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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Jason Industries Inc | NASDAQ:JASN | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.2401 | 0.2402 | 0.2499 | 0 | 01:00:00 |
Jason Industries, Inc. (OTCQX: JASN) (“Jason” or the “Company”) today reported its results for both the fourth quarter and full-year 2019.
Fourth Quarter and Full-Year Financial Results
Key financial results for the fourth quarter 2019 versus the year ago period include:
Continuing Operations
Continuing and Discontinued Operations Cash Flows
Key financial results for the full year 2019 versus the year ago period include:
Continuing Operations
Continuing and Discontinued Operations Cash Flows
“Weakness in global industrial markets and our core verticals along with additional reductions in OEM build schedules impacted our fourth quarter results," said Brian Kobylinski, chairman and chief executive officer of Jason. “We continue to work to optimize the business through facility consolidations, cost reductions, and investments in targeted areas of growth and manufacturing efficiency. As part of the strategic alternatives process we completed the next step in our portfolio transformation with the sale of the Metalex business in the quarter."
Highlights during the quarter include:
Key financial results within the segments for the fourth quarter 2019 versus the year ago period include:
Strategic Alternatives Update:
Other Information:
"Jason is now comprised of two profitable, diverse businesses, Osborn and Milsco," continued Kobylinski. "Consistent with our strategy to invest in these industry leaders, we are excited about our Matchless acquisition which extends Osborn's surface solutions capabilities. We remain focused on providing innovative, high-quality products and solutions and maintaining and continuing to improve our operational performance. We thank our customers, suppliers, and employees for their ongoing support as we continue our strategic alternative process to address our capital structure for the long-term."
Conference Call:
The Company will hold a conference call to discuss its fourth quarter results on Tuesday, March 3, 2020 at 10:00 a.m. Eastern time. A live webcast of the call may be accessed over the Internet from the Company’s Investor Relations website at investors.jasoninc.com. Participants should follow the instructions provided on the website to download and install the necessary audio applications. The conference call is also available by dialing 877-451-6152 (domestic) or 201-389-0879 (international). Participants should ask for the Jason Industries Fourth Quarter 2019 Earnings conference call.
A replay of the live conference call will be available beginning approximately one hour after the call. The replay will be available on the Company’s website or by dialing 844-512-2921 (domestic) or 412-317-6671 (international) and entering the replay passcode 13642137. The telephonic replay will be available until 11:59 pm (Eastern Time), March 10, 2020. The online replay will be available on the website immediately following the call.
About Jason Industries, Inc.
The Company is the parent company to a global family of manufacturing leaders within the finishing and seating markets, including Osborn (Richmond, Ind. and Burgwald, Germany) and Milsco (Milwaukee, Wis.). Headquartered in Milwaukee, Wis., Jason employs more than 1,900 people in 13 countries.
Forward Looking Statements
This press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “anticipate,” “believe,” “expect,” “estimate,” “plan,” “guidance,” and “project” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. Such forward-looking statements include projected financial information. Such forward-looking statements with respect to revenues, earnings, performance, strategies, prospects and other aspects of the Company’s businesses are based on current expectations that are subject to risks and uncertainties. A number of factors could cause actual results or outcomes to differ materially from those indicated by such forward-looking statements. Such factors include, but are not limited to, the level of demand for the Company’s products; volatility in the prices of raw materials and the Company’s ability to pass along increased costs; competition in the Company’s markets; the Company’s ability to grow and manage growth profitably; the Company’s ability to access additional capital; risks associated with the ability to identity and complete strategic alternatives; ability to maintain compliance with the continued listing standards of the NASDAQ Capital Market; changes in applicable laws or regulations; the Company’s ability to attract and retain qualified personnel; the impact of proposed and potential regulations related to the U.S. Tax Cuts and Jobs Act; the possibility that the Company may be adversely affected by other economic, business and/or competitive factors; and other risks and uncertainties identified in the Company’s most recent Annual Report on Form 10-K/A, as such may be amended or supplemented by subsequent Quarterly Reports on Form 10-Q or other reports filed with the Securities and Exchange Commission.
The forward-looking statements contained in this press release are based on assumptions that we have made in light of our industry experience and our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. As you review and consider this press release, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties (some of which are beyond our control) and assumptions. Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect our actual results and cause them to differ materially from those anticipated in the forward-looking statements.
Any forward-looking statement made by us in this press release speaks only as of the date on which we make it. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.
