Margin Expansion
ContinuesAnnounces Finishing Plant
Consolidation
Jason Industries, Inc. (NASDAQ:JASN) (NASDAQ:JASNW) (“Jason” or the
“Company”) today reported results for second quarter 2017.
Key financial results for the second quarter 2017 versus the
year ago period include:
- Net sales of $172.5 million decreased 7.1 percent and included
a negative 2.1 percent impact from the planned exit of non-core
businesses in the margin expansion program and a negative 1.3
percent from foreign currency translation.
- Operating income of $9.9 million, or 5.7 percent of net sales,
improved $2.8 million from 3.8 percent of net sales on improved
operational results on lower sales and lower restructuring and
corporate costs.
- Net loss of $3.5 million, or $0.17 diluted loss per share,
increased $1.1 million or $0.04 per share, significantly impacted
by a loss on the planned divestiture of the Acoustics European
operations of $5.4 million net of tax, or $0.21 per share.
- Free cash flow was $14.2 million, an increase of $10.2 million,
due to higher operating income, lower capital expenditures and a
non-cash preferred dividend. Total liquidity was
$101.1 million, an increase of $12.7 million.
On an adjusted basis, second quarter 2017 results versus the
year ago period include:
- Adjusted EBITDA of $20.6 million, or 11.9 percent of net sales,
improved $1.8 million from 10.1 percent of net sales, driven by
margin expansion from improved operational efficiencies and lower
selling and administrative expenses.
- Adjusted net income of $2.0 million, or $0.07 Adjusted earnings
per share, improved $0.14 per share.
“While revenues decreased with lower volumes in certain end
markets, margins improved in three of our four businesses with
better operational performance. We increased our liquidity
and made progress in lowering our leverage by improving operating
income, generating cash and retiring debt,” said Brian Kobylinski,
chief executive officer of Jason. “We also continue to gain
traction with our targeted growth initiatives.”
Highlights during the quarter include:
- Total Cost Reduction and Margin Expansion program savings were
$2.4 million in the second quarter with a total of $17.0 million
since the inception of the program. Actions taken and
announced to-date are expected to achieve $22 million in annual
run-rate cost savings.
- Completed a sale leaseback of a core U.S. facility, generating
$5.6 million in net proceeds.
- Repurchased $8.0 million Second Lien Term Loans for $6.1
million.
- In June, announced the closure of a Finishing manufacturing
facility in Richmond, Virginia as part of the Company’s ongoing
footprint rationalization. Operations will be consolidated into an
existing facility in Richmond, Indiana by the end of the fourth
quarter. The closure will achieve annual run-rate cost savings of
$0.6 million beginning in the first quarter of 2018. As a
result of this action, Jason expects to record a pre-tax
restructuring charge to earnings of approximately $1.7 million in
2017 funded by the expected proceeds from sale of the
facility.
- The Company expects to complete the sale of the Acoustics
European operations in the third quarter of 2017 for a gross sales
price of approximately $10 million. The divestiture will exit
approximately $30 million of non-core revenue and will result in
approximately $7 million of net cash proceeds from the sale of the
business.
Key financial results within the segments for the second quarter
2017 versus the year ago period include:
- Finishing net sales of $49.8 million decreased $3.4 million, or
6.4 percent, including a negative foreign currency translation
impact of 3.7 percent and a negative 2.6 percent impact from the
exit of a non-core market in Brazil. Organic sales decreased 0.1
percent and were impacted by strategic decisions to exit low-margin
business and products, partially offset by higher volumes in
industrial end markets. Adjusted EBITDA was $7.3 million, or 14.7
percent of net sales, a decrease of $0.3 million from 14.4 percent
of net sales. Adjusted EBITDA margin increased on improved pricing
and lower administrative costs.
- Components net sales of $21.7 million decreased $2.9 million,
or 11.9 percent, including a negative 9.9 percent impact from the
exit of non-core product lines upon closure of the Buffalo Grove,
Illinois facility. Organic sales decreased 2.0 percent with lower
rail volumes, partially offset by increased volumes of smart
utility meter components. Adjusted EBITDA was $2.5 million, or 11.3
percent of net sales, a decrease of $0.9 million from 13.5 percent
of net sales, and was negatively impacted by lower volumes,
unfavorable product mix, higher material costs and lower labor
productivity, partially offset by savings resulting from the cost
reduction program.
- Seating net sales of $44.9 million increased $0.2 million, or
0.5 percent, including a negative foreign currency translation
impact of 0.5 percent. Organic sales increased 1.0 percent on
improved pricing and higher volumes in the construction and power
sports markets, partially offset by lower volumes in motorcycle and
turf care. Adjusted EBITDA was $5.9 million, or 13.1 percent of net
sales, an increase of $0.3 million from 12.6 percent of net sales,
and was positively impacted by savings resulting from the cost
reduction program, partially offset by material cost
inflation.
- Acoustics net sales of $56.1 million decreased $7.1 million, or
11.3 percent, including a negative foreign currency translation
impact of 0.3 percent. Organic sales decreased 11.0 percent due to
automotive assembly plant shutdowns on declining light vehicle
demand, partially offset by new platform awards. Adjusted EBITDA
was $8.0 million, or 14.2 percent of net sales, an increase of $1.2
million from 10.7 percent of net sales due to improved labor and
material productivity and savings resulting from the cost reduction
program, partially offset by lower volumes.
- Corporate expenses of $3.1 million decreased $1.5 million on
lower third-party consulting fees.
2017 Guidance:
“Our ability to identify, prioritize and complete projects is
increasing and we are moving toward the next wave of operational
improvements and growth initiatives. While our revenues are
impacted by weaker market conditions, we expect to maintain our
profitability and reaffirm our EBITDA guidance for ongoing
operations. We have more to do, but are encouraged by this
quarter’s margin enhancement, cash flow generation and improved
liquidity.”
Jason’s net sales outlook is impacted by lower than expected
North American automotive production in Acoustics. The Adjusted
EBITDA impact of lower volumes is expected to be offset by improved
operating efficiencies and lower overall SG&A spend. The impact
of the third quarter Acoustics European divestiture is expected to
reduce 2017 net sales by $10 million and Adjusted EBITDA by $1
million.
For the full year 2017, Jason now expects net sales in the range
of $625 to $640 million, previously $650 to $670 million. Adjusted
EBITDA is now expected to be $63 to $66 million, previously $64 to
$67 million, adjusted for the Acoustics European divestiture.
Conference Call:
The Company will hold a conference call to discuss its second
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 Second Quarter 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), August 10, 2017. 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 4,400 people in 13
countries.
Forward Looking StatementsThis 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 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
InformationIncluded 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 |
|
Six Months Ended |
|
June 30, 2017 |
|
July 1, 2016 |
|
June 30, 2017 |
|
July 1, 2016 |
Net sales |
$ |
172,477 |
|
|
$ |
185,687 |
|
|
$ |
347,670 |
|
|
$ |
376,661 |
|
Cost of goods sold |
136,758 |
|
|
148,531 |
|
|
277,187 |
|
|
301,614 |
|
Gross profit |
35,719 |
|
|
37,156 |
|
|
70,483 |
|
|
75,047 |
|
Selling and
administrative expenses |
25,242 |
|
|
28,273 |
|
|
51,898 |
|
|
60,574 |
|
Loss (gain) on
disposals of property, plant and equipment - net |
65 |
|
|
(14 |
) |
|
(265 |
) |
|
689 |
|
Restructuring |
543 |
|
|
1,783 |
|
|
1,224 |
|
|
4,500 |
|
Operating income |
9,869 |
|
|
7,114 |
|
|
17,626 |
|
|
9,284 |
|
Interest expense |
(8,395 |
) |
|
(7,963 |
) |
|
(16,761 |
) |
|
(15,987 |
) |
Gain on extinguishment
of debt |
1,564 |
|
|
— |
|
|
1,564 |
|
|
— |
|
Equity income |
277 |
|
|
142 |
|
|
420 |
|
|
311 |
|
Loss on
divestiture |
(6,686 |
) |
|
— |
|
|
(6,686 |
) |
|
— |
|
Other income - net |
90 |
|
|
283 |
|
|
203 |
|
|
401 |
|
Loss before income
taxes |
(3,281 |
) |
|
(424 |
) |
|
(3,634 |
) |
|
(5,991 |
) |
Tax provision
(benefit) |
200 |
|
|
1,946 |
|
|
228 |
|
|
(605 |
) |
Net loss |
$ |
(3,481 |
) |
|
$ |
(2,370 |
) |
|
$ |
(3,862 |
) |
|
$ |
(5,386 |
) |
Less net (loss) gain
attributable to noncontrolling interests |
— |
|
|
(400 |
) |
|
5 |
|
|
(910 |
) |
Net loss attributable
to Jason Industries |
$ |
(3,481 |
) |
|
$ |
(1,970 |
) |
|
$ |
(3,867 |
) |
|
$ |
(4,476 |
) |
Accretion of preferred
stock dividends |
936 |
|
|
900 |
|
|
1,854 |
|
|
1,800 |
|
Net loss available to
common shareholders of Jason Industries |
$ |
(4,417 |
) |
|
$ |
(2,870 |
) |
|
$ |
(5,721 |
) |
|
$ |
(6,276 |
) |
|
|
|
|
|
|
|
|
Net loss per share
available to common shareholders of Jason Industries:
|
|
|
|
|
|
|
|
Basic and
diluted |
$ |
(0.17 |
) |
|
$ |
(0.13 |
) |
|
$ |
(0.22 |
) |
|
$ |
(0.28 |
) |
|
|
|
|
|
|
|
|
Weighted average number
of common shares outstanding: |
|
|
|
|
|
|
|
Basic and
diluted |
26,042 |
|
|
22,395 |
|
|
25,914 |
|
|
22,392 |
|
Jason Industries,
Inc.Condensed Consolidated Balance
Sheets(In thousands, except share and per share amounts)
(Unaudited) |
|
|
June 30, 2017 |
|
December 31, 2016 |
Assets |
|
|
|
Current assets |
|
|
|
Cash and
cash equivalents |
$ |
54,919 |
|
|
$ |
40,861 |
|
Accounts
receivable - net |
81,560 |
|
|
77,837 |
|
Inventories - net |
69,313 |
|
|
73,601 |
|
Assets
held for sale |
17,684 |
|
|
— |
|
Other
current assets |
16,418 |
|
|
17,866 |
|
Total
current assets |
239,894 |
|
|
210,165 |
|
Property, plant and
equipment - net |
158,653 |
|
|
178,318 |
|
Goodwill |
44,203 |
|
|
42,157 |
|
Other intangible assets
- net |
136,968 |
|
|
144,258 |
|
Other assets - net |
9,836 |
|
|
9,433 |
|
Total
assets |
$ |
589,554 |
|
|
$ |
584,331 |
|
|
|
|
|
Liabilities and
Shareholders' Equity (Deficit) |
|
|
|
Current
liabilities |
|
|
|
Current
portion of long-term debt |
$ |
7,368 |
|
|
$ |
8,179 |
|
Accounts
payable |
61,881 |
|
|
61,160 |
|
Accrued
compensation and employee benefits |
16,016 |
|
|
13,207 |
|
Accrued
interest |
128 |
|
|
191 |
|
Liabilities held for sale |
8,321 |
|
|
— |
|
Other
current liabilities |
26,279 |
|
|
24,807 |
|
Total
current liabilities |
119,993 |
|
|
107,544 |
|
Long-term debt |
410,302 |
|
|
416,945 |
|
Deferred income
taxes |
36,302 |
|
|
42,747 |
|
Other long-term
liabilities |
21,956 |
|
|
19,881 |
|
Total
liabilities |
588,553 |
|
|
587,117 |
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
Shareholders'
Equity (Deficit) |
|
|
|
Preferred stock |
47,745 |
|
|
45,899 |
|
Jason Industries common
stock |
3 |
|
|
2 |
|
Additional paid-in
capital |
145,271 |
|
|
144,666 |
|
Retained deficit |
(166,743 |
) |
|
(162,876 |
) |
Accumulated other
comprehensive loss |
