Company to host conference call on November 10, 2016, at 1:00 p.m.
ET
Real Industry, Inc. (NASDAQ:RELY) (“Real Industry” or the “Company”)
today reported financial results for its fiscal third quarter ended
September 30, 2016.
Third Quarter 2016 Operating and Financial Highlights and Other
Significant Events
-
Revenues were $314.9 million, compared to $338.6 in the prior year
period and $320.9 million sequentially from the fiscal 2016 second
quarter
-
Net loss was $10.9 million, largely due to lower gross profit from
tight scrap spreads at Real Alloy in North America and one-time
charges relating to the separation of the Company’s former CEO
-
Segment Adjusted EBITDA was $16.9 million, down from $22.8 million in
the prior year period and $20.9 million sequentially from the fiscal
2016 second quarter
-
Consolidated liquidity remains strong at $105.3 million at quarter
end, of which $92.3 million relates to Real Alloy
-
Subsequent to quarter end, Real Industry closed on the acquisition of
the assets of Beck Aluminum Alloys and an investment in an affiliated
trading business
Management Commentary
Mr. Kyle Ross, President, Interim Chief Executive Officer and Chief
Investment Officer of Real Industry, stated, “Over the past few months,
Real Industry has refocused its efforts on improving the value of its
primary operating business and allocating capital based on a critical
evaluation of risk-based returns. As Real Alloy operates through a
challenging scrap spread environment, we are witnessing the value of our
scale and diversified business model with strong results from our base
tolling operations in North America and strong performance in Europe. In
addition, the continued efforts of lean operating practices throughout
all of our facilities have allowed the Company to offset some of the
margin pressure in our buy/sell business and lower tolling volumes.
Mr. Ross continued, “Our sustained performance during this difficult
period, along with our strong liquidity, uniquely positions us to take
advantage of opportunities to acquire assets with tremendous upside.
Beck Aluminum Alloys is a very good example of an opportunistic
acquisition that we can integrate into Real Alloy with limited risk, and
without adding considerable operating expense. This acquisition helps to
diversify and complement our operations by opening new geographies and
allows us to enter new markets of high purity foundry alloys, as well as
supply primary aluminum and other prime-based alloys to our existing
customer base through our affiliation with the trading business. We are
prepared to quickly transact on further opportunistic investments
similar to the Beck acquisition.”
Third Quarter 2016 Consolidated Financial Results
Real Industry reported revenues of $314.9 million in the third quarter
of 2016, which was driven by Real Alloy business’ aggregate 291,300
metric tonnes of metal invoiced. This compares to $338.6 million in
revenues on an aggregate 299,900 metric tonnes of metal invoiced in the
third quarter of 2015. Real Industry reported net loss attributable to
the Company of $10.9 million and net loss available to common
stockholders of $11.6 million in the third quarter of 2016, or $0.40
loss per basic and diluted share.
The year over year reduction in revenues was partially caused by reduced
volume caused by lower toll business from Real Alloy customers that have
elected to use more prime alloy in 2016 given low LME aluminum prices at
the beginning of the year, along with a more meaningful impact of lower
prices for secondary alloys during the period in our buy/sell business.
Compared to the 2016 second quarter, revenues were lower by $6.0 million
and volumes were down approximately 2,700 metric tonnes, a reduction of
less than 1 percent, which was in line with normal seasonal customer
facility shut downs in the third quarter.
Segment Adjusted EBITDA at Real Alloy was $16.9 million in the third
quarter of 2016, compared to $22.8 million in the third quarter of 2015.
The decrease was due to Real Alloy’s financial performance in North
America, offset by improved results in Europe.
Corporate operating costs, which primarily represent SG&A expenses, were
$7.5 million in the third quarter of 2016 and $3.2 million in the prior
year period. This $4.3 million increase in operating costs is primarily
related to costs associated with the separation of the Company’s former
chief executive officer, including $2.0 million of accrued cash
severance and $1.5 million of accelerated share-based compensation
expense.
Segment Operating Results
Real Alloy is our primary operating business and includes two segments,
Real Alloy North America (“RANA”) and Real Alloy Europe (“RAEU”).
For the three months ended September 30, 2016 and 2015, RANA reported
$200.5 million and $205.2 million of revenues, representing 64% and 61%
of the Company’s consolidated revenues, respectively. Approximately 54%
and 53% of RANA’s invoiced sales volume was used in automotive
applications in the three months ended September 30, 2016 and 2015,
respectively.
