This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Handy & Harman Ltd. Reports Fourth Quarter And Year End 2013 Financial Results And Outlook For 2014

Handy & Harman Ltd. (NASDAQ:HNH) ("HNH" or the "Company"), a diversified global industrial company, today announced operating results for the fourth quarter and year ended December 31, 2013. They are summarized in the following paragraphs. For a full discussion of the results, please see the Company's Form 10-K, which can be found at www.handyharman.com.

HNH reported net sales of $152.3 million for the quarter, as compared to $126.1 million for the same period in 2012. Income from continuing operations before tax and equity investment was $4.3 million in the fourth quarter of 2013, as compared to $3.8 million in the 2012 period. Net income for the fourth quarter of 2013 was $12.5 million, or $0.95 per basic and diluted common share, as compared to net income of $4.5 million, or $0.34 per basic and diluted common share for the same period in 2012.

For the year ended December 31, 2013, net sales were $655.2 million, as compared to $579.5 million in 2012. Income from continuing operations before tax and equity investment was $38.1 million, as compared to $35.2 million in 2012. Net income for the year was $42.0 million, or $3.17 per basic and diluted common share, as compared to net income of $26.5 million, or $2.03 per basic and diluted common share in 2012.

HNH generated Adjusted EBITDA of $14.2 million for the fourth quarter of 2013, as compared to $12.3 million for the same period in 2012, an increase of $2.0 million, or 16.1%. For the year, the Company generated Adjusted EBITDA of $77.5 million, as compared to $70.6 million in 2012, an increase of $7.0 million, or 9.9%. See "Note Regarding Use of Non-GAAP Financial Measurements" below for the definition of Adjusted EBITDA.

The Company currently anticipates, based on current information, full-year 2014 net sales and Adjusted EBITDA in the ranges of $648 million to $792 million, and $83 million to $101 million, respectively. The Company's outlook for the first quarter of 2014 is for net sales between $145 million and $177 million and Adjusted EBITDA between $14 million and $18 million.

Financial Summary

   
Three Months Ended Year Ended
(in thousands, except per share) December 31, December 31,
2013   2012 2013   2012
Net sales $ 152,309 $ 126,084 $ 655,224 $ 579,528
Gross profit 39,341 37,644 184,875 169,486
Gross profit margin 25.8 % 29.9 % 28.2 % 29.2 %
Operating income 5,536 7,056 50,950 49,790
Income from continuing operations before tax and equity investment 4,278 3,818 38,149 35,214
Tax provision 2,465 627 16,028 13,065
Gain from associated company, net of tax (10,888 )   (6,006 )  
Income from continuing operations, net of tax 12,701 3,191 28,127 22,149
Net (loss) income from discontinued operations (204 ) 1,312   13,902   4,332  
Net income $ 12,497   $ 4,503   $ 42,029   $ 26,481  
Basic and diluted income per share of common stock
Net income per share $ 0.95   $ 0.34   $ 3.17   $ 2.03  
 

Segment Results

   
 
Income Statement Data Three Months Ended Year Ended
(in thousands) December 31, December 31,
2013   2012 2013   2012
Net sales:
Joining Materials $ 42,696 $ 36,903 $ 195,187 $ 174,621
Tubing 22,374 17,893 91,002 80,849
Building Materials 49,064 38,114 226,806 189,106
Arlon 22,924 18,523 84,060 80,815
Kasco 15,251   14,651   58,169   54,137  
Total net sales $ 152,309   $ 126,084   $ 655,224   $ 579,528  
Segment operating (loss) income:
Joining Materials $ (462 ) $ 5,714 $ 16,624 $ 23,942
Tubing 4,270 2,731 17,434 14,258
Building Materials 4,204 3,573 27,789 22,172
Arlon 3,093 1,929 10,769 11,594
Kasco 1,247   1,351   4,496   4,431  
Total segment operating income 12,352   15,298   77,112   76,397  
Unallocated corporate expenses and non-operating units (5,550 ) (7,421 ) (20,895 ) (23,387 )
Unallocated pension expense (1,341 ) (830 ) (5,342 ) (3,313 )
Gain from asset dispositions 75   9   75   93  
Operating income 5,536   7,056   50,950   49,790  
Interest expense (1,738 ) (4,812 ) (13,705 ) (16,719 )
Realized and unrealized gain on derivatives 492 1,412 1,195 2,582
Other (expense) income (12 ) 162   (291 ) (439 )
Income from continuing operations before tax and equity investment $ 4,278   $ 3,818   $ 38,149   $ 35,214  
 

Supplemental Non-GAAP Disclosures

   
 
Adjusted EBITDA Three Months Ended Year Ended
(in thousands) December 31, December 31,
2013   2012 2013   2012
Income from continuing operations, net of tax $ 12,701 $ 3,191 $ 28,127 $ 22,149
Add (Deduct):
Gain from associated company, net of tax (10,888 ) (6,006 )
Tax provision 2,465 627 16,028 13,065
Interest expense 1,738 4,812 13,705 16,719
Unrealized (gain) loss on embedded derivatives related to sub-notes (606 ) 793 (2,060 )
Non-cash derivative and hedge gain on precious metal contracts (492 ) (806 ) (1,988 ) (522 )
Non-cash adjustment to precious metal inventory valued at LIFO 1,407 (1,110 ) (426 ) (936 )
Depreciation and amortization 4,144 3,472 16,138 13,343
Non-cash pension expense 1,341 830 5,342 3,313
Non-cash stock-based compensation 1,213 1,017 4,860 4,476
Other items, net 608   838   969   1,009  
Adjusted EBITDA $ 14,237   $ 12,265   $ 77,542   $ 70,556  
 

Note Regarding Use of Non-GAAP Financial Measurements

The financial data contained in this press release includes certain non-GAAP financial measurements as defined by the Securities and Exchange Commission ("SEC"), including "Adjusted EBITDA." The Company is presenting Adjusted EBITDA because it believes that it provides useful information to investors about HNH, its business, and its financial condition. The Company defines Adjusted EBITDA as income or loss from continuing operations before the effects of gains or losses from investment in associated company, realized and unrealized gains or losses on derivatives, interest expense, taxes, depreciation and amortization, LIFO liquidation gains or losses, and non-cash pension expense, and excludes certain non-recurring and non-cash items. The Company believes Adjusted EBITDA is useful to investors because it is one of the measures used by the Company's Board of Directors and management to evaluate its business, including in internal management reporting, budgeting, and forecasting processes, in comparing operating results across the business, as an internal profitability measure, as a component in evaluating the ability and the desirability of making capital expenditures and significant acquisitions, and as an element in determining executive compensation.

1 of 4

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,279.74 +13.75 0.08%
S&P 500 2,010.40 -0.96 -0.05%
NASDAQ 4,579.7870 -13.6380 -0.30%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs