DALLAS, Aug. 11, 2011 /PRNewswire/ -- Reddy Ice Holdings,
Inc. (NYSE: FRZ) today reported financial results for the quarter
and six months ended June 30, 2011.
Revenues for the second quarter of 2011 were $106.5 million, compared to $104.2 million in the same quarter of 2010,
an increase of two percent. Revenues in the first six months
of 2011 increased five percent to $147.2
million, compared to $140.1 million in the same period of 2010.
The Company's net loss was $1.9
million in the second quarter of 2011, compared to net
income of $2.1 million in the same
period of 2010. Net loss per share was $0.09 in the second quarter of 2011 compared to a
net income per share of $0.09 in the
same period of 2010. In the first six months of 2011, the
Company's net loss was $41.0 million,
compared to a net loss of $20.5 million in the same period of 2010.
Net loss per share was $1.81 in
the first six months of 2011, compared to a net loss per share of
$0.91 in the same period of 2010.
Adjusted EBITDA, defined as earnings before interest, taxes,
depreciation and amortization, and the effects of certain other
items was $26.2 million in the second
quarter of 2011 versus $28.4 million in the same period of 2010.
Adjusted EBITDA for the first six months of 2011 increased 6%
to $17.5 million, compared to
$16.6 million in the same period of
2010. A discussion regarding the presentation of Adjusted
EBITDA in this press release, including reconciliations of Adjusted
EBITDA to EBITDA and net income (loss), is set forth below in the
section titled, "SUPPLEMENTAL DISCLOSURE REGARDING NON-GAAP
FINANCIAL INFORMATION."
"We are pleased to report that our actual revenues and EBITDA
for the first six months of 2011 grew together on a year over year
basis for the first time since 2006. Although encouraged by
recent results, we aspire to even stronger performance and
execution against our fundamentals and growth opportunities,"
commented Chief Executive Officer and President Gilbert M. Cassagne. "The continued
implementation of certain cost efficiency projects provided
benefits during the second quarter, while increases in commodity
prices and certain other costs and the anticipated carryover
effects of 2010 competitive activities presented challenges."
In March 2010, the Company
refinanced substantially all of its debt. The Company issued
$300 million in principal amount of 11.25% Senior Secured
Notes due 2015, $139.4 million
in principal amount of 13.25% Senior Secured Notes due 2015,
entered into a $35 million revolving credit facility with a
group of banks and entered into a facility for the issuance of cash
collateralized letters of credit. Effective August 4, 2010, the Company expanded the size of
its revolving credit facility from $35 million to
$50 million. On October 22, 2010, the Company
amended and restated its revolving credit facility to amend
covenants and certain other terms. As a result of these
financing transactions, the Company recognized $6.2 million of expenses in the first six
months of 2010 related to fees, expenses and the write-off of
certain debt issuance costs related to the debt that was repaid.
No such costs were incurred during the first six months of
2011. Interest expense in the first six months of 2011 was
$29.2 million, compared to
$21.6 million in the first six
months of 2010.
In connection with the Company's ongoing acquisition strategy,
one acquisition was completed during the second quarter of 2011 for
a total purchase price, excluding $0.6
million of parts and supplies, raw materials and finished
goods inventories, of approximately $4.3
million. Annual revenues and Adjusted EBITDA
associated with this acquisition are approximately $5.5 million and $0.9
million, respectively. "We will continue to evaluate
all acquisition opportunities as part of our ongoing acquisition
strategy and will consider deploying additional capital in this
area. We are pleased to be able to continue acquiring quality
ice businesses at attractive prices," commented Mr. Cassagne.
"The second quarter acquisition further increases our market
share and strengthens our competitive position in the Northwestern United States. On a
year-to-date basis, we have completed nine acquisitions for a total
purchase price of approximately $12.7
million, net of $0.6 million
of inventories, of which approximately $9.6
million relates to acquisitions in the Northwest.
Annual revenues and Adjusted EBITDA associated with our 2011
acquisitions are approximately $13.8
and $3.0, respectively."
CONFERENCE CALL
The Company has scheduled a conference call for today,
August 11, 2011, at 10:00 a.m. Eastern time. To participate in
the teleconference, please dial into the call a few minutes before
the start time: 877-317-6789. Please refer to confirmation
code 10002883. A replay of the call will be available two
hours after the completion of the call through August 18, 2011. To access the replay,
please dial 877-344-7529 and reference the above-listed
confirmation code. The live webcast and archived replay also
can be accessed on the Company's Web site at www.reddyice.com.
ABOUT REDDY ICE
Reddy Ice Holdings, Inc. is the largest manufacturer and
distributor of packaged ice in the United
States. With approximately 1,500 year-round employees, the
Company sells its products primarily under the widely known Reddy
Ice® brand to a variety of customers in 34 states and the
District of Columbia. The
Company provides a broad array of product offerings in the
marketplace through traditional direct store delivery, warehouse
programs and its proprietary technology, The Ice Factory®.
