Continued Adjusted EBITDA Margin
Expansion
Reaffirms Full Year Guidance
Jason Industries, Inc. (NASDAQ:JASN) (NASDAQ:JASNW) (“Jason” or
the “Company”) today reported results for third quarter 2018.
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the full release here:
https://www.businesswire.com/news/home/20181030005302/en/
Key financial results for the third quarter 2018 versus the year
ago period include:
- Net sales of $145.3 million decreased
6.5 percent and included a negative 1.7 percent impact from the
divestiture and planned exit of non-core businesses and a negative
0.5 percent from foreign currency translation.
- Operating income of $2.9 million, or
2.0 percent of net sales, decreased from 3.0 percent of net sales
on higher cost of goods sold.
- Net loss of $5.5 million, or $0.23
diluted loss per share, increased $3.9 million and $0.13 per share,
impacted by $2.2 million, or $0.08 per share, of lower tax
benefits.
- Free cash flow was $6.2 million, an
increase of $5.7 million, due to lower working capital requirements
and timing of capital expenditures.
On an adjusted basis, third quarter 2018 results versus the year
ago period include:
- Adjusted EBITDA of $15.2 million
decreased $0.9 million, including an impact of $0.6 million from
the Acoustics Europe business divested in August 2017. Adjusted
EBITDA margins expanded to 10.5 percent of net sales from 10.4
percent, driven by operational efficiencies and pricing.
- Adjusted Net Loss of $3.7 million, or
$0.12 Adjusted Loss Per Share, increased $0.11 per share.
“We improved margins for the seventh consecutive quarter,
generated strong free cash flow and reduced leverage to 5.1 times.
As best demonstrated by our Seating business, each of our teams
continue to target select growth opportunities, improve operations
and drive cash generation,” said Brian Kobylinski, chief executive
officer of Jason. “Our progress remains steady and our results are
in line with our expectations.”
Highlights during the quarter include:
- Total Cost Reduction and Margin
Expansion program savings were $0.5 million in the third quarter
with a total of $22 million since the inception of the program.
Actions taken and announced to-date are expected to achieve $24
million in annual run-rate cost savings.
- Achieved organic growth of 5.0 percent
in Seating and 1.2 percent in Finishing. Organic growth was
generated through select targeted growth initiatives, pricing
actions and continued strength in U.S. industrial markets.
- Progressed the Nuneaton, United Kingdom
Seating facility consolidation. Expected net proceeds from the
facility sale are now $3.3 million with the consolidation and sale
completed by year-end.
Key financial results within the segments for the third quarter
2018 versus the year ago period include:
- Finishing net sales were $51.0 million
with organic sales increasing 1.2 percent. Targeted growth
initiatives and strong industrial markets in the U.S. were
partially offset by moderating European industrial markets.
Adjusted EBITDA was $7.6 million, or 14.9 percent of net sales, an
increase of $0.1 million from 14.7 percent of net sales. Adjusted
EBITDA margin increased on pricing actions and was impacted by
inflation on both materials and freight.
- Components net sales of $21.4 million
increased $1.5 million, or 7.3 percent. Organic sales decreased 9.4
percent due to lower volumes in rail and expanded metal products.
Organic sales exclude non-core smart meter product lines, which
increased 16.7 percent in preparation for the planned exit of
production by the end of 2018. Adjusted EBITDA was $2.6 million, or
12.0 percent of net sales, compared with 12.3 percent of net sales
in the prior year.
- Seating net sales of $34.6 million
increased $1.6 million with organic sales increasing 5.0 percent.
Higher volumes in the construction, agriculture, and material
handling markets offset expected declines in motorcycles. Adjusted
EBITDA was $3.6 million, or 10.4 percent of net sales, an increase
of $1.0 million from 8.0 percent of net sales, with margins
positively impacted by continuous improvement initiatives, labor
and material efficiencies and pricing.
- Acoustics net sales of $38.3 million
decreased $13.2 million, or 25.6 percent, including a negative 11.5
percent impact from the divestiture of the Acoustics European
operations. Organic sales decreased 14.1 percent due to end-of-life
platform changes and a continuing shift from cars to light truck
vehicles. Adjusted EBITDA was $4.5 million, or 11.7 percent of net
sales, compared with 12.9 percent of net sales in the prior year.
