Jason Industries, Inc. (NASDAQ:JASN) (NASDAQ:JASNW) (“Jason” or the
“Company”) today reported third quarter 2016 net sales of $170.1
million, net loss of $2.5 million and diluted loss per share of
$0.13. These results included pre-tax restructuring of $0.6
million. For the third quarter of 2016, adjusted net loss was
$1.8 million and adjusted loss per share was $0.06. Third
quarter Adjusted EBITDA was $16.5 million or 9.7 percent of net
sales. Net cash provided by operating activities during the quarter
was $2.1 million and free cash flow was negative $1.9 million.
“We continue to operate in a challenged industrial demand
environment, with several declining end markets,” said Jeffry N.
Quinn, chairman and chief executive officer of Jason. “Seating was
impacted by decreases in heavyweight motorcycle volumes which were
driven by our customers’ lower new equipment builds. Components
experienced lower railcar volumes as expected, and Finishing saw
softness in general industrial markets.”
“In spite of our top-line headwinds, we are making progress on
initiatives to structurally improve our margins. While we did not
see the operational improvement at the speed and magnitude we
anticipated during the quarter and are disappointed with the
results, we are confident we will deliver on our cost reduction and
margin expansion commitments. We will continue to devote
significant resources to improving manufacturing efficiency in our
plants and improving our operational talent. Our team is committed
to investing in our businesses for long-term success with our
customers and employees, and value creation for our shareholders,”
added Quinn.
Cost Reduction and Margin Expansion
Program:
As part of the previously announced Cost Reduction and Margin
Expansion program, the Company announced the following business
portfolio optimization and cost reduction actions:
- Acoustics has initiated a sale process for its European
operations to divest approximately $30 million in non-core revenue.
The Company expects to complete the sale of the European operations
in the next two quarters. The sale of this business will drive
margin expansion and a focus on growth in the core North American
automotive market.
- Finishing will close operations in Brazil by the end of 2016,
exiting approximately $6 million of revenue in a non-core
geographic end market. The exit from this market will drive margin
expansion, strategic focus, and simplification of the Finishing
business.
- Components will close a manufacturing facility in Libertyville,
Ill. as part of the Company’s ongoing footprint
rationalization. The facility closure will consolidate two
existing facilities in Libertyville, optimizing footprint and
capacity in response to declining demand in the railcar market
better positioning the business to serve customers through a single
manufacturing facility in the Midwest. The closure will achieve
annual run-rate cost savings of $1.3 million beginning in the
fourth quarter of 2017. As a result of this action, Jason expects
to record a pre-tax restructuring charge to earnings of
approximately $1.5 million in the first half of 2017.
In addition to these actions, the Company announced it has
commenced a process to evaluate monetizing certain real estate
assets through a sale leaseback transaction to accelerate net debt
reduction.
“We reviewed our portfolio and identified assets that are not
core to our strategy. We are in the process of monetizing the value
of our Acoustics European operations, redeploying capital to invest
in our other businesses and restructuring projects, and reducing
net debt. In Finishing, we will expand margins by exiting a
break-even business in Brazil, simplifying the business and
focusing our resources on growing our core,” said Brian Kobylinski,
president and chief operating officer of Jason. “We are also
responding to the rapidly declining railcar volumes by
consolidating facilities and right-sizing our capacity in
Components.”
Cost Reduction and Margin Expansion actions taken and announced
to-date will achieve $11 million in annual run-rate savings in
selling and administrative costs, and $11 million in annual
run-rate savings in supply chain and footprint rationalization
savings by the end of 2017. Global cost reduction program
savings were $2.4 million in the third quarter and $4.8 million
year-to-date in 2016.
Third Quarter 2016 Financial Results (versus the year
ago period):
Lower volumes in Seating, Components and Finishing offset growth
in Acoustics. Net sales of $170.1 million decreased
$1.1 million, or 0.6 percent. Net sales were negatively
impacted by $0.8 million, or 0.4 percent, of foreign currency
translation. Excluding the impact of foreign currency, organic
sales decreased 0.2 percent.
Net loss was $2.5 million compared with net loss of
$3.2 million. Diluted loss per share was $0.13 compared with
diluted loss per share of $0.16. Adjusted net loss was
$1.8 million compared with adjusted net loss of
$0.5 million. Adjusted loss per share was $0.06 compared with
adjusted loss per share of $0.02.
Adjusted EBITDA was $16.5 million, or 9.7 percent of net sales,
compared with $18.6 million, or 10.9 percent of net sales.
Adjusted EBITDA decreased $2.1 million on lower volumes in Seating,
Components and Finishing, and corporate investments in supply chain
initiatives. Global cost reduction program savings and lower
incentive compensation expense of $1.4 million favorably impacted
Adjusted EBITDA compared with prior year.
For the nine months ended September 30, 2016, net cash
provided by operating activities was $22.9 million compared
with $33.0 million. Capital expenditures were $16.1 million, a
decrease of $7.8 million. Free cash flow was $4.1 million
compared with free cash flow of $6.5 million, and was reduced
by $6.6 million due to timing of interest payments relative to the
end of the fiscal period.
Net debt to Adjusted EBITDA on a pro forma trailing twelve-month
basis was 5.8x as of the end of the third quarter. Total liquidity
as of the end of the third quarter was $85.4 million,
comprised of $39.5 million of cash and cash equivalents and
$45.9 million of availability on revolving loan facilities
globally.
Third Quarter 2016 Segment Results (versus the year ago
period):
SeatingSeating net sales of $32.3 million
decreased $4.9 million, or 13.1 percent, with lower volumes in
motorcycle, construction and turf care. Excluding the impact of
foreign currency, organic sales decreased 12.5 percent. Adjusted
EBITDA was $2.5 million, or 7.8 percent of net sales, compared with
$2.9 million, or 7.8 percent of net sales. Adjusted EBITDA was
negatively impacted by lower volumes and favorably impacted by
savings resulting from the global cost reduction program.
