Coinmach Service Corp. Announces Fiscal Fourth Quarter and Fiscal Year 2007 Financial Results.PLAINVIEW, N.Y. -- Coinmach Service Corp. (the "Company") (Amex: "DRY", "DRA DRA Delta Regional Authority DRA Developmental Reading Assessment (educational test) DRA Division of Ratepayer Advocates (California) DRA Data Research Associates DRA Directory and Resource Administrator "), a leading supplier of outsourced laundry equipment services for multi-family housing properties 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. , today reported its quarterly and annual financial results for the period ended March 31, 2007. "I am pleased to announce the fourth quarter and year end financial results for Coinmach Service Corp.'s 2007 fiscal year. This year, each of the Company's operating segments achieved their highest level of 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 since the November 2004 IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. . Additionally, Net Cash Flow before IDS distributions and dividends is at its highest since that time. Year over year, consolidated EBITDA improved by 5%, attributable to a 3% increase in the core Route operations and a 12% increase in the Rental business, coupled with significant improvement in the Distribution business. Net Cash Flow before IDS distributions and dividends improved by 21% over the prior year period or $8.9 million, further demonstrating the Company's consistent ability to fund dividends and reduce leverage," said Stephen Kerrigan, the Company's Chairman and Chief Executive Officer. "During fiscal year 2007, we produced approximately $52 million of cash flow before IDS distributions and dividends. From this cash flow, we distributed approximately $33 million or 63% to our IDS unit holders ("DRY") as well as our Class A common holders ("DRA") in the form of interest and dividends. Additionally, the Company reduced debt by approximately $7 million and paid a $10 million dividend to its Class B shareholders." Mr. Kerrigan continued, "Our solid financial results this year are attributable to several factors. The Route segment continues to improve as a result of disciplined pricing strategies There are many ways in which the price of a product can be determined. The following are the foremost strategies that businesses are likely to use. Competition-based pricing Setting the price based upon prices of the similar competitor products. , as well as gradual occupancy rate Noun 1. occupancy rate - the percentage of all rental units (as in hotels) are occupied or rented at a given time pct, per centum, percent, percentage - a proportion in relation to a whole (which is usually the amount per hundred) improvements throughout our broad geographic operating regions. Small acquisitions, particularly ASI ASI, n See Anxiety Sensitivity Index. , also contributed to the improvement in EBITDA and cash flow. Our Rental business, Appliance Warehouse, continues to grow organically and improve margins through several revenue initiatives. Finally, margins in Super Laundry, our Distribution operation, improved as we continue to focus on improving our 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 . "Looking forward to fiscal 2008, we will continue to build upon the financial improvements reported in fiscal 2007. In that regard, we intend to continue the emphasis on pricing strategies to drive same store sales Same Store Sales A statistic used in retail industry analysis. It compares sales of stores that have been open for a year or more. Notes: This statistic allows investors to determine what portion of new sales has come from sales growth and what portion from the opening of improvements. Additionally, we anticipate improved financial results from ASI as the college and university bidding season is currently underway. Finally, we anticipate expanding Appliance Warehouse into two new operating regions which should enhance growth in revenues and cash flow at our rental operations. "As for other initiatives, we continue to review acquisition opportunities in the core Route business that arise in the ordinary course, noting that we shall remain highly disciplined to identify cash flow accretive acquisition Accretive Acquisition An acquisition that will increase the acquiring company's EPS. Notes: As they are expected to increase the acquiring company's future earnings, these acquisitions tend to be favorable for the company's market price. candidates, such as the ASI acquisition from this past fiscal year. Additionally, we also are considering broadening the Company's service platform, to offer collection and related services to other route based non-laundry businesses." As of March 31, 2007, the Company had outstanding (i) approximately 13.4 million IDS units, each unit representing one share of the Company's Class A common stock and an 11% senior secured note due 2024 with a principal amount of $6.14, and (ii) approximately 29.3 million shares of Class A common stock, of which approximately 15.9 million shares were held separate and apart from the IDSs. The Company's board of directors has approved a dividend on shares of its Class A common stock of approximately $0.206 per share of Class A common stock payable on June 1, 2007 to holders of record on May 25, 2007, which together with an interest payment of approximately $0.169 on the underlying 11% senior secured note payable to holders of record on May 25, 2007 will aggregate $0.375 per IDS. The Company's board of directors has also approved a dividend on shares of its Class B common stock of approximately $0.428 per share of Class B common stock payable on June 1, 2007 for the fiscal year ended March 