Adjusted EBITDA margin decreased on lower sales and input cost
inflation, partially mitigated by improved material efficiencies,
continuous improvement projects, and savings related to the closure
of the Richmond, Indiana facility.
- Corporate expenses of $3.0 million
decreased $0.1 million versus the prior year.
Other Information:
- Net debt to Adjusted EBITDA on a
trailing twelve-month basis was 5.1x as of the end of the third
quarter, a decrease from 5.5x as of the end of 2017. Total
liquidity as of the end of the third quarter was $91.2 million,
comprised of $51.4 million of cash and cash equivalents and $39.8
million of availability on revolving loan facilities globally.
- In the third quarter, Moody’s upgraded
the company’s credit ratings with the corporate family rating
raised to B3 from Caa1, the senior secured first lien term loan
raised to B2 from B3, and the secured second lien term loan raised
to Caa2 from Caa3. The Company’s recently extended senior secured
first lien revolving credit facilities were assigned a rating of
B2. Moody’s ratings outlook remained stable.
2018 Guidance:
Kobylinski stated, “Our nimbleness and execution are outpacing
select end-market volatility and the impact of inflation. We
continue to progress toward our goals and reaffirm our 2018
guidance.”
For the full year 2018, Jason reaffirms guidance of net sales in
the range of $600 to $615 million, Adjusted EBITDA of $66 to $70
million, and free cash flow of $13 to $17 million, resulting in an
implied net debt to Adjusted EBITDA range of 5.3 to 4.9 times.
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 877-451-6152 (domestic) or
201-389-0879 (international). Participants should ask for the Jason
Industries Third Quarter 2018 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 844-512-2921 (domestic) or
412-317-6671 (international) and entering the replay passcode
13642137. The telephonic replay will be available until 11:59 pm
(Eastern Time), November 6, 2018. 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 finishing, components, seating,
and automotive acoustics markets, including Osborn (Richmond, Ind.
and Burgwald, Germany), Metalex (Libertyville, Ill.), Milsco
(Milwaukee, Wis.), and Janesville Acoustics (Southfield, Mich.).
Headquartered in Milwaukee, Wis., Jason employs more than 4,300
people in 13 countries.
Forward Looking Statements
This 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
impact of the recent Tax Reform Act; 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 Information
Included 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, (ii) sales from
divested businesses or exited non-core businesses, and (iii) 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,
divestitures, and exited non-core businesses) and (b) the
period-to-period change in results (excluding acquisitions,
divestitures, and exited non-core businesses) 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 prior year period organic sales.
Jason Industries, Inc. Condensed Consolidated
Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
Nine Months Ended September
September September September
28, 2018 29, 2017 28, 2018 29, 2017 Net
sales $ 145,295 $ 155,430 $ 480,973 $ 503,100 Cost of goods sold
116,818 123,457 379,702 400,874 Gross
profit 28,477 31,973 101,271 102,226 Selling and administrative
expenses 24,514 26,170 80,926 78,068 (Gain) loss on disposals of
property, plant and equipment - net (91 ) (639 ) 154 (904 )
Restructuring 1,185 1,772 3,251 2,996
Operating income 2,869 4,670 16,940 22,066 Interest expense (8,348
) (8,203 ) (24,778 ) (24,964 ) Gain on extinguishment of debt — 819
— 2,383 Equity income 468 295 903 715 Loss on divestiture — (842 )
— (8,730 ) Other income - net 51 58 606 261
Loss before income taxes (4,960 ) (3,203 ) (6,329 ) (8,269 )
Tax provision (benefit) 552 (1,602 ) 589 (1,438 ) Net
loss $ (5,512 ) $ (1,601 ) $ (6,918 ) $ (6,831 ) Less net gain
attributable to noncontrolling interests — — —
5 Net loss attributable to Jason Industries $ (5,512 ) $
(1,601 ) $ (6,918 ) $ (6,836 ) Redemption premium and accretion of
dividends on preferred stock 781 955 3,274
2,809 Net loss available to common shareholders of Jason
Industries $ (6,293 ) $ (2,556 ) $ (10,192 ) $ (9,645 ) Net loss
per share available to common shareholders of Jason Industries:
Basic and diluted $ (0.23 ) $ (0.10 ) $ (0.37 ) $ (0.37 )
Weighted average number of common shares outstanding: Basic and
diluted 27,683 26,241 27,565 26,023
Jason Industries,
Inc. Condensed Consolidated Balance Sheets
(In thousands, except share and per share
amounts) (Unaudited)
September 28, 2018
December 31, 2017 Assets Current assets Cash and cash
equivalents $ 51,370 $ 48,887 Accounts receivable - net 73,341
68,626 Inventories - net 65,473 70,819 Other current assets 17,201
15,655 Total current assets 207,385 203,987 Property,
plant and equipment - net 141,021 154,196 Goodwill 44,410 45,142
Other intangible assets - net 119,646 131,499 Other assets - net
14,080 11,499 Total assets $ 526,542 $ 546,323
Liabilities and Shareholders’ (Deficit) Equity
Current liabilities Current portion of long-term debt $ 6,634 $
9,704 Accounts payable 52,704 53,668 Accrued compensation and
employee benefits 16,543 17,433 Accrued interest 82 276 Other
current liabilities 15,525 19,806 Total current
liabilities 91,488 100,887 Long-term debt 389,211 391,768 Deferred
income taxes 24,973 25,699 Other long-term liabilities 21,272
22,285 Total liabilities 526,944 540,639
Shareholders’ (Deficit) Equity Preferred stock
39,818 49,665 Jason Industries common stock 3 3 Additional paid-in
capital 155,348 143,788 Retained deficit (174,118 ) (167,710 )
Accumulated other comprehensive loss (21,453 ) (20,062 ) Total
shareholders’ (deficit) equity (402 ) 5,684 Total
liabilities and shareholders’ (deficit) equity $ 526,542 $
546,323
Jason Industries, Inc. Condensed
Consolidated Statements of Cash Flows
(In thousands) (Unaudited)
Nine Months Ended September 28,
2018 September 29, 2017 Cash flows from
operating activities Net loss $ (6,918 ) $ (6,831 ) Adjustments
to reconcile net loss to net cash provided by operating activities:
Depreciation 20,415 19,874 Amortization of intangible assets 11,242
9,365 Amortization of deferred financing costs and debt discount
2,199 2,232 Equity income (903 ) (715 ) Deferred income taxes
(1,113 ) (8,540 ) Loss (gain) on disposals of property, plant and
equipment - net 154 (904 ) Gain on extinguishment of debt — (2,383
) Loss on divestiture — 8,730 Transaction fees on divestiture —
(932 ) Share-based compensation 1,728 904 Net increase (decrease)
in cash due to changes in: Accounts receivable (5,155 ) (332 )
Inventories 4,368 3,958 Other current assets 811 655 Accounts
payable (506 ) (5,275 ) Accrued compensation and employee benefits
(689 ) 7,647 Accrued interest (194 ) (80 ) Accrued income taxes
(3,548 ) 2,061 Other - net (1,876 ) (4,954 ) Total adjustments
26,933 31,311 Net cash provided by operating
activities 20,015 24,480
Cash flows from investing
activities Proceeds from disposals of property, plant and
