STUART, Fla., Jan. 31 /PRNewswire-FirstCall/ -- NuCO2 Inc. , the largest supplier in the U.S. of bulk CO2 systems and services for carbonating fountain beverages, today reported operating results for the quarter ended December 31, 2006, in line with the Company's recently announced new strategic growth plan. The Company also announced that its Board of Directors has authorized a share repurchase program.
- Total revenues for the second quarter totaled $32.0 million, compared
with $28.8 million in the corresponding year-ago period, an increase of
11.2%, and for the fiscal 2007 first half increased 13.6%, to $64.3
million from $56.6 million.
- Reflecting increased expenses resulting from the transition to the new
plan, operating income equaled $2.9 million, compared with $4.7
million a year ago, and for the first half equaled $8.7 million,
compared with $9.8 million last year. As expected, the impact of the
previously announced cost savings from the new plan were not reflected
in the second quarter and will be fully realized in the fourth quarter
of this fiscal year.
- EBITDA (earnings before interest, taxes, depreciation and
amortization), which the Company regards as useful information as to
its liquidity, excluding non-cash stock option expense, amounted to
$9.1 million for the second quarter, compared to $10.1 million, on the
same basis, in the corresponding year-ago period. First half EBITDA,
excluding non-cash stock option expense, was $20.4 million, compared
with $19.7 million in the corresponding year-ago period.
- The Company generated $5.0 million in free cash in the first half of
fiscal 2007 that was used to pay down debt.
- Net income in the fiscal 2007 second quarter amounted to $1.4 million,
or $0.09 per fully diluted share, compared with $2.6 million, or $0.17
per fully diluted share, in the corresponding earlier year period.
"The new strategic growth plan is on target," said Michael E. DeDomenico, Chairman and CEO. "Under the new plan, we will be measuring results by growth in return on investment, which is expected to steadily improve in the periods ahead."
Mr. DeDomenico added, "The Board has decided to authorize a share repurchase program, under which the Company may repurchase up to $50 million of the Company's common shares. This represents a vote of confidence in our Company and its prospects, and reflects our commitment to increasing long-term shareholder value. Under our new strategic growth plan we expect to significantly increase free cash flow. The Company will fund the share repurchase program from its free cash supported by borrowings under its existing revolving credit facility. With a significant level of debt capacity, the Company is in a strong position to advance its growth while repurchasing shares."
As part of the share repurchase program, the Company also announced that it will enter into a Rule 10b5-1 repurchase plan with a broker to facilitate its share repurchase activity. The share repurchases are expected to commence on February 5, 2007 and continue through December 31, 2007, subject to certain price, volume and timing constraints. A Rule 10b5-1 repurchase plan allows the Company to purchase its shares at times when it ordinarily would not be in the market due to regulatory or Company restrictions. The share repurchase plan does not obligate the Company to acquire any particular amount of shares and may be suspended at any time. In addition to repurchases made pursuant to the Rule 10b5-1 plan, the Company may also make repurchases at management's discretion from time to time, subject to market conditions, share prices, its cash position and compliance with regulatory requirements subject to the $50 million authorization. As of January 30, 2007, there were approximately 15,826,000 common shares outstanding.
About NuCO2
NuCO2 Inc. is the leading and only national provider of bulk CO2 products and services to the U.S. fountain beverage industry. With service locations within reach of virtually all of the fountain beverage users in the Continental U.S., NuCO2's experienced professionals comprise the largest network of sales and support specialists in the industry serving national restaurant chains, convenience stores, theme parks and sports and entertainment complexes, among others. NuCO2's revenues are largely derived from the installation, maintenance and rental of bulk CO2 systems and delivery of beverage grade CO2, which are increasingly replacing high pressure CO2, until now the traditional method for carbonating fountain beverages. The technology offers consistent quality, greater ease of operation, and heightened efficiency and safety utilizing permanently installed on-site cryogenic storage tanks. NuCO2 provides systems and services that allow its customers to spend more time serving their customers. Visit the Company's website at http://www.nuco2.com/.
Conference Call
A conference call to report operating results for the fiscal 2007 second quarter will be held tomorrow at 11:00 a.m. Eastern Time. It can be accessed over the Internet via NuCO2's website at http://www.nuco2.com/. To listen to the live call, please go to the website at least fifteen minutes early to register, download and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available on NuCO2's website shortly after the call.
Statements contained in this press release concerning the Company's outlook, competitive position and other statements of management's beliefs, goals and expectations are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by the statements. With respect to such forward-looking statements, we claim protection under the Private Securities Litigation Reform Act of 1995. These risks and uncertainties include, but are not limited to, the ability of the Company to add new accounts, competition and future operating performance. The Company disclaims any obligation to update any forward-looking statement as a result of developments occurring after the date of this press release.
NuCO2 Inc.