Non-GAAP and Other Company Information
Included in this press release are certain non-GAAP financial measures designed to complement the financial information presented in accordance with generally accepted accounting principles in the United States of America because management believes such measures are useful to investors. Because the Company’s calculations of these measures may differ from similar measures used by other companies, you should be careful when comparing the Company’s non-GAAP financial measures to those of other companies. In this earnings release, we disclose the following non-GAAP financial measures, and we reconcile these non-GAAP financial measures to the most directly comparable GAAP financial measures: EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Net Debt to Adjusted EBITDA, and Free Cash Flow.
EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin - The Company defines EBITDA as net income (loss) from continuing operations before interest expense, provision (benefit) for income taxes, depreciation and amortization. The Company defines Adjusted EBITDA as EBITDA, excluding the impact of operational restructuring charges and non-cash or non-operational losses or gains, including goodwill and long-lived asset impairment charges, gains or losses on disposal of property, plant and equipment, integration and other restructuring charges, transaction-related expenses, other professional fees, purchase accounting adjustments, lease expense associated with vacated facilities and non-cash share based compensation expense. The Company defines Adjusted EBITDA Margin as Adjusted EBITDA as a percentage of net sales.
Management believes that Adjusted EBITDA provides a more clear picture of the Company’s operating results by eliminating expenses and income that are not reflective of the underlying business performance. The Company uses this metric to facilitate a comparison of operating performance on a consistent basis from period to period and to analyze the factors and trends affecting its segments. The Company’s internal plans, budgets and forecasts use Adjusted EBITDA as a key metric and the Company uses this measure to evaluate its operating performance and segment operating performance and to determine the level of incentive compensation paid to its employees.
Net Debt to Adjusted EBITDA - The Company defines Net Debt to Adjusted EBITDA as current and long-term debt plus debt discounts less cash and cash equivalents, divided by pro forma Adjusted EBITDA for the trailing twelve months. Pro forma Adjusted EBITDA is calculated as Adjusted EBITDA as reported plus Adjusted EBITDA of acquisitions prior to the date of the acquisition during the trailing twelve months. Management believes that Net Debt to Adjusted EBITDA is useful in assessing the Company’s financial leverage.
Free Cash Flow - The Company defines Free Cash Flow as net cash flows from operating activities (as defined by GAAP) less capital expenditures and cash dividends on preferred stock. Management believes that Free Cash Flow is useful in assessing our ability to generate cash from business operations that is available for strategic capital decisions.
In addition to these non-GAAP financial measures, we also use the term “organic sales” to refer to GAAP net sales from existing operations excluding (i) sales from acquired businesses recorded prior to the first anniversary of the acquisition, (ii) sales from divested businesses or exited non-core businesses, and (iii) the impact of foreign currency translation. The impact of foreign currency translation is calculated as the difference between (a) the period-to-period change in results (excluding acquisitions, divestitures, and exited non-core businesses) and (b) the period-to-period change in results (excluding acquisitions, divestitures, and exited non-core businesses) after applying current period average foreign exchange rates to the prior year period. We use the term “organic sales growth” to refer to the measure of comparing current period organic sales with the corresponding prior year period organic sales.
Jason Industries, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts) (Unaudited)
Three Months Ended
Year Ended
December 31, 2019
December 31, 2018
December 31, 2019
December 31, 2018
Net sales
$
76,356
$
80,875
$
337,897
$
367,959
Cost of goods sold
61,767
60,711
263,291
277,852
Gross profit
14,589
20,164
74,606
90,107
Selling and administrative expenses
20,806
20,030
78,200
78,752
Loss (gain) on disposals of property, plant and equipment-net
287
(1,291)
303
(1,318)
Restructuring
544
554
3,954
877
Operating (loss) income
(7,048)
871
(7,851)
11,796
Interest expense-net
(8,277)
(8,609)
(32,978)
(33,277)
Equity income
149
121
316
1,024
Other income-net
400
146
1,098
758
Loss from continuing operations before income taxes
(14,776)
(7,471)
(39,415)
(19,699)
Tax provision (benefit)
2,092
(2,650)
4,016
(5,046)
Net loss from continuing operations
$
(16,868)
$
(4,821)
$
(43,431)
$
(14,653)
Net (loss) income from discontinued operations, net of tax
(11,401)
(2,888)
(38,177)
1,493
