ST. LOUIS, March 10, 2009 (GLOBE NEWSWIRE) -- Thermadyne Holdings Corporation (Nasdaq:THMD) today reported results for the three months and twelve months ended December 31, 2008.
Overview -- Continuing Operations
Three Months Ended December 31, 2008 compared to 2007 fourth quarter
* Sales of $104.6 million declined 16.3% * Net loss of $3.5 million compared to net income of $6.4 million for 2007 fourth quarter * Net cash provided from operating activities was $2.2 million compared to $23.0 million for 2007 fourth quarter * Operating EBITDA, as adjusted, from continuing operations was $8.0 million compared to $15.3 million for 2007 fourth quarter * Cash and Working Capital Facility availability of $48.3 million at December 31, 2008
Twelve Months Ended December 31, 2008 compared with 2007
* Sales of $516.9 million increased 4.6% * Net income of $10.5 million compared to $10.6 million for 2007 * Net cash provided from operating activities was $17.6 million compared to $23.0 million for 2007 * Operating EBITDA, as adjusted, from continuing operations was $64.1 million compared to $59.7 million for 2007
Financial Review of Continuing Operations for the 2008 Fourth Quarter
Net sales were $104.6 million in the fourth quarter of 2008, a decrease of 16.3% from the same quarter of 2007. Net sales decreased 9.7%, excluding the impact of foreign currency translations, and international sales increased 2.5%, in local currency. International sales represented 43% of total net sales as compared to 41% of net sales in the fourth quarter of 2007.
"Our fourth quarter sales declined at an accelerating pace throughout the three month period with a 25% decline during the month of December 2008 as compared to December 2007. Customers reduced their orders in an effort to shrink their own inventories and in response to indications of curtailments in underlying construction and fabrication activities," said Paul D. Melnuk, Thermadyne's Chairman and Chief Executive Officer.
Gross margin in the fourth quarter of 2008 was 24.6% of net sales as compared to 32.7% in the prior-year fourth-quarter period for a decline of 810 basis points (bps). Approximately 600 bps of the margin decline resulted from the combined impact of previously purchased higher cost materials and manufacturing inefficiencies arising from the reduced volumes of activity. Approximately 200 bps of the margin decline resulted from the non-cash charge from LIFO inventory accounting recorded in the fourth quarter of 2008.
Selling, general and administrative (SG&A) expenses were $24.7 million in the fourth quarter of 2008, or 23.6% of net sales, compared to $26.8 million, or 21.5% of net sales, in the same period of 2007. The SG&A expenses in the fourth quarter of 2008 included severance costs of $3.6 million associated with an organizational restructuring to reduce expenses, resulting in elimination of approximately 110 positions, or 13% of the global salaried workforce. Annualized cost savings of approximately $7.5 million are expected. Most of the severance amounts will be paid during the first six months of 2009. SG&A expenses in the fourth quarter of 2008 were reduced by $3.8 million for reversals of incentive employee compensation amounts accrued in previous quarters in the year.
"The fourth quarter was difficult as we intensified our efforts to execute on our priorities of improving customer service and productivity while aggressively reducing discretionary and variable costs and continuing to strive to grow market share wherever possible. This has required a number of difficult decisions including the reduction in our salaried workforce along with the ongoing lay-offs of many personnel in our manufacturing operations," stated Mr. Melnuk.
Financial Review of Continuing Operations for 2008
Net sales for the year ended December 31, 2008 were $516.9 million, an increase of 4.6% from the net sales of $494.0 million in 2007. International sales increased 15% (14% in local currency) and represented 45% of total net sales for 2008 compared to 41% of net sales in 2007.
For the year ended December 31, 2008, gross margin was 30.8% of net sales compared to 31.2% of net sales for the year 2007. Excluding the LIFO inventory accounting method effects on cost of sales, gross margin was 31.6% and 31.4% of net sales for the 2008 and 2007 annual periods, respectively.
SG&A expenses were $112.1 million, or 21.7% of net sales, and $106.0 million, or 21.5% of net sales, for 2008 and 2007, respectively.
