Steel Excel Inc. Reports Fourth Quarter and Year End 2012 Financial Results and Outlook for 2013
Steel Excel Inc. Reports Fourth Quarter and Year End 2012 Financial Results and Outlook for 2013
SAN RAMON, Calif.--(BUSINESS WIRE)-- Steel Excel Inc. (Other OTC: SXCL) ("Steel Excel", "SXCL" or the "Company"), which operates in two reportable segments, Steel Energy and Steel Sports, today announced operating results for the fourth quarter and year ended December 31, 2012. They are summarized in the following paragraphs. For a full discussion of the results, please see the Company's Form 10-K, which can be found at www.steelexcel.com.
Fourth Quarter Results
Steel Excel reported aggregate revenues of $26.9 million for the quarter, as compared to $1.8 million for the same period of 2011. The loss from continuing operations before tax was $0.3 million in the fourth quarter of 2012, as compared to a loss of $1.3 million in the 2011 period. The net loss for the fourth quarter of 2012 was $0.1 million, or $0.01 per diluted common share, as compared to a net loss of $1.7 million, or $0.15 per diluted common share for the same period in 2011. For the quarter, Steel Energy net revenues were $26.4 million, compared to $1.4 million in 2011, while Steel Sports had net revenues of $0.5 million, versus $0.4 million in 2011.
Twelve Month Results
For the year, Steel Excel reported net revenues of $100.1 million, as compared to $2.5 million in 2011. Income from continuing operations before tax was $6.5 million, versus a loss of $0.2 million in 2011. Net income for the year was $20.7 million or $1.71 per diluted common share, which included a net loss from discontinued operations of $1.9 million, or $0.16 per share, as compared to net income of $6.8 million, or $0.62 per diluted common share in 2011, which included net income from discontinued operations of $6.6 million, or $0.61 per share.
Steel Energy reported net revenues for the year of $97.2 million, as compared to $1.4 million the prior year. Steel Sports reported revenues of $2.9 million compared to $1.1 million in 2011.
The principal reason for the increase in revenue and net income for both the fourth quarter and full year was related to the acquisitions completed in 2012 for Steel Energy and the release of $15.1 million of a deferred tax valuation allowance as a result of acquired deferred tax liabilities.
Adjusted EBITDA
Steel Excel generated Adjusted EBITDA of $5.3 million for the fourth quarter of 2012, as compared to a loss of $1.3 million in the 2011 quarter, an improvement of $6.6 million. For the year, the Company generated Adjusted EBITDA of $22.8 million, as compared to a loss of $7.6 million in 2011, an improvement of $30.4 million. See "Note Regarding Use of Non-GAAP Financial Measurements" below for the definition of Adjusted EBITDA.
2013 Guidance
The Company currently anticipates, based on current information, full-year 2013 net revenues and Adjusted EBITDA in the ranges of $114 million to $127 million and $31 million to $35 million, respectively. The Company's outlook for the first quarter of 2013 is for net revenues between $24 million and $27 million and Adjusted EBITDA between $4.5 million and $5.5 million.
Financial Condition
Steel Excel's Balance Sheet at December 31, 2012 reflected net working capital of $276.2 million, which included $270.7 million of cash and marketable securities.
The cash and marketable securities balance, net of debt, at December 31, 2012 was $257.7 million, or $21.24 per share.
