American Railcar Industries, Inc. Reports Record Second Quarter Profits; Damaged Tank Railcar Plant Has Reopened.ST. CHARLES Charles, archduke of Austria Charles, 1771–1847, archduke of Austria; brother of Holy Roman Emperor Francis II. Despite his epilepsy, he was the ablest Austrian commander in the French Revolutionary and Napoleonic wars; however, he was handicapped by , Mo. -- American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Railcar Industries, Inc. ("ARI ARI Acute respiratory infection, see there ") (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : ARII ARII American Railcar Industries Inc (St Louis, Missouri) ) today reported its second quarter financial results. For the three months ended June June: see month. 30, 2006, revenues were $151.6 million versus $160.7 million for the same period of 2005. Revenues increased significantly for all businesses, except for the Marmaduke Marmaduke floppy, self-centered, playful Great Dane. [Comics: Marmaduke] See : Dogs tank railcar manufacturing plant, which was shut down for the quarter and under repair for damage from a tornado tornado, dark, funnel-shaped cloud containing violently rotating air that develops below a heavy cumulonimbus cloud mass and extends toward the earth. The funnel twists about, rises and falls, and where it reaches the earth causes great destruction. that occurred on April 2, 2006. The repairs at the Marmaduke plant are substantially complete and the plant resumed production on August 7, 2006. The second quarter was exceptionally strong for the covered hopper A covered hopper is a railroad freight car. Structurally, it is very similar to an open-top hopper car in that the carbody consists of a large hopper with unloading chutes at the bottom. railcar manufacturing plant, which set a new quarterly record for railcar production and revenues. Net earnings attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to common stock were $10.8 million or $0.51 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share for the three months ended June 30, 2006, versus $1.9 million or $0.17 per diluted share for the comparable period of 2005. Net earnings for the quarter include $5.0 million of business interruption INTERRUPTION. The effect of some act or circumstance which stops the course of a prescription or act of limitation's. 2. Interruption of the use of a thing is natural or civil. compensation from the Company's insurance carrier for lost profits while the tank railcar manufacturing plant was under repair. The Company also received an additional $3.0 million of insurance to cover continuing expenses for the second quarter, and expects further business interruption insurance Noun 1. business interruption insurance - insurance that provides protection for the loss of profits and continuing fixed expenses resulting from a break in commercial activities due to the occurrence of a peril payments for the third quarter. For the three months ended June 30, 2005, the Company declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. preferred dividends preferred dividend n. a payment of a corporation's profits to holders of preferred shares of stock. (See: preferred stock) of $4.6 million, which had the effect of reducing net earnings available to common shareholders. For the six months ended June 30, 2006 revenues were $330.3 million versus $291.6 million for the comparable period of 2005. Revenues for 2006 were reduced by the tank railcar manufacturing plant being under repair for the entire quarter, but still exceeded the prior year due to strong growth in covered hopper railcar production, and growth in the railcar services business. Net earnings attributable to common stock were $17.5 million or $0.87 per diluted share for the six months ended June 30, 2006, which compares favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. to a net loss attributable to common stock of $0.1 million or $0.00 per diluted share for the six months ended June 30, 2005. The Company declared preferred dividends of $0.6 million and $9.1 million for the six months ended June 30, 2006 and 2005, respectively. The preferred dividends had the effect of reducing net earnings available to common shareholders. All of the Company's preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. and substantially all of its debt were retired in the first quarter of 2006 in connection with the Company's January January: see month. 2006 initial public offering. 