JPS INDUSTRIES, INC. GREENVILLE, S.C., Jan. 14, 2015 /PRNewswire/ -- JPS Industries, Inc. (JPST.PK), a leading manufacturer of composite materials, today announced financial and operating results for our fourth fiscal quarter and full year ended November 1, 2014.
Highlights:
-- Fourth quarter gross profit of $8.3 million, a 20.5% gross margin vs.
$8.1 million, a 14.8% gross margin in the year ago fourth quarter, as
lower margin ballistics business comprised a smaller portion of our
overall business mix
-- Fourth quarter and full year adjusted EBITDA of $4.9 million and $16.2
million vs. $5.2 million and $15.1 million in the prior year periods
-- Fourth quarter GAAP net income of $1.5 million, or $0.14 per share,
compared to the year ago quarter 2013 net loss of $700,000. Adjusted for
non-recurring items, the fourth quarter adjusted net income was $2.3
million compared to $2.0 million in the year ago quarter
-- Full year GAAP net income of $14.0 million, or $1.34 per share, which
includes $8.5 million of income and gain from discontinued operations,
compared to 2013 full year net income of $2.0 million, which includes
$1.1 million loss from discontinued operations. Adjusted for
non-recurring items, full year adjusted net income was $6.3 million
compared to $6.7 million in the prior year
-- Fourth quarter net sales of $40.4 million, a 26% decrease from the year
ago quarter net sales of $55.0 million, driven by a $14.3 million or 53%
reduction in ballistics market net sales, consistent with the third
quarter of this year as defense programs are running below the prior
year's level
-- Full year net sales of $162.8 million, a 3% decrease from the prior
year, again due to $9.0 million or 15% lower ballistics sales offsetting
growth in our other markets
-- Fourth quarter SG&A of $2.7 million, increased over the prior year
quarter of $2.5 million due to $0.4 million higher non-cash stock
compensation and legal expenses
-- Recorded an additional $800,000 reserve against our receivable of $4.2
million due from a former ballistics customer related to a 2010
bankruptcy proceeding
-- Cash of $2.7 million and escrow cash of $1.5 million with no debt
outstanding
-- Contributed $17.8 million in cash to the pension plan in the 2014 fiscal
year
Mikel H. Williams, JPS's CEO stated: "This quarter and full year reflect lower sales to the ballistics market, while our electronics, aerospace and other markets generally remained stable with modest growth. For the full year, I am pleased to see that our focus on operational execution continues to show results, with improved gross margins and lower controllable recurring operating expenses. On a non-operating note, we recorded an additional $800,000 reserve against our receivable from a former ballistics customer currently in a bankruptcy settlement proceeding primarily due to the extended time of the settlement process and moved the net asset of $3.2 million to other long-term assets. We also took the opportunity to significantly add to our pension contributions with $17.8 million in cash funded into the plan. Our banking facility remains in place with approximately $24 million available, and we will likely renew the facility when it matures in June."
Williams continued, "Now let me add a bit of a longer term historical perspective. Since fiscal year 2012, we have reduced by over $72 million our net debt and pension obligations, which reflects a significant improvement in our capital structure and value for the benefit of our shareholders. Further, over this period we have improved our annual adjusted EBITDA from $14.8 million in fiscal year 2012 to $16.2 million in fiscal year 2014, despite having sold our Urethane division and eliminated its contribution to our adjusted EBITDA of $2.3 million in fiscal year 2012. This was accomplished through a combination of improved operating performance at the Composite Materials division and reductions in our operating expenses. After adjusting out the fiscal year 2012 $2.2 million of selling, general and administrative costs related to our Urethane division that we sold, we have further reduced our selling, general and administrative costs by an additional $1.7 million from fiscal year 2012 to fiscal year 2014, or 14 percent. We do not believe these balance sheet and operating improvements have been reflected in the OTC trading price of our stock, as our quoted share price has increased by only 10 cents on the exchange, from $7.00 at the end of fiscal year 2012 to $7.10 at the end of fiscal year 2014. Because the volume of company stock traded on the OTC is extremely low, we do not believe that the trading price reflected on the OTC exchange properly reflects the value of the stock. As a result, the company's pension plan has for many years obtained an independent appraisal of the value of the stock for purposes of valuing the stock held in the pension plan. At fiscal year end 2014, the mid-point of the valuation range determined by the independent appraisal for a block of stock was $13 per share. The increase from the prior year's value of $11.70 as determined by the independent appraisal reflects another year of solid cash flows and a slightly improving outlook for our Composite Materials business coupled with overall record valuations in the equity markets generally. The appraised value also considers our significant NOLs, which at $54 million for federal taxes translates to approximately $18 million of future cash tax benefits. The appraised stock value was $7.15 at the end of fiscal year 2012. I am pleased that we have been able to generate this level of improvement in our shareholder value over the past two years, and we will continue to look for ways to improve and also realize this value for the benefit for our shareholders. As always, we will aggressively seek opportunities to fully realize the fair value of the shares for the benefit of our shareholders, considering all possibilities," Williams concluded.