equipment 202 8,758 Payments for property, plant and equipment
(9,636 ) (10,363 ) Proceeds from divestitures, net of cash divested
and debt assumed by buyer — 7,883 Acquisitions of patents (44 ) (64
) Net cash (used in) provided by investing activities (9,478 )
6,214
Cash flows from financing activities Payments
of deferred financing costs (609 ) — Payments of First and Second
Lien term loans (4,825 ) (21,051 ) Proceeds from other long-term
debt 3,314 7,883 Payments of other long-term debt (5,358 ) (6,190 )
Other financing activities - net (14 ) (44 ) Net cash used in
financing activities (7,492 ) (19,402 ) Effect of exchange rate
changes on cash and cash equivalents (562 ) 1,599 Net
increase in cash and cash equivalents 2,483 12,891 Cash, cash
equivalents and restricted cash, beginning of period 48,887
40,861 Cash, cash equivalents and restricted cash, end of
period $ 51,370 $ 53,752
Jason Industries,
Inc. Quarterly Financial Information by Segment
(In thousands) (Unaudited)
2017 2018
1Q 2Q 3Q 4Q
FY 1Q 2Q 3Q
4Q YTD Finishing
Net sales $ 49,476 $ 49,757 $ 51,065 $ 49,986 $ 200,284 $ 53,978 $
55,454 $ 51,016 $ 160,448 Adjusted EBITDA 7,067 7,324 7,503 5,767
27,661 7,799 8,437 7,579 23,815 Adjusted EBITDA % net sales 14.3 %
14.7 % 14.7 % 11.5 % 13.8 % 14.4 % 15.2 % 14.9 % 14.8 %
Components Net sales $ 21,117 $ 21,713 $ 19,945 $ 19,846 $
82,621 $ 22,393 $ 24,559 $ 21,404 $ 68,356 Adjusted EBITDA 2,720
2,451 2,445 2,272 9,888 3,070 3,563 2,563 9,196 Adjusted EBITDA %
net sales 12.9 % 11.3 % 12.3 % 11.4 % 12.0 % 13.7 % 14.5 % 12.0 %
13.5 %
Seating Net sales $ 47,373 $ 44,921 $ 32,963 $
33,872 $ 159,129 $ 47,034 $ 44,993 $ 34,609 $ 126,636 Adjusted
EBITDA 5,530 5,897 2,621 2,300 16,348 5,933 6,870 3,588 16,391
Adjusted EBITDA % net sales 11.7 % 13.1 % 8.0 % 6.8 % 10.3 % 12.6 %
15.3 % 10.4 % 12.9 %
Acoustics Net sales $ 57,227 $
56,086 $ 51,457 $ 41,812 $ 206,582 $ 43,849 $ 43,418 $ 38,266 $
125,533 Adjusted EBITDA 6,721 7,983 6,640 5,997 27,341 5,778 6,044
4,465 16,287 Adjusted EBITDA % net sales 11.7 % 14.2 % 12.9 % 14.3
% 13.2 % 13.2 % 13.9 % 11.7 % 13.0 %
Corporate
Adjusted EBITDA $ (3,477 ) $ (3,075 ) $ (3,073 ) $ (3,861 ) $
(13,486 ) $ (2,867 ) $ (3,550 ) $ (2,965 ) $ (9,382 )
Consolidated Net sales $ 175,193 $ 172,477 $ 155,430 $
145,516 $ 648,616 $ 167,254 $ 168,424 $ 145,295 $ 480,973 Adjusted
EBITDA 18,561 20,580 16,136 12,475 67,752 19,713 21,364 15,230
56,307 Adjusted EBITDA % net sales 10.6 % 11.9 % 10.4 % 8.6 % 10.4
% 11.8 % 12.7 % 10.5 % 11.7 %
Jason Industries, Inc.
Reconciliation of GAAP to Non-GAAP Measures
(In thousands) (Unaudited)
Organic Sales Growth
3Q 2018
Jason
Finishing
Components
Seating
Acoustics
Consolidated
Net sales
Organic sales growth 1.2% (9.4)% 5.0% (14.1)% (4.3)% Currency
impact (1.3)% —% —% —% (0.5)% Divestiture & Non-Core Exit —%
16.7% —% (11.5)% (1.7)% Growth as reported (0.1)% 7.3% 5.0% (25.6)%
(6.5)%
YTD 2018
Jason
Finishing
Components
Seating
Acoustics
Consolidated
Net sales
Organic sales growth 3.3% (0.5)% 0.6% (10.0)% (2.3)% Currency
impact 3.9%
—%
0.5% —% 1.4% Divestiture & Non-Core Exit (0.4)% 9.4% —% (13.8)%
(3.5)% Growth as reported 6.8% 8.9% 1.1% (23.8)% (4.4)%
Free Cash Flow
3Q
YTD 2017 2018 2017
2018 Operating Cash Flow $ 3,648
$ 8,875 $ 24,480 $ 20,015
Less: Capital Expenditures (3,202 ) (2,697 ) (10,363 ) (9,636 )
Free Cash Flow $ 446 $ 6,178
$ 14,117 $ 10,379
Net Debt to Adjusted EBITDA
September 28, 2018 Current and
long-term debt $ 395,845 Add: Debt discounts and deferred financing
costs 7,324 Less: Cash and cash equivalents (51,370 )