Net loss
$
(28,269)
$
(7,709)
$
(81,608)
$
(13,160)
Accretion of preferred stock dividends and redemption premium
862
796
3,347
4,070
Net loss allocable to common shareholders of Jason Industries
$
(29,131)
$
(8,505)
$
(84,955)
$
(17,230)
Basic and diluted net (loss) income per share allocable to common shareholders of Jason Industries:
Net loss per share from continuing operations
$
(0.61)
$
(0.20)
$
(1.64)
$
(0.68)
Net (loss) income per share from discontinued operations
(0.40)
(0.11)
(1.34)
0.06
Basic and diluted net loss per share
$
(1.01)
$
(0.31)
$
(2.98)
$
(0.62)
Weighted average number of common shares outstanding:
Basic and diluted
28,838
27,683
28,484
27,595
Jason Industries, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except share and per share amounts) (Unaudited)
December 31, 2019
December 31, 2018
Assets
Current assets
Cash and cash equivalents
$
84,526
$
46,698
Accounts receivable - net
33,085
36,213
Inventories - net
49,943
49,475
Deferred income taxes
—
—
Other current assets
7,433
5,582
Current assets held for sale
—
58,171
Total current assets
174,987
196,139
Property, plant and equipment - net
70,276
75,166
Right-of-use operating lease assets
20,910
—
Goodwill
45,684
44,065
Other intangible assets - net
64,590
69,700
Other assets - net
10,654
11,287
Noncurrent assets held for sale
—
107,240
Total assets
$
387,101
$
503,597
Liabilities and Shareholders’ (Deficit) Equity
Current liabilities
Current portion of long-term debt
$
5,800
$
5,687
Current portion of operating lease liabilities
4,275
—
Accounts payable
22,914
30,421
Accrued compensation and employee benefits
8,551
11,954
Accrued interest
79
89
Other current liabilities
13,783
13,161
Current liabilities held for sale
—
24,551
Total current liabilities
55,402
85,863
Long-term debt
378,950
386,101
Long-term operating lease liabilities
19,136
—
Deferred income taxes
7,534
17,613
Other long-term liabilities
16,938
18,436
Noncurrent liabilities held for sale
—
3,367
Total liabilities
477,960
511,380
Shareholders’ (Deficit) Equity
Preferred stock
43,950
40,612
Jason Industries common stock
3
3
Additional paid-in capital
155,023
155,533
Retained deficit
(261,192)
(180,360)
Accumulated other comprehensive loss
(28,643)
(23,571)
Total shareholders’ (deficit) equity
(90,859)
(7,783)
Total liabilities and shareholders’ (deficit) equity
$
387,101
$
503,597
Jason Industries, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands) (Unaudited)
Year Ended
Year Ended
Includes cash flow activities from both continuing and discontinued operations
December 31, 2019
December 31, 2018
Cash flows from operating activities
Net loss
$
(81,608)
$
(13,160)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation
24,606
28,356
Amortization of intangible assets
10,855
14,248
Amortization of deferred financing costs and debt discount
2,994
2,937
Non-cash operating lease expense
8,024
—
Non-cash impairment charges
20,597
—
Equity income
(316)
(1,024)
Deferred income taxes
(9,013)
(7,995)
Loss (gain) on disposals of property, plant and equipment - net
448
(1,142)
Non-cash impact of business divestitures and dissolutions
12,858
—
Dividends from joint ventures
728
833
Share-based compensation
3,354
2,709
Net increase (decrease) in cash, net of acquisitions and dispositions, due to changes in:
Accounts receivable
7,239
7,454
Inventories
4,109
5,750
Other current assets
(648)
2,819
Accounts payable
(11,375)
(6,015)
Accrued compensation and employee benefits
(4,409)
(2,710)
Accrued interest
(9)
(187)
Accrued income taxes
312
(1,221)
Operating lease liabilities, net
(7,221)
—
Other - net
(2,325)
(1,895)
Total adjustments
60,808
42,917
Net cash (used in) provided by operating activities
(20,800)
29,757
Cash flows from investing activities
Proceeds from disposals of property, plant and equipment
2,117
3,531
Payments for property, plant and equipment
(11,785)
(13,753)
Proceeds from divestitures, net of cash divested and liabilities assumed by buyer
79,796
—
Acquisitions of business, net of cash acquired
(11,000)
—
Acquisitions of patents
(42)
(152)
Net cash provided by (used in) investing activities
59,086
(10,374)
Cash flows from financing activities
Payments of deferred financing costs
(331)
(649)
Payments of First and Second Lien term loans
(8,100)
(5,600)
Proceeds from other long-term debt
4,645
3,387
Payments of other long-term debt
(6,362)
(7,076)
Payments of finance lease obligation
(340)
—
Value added tax (paid from) collected on building sale
(707)
694
Other financing activities - net
(627)
(22)
Net cash used in financing activities
(11,822)
(9,266)
Effect of exchange rate changes on cash and cash equivalents
(107)
(835)
Net increase in cash and cash equivalents
26,357
9,282
Cash and cash equivalents, beginning of period(1)
58,169
48,887
Cash and cash equivalents, end of period
$
84,526
$
58,169
(1)
Cash and cash equivalents at December 31, 2018 includes $11.5 million of cash and cash equivalents that have been reclassified as held for sale due to the sale of the North American fiber solutions and Metalex businesses, which have been classified as discontinued operations.