FinishingFinishing net sales of $49.2 million
decreased $3.2 million, or 6.1 percent, including a negative
foreign currency translation impact of $0.6 million, or 1.0
percent. Excluding the impact of foreign currency, organic sales
decreased 5.1 percent with lower global industrial demand. Adjusted
EBITDA was $7.0 million, or 14.3 percent of net sales, compared
with $7.2 million, or 13.8 percent of net sales, and was negatively
impacted by lower volumes and favorably impacted by $1.1 million of
savings resulting from the global cost reduction program.
AcousticsAcoustics net sales of $63.7 million
increased $12.0 million, or 23.2 percent, driven by increased
volumes on new platform awards. Adjusted EBITDA was $7.4 million,
or 11.6 percent of net sales, compared with $7.0 million, or 13.6
percent of net sales. Adjusted EBITDA margin decreased due to
operational inefficiencies resulting in lower labor and material
productivity, and was favorably impacted by lower incentive
compensation expense, and savings resulting from the global cost
reduction program.
ComponentsNet sales in Components of $24.9
million decreased $5.0 million, or 16.8 percent, with significantly
lower rail car component volumes and lower demand for industrial
metal products. Adjusted EBITDA was $3.7 million, or 14.7 percent
of net sales, compared with $5.2 million, or 17.4 percent of net
sales. Adjusted EBITDA decreased on lower volumes and unfavorable
product mix, and was favorably impacted by lower raw material costs
and incentive compensation expense.
CorporateCorporate expenses of $4.1 million
increased $0.3 million, primarily due to $1.2 million of costs for
manufacturing and supply chain improvement initiatives, and
investments in enhancing the Company’s organizational structure,
and was favorably impacted by lower incentive compensation
expenses.
2016 Guidance:
“We expect fourth quarter demand to remain challenged with a
more significant impact to higher margin products, and as a result,
we have lowered our guidance for the full year. We continue to
focus on improving free cash flow through reductions in working
capital and non-essential capital expenditures to mitigate the
impact of lower earnings and reduce leverage,” added
Kobylinski.
For 2016, Jason now expects net sales in the range of $695 to
$705 million and Adjusted EBITDA in the range of $62 to $65
million. Prior guidance was net sales in the range of $715 to $730
million and Adjusted EBITDA in the range of $73 to $76 million.
Kobylinski noted, “Since joining Jason, I’ve immersed myself in
our businesses and I see opportunity for significant long-term
improvement. In addition to the larger actions that we have
announced, there are many basic operational process changes that
will be made that drive simplification, consistency, and better
performance over time.”
Conference Call:
The Company will hold a conference call to discuss its third
quarter results today at 10:00 a.m. Eastern time. A live webcast of
the call may be accessed over the Internet from the Company’s
Investor Relations website at investors.jasoninc.com. Participants
should follow the instructions provided on the website to download
and install the necessary audio applications. The conference call
is also available by dialing 877-407-3982 (domestic) or
201-493-6780 (international). Participants should ask for the Jason
Industries Third Quarter Earnings conference call.
A replay of the live conference call will be available beginning
approximately one hour after the call. The replay will be available
on the Company’s website or by dialing 877-870-5176 (domestic) or
858-384-5517 (international) and entering the replay passcode
13642137. The telephonic replay will be available until 11:59 pm
(Eastern Time), November 11, 2016. The online replay will be
available on the website immediately following the call.
About Jason Industries, Inc.The Company is the
parent company to a global family of manufacturing leaders within
the seating, finishing, components and automotive acoustics
markets, including DRONCO (Wunsiedel, Germany), Janesville
Acoustics (Southfield, Mich.), Metalex (Libertyville, Ill.), Milsco
(Milwaukee, Wis.), Osborn (Richmond, Ind. and Burgwald, Germany)
and Sealeze (Richmond, Va.). Headquartered in Milwaukee, Wis.,
Jason employs more than 4,400 people in 14 countries.
Forward Looking StatementsThis press release
includes “forward-looking statements” within the meaning of the
“safe harbor” provisions of the United States Private Securities
Litigation Reform Act of 1995. Forward-looking statements may be
identified by the use of words such as “anticipate,” “believe,”
“expect,” “estimate,” “plan,” “guidance,” and “project” and other
similar expressions that predict or indicate future events or
trends or that are not statements of historical matters. Such
forward-looking statements include projected financial information.
Such forward-looking statements with respect to revenues, earnings,
performance, strategies, prospects and other aspects of the
Company’s businesses are based on current expectations that are
subject to risks and uncertainties. A number of factors could cause
actual results or outcomes to differ materially from those
indicated by such forward-looking statements. Such factors include,
but are not limited to, the level of demand for the Company’s
products; competition in the Company’s markets; the Company’s
ability to grow and manage growth profitably; the Company’s ability
to access additional capital; changes in applicable laws or
regulations; the Company’s ability to attract and retain qualified
personnel; the possibility that the Company may be adversely
affected by other economic, business and/or competitive factors;
and other risks and uncertainties identified in the Company’s most
recent Annual Report on Form 10-K, as such may be amended or
supplemented by subsequent Quarterly Reports on Form 10-Q or other
reports filed with the Securities and Exchange Commission.
The forward-looking statements contained in this press release
are based on assumptions that we have made in light of our industry
experience and our perceptions of historical trends, current
conditions, expected future developments and other factors we
believe are appropriate under the circumstances. As you review and
consider this press release, you should understand that these
statements are not guarantees of performance or results. They
involve risks, uncertainties (some of which are beyond our control)
and assumptions. Although we believe that these forward-looking
statements are based on reasonable assumptions, you should be aware
that many factors could affect our actual results and cause them to
differ materially from those anticipated in the forward-looking
statements.
