American Seafoods Releases Third Quarter Earnings Results.SEATTLE Seattle (sēăt`əl), city (1990 pop. 516,259), seat of King co., W Wash., built on seven hills, between Elliott Bay of Puget Sound and Lake Washington; inc. 1869. -- ASG ASG Assign ASG Allen Systems Group (Naples, FL) ASG Abu Sayyaf Group (terrorist group) ASG Associated Student Government ASG Area Support Group ASG Adaptive Services Grid ASG Assistant Secretary General 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: and its wholly-owned subsidiary 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 Seafoods Group (together, "American Seafoods") today announced their results for the three and nine months ended September September: see month. 30, 2005. American Seafoods Group and its subsidiaries conduct substantially all the operations of American Seafoods. As a result, there are only limited differences between the consolidated financial results of the two companies, which are noted herein. Holders of ASG Consolidated's Senior Discount Notes and American Seafoods Group's Senior Subordinated Subordinated A claim ranked lower in priority than other claims. Common stock claims are always subordinated to debt. Notes are encouraged to review the financial results of each company contained in their respective quarterly reports on Form 10-Q Form 10-Q See 10-Q. to be filed with the SEC. Nine Months Ended September 30, 2005 Compared to the Nine Months Ended September 30, 2004 Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the nine months ended September 30, 2005 increased $22.2 million, or 6.2%, to $377.4 million as compared to $355.2 million for the same prior year period. At-sea processing sales increased as a result of higher prices for our pollock surimi su·ri·mi n. Minced, processed fish used in the preparation of imitation seafood, especially imitation shellfish. [Japanese : suru, to process, mash + mi, meat.] and block products, as well as higher sales volumes of hake and yellowfin sole products. Land-based processing sales increased primarily due to higher sales volumes and prices generated from our secondary processed block-cut products and higher prices for our scallop scallop or pecten, marine bivalve mollusk. Like its close relative the oyster, the scallop has no siphons, the mantle being completely open, but it differs from other mollusks in that both mantle edges have a row of steely blue "eyes" and products. Gross profit for the nine months ended September 30, 2005 increased $6.0 million, or 7.0%, to $91.1 million as compared to $85.1 million for the same prior year period. The increase in gross profit was due primarily to the increases in product sales prices partially offset by an increase in operational costs, such as fuel, freight The price or compensation paid for the transportation of goods by a carrier. Freight is also applied to the goods transported by such carriers. The liability of a carrier for freight damaged, lost, or destroyed during shipment is determined by contract, statute, or and purchased fish costs. Gross margin of 24.1% for the nine months ended September 30, 2005 is comparable to the same prior year period gross margin of 24.0%. Gross margins for both the at-sea and land-based segments were in line with the prior year. 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 (which pursuant to the American Seafood's Group's Credit Agreement is calculated as earnings before net interest expense, income tax benefit or provision, depreciation, amortization, unrealized foreign exchange and other derivatives derivatives In finance, contracts whose value is derived from another asset, which can include stocks, bonds, currencies, interest rates, commodities, and related indexes. Purchasers of derivatives are essentially wagering on the future performance of that asset. gains or losses, loss from debt repayment Repayment The act of paying back a debt. Notes: Everyone has to repay their debts eventually. See also: Debt, Defeasance, Loan and related write-offs, equity-based compensation, 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 certain financing costs and goodwill and other 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. or gains) for the nine months ended September 30, 2005 increased $4.0 million, or 4.3%, to $96.3 million as compared to $92.3 million for the same prior year period. The increase in Adjusted EBITDA was primarily due to the operational factors discussed above, partially offset by higher general and administrative expenses consisting primarily of higher corporate transportation expenses and professional fees. Net income for ASG Consolidated for the nine months ended September 30, 2005 increased $37.5 million to $46.2 million as compared to $8.7 million for the same prior year period for reasons discussed above and due to the absence in 2005 of write-offs of recapitalization Recapitalization Restructuring a company's debt and equity mixture often with the aim of making a company's capital structure more stable. Notes: Companies often want to diversify their debt-to-equity ratio to improve liquidity. 