News
Thermadyne Holdings Corporation Announces Fourth-Quarter and Annual Results for Calendar Year 2007
ST. LOUIS-(Business Wire)-March 12, 2008 - Thermadyne Holdings Corporation (NASDAQ: THMD) today reported results for the three months and twelve months ended December 31, 2007. Financial results related to 2006 have been reclassified for consistency in presentation of the discontinued operations.
HIGHLIGHTS
Three Months Ended December 31, 2007
— Sales increased 13.5% to $125.0 million as compared to 2006
— Operating income was $10.9 million, an increase of $4.5 million, or 71%, over 2006, excluding the 2006 curtailment gain and related expense reductions from changes in the postretirement medical plan and excluding LIFO inventory accounting effects on cost of sales
— Interest expense declined $1.3 million to $5.8 million compared to 2006
— Net cash provided from operating activities totaled $23.0 million increasing $17.9 million over 2006
Twelve Months Ended December 31, 2007
— Sales increased 10.8% to $494 million as compared to 2006
— Operating income was $45.1 million, doubling from the $22.5 million in 2006, excluding the 2006 curtailment gain from changes in the postretirement medical plan and excluding LIFO inventory accounting effects on cost of sales
— Net cash provided from operating activities totaled $23.0 million increasing $38.5 million over 2006
Financial Review of Continuing Operations for the 2007 Fourth Quarter
Net sales from continuing operations in the fourth quarter rose to $125.0 million in 2007, an increase of 13.5% from the same quarter of 2006. Excluding the impact of foreign currency translations, net sales increased 8.9%. International sales increased 23.0% (10.8% in local currency), expanding to represent 41% of total net sales as compared to 38% of net sales in the fourth quarter of 2006. New product introductions, particularly in plasma and welding equipment, helped produce strong growth.
"Our 2007 fourth-quarter sales experienced strong growth over last year's fourth-quarter results, which had benefited from accelerated customer purchases in advance of the Company's new U.S. rebate program which was effective on January 1, 2007," said Paul D. Melnuk, Chairman and Chief Executive Officer.
Gross margin in the fourth quarter of 2007 increased to 32.7% of net sales as compared to 30.5% in the prior-year fourth-quarter period. Excluding the LIFO inventory accounting effects on cost of sales, gross profit was 31.3% and 31.7% of net sales for the fourth quarter 2007 and 2006, respectively. In the fourth quarter of 2007, the LIFO accounting method reduced cost of sales due to adjustments of prior quarterly estimates of inflation and the impact of inventory reductions.
Mr. Melnuk stated, "The increased mix of plasma and welding equipment power units and filler metals sold during the quarter reduced the gross margin percentage as compared to 2006. However, we are very pleased with the continued progress we have made improving the underlying operations."
Selling, general and administrative (SG&A) expenses were $26.8 million in the fourth quarter of 2007, or 21.5% of net sales, compared to $27.7 million, or 25.2% of net sales, in the same period of 2006. The 2006 SG&A expenses included $1.4 million of nonrecurring costs related to nonrecurring bondholder consent fees, incremental accounting fees incurred to compensate for weaknesses in the Company's internal financial controls and international tax planning fees. Excluding these expenses the SG&A expenses as a percentage of sales for the 2006 period was 23.9%.
"We are beginning to benefit from SG&A leverage as our operational performance improves. This has contributed to the improved operating performance," stated Mr. Melnuk.
Financial Review of Continuing Operations for 2007
Net sales for the year ended December 31, 2007 were $494.0 million, an increase of 10.8% from the net sales of $445.7 million in 2006. Excluding the impact of foreign currency translations, net sales increased 7.8%. International sales increased 20.9% (12.8% in local currency) expanding to represent 41% of total net sales for 2007 compared to 37% of net sales in 2006. All products lines grew in 2007 as compared to the prior year from accelerated global demand, the contribution from new product introductions and improved pricing management. Rebate costs, which are included in net sales, were higher in 2006 as the result of a three-year customer incentive program that ended December 2006.
For the year ended December 31, 2007, gross margin was 31.2% of net sales, compared to 29.3% of net sales for the year 2006. Excluding the LIFO inventory accounting effects on cost of sales, gross margin was 31.4% and 30.3% of net sales for the 2007 and 2006 annual periods, respectively. Gross margin improved as result of the Company's ongoing TCP continuous improvement program and improved pricing management offsetting the adverse impact of escalating commodity costs, particularly copper, brass and nickel.
Selling, general and administrative expenses were $106.0 million, or 21.5% of net sales, and $109.6 million, or 24.6% of net sales, for 2007 and 2006, respectively. Excluding the nonrecurring bond consent and accounting related costs aggregating $7.5 million, the percentage would be 22.9% of net sales in the period.
Mr. Melnuk stated, "Operationally, 2007 was a pivotal year for Thermadyne. We are demonstrating a marked turnaround in our performance despite ongoing pressures from material cost increases. This illustrates the strength of our brands, the effectiveness of our plans and improving execution."
Other Income and Expense Items for the Fourth Quarter and Year
The fourth-quarter 2006 results include curtailment gain adjustments and related expense reductions of $13.3 million from modifications to the Company's retiree medical, dental and life benefit plans in consideration of Medicare Part D and limiting coverage to its existing retirees and certain future retirees who had attained age and service requirements at December 31, 2005.
Interest costs decreased $1.3 million during the fourth quarter of 2007 compared to the prior year's fourth quarter. Average indebtedness was also lower during the quarter and interest rates declined for the Company's senior secured and second lien credit facilities as a result of amendments implemented in June 2007. For the year, interest costs in 2007 increased $0.3 million over 2006 including $1.5 million in additional interest costs for the special interest rate adjustment that became effective August 1, 2006 for the Company's Senior Subordinated Notes.
The fourth quarter of 2007 reflects an income tax benefit of $4.1 million primarily due to the reduction of estimated state income tax contingency accruals. These matters were favorably resolved during the period. In the fourth quarter of 2006, the Company recorded tax benefits of $3.2 million for reductions in foreign tax expenses and state income tax contingency accruals. The income tax provision was $0.2 million in the 2007 fourth quarter and $5.5 million for the year 2007, consisting primarily of taxes payable in foreign locations.
Net Income for the 2007 Fourth Quarter and Full Year
For the fourth quarter of 2007, net income from continuing operations was $6.4 million, or $0.47 per diluted share. In comparison, for the fourth quarter of 2006, net income from continuing operations was $15.3 million, or $1.15 per diluted share, including $13.3 million, or $0.99 per diluted share of curtailment gain and related post retirement expense reductions. Included in net income were losses from discontinued operations of $1.8 million, or $0.13 net loss per diluted share, in the 2007 fourth quarter compared to losses of $25.9 million, or $1.94 net loss per diluted share, in the 2006 fourth quarter. For the fourth quarter of 2007, net income was $4.6 million, or $0.34 per diluted share, compared to a net loss of $10.6 million, or $0.79 net loss per diluted share.
For 2007, net income from continuing operations increased to $10.6 million, or $0.79 per diluted share, from $2.5 million, or $0.18 per diluted share, of net income from continuing operations for the year 2006. Included in net income were losses from discontinued operations of $2.0 million, or $0.15 per diluted share, for the year 2007 and lost $25.5 million, or $1.91 per diluted share for the year 2006. For 2007, net income was $8.7 million, or $0.64 per diluted share, compared to a net loss of $23.0 million, or $1.73 per diluted share for the year 2006.
Operating EBITDA, As Adjusted, From Continuing Operations
In the fourth quarter of 2007, Operating EBITDA, as adjusted, from continuing operations increased to $15.3 million, or 12.2% of net sales, as compared to $11.2 million, or 10.1% of net sales, in the 2006 fourth quarter. For 2007, Operating EBITDA, as adjusted, from continuing operations increased to $59.7 million, or 12.1% of net sales, from $46.7 million, or 10.5% of net sales, for the year 2006. Operating EBITDA, as adjusted, was $58.6 million including the discontinued operations for 2007, as compared to $47.9 million for the year 2006.
Divestitures & Discontinued Operations
During 2007, the Company continued its program of divesting non-core operations.
