STAMFORD, Conn., March 7 /PRNewswire-FirstCall/ -- Centerplate, Inc. (AMEX:CVP)(TSX: CVP.un) today reported financial results for the fourth quarter and fiscal year ended January 2, 2007. Net sales of $681.1 million for fiscal year 2006 increased 5.9% from $643.1 million in fiscal year 2005. Adjusted earnings before interest, income taxes, depreciation and amortization (EBITDA) increased 7.6% to $57.5 million for 2006 compared to $53.5 million in 2005. The increase in adjusted EBITDA for the year was primarily due to higher sales volume and lower selling, general and administrative expenses (SG&A).
"2006 was a great year for Centerplate, capped by a very strong fourth quarter. For the full-year we increased revenues and adjusted EBITDA, made great strides with our core strategic initiatives, strengthened our management team, and implemented an enhanced organizational structure to better serve our customers," said Janet L. Steinmayer, President and Chief Executive Officer of Centerplate. She added, "We remain focused on executing on our strategic vision in 2007 -- delivering creative, value-added solutions, partnering with clients on initiatives that are attractive and profitable to both parties, and being an innovator in all aspects of our business." The net sales increase in fiscal year 2006 was primarily due to higher sales at the company's convention centers, Major League Baseball (MLB) facilities and arenas which increased $15.3 million, $13.6 million and $9.2 million, respectively. Higher sales at convention centers were primarily driven by an increase in the number of events held at these facilities. At the company's MLB facilities, an overall increase in attendance and per capita spending resulted in higher net sales, while sales at arenas were positively impacted by the resolution of the National Hockey League (NHL) lock-out and an increase in the number of college basketball tournaments held in a number of these facilities. Net sales at all other facilities increased by $6.0 million, primarily due to increases at the company's National Football League (NFL) venues ($4.8 million). Partially offsetting this improvement was a decline in sales of $6.1 million (net of new accounts) associated with the non-renewal of some of the company's contracts.
Net sales in the fourth quarter increased 8.8%, to $158.0 million, compared to net sales of $145.2 million in the fourth quarter of 2005. Adjusted EBITDA increased 6.8% to $10.7 million in the fourth quarter of 2006 compared to $10.1 million in the fourth quarter of 2005. The increase in adjusted EBITDA was primarily due to higher sales in 2006 and non-recurring expenses incurred in 2005. NFL sales in the quarter improved $11.4 million due to five additional games played in the fourth quarter of 2006 compared to 2005. In addition, convention center sales increased $2.3 million and new accounts, net of closed accounts, added an additional $2.4 million in sales. This was partially offset by a $3.3 million decline in MLB sales because the regular MLB baseball season ended in the company's third quarter in 2006 versus the fourth quarter in 2005.
For the full year 2006, Centerplate reported net income of $3.5 million compared to a loss of $4.6 million in 2005. On a per share basis, Centerplate reported net income of $0.15 per share in 2006 versus a loss of $0.20 per share for fiscal 2005. The improvement in net income and earnings per share in 2006 was primarily due to a one-time charge of $5.8 million related to the refinancing of the company's senior credit facility in April 2005. For the fourth quarter of 2006, Centerplate reported a net loss of $3.1 million compared to a net loss of $2.2 million in the fourth quarter of 2005. On a per share basis, Centerplate reported a net loss of $0.14 per share in the fourth quarter of 2006 compared to a net loss of $0.10 per share in the fourth quarter of 2005. The decline in net income during the fourth quarter of 2006 was primarily due to lower income tax benefits which was partially offset by an increase in operating income.
As previously announced, Centerplate will make its 39th distribution to IDS holders on March 20, at the annual rate of approximately $1.56 per IDS.
Centerplate will discuss its fourth quarter and year-end 2006 financial results on a conference call at 5:30 p.m. (EST) on Wednesday, March 7, 2007. Interested parties may participate in the call by dialing 877-407-8029 approximately 10 minutes before the call is scheduled to begin. International callers should dial 201-689-8029. An audio web cast of the conference call can also be accessed via http://www.centerplate.com/. For individuals unable to participate in the conference call, a telephone replay will be available from 8:00 p.m. on March 7, 2007 through midnight on March 21, 2007. The replay can be accessed domestically by dialing 877-660-6853. For international callers, the dial-in number is 201-612-7415. The replay account number for the call is 252 and the pass code for the replay call is 231822.