"The dramatic change in economic conditions during the fourth quarter brought an abrupt halt to what, at the end of the 2008 third quarter, looked to be an outstanding year of sales, earnings, and strategic growth for Thermadyne. Successful new product sales, improved customer service, productivity improvements through our TCP continuous improvement process, well timed purchase commitments made early in 2008 for certain raw materials and price increases helped our results for most of 2008. However, 2008 fourth quarter results were negatively impacted by the sharp reduction in sales volumes combined with gross margin compression due to manufacturing inefficiencies related to the sudden volume decline and higher cost inventory purchased prior to the recent dramatic decreases in commodity prices," commented Mr. Melnuk.
Other Income and Expense Items for the Fourth Quarter and Year
Interest costs of $4.5 million decreased $1.3 million during the fourth quarter of 2008 compared to the prior year's fourth quarter. Average indebtedness was approximately $8.5 million less than it was in the fourth quarter of the prior year. Average interest rates declined approximately 200 bps for the quarter due to declines in Libor. This favorably impacted the cost of the Company's borrowings under the Working Capital and Second Lien credit facilities and provided benefits from the fixed-to-variable interest rate swap agreement. The Special Interest Rate adjustment for Senior Subordinated Notes during the fourth quarter of 2008 of 25 bps was 100 bps less than in the prior year's fourth quarter. The Special Interest Rate adjustment for the Notes increases to 75 bps effective April 1, 2009 based on the leverage ratio as of December 31, 2008. For 2008, interest costs of $20.3 million were $6.5 million less than 2007.
The fourth quarter of 2008 reflects an income tax benefit of $1.0 million which is net of $0.5 million of expenses from foreign withholding taxes for which foreign tax credit benefits are not currently available to the Company. The income tax provision was $0.2 million in the 2007 fourth-quarter, including tax benefits of $4.1 million from the favorable resolution of previously recorded state income tax contingency accruals. The income tax provision for 2008 represents a 53% effective tax rate with approximately 30% currently payable in connection with earnings in foreign countries. The portion of the income tax provision that is not currently payable arises primarily from additional U.S. income taxes accrued on earnings in foreign countries that may ultimately be repatriated and for which the use of offsetting tax credits is uncertain.
Net Income for the 2008 Fourth Quarter and Full Year
For the fourth quarter of 2008, the net loss was $2.5 million, or $0.19 loss per share, including income from discontinued operations of $1.0 million, or $0.07 income per diluted share, compared to net income for the prior year of $4.6 million, or $0.34 income per diluted share, including a loss from discontinued operations of $1.8 million, or $0.13 loss per share.
For 2008, net income was $10.7 million, or $0.79 income per diluted share, compared to net income of $8.7 million, or $0.64 income per diluted share, for the year 2007. Net income from continuing operations was $10.5 million, or $0.78 income per diluted share, for 2008 compared to $10.6 million, or $0.79 income per diluted share, from continuing operations for the year 2007. Discontinued operations provided income of $0.2 million, or $0.01 income per diluted share, for the year 2008 compared to a loss of $2.0 million, or $0.15 loss per diluted share, for the year 2007.
Operating EBITDA, As Adjusted, From Continuing Operations
In the fourth quarter of 2008, Operating EBITDA, as adjusted, from continuing operations was $8.0 million, or 7.6% of net sales, as compared to $15.3 million, or 12.2% of net sales, in the 2007 fourth quarter. For 2008, Operating EBITDA, as adjusted, from continuing operations was $64.1 million, or 12.4% of net sales, compared to $59.7 million, or 12.1% of net sales, for 2007. Operating EBITDA, as adjusted, was $64.4 million including the discontinued operations for 2008, as compared to $58.6 million for 2007.
Divestitures & Discontinued Operations
The Company continued its program of completing the divestitures of non-core operations. The Company entered an agreement for sale of its facilities in Brazil during the fourth quarter of 2008. The Company expects to complete the transaction and receive a final payment of $1.8 million in March 2009.
Liquidity and Cash Flows
The Company had combined cash and availability under its senior secured credit facility of $48 million at December 31, 2008.