Net
Debt $ 351,799 Adjusted EBITDA 4Q17 $
12,475 1Q18 19,713 2Q18 21,364 3Q18 15,230 TTM Adjusted
EBITDA 68,782
Net Debt to Adjusted EBITDA*
5.1x
*Note the consolidated first lien net leverage ratio under the
Company’s senior secured credit facilities was 3.68x as of
September 28, 2018. 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)
2017 2018
1Q 2Q 3Q 4Q
FY 1Q 2Q 3Q
4Q YTD Net (loss) income $ (493 ) $
(4,737 ) $ (1,601 ) $ 2,358 $ (4,473 ) $ (819 ) $ (587 ) $ (5,512 )
$ (6,918 ) Interest expense 8,366 8,395 8,203 8,125
33,089 8,027 8,403 8,348 24,778 Tax (benefit) provision (15 ) 179
(1,602 ) (8,946 ) (10,384 ) 275 (238 ) 552 589 Depreciation and
amortization 10,003 9,487 9,749 9,695
38,934 10,807 11,046 9,804
31,657
EBITDA 17,861 13,324 14,749
11,232 57,166 18,290 18,624
13,192 50,106 Adjustments: Restructuring(1)
681 543 1,772 1,270 4,266 602 1,464 1,185 3,251 Integration and
other restructuring costs(2) — — — (569 ) (569 ) 356 712 — 1,068
Share-based compensation(3) 349 324 231 215 1,119 231 553 944 1,728
(Gain) loss on disposals of property, plant and equipment—net(4)
(330 ) 65 (639 ) 145 (759 ) 234 11 (91 ) 154 (Gain) loss on
extinguishment of debt(5) — (1,564 ) (819 ) 182 (2,201 ) — — — —
Loss on divestiture(6) — 7,888 842 —
8,730 — — — — Total adjustments 700
7,256 1,387 1,243 10,586 1,423
2,740 2,038 6,201
Adjusted
EBITDA $ 18,561 $ 20,580 $ 16,136 $ 12,475
$ 67,752 $ 19,713 $ 21,364 $ 15,230
$ 56,307 (1) 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. (2) During 2018, integration and other restructuring
costs includes $1.5 million of net costs and recoveries associated
with a force majeure incident at a supplier in the seating segment
that resulted in incremental costs to maintain production and are
expected to be recovered through insurance pending finalization of
claims in future periods. The integration and other restructuring
costs were partially offset by $0.4 million of legal settlement
income related to proceeds from a supplier claim in the seating
segment associated with periods prior to the Company’s go public
business combination in 2014. During 2017, integration and other
restructuring costs includes a $0.6 million reversal of a liability
recorded in acquisition accounting for the go public business
combination. (3) Represents non-cash share based
compensation expense for awards under the Company’s 2014 Omnibus
Incentive Plan. (4) (Gain) loss on disposals of property,
plant and equipment for the first quarter of 2018 includes a loss
of $0.2 million from the disposition of equipment in connection
with the consolidation of the component segment’s Libertyville,
Illinois facilities, for the third quarter of 2017 includes a gain
of $0.5 million on the sale of a building related to the closure of
the finishing segment’s Richmond, Virginia facility and for the
first quarter of 2017 includes a gain of $0.4 million on the sale
of equipment related to the closure of the components segment’s
Buffalo Grove, Illinois facility. (5) Represents a (gain)
loss on extinguishment of Second Lien Term Loan debt in both the
second and third quarters of 2017 and a $0.2 million prepayment fee
to retire foreign debt in the fourth quarter of 2017. (6)
Represents the completed divestiture of the Company’s Acoustics
European operations. A pre-tax loss of $7.9 million was recorded in
the second quarter of 2017 when the business was classified as held
for sale and a pre-tax loss of $0.8 million was recorded in the
third quarter of 2017 upon closing of the divestiture.