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 was $19.4 million for the second quarter of 2006 and $13.7 million for the same quarter of 2005. For the six months ended June 30, 2006 EBITDA was $33.7 million and compares favorably to the $19.7 million for the same period of 2005. Adjusted EBITDA was $20.9 million in the second quarter of 2006 and $13.7 million for the same quarter of 2005. The adjustment to EBITDA reflects stock based compensation expenses of $1.5 million. Adjusted EBITDA for the six months ended June 30, 2006 was $38.8 million and reflects an adjustment to exclude $5.1 million of stock based compensation expense. For the six months ended June 30, 2005 Adjusted EBITDA was $19.7 million. The Company expects to incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. an additional $1.5 million compensation expense, related to previous grants of restricted stock and stock options, per quarter for the balance of 2006. The improvements in net earnings, EBITDA and Adjusted EBITDA from 2005 to 2006 resulted primarily from improved profit margins which were primarily due to improved operating efficiencies, the recovery of raw material cost increases through variable pricing Most firms use a fixed price policy. That is, they examine the situation, determine an appropriate price, and leave the price fixed at that amount until the situation changes, at which point they go through the process again. clauses in our customer contracts, and insurance compensation for business interruption while our Marmaduke tank railcar manufacturing plant was shut down and under repair due to tornado damage. A reconciliation of the Company's net earnings to EBITDA and Adjusted EBITDA (both non-GAAP financial measures) is set forth in the supplemental disclosure attached to this press release. ARI shipped 1,734 railcars in the second quarter of 2006. This compares to 1,863 railcars shipped in the second quarter of 2005. Second quarter 2006 shipments were comprised of 1,649 covered hopper railcars and 85 tank railcars (all of which were substantially complete at the time of the storm). In the same quarter of 2005, shipments were comprised of 1,034 covered hopper railcars, 354 centerbeam platform railcars and 475 tank railcars. Railcar production and revenues were lower in the quarter as a result of the Marmaduke plant closure, however the Company's insurance is compensating the Company for its business interruption losses (less a deductible That which may be taken away or subtracted. In taxation, an item that may be subtracted from gross income or adjusted gross income in determining taxable income (e.g., interest expenses, charitable contributions, certain taxes). ). "The Company had a very strong quarter, even though our tank railcar manufacturing plant was undergoing repair. The covered hopper railcar plant set a new production record with 1,649 railcars shipped in the quarter," said James James, person in the Bible James, in the Gospel of St. Luke, kinsman of St. Jude. The original does not specify the relationship. James, rivers, United States James. J. Unger Unger may refer to:
The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. of unfilled orders for new railcars totaled 12,790 cars at June 30, 2006, and was almost double the 6,425 railcar backlog of one year earlier. Our Marmaduke plant has resumed operations this week and we expect to see production steadily increase and reach capacity rates by the end of the third quarter. We expect the third quarter to be strong with good operating rates Operating rate The percentage of total production capacity of a company, industry, or country that is being used. operating rate The portion of capacity at which a business operates. for covered hopper railcars and further payments from our business interruption insurance for our tank railcar manufacturing plant, as production at that plant increases to capacity production rates. The fourth quarter is expected to be very strong, with both railcar assembly plants expected to be operating at capacity levels by the beginning of that quarter." ARI will host a webcast and conference call on Thursday Thursday: see week. August 10th, 2006 at 10:00 am (Eastern time) to discuss the Company's second quarter financial results. To participate in the webcast, please log on to ARI's investor relations Investor relations The process by which the corporation communicates with its investors. page through the ARI web site at www.americanrailcar.com. To participate in the conference call dial 1-800-573-4752 and use participant Participant A party of a funding. It usually refers to the lowest rank or smallest level of funding. code 36243490. Participants are asked to logon See login. 1. (jargon) logon - login. 2. (networking) logon - In ACF/VTAM, an unformatted session-initiation request for a session between two logical units. to the ARI website or dial in to the conference call approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 10 to 15 minutes prior to the start time. An audio replay of the call will also be available on the Company's website promptly prompt adj. prompt·er, prompt·est 1. Being on time; punctual. 