31, 2007 to holders of record on May 25, 2007. Subject to certain limitations, our dividend policy provides that holders of class B Common Stock may receive annual cash dividends on June 1 of each fiscal year. The Class A common stock dividend represents the Company's tenth consecutive quarterly dividend payment, consistent with the Company's dividend policy. Results for the Quarter and Year Ended March 31, 2007 and 2006 Net Cash Flow before IDS distributions and dividends was $12.9 million for the quarter ended March 31, 2007 as compared to $11.0 million for the quarter ended March 31, 2006. Net Cash Flow before IDS distributions and dividends was $51.8 million for the fiscal year ended March 31, 2007 as compared to $42.9 million for the fiscal year ended March 31, 2006. The following table (unaudited) reflects the computation Computation is a general term for any type of information processing that can be represented mathematically. This includes phenomena ranging from simple calculations to human thinking. of Net Cash Flow(*)(in millions): [TABLE OMITTED] The following discussion of operating results focuses on revenue and EBITDA for each of the Company's operating segments. For information regarding the Company's use of EBITDA and for reconciliations to net (loss) income and cash flow from operating activities, refer to "Presentation of Non-GAAP Financial Information" below, including the tables attached hereto here·to adv. To this document, matter, or proposition. hereto Adverb Formal or law to this place, matter, or document Adv. 1. . [TABLE OMITTED] "As of March 31, 2007, we are extremely proud to have returned in excess of $75 million of interest and dividends to our investors since the IPO in November 2004. Cash flow improvements have enabled us to make those distributions, along with funding ongoing strategic initiatives such as the technology investment at our Center of Excellence in Dallas, Texas “Dallas” redirects here. For other uses, see Dallas (disambiguation). The City of Dallas (pronounced [ˈdæl.əs] or [ˈdæl. , as well as acquisitions such as ASI. Additionally, notwithstanding the reinvestment Reinvestment Using dividends, interest and capital gains earned in an investment or mutual fund to purchase additional shares or units, rather than receiving the distributions in cash. 1. In terms of stocks, it is the reinvestment of dividends to purchase additional shares. in our business segments, we continue to reduce indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. while maintaining strong liquidity position with a cash balance as of March 31, 2007 in excess of $39 million, along with 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 availability of approximately $68 million. As such, we are pleased with our financial performance in fiscal 2007, but remain focused on continuous improvements in our three operating segments. Additionally, we will complete the roll out of the technology upgrade throughout our operating regions which expect to enhance financial results in late fiscal 2008," stated Mr. Stephen Kerrigan. Mr. Kerrigan continued, "For the quarter ended March 31, 2007, consolidated revenue increased slightly with improved EBITDA and cash flow of $2.6 million and $2.1 million, respectively, from the March 31, 2006 period. Similarly, for the fiscal year ended March 31, 2007 versus 2006, consolidated revenue increased by $11.8 million with improved EBITDA of $7.3 million and improved cash flow of $7.0 million. "On a segment level, the Route operation reported decreased revenue of $0.4 million and improved EBITDA of $2.2 million for the quarter over quarter period ended March 31, 2007 and 2006, respectively. Cash flow for the comparable period increased by approximately $0.2 million which is attributed to the timing of capital expenditures. For the fiscal year ended March 31, 2007, the Route operation reported increased revenue of $10.4 million with $4.3 million of improved EBITDA, but a $0.8 million decline in cash flow as compared to the prior year period. The Rental segment generated revenue and EBITDA growth of approximately 1% and 10%, respectively, for the quarter over quarter period ended March 31, 2007 and 2006. In terms of the fiscal year ended March 31, 2007 versus 2006, Rental revenue grew by approximately 6% with EBITDA growth of approximately 12%. The Distribution segment recorded improved financial results, reflecting the efforts to restructure its operations to improve EBITDA and resulting cash flow. On a consolidated basis, corporate expenses increased by approximately $0.2 million quarter over quarter due to the timing of public company expenses. In addition, financial results had been affected by costs associated with efforts and procedures required to comply with Sarbanes Oxley. Excluding expenditures related to acquisitions and the technology upgrades, consolidated capital expenditures increased by approximately $2.3 million this quarter as compared to the same quarter last year." Earnings Conference Call The Company has scheduled a conference call for Wednesday May 30, 2007, at 10:00 a.m. Eastern Standard Time to discuss its fiscal fourth quarter and fiscal year-end Fiscal Year-End The completion of a one-year, or 12-month, accounting period. Notes: The reason that a company's fiscal year often differs from the calendar year and does not close on Dec 31, is due to the nature of company's needs. 