About Centerplate Centerplate is a leading provider of catering, concessions, merchandise and facility management services for sports facilities, convention centers and other entertainment venues. Visit the company online at http://www.centerplate.com/.
Presentation of Information in this Press Release Centerplate presents Adjusted EBITDA because covenants in the indenture governing the company's subordinated notes contain ratios based on this measure. A reconciliation of Adjusted EBITDA to net income or loss is included in the attached tables.
Forward-Looking Statements This news release includes forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act. These statements may involve risks and uncertainties that could cause actual results to differ materially from those described in such statements. Although Centerplate believes that the expectations reflected in these forward-looking statements are reasonable, the company can give no assurance that these expectations will prove to have been correct or that they will occur. Important factors beyond Centerplate's control, including general economic conditions, consumer spending levels, changing trends in our business and competitive environment, adverse weather conditions and other factors, as well as the risks identified in our most recent annual report on Form 10-K, could cause actual results to differ materially from Centerplate's expectations. Centerplate undertakes no obligation to update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.
CENTERPLATE, INC. CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
13 Weeks 14 Weeks 52 Weeks 53 Weeks
Ended Ended Ended Ended
January 2, January 3, January 2, January 3,
2007 2006 2007 2006
(In thousands, except share data) Net sales $157,987 $145,202 $681,120 $643,112 Cost of sales 128,919 117,657 554,752 519,395
Selling, general and
administrative 18,854 18,017 70,538 71,405
Depreciation and
amortization 7,517 7,822 28,854 29,255
Transaction related
expenses 700 1,006 700 1,006
Contract related losses 258 89 358 369 Operating income 1,739 611 25,918 21,682 Interest expense 6,112 5,796 24,360 31,274 Other income, net (526) (524) (1,690) (1,151) Income (loss) before
income taxes (3,847) (4,661) 3,248 (8,441) Income tax benefit (720) (2,467) (230) (3,853)
Net income (loss) $(3,127) $(2,194) $3,478 $(4,588) Basic and diluted net
income (loss) per share
with and without
conversion option $(0.14) $(0.10) $0.15 $(0.20) Weighted average shares
outstanding with
conversion option 4,060,997 4,060,997 4,060,997 4,060,997
Weighted average shares
outstanding without
conversion option 18,463,995 18,463,995 18,463,995 18,463,995
Total weighted average
shares outstanding 22,524,992 22,524,992 22,524,992 22,524,992 Dividends declared per
share $0.20 $0.20 $0.79 $0.79 CENTERPLATE, INC. RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EARNINGS BEFORE INTEREST,
INCOME TAXES, DEPRECIATION, AND AMORTIZATION (UNAUDITED)
13 Weeks 14 Weeks 52 Weeks 53 Weeks
Ended Ended Ended Ended
January January January January
2, 2007 3, 2006 2, 2007 3, 2006
(In thousands)
Net income (loss) $(3,127) $(2,194) $3,478 $(4,588)
Income tax benefit (720) (2,467) (230) (3,853)
Income (loss) before income taxes (3,847) (4,661) 3,248 (8,441)
Adjustments:
Interest expense (1) 6,112 5,796 24,360 31,274
Depreciation and amortization 7,517 7,822 28,854 29,255
EBITDA (2) $9,782 $8,957 $56,462 $52,088
The following adjustments to EBITDA
were made to compute Adjusted EBITDA: EBITDA $9,782 $8,957 $56,462 $52,088
Adjustments:
Transaction related expenses (3) 700 1,006 700 1,006
Contract related losses (4) 258 89 358 369
Adjusted EBITDA (2) $10,740 $10,052 $57,520 $53,463
(1) Included in interest expense for the 53 weeks ended January 3, 2006
is $5.8 million in expenses related to entering into our credit
agreement on April 1, 2005. The $5.8 million includes a prepayment
premium of approximately $4.6 million on the prior credit facility
and a $1.2 million non-cash charge for the write-off of deferred
financing costs. Additionally, for the 13 and 52 weeks ended January
2, 2007 included in interest is a non-cash credit of $1.0 million and
$3.4 million, respectively, related to the change in the fair value
of our derivatives as compared to $1.0 million and $40,000,
respectively, for the 13 and 53 week periods ended January 3, 2006. (2) EBITDA is not a measure in accordance with GAAP. EBITDA is not
intended to represent cash flows from operations as determined by
GAAP and should not be used as an alternative to income (loss) before
taxes or net income (loss) as an indicator of operating performance
or to cash flows as a measure of liquidity. We believe that EBITDA
is an important measure of the cash returned on our investment in
capital expenditures under our contracts. Adjusted EBITDA as defined
in the indenture governing our subordinated notes issued in 2003, is
determined as EBITDA as adjusted for transaction related expenses,
contract related losses, other non-cash charges, and the former
annual management fee paid to affiliates of Blackstone and GE
Capital, less any non-cash credits. We present Adjusted EBITDA
because covenants in the indenture governing our 2003 notes contain
ratios based on this measure and it is used by management to among
other things evaluate our ability to make interest and dividend
payments. (3) Reflects expenses incurred in connection with the contemplated
follow-on offering to the Company's 2003 initial public offering. (4) Reflects non-cash expense for the write-off of impaired assets
associated with the Company's contracts.
