DALLAS, Nov. 9, 2011 /PRNewswire/ -- Reddy Ice Holdings,
Inc. (NYSE: FRZ) today reported financial results for the quarter
and nine months ended September 30,
2011.
Revenues for the third quarter of 2011 were $126.3 million, compared to $120.1 million in the same quarter of 2010,
an increase of five percent. Revenues in the first nine
months of 2011 increased five percent to $273.6 million, compared to $260.2 million in the same period of 2010.
The Company's net income was $4.9
million in the third quarter of 2011, compared to net income
of $9.0 million in the same period of
2010. Net income per diluted share was $0.21 in the third quarter of 2011 compared to
net income per diluted share of $0.39
in the same period of 2010. In the first nine months of 2011,
the Company's net loss was $36.2
million, compared to a net loss of $11.5 million in the same period of 2010.
Net loss per share was $1.59 in
the first nine months of 2011, compared to a net loss per share of
$0.51 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 $34.5 million in the third
quarter of 2011 versus $34.4 million
in same period of 2010. Adjusted EBITDA for the first nine
months of 2011 was $52.0 million,
compared to $51.0 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 continued to improve our performance by achieving growth in
both revenues and EBITDA for the quarter and the first nine months
of 2011 on a year over year basis," commented Chief Executive
Officer and President Gilbert M.
Cassagne. "Although the business is being challenged on
several fronts, including commodity prices and same store sales
trends, we remain committed to our ongoing programs and initiatives
as the path for building future success."
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 $6.5 million of expense in the first nine
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 nine months of
2011. Interest expense in the first nine months of 2011 was
$43.9 million, compared to
$35.7 million in the first nine
months of 2010.
In connection with the Company's ongoing acquisition strategy,
nine acquisitions were completed in the first nine months of 2011
for a total purchase price of approximately $12.7 million, net of $0.7
million of inventories, of which approximately $9.6 million relates to acquisitions in the
Northwest. No acquisitions were completed during the three
months ended September 30, 2011.
Annual revenues and Adjusted EBITDA associated with our 2011
acquisitions are approximately $13.8
million and $3.0 million,
respectively.
The Company incurred acquisition expenses in the third quarter
of $1.7 million and $4.1 million for the first nine months of 2011.
Acquisition expenses for the three and nine months ended
September 30, 2010 were $0.4 million and $0.6
million, respectively. Substantially all of the 2011
expenses were in connection with the Company's evaluation of a
strategic merger opportunity within the packaged ice industry.
While this evaluation is ongoing, no agreement has been
reached and there can be no assurance that an agreement will be
reached.
CONFERENCE CALL
The Company has scheduled a conference call for today,
November 9, 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 10006551. A replay of the call will be available two
hours after the completion of the call through November 16, 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:
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Steven J. Janusek
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Executive Vice President &
CFO
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sjanusek@reddyice.com
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800-683-4423
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– Financial
Tables Follow –
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REDDY ICE
HOLDINGS, INC. AND SUBSIDIARY
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
Nine Months
Ended
|
|
|
September
30,
|
September
30,
|
|
|
2011
|
2010
|
2011
|
2010
|
|
|
(in
thousands, except per share amounts)
|
|
|
|
|
|
|
|
Revenues
|
$126,330
|
$120,147
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$273,575
|
$260,204
|
|
Cost of sales (excluding
depreciation)
|
77,800
|
71,770
|
181,793
|
168,787
|
|
Depreciation expense related to
cost of sales
|
7,819
|
5,694
|
23,007
|
16,655
|
|
Gross profit
|
40,711
|
42,683
|
68,775
|
74,762
|
|
Operating expenses
|
14,725
|
14,358
|
41,839
|
41,850
|
|
Depreciation and amortization
expense
|
2,249
|
2,435
|
7,233
|
6,484
|
|
Loss on dispositions of
assets
|
629
|
1,035
|
461
|
2,432
|
|
Impairment of long-lived
assets
|
1,971
|
514
|
2,741
|
750
|
|
Acquisition expenses
|
1,664
|
414
|
4,111
|
624
|
|
Gain on contingent acquisition
consideration
|
(202)
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-
|
(202)
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-
|
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Cost (insurance recoveries)
related to antitrust investigations
|
|
|
|
|
|
and related
litigation
|
785
|
(3,867)
|
2,937
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(1,824)
|
|
Income from
operations
|
18,890
|
27,794
|
9,655
|
24,446
|
|
Interest expense
|
(14,698)
|
(14,099)
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(43,873)
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(35,678)
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Interest income
|
4
|
3
|
12
|
15
|
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Gain on bargain
purchase
|
-
|
264
|
-
|
264
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|
Debt refinance costs
|
-
|
(310)
|
-
|
(6,478)
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|
Income (loss) before income
taxes
|
4,196
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13,652
|
(34,206)
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(17,431)
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|
Income tax benefit
(expense)
|
696
|
(4,662)
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(1,949)