Any forward-looking statement made by us in this press release
speaks only as of the date on which we make it. We undertake no
obligation to publicly update any forward-looking statement,
whether as a result of new information, future developments or
otherwise, except as may be required by law.
Non-GAAP and Other Company
InformationIncluded in this press release are certain
non-GAAP financial measures designed to complement the financial
information presented in accordance with generally accepted
accounting principles in the United States of America because
management believes such measures are useful to investors. Because
the Company’s calculations of these measures may differ from
similar measures used by other companies, you should be careful
when comparing the Company’s non-GAAP financial measures to those
of other companies. In this earnings release, we disclose the
following non-GAAP financial measures, and we reconcile these
non-GAAP financial measures to the most directly comparable GAAP
financial measures: EBITDA, Adjusted EBITDA, Adjusted EBITDA
Margin, Adjusted Net Income, Adjusted Earnings Per Share, Net Debt
to Adjusted EBITDA, and Free Cash Flow.
EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin - The
Company defines EBITDA as net income (loss) before interest
expense, provision (benefit) for income taxes, depreciation and
amortization. The Company defines Adjusted EBITDA as EBITDA,
excluding the impact of operational restructuring charges and
non-cash or non-operational losses or gains, including goodwill and
long-lived asset impairment charges, gains or losses on disposal of
property, plant and equipment, integration and other operational
restructuring charges, transactional legal fees, other professional
fees, purchase accounting adjustments, and non-cash share based
compensation expense. The Company defines Adjusted EBITDA Margin as
Adjusted EBITDA as a percentage of net sales.
Management believes that Adjusted EBITDA provides a more clear
picture of the Company’s operating results by eliminating expenses
and income that are not reflective of the underlying business
performance. The Company uses this metric to facilitate a
comparison of operating performance on a consistent basis from
period to period and to analyze the factors and trends affecting
its segments. The Company’s internal plans, budgets and forecasts
use Adjusted EBITDA as a key metric and the Company uses this
measure to evaluate its operating performance and segment operating
performance and to determine the level of incentive compensation
paid to its employees.
Adjusted Net Income and Adjusted Earnings Per Share - The
Company defines Adjusted Net Income and Adjusted Earnings Per Share
(calculated on a diluted basis) as net income and earnings per
share (as defined by GAAP), excluding the impact of operational
restructuring charges and non-cash or non-operational losses or
gains, including goodwill and long-lived asset impairment charges,
gains or losses on disposal of property, plant and equipment,
integration and other operational restructuring charges,
transactional legal fees, other professional fees, purchase
accounting adjustments, and non-cash share based compensation
expense, net of their income tax impact. The tax rates used to
calculate adjusted net income and adjusted earnings per share are
based on a transaction specific basis. Adjusted earnings per share
includes the impact of share based compensation to the extent it is
dilutive in each period. Adjusted earnings per share includes the
impact to Jason Industries common shares upon conversion of JPHI
Holdings Inc. rollover shares and conversion of preferred stock.
Management believes that Adjusted Net Income and Adjusted Earnings
Per Share are useful in assessing the Company’s financial
performance by eliminating expenses and income that are not
reflective of the underlying business performance.
Net Debt to Adjusted EBITDA - The Company defines Net Debt to
Adjusted EBITDA as current and long-term debt plus debt discounts
less cash and cash equivalents, divided by pro forma Adjusted
EBITDA for the trailing twelve months. Pro forma Adjusted
EBITDA is calculated as Adjusted EBITDA as reported plus Adjusted
EBITDA of acquisitions prior to the date of the acquisition during
the trailing twelve months. Management believes that Net Debt to
Adjusted EBITDA is useful in assessing the Company’s financial
leverage.
Free Cash Flow - The Company defines Free Cash Flow as net cash
flows from operating activities (as defined by GAAP) less capital
expenditures and cash dividends on preferred stock.
Management believes that Free Cash Flow is useful in assessing our
ability to generate cash from business operations that is available
for strategic capital decisions.
In addition to these non-GAAP financial measures, we also use
the term “organic sales” to refer to GAAP net sales from existing
operations excluding (i) sales from acquired businesses recorded
prior to the first anniversary of the acquisition, and (ii) the
impact of foreign currency translation. The impact of foreign
currency translation is calculated as the difference between (a)
the period-to-period change in results (excluding acquisitions) and
(b) the period-to-period change in results (excluding acquisitions)
after applying current period average foreign exchange rates to the
prior year period. We use the term “organic sales growth” to refer
to the measure of comparing current period organic sales with the
corresponding period of the prior year.
