Anchor Glass Container Corporation Reports 2003 Fourth-Quarter and Full-Year Results.Business Editors TAMPA, Fla.--(BUSINESS WIRE)--Feb. 12, 2004 Anchor Glass Container Corporation (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 :AGCC) today reported financial results for its fourth quarter and year ended December 31, 2003. For the fourth quarter of 2003, 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 increased 6.5 percent to $167.1 million, from $156.9 million in the prior year, reflecting a continuation of the stronger sales growth that began in the third quarter. 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. for the quarter totaled $38.7 million as the Company performed major reconstruction on the furnace furnace, enclosed space for the burning of fuel. There are many kinds of furnaces, the type depending upon the fuel and the use to which the heat produced within it is put. Most familiar are the furnaces used in the heating of buildings. in the Lawrenceburg, Indiana Lawrenceburg is a city in Dearborn County, Indiana, United States. The population was 4,685 at the 2000 census. The city is the county seat of Dearborn CountyGR6. Lawrenceburg is located in southeast Indiana, on the Ohio River west of Cincinnati. factory and on two of the three furnaces The Three Furnaces of China () refers to the especially hot summer weather in several major cities in the People's Republic of China:
The strong growth in sales for the quarter was driven by a 9.3 percent increase in unit shipments, principally in the beer category. The favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impact of strong sales and overall productivity improvements was offset by a significant increase in downtime The time during which a computer is not functioning due to hardware, operating system or application program failure. costs related to the reconstruction of the three furnaces. The Company absorbed an increase of approximately 200 machine days of downtime compared to the fourth quarter of 2002. Results were also adversely impacted by a year-over-year increase in the cost of natural gas ($2.9 million), and interest expense ($3.9 million). As a result of these factors, the Company reported a net loss for the quarter of $11.3 million. 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 definition below) totaled $18.0 million for the quarter. "Sales remained strong during the fourth quarter, continuing the positive trend from the third quarter," said Richard M. Deneau, President and Chief Executive Officer. "We completed three more major capital improvement initiatives in the quarter along with several other minor initiatives. Even with these substantial investments, we ended the year undrawn un·draw tr.v. un·drew , un·drawn , un·draw·ing, un·draws To draw to one side, as a curtain. Adj. 1. undrawn - not represented in a drawing undelineated - not represented accurately or precisely on our revolver revolver: see small arms. revolver Pistol with a revolving cylinder that provides multishot action. Some early versions, known as pepperboxes, had several barrels, but as early as the 17th century pistols were being made with a revolving chamber to loan, so our liquidity position is excellent. These plant enhancements will drive significant productivity improvements in 2004." For full-year 2003, net sales were $709.9 million, compared to $715.6 million in the prior year, a small decline of 0.8 percent. EBITDA declined 3.5 percent to $93.1 million, from $96.5 million in the prior year. These results reflect the high cost of natural gas in 2003, which resulted in a year-over-year cost increase of $18.0 million. It also includes the substantial increase in downtime incurred during the year as a result of the major capital improvement projects involving five of Anchor's furnaces. These costs were nearly offset by productivity gains, pricing improvements, lower SG&A costs and reduced rent expenses. "We are looking forward to returning to a normal downtime schedule in 2004," said Deneau. "We will have approximately 650 fewer days of machine downtime next year. These positive factors, combined with a strong 2004 order book, provide good momentum heading into the new year." Dividend Declared The Board of Directors of Anchor declared a quarterly dividend of $0.04 per share of its common stock. The dividend is payable March 15, 2004, to stockholders of record at the close of business on March 1, 2004. Disclosures EBITDA is an amount equal to net income (loss) plus restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). , net; reorganization items, net; interest expense; income taxes; depreciation and amortization; loss (gain) on fixed asset sales; and other noncash items. EBITDA is not a presentation made 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). ) and is not intended to present a superior measure of financial condition or profitability from those determined under GAAP. EBITDA is a primary component of financial covenants under Anchor's debt agreements. Although management uses this measure, it is not necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation. 