Accellent Inc. Announces Fourth Quarter 2012 Results

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Accellent Inc. Announces Fourth Quarter 2012 Results

WILMINGTON, Mass.--(BUSINESS WIRE)-- Accellent Inc. (the "Company" or "Accellent"), a wholly owned subsidiary of Accellent Holdings Corp., today announced results for its fiscal fourth quarter ended December 31, 2012.

Fourth Quarter 2012 Financial Results


Net sales were $122.1 million in the fourth quarter of 2012 compared with $120.8 million in the fourth quarter of 2011. Income from continuing operations was $11.2 million in the fourth quarter of 2012, compared with $13.7 million in the fourth quarter of 2011. Net loss was $3.3 million in the fourth quarter of 2012 compared to $3.4 million in the fourth quarter of 2011.

Adjusted EBITDA in the fourth quarter of 2012 was $22.0 million, or 18.0% of net sales, compared to Adjusted EBITDA of $23.1 million, or 19.1% of net sales, in the fourth quarter of 2011.

"Although the challenging market conditions continued and we saw only slight growth in the fourth quarter of 2012, we remained focused on improving the fundamentals of the business," stated Donald Spence, President and CEO of Accellent. "With improved working capital management and the divestiture of non-strategic sites, we ended 2012 with a record cash balance of nearly $60 million. I am optimistic that our actions will continue to generate positive results."

Twelve Months Ended December 31, 2012 Financial Results

Net sales decreased 1.3% to $498.6 million in the twelve months of 2012 compared with $505.4 million in the twelve months of 2011. Income from continuing operations was $51.0 million in the twelve months of 2012 compared with $58.1 million in the twelve months of 2011. Net loss was $22.4 million in the twelve months of 2012 compared with a net loss of $14.9 million in the twelve months of 2011.

Adjusted EBITDA for the twelve months of 2012 was $98.7 million, or 19.8% of net sales compared to Adjusted EBITDA of $100.2 million, or 19.8% of net sales in the twelve months of 2011.

Reconciliations of non-GAAP financial measures to GAAP financial measures are provided in the financial information accompanying this press release.

The financial information included in this press release reflect results from continuing operations for all periods presented and assets to be held and used. Results of discontinued operations and assets held for sale are presented separately for all periods presented.

Conference Call

Donald Spence, President and Chief Executive Officer, and Jeremy A. Friedman, Executive Vice President and Chief Financial Officer, will discuss our fourth quarter financial results in a conference call scheduled for today, March 27, 2013 at 5:00 p.m. Eastern Standard Time. The teleconference can be accessed live on the Internet through the Investor Relations section of the Accellent website at www.accellent.com or by calling (888) 895-5271 pass code 34513766. Please visit the website or dial in 10 to 15 minutes prior to the beginning of the call to download and install any necessary audio software. A replay of the conference call will be available via www.accellent.com or by telephone at (888) 843-7419 pass code 34513766 until April 3, 2013.

About Accellent

Accellent Holdings Corp., through its wholly owned subsidiary Accellent, Inc., provides fully integrated outsourced manufacturing and engineering services to the medical device industry, primarily in the cardiology, endoscopy and orthopedic markets. Accellent has broad capabilities in precision component fabrication, finished device assembly, complete supply chain management capabilities and engineering services. These capabilities enhance customers' speed to market and return on investment by enabling them to refocus internal resources more efficiently. For more information, please visit www.accellent.com.

Forward-Looking Statements

This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934, as amended. All statements included herein, other than statements of historical fact, may constitute forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Important factors that could cause actual results to differ materially from the Company's expectations are disclosed in the risk factors contained in the Company's Form 10-K for the year ended December 31, 2011 filed with the Securities and Exchange Commission on March 29, 2012. All forward-looking statements are expressly qualified in their entirety by such risk factors.

ACCELLENT INC.