As of December 31, 2008, long-term debt obligations, net of cash, were $222.1 million compared to $218.4 million at December 31, 2007. The Second Lien Facility of $14 million matures in November 2010, the Working Capital Facility matures in June 2012 and the $175 million of Senior Subordinated Notes mature in February 2014, subject to the early redemption requirements of the excess cash flow provision. The Company has maintained a position with respect to debt maturities which is beneficial in today's global financial market environment. Net long term debt was 3.5 times Operating EBITDA, as adjusted in 2008 compared to 3.65 times in the prior year.
During the fourth quarter of 2008, the Company generated $2.2 million in cash from operating activities compared with cash flow generation of $23.0 million from operating activities in the 2007 fourth quarter. The major elements impacting cash flows in the fourth quarter of 2008 compared with the 2007 fourth quarter were the operational loss in 2008 which used $3.4 million compared to $8.5 million of cash provided from the operational profit in the fourth quarter of 2007. The changes in working capital during the fourth quarter of 2008 provided $5.6 million of cash compared to $14.5 million of cash generated in the fourth quarter of 2007. The working capital changes in 2008 included $20.3 million of cash generated from the decline in receivable and inventory balances as compared to $16.1 million generated in 2007. Inventories did not decline commensurate with the decline in sales volumes in the 2008 fourth quarter. The Company had approximately four months supply on hand at year end 2008 compared to slightly more than three months supply at year end 2007, based on the trailing three months' sales volumes. While inventory levels on hand increased, the amounts payable to suppliers decreased as the Company used $15.7 million of cash during the quarter to reduce accounts payable. Accounts payable as a percentage of inventories declined to 30% at December 31, 2008 from 44% at September 30, 2008 and 35% in December 2007 due to paying suppliers in the normal course while the inventory turn ratio declined.
Outlook for 2009
Mr. Melnuk stated, "The early days of 2009 have been similar to the trends seen late in 2008 with sales down 25%-30%, excluding currency translation effects, as compared to the start of last year. Our recent cost savings actions were intended to position us for the challenges of 2009 and beyond. We are monitoring the markets very closely and we will take additional decisive action as necessary with a goal of maintaining our operating ratios at or better than levels of the past two years.
"In the short term, cash flow and liquidity are important measurements of company health and I am pleased with our position today," said Mr. Melnuk. "We have no debt maturities until November 2010. We will realize cash flow from the declining working capital associated with reduced volumes. This benefit will be realized in the coming months as the reductions work through the entire supply chain, which has become longer due to the abrupt unanticipated sales decline," he continued.
"Maintaining our operating ratio goals will likely not be achieved until the second half of the year," said Mr. Melnuk. "Gross margin percentages will suffer in the first six months due to the impact of previously purchased higher cost inventory, the inefficiencies from lower production volumes and competitive markets. In addition, it will take time to negotiate price reductions from our vendors on new purchases and it will then take more time before these benefits flow through reported gross margin. It will also take some time before the full effect of our SG&A cost saving initiatives are fully reflected in the run rate. However, we are aggressively addressing these challenges and are pleased with our progress to date."
"We expect the benefits from our TCP continuous improvement process such as process and equipment efficiency improvements in our manufacturing operations, better purchasing practices and re-engineering our products to increase their value in the marketplace will mitigate the adverse effects from the economic conditions. Although some of the improvement opportunities will require capital investment to realize, our priority is to maximize cash flow so we may defer some attractive opportunities that have lower paybacks," Mr. Melnuk commented.
Mr. Melnuk concluded, "Over the last few years, we have made great strides improving our operations and our financial position. Operationally, we continue to see substantial potential for ongoing improvements. Financially, we have a good debt maturity profile and positive operating cash flow. We also have an expanding global footprint, leading brand names and products, a unique tiered brand strategy, improving customer service and a strong management organization. As a result, we have confidence that our performance will resume its improving trend even though the economic environment may not improve for some time. This will also position us well when markets recover."
Use of Non-GAAP Measures
Our discussions of operations include reference to "Operating EBITDA, as adjusted." While a non-GAAP measure, management believes this measure enhances the reader's understanding of underlying and continuing operating results in the periods presented. The Company defines "Operating EBITDA" as earnings before interest, taxes, depreciation, amortization, LIFO adjustments, stock-based compensation expense, minority interest, the nonrecurring items of severance accruals, and post retirement benefit expense in excess of cash payments. The presentation of "Operating EBITDA, as adjusted" facilitates the reader's ability to compare current period results to other periods by isolating certain unusual items of income or expense, such as those detailed in an attached schedule. Operating EBITDA, as adjusted for certain unusual items is reflective of management measurements which focus on operating spending levels and efficiencies and less on the non-cash and unusual items believed to be nonrecurring. Additionally, non-GAAP measures such as Operating EBITDA and Operating EBITDA, as adjusted, are commonly used to value the business by investors and by our lenders pursuant to the provisions of our loan agreements.