2007 financial results. Hosting the call will be Stephen R. Kerrigan, the Company's Chairman and Chief Executive Officer, and Robert M. Doyle, the Company's Chief Financial Officer. Interested parties may participate by accessing the teleconference via a webcast on the Company's Investor Relations Investor relations The process by which the corporation communicates with its investors. page, www.coinmachservicecorp.com, or by dialing 1-800-819-9193 (1-913-981-4911) for international callers) and using the pass code 8445308 approximately 5 minutes before the start of the call. The call will be open to the public with a question and answer session at the end of the call. A replay of the conference call will be available for 7 days on the Company's Investor Relations page or by dialing 1-888-203-1112 (1-719-457-0820) for international callers) and using the pass code 8445308. About Coinmach Service Corp. Coinmach Service Corp., through its operating subsidiaries An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. , is a leading supplier of outsourced laundry equipment services for multi-family housing properties in North America. The Company's core business involves leasing laundry rooms A laundry room (also called a utility room) is a room where clothes are washed. In a modern home, a laundry room would be equipped with an automatic washing machine and clothes dryer,and often a large basin, called a laundry tub, for hand-washing delicate articles of clothing such from building owners and property management companies, installing and servicing laundry equipment and collecting revenues generated from laundry machines. Presentation of Non-GAAP Financial Information Certain disclosures in this press release include "non-GAAP financial measures." A non-GAAP financial measure is a numerical numerical expressed in numbers, i.e. Arabic numerals of 0 to 9 inclusive. numerical nomenclature a numerical code is used to indicate the words, or other alphabetical signals, intended. measure of financial performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and 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 GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). (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 ). Net Cash Flow is defined as consolidated EBITDA less capital expenditures (including property, plant and equipment) and interest expense. Management believes Net Cash Flow (after capital and interest) is a useful measure of the Company's ability, subject to restrictions contained in its debt agreements and those of its subsidiaries and applicable law, to pay dividends on its common stock. EBITDA represents earnings from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the before deductions for interest, income taxes and depreciation and amortization. Management believes that EBITDA is useful as a means to evaluate its ability to service existing debt, to sustain potential future increases in debt and to satisfy capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. . EBITDA is also used by the Company as a measure of evaluating the performance of its three operating segments. Management further believes that EBITDA is useful to investors as a measure of comparative operating performance as it is less susceptible to variances in actual performance resulting from depreciation, amortization 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. and more reflective Refers to light hitting an opaque surface such as a printed page or mirror and bouncing back. See reflective media and reflective LCD. of changes in pricing decisions, cost controls and other factors that affect operating performance. The Company uses EBITDA to develop compensation plans, to measure sales force performance and to allocate capital assets capital assets n. equipment, property, and funds owned by a business. (See: capital, capital account) . Additionally, because the Company has historically provided EBITDA to investors, management believes that presenting this non-GAAP financial measure provides consistency in its financial reporting. The Company's use of Net Cash Flow and EBITDA, however, is not intended to represent cash flows for the period, nor has it been presented as an alternative to either (a) 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 determined by GAAP) as an indicator of operating performance or (b) cash flows from operating, investing and financing activities (as determined by GAAP) as a measure of liquidity. Given that Net Cash Flow and EBITDA are not measurements determined in accordance with GAAP and are thus susceptible to varying calculations, such measures may not be comparable to other similarly titled measures of other companies. Reconciliations of EBITDA to Net Cash Flow and EBITDA to net (loss) income and cash flow provided from operating activities are included in the attached tables. 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. Statements in this press release that are not statements of historical or current fact constitute "forward-looking statements." Such forward-looking statements involve known and unknown risks, uncertainties and other unknown factors that could cause the actual results of the Company to be materially different from the historical results or from any future results expressed or implied by such forward-looking statements. In addition to statements which explicitly describe such risks and uncertainties, readers are urged to consider statements labeled with the terms "believes," "belief," "expects," "intends," "anticipates", "plans" or similar terms to be uncertain and forward-looking. The forward-looking statements contained herein are also subject generally to other risks and uncertainties that are described from time to time in the Company's filings with the Securities and Exchange Commission. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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