Jason Industries, Inc.
Quarterly Financial Information by Segment
(In thousands) (Unaudited)
2018
2019
1Q
2Q
3Q
4Q
FY
1Q
2Q
3Q
4Q
FY
Industrial
Net sales
$
53,978
$
55,454
$
51,016
$
47,189
$
207,637
$
49,737
$
54,993
$
48,859
$
47,928
$
201,517
Adjusted EBITDA
7,799
8,437
7,579
5,164
28,979
6,841
5,927
5,004
3,173
20,945
Adjusted EBITDA % net sales
14.4
%
15.2
%
14.9
%
10.9
%
14.0
%
13.8
%
10.8
%
10.2
%
6.6
%
10.4
%
Engineered Components
Net sales
$
47,035
$
44,992
$
34,608
$
33,687
$
160,322
$
43,179
$
37,482
$
27,290
$
28,429
$
136,380
Adjusted EBITDA
5,932
6,870
3,589
3,356
19,747
5,988
4,428
2,206
2,476
15,098
Adjusted EBITDA % net sales
12.6
%
15.3
%
10.4
%
10.0
%
12.3
%
13.9
%
11.8
%
8.1
%
8.7
%
11.1
%
Corporate
Adjusted EBITDA
$
(2,851)
$
(3,533)
$
(2,949)
$
(2,732)
$
(12,065)
$
(2,070)
$
(2,758)
$
(3,347)
$
(3,050)
$
(11,225)
Consolidated - Continuing Operations
Net sales
$
101,013
$
100,446
$
85,625
$
80,875
$
367,959
$
92,916
$
92,475
$
76,150
$
76,356
$
337,897
Adjusted EBITDA
10,880
11,774
8,219
5,788
36,661
10,759
7,597
3,863
2,599
24,818
Adjusted EBITDA % net sales
10.8
%
11.7
%
9.6
%
7.2
%
10.0
%
11.6
%
8.2
%
5.1
%
3.4
%
7.3
%
Jason Industries, Inc.
Reconciliation of GAAP to Non-GAAP Measures
(In thousands) (Unaudited)
Organic Sales - Continuing Operations
4Q 2019
Industrial
Engineered Components
Jason Consolidated
Net sales
Organic sales growth
(7.1)%
(15.6)%
(10.4)%
Currency impact
(1.8)%
—%
(1.1)%
Acquisitions
10.5%
—%
5.9%
Change in net sales as reported
1.6%
(15.6)%
(5.6)%
Fiscal 2019
Industrial
Engineered Components
Jason Consolidated
Net sales
Organic sales growth
(6.6)%
(14.9)%
(10.2)%
Currency impact
(3.4)%
—%
(1.9)%
Acquisitions
7.1%
—%
3.9%
Change in net sales as reported
(2.9)%
(14.9)%
(8.2)%
Free Cash Flow
(Includes cash flow activities from both continuing and discontinued operations)
1Q
2Q
3Q
4Q
FY
2019
2019
2019
2019
2019
Operating Cash Flow
$
(7,249)
$
(1,636)
$
(6,930)
$
(4,985)
$
(20,800)
Less: Capital Expenditures
(3,468)
(2,866)
(2,409)
(3,042)
(11,785)
Free Cash Flow
$
(10,717)
$
(4,502)
$
(9,339)
$
(8,027)
$
(32,585)
Net Debt to Adjusted EBITDA
December 31, 2019
Current and long-term debt
$
384,750
Add: Debt discounts and deferred financing costs
4,261
Less: Cash and cash equivalents
(84,526)
Net Debt
$
304,485
Adjusted EBITDA - Continuing Operations
1Q19
$
10,759
2Q19
7,597
3Q19
3,863
4Q19
2,599
TTM Adjusted EBITDA
24,818
Acquisitions TTM Adjusted EBITDA*
457
Pro Forma TTM Adjusted EBITDA
25,275
Net Debt to Adjusted EBITDA**
12.0x
*Acquisitions TTM Adjusted EBITDA includes Adjusted EBITDA prior to the date of the acquisition during the trailing twelve months.
