 million as compared to a net loss of $30.7 million for the nine months ended September 30, 2005. Adjusted EBITDA (see "About Non-GAAP Financial Measures" below) for the nine months ended September 30, 2006 increased $1.3 million to $44.6 million from $43.3 million for the nine months ended September 30, 2005. In announcing the Company's results, 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. and President Thomas F. L'Esperance said, "We are pleased to report yet another solid quarter. Our project work this year and this past quarter has been going extremely well. The Marianna transition to Ripon for washer-extractor production is essentially complete. The consolidation of acquired U.S. operations also is going well with completion scheduled for early 2007. Additionally, the tooling for the IPH IPH International Association of Paper Historians IPH Impressions Per Hour IPH International Paper Historians (paper watermark database) IPH Ipoh, Malaysia - Ipoh (Airport Code) washer-extractors product line will be transferred to Ripon from an LSG LSG Logistic(s) Support Group LSG Lufthansa Service GMBH LSG Little School Girl LSG Life Sciences Glovebox LSG Lunar Surface Gravimeter LSG Lump Sum Grant LSG Local Street Gazetteer LSG Levert Sweat and Gill facility next spring. This tooling transfer will complete all U.S. acquisition related projects. The Belgium operation required no project work and is performing well." About Non-GAAP Financial Measures In addition to disclosing financial results that are determined in accordance 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). ), we also disclose EBITDA and Adjusted EBITDA, which are non-GAAP measures. We have presented EBITDA and Adjusted EBITDA because certain covenants in our Senior Credit Facility are tied to ratios based on these measures. "EBITDA" represents net income (loss) before interest expense, income tax (provision) benefit and depreciation and amortization, and "Adjusted EBITDA" (as defined under the Senior Credit Facility) is EBITDA as further adjusted to exclude, among other things, certain non-recurring expenses and other non-recurring non-cash charges 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. . EBITDA and Adjusted EBITDA do not represent, and should not be considered, an alternative to net income or cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses , as determined by GAAP, and our calculations thereof may not be comparable to similarly entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: measures reported by other companies. Our Senior Credit Facility requires us to satisfy specified financial ratios and tests, including a maximum of total debt to Adjusted EBITDA and a minimum Adjusted EBITDA to cash interest expense. To the extent that we fail to maintain either of these ratios within the limits set forth in the Senior Credit Facility, our ability to access amounts available under our Revolving Credit 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. Facility would be limited, our liquidity would be adversely affected and our obligations under the Senior Credit Facility could be accelerated. In addition, any such acceleration would constitute an event of default under the indenture An agreement declaring the benefits and obligations of two or more parties, often applicable in the context of Bankruptcy and bond trading. The term indenture primarily describes secured contracts and has several applications in U.S. law. governing the Senior Subordinated Notes (the "Notes Indenture"), and such an event of default under the Notes Indenture could lead to an acceleration of our obligations under the Senior Subordinated Notes. A reconciliation of EBITDA and Adjusted EBITDA with the most directly comparable GAAP measure is included below for the three and nine months ended September 30, 2006 along with the components of EBITDA and Adjusted EBITDA. About Alliance Laundry Holdings LLC Alliance Laundry Holdings LLC is the parent company of Alliance Laundry Systems LLC (www.comlaundry.com), a leading North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. manufacturer of commercial laundry products and provider of services for laundromats, multi-housing laundries, on-premise laundries and drycleaners. Alliance 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 the well known brand names Speed Queen[R], UniMac[R], Huebsch[R], IPSO[R] and Cissell[R]. 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, and Section 21E of the Securities Act of 1934, as amended. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of our business to differ materially from those expressed or implied by such forward-looking statements. Although we believe that our plans, intentions and expectations reflected in such forward-looking statements are based on reasonable assumptions, we can give no assurance that such plans, intentions, expectations, objectives or goals will be achieved. Important factors that could cause actual results to differ materially from those included in forward-looking statements include: impact of competition; continued sales to key customers; possible fluctuations in the cost of raw materials and components; possible fluctuations in currency exchange rates, which affect the competitiveness of our products abroad; possible fluctuation Fluctuation A price or interest rate change. in interest rates, which affects our earnings and cash flows; the impact of substantial leverage and debt service on us; possible loss of suppliers; risks related to our asset backed facilities; dependence on key personnel; labor relations; potential liability for environmental, health and safety matters; potential future legal proceedings All actions that are authorized or sanctioned by law and instituted in a court or a tribunal for the acquisition of rights or the enforcement of remedies. and litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. ; and other risks listed from time to time in the Company's reports, including, but not limited to the Company's most recent Annual Report on Form 10-K 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 31, 2005. Financial information for Alliance Laundry Holdings LLC appears on the next seven pages for the three and nine months ended September 30, 2006. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] Reconciliation of Net Loss to EBITDA and Adjusted EBITDA, and reconciliation of Adjusted EBITDA to Net Cash Provided by (Used in) Operating Activities for the Three and Nine Months Ended September 30, 2006 (Dollars in Thousands): [TABLE OMITTED] (a) Depreciation and amortization amounts include amortization of deferred financing costs included in interest expense. (b) We currently operate an off-balance sheet commercial equipment finance program in which newly originated equipment loans are sold to qualified special-purpose bankruptcy remote A company within a corporate group is said to be bankruptcy remote when the solvency of that company does not affect any other company in the group, particularly any holding company or subsidiary company of the bankruptcy remote vehicle. entities. In accordance with GAAP, we are required to record gains/losses on the sale of these equipment based promissory notes promissory note, unconditional written promise to pay a certain sum of money at a definite time to bearer or to a specified person on his order. Promissory notes are generally used as evidence of debt. . In calculating Adjusted EBITDA, management determines the