Reddy Ice serves most significant consumer packaged goods
channels of distribution, as well as restaurants, special
entertainment events, commercial users and the agricultural
sector.
This press release contains various "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements are based on
management's belief as well as assumptions made by and information
currently available to management. Although the Company
believes that the expectations reflected in such forward-looking
statements are reasonable, it can give no assurance that such
expectations will prove to have been correct. Such statements
contain certain risks, uncertainty and assumptions. Should one or
more of these risks materialize, or should underlying assumptions
prove incorrect, actual results may vary materially from those
expected.
Contacts:
|
Steven J. Janusek
|
|
|
Executive Vice President &
CFO
|
|
|
sjanusek@reddyice.com
|
|
|
800-683-4423
|
|
|
|
– Financial Tables Follow –
REDDY ICE
HOLDINGS, INC. AND SUBSIDIARY
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June
30,
|
|
June
30
|
|
|
|
2011
|
|
2010
|
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$106,493
|
|
$104,163
|
|
|
$147,245
|
|
$140,057
|
|
Cost of sales (excluding
depreciation)
|
|
66,768
|
|
62,109
|
|
|
103,993
|
|
97,017
|
|
Depreciation expense related to
cost of sales
|
|
7,480
|
|
5,647
|
|
|
15,188
|
|
10,961
|
|
Gross profit
|
|
32,245
|
|
36,407
|
|
|
28,064
|
|
32,079
|
|
Operating expenses
|
|
14,315
|
|
14,373
|
|
|
27,114
|
|
27,492
|
|
Depreciation and amortization
expense
|
|
2,454
|
|
2,173
|
|
|
4,984
|
|
4,049
|
|
(Gain) loss on dispositions of
assets
|
|
(114)
|
|
1,170
|
|
|
(168)
|
|
1,397
|
|
Impairment of long-lived
assets
|
|
539
|
|
236
|
|
|
770
|
|
236
|
|
Acquisition expenses
|
|
1,844
|
|
208
|
|
|
2,447
|
|
210
|
|
Cost of antitrust investigations
and related litigation
|
|
731
|
|
1,130
|
|
|
2,152
|
|
2,043
|
|
Income (loss) from
operations
|
|
12,476
|
|
17,117
|
|
|
(9,235)
|
|
(3,348)
|
|
Interest expense
|
|
(14,826)
|
|
(14,320)
|
|
|
(29,175)
|
|
(21,579)
|
|
Interest income
|
|
4
|
|
8
|
|
|
8
|
|
12
|
|
Debt refinance costs
|
|
-
|
|
(60)
|
|
|
-
|
|
(6,168)
|
|
Income (loss) before income
taxes
|
|
(2,346)
|
|
2,745
|
|
|
(38,402)
|
|
(31,083)
|
|
Income tax benefit
(expense)
|
|
400
|
|
(613)
|
|
|
(2,645)
|
|
10,618
|
|
Net income (loss)
|
|
$(1,946)
|
|
$2,132
|
|
|
$(41,047)
|
|
$(20,465)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income (loss) per
share:
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$(0.09)
|
|
$0.09
|
|
|
$(1.81)
|
|
$(0.91)
|
|
|
Weighted average common shares
outstanding
|
|
22,737
|
|
22,870
|
|
|
22,713
|
|
22,432
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income (loss) per
share:
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$(0.09)
|
|
$0.09
|
|
|
$(1.81)
|
|
$(0.91)
|
|
|
Weighted average common shares
outstanding
|
|
22,737
|
|
23,165
|
|
|
22,713
|
|
22,432
|
|
|
|
|
|
|
|
|
|
|
|
|
REDDY ICE
HOLDINGS, INC. AND SUBSIDIARY
CONDENSED
CONSOLIDATED BALANCE SHEET DATA
(Unaudited)
|
|
|
|
|
|
June
30,
|
|
December
31,
|
|
|
|
2011
|
|
2010
|
|
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
$10,455
|
|
|
$42,173
|
|
Restricted cash
|
|
|
10,758
|
|
|
10,110
|
|
All other current
assets
|
|
|
76,699
|
|
|
39,602
|
|
Total assets
|
|
|
476,628
|
|
|
470,925
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued
expenses
|
|
|
$50,427
|
|
|
$39,467
|
|
Total current and non-current
debt
|
|
|
|
|
|
|
|
(including
revolving credit facility)
|
|
|
480,848
|
|
|
450,691
|
|
Total stockholders'
deficit
|
|
|
(69,736)
|
|
|
(29,793)
|
|
Total liabilities and
stockholders' deficit
|
|
|
476,628
|
|
|
470,925
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE REGARDING NON-GAAP FINANCIAL
INFORMATION
EBITDA represents the Company's consolidated net loss before
income taxes, interest and depreciation and amortization.