RANA’s Segment Adjusted EBITDA was $9.0 million in the third quarter
compared, to $15.4 million in the prior year period. Segment Adjusted
EBITDA per tonne decreased from $77 to $46 due primarily to lower gross
profit from tighter scrap spreads in the three months ended September
30, 2016, compared to the same period in the prior year, partially
offset by lower SG&A costs, driven by the termination of the transition
services agreement with Aleris. The reduction in scrap spreads is
primarily driven by a decrease in scrap availability, partially driven
by lower steel prices, as well as increased imports due to the
strengthening U.S. dollar.
In the three months ended September 30, 2016 and 2015, RAEU reported
$114.4 million and $133.4 million of revenues, representing 36% and 39%
of the Company’s consolidated revenues, respectively. RAEU supplies the
European automobile industry, which represented approximately 65% and
72% of this segment’s invoiced sales volume in the three months ended
September 30, 2016 and 2015, respectively.
RAEU’s Segment Adjusted EBITDA was $7.9 million in the third quarter,
compared to $7.4 million in the prior year period. Segment Adjusted
EBITDA per tonne increased to $82 from $74 in the three months ended
September 30, 2016 and 2015, respectively, due to higher gross profit
driven by lower natural gas prices and lower SG&A costs.
Management Outlook
Mr. Ross stated, “We have a defined strategy to increase stockholder
value at Real Industry by supporting and leveraging a valuable operating
asset in Real Alloy, and utilizing our $870 million in federal NOLs. We
continue to evaluate other potential M&A opportunities under favorable
terms, and will focus on situations where we can deploy capital
effectively with an attractive return on investment.”
Balance Sheet and Liquidity
As of September 30, 2016, Real Industry’s cash and cash equivalents were
$34.6 million, total debt was $342.2 million, and stockholders’ equity
was $123.2 million. The Company’s total liquidity was $105.3 million as
of September 30, 2016, of which $92.3 million relates to Real Alloy.
Conference Call and Webcast Information
The Company will host a conference call at 1:00 p.m. ET on Thursday,
November 10, 2016, during which management will discuss the results of
operations for the third quarter ended September 30, 2016.
The dial-in numbers are:
(877) 407-9163 (Toll-free U.S. & Canada)
(412) 902-0043 (International)
Participants may also access the live call via webcast at http://realindustryinc.equisolvewebcast.com/q3-2016.
The webcast will be archived and accessible for approximately 30 days. A
replay will be available shortly after the call in the investor
relations section of the Company’s website, www.realindustryinc.com,
and will remain available for 90 days.
About Real Industry, Inc.
Real Industry is a North America-based holding company seeking to take
significant ownership stakes in well-managed and consistently profitable
businesses concentrated primarily in the U.S. industrial and commercial
marketplace. Real Industry has significant capital resources, and U.S.
federal net operating loss tax carryforwards of more than $870 million.
For more information about Real Industry, visit its corporate website at www.realindustryinc.com.
Cautionary Statement Regarding Forward-Looking Statements
This release contains forward-looking statements, which are based on our
current expectations, estimates, and projections about the Company’s and
its subsidiaries’ businesses and prospects, as well as management’s
beliefs, and certain assumptions made by management. Words such as
“anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,”
“estimates,” “may,” “should,” “will” and variations of these words are
intended to identify forward-looking statements. Such statements speak
only as of the date hereof and are subject to change. The Company
undertakes no obligation to revise or update publicly any
forward-looking statements for any reason. These statements include, but
are not limited to, statements about: our financial results, including
for the third quarter of 2016, as well as our expectations for future
financial trends and performance of our business and our strategy in
future periods including during fiscal 2016; our ability to take
advantage of opportunities to acquire assets with tremendous upside; the
expected benefits to the Company of the integration of Beck Aluminum
Alloys into Real Alloy; future opportunistic investments; the Company’s
evaluation of other potential M&A opportunities; our long-term outlook;
our preparation for future market conditions; and any statements or
assumptions underlying any of the foregoing. Such statements are not
guarantees of future performance and are subject to certain risks,
uncertainties, and assumptions that are difficult to predict.