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)
2017 2018
1Q 2Q 3Q 4Q
FY 1Q 2Q 3Q
4Q YTD GAAP Net (loss) income $ (493 )
$ (4,737 ) $ (1,601 ) $ 2,358 $ (4,473 ) $ (819 ) $ (587 ) $
(5,512 ) $ (6,918 ) Adjustments: Restructuring
681 543 1,772 1,270 4,266 602 1,464 1,185 3,251 Integration and
other restructuring costs — — — (569 ) (569 ) 356 712 — 1,068 Share
based compensation 349 324 231 215 1,119 231 553 944 1,728 (Gain)
loss on disposal of property, plant and equipment - net (330 ) 65
(639 ) 145 (759 ) 234 11 (91 ) 154 (Gain) loss on extinguishment of
debt — (1,564 ) (819 ) 182 (2,201 ) — — — — Loss on divestitures —
7,888 842 — 8,730 — — — — Tax effect on adjustments(1) (55 ) (582 )
(214 ) (122 ) (973 ) (314 ) (697 ) (445 ) (1,456 ) Tax (benefit)
provision(2) — — — (3,787 ) (3,787 ) 410
— 170 580
Adjusted net income (loss) $ 152 $ 1,937 $
(428 ) $ (308 ) $ 1,353 $ 700 $ 1,456 $ (3,749
) $ (1,593 ) Effective tax rate on
adjustments(1) 16 % 8 % 16 % 10 % 9 % 22 % 25 % 22 % 23 %
Diluted weighted average number of common shares outstanding
(GAAP): 25,784 26,042 26,241 26,255 26,082 27,329 27,677 27,683
27,565 Plus: effect of dilutive share-based compensation
(non-GAAP)(3) — — — 530 — — — — — Plus: effect of convertible
preferred stock and rollover shares (non-GAAP)(3) 3,967
3,815 3,889 3,982 3,917 3,309
3,147 3,212 3,222 Diluted
weighted average number of common shares outstanding (non-GAAP)(3)
29,751 29,857 30,130 30,767 29,999
30,638 30,824 30,895
30,787
Adjusted earnings (loss) per
share $ 0.01 $ 0.06 $ (0.01 ) $ (0.01 ) $ 0.05
$ 0.02 $ 0.05 $ (0.12 ) $
(0.05 )
GAAP Net (loss) income per share available to
common shareholders of Jason Industries $ (0.05 ) $ (0.22 ) $
(0.10 ) $ 0.05 $ (0.32 ) $ (0.09 ) $ (0.05 ) $ (0.23 ) $ (0.37 )
Adjustments net of income taxes: Restructuring 0.02 0.01 0.04 0.04
0.13 0.02 0.04 0.03 0.09 Integration and other restructuring costs
— — — (0.02 ) (0.02 ) 0.01 0.02 — 0.03 Share based compensation
0.02 0.02 0.01 0.01 0.06 0.01 0.02 0.03 0.06 (Gain) loss on
disposal of property, plant and equipment - net (0.01 ) — (0.01 ) —
(0.02 ) 0.01 — — 0.01 (Gain) loss on extinguishment of debt — (0.04
) (0.02 ) 0.01 (0.06 ) — — — — Loss on divestitures — 0.26 0.03 —
0.29 — — — — Tax (benefit) provision(2) — — — (0.12 ) (0.13 ) 0.02
— 0.01 0.02 Redemption premium on preferred stock conversion — — —
— — 0.04 — — 0.04 GAAP to non-GAAP impact per share(3) 0.03
0.03 0.04 0.02 0.12 — 0.02
0.04 0.07
Adjusted
earnings (loss) per share $ 0.01 $ 0.06 $ (0.01 )
$ (0.01 ) $ 0.05 $ 0.02 $ 0.05 $ (0.12 )
$ (0.05 ) (1) The effective tax rate on
adjustments is impacted by nondeductible foreign transaction and
restructuring costs, 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) Represents discrete tax items
associated with The Tax Cuts and Jobs Act enacted in December 2017.
(3) Adjusted earnings (loss) 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, the conversion of 12,136 shares of preferred stock
at a conversion rate of 115 preferred shares to common shares and
the conversion of all remaining preferred stock at the voluntary
conversion ratio.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20181030005302/en/
Jason Industries, Inc.Investor Relations:Rachel
Zabkowiczinvestors@jasoninc.com414.277.2007
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