Financial Summary | |||||||||||||||||
Quarter Ended | Year Ended | ||||||||||||||||
December 31, | December 31, | ||||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||||
(in thousands, except per share amounts) | |||||||||||||||||
Net revenues | $ | 26,915 | $ | 1,795 | $ | 100,104 | $ | 2,502 | |||||||||
Cost of revenues | 20,247 | 1,283 | 66,064 | 1,459 | |||||||||||||
Gross margin | 6,668 | 512 | 34,040 | 1,043 | |||||||||||||
Operating expenses | |||||||||||||||||
Selling, general and administrative | 6,965 | 2,094 | 28,031 | 9,554 | |||||||||||||
Impairment of goodwill | 192 | - | 192 | - | |||||||||||||
Total operating expenses | 7,157 | 2,094 | 28,223 | 9,554 | |||||||||||||
Income (loss) from continuing operations | (489 | ) | (1,582 | ) | 5,817 | (8,511 | ) | ||||||||||
Interest and other income, net | 159 | 244 | 650 | 8,353 | |||||||||||||
Income (loss) from continuing operations before taxes | (330 | ) | (1,338 | ) | 6,467 | (158 | ) | ||||||||||
Benefit from (provision for) income taxes | 334 | (111 | ) | 15,712 | 226 | ||||||||||||
Income (loss) from continuing operations, net of taxes | 4 | (1,449 | ) | 22,179 | 68 | ||||||||||||
Income (loss) from discontinued operations, net of taxes | 51 | (286 | ) | (1,935 | ) | 1,624 | |||||||||||
Gain on disposal of discontinued operations, net of taxes | - | - | - | 5,005 | |||||||||||||
Income (loss) from discontinued operations, net of taxes | 51 | (286 | ) | (1,935 | ) | 6,629 | |||||||||||
Net income (loss) | 55 | (1,735 | ) | 20,244 | 6,697 | ||||||||||||
Net income (loss) attributable to non-controlling interest in consolidated entities | 131 | (72 | ) | (449 | ) | (72 | ) | ||||||||||
Net income (loss) attributable to Steel Excel Inc. | $ | (76 | ) | $ | (1,663 | ) | $ | 20,693 | $ | 6,769 | |||||||
Net income (loss) per share attributable to Steel Excel Inc. | |||||||||||||||||
Basic | $ | (0.01 | ) | $ | (0.15 | ) | $ | 1.71 | $ | 0.62 | |||||||
Diluted | $ | (0.01 | ) | $ | (0.15 | ) | $ | 1.71 | $ | 0.62 | |||||||
Shares used in computing income (loss) per share: | |||||||||||||||||
Basic | 12,984 | 10,887 | 12,110 | 10,882 | |||||||||||||
Diluted | 13,007 | 10,905 | 12,133 | 10,897 | |||||||||||||
Segment Results | |||||||||||||||||
Quarter Ended | Year Ended | ||||||||||||||||
December 31, | December 31, | ||||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||||
(in thousands) | |||||||||||||||||
Net revenues | |||||||||||||||||
Steel Energy | $ | 26,403 | $ | 1,417 | $ | 97,191 | $ | 1,417 | |||||||||
Steel Sports | 512 | 378 | 2,913 | 1,085 | |||||||||||||
Total net revenues | $ | 26,915 | $ | 1,795 | $ | 100,104 | $ | 2,502 | |||||||||
Segment Operating income (loss): | |||||||||||||||||
Steel Energy | $ | 2,287 | $ | 165 | $ | 16,836 | $ | 165 | |||||||||
Steel Sports | (670 | ) | (676 | ) | (2,062 | ) | (354 | ) | |||||||||
Total segment operating income (loss) | 1,617 | (511 | ) | 14,774 | (189 | ) | |||||||||||
Unallocated corporate expenses and nonoperating units | (2,106 | ) | (1,071 | ) | (8,957 | ) | (8,322 | ) | |||||||||
Operating income (loss) | (489 | ) | (1,582 | ) | 5,817 | (8,511 | ) | ||||||||||
Interest and other income, net | 159 | 244 | 650 | 8,353 | |||||||||||||
Income (loss) from continuing operations before taxes | $ | (330 | ) | $ | (1,338 | ) | $ | 6,467 | $ | (158 | ) | ||||||
Supplemental Non-GAAP Disclosures: | |||||||||||||||||
EBITDA Calculation | |||||||||||||||||
Quarter Ended | Year Ended | ||||||||||||||||
December 31, | December 31, | ||||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||||
(in thousands, except percentages) | |||||||||||||||||
Reconciliation of Net Income to Adjusted EBITDA: | |||||||||||||||||
Net income (loss) attributable to Steel Excel Inc. | $ | (76 | ) | $ | (1,663 | ) | $ | 20,693 | $ | 6,769 | |||||||
Non-controlling interest | 131 | (72 | ) | (449 | ) | (72 | ) | ||||||||||
Net income (loss) | 55 | (1,735 | ) | 20,244 | 6,697 | ||||||||||||
Income (loss) from discontinued operations, net | (51 | ) | 286 | 1,935 | (6,629 | ) | |||||||||||
Interest and other income, net | (159 | ) | (244 | ) | (650 | ) | (8,353 | ) | |||||||||
Provision for (benefit from) income taxes | (334 | ) | 111 | (15,712 | ) | (226 | ) | ||||||||||
Operating income (loss) | (489 | ) | (1,582 | ) | 5,817 | (8,511 | ) | ||||||||||
Depreciation and amortization | 5,137 | 279 | 15,458 | 369 | |||||||||||||
Stock-based compensation | 631 | 33 | 1,487 | 523 | |||||||||||||
Adjusted EBITDA | $ | 5,279 | $ | (1,270 | ) | $ | 22,762 | $ | (7,619 | ) | |||||||
Calculation of Adjusted EBITDA Margin: | |||||||||||||||||
Adjusted EBITDA | $ | 5,279 | $ | (1,270 | ) | $ | 22,762 | $ | (7,619 | ) | |||||||
Net revenues | |||||||||||||||||
