Handy & Harman Ltd. (NASDAQ: HNH), a diversified global
industrial company, today announced operating results for the third
quarter and nine months ended September 30, 2016, which are
summarized in the following paragraphs. For a full discussion of
the results, please see the Company's Form 10-Q as filed with the
U.S. Securities and Exchange Commission, which can be found at
www.handyharman.com.
HNH reported an increase in net sales to $230.8 million for the
2016 third quarter, compared with $181.1 million for the same
period in 2015. Income from continuing operations before tax and
equity investment was $13.0 million in the third quarter of 2016,
compared with $14.8 million in the 2015 period. Income from
continuing operations, net of tax, for the third quarter of 2016
was $8.0 million, or $0.66 per basic and diluted common share,
compared with $4.4 million, or $0.37 per basic and diluted common
share, for the same period in 2015.
For the nine months ended September 30, 2016, net sales
grew to $592.4 million, from $485.6 million for the same period in
2015. Income from continuing operations before tax and equity
investment was $24.6 million, compared with $33.1 million in the
2015 period. Income from continuing operations, net of tax, for the
nine-month period was $7.8 million, or $0.63 per basic and diluted
common share, compared with $14.0 million, or $1.26 per basic and
diluted common share, for the same period in 2015.
Results for the third quarter and nine-month periods ended
September 30, 2016 and 2015 include certain significant
acquisition and integration-related charges associated with the
Company's recently completed acquisitions, as well as other
non-cash asset impairment charges resulting from HNH's continual
focus on operational productivity and site rationalization. In
particular, for the nine months ended September 30, 2016, the
Company recorded non-cash asset impairment charges totaling $10.4
million, as well as acquisition costs totaling $3.2 million and
non-cash charges of $1.9 million due to the amortization of the
fair value adjustments to acquisition-date inventories. Comparable
charges during the nine months ended September 30, 2015
included acquisition costs totaling $1.0 million and non-cash
charges of $3.6 million due to the amortization of the fair value
adjustments to acquisition-date inventories.
HNH generated Adjusted EBITDA of $33.4 million for the third
quarter of 2016, compared with $27.0 million for the same period in
2015, an increase of 23.8%. For the nine-month period, the Company
generated Adjusted EBITDA of $77.8 million, compared with $60.1
million for the same period in 2015, an increase of 29.5%. See
"Note Regarding Use of Non-GAAP Financial Measurements" below for
the definition of Adjusted EBITDA.
As previously announced, on September 30, 2016, HNN completed
the acquisition of substantially all of the net assets of the
Electromagnetic Enterprise division ("EME") of Hamilton Sundstrand
Corporation for approximately $64.5 million in cash. EME designs,
manufactures and assembles complex, custom engineered electric
motors and generators, including a wide range of customized
electromagnetic products with high efficiencies and high power
densities that provide unique, turnkey solutions for a blue-chip
industrial customer base.
"Through several recent successful acquisitions, Handy &
Harman has strengthened its product portfolios, diversified its
customer base and enhanced its brand," said Bill Fejes, President
and CEO of Handy & Harman Group Ltd. "The EME acquisition, in
particular, augments our Electrical Products segment, while
providing a solid platform for future growth. We are continuing to
focus on both organic and strategic growth opportunities, as well
as on operational initiatives that will further strengthen our
business, to drive long term value for our customers and
stockholders."
Based on current information, the Company anticipates full-year
2016 net sales and Adjusted EBITDA in the ranges of $798 million to
$843 million, and $98 million to $103 million, respectively. These
forecasts include the expected operating results for EME from the
date of acquisition.