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). and goodwill incurred in 2004. Additionally, during 2005 there was a net increase in gains on foreign exchange and other derivative derivative: see calculus. derivative In mathematics, a fundamental concept of differential calculus representing the instantaneous rate of change of a function. contracts. These increases are partially offset by interest expense related to the Senior Discount Notes, which were not outstanding during the first three quarters of 2004. Net income for American Seafoods Group for the nine months ended September 30, 2005 was $57.7 million. The $11.5 million difference in net income between the two companies is comprised substantially of interest expense and amortization of deferred financing costs related to ASG Consolidated's Senior Discount Notes. Three Months Ended September 30, 2005 Compared to the Three Months Ended September 30, 2004 Net sales for the three months ended September 30, 2005 increased $7.4 million, or 8.0%, to $100.4 million as compared to $93.0 million during the same prior year period due mainly to higher prices for surimi and block products and higher volumes of hake surimi and pollock block products. Land-based processing sales increased slightly for the third quarter of 2005 primarily due to higher sales prices generated from our scallop products. Gross profit for the three months ended September 30, 2005 increased $2.6 million, or 13.7%, to $21.4 million as compared to $18.8 million for the same prior year period. The increase in gross profit was due primarily to the increases in product sales prices partially offset by an increase in operational costs, such as fuel, freight and purchased fish costs. Gross margin for the three months ended September 30, 2005 increased to 21.3% as compared to the prior year period gross margin of 20.2%, primarily as a result of the increase in product sales prices and the operational factors discussed above. Adjusted EBITDA (as defined above) for the three months ended September 30, 2005 increased $2.3 million, or 14.8%, to $17.5 million as compared to $15.3 million for the same prior year period primarily due to the increase in revenue and the operational factors discussed above. This increase was partially offset by higher general and administrative expenses consisting primarily of higher corporate transportation costs and professional fees. Net income for ASG Consolidated for the three months ended September 30, 2005 increased $22.2 million to $5.9 million as compared to a loss of $16.3 million for the same prior year period for reasons discussed above and due to the absence in 2005 of write-offs of recapitalization transaction costs and goodwill incurred in 2004. Additionally, during the third quarter of 2005 there was a net increase in gains on foreign exchange and other derivative contracts. These increases are partially offset by interest expense related to the Senior Discount Notes, which were not outstanding in the third quarter of 2004. Net income for American Seafoods Group for the three months ended September 30, 2005 was $9.9 million. The $4.0 million difference in net income between the two companies is comprised primarily of interest expense and amortization of deferred financing costs related to ASG Consolidated's Senior Discount Notes. Quarterly Conference Call Information: American Seafoods will host its conference call 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 release of its third quarter financial results live on Thursday Thursday: see week. , November November: see month. 10th at 10:00 am PST PST Paroxysmal supraventricular tachycardia, see there (1:00 pm EST EST electroshock therapy. EST abbr. electroshock therapy ). In order to participate, call 800-946-0715 and enter access code 8313664. We expect the call to start no later than 10:15 am PST. There will also be a replay of the conference call available for 30 days by dialing 888-203-1112 and entering access code 8313664. About American Seafoods American Seafoods is a leader in the harvesting har·vest n. 1. The act or process of gathering a crop. 2. a. The crop that ripens or is gathered in a season. b. The amount or measure of the crop gathered in a season. c. , processing, preparation and supply of quality seafood seafood Edible aquatic animals excluding mammals, but including both freshwater and ocean creatures. Seafood includes bony and cartilaginous fishes, crustaceans, mollusks, edible jellyfish, sea turtles, frogs, sea urchins, and sea cucumbers. . Harvesting a variety of fish species, the Company processes seafood into an array of finished products, both on board its state-of-the-art fleet of vessels Vessels are a post-rock band from Leeds, UK. Vessels were born from the ashes of A Day Left in September 2005. In 2006 they self-released a 5 track eponymous ep, and played many gigs including the unsigned stage at Leeds Festival. and at its HACCP-approved production facilities located in both Massachusetts Massachusetts (măsəch  `sĭts), most populous of the New England states of the NE United States. and