Accordingly, actual results could differ materially and adversely from
those expressed in any forward-looking statements as a result of various
factors. Important factors that may cause such a difference include, but
are not limited to, changes in domestic and international demand for
recycled aluminum; the cyclical nature and general health of the
aluminum industry and related industries; commodity price fluctuations
and our ability to enter into effective commodity derivatives or
arrangements to effectively manage our exposure to such commodity price
fluctuations; inventory risks, commodity price risks, and energy risks
associated with Real Alloy’s buy/sell business model; our ability to
service, and the high leverage associated with, our indebtedness, and
compliance with the terms of the indebtedness, including the restrictive
covenants that constrain the operation of our business and the
businesses of our subsidiaries; our ability to successfully identify,
acquire and integrate additional companies and businesses that perform
and meet expectations after completion of such acquisitions; our ability
to achieve future profitability; our ability to control operating costs
and other expenses; that general economic conditions may be worse than
expected; that competition may increase significantly; changes in laws
or government regulations or policies affecting our current business
operations and/or our legacy businesses, as well as those risks and
uncertainties disclosed under the sections entitled “Risk Factors” and
“Management’s Discussion and Analysis of Financial Condition and Results
of Operations” in Real Industry, Inc.’s Form 10-K filed with the
Securities and Exchange Commission (“SEC”) on March 14, 2016, and
similar disclosures in subsequent reports filed with the SEC, which are
available on our website at www.realindustryinc.com
and on the SEC website at https://www.sec.gov.
|
|
|
|
|
|
|
REAL INDUSTRY, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
|
December 31,
|
(In millions)
|
|
|
2016
|
|
|
2015
|
ASSETS
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
34.6
|
|
|
$
|
35.7
|
Trade accounts receivable, net
|
|
|
|
97.1
|
|
|
|
77.2
|
Financing receivable
|
|
|
|
45.2
|
|
|
|
32.7
|
Inventories
|
|
|
|
95.5
|
|
|
|
101.2
|
Prepaid expenses, supplies, and other current assets
|
|
|
|
25.9
|
|
|
|
24.7
|
Current assets of discontinued operations
|
|
|
|
—
|
|
|
|
0.3
|
Total current assets
|
|
|
|
298.3
|
|
|
|
271.8
|
Property, plant and equipment, net
|
|
|
|
287.3
|
|
|
|
301.5
|
Intangible assets, net
|
|
|
|
13.2
|
|
|
|
15.1
|
Goodwill
|
|
|
|
104.6
|
|
|
|
104.3
|
Other noncurrent assets
|
|
|
|
8.9
|
|
|
|
8.2
|
TOTAL ASSETS
|
|
|
$
|
712.3
|
|
|
$
|
700.9
|
LIABILITIES, REDEEMABLE PREFERRED STOCK
AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Trade payables
|
|
|
$
|
112.4
|
|
|
$
|
100.9
|
Accrued liabilities
|
|
|
|
41.6
|
|
|
|
51.8
|
Long-term debt due within one year
|
|
|
|
2.4
|
|
|
|
2.3
|
Current liabilities of discontinued operations
|
|
|
|
0.1
|
|
|
|
0.1
|
Total current liabilities
|
|
|
|
156.5
|
|
|
|
155.1
|
Accrued pension benefits
|
|
|
|
39.3
|
|
|
|
38.0
|
Environmental liabilities
|
|
|
|
11.7
|
|
|
|
11.7
|
Long-term debt, net
|
|
|
|
339.8
|
|
|
|
312.1
|
Common stock warrant liability
|
|
|
|
4.2
|
|
|
|
6.9
|