Financial
Summary
Three Months Ended Nine Months Ended (in
thousands, except per share) September 30, September
30, 2016 2015 2016
2015 Net sales $ 230,760 $ 181,139 $ 592,437 $ 485,596 Gross
profit 65,675 47,105 161,355 133,659 Gross profit margin 28.5 %
26.0 % 27.2 % 27.5 % Operating income 15,183 15,969 29,963 36,628
Income from continuing operations before tax and equity investment
13,016 14,816 24,598 33,100 Tax provision 6,790 6,351 11,788 13,862
(Gain) loss from associated company, net of tax (1,809 ) 4,047
5,053 5,286 Income from continuing operations,
net of tax 8,035 4,418 7,757 13,952 Net income from discontinued
operations — 195 — 90,133 Net income $
8,035 $ 4,613 $ 7,757 $ 104,085
Basic and diluted income per share of common stock Income
from continuing operations, net of tax, per share $ 0.66 $ 0.37 $
0.63 $ 1.26 Discontinued operations, net of tax, per share —
0.02 — 8.12 Net income per share $ 0.66
$ 0.39 $ 0.63 $ 9.38
Segment
Results
Income Statement Data
Three Months Ended Nine Months Ended (in
thousands) September 30, September 30,
2016 2015 2016 2015 Net
sales: Joining Materials $ 45,013 $ 45,360 $ 134,006 $ 144,094
Tubing 19,088 19,382 59,411 61,330 Building Materials 78,326 73,475
218,062 207,841 Performance Materials 25,217 28,065 76,201 28,065
Electrical Products 48,349 — 60,143 — Kasco 14,767 14,857
44,614 44,266 Total net sales $ 230,760
$ 181,139 $ 592,437 $ 485,596 Segment
operating income (loss): Joining Materials $ 2,063 $ 4,336 $ 12,605
$ 16,177 Tubing 3,190 3,799 10,960 10,226 Building Materials 14,832
13,685 33,788 28,943 Performance Materials (443 ) (2,400 ) (7,408 )
(2,400 ) Electrical Products 241 — (3,022 ) — Kasco 941
1,364 2,489 3,062 Total segment operating
income 20,824 20,784 49,412 56,008
Unallocated corporate expenses and non-operating units (3,845 )
(3,222 ) (13,707 ) (13,783 ) Unallocated pension expense (1,821 )
(1,761 ) (6,104 ) (5,906 ) Gain from asset dispositions 25
168 362 309 Operating income 15,183
15,969 29,963 36,628 Interest expense (2,071 )
(1,208 ) (4,486 ) (3,483 ) Realized and unrealized (loss) gain on
derivatives (275 ) 168 (814 ) 273 Other income (expense) 179
(113 ) (65 ) (318 ) Income from continuing operations before tax
and equity investment $ 13,016 $ 14,816 $ 24,598
$ 33,100
Supplemental
Non-GAAP Disclosures
Adjusted EBITDA Three Months
Ended Nine Months Ended (in thousands)
September 30, September 30, 2016
2015 2016 2015 Income from continuing
operations, net of tax $ 8,035 $ 4,418 $ 7,757 $ 13,952 (Deduct)
Add: (Gain) loss from associated company, net of tax (1,809 ) 4,047
5,053 5,286 Tax provision 6,790 6,351 11,788 13,862 Interest
expense 2,071 1,208 4,486 3,483 Non-cash derivative and hedge loss
(gain) on precious metal contracts 275 (168 ) 814 (273 ) Non-cash
adjustment to precious metal inventory valued at LIFO 293 186 578
(240 ) Depreciation and amortization 11,434 5,897 23,784 12,547
Non-cash pension expense 1,821 1,761 6,104 5,906 Non-cash asset
impairment charges 2,540 — 10,398 — Non-cash stock-based
compensation 275 663 1,207 2,714 Amortization of fair value
adjustments to acquisition-date inventories 940 3,347 1,924 3,599
Other items, net 714 (744 ) 3,895 (752 ) Adjusted
EBITDA $ 33,379 $ 26,966 $ 77,788 $ 60,084
Note Regarding Use of Non-GAAP
Financial Measurements
The financial data contained in this press release includes
certain non-GAAP financial measurements as defined by the U.S.
Securities and Exchange Commission ("SEC"), including "Adjusted
EBITDA." The Company is presenting Adjusted EBITDA because it
believes that it provides useful information to investors about
HNH, its business, and its financial condition. The Company defines
Adjusted EBITDA as income or loss from continuing operations before
the effects of gains or losses from investment in associated
company, realized and unrealized gains or losses on derivatives,
interest expense, taxes, depreciation and amortization, LIFO
liquidation gains or losses, and non-cash pension expense, and
excludes certain non-recurring and non-cash items. The Company
believes Adjusted EBITDA is useful to investors because it is one
of the measures used by the Company's Board of Directors and
management to evaluate its business, including in internal
management reporting, budgeting, and forecasting processes, in
comparing operating results across the business, as an internal
profitability measure, as a component in evaluating the ability and
the desirability of making capital expenditures and significant
acquisitions, and as an element in determining executive
compensation.