|
Jason
Industries, Inc. |
Condensed
Consolidated Statements of Operations |
(In thousands, except
per share amounts) (Unaudited) |
|
|
Three Months Ended |
|
Nine Months Ended |
|
September 30, 2016 |
|
September 25, 2015 |
|
September 30, 2016 |
|
September 25, 2015 |
Net sales |
$ |
170,108 |
|
|
$ |
171,174 |
|
|
$ |
546,769 |
|
|
$ |
534,588 |
|
Cost of goods sold |
139,129 |
|
|
135,733 |
|
|
440,743 |
|
|
418,576 |
|
Gross profit |
30,979 |
|
|
35,441 |
|
|
106,026 |
|
|
116,012 |
|
Selling and
administrative expenses |
25,941 |
|
|
31,704 |
|
|
86,515 |
|
|
95,718 |
|
Loss (gain) on
disposals of property, plant and equipment - net |
68 |
|
|
(8 |
) |
|
757 |
|
|
14 |
|
Restructuring |
566 |
|
|
923 |
|
|
5,066 |
|
|
3,637 |
|
Transaction-related
expenses |
— |
|
|
— |
|
|
— |
|
|
886 |
|
Operating income |
4,404 |
|
|
2,822 |
|
|
13,688 |
|
|
15,757 |
|
Interest expense |
(7,906 |
) |
|
(7,996 |
) |
|
(23,893 |
) |
|
(23,420 |
) |
Equity income |
146 |
|
|
136 |
|
|
457 |
|
|
678 |
|
Other income - net |
247 |
|
|
48 |
|
|
648 |
|
|
133 |
|
Loss before income
taxes |
(3,109 |
) |
|
(4,990 |
) |
|
(9,100 |
) |
|
(6,852 |
) |
Tax benefit |
(657 |
) |
|
(1,814 |
) |
|
(1,262 |
) |
|
(1,917 |
) |
Net loss |
$ |
(2,452 |
) |
|
$ |
(3,176 |
) |
|
$ |
(7,838 |
) |
|
$ |
(4,935 |
) |
Less net loss
attributable to noncontrolling interests |
(415 |
) |
|
(537 |
) |
|
(1,325 |
) |
|
(834 |
) |
Net loss attributable
to Jason Industries |
$ |
(2,037 |
) |
|
$ |
(2,639 |
) |
|
$ |
(6,513 |
) |
|
$ |
(4,101 |
) |
Accretion of preferred
stock dividends |
900 |
|
|
900 |
|
|
2,700 |
|
|
2,700 |
|
Net loss available to
common shareholders of Jason Industries |
$ |
(2,937 |
) |
|
$ |
(3,539 |
) |
|
$ |
(9,213 |
) |
|
$ |
(6,801 |
) |
|
|
|
|
|
|
|
|
Net loss per share
available to common shareholders of Jason Industries: |
|
|
|
|
|
|
|
Basic and diluted |
$ |
(0.13 |
) |
|
$ |
(0.16 |
) |
|
$ |
(0.41 |
) |
|
$ |
(0.31 |
) |
|
|
|
|
|
|
|
|
Weighted average number
of common shares outstanding: |
|
|
|
|
|
|
|
Basic and diluted |
22,499 |
|
|
22,161 |
|
|
22,423 |
|
|
22,056 |
|
Jason Industries,
Inc. |
Condensed
Consolidated Balance Sheets |
(In thousands, except
share and per share amounts) (Unaudited) |
|
|
|
September 30, 2016 |
|
December 31, 2015 |
Assets |
|
|
|
Current assets |
|
|
|
Cash and cash equivalents |
$ |
39,537 |
|
|
$ |
35,944 |
|
Accounts receivable - net |
94,952 |
|
|
79,088 |
|
Inventories - net |
79,368 |
|
|
80,432 |
|
Other current assets |
19,835 |
|
|
30,903 |
|
Total current assets |
233,692 |
|
|
226,367 |
|
Property, plant and
equipment - net |
186,223 |
|
|
196,150 |
|
Goodwill |
107,013 |
|
|
106,170 |
|
Other intangible assets
- net |
149,364 |
|
|
157,915 |
|
Other assets - net |
8,202 |
|
|
10,490 |
|
Total assets |
$ |
684,494 |
|
|
$ |
697,092 |
|
|
|
|
|
Liabilities and
Equity |
|
|
|
Current
liabilities |
|
|
|
Current portion of long-term
debt |
$ |
5,547 |
|
|
$ |
6,186 |
|
Accounts payable |
63,641 |
|
|
56,838 |
|
Accrued compensation and employee
benefits |
17,589 |
|
|
18,750 |
|
Accrued interest |
108 |
|
|
75 |
|
Other current liabilities |
28,249 |
|
|
28,733 |
|
Total current liabilities |
115,134 |
|
|
110,582 |
|
Long-term debt |
426,139 |
|
|
426,150 |
|
Deferred income
taxes |
48,429 |
|
|
57,247 |
|
Other long-term
liabilities |
23,021 |
|
|
18,119 |
|
Total liabilities |
612,723 |
|
|
612,098 |
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
Equity |
|
|
|
Preferred stock,
$0.0001 par value (5,000,000 shares authorized; 45,000 shares
issued and outstanding at September 30, 2016 and December 31,
2015) |
45,000 |
|
|
45,000 |
|
Jason Industries common
stock, $0.0001 par value (120,000,000 shares authorized; issued and
outstanding: 22,395,705 shares at September 30, 2016 and 22,295,003
shares at December 31, 2015) |
2 |
|
|
2 |
|
Additional paid-in
capital |
139,818 |
|
|
143,533 |
|
Retained deficit |
(102,510 |
) |
|
(95,997 |
) |
Accumulated other