A schedule is attached which reconciles Net Income from Continuing Operations as shown in the Consolidated Statements of Operations to Operating EBITDA and Operating EBITDA, as adjusted.
Non-GAAP measurements such as "Operating EBITDA" and "Operating EBITDA, as adjusted" are not recognized in accordance with GAAP and should not be viewed as an alternative to GAAP measures of performance. Use of Operating EBITDA and Operating EBITDA, as adjusted, has material limitations, and therefore management provides reconciliation for the reader of Operating EBITDA and Operating EBITDA, as adjusted, to Net Income from Continuing Operations.
The financial statement information presented in accordance with generally accepted accounting principles (GAAP) and the non-GAAP measure have not been reviewed by an independent registered public accounting firm.
Conference Call
Thermadyne will hold a teleconference on Wednesday, March 11, 2009 at 11:00 a.m. Eastern.
To participate via telephone, please dial:
* U.S. and Canada: 800-762-8779 (Conference ID 4002573) * International: 1-480-629-9031
Those wishing to participate are asked to dial in ten minutes before the conference begins. For those unable to participate in the live conference call, a recording of the conference will be available from March 11, 2009 at 2:00 p.m. (Eastern) until March 18, 2009 at 11:59 p.m. (Eastern) by dialing U.S. and Canada (800) 406-7325; International 1-303-590-3030. Enter conference ID 4002573 to listen to the recording.
About Thermadyne
Thermadyne, headquartered in St. Louis, Missouri, is a leading global manufacturer and marketer of metal cutting and welding products and accessories under a variety of leading premium brand names including Victor(r), Tweco(r), Arcair(r), Thermal Dynamics(r), Thermal Arc(r), Stoody(r), TurboTorch(r), Firepower(r) and Cigweld(r). Its common shares trade on the NASDAQ under the symbol THMD. For more information about Thermadyne, its products and services, visit the Company's web site at www.Thermadyne.com.
The Thermadyne Holdings Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4937
Cautionary Statement Regarding Forward-Looking Statements:
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements present management's expectations, beliefs, plans and objectives and accordingly involve estimates, assumptions, judgments and uncertainties, also involve known and unknown risks, uncertainties and other factors that could cause the actual results of the Company to differ from the results expressed or implied by such statements, including general economic and business conditions, conditions affecting the industries served by the Company and its subsidiaries, adverse charges and volatility in capital markets, conditions affecting the Company's customers and suppliers, competitor responses to the Company's products and services, the overall market acceptance of such products and services, and other factors disclosed in the Company's periodic reports filed with the Securities and Exchange Commission. Consequently such forward-looking statements should be regarded as the Company's current plans, estimates and beliefs and should not be regarded as an indicator of the Company's future operations or financial performance. The forward-looking statements contained herein are made as of the date hereof and the Company does not undertake and specifically declines any obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
THERMADYNE HOLDINGS CORPORATION
FINANCIAL HIGHLIGHTS
(In thousands, except share data)
Schedule 1
Condensed Consolidated Statements of Operations
Three Months Ended December 31,
------------------------------------
% of % of
2008 Sales 2007 Sales
-------- ------- -------- -------
Net sales $104,633 100.0% $125,001 100.0%
Cost of goods sold 78,922 75.4% 84,132 67.3%
-------- ------- -------- -------