(25,275 |
) |
|
(30,372 |
) |
Shareholders’ equity (deficit) attributable to Jason Industries
|
1,001 |
|
|
(2,681 |
) |
Noncontrolling
interests |
— |
|
|
(105 |
) |
Total
shareholders' equity (deficit) |
1,001 |
|
|
(2,786 |
) |
Total
liabilities and shareholders' equity (deficit) |
$ |
589,554 |
|
|
$ |
584,331 |
|
Jason Industries,
Inc.Condensed Consolidated Statements of Cash
Flows(In thousands) (Unaudited) |
|
|
Six Months Ended |
|
June 30, 2017 |
|
July 1, 2016 |
Cash flows from
operating activities |
|
|
|
Net loss |
$ |
(3,862 |
) |
|
$ |
(5,386 |
) |
Adjustments to
reconcile net loss to net cash provided by operating activities:
|
|
|
|
Depreciation of property, plant and equipment |
13,153 |
|
|
15,322 |
|
Amortization of intangible assets |
6,107 |
|
|
6,315 |
|
Amortization of deferred financing costs and debt discount |
1,498 |
|
|
1,504 |
|
Equity
income |
(420 |
) |
|
(311 |
) |
Deferred
income taxes |
(5,311 |
) |
|
(2,313 |
) |
(Gain)
loss on disposals of property, plant and equipment - net |
(265 |
) |
|
689 |
|
Gain on
extinguishment of debt |
(1,564 |
) |
|
— |
|
Loss on
divestiture |
6,686 |
|
|
— |
|
Dividends
from joint venture |
— |
|
|
836 |
|
Share-based compensation |
673 |
|
|
(1,373 |
) |
Net
increase (decrease) in cash due to changes in: |
|
|
|
Accounts
receivable |
(6,316 |
) |
|
(17,322 |
) |
Inventories |
4,417 |
|
|
2,346 |
|
Other
current assets |
542 |
|
|
4,142 |
|
Accounts
payable |
1,156 |
|
|
14,206 |
|
Accrued
compensation and employee benefits |
4,955 |
|
|
1,342 |
|
Accrued
interest |
(63 |
) |
|
106 |
|
Accrued
income taxes |
2,122 |
|
|
(652 |
) |
Other -
net |
(2,676 |
) |
|
1,326 |
|
Total
adjustments |
24,694 |
|
|
26,163 |
|
Net cash
provided by operating activities |
20,832 |
|
|
20,777 |
|
Cash flows from
investing activities |
|
|
|
Proceeds from disposals
of property, plant and equipment |
6,400 |
|
|
3,017 |
|
Payments for property,
plant and equipment |
(7,161 |
) |
|
(12,129 |
) |
Acquisitions of
patents |
(33 |
) |
|
(101 |
) |
Net cash
used in investing activities |
(794 |
) |
|
(9,213 |
) |
Cash flows from
financing activities |
|
|
|
Payments of First and
Second Lien term loans |
(9,549 |
) |
|
(1,550 |
) |
Proceeds from other
long-term debt |
6,134 |
|
|
4,571 |
|
Payments of other
long-term debt |
(3,671 |
) |
|
(6,316 |
) |
Payments of preferred
stock dividends |
(4 |
) |
|
(2,700 |
) |
Other financing
activities - net |
(35 |
) |
|
(125 |
) |
Net cash
used in financing activities |
(7,125 |
) |
|
(6,120 |
) |
Effect of exchange rate
changes on cash and cash equivalents |
1,145 |
|
|
(62 |
) |
Net increase in cash
and cash equivalents |
14,058 |
|
|
5,382 |
|
Cash and cash
equivalents, beginning of period |
40,861 |
|
|
35,944 |
|
Cash and cash
equivalents, end of period |
$ |
54,919 |
|
|
$ |
41,326 |
|
Jason Industries,
Inc.Quarterly Financial Information by
Segment(In thousands) (Unaudited) |
|
|
2016 |
|
2017 |
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
FY |
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
YTD |
Finishing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
$ |
50,276 |
|
|
$ |
53,148 |
|
|
$ |
49,162 |
|
|
$ |
44,297 |
|
|
$ |
196,883 |
|
|
$ |
49,476 |
|
|
$ |
49,757 |
|
|
|
|
|
|
$ |
99,233 |
|
Adjusted EBITDA |
5,229 |
|
|
7,634 |
|
|
7,042 |
|