**Note the consolidated first lien net leverage ratio under the Company’s senior secured credit facilities was 7.52x as of December 31, 2019. See Form 10-K for further discussion of the Company’s senior secured credit facilities.
Jason Industries, Inc.
Reconciliation of GAAP to Non-GAAP Measures
Adjusted EBITDA
(In thousands) (Unaudited)
2018
2019
1Q
2Q
3Q
4Q
FY
1Q
2Q
3Q
4Q
FY
Net loss from continuing operations
$
(2,322)
$
(2,145)
$
(5,365)
$
(4,821)
$
(14,653)
$
(5,253)
$
(9,734)
$
(11,576)
$
(16,868)
$
(43,431)
Interest expense-net
7,991
8,365
8,312
8,609
33,277
8,205
8,327
8,169
8,277
32,978
Tax (benefit) provision
(370)
(921)
(1,105)
(2,650)
(5,046)
349
805
770
2,092
4,016
Depreciation and amortization
5,037
5,223
5,339
5,538
21,137
5,180
5,609
5,460
5,986
22,235
EBITDA
10,336
10,522
7,181
6,676
34,715
8,481
5,007
2,823
(513)
15,798
Adjustments:
Restructuring(1)
6
67
250
554
877
1,366
1,127
917
544
3,954
Transaction-related expenses(2)
—
—
—
—
—
239
402
28
336
1,005
Integration and other restructuring costs(3)
355
713
—
(976)
92
(58)
398
(261)
1,311
1,390
Share-based compensation(4)
210
468
792
825
2,295
723
663
348
634
2,368
(Gain) loss on disposals of property, plant and equipment—net(5)
(27)
4
(4)
(1,291)
(1,318)
8
—
8
287
303
Total adjustments
544
1,252
1,038
(888)
1,946
2,278
2,590
1,040
3,112
9,020
Adjusted EBITDA
$
10,880
$
11,774
$
8,219
$
5,788
$
36,661
$
10,759
$
7,597
$
3,863
$
2,599
$
24,818
(1)
Restructuring includes costs associated with exit or disposal activities as defined by GAAP related to facility consolidation, including one-time employee termination benefits, costs to close facilities and relocate employees, and costs to terminate contracts other than financing leases in 2018 and financing and operating leases in 2019.
(2)
Transaction-related expenses primarily consist of professional fees and other expenses related to acquisitions, divestitures and financing activities.
(3)
During 2019, integration and other restructuring costs included $1.0 million of accelerated lease expense related to planned facility consolidations in the engineered components and industrial segments and $0.9 million of integration costs related to an acquisition in the industrial segment. This was offset by $0.8 million due to the reclassification to earnings of a foreign currency translation gain for the wind down and substantial dissolution of certain U.K. entities. During 2018, integration and other restructuring costs included $0.2 million for settlement costs related to a legal claim in the former Assembled Products business in the engineered components segment associated with periods prior to the Company's go public business combination, $0.1 million related to legal entity restructuring activities and $0.1 million associated with the insurance deductible related to a force majeure incident at a supplier in the engineered components segment. The supplier incident had resulted in incremental costs to maintain production throughout 2018, with such costs offset by insurance recoveries received during the third and fourth quarters of 2018. These costs were partially offset by $0.4 million of net legal settlement income related to proceeds from claims in the engineered components segment associated with periods prior to the Company’s go public business combination. Such items are not included in restructuring for GAAP purposes.
(4)
Represents non-cash share based compensation expense from continuing operations for awards under the Company’s 2014 Omnibus Incentive Plan.
(5)
During 2019, (gain) loss on disposals of property, plant and equipment included for the fourth quarter of 2019 a loss of $0.3 million on the sale of a former Schaffner building in the industrial segment. During 2018, (gain) loss on disposals of property, plant and equipment included for the fourth quarter of 2018 a gain of $1.3 million on the sale of a building related to the closure of the engineered components segment’s U.K. facility.
View source version on businesswire.com: https://www.businesswire.com/news/home/20200302005211/en/
Investor Relations: Rachel Zabkowicz investors@jasoninc.com 414.277.2007
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