However, Adjusted EBITDA is not a measure of financial
performance under generally accepted accounting principles in the
U.S. ("U.S. GAAP"), and the items excluded from Adjusted EBITDA are
significant components in understanding and assessing financial
performance. Therefore, Adjusted EBITDA should not be considered a
substitute for net income or cash flows from operating, investing,
or financing activities. Because Adjusted EBITDA is calculated
before recurring cash charges, including realized and unrealized
losses on derivatives, interest expense, and taxes, and is not
adjusted for capital expenditures or other recurring cash
requirements of the business, it should not be considered as a
measure of discretionary cash available to invest in the growth of
the business. There are a number of material limitations to the use
of Adjusted EBITDA as an analytical tool, including the
following:
- Adjusted EBITDA does not reflect gains
or losses from the Company's investment in associated company;
- Adjusted EBITDA does not reflect the
Company's net realized and unrealized gains and losses on
derivatives and any LIFO liquidations of its precious metal
inventory;
- Adjusted EBITDA does not reflect the
Company's interest expense;
- Adjusted EBITDA does not reflect the
Company's tax provision or the cash requirements to pay its
taxes;
- Although depreciation and amortization
are non-cash expenses in the period recorded, the assets being
depreciated and amortized may have to be replaced in the future,
and Adjusted EBITDA does not reflect the cash requirements for such
replacement;
- Adjusted EBITDA does not include
non-cash charges for pension expense and stock-based
compensation;
- Adjusted EBITDA does not include
discontinued operations; and
- Adjusted EBITDA does not include
certain other non-recurring and non-cash items.
The Company compensates for these limitations by relying
primarily on its U.S. GAAP financial measures and by using Adjusted
EBITDA only as supplemental information. The Company believes that
consideration of Adjusted EBITDA, together with a careful review of
its U.S. GAAP financial measures, is the most informed method of
analyzing HNH.
The Company reconciles Adjusted EBITDA to income or loss from
continuing operations, net of tax, and that reconciliation is set
forth above. Because Adjusted EBITDA is not a measurement
determined in accordance with U.S. GAAP and is susceptible to
varying calculations, Adjusted EBITDA, as presented, may not be
comparable to other similarly titled measures of other companies.
Revenues and expenses are measured in accordance with the policies
and procedures described in the Company's Annual Report on Form
10-K for the year ended December 31, 2015.
About Handy & Harman
Ltd.
Handy & Harman Ltd. is a diversified manufacturer of
engineered niche industrial products with leading market positions
in many of the markets it serves. Through its wholly-owned
operating subsidiaries, HNH focuses on high margin products and
innovative technology and serves customers across a wide range of
end markets. HNH's diverse product offerings are marketed
throughout the United States and internationally.
HNH's companies are organized into six businesses: Joining
Materials, Tubing, Building Materials, Performance Materials,
Electrical Products, and Kasco.
The Company sells its products and services through direct sales
forces, distributors, and manufacturer's representatives. HNH
serves a diverse customer base, including the construction,
electrical, electronics, transportation, power control, utility,
medical, oil and gas exploration, aerospace and defense, and food
industries.
The Company's business strategy is to enhance the growth and
profitability of the HNH business units and to build upon their
strengths through internal growth, the Steel Business System, and
strategic acquisitions. Management expects HNH to continue to focus
on high margin products and innovative technology. Management has
evaluated and will continue to evaluate, from time to time,
potential strategic and opportunistic acquisition opportunities, as
well as the potential sale of certain businesses and assets.
The Company is based in White Plains, N.Y., and its common stock
is listed on the NASDAQ Capital Market under the symbol HNH.
Website: www.handyharman.com
Forward-Looking
Statements
This press release contains certain "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, that reflect HNH's current expectations and projections
about its future results, performance, prospects, and
opportunities. HNH has tried to identify these forward-looking
statements by using words such as "may," "should," "expect,"
"hope," "anticipate," "believe," "intend," "plan," "estimate," and
similar expressions. These forward-looking statements are based on
information currently available to the Company and are subject to a
number of risks, uncertainties, and other factors that could cause
its actual results, performance, prospects, or opportunities in
2016 and beyond to differ materially from those expressed in, or
implied by, these forward-looking statements. These factors
include, without limitation, HNH's need for additional financing
and the terms and conditions of any financing that is consummated,
customers' acceptance of its new and existing products, the risk
that the Company will not be able to compete successfully, the
possible volatility of the Company's stock price, and the potential
fluctuation in its operating results. Although HNH believes that
the expectations reflected in these forward-looking statements are
reasonable and achievable, such statements involve significant
risks and uncertainties, and no assurance can be given that the
actual results will be consistent with these forward-looking
statements. Investors should read carefully the factors described
in the "Risk Factors" section of the Company's filings with the
SEC, including the Company's Form 10-K for the year ended
December 31, 2015, for information regarding risk factors that
could affect the Company's results. Except as otherwise required by
Federal securities laws, HNH undertakes no obligation to publicly
update or revise any forward-looking statements, whether as a
result of new information, future events, changed circumstances, or
any other reason.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161101006873/en/
PondelWilkinson Inc.Roger S. Pondel,
310-279-5965rpondel@pondel.com
Handy & Harman Ltd. (NASDAQ:HNH)
Gráfica de Acción Histórica
De May 2024 a Jun 2024
Handy & Harman Ltd. (NASDAQ:HNH)
Gráfica de Acción Histórica
De Jun 2023 a Jun 2024