Deferred income taxes
|
|
|
|
5.9
|
|
|
|
6.7
|
Other noncurrent liabilities
|
|
|
|
6.9
|
|
|
|
5.4
|
Noncurrent liabilities of discontinued operations
|
|
|
|
0.7
|
|
|
|
0.7
|
TOTAL LIABILITIES
|
|
|
|
565.0
|
|
|
|
536.6
|
Redeemable Preferred Stock
|
|
|
|
24.1
|
|
|
|
21.9
|
TOTAL STOCKHOLDERS' EQUITY
|
|
|
|
123.2
|
|
|
|
142.4
|
TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK AND
STOCKHOLDERS' EQUITY
|
|
|
$
|
712.3
|
|
|
$
|
700.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REAL INDUSTRY, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
|
Nine Months Ended September 30,
|
|
(In millions, except per share amounts)
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
Revenues
|
|
|
|
$
|
314.9
|
|
|
$
|
338.6
|
|
|
$
|
945.2
|
|
|
$
|
845.1
|
|
Cost of sales
|
|
|
|
|
298.3
|
|
|
|
313.2
|
|
|
|
889.7
|
|
|
|
793.5
|
|
Gross profit
|
|
|
|
|
16.6
|
|
|
|
25.4
|
|
|
|
55.5
|
|
|
|
51.6
|
|
Operating costs
|
|
|
|
|
20.1
|
|
|
|
18.0
|
|
|
|
53.0
|
|
|
|
44.6
|
|
Operating profit (loss)
|
|
|
|
|
(3.5
|
)
|
|
|
7.4
|
|
|
|
2.5
|
|
|
|
7.0
|
|
Nonoperating expense, net
|
|
|
|
|
7.8
|
|
|
|
4.9
|
|
|
|
24.2
|
|
|
|
43.2
|
|
Earnings (loss) from continuing operations
before income taxes
|
|
|
|
|
(11.3
|
)
|
|
|
2.5
|
|
|
|
(21.7
|
)
|
|
|
(36.2
|
)
|
Income tax expense (benefit)
|
|
|
|
|
(0.5
|
)
|
|
|
0.5
|
|
|
|
0.4
|
|
|
|
(6.7
|
)
|
Earnings (loss) from continuing operations
|
|
|
|
|
(10.8
|
)
|
|
|
2.0
|
|
|
|
(22.1
|
)
|
|
|
(29.5
|
)
|
Earnings (loss) from discontinued operations,
net of income taxes
|
|
|
|
|
—
|
|
|
|
(0.7
|
)
|
|
|
0.1
|
|
|
|
26.5
|
|
Net earnings (loss)
|
|
|
|
|
(10.8
|
)
|
|
|
1.3
|
|
|
|
(22.0
|
)
|
|
|
(3.0
|
)
|
Earnings from continuing operations
attributable to noncontrolling interest
|
|
|
|
|
0.1
|
|
|
|
0.1
|
|
|
|
0.5
|
|
|
|
0.3
|
|
Net earnings (loss) attributable to
Real Industry, Inc.
|
|
|
|
$
|
(10.9
|
)
|
|
$
|
1.2
|
|
|
$
|
(22.5
|
)
|
|
$
|
(3.3
|
)
|
EARNINGS (LOSS) PER SHARE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) attributable to
Real Industry, Inc.
|
|
|
|
$
|
(10.9
|
)
|
|
$
|
1.2
|
|
|
$
|
(22.5
|
)
|
|
$
|
(3.3
|
)
|
Dividends on Redeemable Preferred
Stock, in-kind
|
|
|
|
|
(0.5
|
)
|
|
|
(0.5
|
)
|
|
|
(1.4
|
)
|
|
|
(1.0
|
)
|
Accretion of discount on Redeemable
Preferred Stock
|
|
|
|
|
(0.2
|
)
|
|
|
(0.2
|
)
|
|
|
(0.8
|
)
|
|
|
(0.6
|
)
|
Net earnings (loss) available to
common stockholders
|
|
|
|
$
|
(11.6
|
)
|
|
$
|
0.5
|
|
|
$
|
(24.7
|
)
|
|
$
|
(4.9
|
)
|
Basic earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
|
$
|
(0.40
|
)
|
|
$
|
0.04
|
|
|
$
|
(0.85
|
)
|
|
$
|
(1.21
|
)
|
Discontinued operations
|
|
|
|
|
—
|
|
|
|
(0.02
|
)
|
|
|
—
|
|
|
|
1.02
|
|
Basic earnings (loss) per share
|
|
|
|
$
|
(0.40
|
)
|
|
$
|
0.02
|
|
|
$
|
(0.85
|
)
|
|
$
|
(0.19
|
)
|
Diluted earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
|
$
|
(0.40
|
)
|
|
$
|
0.04
|
|
|
$
|
(0.85
|
)
|
|
$
|
(1.21
|
)
|
Discontinued operations
|
|
|
|
|
—
|
|
|
|
(0.02
|
)
|
|
|
—
|
|
|
|
1.02
|
|
Diluted earnings (loss) per share
|
|
|
|
$
|
(0.40
|
)
|
|
$
|
0.02
|
|
|
$
|
(0.85
|
)
|
|
$
|
(0.19
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REAL INDUSTRY, INC.
UNAUDITED SEGMENT INFORMATION
|
Differences between segment totals and consolidated totals are
included in Corporate and Other.
