First Quarter 2023 Highlights as compared to Prior Year
- Net sales of
$99.5 million , up 9.8% from$90.6 million in the prior year; and product sales of$98.3 million , up 9.4%. - Gross margin of
$17.7 million , or 17.8% of net sales, compared to$14.5 million or 16.0% of net sales. - Selling, general and administrative expenses of
$9.7 million , or 9.7% of net sales compared to$8.5 million or 9.4%. - Operating income of
$8.1 million , or 8.1% of net sales, versus operating income of$6.0 million , or 6.6% of net sales. - Net income of
$5.9 million , or$0.66 per diluted share, compared to net income of$3.9 million , or$0.46 per diluted share. - Adjusted EBITDA1 of
$12.2 million , or 12.3% of net sales, compared to$9.5 million , or 10.5%.
1 Adjusted EBITDA is a non-GAAP financial measure as defined and reconciled below.
1Free Cash Flow and Return on capital employed are non-GAAP financial measures as defined and reconciled below.
2023 Capital Expenditures
The Company’s capital expenditures for first quarter 2023 were
Financial Position at
The Company’s total liquidity at the end of the first fiscal quarter 2023 was
1 Adjusted EBITDA and return on capital employed are non-GAAP financial measures as defined and reconciled below.
Conference Call
The Company will conduct a conference call today at
About
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the federal securities laws that are subject to risks and uncertainties. These statements often include words such as “believe”, “anticipate”, “plan”, “expect”, “intend”, “will”, “should”, “could”, “would”, “project”, “continue”, “likely”, and similar expressions. In particular, this press release may contain forward-looking statements about the Company’s expectations for future periods with respect to its plans to improve financial results and the future of the Company’s end markets. Factors that could cause actual results to differ from those reflected in forward-looking statements relating to our operations and business include: general macroeconomic, social, regulatory and political conditions, including uncertainties surrounding volatility in financial markets; the short-term and long-term impact of the coronavirus (COVID-19) pandemic, or other pandemics in the future, on our business; changes in the plastics, transportation, marine and commercial product industries; efforts of the Company to expand its customer base and develop new products to diversify markets, materials and processes and increase operational enhancements; the Company’s initiatives to quote and execute manufacturing processes for new business, acquire raw materials, address inflationary pressures, regulatory matters and labor relations; and the Company’s financial position or other financial information. These statements are based on certain assumptions that the Company has made in light of its experience as well as its perspective on historical trends, current conditions, expected future developments and other factors it believes are appropriate under the circumstances. Actual results may differ materially from the anticipated results because of certain risks and uncertainties, including those included in the Company’s filings with the
Company Contact:
Executive Vice President & Chief Financial Officer
614-870-5604
Investor Relations Contact:
Three
214-616-2207
- Financial Statements Follow –
Consolidated Statements of Operations (unaudited, in thousands, except share and per share data) | |||||||
Three months ended | |||||||
2023 | 2022 | ||||||
Net sales: | |||||||
Products | $ | 98,337 | $ | 89,901 | |||
Tooling | 1,170 | 691 | |||||
Total net sales | 99,507 | 90,592 | |||||
Total cost of sales | 81,764 | 76,085 | |||||
Gross margin | 17,743 | 14,507 | |||||
Selling, general and administrative expense | 9,668 | 8,495 | |||||
Operating income | 8,075 | 6,012 | |||||
Other income and expense | |||||||
Interest expense | 356 | 541 | |||||
Net periodic post-retirement benefit | (52 | ) | (31 | ) | |||
Total other income and expense | 304 | 510 | |||||
Income before income taxes | 7,771 | 5,502 | |||||
Income tax expense | 1,919 | 1,638 | |||||
Net income | $ | 5,852 | $ | 3,864 | |||
Net income per common share: | |||||||
Basic | $ | 0.69 | $ | 0.46 | |||
Diluted | $ | 0.66 | $ | 0.46 |
Consolidated Balance Sheets (in thousands) | |||||||
As of | |||||||
As of | |||||||
2023 | |||||||
(unaudited) | 2022 | ||||||
Assets: | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 4,492 | $ | 4,183 | |||
Accounts receivable, net | 52,501 | 44,261 | |||||
Inventories, net | 25,010 | 23,871 | |||||
Prepaid expenses and other current assets | 9,169 | 8,350 | |||||
Total current assets | 91,172 | 80,665 | |||||
Right of use asset | 5,037 | 5,114 | |||||
Property, plant and equipment, net | 81,730 | 83,267 | |||||
17,376 | 17,376 | ||||||
Intangibles, net | 7,207 | 7,619 | |||||
Other non-current assets | 4,259 | 4,574 | |||||
Total Assets | $ | 206,781 | $ | 198,615 | |||
Liabilities and Stockholders' Equity: | |||||||
Liabilities: | |||||||
Current liabilities: | |||||||
Current portion of long-term debt | $ | 1,205 | $ | 1,208 | |||
Revolving debt | — | 1,864 | |||||
Accounts payable | 33,244 | 29,586 | |||||
Contract liabilities | 3,146 | 1,395 | |||||
Compensation and related benefits | 7,360 | 9,101 | |||||
Accrued other liabilities | 8,284 | 7,643 | |||||
Total current liabilities | 53,239 | 50,797 | |||||
Other non-current liabilities | 3,027 | 3,516 | |||||
Long-term debt | 22,685 | 22,986 | |||||
Post retirement benefits liability | 5,097 | 5,191 | |||||
Total Liabilities | 84,048 | 82,490 | |||||
Stockholders' Equity: | |||||||
Common stock | 84 | 84 | |||||
Paid in capital | 41,073 | 40,342 | |||||
Accumulated other comprehensive income, net of income taxes | 3,101 | 3,053 | |||||
(29,122 | ) | (29,099 | ) | ||||
Retained earnings | 107,597 | 101,745 | |||||
Total Stockholders' Equity | 122,733 | 116,125 | |||||
Total Liabilities and Stockholders' Equity | $ | 206,781 | $ | 198,615 |
Consolidated Statements of Cash Flows (unaudited, in thousands) | |||||||
Three months ended | |||||||
2023 | 2022 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 5,852 | $ | 3,864 | |||
Adjustments to reconcile net income to net cash used in operating activities: | |||||||
Depreciation and amortization | 3,410 | 3,125 | |||||
Loss on disposal of property, plant and equipment | 80 | — | |||||
Share-based compensation | 731 | 501 | |||||
Losses on foreign currency | 81 | 240 | |||||
Change in operating assets and liabilities: | |||||||
Accounts receivable | (8,240 | ) | (17,031 | ) | |||
Inventories | (1,139 | ) | (3,270 | ) | |||
Prepaid and other assets | (450 | ) | 1,502 | ||||
Accounts payable | 4,209 | 10,407 | |||||
Accrued and other liabilities | 324 | (948 | ) | ||||
Post retirement benefits liability | (211 | ) | (47 | ) | |||
Net cash provided by operating activities | 4,647 | (1,657 | ) | ||||
Cash flows from investing activities: | |||||||
Purchase of property, plant and equipment | (2,127 | ) | (2,482 | ) | |||
Net cash used in investing activities | (2,127 | ) | (2,482 | ) | |||
Cash flows from financing activities: | |||||||
Gross borrowings on revolving loans | (35,369 | ) | (37,444 | ) | |||
Gross repayment on revolving loans | 33,505 | 37,855 | |||||
Payments related to the purchase of treasury stock | (23 | ) | — | ||||
Payment on principal on term loans | (324 | ) | (1,092 | ) | |||
Net cash used in financing activities | (2,211 | ) | (681 | ) | |||
Net change in cash and cash equivalents | 309 | (4,820 | ) | ||||
Cash and cash equivalents at beginning of year | 4,183 | 6,146 | |||||
Cash and cash equivalents at end of year | $ | 4,492 | $ | 1,326 | |||
Cash paid for: | |||||||
Interest | $ | 345 | $ | 420 | |||
Income taxes | $ | 1,931 | $ | 2,198 | |||
Non cash investing activities: | |||||||
Fixed asset purchases in accounts payable | $ | 262 | $ | 513 |
Non-GAAP Financial Measures
This press release contains financial information determined by methods other than in accordance with accounting principles generally accepted in
Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDA represents net income before, as applicable from time to time, (i) interest expense, net, (ii) provision (benefit) for income taxes, (iii) depreciation and amortization of long-lived assets, (iv) share based compensation expense, (v) plant closure costs, and (vi) nonrecurring legal settlement costs and associated legal expenses unrelated to the Company's core operations. Free Cash Flow represents net cash (used in) provided by operating activities less purchase of property, plant and equipment and net working capital. Return on capital employed represents earnings before (i) interest expense, net and (ii) provision (benefit) for income taxes divided by (i) stockholders' equity and (ii) current and long-term debt. Return on capital employed represents earnings before (i) interest expense, net and (ii) provision (benefit) for income taxes divided by (i) stockholders' equity and (ii) current and long-term debt.
We present Adjusted EBITDA, Adjusted EBITDA as a percent of net sales, debt-to-trailing twelve months adjusted EBITDA, Free Cash Flow and Return on Capital Employed because management uses these measures as key performance indicators, and we believe that securities analysts, investors and others use these measures to evaluate companies in our industry. These measures have limitations as analytical tools and should not be considered in isolation or as an alternative to performance measure derived in accordance with GAAP as an indicator of our operating performance. Our calculation of these measures may not be comparable to similarly named measures reported by other companies. The following tables present reconciliations of net income to Adjusted EBITDA, and Cash Flow from Operating Activities to Free Cash Flow, the most directly comparable GAAP measures, and Return on Capital Employed, for the periods presented:
Net Income to Adjusted EBITDA Reconciliation (unaudited, in thousands) | |||||||
Three months ended March | |||||||
2023 | 2022 | ||||||
Net income | $ | 5,852 | $ | 3,864 | |||
Provision for income taxes | 1,919 | 1,638 | |||||
Total other expenses(1) | 304 | 510 | |||||
Depreciation and amortization | 3,390 | 3,004 | |||||
Share-based compensation | 731 | 501 | |||||
Adjusted EBITDA | $ | 12,196 | $ | 9,517 | |||
Adjusted EBITDA as a percent of net sales | 12.3 | % | 10.5 | % | |||
(1)Includes interest expense and non-cash periodic post-retirement benefit cost |
Computation of Debt to Trailing Twelve Months Adjusted EBITDA (unaudited, in thousands) | |||||||||||||||
Q2 2022 | Q3 2022 | Q4 2022 | Q1 2023 | Trailing Twelve Month Adjusted EBITDA | |||||||||||
Net income | $ | 2,188 | $ | 1,319 | $ | 4,832 | $ | 5,852 | $ | 14,191 | |||||
Provision for income taxes | 1,769 | 1,251 | (2,276 | ) | 1,919 | 2,663 | |||||||||
Total other expenses(1) | 428 | 2,062 | 418 | 304 | 3,212 | ||||||||||
Depreciation and amortization | 2,972 | 3,170 | 2,457 | 3,390 | 11,989 | ||||||||||
Share-based compensation | 581 | 623 | 624 | 731 | 2,559 | ||||||||||
Adjusted EBITDA | $ | 7,938 | $ | 8,425 | $ | 6,055 | $ | 12,196 | $ | 34,614 | |||||
Total Outstanding Term Debt as of | $ | 23,890 | |||||||||||||
Debt to Trailing Twelve Months Adjusted EBITDA | 0.69 | ||||||||||||||
(1)Includes interest expense and non-cash periodic post-retirement benefit cost and loss due to the extinguishment of debt |
Computation of Return on Capital Employed Three Months Ended (unaudited, in thousands) | |||||||
2023 | 2022 | ||||||
Equity | $ | 122,733 | $ | 104,397 | |||
Structured debt | 23,890 | 29,058 | |||||
Total structured investment | $ | 146,623 | $ | 133,455 | |||
Operating income | $ | 8,075 | $ | 6,012 | |||
Return on capital employed | 5.5 | % | 4.5 | % | |||
Annualized return on capital employed | 22.0 | % | 18.0 | % |
Free Cash Flow Three Months Ended (unaudited, in thousands) | |||||||
2023 | 2022 | ||||||
Cash flow provided by operations | $ | 4,647 | $ | (1,657 | ) | ||
Purchase of property, plant and equipment | (2,127 | ) | (2,482 | ) | |||
Free cash flow (deficit) surplus | $ | 2,520 | $ | (4,139 | ) |
Source:
2023 GlobeNewswire, Inc., source