comprehensive loss |
(22,843 |
) |
|
(21,456 |
) |
Shareholders’ equity attributable
to Jason Industries |
59,467 |
|
|
71,082 |
|
Noncontrolling
interests |
12,304 |
|
|
13,912 |
|
Total equity |
71,771 |
|
|
84,994 |
|
Total liabilities and equity |
$ |
684,494 |
|
|
$ |
697,092 |
|
Jason Industries,
Inc. |
Condensed
Consolidated Statements of Cash Flows |
(In thousands)
(Unaudited) |
|
|
Nine Months Ended |
|
September 30, 2016 |
|
September 25, 2015 |
Cash flows from
operating activities |
|
|
|
Net loss |
$ |
(7,838 |
) |
|
$ |
(4,935 |
) |
Adjustments to
reconcile net loss to net cash provided by operating
activities: |
|
|
|
Depreciation |
23,153 |
|
|
22,585 |
|
Amortization of intangible
assets |
9,421 |
|
|
10,993 |
|
Amortization of deferred financing
costs and debt discount |
2,256 |
|
|
2,256 |
|
Equity income |
(457 |
) |
|
(678 |
) |
Deferred income taxes |
(7,537 |
) |
|
(6,255 |
) |
Loss on disposals of property,
plant and equipment - net |
757 |
|
|
14 |
|
Dividends from joint venture |
2,068 |
|
|
— |
|
Share-based compensation |
(864 |
) |
|
6,463 |
|
Net increase (decrease) in cash due
to changes in: |
|
|
|
Accounts receivable |
(15,857 |
) |
|
(10,600 |
) |
Inventories |
1,487 |
|
|
2,275 |
|
Other current assets |
6,366 |
|
|
(5,945 |
) |
Accounts payable |
7,850 |
|
|
(44 |
) |
Accrued compensation and employee
benefits |
(1,209 |
) |
|
7,378 |
|
Accrued interest |
33 |
|
|
6,514 |
|
Accrued income taxes |
2,030 |
|
|
369 |
|
Accrued transaction costs |
— |
|
|
(177 |
) |
Other - net |
1,213 |
|
|
2,821 |
|
Total adjustments |
30,710 |
|
|
37,969 |
|
Net cash provided by operating
activities |
22,872 |
|
|
33,034 |
|
Cash flows from
investing activities |
|
|
|
Proceeds from disposals
of property, plant and equipment |
3,299 |
|
|
116 |
|
Payments for property,
plant and equipment |
(16,111 |
) |
|
(23,864 |
) |
Acquisitions of
business, net of cash acquired |
— |
|
|
(34,763 |
) |
Acquisitions of
patents |
(134 |
) |
|
(146 |
) |
Net cash used in investing
activities |
(12,946 |
) |
|
(58,657 |
) |
Cash flows from
financing activities |
|
|
|
Payments of First Lien
term loan |
(2,325 |
) |
|
(1,550 |
) |
Proceeds from other
long-term debt |
8,415 |
|
|
18,538 |
|
Payments of other
long-term debt |
(9,635 |
) |
|
(4,078 |
) |
Payments of preferred
stock dividends |
(2,700 |
) |
|
(2,700 |
) |
Other financing
activities - net |
(151 |
) |
|
(730 |
) |
Net cash (used in) provided by
financing activities |
(6,396 |
) |
|
9,480 |
|
Effect of exchange rate
changes on cash and cash equivalents |
63 |
|
|
(1,698 |
) |
Net increase (decrease)
in cash and cash equivalents |
3,593 |
|
|
(17,841 |
) |
Cash and cash
equivalents, beginning of period |
35,944 |
|
|
62,279 |
|
Cash and cash
equivalents, end of period |
$ |
39,537 |
|
|
$ |
44,438 |
|
Jason
Industries, Inc. |
Quarterly
Financial Information by Segment |
(In thousands)
(Unaudited) |
|
|
2015 |
|
2016 |
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
FY |
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
YTD |
Seating |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
$ |
50,960 |
|
|
$ |
51,909 |
|
|
$ |
37,198 |
|
|
$ |
36,725 |
|
|
$ |
176,792 |
|
|
$ |
51,950 |
|
|
$ |
44,680 |
|
|
$ |
32,330 |
|
|
|
|
$ |
128,960 |
|
Adjusted EBITDA |
7,960 |
|
|
9,311 |
|
|
2,904 |
|
|
(409 |
) |
|
19,766 |
|
|
6,629 |
|
|
5,620 |
|
|
2,507 |
|
|
|
|
14,756 |
|
Adjusted EBITDA % net
sales |
15.6 |
% |
|
17.9 |
% |
|
7.8 |
% |
|
(1.1 |
)% |
|
11.2 |
% |
|
12.8 |
% |
|
12.6 |
% |
|
7.8 |
% |
|
|
|
11.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finishing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
$ |
42,850 |
|
|
$ |
46,646 |
|
|
$ |
52,339 |
|
|
$ |
49,559 |
|
|
$ |
191,394 |
|
|
$ |
50,276 |
|
|
$ |
53,148 |
|
|
$ |
49,162 |
|
|
|
|
$ |
152,586 |
|
Adjusted EBITDA |
6,311 |
|
|
6,727 |
|
|
7,223 |
|
|
5,538 |
|
|
25,799 |
|
|
5,229 |
|
|
7,634 |
|
|
7,042 |
|
|
|
|
19,905 |
|
Adjusted EBITDA % net