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2016
|
(Dollars in millions, except per tonne information,
tonnes in thousands)
|
|
|
|
RANA
|
|
|
RAEU
|
|
|
Segment
Totals
|
Metric tonnes invoiced:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tolling arrangements
|
|
|
|
|
98.9
|
|
|
|
48.8
|
|
|
|
147.7
|
Buy/sell arrangements
|
|
|
|
|
96.6
|
|
|
|
47.0
|
|
|
|
143.6
|
Total metric tonnes invoiced
|
|
|
|
|
195.5
|
|
|
|
95.8
|
|
|
|
291.3
|
Revenues
|
|
|
|
$
|
200.5
|
|
|
$
|
114.5
|
|
|
$
|
315.0
|
Cost of sales
|
|
|
|
|
192.3
|
|
|
|
105.9
|
|
|
|
298.2
|
Gross profit
|
|
|
|
$
|
8.2
|
|
|
$
|
8.6
|
|
|
$
|
16.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
|
$
|
6.7
|
|
|
$
|
3.9
|
|
|
$
|
10.6
|
Depreciation and amortization
|
|
|
|
$
|
8.1
|
|
|
$
|
3.1
|
|
|
$
|
11.2
|
Capital expenditures
|
|
|
|
$
|
4.0
|
|
|
$
|
3.4
|
|
|
$
|
7.4
|
Segment Adjusted EBITDA
|
|
|
|
$
|
9.0
|
|
|
$
|
7.9
|
|
|
$
|
16.9
|
Segment Adjusted EBITDA per metric tonne invoiced
|
|
|
|
$
|
46
|
|
|
$
|
82
|
|
|
$
|
58
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2015
|
(Dollars in millions, except per tonne information,
tonnes in thousands)
|
|
|
|
RANA
|
|
|
RAEU
|
|
|
Segment
Totals
|
Metric tonnes invoiced:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tolling arrangements
|
|
|
|
|
112.3
|
|
|
|
53.2
|
|
|
|
165.5
|
Buy/sell arrangements
|
|
|
|
|
88.1
|
|
|
|
46.3
|
|
|
|
134.4
|
Total metric tonnes invoiced
|
|
|
|
|
200.4
|
|
|
|
99.5
|
|
|
|
299.9
|
Revenues
|
|
|
|
$
|
205.2
|
|
|
$
|
133.4
|
|
|
$
|
338.6
|
Cost of sales
|
|
|
|
|
189.0
|
|
|
|
125.7
|
|
|
|
314.7
|
Gross profit
|
|
|
|
$
|
16.2
|
|
|
$
|
7.7
|
|
|
$
|
23.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
|
$
|
8.8
|
|
|
$
|
4.6
|
|
|
$
|
13.4
|
Depreciation and amortization
|
|
|
|
$
|
7.2
|
|
|
$
|
3.1
|
|
|
$
|
10.3
|
Capital expenditures
|
|
|
|
$
|
7.7
|
|
|
$
|
0.9
|
|
|
$
|
8.6
|
Segment Adjusted EBITDA
|
|
|
|
$
|
15.4
|
|
|
$
|
7.4
|
|
|
$
|
22.8
|
Segment Adjusted EBITDA per metric tonne invoiced
|
|
|
|
$
|
77
|
|
|
$
|
74
|
|
|
$
|
76
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REAL INDUSTRY, INC.
UNAUDITED SEGMENT INFORMATION
|
Differences between segment totals and consolidated totals are
included in Corporate and Other.