|
4,295 |
|
|
24,200 |
|
|
7,067 |
|
|
7,324 |
|
|
|
|
|
|
14,391 |
|
Adjusted EBITDA % net
sales |
10.4 |
% |
|
14.4 |
% |
|
14.3 |
% |
|
9.7 |
% |
|
12.3 |
% |
|
14.3 |
% |
|
14.7 |
% |
|
|
|
|
|
14.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
$ |
26,837 |
|
|
$ |
24,634 |
|
|
$ |
24,876 |
|
|
$ |
21,320 |
|
|
$ |
97,667 |
|
|
$ |
21,117 |
|
|
$ |
21,713 |
|
|
|
|
|
|
$ |
42,830 |
|
Adjusted EBITDA |
4,613 |
|
|
3,337 |
|
|
3,658 |
|
|
2,641 |
|
|
14,249 |
|
|
2,720 |
|
|
2,451 |
|
|
|
|
|
|
5,171 |
|
Adjusted EBITDA % net
sales |
17.2 |
% |
|
13.5 |
% |
|
14.7 |
% |
|
12.4 |
% |
|
14.6 |
% |
|
12.9 |
% |
|
11.3 |
% |
|
|
|
|
|
12.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Seating |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
$ |
51,950 |
|
|
$ |
44,680 |
|
|
$ |
32,330 |
|
|
$ |
32,090 |
|
|
$ |
161,050 |
|
|
$ |
47,373 |
|
|
$ |
44,921 |
|
|
|
|
|
|
$ |
92,294 |
|
Adjusted EBITDA |
6,629 |
|
|
5,620 |
|
|
2,507 |
|
|
1,366 |
|
|
16,122 |
|
|
5,530 |
|
|
5,897 |
|
|
|
|
|
|
11,427 |
|
Adjusted EBITDA % net
sales |
12.8 |
% |
|
12.6 |
% |
|
7.8 |
% |
|
4.3 |
% |
|
10.0 |
% |
|
11.7 |
% |
|
13.1 |
% |
|
|
|
|
|
12.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acoustics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
$ |
61,911 |
|
|
$ |
63,225 |
|
|
$ |
63,740 |
|
|
$ |
61,043 |
|
|
$ |
249,919 |
|
|
$ |
57,227 |
|
|
$ |
56,086 |
|
|
|
|
|
|
$ |
113,313 |
|
Adjusted EBITDA |
6,615 |
|
|
6,758 |
|
|
7,414 |
|
|
6,415 |
|
|
27,202 |
|
|
6,721 |
|
|
7,983 |
|
|
|
|
|
|
14,704 |
|
Adjusted EBITDA % net
sales |
10.7 |
% |
|
10.7 |
% |
|
11.6 |
% |
|
10.5 |
% |
|
10.9 |
% |
|
11.7 |
% |
|
14.2 |
% |
|
|
|
|
|
13.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
(4,747 |
) |
|
$ |
(4,595 |
) |
|
$ |
(4,098 |
) |
|
$ |
(4,173 |
) |
|
$ |
(17,613 |
) |
|
$ |
(3,477 |
) |
|
$ |
(3,075 |
) |
|
|
|
|
|
$ |
(6,552 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
$ |
190,974 |
|
|
$ |
185,687 |
|
|
$ |
170,108 |
|
|
$ |
158,750 |
|
|
$ |
705,519 |
|
|
$ |
175,193 |
|
|
$ |
172,477 |
|
|
|
|
|
|
$ |
347,670 |
|
Adjusted EBITDA |
18,339 |
|
|
18,754 |
|
|
16,523 |
|
|
10,544 |
|
|
64,160 |
|
|
18,561 |
|
|
20,580 |
|
|
|
|
|
|
39,141 |
|
Adjusted EBITDA % net
sales |
9.6 |
% |
|
10.1 |
% |
|
9.7 |
% |
|
6.6 |
% |
|
9.1 |
% |
|
10.6 |
% |
|
11.9 |
% |
|
|
|
|
|
11.3 |
% |
Jason Industries,
Inc.Reconciliation of GAAP to Non-GAAP
Measures(In thousands) (Unaudited)Organic Sales
Growth |
|
|
2Q 2017 |
|
Finishing |
|
Components |
|
Seating |
|
Acoustics |
|
JasonConsolidated |
|
|
|
|
|
|
|
|
|
|
Net sales |
|
|
|
|
|
|
|
|
|
Organic
sales growth |
(0.1 |
)% |
|
(2.0 |
)% |
|
1.0 |
% |
|
(11.0 |
)% |
|
(3.7 |
)% |
Currency
impact |
(3.7 |
)% |
|
— |
% |
|
(0.5 |
)% |
|
(0.3 |
)% |
|
(1.3 |
)% |
Divestiture & Non-Core Exit
|
(2.6 |
)% |
|
(9.9 |
)% |
|
— |
% |
|
— |
% |
|
(2.1 |
)% |
Growth as
reported |
(6.4 |
)% |
|
(11.9 |
)% |
|
0.5 |
% |
|
(11.3 |
)% |
|
(7.1 |
)% |
|
|
|
|
|
|
|
|
|
|
|
YTD 2017 |
|
Finishing |
|
Components |
|
Seating |
|
Acoustics |
|
JasonConsolidated |
|
|
|
|
|
|
|
|
|
|
Net sales |
|
|
|
|
|
|
|
|
|
Organic
sales growth |
1.5 |
% |
|
(5.1 |
)% |
|
(3.9 |
)% |
|
(9.0 |
)% |
|
(4.3 |
)% |
Currency
impact |
(3.1 |
)% |
|
— |
% |
|
(0.6 |
)% |
|
(0.4 |
)% |
|
(1.1 |
)% |
Divestiture & Non-Core Exit |
