STUART, Fla., Aug. 15 /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 fourth quarter and fiscal year ended June 30, 2007 in line with the Company's strategic growth plan instituted in January 2007.
-- Total revenues for the quarter amounted to $33.9 million, compared with
$30.4 million a year ago, and for all of fiscal 2007 totaled
$130.1 million, compared with $116.2 million last year, increases of
11.6% and 12.0%, respectively, over prior year results.
-- Operating income for the fiscal 2007 fourth quarter totaled
$5.5 million, compared with $2.6 million in the preceding third quarter
and $5.6 million a year ago. Full year operating income totaled
$16.7 million, compared to $19.5 million last year. The change in
operating income compared to the prior year reflects the impact of the
Company's strategic growth plan instituted in January 2007 that
includes a higher level of expenses to support customer service and
field operations.
-- EBITDA (earnings before interest, taxes, depreciation and
amortization), which the Company regards as useful information as to
liquidity, excluding non-cash stock option expense, totaled
$11.6 million in the fourth quarter, compared with $11.2 million last
year, and for the full year amounted to $41.0 million, compared with
$41.1 million last year. Compared to the immediately preceding quarter,
EBITDA for the fiscal 2007 fourth quarter, excluding non-cash stock
option expense, increased $2.6 million, or 28.9%.
-- Operating cash flow for the quarter increased to $15.4 million, up 62%
sequentially and 65% from last year. For the full year, operating cash
flow amounted to $42.8 million, compared to $33.6 million for fiscal
2006. In the second half of fiscal 2007, operating cash flow totaled
$24.9 million, compared with $16.4 million in the corresponding year
ago six months, an increase of 52%.
-- Fully diluted earnings per share for the fourth quarter equaled $0.17,
versus $0.16 last year, and $0.48 for fiscal 2007, as compared to $0.65
last year.
"In the fiscal fourth quarter, our Company continued to make solid progress in line with the goals we outlined in early January," said Michael E. DeDomenico, Chairman and CEO. "Our objectives of enhancing customer service and field operations while strengthening the Company financially are paying off. We have also successfully refocused our sales force and reduced related expenses as part of our new plan while improving our access to targeted new business."
The Company noted that while advancing operations, it continued in the quarter to achieve improved liquidity and an enhanced balance sheet.
-- Total customers at year end totaled 115,544, as compared to 116,051 at
March 31, 2007. Gross new customer activations during the fourth
quarter were 2,450. Total attrition totaled 2,957, of which more than
half resulted from the Company's recently instituted program to upgrade
the quality of its customer base and increase tank utilization. The
balance was in line with normal experience. The Company expects to
complete the upgrading program in the first quarter of fiscal 2008.
-- Improved asset utilization and reduced tank purchases resulted in
capital expenditures of $4.1 million in the fourth quarter, compared to
$8.1 million excluding acquisition capex in the prior year, bringing
capex in fiscal 2007 to $23.4 million as compared to $31.9 million in
fiscal 2006. The fiscal 2007 fourth quarter reduction in capex was
achieved primarily through the Company's accelerated improvement
program to better utilize its nationwide tank inventory.
-- Continuing with the Company's upgraded credit and collection practices,
accounts receivables at June 30, 2007, improved to $11.8 million,
compared with approximately $13 million a year ago.
-- Free cash flow, defined as cash flow from operations less capital
expenditures, continued to improve, amounting to $11.3 million for the
quarter, compared to $5.9 million in the preceding quarter. Free cash
flow for fiscal 2007 amounted to $19.4 million.
-- During the quarter, the Company, as part of its previously announced
$50 million share repurchase plan, repurchased 392,791 shares of common
stock at a cost of approximately $10 million. Through June 30, 2007,
the Company repurchased a total of 906,109 shares, for a total of
$22.5 million. The share repurchases were financed primarily from free
cash flow.