2. Carried out or performed without delay: a prompt reply. tr.v. following the earnings call. About American Railcar Industries, Inc. American Railcar Industries, Inc. is 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 covered hopper and tank railcars. ARI also repairs and refurbishes railcars, provides fleet management services and designs and manufactures certain railcar and industrial components used in the production of its railcars as well as railcars and non-railcar industrial products produced by others. ARI provides its railcar customers with integrated solutions through a comprehensive set of high quality products and related services. Forward Looking Statement Disclaimer (networking) disclaimer - Statement ritually appended to many Usenet postings (sometimes automatically, by the posting software) reiterating the fact (which should be obvious, but is easily forgotten) that the article reflects its author's opinions and not necessarily those of the This press release contains statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc our expected financial performance and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. future business prospects, events and plans that 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. " as defined under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Forward-looking statements represent the Company's estimates and assumptions only as of the date of this press release. Such statements include, without limitation, statements regarding estimated future production rates and estimated third and fourth quarter results, statements regarding expected insurance recoveries, and statements regarding any implication implication In logic, a relation that holds between two propositions when they are linked as antecedent and consequent of a true conditional proposition. Logicians distinguish two main types of implication, material and strict. that the Company's backlog may be indicative indicative: see mood. of future sales. These forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from the results described in or anticipated by our forward-looking statements. Estimated backlog reflects the total sales attributable to the backlog reported at the end of the particular period as if such backlog were converted to actual sales. Estimated backlog does not reflect potential price increases or decreases under our customer contracts that provide for variable pricing based on changes in the cost of certain raw materials and railcar components or the possibility that contracts may be canceled or railcar delivery dates delayed, and does not reflect the effects of any cancellation cancellation (See: cancel) CANCELLATION. Its general acceptation, is the act of crossing a writing; it is used sometimes to signify the manual operation of tearing or destroying the instrument itself. Hyde v. Hyde, 1 Eq. Cas. Abr. 409; Rob. or delay of railcar orders that may occur. ARI cannot guarantee that its insurance coverage, subject to applicable deductibles, will be adequate to cover damage to the facility and railcars. Nor can ARI guarantee that its business interruption insurance will be adequate to cover its losses resulting from the business interruption. ARI's insurance carrier could also contest the scope of ARI's coverage or the amount of its coverage or deductibles. Even if ARI's assessment of its insurance coverage is correct, delays in receiving payments from, or disputes with, its insurance carrier, could adversely affect ARI's business and results of operations. Although the plant rebuilding is substantially complete, ARI cannot guarantee the timing of achieving full production rates at its Marmaduke facility, or whether its rebuilding efforts, plant shut down or associated delivery delays will result in unanticipated costs that may not be covered by insurance. ARI cannot assure that it will be able to retain its tank railcar customers or orders. Its tank railcar orders may be subject to cancellation in connection with its plant shut-down or otherwise, or ARI may incur disputes with those customers over rescheduling deliveries. ARI also cannot guarantee that it will be able to retain its employees, several of whom may have been displaced displaced see displacement. from their homes. Other potential risks and uncertainties include, among other things: the cyclical cyclical Of or relating to a variable, such as housing starts, car sales, or the price of a certain stock, that is subject to regular or irregular up-and-down movements. nature of the railcar manufacturing business; adverse economic and market conditions; fluctuating fluc·tu·ate v. fluc·tu·at·ed, fluc·tu·at·ing, fluc·tu·ates v.intr. 1. To vary irregularly. See Synonyms at swing. 2. To rise and fall in or as if in waves; undulate. v. costs of raw materials, including steel and railcar components, and delays in the delivery of such raw materials and components; ARI's ability to maintain relationships with its suppliers of railcar components and raw materials; fluctuations in the supply of components and raw materials ARI uses in railcar manufacturing; the highly competitive nature of the railcar manufacturing industry; the risk of further damage to our primary railcar manufacturing facilities or equipment in Paragould Paragould (pâr`əg  ld), city (1990 pop. 18,540), seat of Greene co., NE Ark.; inc. 1882. or Marmaduke,