(2.5 |
)% |
|
(11.7 |
)% |
|
— |
% |
|
— |
% |
|
(2.3 |
)% |
Growth as
reported |
(4.1 |
)% |
|
(16.8 |
)% |
|
(4.5 |
)% |
|
(9.4 |
)% |
|
(7.7 |
)% |
Free Cash Flow |
|
|
2Q |
|
YTD |
|
2016 |
|
2017 |
|
2016 |
|
2017 |
Operating Cash
Flow |
$ |
10,508 |
|
|
$ |
17,931 |
|
|
$ |
20,777 |
|
|
$ |
20,832 |
|
Less:
Capital Expenditures |
(5,680 |
) |
|
(3,765 |
) |
|
(12,129 |
) |
|
(7,161 |
) |
Less:
Preferred Stock Dividends |
(900 |
) |
|
(3 |
) |
|
(2,700 |
) |
|
(4 |
) |
Free Cash Flow
After Dividends
|
$ |
3,928 |
|
|
$ |
14,163 |
|
|
$ |
5,948 |
|
|
$ |
13,667 |
|
Net Debt to Adjusted EBITDA |
|
|
June 30, 2017 |
Current and long-term
debt* |
$ |
419,811 |
|
Add: Debt
discounts and deferred financing costs
|
10,859 |
|
Less:
Cash and cash equivalents* |
(54,950 |
) |
Net
Debt |
$ |
375,720 |
|
|
|
Adjusted EBITDA |
|
3Q16 |
$ |
16,523 |
|
4Q16 |
10,544 |
|
1Q17 |
18,561 |
|
2Q17 |
20,580 |
|
TTM Adjusted
EBITDA |
66,208 |
|
|
|
Net Debt to
Adjusted EBITDA** |
5.7x |
*Includes cash of $31 and current and long-term debt of $2,141
associated with Acoustics Europe classified as assets and
liabilities held for sale, respectively.
**Note the consolidated first lien net leverage ratio under the
Company’s senior secured credit facilities was 3.89x as of
June 30, 2017. See Form 10-Q for further discussion of the
Company’s senior secured credit facilities.
Jason Industries,
Inc.Reconciliation of GAAP to Non-GAAP
MeasuresAdjusted EBITDA(In thousands)
(Unaudited) |
|
|
2016 |
|
2017 |
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
FY |
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
YTD |
Net income
(loss) |
$ |
(3,016 |
) |
|
$ |
(2,370 |
) |
|
$ |
(2,452 |
) |
|
$ |
(69,859 |
) |
|
$ |
(77,697 |
) |
|
$ |
(381 |
) |
|
$ |
(3,481 |
) |
|
|
|
|
|
$ |
(3,862 |
) |
Tax provision
(benefit) |
(2,551 |
) |
|
1,946 |
|
|
(657 |
) |
|
(4,895 |
) |
|
(6,157 |
) |
|
28 |
|
|
200 |
|
|
|
|
|
|
228 |
|
Interest expense |
8,024 |
|
|
7,963 |
|
|
7,906 |
|
|
7,950 |
|
|
31,843 |
|
|
8,366 |
|
|
8,395 |
|
|
|
|
|
|
16,761 |
|
Depreciation and
amortization |
10,297 |
|
|
11,340 |
|
|
10,937 |
|
|
10,972 |
|
|
43,546 |
|
|
9,848 |
|
|
9,412 |
|
|
|
|
|
|
19,260 |
|
EBITDA |
12,754 |
|
|
18,879 |
|
|
15,734 |
|
|
(55,832 |
) |
|
(8,465 |
) |
|
17,861 |
|
|
14,526 |
|
|
|
|
|
|
32,387 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment charges(1) |
— |
|
|
— |
|
|
— |
|
|
63,285 |
|
|
63,285 |
|
|
— |
|
|
— |
|
|
|
|
|
|
— |
|
Restructuring(2) |
2,717 |
|
|
1,783 |
|
|
566 |
|
|
2,166 |
|
|
7,232 |
|
|
681 |
|
|
543 |
|
|
|
|
|
|
1,224 |
|
Integration and other restructuring costs(3) |
1,589 |
|
|
55 |
|
|
(354 |
) |
|
690 |
|
|
1,980 |
|
|
— |
|
|
— |
|
|
|
|
|
|
— |
|
Share-based compensation(4) |
576 |
|
|
(1,949 |
) |
|
509 |
|
|
112 |
|
|
(752 |
) |
|
349 |
|
|
324 |
|
|
|
|
|
|
673 |
|
Loss
(gain) on disposals of fixed assets—net(5) |
703 |
|
|
(14 |
) |
|
68 |
|
|
123 |
|
|
880 |
|
|
(330 |
) |
|
65 |
|
|
|
|
|
|
(265 |
) |
Gain on
extinguishment of debt(6) |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(1,564 |
) |
|
|
|
|
|
(1,564 |
) |
Loss on
divestitures(7) |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
6,686 |
|
|
|
|
|
|
6,686 |
|
Total
adjustments |
5,585 |
|
|
(125 |
) |
|
789 |
|
|
66,376 |
|
|
72,625 |
|
|