Gross margin 25,711 24.6% 40,869 32.7%
Selling, general and
administrative expenses 24,703 23.6% 26,816 21.5%
Amortization of intangibles 670 0.6% 734 0.6%
Net periodic postretirement
benefits 166 0.2% 673 0.5%
-------- ------- -------- -------
Operating income 172 0.2% 12,646 10.1%
Other income (expenses):
Interest (4,510) (4.3)% (5,812) (4.6)%
Amortization of deferred
financing costs (235) (0.2)% (369) (0.3)%
Minority interest 69 0.1% 76 0.1%
-------- ------- -------- -------
Income (loss) from continuing
operations before income tax
provision and discontinued
operations (4,504) (4.3)% 6,541 5.2%
Income tax provision (benefit) (1,027) (1.0)% 171 0.1%
-------- ------- -------- -------
Net income (loss) from continuing
operations (3,477) (3.3)% 6,370 5.1%
Income (loss) from discontinued
operations, net of tax 980 0.9% (1,803) (1.4)%
-------- ------- -------- -------
Net income (loss) $ (2,497) (2.4)% $ 4,567 3.7%
======== ======= ======== =======
Basic net income (loss) per
share:
Continuing operations $ (0.25) $ 0.48
Discontinued operations 0.07 (0.13)
-------- --------
Net income (loss) $ (0.18) $ 0.35
======== ========
Diluted net income (loss) per
share:
Continuing operations $ (0.26) $ 0.47
Discontinued operations 0.07 (0.13)
-------- --------
Net income (loss) $ (0.19) $ 0.34
======== ========
Twelve Months Ended December 31,
------------------------------------
% of % of
2008 Sales 2007 Sales
-------- ------- -------- -------
Net sales $516,908 100.0% $493,975 100.0%
Cost of goods sold 357,855 69.2% 339,622 68.8%
-------- ------- -------- -------
Gross margin 159,053 30.8% 154,353 31.2%
Selling, general and
administrative expenses 112,122 21.7% 106,033 21.5%
Amortization of intangibles 2,675 0.5% 2,921 0.6%
Net periodic postretirement
benefits 322 0.1% 1,087 0.2%
-------- ------- -------- -------
Operating income 43,934 8.5% 44,312 9.0%
Other income (expenses):
Interest (20,304) (3.9)% (26,799) (5.4)%
Amortization of deferred
financing costs (938) (0.2)% (1,444) (0.3)%
Minority interest (80) (0.0)% 82 0.0%
-------- ------- -------- -------
Income (loss) from continuing
operations before income tax
provision and discontinued
operations 22,612 4.4% 16,151 3.3%
Income tax provision (benefit) 12,089 2.3% 5,515 1.1%
-------- ------- -------- -------
Net income (loss) from continuing
operations 10,523 2.0% 10,636 2.2%
Income (loss) from discontinued
operations, net of tax 185 0.0% (1,971) (0.4)%
-------- ------- -------- -------
Net income (loss) $ 10,708 2.1% $ 8,665 1.8%
======== ======= ======== =======
Basic net income (loss) per
share:
Continuing operations $ 0.79 $ 0.80
Discontinued operations 0.01 (0.15)
-------- --------
Net income (loss) $ 0.80 $ 0.65
======== ========
Diluted net income (loss) per
share:
Continuing operations $ 0.78 $ 0.79
Discontinued operations 0.01 (0.15)
-------- --------
Net income (loss) $ 0.79 $ 0.64
======== ========
The financial statement presentations reflect the reclassification of
the Company's discontinued operations
THERMADYNE HOLDINGS CORPORATION
FINANCIAL HIGHLIGHTS
(In thousands)
Schedule 2
Condensed Consolidated Cash Flow Data
Three Months Ended Twelve Months Ended
------------------ -------------------
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2008 2007 2008 2007
-------- -------- -------- --------
Cash flows from continuing
operations
Cash flows from operating
activities:
Net income (loss) $ (2,497) $ 4,567 $ 10,708 $ 8,665
Adjustments to reconcile net
income to net cash used in
operating activities:
(Income) loss from
discontinued operations (980) 1,803 (185) 1,971
Minority Interest (69) (76) 80 (82)
Depreciation and
amortization 3,019 3,309 12,365 13,117
Deferred income taxes (3,048) (1,786) 4,850 (1,233)
Net Periodic post-retirement
benefits 166 673 322 1,087
-------- -------- -------- --------
(3,409) 8,490 28,140 23,525
-------- -------- -------- --------