The Statement of Operations for both the current year and the prior year periods have been prepared reflecting the Urethane division as a discontinued operation, as the sale was closed on April 30, 2014. The prior year balance sheet has not been restated for comparison purposes since the division was not an asset held for sale at that time, nor for the 2013 presentation of the ballistics customer's receivable where it was reflected as a current account in that year. Certain reclassifications as well as re-allocations among quarterly periods have been made to the prior year's fourth quarter's financial statements to conform to the current year's presentation. These changes had no effect on the previously reported results of operations for the full fiscal year 2013.
About JPS Industries, Inc.
JPS Industries, Inc. is a major U.S. manufacturer of sheet and mechanically formed glass and aramid materials for specialty applications in a wide expanse of markets requiring highly engineered products. JPS's products are used in a wide range of applications including: advanced composite materials; civilian and military aerospace components; printed electronic circuit boards; filtration and insulation products; specialty commercial construction substrates; automotive and industrial components; soft body armor for civilian and military applications. Headquartered in Greenville, South Carolina, the Company operates three manufacturing locations in Anderson and Slater, South Carolina and Statesville, North Carolina.
Non-GAAP Financial Measures
This release includes 'adjusted EBITDA', a non-GAAP financial measure as defined in Regulation G of the Securities Exchange Act of 1934. This release also includes net income adjusted for non-recurring items, a non-GAAP financial measure as defined in Regulation G of the Securities Act of 1934. Management believes that the disclosure of non-GAAP financial measures, when presented in conjunction with the corresponding GAAP measures, provide useful information to the Company, investors and other users of the financial statements and other financial information in identifying and understanding operating performance for a given level of net sales and business trends. Management believes that adjusted EBITDA and net income adjusted for non-recurring items are important factors of the Company's business because they reflect financial performance that is unencumbered by debt service and other non-cash, non-recurring or unusual items. However, they should not be considered as an alternative to cash flow from operating activities, as a measure of liquidity or as an alternative to net income as a measure of operating results in accordance with generally accepted accounting principles. The Company's definition of adjusted EBITDA may differ from definitions of such financial measure used by other companies. The Company has provided a reconciliation of adjusted EBITDA to GAAP financial information and net income adjusted for non-recurring items to GAAP financial information in the attached Schedule of Non-GAAP reconciliations.
"SafeHarbor" Statement under the Private Securities Litigation Reform Act of 1995
Except for historical information contained in this release, statements in this release may constitute forward-looking statements regarding the Company's assumptions, projections, expectations, targets, intentions or beliefs about future events. Words or phrases such as "anticipates," "believes," "estimates," "expects," "intends," "plans," "predicts," "projects," "targets," "will likely result," "will continue," "may," "could" or similar expressions identify forward-looking statements. Forward-looking statements involve risks and uncertainties, which could cause actual results or outcomes to differ materially from those expressed. The Company cautions that while it makes such statements in good faith and it believes such statements are based on reasonable assumptions, including without limitation, management's examination of historical operating trends, data contained in records, and other data available from third parties, it cannot assure you that the Company's projections will be achieved. Important factors that could cause actual results or outcomes for JPS or its subsidiaries to differ materially from those discussed in forward-looking statements include changes in general economic conditions in the markets in which it may compete and fluctuations in demand; the Company's ability to sustain historical margins; increased competition and the risk of lost customer business; increased costs; loss or retirement of key members of management; currency exchange rate fluctuations; integration of acquired operations; international operations; compliance with environmental regulations and other laws; product compliance issues; potential impacts of natural disasters on the industry and the Company's supply chain; increases in the Company's cost of borrowings or unavailability of additional debt or equity capital on terms considered reasonable by management; and adverse state, federal or foreign legislation or regulation or adverse determinations by regulators. Any forward-looking statement speaks only as of the date on which such statement is made, and, except as required by law, the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for management to predict all such factors.
JPS INDUSTRIES, INC.