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2016
|
(Dollars in millions, except per tonne information,
tonnes in thousands)
|
|
|
|
RANA
|
|
|
RAEU
|
|
|
Segment
Totals
|
Metric tonnes invoiced:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tolling arrangements
|
|
|
|
|
298.7
|
|
|
|
153.5
|
|
|
|
452.2
|
Buy/sell arrangements
|
|
|
|
|
292.5
|
|
|
|
132.8
|
|
|
|
425.3
|
Total metric tonnes invoiced
|
|
|
|
|
591.2
|
|
|
|
286.3
|
|
|
|
877.5
|
Revenues
|
|
|
|
$
|
613.7
|
|
|
$
|
331.5
|
|
|
$
|
945.2
|
Cost of sales
|
|
|
|
|
575.6
|
|
|
|
314.0
|
|
|
|
889.6
|
Gross profit
|
|
|
|
$
|
38.1
|
|
|
$
|
17.5
|
|
|
$
|
55.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
|
$
|
21.8
|
|
|
$
|
11.9
|
|
|
$
|
33.7
|
Depreciation and amortization
|
|
|
|
$
|
23.6
|
|
|
$
|
12.9
|
|
|
$
|
36.5
|
Capital expenditures
|
|
|
|
$
|
11.5
|
|
|
$
|
7.1
|
|
|
$
|
18.6
|
Segment Adjusted EBITDA
|
|
|
|
$
|
36.5
|
|
|
$
|
19.6
|
|
|
$
|
56.1
|
Segment Adjusted EBITDA per metric tonne invoiced
|
|
|
|
$
|
62
|
|
|
$
|
68
|
|
|
$
|
64
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2015
|
(Dollars in millions, except per tonne information,
tonnes in thousands)
|
|
|
|
RANA
|
|
|
RAEU
|
|
|
Segment
Totals
|
Metric tonnes invoiced:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tolling arrangements
|
|
|
|
|
265.9
|
|
|
|
124.0
|
|
|
|
389.9
|
Buy/sell arrangements
|
|
|
|
|
212.7
|
|
|
|
113.1
|
|
|
|
325.8
|
Total metric tonnes invoiced
|
|
|
|
|
478.6
|
|
|
|
237.1
|
|
|
|
715.7
|
Revenues
|
|
|
|
$
|
521.7
|
|
|
$
|
323.3
|
|
|
$
|
845.0
|
Cost of sales
|
|
|
|
|
487.6
|
|
|
|
308.1
|
|
|
|
795.7
|
Gross profit
|
|
|
|
$
|
34.1
|
|
|
$
|
15.2
|
|
|
$
|
49.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
|
$
|
18.9
|
|
|
$
|
10.4
|
|
|
$
|
29.3
|
Depreciation and amortization
|
|
|
|
$
|
17.0
|
|
|
$
|
7.2
|
|
|
$
|
24.2
|
Capital expenditures
|
|
|
|
$
|
15.9
|
|
|
$
|
2.7
|
|
|
$
|
18.6
|
Segment Adjusted EBITDA
|
|
|
|
$
|
36.3
|
|
|
$
|
16.9
|
|
|
$
|
53.2
|
Segment Adjusted EBITDA per metric tonne invoiced
|
|
|
|
$
|
76
|
|
|
$
|
71
|
|
|
$
|
74
|
NON-GAAP FINANCIAL MEASURES
A non-GAAP financial measure is a numerical measure of historical or
future financial performance, financial position or cash flows that
excludes amounts, or is subject to adjustments that have the effect of
excluding amounts, that are included in the most directly comparable
measure calculated and presented in accordance with generally accepted
accounting principles (“GAAP”) in the balance sheets, statements of
operations, or statements of cash flows; or includes amounts, or is
subject to adjustments that have the effect of including amounts, that
are excluded from the most directly comparable measures so calculated
and presented. We report our financial results in accordance with GAAP;
however, our management believes that certain non-GAAP performance
measures, which we use in managing our businesses, may provide investors
with additional meaningful comparisons between current results and
results in prior periods. Segment Adjusted EBITDA (defined below) is an
example of a non-GAAP financial measure that we believe provides
investors and other users of our financial information with useful
information.
Our CODM and management use several measures of performance for our
reportable segments, including earnings before interest, taxes,
depreciation and amortization and excludes certain other items (“Segment
Adjusted EBITDA”). We use Segment Adjusted EBITDA as our primary
financial performance metric and believe this measure provides
additional information commonly used by holders of our common stock, as
well as the holders of the Senior Secured Notes and parties to the
Asset-Based Facility with respect to the ongoing performance of our
underlying business activities.
Our Segment Adjusted EBITDA calculations represent segment earnings
(loss) before interest, taxes, depreciation and amortization, unrealized
gains and losses on derivative financial instruments, charges and
expenses related to acquisitions, and certain other gains and losses.
Segment Adjusted EBITDA as we use it may not be comparable to similarly
titled measures used by other companies. We calculate Segment Adjusted
EBITDA by eliminating the impact of a number of items we do not consider
indicative of our ongoing operating performance and certain other items.
Readers are encouraged to evaluate each adjustment shown in the
reconciliation and the reasons we consider it appropriate for
supplemental analysis, however, Segment Adjusted EBITDA is not a
financial measurement calculated and presented in accordance with GAAP.