Changes in operating assets
and liabilities:
Accounts receivable 17,021 7,054 7,052 (2,001)
Inventories 3,259 9,029 (15,440) 9,076
Prepaids 1,997 75 762 --
Accounts payable (15,687) (3,038) (1,902) (1,268)
Accrued and other liabilities (5,008) (4,428) 1,242 (5,795)
Accrued interest 3,515 4,174 (1,474) (225)
Other long-term liabilities 179 (3,453) (838) (3,453)
Other, net 351 5,048 103 3,154
-------- -------- -------- --------
5,627 14,461 (10,495) (512)
-------- -------- -------- --------
Net cash provided by
operating activities 2,218 22,951 17,645 23,013
-------- -------- -------- --------
Cash flows from investing
activities:
Capital expenditures (5,268) (2,730) (13,393) (11,358)
Proceeds from sales of assets -- -- 500 13,783
Purchase of minority interest (838) -- (838) --
Purchase of outside interest
in joint venture (42) -- (3,055) --
Other, net (366) 496 (757) (487)
-------- -------- -------- --------
Net cash provided by (used
in) investing activities (6,514) (2,234) (17,543) 1,938
-------- -------- -------- --------
Cash flows from financing
activities:
Borrowings under Working
Capital Facility 3,290 -- 27,751 20,041
Repayments of Working Capital
Facility 872 (14,943) (7,878) (24,989)
Repayments of other debt 40 (1,785) (22,789) (16,725)
Advances to discontinued
operations 665 1,221 (2,657) (837)
Other, net (1,078) 76 2,420 1,664
-------- -------- -------- --------
Net cash provided by (used
in) financing activities 3,789 (15,431) (3,153) (20,846)
-------- -------- -------- --------
Effect of exchange rate
changes on cash and cash
equivalents (1,308) (125) (1,192) 744
-------- -------- -------- --------
Net cash provided by (used
in) continuing operations $ (1,815) $ 5,161 $ (4,243) $ 4,849
======== ======== ======== ========
Cash flows from discontinued
operations
Net cash provided by (used in)
operating activities $ 137 $ 834 $ (2,574) $ 812
Net cash provided by (used in)
investing activities -- 6,053 500 5,084
Net cash provided by (used in)
financing activities 334 (6,754) 2,538 (5,650)
Effect of exchange rates on
cash and cash equivalents (113) 20 (155) 30
-------- -------- -------- --------
Net cash provided by (used in)
discontinued operation $ 358 $ 153 $ 309 $ 276
======== ======== ======== ========
Total increase (decrease) in
cash and cash equivalents $ (1,457) $ 5,314 $ (3,934) $ 5,125
Total cash and cash equivalents
beginning of period (including
cash of discontinued
operations) 13,958 11,121 16,435 11,310
-------- -------- -------- --------
Total cash and cash equivalents
end of period (including cash
of discontinued operations) $ 12,501 $ 16,435 $ 12,501 $ 16,435
======== ======== ======== ========
The financial statement presentations reflect the reclassification of
the Company's discontinued operations
THERMADYNE HOLDINGS CORPORATION
FINANCIAL HIGHLIGHTS
(In thousands)
Schedule 3
December 31, December 31,
2008 2007
------------ ------------
ASSETS
Cash and cash equivalents $ 11,916 $ 16,159
Accounts receivable, net 72,044 83,852
Inventories 102,479 90,961
Prepaid expenses and other 5,443 6,147
Deferred tax assets 2,277 2,721
Assets held for sale 916 2,023
------------ ------------
Total current assets 195,075 201,863
Property, plant and equipment, net 47,501 44,356
Goodwill 184,043 182,163
Intangibles, net 60,783 63,204
Other assets 6,967 5,841
------------ ------------
Total assets $ 494,369 $ 497,427
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Working capital facility $ 32,531 $ 12,658
Current maturities of long-term obligations 2,060 8,778
Accounts payable 30,823 31,577
Accrued and other liabilities 28,295 28,826
Accrued interest 6,558 8,032
Income taxes payable 2,849 4,664
Deferred tax liabilities 3,253 2,667
Liabilities applicable to assets held for
sale 5,266 7,417
------------ ------------
Total current liabilities 111,635 104,619
Long-term obligations, less current