Arkansas Marmaduke is a city in Greene County, Arkansas, United States. The population was 1,158 at the 2000 census. HistoryThe town of Marmaduke was named for Confederate Major General John Sappington Marmaduke, who later served as Governor of Missouri. ; our reliance upon a small number of customers that represent a large percentage of our revenues; the variable purchase patterns of our customers and the timing of completion, delivery and acceptance of customer orders; our dependence on key personnel; the risks of labor shortage A Labor shortage is an economic condition in which there are insufficient qualified candidates (employees) to fill the market-place demands for employment at any price. This condition is sometimes referred to by Economists as "an insufficiency in the labor force. in light of our recent growth; the risk of lack of acceptance of our new railcar offerings by our customers; and the additional risk factors described in our filings with the Securities and Exchange Commission. We expressly disclaim dis·claim v. dis·claimed, dis·claim·ing, dis·claims v.tr. 1. To deny or renounce any claim to or connection with; disown. 2. To deny the validity of; repudiate. 3. any duty to provide updates to any forward-looking statements made in this press release, whether as a result of new information, future events or otherwise.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts, unaudited)
December June 30,
31,
------------------
2005 2006
----------------------------------------------------------------------
Assets
Current assets
Cash and cash equivalents $ 28,692 $ 27,609
Accounts receivable, net 38,273 35,538
Accounts receivable, due from affiliates 5,110 2,678
Insurance claim receivable, net - 8,000
Inventories, net 88,001 111,877
Prepaid expenses 2,523 4,001
Deferred tax asset 1,967 1,746
-----------------
Total current assets 164,566 191,449
Property, plant and equipment
Buildings 84,255 87,676
Machinery and equipment 68,187 80,189
-----------------
152,442 167,865
Less accumulated depreciation 65,398 69,834
-----------------
Net property, plant and equipment 87,044 98,031
Construction in process 3,759 12,553
Land 2,182 2,593
-----------------
Total property, plant and equipment 92,985 113,177
Debt issuance costs 565 207
Deferred offering costs 4,860 -
Goodwill - 7,230
Other assets 26 37
Investment in joint venture 5,578 5,600
-----------------
Total assets $268,580 $317,700
=================
CONDENSED CONSOLIDATED BALANCE SHEETS, CONTINUED
(In thousands, except per share amounts, unaudited)
December June 30,
31,
------------------
2005 2006
--------- --------
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $ 33,294 $ 85
Accounts payable 55,793 47,008
Accounts payable, due to affiliates 4,457 933
Accrued expenses and taxes 7,675 7,774
Insurance advance - 2,881
Accrued compensation 7,243 9,360
Accrued dividends 11,336 636
Note payable to affiliate - current 19,000 -
-----------------
Total current liabilities 138,798 68,677
Long - term debt, net of current portion 7,076 53
Deferred tax liability 5,364 6,512
Pension and post-retirement liabilities 10,522 10,261
Other amounts due to affiliates - 4
Other liabilities 59 58
Mandatory redeemable preferred stock, stated value
$1,000, 99,000 shares authorized, 1 share issued
and outstanding at December 31, 2005, none
outstanding at June 30, 2006 1 -
-----------------
Total liabilities 161,820 85,565
Commitments and contingencies - -
Stockholders' equity:
New Preferred Stock, $.01 par value per share,
stated value $1,000 per share, 500,000 shares
authorized, 82,055 shares issued and outstanding at
December 31, 2005, none outstanding at June 30,
2006 82,055 -
Common stock, $.01 par value, 50,000,000 shares
authorized, 11,147,059 and 21,207,773 shares issued
and outstanding at December 31, 2005 and June 30,
2006, respectively 111 212
Additional paid-in capital 41,667 232,716
Retained earnings accumulated (deficit) (15,442) 801
Accumulated other comprehensive loss (1,631) (1,594)
-----------------
Total stockholders' equity 106,760 232,135
-----------------
Total Liabilities and stockholders' equity $268,580 $317,700
=================
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts, unaudited)
For the Three
Months Ended,
June 30, June 30,
------------------
2005 2006
------------------
Revenues:
Manufacturing operations (including revenues from
affiliates of $17,050 and $5,182 for the three
months ended June 30, 2005 and 2006, respectively) $149,284 $138,816
Railcar services (including revenues from affiliates
of $5,509 and $4,531 for the three months ended
June 30, 2005 and 2006, respectively) 11,437 12,734
-----------------
Total revenues 160,721 151,550
Cost of goods sold:
Manufacturing operations (including costs related to
affiliates of $15,475 and $4,800 for the three
months ended June 30, 2005 and 2006, respectively) 135,399 123,618
Railcar services (including costs related to
affiliates of $5,312 and $3,544 for the three
months ended June 30, 2005 and 2006, respectively) 10,323 9,947
-----------------
Total cost of goods sold 145,722 133,565
Gross profit 14,999 17,985
Income related to insurance recoveries, net - 4,983
Selling, administrative and other 3,229 4,608
Stock based compensation expense - 1,419
-----------------
Earnings from operations 11,770 16,941
Interest income 109 429
Interest expense (including interest expense to
affiliates of $346 and $0 for the three months
ended June 30, 2005 and 2006, respectively) 1,296 103
Earnings (loss) from joint venture 180 (138)
-----------------
Earnings before income tax expense 10,763 17,129
Income tax expense 4,264 6,308
-----------------
Net earnings $ 6,499 $ 10,821
=================
Less preferred dividends (4,570) -
-----------------
Earnings available to common shareholders $ 1,929 $ 10,821
Net earnings per common share - basic $ 0.17 $ 0.51
Net earnings per common share - diluted $ 0.17 $ 0.51
Weighted average common shares outstanding - basic 11,147 21,208
Weighted average common shares outstanding -
diluted 11,147 21,289
-----------------
Dividends declared per common share $ - $ 0.03
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts, unaudited)
For the Six Months
Ended,
June 30, June 30,
--------------------
2005 2006
--------------------
Revenues:
Manufacturing operations (including revenues from
affiliates of $28,148 and $20,209 for the six
months ended June 30, 2005 and 2006,
respectively) $269,978 $305,306
Railcar services (including revenues from
affiliates of $11,280 and $10,513 for the six
months ended June 30, 2005 and 2006,
respectively) 21,665 24,973
-----------------
Total revenues 291,643 330,279
Cost of goods sold:
Manufacturing operations (including costs related
to affiliates of $25,943 and $18,868 for the six
months ended June 30, 2005 and 2006,
respectively) 250,916 271,874
Railcar services (including costs related to
affiliates of $9,106 and $8,115 for the six
months ended June 30, 2005 and 2006,
respectively) 18,575 20,160
-----------------
Total cost of goods sold 269,491 292,034
Gross profit 22,152 38,245
Gain related to insurance recoveries - 4,983
Selling, administrative and other 6,628 9,753
Stock based compensation expense - 4,969
-----------------
Earnings from operations 15,524 28,506
Interest income (including interest income from
affiliates of $823 and $0 for the six months
ended June 30, 2005 and 2006, respectively) 977 915
Interest expense (including interest expense to
affiliates of $1,174 and $98 for the six months
ended June 30, 2005 and 2006, respectively) 2,382 1,133
Earnings from joint venture 924 337
-----------------
Earnings before income tax expense 15,043 28,625
Income tax expense 6,006 10,543
-----------------
Net earnings $ 9,037 $ 18,082
=================
Less preferred dividends (9,090) (568)
-----------------
Earnings (loss) available to common shareholders $ (53)$ 17,514
Net earnings (loss) per common share - basic $ (0.00)$ 0.87
Net earnings (loss) per common share - diluted $ (0.00)$ 0.87
Weighted average common shares outstanding - basic 11,147 20,116
Weighted average common shares outstanding -
diluted 11,147 20,220
-----------------
Dividends declared per common share $ - $ 0.06
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
For the Six Months
Ended
June 30, June 30,
------------------
2005 2006
------------------
Operating activities:
Net earnings $ 9,037 $ 18,082
Adjustments to reconcile net earnings to net cash
provided by (used in) operating activities:
Depreciation and amortization 3,229 4,915
Loss on the write-off of property, plant and
equipment - 3,867
Write-off of deferred financing costs - 566
Stock based compensation - 5,064
Change in joint venture investment as a result of
earnings (924) (337)
Expense relating to pre-recapitalization
liabilities 530 -
Provision for deferred income taxes 4,619 (221)
Provision for losses on accounts receivable 39 263
