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Aearo Co I (1290498) SEC Filing 10-K Annual report for the fiscal year ending Friday, September 30, 2005

Aearo Co I

CIK: 1290498

EX-99.1
2
b409945_ex99-1.txt
PRESS RELEASE



                                                                    Exhibit 99.1


               Aearo Announces Record Results for Fiscal Year 2005



INDIANAPOLIS, November 21, 2005 - Aearo Company I (the "Company"), one of the
world's leading designers, manufacturers and marketers of a broad range of
personal protective products, today announced net sales for the year ended
September 30, 2005 increased $60.6 million, or 16.7%, to $423.4 million from
$362.8 million for the year ended September 30, 2004. Adjusted EBITDA increased
25.0% to $77.8 million for the year ended September 30, 2005 from $62.2 million
for the year ended September 30, 2004. Net income for the year months ended
September 30, 2005 increased to $27.6 million from $3.5 million for the year
ended September 30, 2004. This performance represents the best fiscal year for
sales and earnings in the Company's history.

The increase in net sales was primarily driven by organic growth in the Safety
Products and Specialty Composites segments and foreign currency translation. The
weakness of the U.S. dollar favorably impacted net sales by $7.7 million or
2.1%.

Gross profit for the year ended September 30, 2005 increased 33.1% to $206.7
million from $155.3 million for the year ended September 30, 2004. Gross profit
for 2004 was adversely affected by a non-recurring charge of $17.1 million
resulting from the write-up of inventory required by SFAS No. 141 on the merger
date and subsequent sale of such inventory. Gross profit as a percentage of
sales for the year ended September 30, 2005 was 48.8% as compared to 47.5% for
the year ended September 30, 2004 with fiscal year 2004 calculated by excluding
the effects of the purchase accounting adjustment. The improvement in the gross
profit percentage, to the highest annual gross profit percentage in the
Company's history, is primarily due to the favorable impacts of higher
manufacturing volumes in the Company's plants covering its manufacturing costs,
favorable product mix, productivity improvements and the impact of foreign
currency translation.

The provision for income taxes for the year ended Sept 30, 2005 was $11.2
million compared to $1.0 million for the year ended September 30, 2004. The
effective tax rate for the year ended September 30, 2005 and 2004 was different
from the statutory rate due to the mix of income between the Company's foreign
and domestic subsidiaries. The Company's foreign subsidiaries had taxable income
in their foreign jurisdictions while the Company's domestic subsidiaries have
net operating loss carry-forwards for income tax purposes.

The Company uses Adjusted EBITDA, a non-GAAP financial measure, as a management
tool to measure and monitor financial performance and as part of the calculation
of Company performance as stated in senior bank facility covenants. While the
Company believes Adjusted EBITDA is a useful indicator of its ability to service
debt, Adjusted EBITDA should not be considered as a substitute for net income
(loss) determined in accordance with GAAP as an indicator of operating
performance, or as an alternative to cash flow as a measure of liquidity.
Investors should be aware that Adjusted EBITDA may not be comparable to
similarly titled measures presented by other companies and comparisons could be
misleading unless all companies and analysts calculate this measure in the same
fashion.

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The following table provides a reconciliation of Adjusted EBITDA to net income
for the years ended September 30, 2005 and 2004, respectively:


TWELVE MONTHS ENDED SEPTEMBER 30, ------------------------------ 2005 2004 ---- ---- Adjusted EBITDA $ 77,827 $ 62,250 Depreciation 10,631 10,951 Amortization of intangibles 5,229 2,873 Other non-cash charges (income), net 1,181 (316) Inventory purchase accounting -- 17,067 Restructuring -- (1,091) Bond call premium -- 1,532 Interest 22,010 26,744 Taxes 11,187 1,036 -------- -------- Net Income $ 27,589 $ 3,454 ======== ========
Other non-cash charges are defined as extraordinary gains or losses, or gains or losses from sales of assets other than in the ordinary course of business. EARNINGS CALL The Company has scheduled a conference call to discuss its financial results on Tuesday, November 22, 2005 at 1:30 p.m. Eastern. The call in number is (703) 639-1156 conference ID 814697. A recording of the conference call will be available through November 29, 2005. The recording can be accessed by dialing (703) 925-2533, conference ID 814697. ABOUT AEARO Headquartered in Indianapolis, Ind., Aearo Company (www.aearo.com) is one of the world's leading designers, manufacturers and marketers of a broad range of personal protective products and energy-absorbing products, including head and hearing protection devices, prescription and non-prescription eyewear, and eye/face protection devices for use in a wide variety of industrial and household applications. 4 AEARO COMPANY I AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in Thousands, Except Share Amounts)
SEPTEMBER 30, SEPTEMBER 30, 2004 2005 ---- ---- ASSETS CURRENT ASSETS: Cash and cash equivalents $ 27,724 $ 30,068 Accounts receivable (net of allowance for doubtful accounts of $1,334 and $1,206, respectively) 54,159 61,998 Inventories 40,849 48,132 Deferred and prepaid expenses 4,146 8,385 --------- --------- Total current assets 126,878 148,583 --------- --------- LONG TERM ASSETS: Property, plant and equipment, net 54,750 50,444 Goodwill 133,745 107,887 Other intangible assets, net 185,855 180,787 Other assets 15,144 13,644 --------- --------- Total assets $ 516,372 $ 501,345 ========= ========= LIABILITIES CURRENT LIABILITIES: Current portion of long-term debt $ 1,639 $ 3,432 Accounts payable and accrued liabilities 46,730 58,632 Accrued interest 6,996 6,678 U.S. and foreign income taxes 1,648 1,888 --------- --------- Total current liabilities 57,013 70,630 --------- --------- LONG TERM LIABILITIES: Long-term debt 302,842 297,625 Deferred income taxes 59,699 45,340 Due to parent -- 1,161 Other liabilities 14,726 12,984 --------- --------- Total liabilities 434,280 427,740 COMMITMENTS AND CONTINGENT LIABILITIES STOCKHOLDER'S EQUITY Common stock, $.01 par value- Authorized--100 shares Issued and outstanding--100 shares -- -- Paid in capital 101,610 101,750 Accumulated deficit (19,415) (26,820) Accumulated other comprehensive loss (103) (1,325) --------- --------- Total stockholder's equity 82,092 73,605 --------- --------- Total liabilities and stockholder's equity $ 516,372 $ 501,345 ========= =========
5 AEARO COMPANY I AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in Thousands)
-------------------------------- ----------------------------------- PREDECESSOR SUCCESSOR -------------------------------- ----------------------------------- SIX SIX YEAR ENDED MONTHS ENDED MONTHS ENDED YEAR ENDED SEPTEMBER 30, MARCH 31, SEPTEMBER 30, SEPTEMBER 30, 2003 2004 2004 2005 ---- ---- ---- ---- Net sales $ 316,428 $ 169,579 $ 193,261 $ 423,420 Cost of sales 164,289 89,056 118,491 216,710 Restructuring (270) -- -- -- --------- --------- --------- --------- Gross profit 152,409 80,523 74,770 206,710 Selling and administrative 101,257 56,835 56,752 131,232 Research and technical services 6,402 3,623 4,028 9,175 Amortization expense 267 242 2,631 5,229 Other charges (income), net 1,737 (506) 1,545 288 Restructuring -- (1,091) -- -- --------- --------- --------- --------- Operating income 42,746 21,420 9,814 60,786 Interest income (107) (53) (33) (100) Interest expense 19,563 10,889 15,941 22,110 --------- --------- --------- --------- Income (loss) before provision for income taxes 23,290 10,584 (6,094) 38,776 Provision (benefit) for income taxes 2,603 2,020 (984) 11,187 --------- --------- --------- --------- Net income (loss) $ 20,687 $ 8,564 $ (5,110) $ 27,589 ========= ========= ========= =========
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The following information was filed by Aearo Co I on Monday, November 21, 2005 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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CIK: 1290498
Form Type: 10-K Annual Report
Accession Number: 0001125282-05-006158
Submitted to the SEC: Tue Nov 22 2005 11:50:32 AM EST
Accepted by the SEC: Tue Nov 22 2005
Period: Friday, September 30, 2005
Industry: Miscellaneous Manufacturing Industries

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