CONDENSED BALANCE SHEETS
(In thousands)
ASSETS December 31, 2006 June 30, 2006
Current assets:
Cash and cash equivalents $187 $341
Trade accounts receivable, net
of allowance for doubtful
accounts of $2,091 and $2,538,
respectively 13,480 12,955
Inventories 306 302
Prepaid insurance expense and deposits 3,795 5,846
Prepaid expenses and other current assets 2,556 1,465
Deferred tax assets - current portion 8,473 8,598
Total current assets 28,797 29,507
Property and equipment, net 125,300 119,603
Goodwill & other intangible assets, net 40,182 40,905
Deferred tax assets 6,594 8,807
Other 203 185
Total other assets 46,979 49,897
Total assets $201,076 $199,007
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $7,564 $6,883
Accrued expenses & other
current liabilities 3,693 5,945
Total current liabilities 11,257 12,828
Long-term debt 30,500 35,450
Customer deposits 4,113 3,805
Total liabilities 45,870 52,083
Total shareholders' equity 155,206 146,924
Total liabilities & shareholders' equity $201,076 $199,007
NuCO2 Inc.
STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Three Months Six Months
Ended Ended
December 31, December 31,
2006 2005 2006 2005
Revenues:
Product sales $21,319 $18,895 $42,870 $36,933
Equipment rentals 10,642 9,858 21,447 19,685
Total Revenues 31,961 28,753 64,317 56,618
Costs and expenses:
Cost of products sold, excluding
depreciation & amortization 13,797 12,074 27,783 24,061
Cost of equipment rentals,
excluding depreciation &
amortization 1,949 807 2,740 1,483
Selling, general and administrative
expenses 7,834 6,172 14,391 11,255
Depreciation and amortization 4,897 4,556 9,742 8,860
Loss on asset disposal 542 398 984 1,205
29,019 24,007 55,640 46,864
Operating income 2,942 4,746 8,677 9,754
Gain on financial instrument - - - (177)
Interest expense 550 543 1,126 908
Income before provision for income
taxes 2,392 4,203 7,551 9,023
Provision for income tax 1,009 1,564 3,649 3,429
Net income $1,383 $2,639 $3,902 $5,594
Weighted average number of common and
common equivalent shares outstanding
Basic 15,776 15,365 15,725 15,337
Diluted 16,087 15,892 16,035 15,846
Net income per basic common share $0.09 $0.17 $0.25 $0.36
Net income per diluted common share $0.09 $0.17 $0.24 $0.35
RECONCILIATION OF GAAP NET INCOME TO NON-GAAP MEASURES EBITDA AND EBITDA
EXCLUDING STOCK OPTION EXPENSE
Three Months Ended
December 31, Sep 30,
2006 2005 2006
Net income $1,383 $2,639 $2,519
Interest expense 550 543 576
Depreciation & amortization 4,897 4,556 4,845
Gain on financial instrument - - -
Provision for income taxes 1,009 1,564 2,640
EBITDA $7,839 $9,302 $10,580
Noncash option expense 1,245 787 699
EBITDA excluding stock option expense $9,084 $10,089 $11,279
Cash flows provided by (used in):
Operating activities $9,105 $9,557 $8,849
Investing activities $(7,455) $(9,311) $(8,316)
Financing activities $(1,935) $(176) $(402)
Six Months Ended
December 31,
2006 2005
Net income $3,902 $5,594
Interest expense 1,126 908
Depreciation & amortization 9,742 8,860
Gain on financial instrument - (177)
Provision for income taxes 3,649 3,429
EBITDA $18,419 $18,614
Noncash option expense 1,944 1,085
EBITDA excluding stock option expense $20,363 $19,699
Cash flows provided by (used in):
Operating activities $17,953 $17,184
Investing activities $(15,771) $(20,944)
Financing activities $(2,336) $2,975
Earnings before interest, taxes, depreciation and amortization ("EBITDA")
is one of the principal financial measures by which the Company measures
its financial performance. EBITDA is a widely accepted financial indicator
used by many investors, lenders and analysts to analyze and compare
companies on the basis of operating performance, and the Company believes
that EBITDA provides useful information regarding the Company's ability to
service its debt and other obligations. However, EBITDA does not represent
cash flow from operations, nor has it been presented as a substitute to
operating income or net income as indicators of the Company's operating
performance. EBITDA excludes significant costs of doing business and
should not be considered in isolation or as a substitute for measures of
performance prepared in accordance with accounting principles generally
accepted in the United States of America. In addition, the Company's
calculation of EBITDA may be different from the calculation used by its
competitors, and therefore comparability may be affected. The Company's
lender also uses EBITDA to assess the Company's compliance with debt
covenants. These financial covenants are based on a measure that is not
consistent with accounting principles generally accepted in the United
States of America. Such measure is EBITDA (as defined) as modified by
certain defined adjustments.