CONDENSED CONSOLIDATED
BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
November 1, November 2,
2014 2013
---- ----
ASSETS
Current Assets:
Cash $2,713 $1,656
Restricted cash - 3,685
Cash held in escrow 1,500 -
Accounts receivable,
net of reserves 19,760 31,295
Inventories 21,600 24,341
Prepaid expenses and
other 5,381 7,525
----- -----
Total current assets 50,954 68,502
------ ------
Property, plant and
equipment, net 13,246 16,935
Deferred income taxes 45,714 54,954
Goodwill 10,100 10,100
Other assets 3,482 536
----- ---
Total assets $123,496 $151,027
======== ========
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $10,780 $10,013
Accrued pension costs 1,267 8,611
Accrued salaries,
benefits and other 3,655 7,487
Current portion of
long-term debt - 4,980
--- -----
Total current
liabilities 15,702 31,091
------ ------
Long-term debt - 18,147
Accrued pension costs 17,987 27,648
Other long-term
liabilities 150 534
--- ---
Total liabilities 33,839 77,420
Total shareholders'
equity 89,657 73,607
------ ------
Total liabilities and
shareholders' equity $123,496 $151,027
======== ========
JPS INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
(Unaudited)
13 Weeks Ended 52 Weeks Ended
-------------- ---------------
November 1, November 2, November 1, November 2,
2014 2013 2014 2013
---- ---- ---- ----
Net sales $40,421 $54,961 $162,841 $168,473
Cost of sales 32,151 46,819 134,235 140,639
------ ------ ------- -------
Gross profit 8,270 20.5% 8,142 14.8% 28,606 17.6% 27,834 16.5%
SG&A and other 2,744 2,490 10,545 10,406
Litigation charge (recovery) - - - (502)
Severance and restructuring - - - 4,023
Non current A/R reserve 800 - 800 -
Distribution 1,113 989 3,894 3,790
Pension and postretirement 436 257 3,299 3,017
--- --- ----- -----
Operating profit 3,177 7.9% 4,406 8.0% 10,068 6.2% 7,100 4.2%
Interest expense, net 95 320 630 1,265
--- --- --- -----
Income before income taxes 3,082 4,086 9,438 5,835
Income taxes 1,561 2,085 3,900 2,695
----- ----- ----- -----
Income from continuing operations 1,521 2,001 5,538 3,140
Discontinued operations:
Gain on sale - net of taxes - - 7,471 -
Income (loss), net of taxes - (2,705) 999 (1,093)
--- ------ --- ------
Net income (loss) $1,521 3.8% $(704) -1.3% $14,008 8.6% $2,047 1.2%
====== ===== ======= ======
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING: (in millions)
Basic 10,376 10,281 10,319 10,263
====== ====== ====== ======
Diluted 10,637 10,340 10,464 10,343
====== ====== ====== ======
Basic earnings (loss) per common share $0.15 $(0.07) $1.36 $0.20
===== ====== ===== =====
Diluted earnings (loss) per common share $0.14 $(0.07) $1.34 $0.20
===== ====== ===== =====
See EBITDA calculation on following page.
JPS INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (continued)
(Dollars in thousands, except per share data)
(Unaudited)
13 Weeks Ended 52 Weeks Ended
-------------- ---------------
November 1, November 2, November 1, November 2,
2014 2013 2014 2013
---- ---- ---- ----
Adjusted EBITDA:
Net income (loss) $1,521 $(704) $14,008 $2,047
Interest expense 95 320 630 1,265
Income taxes (benefit) 1,561 2,085 3,900 2,695
Depreciation and amortization 319 522 1,502 1,362
Stock compensation 164 18 549 116
Pension and postretirement 436 257 3,299 3,017
Non recurring items:
Severance and restructuring - - - 4,023
Litigation exp. (recovery) in SGA - - - (502)
Non current A/R reserve 800 - 800 -
Discontinued operations:
Gain, net of taxes - - (7,471) -
(Income) loss, net of taxes - 2,705 (999) 1,093
--- ----- ---- -----
Adjusted EBITDA $4,896 12.1% $5,203 9.5% $16,218 10.0% $15,116 9.0%
====== ====== ======= =======
Adjusted Net Income:
Net Income (loss) $1,521 $(704) $14,008 $2,047
Non recurring items:
Severance and restructuring - - - 4,023
Litigation exp. (recovery) in SGA - - - (502)
Non current A/R reserve 800 - 800 -
Discontinued operations:
Gain, net of taxes - - (7,471) -
(Income) loss, net of taxes - 2,705 (999) 1,093
--- ----- ---- -----
Adjusted Net Income $2,321 $2,001 $6,338 $6,661
====== ====== ====== ======
Capital expenditures $773 $30 $1,431 $1,532
Cash taxes paid $146 $42 $652 $147
Cash pension contributions $10,725 $2,376 $17,782 $3,883
For Further Information:
Mikel H. Williams
President and Chief Executive Officer
(864) 239-3900
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SOURCE JPS Industries, Inc.