— In May 2007, the Company completed the sale of its remaining South African operations. The sales proceeds of approximately $13.8 million were used to reduce the Company's second lien facility.
As of December 31, 2006, the Company recorded an impairment charge, net of tax, of $9.2 million primarily related to the write off of goodwill as a result of this transaction.
— The Company closed and sold its manufacturing operations in Brazil during the fourth quarter of 2007. The Company expects to complete the disposition of a building and certain other property in early 2008 with insignificant further cash flow impact.
As of December 31, 2006, the Company recorded an impairment charge, net of tax, of $15.2 million primarily related to the write off of goodwill, property and equipment of the Brazilian operation.
— In December 2007, the Company agreed to sell its cutting table business, C&G Systems Inc., based in Chicago, Illinois. The Company recorded an impairment charge, net of tax, of $0.6 million as of December 31, 2007 primarily related to the write off of goodwill and other intangibles. The unaudited sales for this operation were approximately $4.1 million in 2007 with an unaudited loss from operations before income taxes of $0.7 million. The Company has classified the results of these operations as discontinued operations in the 2007 financial results and for prior periods.
This completes the non-core asset disposal process that the Company initiated in 2005, which has resulted in the sale of seven businesses. In total, the process generated net cash proceeds to date of approximately $40 million from businesses that had been largely negative cash flow operations. The cash proceeds were used to repay indebtedness and fund operations.
Working Capital, Liquidity and Long-Term Obligations
As of December 31, 2007, long-term obligations, net of cash, declined to $218.4 million from $245.7 million at December 31, 2006. The Company had combined cash and availability under its senior secured credit facility of $72 million in comparison with $35 million at December 2006. The reduction in indebtedness and improved liquidity position resulted from the $13.8 million of proceeds received from sale of its South African operations along with the Company's improved operating results and working capital efficiency. Working capital efficiency improved to 28.6% of net sales at December 31, 2007 from 32.7% at December 31, 2006 as a result of reduced levels of accounts receivable and inventory, even with the growth in sales levels (see schedule 4).
Progress in 2007/Outlook for 2008
Mr. Melnuk stated, "We are pleased with our 2007 financial and operating results. The Company has come a long way over the past year and we are working hard to continue to execute on our business plan and financial model.
"In 2007, we produced measurable and consistent improvement in our financial metrics with strong sales growth, increasing gross margins despite rapidly escalating commodity costs, and improved expense leverage from the selling, general & administrative functions. These improvements combined to result in Operating EBITDA from continuing operations, as adjusted, increasing to 12.1% of net sales for the year from 10.5% in 2006. At the same time, working capital efficiency improved to 28.6% of net sales from 32.7% at year-end 2006. These factors enabled the Company to generate free cash flow for the first time since emerging from bankruptcy in 2003 while generating strong net sales growth.
"Although there is tremendous opportunity yet to be realized, we have declared the turnaround phase of our development to have been completed in 2007. We now look to the future with confidence as we have the business plan, management team and structure to fully realize the vast potential of our business prospects. With the momentum from 2007, we look to further improve our financial performance in 2008 and beyond.
"While there is concern for economic slowing, particularly in the U.S. market, we expect sales in the first quarter to increase 8% to 10% from the comparable quarter of 2007. It is difficult to estimate sales patterns for the year in this environment but global demand for our products looks very solid at this point. Despite the challenge of continued rising commodity costs, we believe gross margins should increase further during 2008. Our continuous improvement process (TCP) will further reduce costs through strengthened global procurement organization and practices including low-cost country sourcing, further gains from manufacturing efficiency and value engineering initiatives. Pricing changes will be implemented as necessary to offset higher material costs.
"The gross margin improvement combined with further leverage of our selling, general and administrative expenses is expected to increase our Operating EBITDA, as adjusted, to a range of 13% to 14%. We also expect working capital efficiency to improve to 27% of sales or better during 2008 through further reductions in our inventory levels relative to sales. As a result of these factors, we expect to further reduce our indebtedness during 2008. This will reduce interest costs from the 2007 amounts, as well as an expected more favorable LIBOR-based interest rate grid applicable under our borrowing agreements during 2008," concluded Mr. Melnuk.
