STUART, Fla., May 8 /PRNewswire-FirstCall/ -- NuCO2 Inc. , the largest supplier in the U.S. of bulk CO2 systems and services for carbonating fountain beverages, today reported results for the fiscal three and nine months ended March 31, 2008.
-- Total revenues for the quarter increased 7.7%, to $34.4 million, and for the nine months were up 7.4%, to $103.4 million, compared to the corresponding period last year, respectively. -- Selling, general and administrative expenses (SG&A) for the quarter declined to $7.1 million, from approximately $8.0 million last year, and as a percentage of total revenues improved to 20.7%, from 24.9%, last year. Included in SG&A for the quarter is approximately $900,000 of expenses in connection with the Company's pending merger with affiliates of Aurora Capital Group. Nine month SG&A amounted to $20.4 million, or 19.8% as a percentage of total revenues, compared with $22.3 million and 23.2%, respectively, in the year ago period. -- Operating income for the quarter advanced 55.2%, to $4.0 million, and as a percentage of total revenues expanded to 11.5%, compared to 8% a year ago. For the nine months, operating income was up 24.7%, to $14.0 million, and as a percentage of total revenues was 13.5%, compared to last year's 11.7%. -- 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 $9.9 million, up 10% from the year-ago's $9.0 million, and for the nine months increased 7.7%, to $31.6 million. -- Operating cash flow for the quarter increased to $14.5 million, from $9.5 million, a 52.9% gain, while for the nine month period, it totaled $38.4 million, up 39.9%. Free cash flow (cash flow from operations less capital expenditures) amounted to $8.9 million for the third fiscal quarter, compared to $5.9 million a year earlier, and for the nine months amounted to $22.6 million and $8.1 million, respectively. -- Third fiscal quarter net income increased to $1.9 million, from $1.1 million, a year earlier, and fully diluted net income per share amounted to $0.13, up from $0.07 a year earlier. Nine month net income totaled $7.0 million, a 39.4% increase year over year, with fully diluted net income per share at $0.46, up from $0.31. -- Long-term debt of $25.4 million as of March 31, 2008 includes $7.6 million of indebtedness incurred for payments made in connection with the merger transaction.
"Results for our third fiscal quarter showed continued solid improvement in overall business performance, the result of our progress in executing the strategic plan we implemented approximately a year ago, and our focus on providing superior customer service and building operational excellence," said Michael E. DeDomenico, Chairman and CEO.
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 2008 third quarter will be held tomorrow, Friday, May 9, 2008 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 March 31, 2008 June 30, 2007 Current assets: Cash and cash equivalents $332 $343 Trade accounts receivable, net of allowance for doubtful accounts of $626 and $1,004, respectively 8,863 11,823 Inventories 312 297 Prepaid insurance expense and deposits 3,743 3,121 Prepaid expenses and other current assets 6,416 1,412 Deferred tax assets - current portion 6,725 8,264 Total current assets 26,391 25,260 Property and equipment, net 121,782 122,364 Goodwill & other intangible assets, net 37,936 39,180 Deferred tax assets 482 3,813 Other 234 221 Total other assets 38,652 43,214 Total assets $186,825 $190,838 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $8,193 $6,061 Accrued expenses & other current liabilities 8,157 5,889 Total current liabilities 16,350 11,950 Long-term debt 25,350 34,750 Customer deposits 4,333 4,246 Total liabilities 46,033 50,946 Total shareholders' equity 140,792 139,892 Total liabilities & shareholders' equity $186,825 $190,838 NuCO2 Inc. STATEMENTS OF INCOME (In thousands, except per share amounts) Three Months Nine Months Ended March 31, Ended March 31, 2008 2007 2008 2007 Revenues: Product sales $22,401 $20,995 $68,249 $63,865 Equipment rentals 11,974 10,919 35,144 32,366 Total revenues 34,375 31,914 103,393 96,231 Costs and expenses: Cost of products sold, excluding depreciation & amortization 15,101 13,728 44,392 41,648 Cost of equipment rentals, excluding depreciation & amortization 2,447 1,999 7,032 4,603 Selling, general and administrative expenses 7,108 7,952 20,427 22,343 Depreciation and amortization 5,077 5,158 15,124 14,900 Loss on asset disposal 676 522 2,416 1,506 30,409 29,359 89,391 85,000 Operating income 3,966 2,555 14,002 11,231 Interest expense 410 509 1,502 1,635 Income before provision for income taxes 3,556 2,046 12,500 9,596 Provision for income tax 1,615 935 5,513 4,584 Net income $1,941 $1,111 $6,987 $5,012 Weighted average number of common and common equivalent shares outstanding Basic 14,797 15,680 14,803 15,711 Diluted 15,191 15,896 15,182 15,979 Net income per basic common share $0.13 $0.07 $0.47 $0.32 Net income per diluted common share $0.13 $0.07 $0.46 $0.31 RECONCILIATION OF GAAP NET INCOME TO NON-GAAP MEASURES EBITDA AND EBITDA EXCLUDING STOCK OPTION EXPENSE Three Months Ended Nine Months Ended March 31, March 31, 2008 2007 2008 2007 Net income $1,941 $1,111 $6,987 $5,012 Interest expense 410 509 1,502 1,635 Depreciation & amortization 5,077 5,158 15,124 14,900 Provision for income taxes 1,615 935 5,513 4,584 EBITDA $9,043 $7,713 $29,126 $26,131 Noncash option expense 870 1,301 2,511 3,245 EBITDA excluding stock option expense $9,913 $9,014 $31,637 $29,376 Cash flows provided by (used in): Operating activities $14,520 $9,495 $38,388 $27,448 Investing activities $(5,588) $(3,554) $(15,789) $(19,325) Financing activities $(8,984) $(5,888) $(22,610) $(8,224) 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.