Alabama Alabama, indigenous people of North AmericaAlabama (ăləbăm`ə), indigenous people of North America whose language belongs to the Muskogean branch of the Hokan-Siouan linguistic stock (see Native American languages). . The Company produces a diverse range of fillet fillet /fil·let/ (fil´et) 1. a loop, as of cord or tape, for making traction on the fetus. 2. in the nervous system, a long band of nerve fibers. fil·let n. 1. , surimi, roe and block product offerings, made from Alaska pollock There are members of the Theragra genus that are commonly referred to as pollocks. This includes the Alaska pollock or walleye pollock (Theragra chalcogramma) and the Norwegian pollock (Theragra finnmarchica). , Pacific cod, sea scallops, and U.S. farm raised catfish catfish, common name applied to members of the freshwater fish families constituting the suborder Nematognathi. The catfish is related to the sucker and the minnow, and like them has a complex set of bones forming a sensitive hearing apparatus. . Finished products are sold worldwide through an extensive global distribution and customer support network. From the ocean to the plate, American Seafoods has established a global sourcing, selling, marketing and distribution network bringing quality seafood to consumers worldwide. For more information, please visit us at www.americanseafoods.com. This press release contains 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. . The words "will," "believes," "anticipates," "intends," "estimates," "expects," "projects," "plans," or similar expressions are intended to identify forward-looking statements. All statements in this press release other than statements of historical fact, including statements which address our strategy, future operations, future financial position, estimated sales, projected costs, prospects, plans and objectives of management and events or developments that the Company expects or anticipates will occur, are forward-looking statements. All forward-looking statements speak only as of the date on which they are made. They rely on a number of assumptions concerning future events and are subject to a number of risks and uncertainties, many of which are outside of the Company's control and could cause actual results to differ materially from such statements.
ASG Consolidated LLC
Financial Highlights
(Unaudited, dollars in thousands)
As of and for the Nine
Months Ended
September 30,
----------------------
2004 2005 Change
---------- --------- ------
Statement of Operations Data:
Net sales $ 355,175 $ 377,356 5.6%
Cost of sales, including
depreciation expense
of $25,955 and $27,406,
respectively 245,961 261,319
Shipping & Handling 24,056 24,919
--------- ---------
Total Cost of Sales 270,017 286,238
--------- ---------
Gross profit 85,158 91,118 5.1%
Gross margin 24.0% 24.1%
Selling, general and administrative
expenses 21,623 30,191
Depreciation and amortization (1) 2,320 2,377
Goodwill impairment 7,171 -
--------- ---------
Operating income 54,044 58,550 1.1%
Interest expense, net (28,744) (43,173)
Foreign exchange gains, net 3,762 18,717
Other derivatives gains (losses),
net (1,162) 13,084
Write off of recapitalization
transaction costs (18,948) -
Other expense, net (249) (1,000)
--------- ---------
Net income $ 8,703 $ 46,178 61.2%
========= =========
Adjusted EBITDA calculations:
Net income $ 8,703 $ 46,178
Interest expense, net 28,744 43,173
Income tax provision 32 30
Depreciation and amortization 28,275 29,783
Unrealized losses (gains) on
derivatives, net 3,782 (23,588)
Equity-based compensation expense
(benefit) (3,334) 996
Other 13 (225)
Goodwill impairment 7,171 -
Writeoff of recapitalization
transaction costs 18,948 -
--------- ---------
Adjusted EBITDA (2) $ 92,334 $ 96,347 2.3%
========= =========
Adjusted EBITDA margin 26.0% 25.5%
Other Data:
Capital expenditures $ 10,914 $ 13,169
Pollock production (metric tons) 89,155 92,890
Pollock sales (metric tons) 74,279 65,641
Reconciliation of adjusted EBITDA to cash
flow from operating activities (2):
Cash flows from operating
activities $ 43,034 $ 34,858
Interest expense, net 28,744 43,173
Net change in operating assets and
liabilities 24,398 33,929
Amortization of deferred financing
costs in interest expense (3,959) (4,429)
Amortization of debt discounts in
interest expense - (11,120)
Other 117 (64)
--------- ---------
Adjusted EBITDA $ 92,334 $ 96,347
========= =========
(1) Amortization of intangibles and depreciation of other assets.
(2) Adjusted EBITDA is not a measure of operating income, operating
performance or liquidity under generally accepted accounting
principles. We include Adjusted EBITDA because we understand it is
used by some investors to determine a company's historical ability
to service indebtedness and fund ongoing capital expenditures, and
because certain covenant measures in our note indenture and credit
agreement are based upon Adjusted EBITDA. In addition, it should
be noted that companies calculate Adjusted EBITDA differently and,
therefore, Adjusted EBITDA presented by us may not be comparable
to Adjusted EBITDA as reported by other companies.
December 31, September 30,
2004 2005
------------ -------------
Selected Balance Sheet Data:
Cash and cash equivalents $ 1,577 $ 6,046
Accounts receivable, trade 38,042 34,252
Inventories 50,647 104,689
Property, vessels and equipment, net 198,335 179,134
Cooperative rights, other intangibles
and goodwill, net 120,713 118,750
Total assets 463,139 514,993
Total debt 608,805 605,549
American Seafoods Group LLC
Financial Highlights
(Unaudited, dollars in thousands)
As of and for the
Nine Months Ended
September 30,
-------------------
2004 2005 Change
-------- -------- ------
Statement of Operations Data:
Net sales $355,175 $377,356 6.2%
Cost of sales, including depreciation
expense of $25,955 and $27,406,
respectively 245,961 261,319
Shipping & Handling 24,056 24,919
-------- --------
Total Cost of Sales 270,017 286,238
-------- --------
Gross profit 85,158 91,118 7.0%
Gross margin 24.0% 24.1%
Selling, general and administrative
expenses 21,623 30,187
Depreciation and amortization (1) 2,320 2,377
Goodwill impairment 7,171 -
-------- --------
Operating income 54,044 58,554 8.3%
Interest expense, net (28,744) (31,638)
Foreign exchange gains, net 3,762 18,717
Other derivatives gains (losses), net (1,162) 13,084
Write off of recapitalization
transaction costs (18,948) -
Other expense, net (249) (1,000)
-------- --------
Net income $ 8,703 $ 57,717 563.2%
======== ========
Adjusted EBITDA calculations:
Net income $ 8,703 $ 57,717
Interest expense, net 28,744 31,638
Income tax provision 32 30
Depreciation and amortization 28,275 29,783
Unrealized losses (gains) on
derivatives, net 3,782 (23,588)
Equity-based compensation expense
(benefit) (3,334) 996
Other 13 (225)
Goodwill impairment 7,171 -
Writeoff of recapitalization
transaction costs 18,948 -
-------- --------
Adjusted EBITDA (2) $ 92,334 $ 96,351 4.3%
======== ========
Adjusted EBITDA margin 26.0% 25.5%
Other Data:
Capital expenditures $ 10,914 $ 13,169
Pollock production (metric tons) 89,155 92,890
Pollock sales (metric tons) 74,279 65,641
Reconciliation of adjusted EBITDA to cash
flow from operating activities (2):
Cash flows from operating
activities $ 43,034 $ 34,865
Interest expense, net 28,744 31,638
Net change in operating assets and
liabilities 24,262 33,927
Amortization of deferred financing
costs in interest expense (3,959) (4,015)
Other 253 (64)
-------- --------
Adjusted EBITDA $ 92,334 $ 96,351
======== ========
(1) Amortization of intangibles and depreciation of other assets.
(2) Adjusted EBITDA is not a measure of operating income, operating
performance or liquidity under generally accepted accounting
principles. We include Adjusted EBITDA because we understand it is
used by some investors to determine a company's historical ability
to service indebtedness and fund ongoing capital expenditures, and
because certain covenant measures in our note indenture and credit
agreement are based upon Adjusted EBITDA. In addition, it should
be noted that companies calculate Adjusted EBITDA differently and,
therefore, Adjusted EBITDA presented by us may not be comparable
to Adjusted EBITDA as reported by other companies.