|
5,956
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|
Net income (loss)
|
$4,892
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$8,990
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$(36,155)
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$(11,475)
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|
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Basic net income (loss) per
share:
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Net income
(loss)
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$0.21
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$0.39
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$(1.59)
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$(0.51)
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Weighted average
common shares outstanding
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23,394
|
22,949
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22,742
|
22,450
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|
|
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Diluted net income (loss) per
share:
|
|
|
|
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Net income
(loss)
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$0.21
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$0.39
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$(1.59)
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$(0.51)
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Weighted average
common shares outstanding
|
23,466
|
23,058
|
22,742
|
22,450
|
|
|
|
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REDDY ICE
HOLDINGS, INC. AND SUBSIDIARY
CONDENSED
CONSOLIDATED BALANCE SHEET DATA
(Unaudited)
|
|
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September
30,
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December
31,
|
|
|
2011
|
2010
|
|
|
(in
thousands)
|
|
|
|
|
|
Cash and cash
equivalents
|
$10,802
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$42,173
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Restricted cash
|
13,107
|
10,110
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All other current
assets
|
68,168
|
39,602
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Total assets
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460,947
|
470,925
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|
|
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Accounts payable and accrued
expenses
|
$46,376
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$39,467
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Total current and non-current
debt (including revolving credit facility)
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465,276
|
450,691
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Total stockholders'
deficit
|
(64,320)
|
(29,793)
|
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Total liabilities and
stockholders' deficit
|
460,947
|
470,925
|
|
|
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SUPPLEMENTAL DISCLOSURE REGARDING NON-GAAP FINANCIAL
INFORMATION
EBITDA represents the Company's consolidated net income (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
|
Nine Months
Ended
|
|
|
September
30,
|
September
30,
|
|
|
2011
|
2010
|
2011
|
2010
|
|
|
(in
thousands, unaudited)
|
|
|
|
|
|
|
|
Net income (loss)
|
$4,892
|
$8,990
|
$(36,155)
|
$(11,475)
|
|
Depreciation expense related to
costs of sales
|
7,819
|
5,694
|
23,007
|
16,655
|
|
Depreciation and amortization
expense
|
2,249
|
2,435
|
7,233
|
6,484
|
|
Interest expense
|
14,698
|
14,099
|
43,873
|
35,678
|
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Interest income
|
(4)
|
(3)
|
(12)
|
(15)
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Income tax (benefit)
expense
|
(696)
|
4,662
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1,949
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(5,956)
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EBITDA
|
28,958
|
35,877
|
39,895
|
41,371
|
|
Other non-cash and excluded
charges:
|
|
|
|
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Stock-based
compensation expense
|
596
|
392
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1,804
|
1,423
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Loss on
dispositions of assets
|
629
|
1,035
|
461
|
2,432
|
|
Impairment of
long-lived assets
|
1,971
|
514
|
2,741
|
750
|
|
Acquisition
expenses
|
1,664
|
414
|
4,111
|
624
|
|
Decrease in fair
value of diesel hedge
|
83
|
-
|
245
|
-
|
|
Gain on contingent
acquisition consideration
|
(202)
|
-
|
(202)
|
-
|
|
Gain on bargain
purchase
|
-
|
(264)
|
-
|
(264)
|
|
Debt refinance
costs
|
-
|
310
|
-
|
6,478
|
|
Reddy Holdings items:
|
|
|
|
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Cost (insurance
recoveries) related to antitrust investigations
|
|
|
|
|
|
and related litigation (a)
|
785
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(3,867)
|
2,937
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(1,824)
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|
Adjusted EBITDA
|
$34,484
|
$34,411
|
$51,992
|
$50,990
|
|
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(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.
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|
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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
|
Nine Months
Ended
|
|
|
September
30,
|
September
30,
|
|
|
2011
|
2010
|
2011
|
2010
|
|
|
(in
thousands, unaudited)
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
$34,484
|
$34,411
|
$51,992
|
$50,990
|
|
Acquisition adjustments
(a)
|
-
|
3,877
|
(379)
|
6,009
|
|
Pro forma adjusted
EBITDA
|
$34,484
|
$38,288
|
$51,613
|
$56,999
|
|
|
|
|
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(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 September 30, 2011.
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SOURCE Reddy Ice Holdings, Inc.