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. that involve risks and uncertainties that may cause actual results to differ materially from forward-looking statements. Risks and uncertainties include, but are not limited to, economic, competitive, government and technological factors outside the control of Anchor. Risks and uncertainties may also include the highly competitive nature of the glass container industry Glass containers are common parts of everyday life - we enjoy beverages such as water, soft drink, juice, beer, wine, spirit from bottles - jams and spreads from jars. The glass container's manufacture often involves a far greater level of complexity, automation and involvement and the intense competition from makers of alternative forms of packaging; fluctuations in the price of natural gas; Anchor's focus on the beer industry and its dependence on certain key customers; the seasonal nature of brewing brewing: see beer. and other beverage industries; volatility in demand from emerging new markets; Anchor's dependence on certain executive officers; and changes in environmental and other government regulations. Anchor operates in a changing environment in which new risk factors can emerge from time to time. It is not possible for management to predict all of these risks, nor can it assess the extent to which any factor, or a combination of factors, may cause actual results to differ materially from those contained in forward-looking statements. Anchor does not intend to update forward-looking statements contained in this press release. Anchor Glass will discuss fourth-quarter and full-year 2003 results during a conference call Friday, February 13, 2004, at 11:00 a.m. Eastern Time. Interested parties may listen to the call through Shareholder.com investor center at www.shareholder.com/anchor/medialist.cfm or by phone at (800) 289-0485. Anchor Glass Container Corporation is the third largest manufacturer of glass containers in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . It has nine strategically located facilities where it produces a diverse line of flint flint, mineral flint, variety of quartz that commonly occurs in rounded nodules and whose crystal structure is not visible to the naked eye. Flint is dark gray, smoky brown, or black in color; pale gray flint is called chert. (clear), amber, green and other colored glass containers for the beer, beverage, food, liquor and flavored alcoholic beverage alcoholic beverage Any fermented liquor, such as wine, beer, or distilled liquor, that contains ethyl alcohol, or ethanol, as an intoxicating agent. When an alcoholic beverage is ingested, the alcohol is rapidly absorbed in the stomach and intestines because it does not markets.
Anchor Glass Container Corporation
Financial Summary
Dollars in thousands. Unaudited.
Fourth quarter ended December 31,
2003 2002
Net sales $ 167,172 $ 156,899
Cost of products sold 161,101 141,987
Selling and administrative expenses 6,870 7,741
Income (loss) from operations (799) 7,171
Other income, net 1,260 5
Interest expense (11,744) (7,810)
Net loss $ (11,283) $ (634)
EBITDA $ 18,035 $ 20,582
Other data for the fourth quarter ended December 31,
2003 2002
Depreciation and amortization $ 18,796 $ 13,358
Capital expenditures 38,678 23,218
Years ended December 31,
2003 (a)2002
Net sales $ 709,943 $ 715,574
Cost of products sold 660,402 644,053
Selling and administrative expenses 26,963 28,945
Restructuring, net -- (395)
Income from operations 22,578 42,971
Reorganization items, net -- 47,389
Other income (expense), net (156) 1,123
Interest expense (48,549) (28,329)
Net income (loss) $ (26,127) $ 63,154
EBITDA $ 93,136 $ 96,479
(a) 2002 is comprised of the four months ended December 31, 2002, and
the eight months ended August 31, 2002.
Balance sheet data at December 31,
2003 2002
Total assets $ 706,544 $ 556,397
Total debt 431,776 298,801
Preferred stock - Series C -- 78,022
Total stockholders' equity 95,563 1,499
Other data for the years ended December 31,
2003 2002
Depreciation and amortization $ 70,512 $ 53,732
Capital expenditures 119,115 71,320
Reconciliation of net income (loss) to EBITDA
Fourth quarter ended Years ended
December 31, December 31,
2003 2002 2003 2002
Net income (loss) $ (11,283) $ (634) $ (26,127) $ 63,154
Restructuring, net -- -- -- (395)
Reorganization items, net -- -- -- (47,389)
Interest expense 11,744 7,810 48,549 28,329
Depreciation and
amortization 18,796 13,358 70,512 53,732
Loss (gain) on fixed
asset sales (8) (7) 379 83
Other noncash items (1,214) 55 (177) (1,035)
EBITDA $ 18,035 $ 20,582 $ 93,136 $ 96,479
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