Use of Non-GAAP Measures
Our discussions of operations include reference to "Operating EBITDA, as adjusted." While a non-GAAP measure, management believes this measure enhances the reader's understanding of underlying and continuing operating results in the periods presented. The Company defines "Operating EBITDA" as earnings before interest, taxes, depreciation, amortization, LIFO adjustments, stock-based compensation expense, minority interest, the nonrecurring items of severance accruals, and post retirement benefit expense in excess of cash payments. The presentation of "Operating EBITDA, as adjusted" facilitates the reader's ability to compare current period results to other periods by isolating certain unusual items of income or expense, such as those detailed in an attached schedule. Operating EBITDA, as adjusted for certain unusual items is reflective of management measurements which focus on operating spending levels and efficiencies and less on the non-cash and unusual items believed to be nonrecurring. Additionally, non-GAAP measures such as Operating EBITDA and Operating EBITDA, as adjusted, are commonly used to value the business by investors and lenders.
A schedule is attached which reconciles Net Income from Continuing Operations as shown in the Consolidated Statements of Operations to Operating EBITDA and Operating EBITDA, as adjusted.
Non-GAAP measurements such as "Operating EBITDA" and "Operating EBITDA, as adjusted" are not recognized in accordance with GAAP and should not be viewed as an alternative to GAAP measures of performance. Use of Operating EBITDA and Operating EBITDA, as adjusted, has material limitations, and therefore management provides reconciliation for the reader of Operating EBITDA and Operating EBITDA, as adjusted, to Net Income from Continuing Operations.
The financial statement information presented in accordance with generally accepted accounting principles (GAAP) and the non-GAAP measure have not been reviewed by an independent registered public accounting firm.
Conference Call
Thermadyne will hold a teleconference on March 13, 2008 at 8:00 a.m. Eastern.
To participate via telephone, please dial:
— U.S. and Canada: 800-762-8779 (Conference ID 3852144)
Those wishing to participate are asked to dial in ten minutes before the conference begins. For those unable to participate in the live conference call, a recording of the conference will be available from March 13, 2008 at 11:00 a.m. (Eastern) until March 20, 2008 at 11:30 p.m. (Eastern) by dialing (800) 406-7325. Enter conference ID 3852144 to listen to the recording.
About Thermadyne
Thermadyne, headquartered in St. Louis, Missouri, is a leading global manufacturer and marketer of metal cutting and welding products and accessories under a variety of leading premium brand names including Victor(R), Tweco(R) / Arcair(R), Thermal Dynamics(R), Thermal Arc(R), Stoody(R), TurboTorch(R), Firepower(R) and Cigweld(R). Its common shares trade on the NASDAQ under the symbol THMD. For more information about Thermadyne, its products and services, visit the Company's web site at www.Thermadyne.com.
Cautionary Statement Regarding Forward-Looking Statements:
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements reflect management's current expectations and involve a number of risks and uncertainties. Actual results may differ materially from such statements due to a variety of factors that could adversely affect the Company's operating results. These risks and factors are set forth in documents the Company files with the Securities and Exchange Commission, specifically in the Company's most recent Annual Report on Form 10-K and other reports it files from time to time. -0- *T THERMADYNE HOLDINGS CORPORATION FINANCIAL HIGHLIGHTS (In thousands, except share data) Schedule 1 Condensed Consolidated Statements of Operations Three Months