sales |
14.7 |
% |
|
14.4 |
% |
|
13.8 |
% |
|
11.2 |
% |
|
13.5 |
% |
|
10.4 |
% |
|
14.4 |
% |
|
14.3 |
% |
|
|
|
13.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acoustics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
$ |
50,921 |
|
|
$ |
56,052 |
|
|
$ |
51,755 |
|
|
$ |
59,319 |
|
|
$ |
218,047 |
|
|
$ |
61,911 |
|
|
$ |
63,225 |
|
|
$ |
63,740 |
|
|
|
|
$ |
188,876 |
|
Adjusted EBITDA |
4,854 |
|
|
7,338 |
|
|
7,014 |
|
|
8,309 |
|
|
27,515 |
|
|
6,615 |
|
|
6,758 |
|
|
7,414 |
|
|
|
|
20,787 |
|
Adjusted EBITDA % net
sales |
9.5 |
% |
|
13.1 |
% |
|
13.6 |
% |
|
14.0 |
% |
|
12.6 |
% |
|
10.7 |
% |
|
10.7 |
% |
|
11.6 |
% |
|
|
|
11.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
$ |
31,105 |
|
|
$ |
32,971 |
|
|
$ |
29,882 |
|
|
$ |
28,175 |
|
|
$ |
122,133 |
|
|
$ |
26,837 |
|
|
$ |
24,634 |
|
|
$ |
24,876 |
|
|
|
|
$ |
76,347 |
|
Adjusted EBITDA |
5,173 |
|
|
5,529 |
|
|
5,211 |
|
|
5,030 |
|
|
20,943 |
|
|
4,613 |
|
|
3,337 |
|
|
3,658 |
|
|
|
|
11,608 |
|
Adjusted EBITDA % net
sales |
16.6 |
% |
|
16.8 |
% |
|
17.4 |
% |
|
17.9 |
% |
|
17.1 |
% |
|
17.2 |
% |
|
13.5 |
% |
|
14.7 |
% |
|
|
|
15.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
(3,295 |
) |
|
$ |
(4,005 |
) |
|
$ |
(3,762 |
) |
|
$ |
(1,797 |
) |
|
$ |
(12,859 |
) |
|
$ |
(4,747 |
) |
|
$ |
(4,595 |
) |
|
$ |
(4,098 |
) |
|
|
|
$ |
(13,440 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
$ |
175,836 |
|
|
$ |
187,578 |
|
|
$ |
171,174 |
|
|
$ |
173,778 |
|
|
$ |
708,366 |
|
|
$ |
190,974 |
|
|
$ |
185,687 |
|
|
$ |
170,108 |
|
|
|
|
$ |
546,769 |
|
Adjusted EBITDA |
21,003 |
|
|
24,900 |
|
|
18,590 |
|
|
16,671 |
|
|
81,164 |
|
|
18,339 |
|
|
18,754 |
|
|
16,523 |
|
|
|
|
53,616 |
|
Adjusted EBITDA % net
sales |
11.9 |
% |
|
13.3 |
% |
|
10.9 |
% |
|
9.6 |
% |
|
11.5 |
% |
|
9.6 |
% |
|
10.1 |
% |
|
9.7 |
% |
|
|
|
9.8 |
% |
Jason
Industries, Inc. |
Reconciliation
of GAAP to Non-GAAP Measures |
(In thousands)
(Unaudited) |
|
Organic Sales
Growth |
|
|
3Q 2016 |
|
Seating |
|
Finishing |
|
Acoustics |
|
Components |
|
Jason Consolidated |
|
|
|
|
|
|
|
|
|
|
Net sales |
|
|
|
|
|
|
|
|
|
Organic sales growth |
|
(12.5 |
)% |
|
|
(5.1 |
)% |
|
|
23.2 |
% |
|
|
(16.8 |
)% |
|
|
(0.2 |
)% |
Currency impact |
|
(0.6 |
)% |
|
|
(1.0 |
)% |
|
—% |
|
—% |
|
|
(0.4 |
)% |
Growth as reported |
|
(13.1 |
)% |
|
|
(6.1 |
)% |
|
|
23.2 |
% |
|
|
(16.8 |
)% |
|
|
(0.6 |
)% |
|
YTD 2016 |
|
Seating |
|
Finishing |
|
Acoustics |
|
Components |
|
Jason Consolidated |
|
|
|
|
|
|
|
|
|
|
Net sales |
|
|
|
|
|
|
|
|
|
Organic sales growth |
|
(7.6 |
)% |
|
|
(3.1 |
)% |
|
|
19.0 |
% |
|
|
(18.7 |
)% |
|
|
(0.4 |
)% |
Currency impact |
|
(0.3 |
)% |
|
|
(1.5 |
)% |
|
—% |
|
—% |
|
|
(0.5 |
)% |
Acquisitions |
—% |
|
|
12.2 |
% |
|
—% |
|
—% |
|
|
3.2 |
% |
Growth as reported |
|
(7.9 |
)% |
|
|
7.6 |
% |
|
|
19.0 |
% |
|
|
(18.7 |
)% |
|
|
2.3 |
% |
Free Cash
Flow |
|
|
3Q |
|
YTD |
|
2015 |
|
2016 |
|
2015 |
|
2016 |
Operating Cash
Flow |
$ |
11,531 |
|
|
$ |
2,095 |
|
|
$ |
33,034 |
|
|
$ |
22,872 |
|
Less: Capital Expenditures |
(8,546 |
) |
|
(3,982 |
) |
|
(23,864 |
) |
|
(16,111 |
) |
Less: Preferred Stock
Dividends |
(900 |
) |
|
— |
|
|
(2,700 |
) |
|
(2,700 |
) |
Free Cash Flow
After Dividends |
$ |
2,085 |
|
|
$ |
(1,887 |
) |
|
$ |
6,470 |
|
|
$ |
4,061 |
|
Net Debt to
Adjusted EBITDA |
|
|
September 30, 2016 |
Current and long-term
debt |
$ |
431,686 |
|
Add: Debt discounts and deferred
financing costs |
13,153 |
|
Less: Cash and cash
equivalents |
(39,537 |
) |
Net
Debt |
$ |
405,302 |
|
|
|
Adjusted EBITDA |
|
4Q15 |
$ |
16,671 |
|
1Q16 |
18,339 |
|
2Q16 |
18,754 |
|
3Q16 |
16,523 |
|
TTM Adjusted
EBITDA |
70,287 |
|
|
|
Net Debt to
Adjusted EBITDA* |
5.8x |
*Note the consolidated first lien net leverage ratio under the
Company’s senior secured credit facilities was 3.75x as of
September 30, 2016. See Form 10-Q for further discussion of
the Company’s senior secured credit facilities.