CENTERPLATE, INC. SELECTED CONSOLIDATED CASH FLOW DATA (UNAUDITED)
(in thousands) 13 Weeks 14 Weeks 52 Weeks 53 Weeks
Ended Ended Ended Ended
January January January January
2, 2007 3, 2006 2, 2007 3, 2006
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income (loss) $(3,127) $(2,194) $3,478 $(4,588)
Adjustments to reconcile net
income (loss) to net cash
provided by (used in)
operating activities:
Depreciation and amortization 7,517 7,822 28,854 29,255
Amortization of deferred
financing costs 642 649 2,569 3,474
Charge for impaired assets 258 1,095 358 1,375
Non-cash interest earned on
restricted cash (145) (104) (455) (196)
Derivative non-cash interest (1,010) (1,017) (3,364) (40)
Deferred tax change (710) (2,161) (707) (3,547)
Loss on disposition of assets 54 62 22 15
Other (281) 53 9 157 Changes in assets and
liabilities (9,071) (19,709) 8,562 2,503 Net cash provided by
(used in) operating
activities (5,873) (15,504) 39,326 28,408 CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase of property and
equipment (4,147) (2,855) (13,752) (14,712)
Proceeds from sale of property
and equipment - (118) 250 338
Purchase of contract rights (1,609) (1,369) (14,014) (10,363)
Return of unamortized capital
investment - - 1,828 -
Restricted cash (13,050) - (13,050) - Net cash used in
investing activities (18,806) (4,342) (38,738) (24,737) CASH FLOWS FROM FINANCING
ACTIVITIES:
Repayments - revolving loans (5,000) - (10,000) (44,250)
Borrowings - revolving loans 20,000 - 25,000 44,250
Principal payments on long-
term debt (268) (537) (1,075) (806)
Proceeds from issuance of
long-term debt - - - 107,500
Retirement of existing long-
term borrowings - - - (65,000)
Payments of financing costs - (19) - (7,266)
Dividend payments (4,460) (4,460) (17,840) (17,840)
Increase (decrease) in bank
overdrafts (1,340) (4,958) 1,508 (3,626) Net cash provided by
(used in) financing
activities 8,932 (9,974) (2,407) 12,962 INCREASE (DECREASE) IN CASH (15,747) (29,820) (1,819) 16,633 CASH AND CASH EQUIVALENTS:
Beginning of period 55,338 71,230 41,410 24,777 End of period $39,591 $41,410 $39,591 $41,410 CENTERPLATE, INC. SELECTED CONSOLIDATED BALANCE SHEET DATA (UNAUDITED)
January 2, January 3,
2007 2006
ASSETS (in thousands)
Current assets $102,194 $88,790
Property and equipment, net 50,684 49,725
Contract rights, net 79,209 80,557
Cost in excess of net assets
acquired 41,142 41,142
Deferred financing costs, net 12,930 15,499
Other assets 46,211 42,312
TOTAL ASSETS $332,370 $318,025 LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $98,700 $70,822
Long-term debt 209,789 210,864
Other liabilities 8,279 6,384 Common Stock with conversion
option, par value $0.01,
exchangeable for subordinated
debt, net of discount 14,352 14,352 Total stockholders' equity 1,250 15,603
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $332,370 $318,025
DATASOURCE: Centerplate, Inc.
CONTACT: Gael Doar, Director of Communications of Centerplate, Inc., +1-203-975-5941, or Web site: http://www.centerplate.com/
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