Changes in operating assets and liabilities:
Accounts receivable, net (4,897) 2,479
Accounts receivable, due from affiliate - 2,423
Business interruption insurance claim receivable - (8,000)
Inventories (4,067) (20,039)
Prepaid expenses (4,399) (1,465)
Accounts payable 27,543 (8,785)
Accounts payable, due to affiliate - (2,048)
Accrued expenses and taxes 5,301 (2,546)
Other (169) (239)
-----------------
Net cash provided by (used in) operating activities 35,842 (6,021)
Investing activities:
Purchases of property, plant and equipment (9,392) (21,036)
Property insurance advance on Marmaduke tornado
damage - 7,500
Repayment of note receivable from affiliate (Ohio
Castings LLC) - 315
Acquisitions - (17,220)
-----------------
Net cash used in investing activities (9,392) (30,441)
Financing activities:
Proceeds from sale of common stock - 205,275
Offering costs - (14,605)
Preferred stock redemption - (82,056)
Preferred stock dividends - (11,904)
Common stock dividends - (636)
Decrease in amounts due to affiliates (35,233) (20,473)
Majority shareholder capital contribution - 275
Finance fees related to new credit facility - (265)
Proceeds from debt issuance 30,770 -
Repayment of debt (1,126) (40,232)
-----------------
Net cash (used in) provided by financing activities (5,589) 35,379
-----------------
Increase (decrease) in cash and cash equivalents 20,861 (1,083)
Cash and cash equivalents at beginning of period 6,943 28,692
-----------------
Cash and cash equivalents at end of period $ 27,804 $ 27,609
=================
Three months Six months ended
ended
------------------ -----------------
June 30, June 30,
------------------ -----------------
2005 2006 2005 2006
---------------------------------------------------- -----------------
Net earnings $ 6,499 $10,821 $ 9,037 $18,082
Income tax expense 4,264 6,308 6,006 10,543
Interest expense 1,296 103 2,382 1,133
Interest income (109) (429) (977) (915)
Depreciation 1,704 2,596 3,229 4,857
------- ------- ------- -------
EBITDA $13,654 $19,399 $19,677 $33,700
======= ======= ======= =======
Stock based compensation expense - 1,514 - 5,064
------- ------- ------- -------
Adjusted EBITDA $13,654 $20,913 $19,677 $38,764
======= ======= ======= =======
EBITDA represents net earnings (loss) before income tax expense (benefit), interest expense (income), net of amortization and depreciation of property and equipment. We believe EBITDA is useful to investors in evaluating our operating performance compared to that of other companies in our industry. In addition, our management uses EBITDA to evaluate our operating performance. The calculation of EBITDA eliminates the effects of financing, income taxes and the accounting effects of capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. . These items may vary for different companies for reasons unrelated to the overall operating performance of a company's business. EBITDA is not a financial measure presented 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 U.S. 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 , or U.S. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). . Accordingly, when analyzing our operating performance, investors should not consider EBITDA in isolation or as a substitute for net earnings (loss), cash flows from operating activities or other statements of operations or statements of cash flow data prepared in accordance with U.S. GAAP. Our calculation of EBITDA is not necessarily comparable to that of other similarly titled measures reported by other companies. Adjusted EBITDA represents EBITDA before stock based compensation expense related to a restricted stock grant and stock options. We believe that Adjusted EBITDA is useful to investors evaluating our operating performance compared to that of other companies in our industry. In addition, these charges are excluded from our calculation of EBITDA under our new revolving credit agreement Revolving credit agreement A legal commitment in which a bank promises to lend a customer up to a specified maximum amount during a specified period. revolving credit agreement See line of credit. entered into in January 2006. Management also uses Adjusted EBITDA in evaluating our operating performance. Adjusted EBITDA is not a financial measure presented in accordance with U.S. GAAP. Accordingly, when analyzing our operating performance, investors should not consider Adjusted EBITDA in isolation or as a substitute for net income, cash flows from operating activities or other statements of operations or statements of cash flow data prepared in accordance with U.S. GAAP. Our calculation of Adjusted EBITDA is not necessarily comparable to that of other similarly titled measures reported by other companies. |
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