Adjusted EBITDA represents EBITDA as further adjusted to give
effect to unusual items, non-cash items, Reddy Ice Holdings, Inc.
("Reddy Holdings") gains and expenses and other adjustments set
forth below, such additional adjustments being required to
calculate covenant ratios and compliance under the Company's new
credit facility. EBITDA and Adjusted EBITDA are not
presentations made in accordance with generally accepted accounting
principles ("GAAP") and are not measures of financial condition or
profitability. EBITDA and Adjusted EBITDA should not be
considered in isolation or as a substitute for "net income (loss)",
the most directly comparable GAAP financial measure, as an
indicator of operating performance.
By presenting Adjusted EBITDA, the Company intends to provide
investors with a better understanding of its core operating results
to measure past performance as well as prospects for the future.
The Company evaluates operating performance based on several
measures, including Adjusted EBITDA, as the Company believes it is
an important measure of the operational strength of its business.
Furthermore, the additional adjustments included in the
calculation of Adjusted EBITDA are required to calculate covenant
ratios and compliance under the Company's credit facility.
Adjusted EBITDA as we have presented it may not be comparable to
similarly titled measures used by other companies. Adjusted
EBITDA is not necessarily a measure of the Company's ability to
fund its cash needs, as it excludes certain financial information
when compared to "net income (loss)". Users of this financial
information should consider the types of events and transactions
which are excluded.
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June
30,
|
|
June
30,
|
|
|
2011
|
2010
|
|
2011
|
2010
|
|
|
(in
thousands, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$(1,946)
|
|
$2,132
|
|
|
$(41,047)
|
|
$(20,465)
|
|
Depreciation expense related to
costs of sales
|
|
7,480
|
|
5,647
|
|
|
15,188
|
|
10,961
|
|
Depreciation and amortization
expense
|
|
2,454
|
|
2,173
|
|
|
4,984
|
|
4,049
|
|
Interest expense
|
|
14,826
|
|
14,320
|
|
|
29,175
|
|
21,579
|
|
Interest income
|
|
(4)
|
|
(8)
|
|
|
(8)
|
|
(12)
|
|
Income tax (benefit)
expense
|
|
(400)
|
|
613
|
|
|
2,645
|
|
(10,618)
|
|
EBITDA
|
|
22,410
|
|
24,877
|
|
|
10,937
|
|
5,494
|
|
Other non-cash and excluded
charges:
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation
expense
|
|
577
|
|
704
|
|
|
1,208
|
|
1,031
|
|
|
(Gain) loss on dispositions of
assets
|
|
(114)
|
|
1,170
|
|
|
(168)
|
|
1,397
|
|
|
Impairment of long-lived
assets
|
|
539
|
|
236
|
|
|
770
|
|
236
|
|
|
Acquisition expenses
|
|
1,844
|
|
208
|
|
|
2,447
|
|
210
|
|
|
Decrease in fair value of diesel
hedge
|
|
178
|
|
-
|
|
|
162
|
|
-
|
|
|
Debt refinance costs
|
|
-
|
|
60
|
|
|
-
|
|
6,168
|
|
Reddy Holdings items:
|
|
|
|
|
|
|
|
|
|
|
|
Cost of antitrust investigations
and related litigation (a)
|
|
731
|
|
1,130
|
|
|
2,152
|
|
2,043
|
|
Adjusted EBITDA
|
|
$26,165
|
|
$28,385
|
|
|
$17,508
|
|
$16,579
|
|
|
|
(a) The cost of the
antitrust investigations and related litigation and related
insurance recoveries are excluded from the calculation of Adjusted
EBITDA as these costs have been paid by Reddy Holdings. Reddy
Holdings is currently paying these costs with the excess cash
remaining from the initial public offering of its common stock in
August 2005, the funds paid to Reddy Holdings by affiliates of GSO
Capital Partners LP in February 2008 in connection with the
termination of the merger agreement, proceeds of insurance
recoveries by Reddy Holdings and dividends received from its
wholly-owned subsidiary, Reddy Ice Corporation.
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company's credit agreement requires that pro forma effect be
given to certain items, such as acquisitions and dispositions of
businesses and the purchase of leased assets, when calculating
Adjusted EBITDA. The following table sets forth the
calculation of pro forma Adjusted EBITDA:
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June
30,
|
|
June
30,
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
(in
thousands, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
$26,165
|
|
$28,385
|
|
$17,508
|
|
$16,579
|
|
Acquisition adjustments
(a)
|
(30)
|
|
2,434
|
|
(428)
|
|
2,165
|
|
Pro forma adjusted
EBITDA
|
$26,135
|
|
$30,819
|
|
$17,080
|
|
$18,744
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Represents the
incremental Adjusted EBITDA of acquired businesses as if each
acquisition had been consummated on the first day of the period
presented. All acquisitions included herein were consummated
on or before June 30, 2011.
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE Reddy Ice Holdings, Inc.