|
Jason
Industries, Inc. |
Reconciliation
of GAAP to Non-GAAP Measures |
Adjusted
EBITDA |
(In thousands)
(Unaudited) |
|
|
2015 |
|
2016 |
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
FY |
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
YTD |
Net income
(loss) |
$ |
(894 |
) |
|
$ |
(865 |
) |
|
$ |
(3,176 |
) |
|
$ |
(84,666 |
) |
|
$ |
(89,601 |
) |
|
$ |
(3,016 |
) |
|
$ |
(2,370 |
) |
|
$ |
(2,452 |
) |
|
|
|
$ |
(7,838 |
) |
Tax provision
(benefit) |
(747 |
) |
|
644 |
|
|
(1,814 |
) |
|
(20,338 |
) |
|
(22,255 |
) |
|
(2,551 |
) |
|
1,946 |
|
|
(657 |
) |
|
|
|
(1,262 |
) |
Interest expense |
7,506 |
|
|
7,918 |
|
|
7,996 |
|
|
8,415 |
|
|
31,835 |
|
|
8,024 |
|
|
7,963 |
|
|
7,906 |
|
|
|
|
23,893 |
|
Depreciation and
amortization |
10,411 |
|
|
11,476 |
|
|
11,691 |
|
|
11,670 |
|
|
45,248 |
|
|
10,297 |
|
|
11,340 |
|
|
10,937 |
|
|
|
|
32,574 |
|
EBITDA |
16,276 |
|
|
19,173 |
|
|
14,697 |
|
|
(84,919 |
) |
|
(34,773 |
) |
|
12,754 |
|
|
18,879 |
|
|
15,734 |
|
|
|
|
47,367 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment charges(1) |
— |
|
|
— |
|
|
— |
|
|
94,126 |
|
|
94,126 |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
Restructuring(2) |
1,704 |
|
|
1,010 |
|
|
923 |
|
|
163 |
|
|
3,800 |
|
|
2,717 |
|
|
1,783 |
|
|
566 |
|
|
|
|
5,066 |
|
Transaction-related
expenses(3) |
176 |
|
|
710 |
|
|
— |
|
|
— |
|
|
886 |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
Integration and other restructuring
costs(4) |
758 |
|
|
1,122 |
|
|
1,467 |
|
|
5,700 |
|
|
9,047 |
|
|
1,589 |
|
|
55 |
|
|
(354 |
) |
|
|
|
1,290 |
|
Share-based compensation(5) |
2,063 |
|
|
2,889 |
|
|
1,511 |
|
|
1,506 |
|
|
7,969 |
|
|
576 |
|
|
(1,949 |
) |
|
509 |
|
|
|
|
(864 |
) |
Loss (gain) on disposals of fixed
assets—net(6) |
26 |
|
|
(4 |
) |
|
(8 |
) |
|
95 |
|
|
109 |
|
|
703 |
|
|
(14 |
) |
|
68 |
|
|
|
|
757 |
|
Total adjustments |
4,727 |
|
|
5,727 |
|
|
3,893 |
|
|
101,590 |
|
|
115,937 |
|
|
5,585 |
|
|
(125 |
) |
|
789 |
|
|
|
|
6,249 |
|
Adjusted
EBITDA |
$ |
21,003 |
|
|
$ |
24,900 |
|
|
$ |
18,590 |
|
|
$ |
16,671 |
|
|
$ |
81,164 |
|
|
$ |
18,339 |
|
|
$ |
18,754 |
|
|
$ |
16,523 |
|
|
|
|
$ |
53,616 |
|
(1) Represents non-cash impairment charges of $58.8 million
and $35.3 million related to impairment of goodwill and other
intangible assets, respectively, in the seating segment.
(2) Restructuring includes costs associated with exit or
disposal activities as defined by GAAP related to facility
consolidation, including one-time employee termination benefits,
costs to close facilities and relocate employees, and costs to
terminate contracts other than capital leases.
(3) Transaction-related expenses primarily consist of
professional service fees related to the Company’s acquisition and
divestiture activities.
(4) During 2016, integration and other restructuring costs
primarily includes costs incurred in connection with the start-up
of a new acoustics segment facility in Richmond, Indiana, and
during the third quarter of 2016 includes a $0.6 million reversal
of a reserve related to the Newcomerstown fire recorded in
acquisition accounting for the business combination in 2014. During
2015, integration and other restructuring costs includes 1)
equipment move costs and incremental facility preparation and
related costs incurred in connection with the start-up of new
acoustics segment facilities in Warrensburg, Missouri and Richmond,
Indiana, and 2) $5.9 million of severance and expenses related to
the transitions of the Company’s Chief Executive Officer (CEO) and
Chief Financial Officer (CFO), partially offset by 3) a $0.8
million gain resulting from termination of an unfavorable lease
recorded in acquisition accounting. Such costs are not included in
restructuring for GAAP purposes.
(5) Represents non-cash share based compensation expense
(income) for awards under the Company’s 2014 Omnibus Incentive
Plan. During the second quarter of 2016, share-based compensation
includes $2.5 million of expense reversal as a result of the
lowering of assumed vesting levels for Adjusted EBITDA performance
share units. During 2015, share based compensation includes $2.9
million of expense due to accelerated vesting of RSU’s related to
the transition of the Company’s CEO and CFO.
(6) Loss (gain) on disposals of fixed assets for the first
quarter of 2016 includes a loss of $0.6 million on the sale of a
seating segment facility.