Ended December 31, ————————————————————— 2007 % of Sales 2006 % of Sales ————- ————— ————- —————- Net sales $125,001 100.0% $110,103 100.0% Cost of goods sold 84,132 67.3% 76,509 69.5% ————- ————— ————- —————- Gross margin 40,869 32.7% 33,594 30.5% Selling, general and administrative expenses 26,816 21.5% 27,742 25.2% Amortization of intangibles 734 0.6% 726 0.7% Net periodic postretirement benefits 673 0.5% (13,339) (12.1)% ————- ————— ————- —————- Operating income 12,646 10.1% 18,465 16.8% Other expenses: Interest (5,812) (4.6)% (7,128) (6.5)% Amortization of deferred financing costs (369) (0.3)% (351) (0.3)% Minority interest 76 0.1% 52 0.0% ————- ————— ————- —————- Income from continuing operations before income tax provision and discontinued operations 6,541 5.2% 11,038 10.0% Income tax provision 171 0.1% (4,234) (3.8)% ————- ————— ————- —————- Net income (loss) from continuing operations 6,370 5.1% 15,272 13.9% Loss from discontinued operations, net of tax (1,803) - (25,910) (23.5)% ————- ————— ————- —————- Net income (loss) $4,567 3.7% $(10,638) (9.7)% ========= ========== ========= =========== Basic net income (loss) per share: Continuing operations $0.47 $1.15 Discontinued operations (0.13) (1.94) ————- ————- Net income (loss) $0.34 $(0.79) ========= ========= Diluted net income (loss) per share: Continuing operations $0.47 $1.15 Discontinued operations (0.13) (1.94) ————- ————- Net income (loss) $0.34 $(0.79) ========= ========= Twelve Months Ended December 31, ————————————————————- 2007 % of Sales 2006 % of Sales ————- ————— ————- ————— Net sales $493,975 100.0% $445,727 100.0% Cost of goods sold 339,622 68.8% 315,052 70.7% ————- ————— ————- ————— Gross margin 154,353 31.2% 130,675 29.3% Selling, general and administrative expenses 106,033 21.5% 109,563 24.6% Amortization of intangibles 2,921 0.6% 2,894 0.6% Net periodic postretirement benefits 1,087 0.2% (11,755) (2.6)% ————- ————— ————- ————— Operating income 44,312 9.0% 29,973 6.7% Other expenses: Interest (26,799) (5.4)% (26,512) (5.9)% Amortization of deferred financing costs (1,444) (0.3)% (1,344) (0.3)% Minority interest 82 0.0% (44) (0.0)% ————- ————— ————- ————— Income from continuing operations before income tax provision and discontinued operations 16,151 3.3% 2,073 0.5% Income tax provision 5,515 1.1% (405) (0.1)% ————- ————— ————- ————— Net income (loss) from continuing operations 10,636 2.2% 2,478 0.6% Loss from discontinued operations, net of tax (1,971) (0.4)% (25,525) (5.7)% ————- ————— ————- ————— Net income (loss) $8,665 1.8% $(23,047) (5.2)% ========= ========== ========= ========== Basic net income (loss) per share: Continuing operations $0.80 $0.19 Discontinued operations (0.15) (1.92) ————- ————- Net income (loss) $0.65 $(1.73) ========= ========= Diluted net income (loss) per share: Continuing operations $0.79 $0.18 Discontinued operations (0.15) (1.91) ————- ————- Net income (loss) $0.64 $(1.73) ========= ========= The financial statement presentations reflect the reclassification of the Company's discontinued operations *T -0- *T THERMADYNE HOLDINGS CORPORATION FINANCIAL HIGHLIGHTS (In thousands) Schedule 2 Condensed Consolidated Cash Flow Data Three Months Ended Twelve Months Ended ————————— —————————- Dec. 31, Dec. 31, Dec. 31, Dec. 31, 2007 2006 2007 2006 ———— ————- ————- ————- Cash flows from continuing operations Cash flows from operating activities: Net income loss $4,567 $(10,638) $8,665 $(23,047) Adjustments to reconcile net income (loss) to net cash used in operating activities: Loss from discontinued operations 1,803 25,910 1,971 25,525 Minority Interest (76) (52) (82) 44 Depreciation and amortization 3,309 3,474 13,117 15,727 Deferred income taxes (1,786) (6,700) (1,233) (8,815) Net Periodic post-retirement benefits 673 (13,339) 1,087 (11,755) Changes in operating assets and liabilities 9,413 8,926 (3,666) (11,494) Other, net 5,048 (2,553) 3,154 (1,651) ———— ————- ————- ————- Net cash provided by (used in) operating activities 22,951 5,028 23,013 (15,466) ———— ————- ————- ————- Cash flows from investing activities: Capital expenditures (2,730) (4,175) (11,358) (8,499) Proceeds from sales of assets - 1,957 13,783 18,412 Minority interests and joint venture investments - - - (3,954) Other, net 496 - (487) - ———— ————- ————- ————- Net cash provided by investing activities (2,234) (2,218) 1,938 5,959 ———— ————- ————- ————- Cash flows from financing activities: Borrowings under Working Capital Facility (0) 0 20,041 9,357 Repayments of Working Capital Facility (14,943) (7,549) (24,989) (23,547) Borrowings under other debt - - - 20,000 Repayments of other debt (1,785) (1,330) (16,725) (7,790) Advances from (to) discontinued operations 686 7,773 (837) 8,330 Other, net 611 (831) 1,664 915 ———— ————- ————- ————- Net cash provided by (used in) financing activities (15,431) (1,937) (20,846) 7,265 ———— ————- ————- ————- Effect of exchange rate changes on cash and cash equivalents (125) (207) 744 365 ———— ————- ————- ————- Net cash provided by (used in) continuing operations $5,161 $666 $4,849 $(1,877) ======== ========= ========= ========= Cash flows from discontinued operations Net cash provided by operating activities $834 $6,571 $812 $8,008 Net cash provided by (used in) investing activities 6,053 914 5,084 (342) Net cash used in financing activities (6,754) (8,251) (5,650) (9,854) Effect of exchange rates on cash and cash equivalents 20 152 30 (187) ———— ————- ————- ————- Net cash provided by (used in) discontinued operation $153 $(614) $276 $(2,375) ======== ========= ========= ========= Total increase (decrease) in cash and cash equivalents $5,314 $52 $5,125 $(4,252) Total cash and cash equivalents beginning of period (including cash of discontinued operations) 11,121 11,258 11,310 15,562 ———— ————- ————- ————- Total cash and cash equivalents end of period (including cash of discontinued operations) $16,435 $11,310 $16,435 $11,310 ======== ========= ========= ========= The financial statement presentations reflect the reclassification of the Company's discontinued operations *T -0- *T THERMADYNE HOLDINGS CORPORATION FINANCIAL HIGHLIGHTS (In thousands) Schedule 3 December 31, 2007 December 31, 2006 ————————- ————————- ASSETS Cash and cash equivalents $16,159 $11,310 Accounts receivable, net 83,852 78,996 Inventories 90,961 97,141 Prepaid expenses and other 6,147 6,407 Deferred tax assets 2,721 1,798 Assets held for sale 2,023 18,552 ————————- ————————- Total current assets 201,863 214,204 Property, plant and equipment, net 44,356 43,241 Goodwill 182,163 189,103 Intangibles, net 63,204 65,638 Other assets 5,841 6,761 ————————- ————————- Total assets $497,427 $518,947 ================= ================= LIABILITIES AND SHAREHOLDERS' EQUITY Working capital facility $12,658 $17,606 Current maturities of long-term obligations 8,778 1,378 Accounts payable 31,577 31,932 Accrued and other liabilities 28,826 33,822 Accrued interest 8,032 8,252 Income taxes payable 4,664 1,248 Deferred tax liabilities 2,667 2,796 Liabilities applicable to assets held for sale 7,417 12,342 ————————- ————————- Total current liabilities 104,619 109,376 Long-term obligations, less current maturities 213,142 238,012 Deferred tax liabilities 44,306 44,482 Other long-term liabilities 12,989 23,266 Minority interest 287 307 Total shareholders' equity 122,084 103,504 ————————- ————————- Total liabilities and shareholders' equity $497,427 $518,947 ================= ================= Long-term Obligations December 31, 2007 December 31, 2006 ————————- ————————- Working Capital Facility $12,658 $17,606 Second-Lien Facility 36,000 50,000 Senior Subordinated Notes, due February 1, 2014, 9 1/4% interest payable semiannually on February 1 and August 1 175,000 175,000 