Unaudited Condensed Consolidated Statements of Operations

(in thousands)

          
Three Months EndedYear Ended

December 31,
2011

December 31,
2012

December 31,
2011

December 31,
2012

Net sales$120,832$122,101$505,362$498,627
Cost of sales (exclusive of amortization) 92,070  95,605  376,126  375,975 
Gross profit28,76226,496129,236122,652
 
Operating expenses:
Selling, general and administrative expenses11,31110,90053,98852,402
Research and development expenses4413312,5221,695
Restructuring expenses3483143482,866
Gain on disposal of assets(739)(7)(686)(261)
Amortization of intangible assets 3,734  3,734  14,939  14,939 
Total operating expenses 15,095  15,272  71,111  71,641 
Income from continuing operations13,66711,22458,12551,011
 
Other (expense) income, net:
Interest expense, net(17,221)(17,217)(68,881)(69,096)
Other income (expense), net 1,433  1,190  30  1,100 
Total other (expense) income, net (15,788) (16,027) (68,851) (67,996)
Loss from continuing operations before income taxes(2,121)(4,803)(10,726)(16,985)
 
Provision for income taxes 1,235  (1,449) 5,133  1,784 
Net loss from continuing operations(3,356)(3,354)(15,859)(18,769)
Net income (loss) from discontinued operations, net of tax (24) 58  920  (3,601)
Net loss$(3,380)$(3,296)$(14,939)$(22,370)
 

ACCELLENT INC.

Unaudited Condensed Consolidated Balance Sheets

(in thousands)

    

December 31,
2011

December 31,
2012

Assets
Current assets:
Cash$38,858$59,901

Accounts receivable, net of allowances of $1,983 and $2,106 as of December 31, 2011

December 31, 2012 respectively54,76349,404
Inventory62,15357,069
Assets held for sale, current portion3,874-
Prepaid expenses and other current assets 4,416  10,973 
Total current assets164,064177,347
 
Property, plant and equipment, net121,153115,869
Long-term assets held for sale16,250-
Goodwill619,443619,443
Other intangible assets, net149,687134,747
Deferred financing costs and other assets, net 16,825  13,766 
Total assets$1,087,422 $1,061,172 
 
Liabilities and Stockholder's equity
Current liabilities:
Current portion of long-term debt$22$11
Accounts payable21,03520,044
Accrued payroll and benefits7,8586,829
Accrued interest19,51919,323
Liabilities held for sale1,908-
Accrued expenses and other current liabilities 18,747  17,359 
Total current liabilities69,08963,566
Long-term debt712,967713,294
Other liabilities 38,466  39,905 
Total liabilities 820,522  816,765 
 
Stockholder's equity:

Common stock, par value $0.01 per share, 50,000,000 shares authorized; 1,000 shares issued and outstanding at December 31, 2011 and December 31, 2012, respectively

--
Additional paid-in capital638,445639,610
Accumulated other comprehensive loss(1,266)(2,554)
Accumulated deficit (370,279) (392,649)
Total stockholder's equity 266,900  244,407 
Total liabilities and stockholder's equity$1,087,422 $1,061,172 
 

ACCELLENT INC.

Reconciliation of Net Income (Loss) to EBITDA to Adjusted EBITDA

(in thousands)

          

Three Months Ended

Year Ended

December 31,
2011

December 31,
2012

December 31,
2011

December 31,
2012

 
Net income (loss)$(3,380)$(3,296)$(14,939)$(22,370)
Interest expense, net17,21917,21668,88169,096
Provision for income taxes1,235(1,449)5,1331,784
Depreciation and amortization 8,207  8,850  37,011  39,169 
EBITDA (1)$23,281$21,321$96,086$87,679
 
Adjustments:
Stock-based compensation - employees2603451,021709
Stock-based compensation - non-employees22229090
Employee severance and relocation3418281,6472,698
(Income) loss on discontinued operations, net24(58)(920)3,601
Restructuring expenses3483143482,866
Executive recruiting costs--307-
Plant closure costs156214156732
Currency translation (gain) loss(1,377)(435)97(283)
Gain on disposal of assets(738)(8)(686 Read Full Story

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