|
Jason
Industries, Inc. |
Reconciliation
of GAAP to Non-GAAP Measures |
Adjusted Net
Income and Adjusted Earnings per Share |
(In thousands, except
per share amounts) (Unaudited) |
|
|
2015 |
|
2016 |
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
FY |
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
YTD |
GAAP Net income
(loss) |
$ |
(894 |
) |
|
$ |
(865 |
) |
|
$ |
(3,176 |
) |
|
$ |
(84,666 |
) |
|
$ |
(89,601 |
) |
|
$ |
(3,016 |
) |
|
$ |
(2,370 |
) |
|
$ |
(2,452 |
) |
|
|
|
$ |
(7,838 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment charges |
— |
|
|
— |
|
|
— |
|
|
94,126 |
|
|
94,126 |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
Restructuring |
1,704 |
|
|
1,010 |
|
|
923 |
|
|
163 |
|
|
3,800 |
|
|
2,717 |
|
|
1,783 |
|
|
566 |
|
|
|
|
5,066 |
|
Transaction-related expenses |
176 |
|
|
710 |
|
|
— |
|
|
— |
|
|
886 |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
Integration and other restructuring
costs |
758 |
|
|
1,122 |
|
|
1,467 |
|
|
5,700 |
|
|
9,047 |
|
|
1,589 |
|
|
55 |
|
|
(354 |
) |
|
|
|
1,290 |
|
Share based compensation |
2,063 |
|
|
2,889 |
|
|
1,511 |
|
|
1,506 |
|
|
7,969 |
|
|
576 |
|
|
(1,949 |
) |
|
509 |
|
|
|
|
(864 |
) |
Loss (gain) on disposal of fixed
assets - net(3) |
|
|
|
|
|
|
|
|
|
|
703 |
|
|
(14 |
) |
|
68 |
|
|
|
|
757 |
|
Tax effect on adjustments(1) |
(1,786 |
) |
|
(1,505 |
) |
|
(1,204 |
) |
|
(16,097 |
) |
|
(20,593 |
) |
|
(1,926 |
) |
|
558 |
|
|
(122 |
) |
|
|
|
(1,490 |
) |
Adjusted net
income (loss) |
$ |
2,021 |
|
|
$ |
3,361 |
|
|
$ |
(479 |
) |
|
$ |
732 |
|
|
$ |
5,634 |
|
|
$ |
643 |
|
|
$ |
(1,937 |
) |
|
$ |
(1,785 |
) |
|
|
|
$ |
(3,079 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax rate on
adjustments(1) |
38 |
% |
|
26 |
% |
|
31 |
% |
|
16 |
% |
|
18 |
% |
|
34 |
% |
|
446 |
% |
|
15 |
% |
|
|
|
24 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted
average number of common shares outstanding (GAAP): |
21,991 |
|
|
22,011 |
|
|
22,161 |
|
|
22,289 |
|
|
22,145 |
|
|
22,388 |
|
|
22,395 |
|
|
22,499 |
|
|
|
|
22,423 |
|
Plus: effect of
dilutive share-based compensation (non-GAAP)(2) |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
Plus: effect of
convertible preferred stock and rollover shares (non-GAAP)(2) |
7,139 |
|
|
7,139 |
|
|
7,139 |
|
|
7,139 |
|
|
7,139 |
|
|
7,139 |
|
|
7,139 |
|
|
7,139 |
|
|
|
|
7,139 |
|
Diluted weighted
average number of common shares outstanding (non-GAAP)(2) |
29,130 |
|
|
29,150 |
|
|
29,300 |
|
|
29,428 |
|
|
29,284 |
|
|
29,527 |
|
|
29,534 |
|
|
29,638 |
|
|
|
|
29,562 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
earnings (loss) per share |
$ |
0.07 |
|
|
$ |
0.12 |
|
|
$ |
(0.02 |
) |
|
$ |
0.02 |
|
|
$ |
0.19 |
|
|
$ |
0.02 |
|
|
$ |
(0.07 |
) |
|
$ |
(0.06 |
) |
|
|
|
$ |
(0.10 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Net (loss)
income per share available to common shareholders of Jason
Industries |
$ |
(0.07 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.16 |
) |
|
$ |
(3.20 |
) |
|
$ |
(3.53 |
) |
|
$ |
(0.15 |
) |
|
$ |
(0.13 |
) |
|
$ |
(0.13 |
) |
|
|
|
$ |
(0.41 |
) |
Adjustments net of
income taxes: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment charges, net of
noncontrolling interest |
— |
|
|
— |
|
|
— |
|
|
3.00 |
|
|
3.02 |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
Restructuring |
0.05 |
|
|
0.04 |
|
|
0.03 |
|
|
0.01 |
|
|
0.12 |
|
|
0.08 |
|
|
0.06 |
|
|
0.02 |
|
|
|
|
0.15 |
|
Transaction-related expenses |
— |
|
|
0.03 |
|
|
— |
|
|
— |
|
|
0.03 |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
Integration and other restructuring
costs |
0.02 |
|
|
0.03 |
|
|
0.04 |
|
|
0.16 |
|
|
0.26 |
|
|
0.04 |
|
|
— |
|
|
(0.01 |
) |
|
|
|
0.04 |
|
Share based compensation |
0.06 |
|
|
0.09 |
|
|
0.05 |
|
|
0.06 |
|
|
0.25 |
|
|
0.02 |
|
|
(0.04 |
) |
|
0.02 |
|
|
|
|
— |
|
Loss (gain) on disposal of fixed
assets - net(3) |
|
|
|
|
|
|
|
|
|
|
0.02 |
|
|
— |
|
|
— |
|
|
|
|
0.02 |
|
GAAP to non-GAAP impact per
share(2) |
0.01 |
|
|
— |
|
|
0.02 |
|
|
(0.01 |
) |
|
0.04 |
|
|
0.01 |
|
|
0.04 |
|
|
0.04 |
|
|
|
|
0.10 |
|
Adjusted
earnings (loss) per share |
$ |
0.07 |
|
|
$ |
0.12 |
|
|
$ |
(0.02 |
) |
|
$ |
0.02 |
|
|
$ |
0.19 |
|
|
$ |
0.02 |
|
|
$ |
(0.07 |
) |
|
$ |
(0.06 |
) |
|
|
|
$ |
(0.10 |
) |
(1) The effective tax rate on adjustments is impacted by
nondeductible foreign transaction and restructuring costs,
nondeductible impairment of goodwill, restructuring charges in
foreign jurisdictions at statutory tax rates, and discrete non-cash
tax expense related to the vesting of restricted stock units for
which no tax benefit will be realized.
(2) Adjusted earnings per share includes the impact of
share-based compensation to the extent it is dilutive in each
period. Adjusted earnings per share includes the impact to Jason
Industries common shares upon conversion of JPHI Holdings Inc.
rollover shares and conversion of preferred stock.
(3) In 2015, the Company did not exclude losses and gains
on disposals of fixed assets from adjusted net income due to
insignificance. Loss (gain) on disposals of fixed assets for the
first quarter of 2016 includes a loss of $0.6 million on the sale
of a seating segment facility.
Contact Information
Investor Relations:
Chad Paris
investors@jasoninc.com
414.277.2007
Media: Melissa Zona
mzona@jasoninc.com
636.751.4057
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