When analyzing our operating performance, we encourage investors to use
Segment Adjusted EBITDA in addition to, and not as an alternative for,
net earnings (loss) derived in accordance with GAAP. Segment Adjusted
EBITDA has limitations as an analytical tool, and it should not be
considered in isolation, or as a substitute for, or superior to, our
measures of financial performance prepared in accordance with GAAP.
These limitations include, but are not limited to:
-
Does not reflect our cash expenditures or future requirements for
capital expenditures or contractual commitments;
-
Does not reflect changes in, or cash requirements for, working capital
needs;
-
Does not reflect interest expense or cash requirements necessary to
service interest and/or principal payments under the Senior Secured
Notes or Asset-Based Facility;
-
Does not reflect certain tax payments that may represent a reduction
in cash available to us;
-
Does not reflect the operating results of Corporate and Other; and
-
Although depreciation and amortization are noncash charges, the assets
being depreciated and amortized may have to be replaced in the future,
and Segment Adjusted EBITDA does not reflect cash requirements for
such replacements.
Other companies, including companies in our industry, may calculate
Segment Adjusted EBITDA differently and the degree of their usefulness
as a comparative measure correspondingly decreases as the number of
differences in computations increases.
In addition, in evaluating Segment Adjusted EBITDA it should be noted
that in the future we may incur expenses similar to the adjustments in
the below presentation. Our presentation of Segment Adjusted EBITDA
should not be construed as an inference that our future results will be
unaffected by unusual or nonrecurring items.
The table below provides a reconciliation of Segment Adjusted EBITDA to
the most directly comparable financial measure presented in accordance
with GAAP, net loss, for the three and nine months ended September 30,
2016 and 2015:
|
|
|
|
Three Months Ended September 30,
|
|
|
Nine Months Ended September 30,
|
|
(In millions)
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
Segment Adjusted EBITDA
|
|
|
|
$
|
16.9
|
|
|
$
|
22.8
|
|
|
$
|
56.1
|
|
|
$
|
53.2
|
|
Unrealized gains (losses) on derivative
financial instruments
|
|
|
|
|
(0.6
|
)
|
|
|
0.5
|
|
|
|
0.9
|
|
|
|
(0.8
|
)
|
Segment depreciation and amortization
|
|
|
|
|
(11.3
|
)
|
|
|
(10.3
|
)
|
|
|
(36.6
|
)
|
|
|
(24.2
|
)
|
Amortization of inventories and supplies
purchase accounting adjustments
|
|
|
|
|
—
|
|
|
|
(1.3
|
)
|
|
|
(0.9
|
)
|
|
|
(8.5
|
)
|
Corporate and Other selling, general and
administrative expenses
|
|
|
|
|
(7.5
|
)
|
|
|
(3.2
|
)
|
|
|
(14.4
|
)
|
|
|
(10.5
|
)
|
Other, net
|
|
|
|
|
(1.0
|
)
|
|
|
(1.1
|
)
|
|
|
(2.6
|
)
|
|
|
(2.2
|
)
|
Operating profit (loss)
|
|
|
|
|
(3.5
|
)
|
|
|
7.4
|
|
|
|
2.5
|
|
|
|
7.0
|
|
Interest expense, net
|
|
|
|
|
(9.2
|
)
|
|
|
(9.2
|
)
|
|
|
(27.5
|
)
|
|
|
(26.6
|
)
|
Change in fair value of common
stock warrant liability
|
|
|
|
|
1.9
|
|
|
|
3.4
|
|
|
|
2.6
|
|
|
|
(2.2
|
)
|
Acquisition-related costs and expenses
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(14.8
|
)
|
Foreign exchange gains on intercompany
loans
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1.0
|
|
|
|
—
|
|
Other nonoperating income, net
|
|
|
|
|
(0.5
|
)
|
|
|
0.9
|
|
|
|
(0.3
|
)
|
|
|
0.4
|
|
Income tax benefit (expense)
|
|
|
|
|
0.5
|
|
|
|
(0.5
|
)
|
|
|
(0.4
|
)
|
|
|
6.7
|
|
Earnings (loss) from discontinued
operations, net of income taxes
|
|
|
|
|
—
|
|
|
|
(0.7
|
)
|
|
|
0.1
|
|
|
|
26.5
|
|
Net earnings (loss)
|
|
|
|
$
|
(10.8
|
)
|
|
$
|
1.3
|
|
|
$
|
(22.0
|
)
|
|
$
|
(3.0
|
)
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20161109006348/en/
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