Capital leases and other 10,920 14,390 ————————- ————————- 234,578 256,996 Current maturities and working capital facility (21,436) (18,984) ————————- ————————- $213,142 $238,012 ================= ================= The financial statement presentations reflect the reclassification of the Company's discontinued operations *T -0- *T THERMADYNE HOLDINGS CORPORATION FINANCIAL HIGHLIGHTS (In thousands) Schedule 4 Working Capital Efficiency Information 2007 2006 ———————————————————- ————- Dec. 31, Sept. 30, June 30, March 31, Dec. 31, ————- ————- ————- ————- ————- Accounts receivable, net $83,852 $90,748 $91,160 $84,694 $78,996 Inventories 90,961 99,803 98,692 101,322 97,141 Accounts payable (31,577) (34,699) (34,429) (29,604) (31,932) ————- ————- ————- ————- ————- $143,236 $155,852 $155,423 $156,412 $144,205 ========= ========= ========= ========= ========= % Annualized Sales 28.6% 31.0% 30.6% 33.7% 32.7% DSO 60.4 65.0 64.5 65.7 64.6 Inventory Turns 3.70 3.52 3.63 3.09 3.15 DPO 33.8 35.6 34.6 34.0 37.6 Calculation Notes ——————————- % Annualized Sales = Net amount compared to annualized quarterly sales DSO = Accounts receivable compared to related quarterly sales divided by 90 Inventory Turns = Quarterly cost of sales annualized divided by inventory DPO = Accounts payable compared to related quarterly cost of sales divided by 90 The financial statement presentations reflect the reclassification of the Company's discontinued operations *T -0- *T THERMADYNE HOLDINGS CORPORATION FINANCIAL HIGHLIGHTS (In millions) Schedule 5 Reconciliations of Net Loss from continuing operations to Operating EBITDA (1) and Operating EBITDA, as adjusted Three Months Ended December 31, ——————— 2007 2006 ———- ——— Net income (loss) from continuing operations $6.4 $15.3 Plus: Depreciation and amortization including deferred financing fees 3.3 3.3 Interest expense 5.8 7.1 Net periodic postretirement benefits in excess of cash payments 0.4 (12.7) LIFO (1.7) 1.4 Minority interest (0.1) - Severance accrual 0.6 0.2 Stock compensation expense 0.4 0.4 Provision for income taxes 0.2 (4.5) ———- ——— Operating EBITDA from continuing operations(1) $15.3 $10.5 Incremental audit and accounting expenses related to delayed and restated financial statements - 1.0 Fees and expenses for May 2006 consent solicitation of Senior Subordinated Bondholders - 0.4 Expenses incurred in evaluating strategic alternative of selected non-core operations - (0.7) ———- ——— Operating EBITDA, as adjusted, from continuing operations(1) 15.3 11.2 Percentage of Net Sales 12.2% 10.1% EBITDA from discontinued operations (1.8) (1.4) ———- ——— Operating EBITDA, as adjusted(1) $13.5 $9.8 ======= ====== Twelve Months Ended December 31, ——————— 2007 2006 ———- ——— Net income (loss) from continuing operations $10.6 $2.5 Plus: Depreciation and amortization including deferred financing fees 13.1 15.7 Interest expense 26.8 26.5 Net periodic postretirement benefits in excess of cash payments 0.8 (11.7) LIFO 0.8 4.5 Minority interest (0.1) 0.1 Severance accrual 0.6 0.9 Stock compensation expense 1.6 1.1 Provision for income taxes 5.5 (0.4) ———- ——— Operating EBITDA(1) $59.7 $39.2 Incremental audit and accounting expenses related to delayed and restated financial statements - 3.8 Fees and expenses for May 2006 consent solicitation of Senior Subordinated Bondholders - 3.7 Expenses incurred in evaluating strategic alternative of selected non-core operations - - ———- ——— Operating EBITDA, as adjusted, from continuing operations(1) 59.7 46.7 Percentage of Net Sales 12.1% 10.5% EBITDA from discontinued operations (1.1) 1.2 ———- ——— Operating EBITDA, as adjusted(1) $58.6 $47.9 ======= ====== (1) A Non-GAAP measure The financial statement presentations reflect the reclassification of the Company's discontinued operations *T
Search Our News Using Google Search
Can't find what you want? Try using Google:
