Forterra Announces Strategic Exchange of Assets Within Existing Sale-Leaseback Arrangement
June 11 2018 - 5:00PM
Forterra, Inc. (“Forterra” or the "Company”) (NASDAQ:FRTA) ), a
leading manufacturer of water and drainage infrastructure pipe and
products in the United States and Eastern Canada, today announced
that it has amended and restated its existing sale-leaseback
arrangement (the “SLB”). The transaction removed a total of 24 U.S.
drainage facilities and U.S. and Canadian concrete pressure pipe
facilities from the SLB, in exchange for Forterra’s contribution of
two ductile iron pipe facilities in Bessemer, Alabama to the
SLB. The transaction is expected to provide Forterra with
increased flexibility to evaluate portfolio enhancement initiatives
for the 24 facilities removed from the agreement.
In connection with the transaction, certain modifications to the
SLB, including an increase in the lease term, will change the
accounting treatment of the SLB. The SLB will now be
accounted for as a finance lease, rather than an operating lease,
which Forterra expects will increase EBITDA and Adjusted EBITDA and
increase financing obligations on the balance sheet. The
increase in the financing obligation on the balance sheet is
expected to result in a slight initial increase in Forterra’s
financial leverage after adjusting for the associated increase in
EBITDA and Adjusted EBITDA. Prior to this transaction,
Forterra expected to incur approximately $19 million in SLB
operating expenses in 2018.
The Company expects to make a cash tax payment of approximately
$17 million in 2018 as a result of a tax basis gain on the
transaction. The exchange will also increase Forterra’s annual SLB
cash payments by approximately $200,000. The Company expects to
more than offset the 2018 cash impact by executing on portfolio
enhancement initiatives related to the re-acquired properties over
the remainder of 2018 and beyond.
About ForterraForterra is a leading
manufacturer of water and drainage pipe and products in the U.S.
and Eastern Canada for a variety of water-related infrastructure
applications, including water transmission, distribution, drainage
and stormwater management. Based in Irving, Texas, Forterra’s
product breadth and significant scale help make it a one-stop shop
for water related pipe and products and a preferred supplier to a
wide variety of customers, including contractors, distributors and
municipalities. For more information on Forterra, visit
http://forterrabp.com.
Forward-Looking StatementsThis press release
contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. Forward-looking
statements may be identified by the use of words such as
"anticipate", "believe", "expect", "estimate", "plan", "outlook",
and "project" and other similar expressions that predict or
indicate future events or trends or that are not statements of
historical matters. Forward-looking statements should not be read
as a guarantee of future performance or results, and will not
necessarily be accurate indications of the times at, or by, which
such performance or results will be achieved. Forward-looking
statements are based on historical information available at the
time the statements are made and are based on management's
reasonable belief or expectations with respect to future events,
and are subject to risks and uncertainties, many of which are
beyond the Company's control, that could cause actual performance
or results to differ materially from the belief or expectations
expressed in or suggested by the forward-looking statements.
Forward-looking statements speak only as of the date on which they
are made and the Company undertakes no obligation to update any
forward-looking statement to reflect future events, developments or
otherwise, except as may be required by applicable law. Investors
are referred to the Company's filings with the Securities and
Exchange Commission, including its Annual Report on Form 10-K, for
additional information regarding the risks and uncertainties that
may cause actual results to differ materially from those expressed
in any forward-looking statement.
Company Contact Information:David J.
LawrenceVice President of Treasury and Investor
Relations469-299-9113IR@forterrabp.com
Forterra (NASDAQ:FRTA)
Historical Stock Chart
From Aug 2024 to Sep 2024
Forterra (NASDAQ:FRTA)
Historical Stock Chart
From Sep 2023 to Sep 2024