maturities 199,454 213,142
Deferred tax liabilities 47,292 44,306
Other long-term liabilities 17,685 12,989
Minority interest -- 287
Total shareholders' equity 118,303 122,084
------------ ------------
Total liabilities and shareholders'
equity $ 494,369 $ 497,427
============ ============
December 31, December 31,
Long-term Obligations 2008 2007
------------ ------------
Working Capital Facility $ 32,531 $ 12,658
Second-Lien Facility 14,000 36,000
Senior Subordinated Notes, due February 1,
2014, 9 1/4% interest payable semiannually
on February 1 and August 1 175,000 175,000
Capital leases and other 12,514 10,920
------------ ------------
234,045 234,578
Current maturities and working capital
facility (34,591) (21,436)
------------ ------------
$ 199,454 $ 213,142
============ ============
The financial statement presentations reflect the reclassification of
the Company's discontinued operations
THERMADYNE HOLDINGS CORPORATION
FINANCIAL HIGHLIGHTS
(In thousands)
Schedule 4
Working Capital Efficiency Information
2008 2007
-------------------------------------- --------
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
-------- -------- -------- -------- --------
Accounts receivable,
net $ 72,044 $ 93,842 $ 95,997 $ 90,869 $ 83,852
Inventories 102,479 109,539 99,576 90,231 90,961
Accounts payable (30,823) (47,857) (47,235) (36,080) (31,577)
-------- -------- -------- -------- --------
$143,700 $155,524 $148,338 $145,020 $143,236
======== ======== ======== ======== ========
% Annualized Sales 34.3% 27.9% 26.1% 27.7% 28.6%
DSO 62.0 60.6 60.8 62.5 60.4
Inventory Turns 3.08 3.49 3.81 3.92 3.70
DPO 35.1 45.1 44.8 36.7 33.8
Calculation Notes
-----------------------------
% Annualized Sales = Net amount compared to annualized quarterly sales
DSO = Accounts receivable compared to related quarterly sales divided
by 90
Inventory Turns = Quarterly cost of sales annualized divided by
inventory
DPO = Accounts payable compared to related quarterly cost of sales
divided by 90
The financial statement presentations reflect the reclassification of
the Company's discontinued operations
THERMADYNE HOLDINGS CORPORATION
FINANCIAL HIGHLIGHTS
(In millions)
Schedule 5
Reconciliations of Net Loss from continuing operations to Operating
EBITDA(1) and Operating EBITDA, as adjusted
Three Months Ended
December 31,
------------------
2008 2007
-------- --------
Net income (loss) from continuing operations $ (3.4) $ 6.4
Plus:
Depreciation and amortization including deferred
financing fees 3.0 3.3
Interest expense 4.6 5.8
Net periodic postretirement benefits in excess of
cash payments 0.1 0.4
LIFO 2.1 (1.7)
Minority interest (0.1) (0.1)
Severance accrual 3.8 0.6
Stock compensation expense (1.1) 0.4
Provision for income taxes (1.0) 0.2
-------- --------
Operating EBITDA, as adjusted, from continuing
operations(1) $ 8.0 $ 15.3
Percentage of Net Sales 7.6% 12.2%
EBITDA from discontinued operations 1.0 (1.8)
-------- --------
Operating EBITDA, as adjusted(1) $ 9.0 $ 13.5
======== ========
Twelve Months Ended
December 31,
------------------
2008 2007
-------- --------
Net income from continuing operations $ 10.5 $ 10.6
Plus:
Depreciation and amortization including deferred
financing fees 12.4 13.1
Interest expense 20.3 26.8
Net periodic postretirement benefits in excess of
cash payments 0.1 0.8
LIFO 4.1 0.8
Minority interest 0.1 (0.1)
Severance accrual 4.0 0.6
Stock compensation expense 0.5 1.6
Provision for income taxes 12.1 5.5
-------- --------
Operating EBITDA, as adjusted, from continuing
operations(1) $ 64.1 $ 59.7
Percentage of Net Sales 12.4% 12.1%
EBITDA from discontinued operations 0.3 (1.1)
-------- --------
Operating EBITDA, as adjusted(1) $ 64.4 $ 58.6
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(1) A Non-GAAP measure
The financial statement presentations reflect the reclassification of
the Company's discontinued operations