December 31, September 30,
2004 2005
------------ -------------
Selected Balance Sheet Data:
Cash and cash equivalents $ 740 $ 5,799
Accounts receivable, trade 38,042 34,252
Inventories 50,647 104,689
Property, vessels and equipment, net 198,335 179,134
Cooperative rights, other intangibles
and goodwill, net 120,713 118,750
Total assets 458,078 510,353
Total debt 481,122 466,746
ASG Consolidated LLC
Financial Highlights
(Unaudited, dollars in thousands)
For the Quarter
Ended
September 30,
------------------
2004 2005 Change
--------- -------- ------
Statement of Operations Data:
Net sales $ 92,986 $100,403 8.0%
Cost of sales, including depreciation
expense of $4,181 and $5,286,
respectively 66,845 71,187
Shipping & Handling 7,325 7,815
-------- --------
Total Cost of Sales 74,170 79,002
-------- --------
Gross profit 18,816 21,401 13.7%
Gross margin 20.2% 21.3%
Selling, general and administration
expenses 3,303 9,083
Depreciation and amortization (1) 792 771
Goodwill impairment 7,171 -
-------- --------
Operating income 7,550 11,547 52.9%
Interest expense, net (9,502) (14,572)
Foreign exchange gains, net 5,850 4,940
Other derivatives gains (losses), net (1,162) 4,499
Write off of recapitalization
transaction costs (18,948) -
Other (41) (459)
-------- --------
Net income (loss) $(16,253) $ 5,955
======== ========
Adjusted EBITDA calculations:
Net income (loss) $(16,253) $ 5,955
Interest expense, net 9,502 14,572
Income tax provision 19 13
Depreciation and amortization 4,973 6,057
Unrealized gains on derivatives, net (5,211) (8,686)
Equity-based compensation benefit (3,900) (160)
Other 13 (225)
Goodwill impairment 7,171 -
Writeoff of recapitalization
transaction costs 18,948 -
-------- --------
Adjusted EBITDA (2) $ 15,262 $ 17,526 14.8%
======== ========
Adjusted EBITDA margin 16.4% 17.5%
Other Data (quarter ended):
Capital expenditures $ 1,994 $ 2,037
Pollock production (metric tons) 43,065 47,609
Pollock sales (metric tons) 24,108 21,009
Reconciliation of adjusted EBITDA to cash
flow from operating activities (2):
Cash flows from operating activities $(17,324) $(21,512)
Interest expense, net 9,502 14,572
Net change in operating assets and
liabilities 24,318 29,993
Amortization of deferred financing
costs in interest expense (1,304) (1,473)
Amortization of debt discounts in
interest expense - (3,838)
Other 70 (216)
-------- --------
Adjusted EBITDA $ 15,262 $ 17,526
======== ========
American Seafoods Group LLC
Financial Highlights
(Unaudited, dollars in thousands)
For the Quarter
Ended
September 30,
-------------------
2004 2005 Change
-------- -------- ------
Statement of Operations Data:
Net sales $ 92,986 $100,403 8.0%
Cost of sales, including depreciation
expense of $4,181 and $5,286,
respectively 66,845 71,187
Shipping & Handling 7,325 7,815
-------- --------
Total Cost of Sales 74,170 79,002
-------- --------
Gross profit 18,816 21,401 13.7%
Gross margin 20.2% 21.3%
Selling, general and administration
expenses 3,303 9,083
Depreciation and amortization (1) 792 771
Goodwill impairment 7,171 -
-------- --------
Operating income 7,550 11,547 52.9%
Interest expense, net (9,502) (10,598)
Foreign exchange gains, net 5,850 4,940
Other derivatives gains (losses), net (1,162) 4,499
Write off of recapitalization
transaction costs (18,948) -
Other expense, net (41) (459)
-------- --------
Net income (loss) $(16,253) $ 9,929
======== ========
Adjusted EBITDA calculations:
Net income (loss) $(16,253) $ 9,929
Interest expense, net 9,502 10,598
Income tax provision 19 13
Depreciation and amortization 4,973 6,057
Unrealized gains on derivatives, net (5,211) (8,686)
Equity-based compensation benefit (3,900) (160)
Other 13 (225)
Goodwill impairment 7,171 -
Writeoff of recapitalization
transaction costs 18,948 -
-------- --------
Adjusted EBITDA (2) $ 15,262 $ 17,526 14.8%
======== ========
Adjusted EBITDA margin 16.4% 17.5%
Other Data (quarter ended):
Capital expenditures $ 1,994 $ 2,037
Pollock production (metric tons) 43,065 47,609
Pollock sales (metric tons) 24,108 21,009
Reconciliation of adjusted EBITDA to cash
flow from operating activities (2):
Cash flows from operating activities $(17,324) $(21,502)
Interest expense, net 9,502 10,598
Net change in operating assets and
liabilities 24,318 29,984
Amortization of deferred financing
costs in interest expense (1,304) (1,339)
Other 70 (216)
-------- --------
Adjusted EBITDA $ 15,262 $ 17,526
======== ========
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