J.L. French Automotive Castings Announces Second-Quarter Results
9 August 2000
J.L. French Automotive Castings Announces Second-Quarter Results
MINNEAPOLIS - J.L. French Automotive Castings, Inc., today announced
increased sales and operating income for the quarter and six months ended June
30, 2000. Results of operations for the first half of 1999 have been restated
to reflect the company's change in recording reimbursable customer tooling costs.
The restatement had no effect on previously reported gross profit or net income.
J.L. French completed a recapitalization transaction on April 21, 1999,
whereby new investors acquired 87 percent of the company's outstanding common
stock. The recapitalization included the investment of $156 million in cash
by new stockholders. As a result of the recapitalization accounting
treatment, the statements of operations are not directly comparable between
years below the operating income line. In addition, the company has a deficit
in stockholders' investment as a result of the recapitalization and the
redemption of the previously outstanding shares.
For the second quarter of 2000, sales were $145.0 million, an increase of
$66.8 million, compared with $78.2 million in the 1999 period. Operating
income rose to $17.7 million from $13.6 million (before recapitalization
expenses) reported last year. Earnings before interest, taxes, depreciation
and amortization (EBITDA) increased to $29.4 million from $22.0 million in the
second quarter of 1999.
For the first half of 2000, sales were $297.1 million compared to
$153.5 million in the previous period. Operating income rose to $38.4 million
from $26.6 million (before recapitalization expenses) in the comparable 1999
period. EBITDA of $61.5 million for the first six months of 2000 compares to
$43.1 million in the 1999 period.
In commenting on second quarter results, Charles Waldon, president and
chief executive officer of J.L. French said, "We are continuing to work on
improving operations at our facilities in Grandville, Glasgow and Benton
Harbor. While we benefited from some improvements during the second quarter,
we will continue to make operating changes to improve efficiencies in order to
achieve our desired operating results. We expect to see the efforts of all of
our employees begin to yield improved profitability during the second half of
the year."
J.L. French Automotive Castings, Inc., is a leading global designer and
manufacturer of highly engineered aluminum die cast automotive parts including
oil pans, engine front covers and transmission cases. The company has
manufacturing facilities in Sheboygan, Wis.; Grandville, and Benton Harbor,
Mich.; Glasgow, Ky.; San Andres de Echevarria, Spain; Saltillo, Mexico; as
well as five plants in the United Kingdom. The company is based in Sheboygan,
Wis. and has its corporate office in Minneapolis, Minn.
J.L. FRENCH AUTOMOTIVE CASTINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands - unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999
Sales $145,031 $78,164 $297,109 $153,468
Cost of sales 118,104 56,520 240,684 111,185
Gross profit 26,927 21,644 56,425 42,283
Selling, general and
administrative
expenses 6,415 5,202 12,718 10,228
Recapitalization
expenses -- 21,151 -- 21,151
Amortization expense 2,827 2,817 5,300 5,505
Operating income (loss) 17,685 (7,526) 38,407 5,399
Interest expense, net 15,160 9,073 30,241 13,823
Income (loss) before
income taxes and
extraordinary loss 2,525 (16,599) 8,166 (8,424)
Provision (benefit)
for income taxes 1,151 (6,816) 3,410 (3,369)
Income (loss) before
extraordinary item 1,374 (9,783) 4,756 (5,055)
Extraordinary loss on
early extinguishment
of debt, net of
income taxes -- 8,112 -- 8,112
Net income (loss) $1,374 $(17,895) $4,756 $(13,167)
J.L. FRENCH AUTOMOTIVE CASTINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
June 30, December 31,
Assets 2000 1999
(unaudited)
Current assets:
Cash and cash equivalents $2,649 $4,900
Accounts receivable, net 89,767 82,449
Inventories 36,741 36,979
Customer tooling-in-progress 6,700 10,299
Other current assets 9,849 9,034
Total current assets 145,706 143,661
Property, plant and equipment, net 238,951 221,167
Intangible and other assets, net 334,089 330,406
Total assets $718,746 $695,234
Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable $66,116 $56,461
Accrued liabilities 37,743 43,434
Current maturities of long-term debt 27,473 28,400
Total current liabilities 131,332 128,295
Long-term debt, net of current maturities 383,486 373,044
Subordinated notes 175,000 175,000
Convertible subordinated notes 30,000 30,000
Other noncurrent liabilities 20,153 30,488
Total liabilities 739,971 736,827
Stockholders' deficit:
Common stock -- --
Additional paid-in capital 60,825 42,589
Accumulated deficit (78,068) (82,824)
Accumulated other comprehensive loss -
foreign currency translation adjustment (3,982) (1,358)
Total stockholders' deficit (21,225) (41,593)
$718,746 $695,234