700 |
|
|
6,054 |
|
|
|
|
|
|
6,754 |
|
Adjusted
EBITDA |
$ |
18,339 |
|
|
$ |
18,754 |
|
|
$ |
16,523 |
|
|
$ |
10,544 |
|
|
$ |
64,160 |
|
|
$ |
18,561 |
|
|
$ |
20,580 |
|
|
|
|
|
|
$ |
39,141 |
|
|
|
|
|
(1) |
|
|
Represents non-cash
impairment of goodwill of $29.8 million and $33.2 million in the
acoustics and components segments, respectively. |
|
|
|
|
(2) |
|
|
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. |
|
|
|
|
(3) |
|
|
During 2016,
integration and other restructuring costs primarily includes costs
incurred in connection with the start-up of a new acoustics segment
facility in Richmond, Indiana, and costs incurred in connection
with the closure of Finishing operations in Brazil, and during the
third quarter of 2016 includes a $0.6 million reversal of a reserve
related to the Newcomerstown fire recorded in acquisition
accounting for the business combination in 2014. |
|
|
|
|
(4) |
|
|
Represents non-cash
share based compensation expense (income) for awards under the
Company’s 2014 Omnibus Incentive Plan. During the second quarter of
2016, share-based compensation includes $2.5 million of expense
reversal as a result of the lowering of assumed vesting levels for
Adjusted EBITDA performance share units. |
|
|
|
|
(5) |
|
|
Loss (gain) on
disposals of fixed assets 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 and for the first quarter of 2016 includes a loss of $0.6
million on the sale of a seating segment facility. |
|
|
|
|
(6) |
|
|
Represents a gain on
extinguishment of Second Lien Term Loan debt in the second quarter
of 2017. |
|
|
|
|
(7) |
|
|
Represents a write-down
of the carrying amount of the long-lived assets to fair value less
costs to sell in connection with the planned sale of the Acoustics
European operations. |
|
|
|
|
Jason Industries,
Inc.Reconciliation of GAAP to Non-GAAP
MeasuresAdjusted Net Income and Adjusted Earnings
per Share(In thousands, except per share amounts)
(Unaudited) |
|
|
2016 |
|
2017 |
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
FY |
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
YTD |
GAAP Net income
(loss) |
$ |
(3,016 |
) |
|
$ |
(2,370 |
) |
|
$ |
(2,452 |
) |
|
$ |
(69,859 |
) |
|
$ |
(77,697 |
) |
|
$ |
(381 |
) |
|
$ |
(3,481 |
) |
|
|
|
|
|
$ |
(3,862 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment charges |
— |
|
|
— |
|
|
— |
|
|
63,285 |
|
|
63,285 |
|
|
— |
|
|
— |
|
|
|
|
|
|
— |
|
Restructuring |
2,717 |
|
|
1,783 |
|
|
566 |
|
|
2,166 |
|
|
7,232 |
|
|
681 |
|
|
543 |
|
|
|
|
|
|
1,224 |
|
Integration and other restructuring costs |
1,589 |
|
|
55 |
|
|
(354 |
) |
|
690 |
|
|
1,980 |
|
|
— |
|
|
— |
|
|
|
|
|
|
— |
|
Share
based compensation |
576 |
|
|
(1,949 |
) |
|
509 |
|
|
112 |
|
|
(752 |
) |
|
349 |
|
|
324 |
|
|
|
|
|
|
673 |
|
Loss
(gain) on disposal of fixed assets - net(3) |
703 |
|
|
(14 |
) |
|
68 |
|
|
123 |
|
|
880 |
|
|
(330 |
) |
|
65 |
|
|
|
|
|
|
(265 |
) |
Gain on
extinguishment of debt(4) |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(1,564 |
) |
|
|
|
|
|
(1,564 |
) |
Loss on
divestitures(5) |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
6,686 |
|
|
|
|
|
|
6,686 |
|
Tax
effect on adjustments(1) |
(1,926 |
) |
|
558 |
|
|
(122 |
) |
|
(574 |
) |
|
(2,064 |
) |
|
(55 |
) |
|
(579 |
) |
|
|
|
|
|
(634 |