cash impact of net interest income on these notes. The finance program adjustments are the difference between GAAP basis revenues (as prescribed by SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 125/140) and cash basis revenues. (c) Other non-recurring charges are described as follows: * Other non-recurring charges for the quarter ended September 30, 2006 relate to $1.6 million of costs associated with the closure of the Marianna, Florida production facility which are included in the 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. , 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. and other costs line of our Consolidated Statements Of Operations, $0.9 million of costs related to the transfer of the Marianna, Florida product lines to Ripon, Wisconsin which are included in the selling, general and administrative expense line of our Consolidated Statements Of Operations and a periodic accrual accrual, n continually recurring short-term liabilities. Examples are accrued wages, taxes, and interest. of $0.3 million under a one time retention bonus agreement entered into with certain management employees concurrent with the Acquisition, which is included in the selling, general and administrative expense line of our Consolidated Statements Of Operations. Under the retention bonus agreements, the executives are entitled to receive special retention bonus awards upon the second anniversary of the closing date of the Acquisition, subject generally to their continued employment with Alliance Laundry through such date. (d) Other non-cash charges are described as follows: * Other non-cash charges for the quarter ended September 30, 2006 are comprised of $2.7 million of costs associated with the inventory step-up to fair market value recorded at the CLD Acquisition date, which are included in the cost of sales line of our Consolidated Statements Of Operations and $0.1 million of non-cash incentive compensation expense related to management incentive stock options, which is included in the selling, general and administrative expense line of our Consolidated Statements Of Operations. (e) Other expense is described as follows: * Other expense for the quarter ended September 30, 2006 consists of $0.1 million of mark to market losses for two foreign exchange hedge agreements entered to control the foreign exchange risk associated with the initial acquisition price of CLD, which is included in the other expense line of our Consolidated Statements Of Operations. [TABLE OMITTED] (a) Depreciation and amortization amounts include amortization of deferred financing costs included in interest expense. (b) We currently operate an off-balance sheet commercial equipment finance program in which newly originated equipment loans are sold to qualified special-purpose bankruptcy remote entities. In accordance with GAAP, we are required to record gains/losses on the sale of these equipment based promissory notes. In calculating Adjusted EBITDA, management determines the cash impact of net interest income on these notes. The finance program adjustments are the difference between GAAP basis revenues (as prescribed by SFAS No. 125/140) and cash basis revenues. (c) Other non-recurring charges are described as follows: * Other non-recurring charges for the period from January 1, 2005 through January 27, 2005 relate to seller transaction costs Transaction Costs Costs incurred when buying or selling securities. These include brokers' commissions and spreads (the difference between the price the dealer paid for a security and the price they can sell it). of $18.8 million incurred as part of the Acquisition which are included in the transaction costs associated with the sale of business line of our Consolidated Statements Of Operations for such predecessor period, and a loss on the early extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. of debt of $9.9 million which is included in the loss from early extinguishment of debt line of our Consolidated Statements Of Operations. * Other non-recurring charges for the period from January 28, 2005 through September 30, 2005 relate to $8.0 million of transaction costs incurred in establishing a new asset backed facility for the sale of equipment notes and trade receivables, which is included in the securitization, impairment and other costs line of our Consolidated Statements Of Operations, and a periodic accrual of $0.8 million under the one time retention bonus agreement entered into with certain management employees, which is included in the selling, general and administrative expense line of our Consolidated Statements Of Operations. * Other non-recurring charges for the nine months ended September 30, 2006 consist of $2.6 million of costs related to the transfer of the Marianna, Florida product lines to Ripon, Wisconsin which are included in the selling, general and administrative expense line of our Consolidated Statements Of Operations, $4.2 million of costs associated with the closure of the Marianna, Florida production facility which are included in the securitization, impairment and other costs line of our Consolidated Statements Of Operations and a periodic accrual of $0.9 million under the one time retention bonus agreement with certain management employees referred to above. (d) Other non-cash charges are described as follows: * Non-cash charges for the period from January 1, 2005 through January 27, 2005 of $1.1 million relate to non-cash incentive compensation expense resulting from the acceleration of vesting Vesting The process by which employees accrue non-forfeitable rights over employer contributions that are made to the employee's qualified retirement plan account. Notes: for incentive units at the date of the Acquisition, which are included in the selling, general and administrative expense line of our Consolidated Statements Of Operations for such predecessor period. * Non-cash charges for the period from January 28, 2005 through September 30, 2005 relate to $6.2 million of cost associated with the inventory step-up to fair market value recorded at the Acquisition date, which are included in the cost of sales line of our Consolidated Statements Of Operations. * Non-cash charges for the nine month period ended September 30, 2006 are comprised of $2.7 million of costs associated with the inventory step-up to fair market value recorded at the CLD Acquisition date, which are included in the cost of sales line of our Consolidated Statements Of Operations and $1.9 million of non-cash incentive compensation expense related to management incentive stock options which is included in the selling, general and administrative expense line of our Consolidated Statements Of Operations and a $1.4 million non-cash impairment charge related to the Ajax trademark, driven by the Company's decision to discontinue dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: sales of AJAX[R] products. The Ajax impairment is included in the securitization, impairment and other costs line of our Consolidated Statements Of Operations. (e) Other expense is described as follows: * Other expense for the nine months ended September 30, 2006 consists of $0.5 million of mark to market losses for two foreign exchange hedge agreements entered to control the foreign exchange risk associated with the initial acquisition price of CLD, which is included in the other expense line of our Consolidated Statements Of Operations. |
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