"Our results in the fourth quarter and second half reflect our strong focus on quality growth and cash flow. We have made solid progress and what is especially positive is that we were able to fund our growth, return $22.5 million to our shareholders through share repurchases and end the year with a lower debt level than at the beginning of the fiscal year," added Mr. DeDomenico.
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 fourth quarter will be held tomorrow, Thursday, August 16, 2007, 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 June 30, 2007 June 30, 2006
Current assets:
Cash and cash equivalents $343 $341
Trade accounts receivable, net
of allowance for doubtful
accounts of $1,989 and $2,538,
respectively 11,823 12,955
Inventories 297 302
Prepaid insurance expense and
deposits 3,121 5,846
Prepaid expenses and other
current assets 1,412 1,465
Deferred tax assets - current
portion 8,264 8,598
Total current assets 25,260 29,507
Property and equipment, net 122,364 119,603
Goodwill & other intangible
assets, net 39,180 40,905
Deferred tax assets 3,813 8,807
Other 221 185
Total other assets 43,214 49,897
Total assets $190,838 $199,007
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $6,061 $6,883
Accrued expenses & other
current liabilities 5,889 5,945
Total current liabilities 11,950 12,828
Long-term debt 34,750 35,450
Customer deposits 4,246 3,805
Total liabilities 50,946 52,083
Total shareholders' equity 139,892 146,924
Total liabilities & shareholders'
equity $190,838 $199,007
NuCO2 Inc.
STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Three Months Ended Year Ended
June 30, June 30,
2007 2006 2007 2006
Revenues:
Product sales $22,000 $20,042 $85,865 $75,959
Equipment rentals 11,897 10,339 44,263 40,237
Total Revenues 33,897 30,381 130,128 116,196
Costs and expenses:
Cost of products sold, excluding
depreciation & amortization 14,187 12,611 55,835 49,397
Cost of equipment rentals, excluding
depreciation & amortization 2,111 724 6,714 3,086
Selling, general and administrative
expenses 6,178 6,550 28,521 24,146
Depreciation and amortization 5,159 4,806 20,059 18,333
Loss on asset disposal 754 132 2,260 1,733
28,389 24,823 113,389 96,695
Operating income 5,508 5,558 16,739 19,501
Gain on financial instrument - - - (177)
Interest expense 572 526 2,207 1,989
Income before provision for income
taxes 4,936 5,032 14,532 17,689
Provision for income tax 2,309 2,458 6,893 7,341
Net income $2,627 $2,574 $7,639 $10,348
Weighted average number of common and
common equivalent shares outstanding
Basic 15,240 15,576 15,593 15,427
Diluted 15,543 16,063 15,886 15,997
Net income per basic common share $0.17 $0.17 $0.49 $0.67
Net income per diluted common share $0.17 $0.16 $0.48 $0.65
RECONCILIATION OF GAAP NET INCOME TO NON-GAAP MEASURES EBITDA AND EBITDA
EXCLUDING STOCK OPTION EXPENSE
Three Months Ended Year Ended
June 30, Mar 31, June 30,
2007 2006 2007 2007 2006
Net income $2,627 $2,574 $1,111 $7,639 $10,348
Interest expense 572 526 509 2,207 1,989
Depreciation &
amortization 5,159 4,806 5,158 20,059 18,333
Gain on financial
instrument - - - - (177)
Provision for income
taxes 2,309 2,458 935 6,893 7,341
EBITDA $10,667 $10,364 $7,713 $36,798 $37,834
Noncash option expense 949 805 1,301 4,194 3,297
EBITDA excluding stock
option expense $11,616 $11,169 $9,014 $40,992 $41,131
Cash flows provided by
(used in):
Operating activities $15,360 $9,309 $9,495 $42,809 $33,578
Investing activities $(4,092) $(12,984) $(3,554) $(23,417) $(41,682)
Financing activities $(11,166) $3,685 $(5,888) $(19,390) $7,477
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.