) |
Adjusted net
income (loss) |
$ |
643 |
|
|
$ |
(1,937 |
) |
|
$ |
(1,785 |
) |
|
$ |
(4,057 |
) |
|
$ |
(7,136 |
) |
|
$ |
264 |
|
|
$ |
1,994 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
2,258 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax rate on
adjustments(1) |
34 |
% |
|
446 |
% |
|
15 |
% |
|
1 |
% |
|
3 |
% |
|
16 |
% |
|
10 |
% |
|
|
|
|
|
9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted
average number of common shares outstanding (GAAP): |
22,388 |
|
|
22,395 |
|
|
22,499 |
|
|
22,758 |
|
|
22,507 |
|
|
25,784 |
|
|
26,042 |
|
|
|
|
|
|
25,914 |
|
Plus: effect of
dilutive share-based compensation (non-GAAP)(2) |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
— |
|
Plus: effect of
convertible preferred stock and rollover shares (non-GAAP)(2) |
7,139 |
|
|
7,139 |
|
|
7,139 |
|
|
6,919 |
|
|
7,083 |
|
|
3,967 |
|
|
3,815 |
|
|
|
|
|
|
3,897 |
|
Diluted weighted
average number of common shares outstanding (non-GAAP)(2) |
29,527 |
|
|
29,534 |
|
|
29,638 |
|
|
29,677 |
|
|
29,590 |
|
|
29,751 |
|
|
29,857 |
|
|
— |
|
|
— |
|
|
29,811 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted (loss)
earnings per share |
$ |
0.02 |
|
|
$ |
(0.07 |
) |
|
$ |
(0.06 |
) |
|
$ |
(0.14 |
) |
|
$ |
(0.24 |
) |
|
$ |
0.01 |
|
|
$ |
0.07 |
|
|
|
|
|
|
$ |
0.08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Net (loss)
income per share available to common shareholders of Jason
Industries |
$ |
(0.15 |
) |
|
$ |
(0.13 |
) |
|
$ |
(0.13 |
) |
|
$ |
(2.69 |
) |
|
$ |
(3.13 |
) |
|
$ |
(0.05 |
) |
|
$ |
(0.17 |
) |
|
|
|
|
|
$ |
(0.22 |
) |
Adjustments net of
income taxes: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment charges, net of noncontrolling interest |
— |
|
|
— |
|
|
— |
|
|
2.39 |
|
|
2.42 |
|
|
— |
|
|
— |
|
|
|
|
|
|
— |
|
Restructuring |
0.08 |
|
|
0.06 |
|
|
0.02 |
|
|
0.09 |
|
|
0.24 |
|
|
0.02 |
|
|
0.01 |
|
|
|
|
|
|
0.03 |
|
Integration and other restructuring costs |
0.04 |
|
|
— |
|
|
(0.01 |
) |
|
0.03 |
|
|
0.07 |
|
|
— |
|
|
— |
|
|
|
|
|
|
— |
|
Share
based compensation |
0.02 |
|
|
(0.04 |
) |
|
0.02 |
|
|
0.01 |
|
|
0.01 |
|
|
0.02 |
|
|
0.02 |
|
|
|
|
|
|
0.04 |
|
Loss
(gain) on disposal of fixed assets - net |
0.02 |
|
|
— |
|
|
— |
|
|
— |
|
|
0.02 |
|
|
(0.01 |
) |
|
— |
|
|
|
|
|
|
(0.01 |
) |
Gain on
extinguishment of debt |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(0.04 |
) |
|
|
|
|
|
(0.04 |
) |
Loss on
divestitures |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
0.21 |
|
|
|
|
|
|
0.21 |
|
GAAP to
non-GAAP impact per share(2) |
0.01 |
|
|
0.04 |
|
|
0.04 |
|
|
0.03 |
|
|
0.13 |
|
|
0.03 |
|
|
0.04 |
|
|
|
|
|
|
0.07 |
|
Adjusted (loss)
earnings per share |
$ |
0.02 |
|
|
$ |
(0.07 |
) |
|
$ |
(0.06 |
) |
|
$ |
(0.14 |
) |
|
$ |
(0.24 |
) |
|
$ |
0.01 |
|
|
$ |
0.07 |
|
|
|
|
|
|
$ |
0.08 |
|
|
|
|
|
(1) |
|
|
The effective tax rate
on adjustments is impacted by nondeductible foreign transaction and
restructuring costs, nondeductible impairment of goodwill,
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) |
|
|
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. |
|
|
|
|
Contact Information
Investor Relations:
Chad Paris
investors@jasoninc.com
414.277.2007
Jason Industries, Inc. (NASDAQ:JASNW)
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