EXHIBIT 99.1

ASV Holdings, Inc. Reports First Quarter 2018 Results

 

Grand Rapids, MN, May 8, 2018 — ASV Holdings, Inc. (Nasdaq: ASV), a leading provider of rubber-tracked compact track loaders and wheeled skid steer loaders in the compact construction equipment market, today announced First Quarter 2018 results.

For the three months ended March 31, 2018, the Company reported Net Sales of $29.9 million and a Net Loss of $(0.3) million or $(0.03) per share compared to Net Sales of $28.0 million and Net Income of $0.2 million or $0.03 per share for the three months ended March 31, 2017.

First Quarter 2018 Highlights

$29.9 million in Net Sales represented a year-over-year increase of 6.8% over $28.0 million in the first quarter of 2017.

Machine sales revenues to North American distribution grew 31% compared to first quarter 2017. Approximately 50% of this growth was from dealers signed before December 31, 2017.

Total machine sales revenues increased year-over-year by 13.5% to $21.2 million.

Adjusting for the costs of relocating the distribution center, adjusted first quarter 2018 net income* of $0.2 million or $0.02 per share, compared to first quarter 2017 adjusted pro forma C Corporation net loss of $(0.1) million or $(0.02) per share

EBITDA of $1.3 million or 4.2% of sales compared to $2.3 million or 8.3% of sales for the first quarter of 2017.

Adjusted EBITDA* of $2.0 million or 6.7% of sales compared to first quarter 2017 pro forma adjusted EBITDA of $2.0 million or 7.1% of sales.

Completed relocation of aftermarket parts distribution center to Grand Rapids, MN.

Added 26 additional dealer / rental locations in the quarter.

*The Glossary at the end of this press release contains further details regarding reconciliation of GAAP items and Adjusted and Pro-forma items.

Chairman and Chief Executive Officer, Andrew Rooke commented, “Our focus on rebuilding the North American ASV dealership network resulted in 31% year-over-year growth in North American ASV machine sales, and we anticipate continued strength in North America throughout the year. Australia’s record Q1 performance last year did not repeat, however, we anticipate this region to generate healthy sales and growth in 2018. We expect bottom line improvement throughout the year through higher net sales, product mix improvement, and the cost benefits from higher plant utilization, and from engineering and manufacturing efficiencies. Although the possible effect on demand of recently implemented surcharge pricing to offset higher steel and aluminum costs is a potential headwind, our products continue to see a healthy level of demand, and our dealer network continues to grow. We are working hard to achieve gradual margin expansion and higher levels of EBITDA margin and profitability as we scale and grow the business.”

 

 

Missi How, Chief Financial Officer, commented, “Adjusting for relocation costs that were incurred in the quarter, we were able to achieve a positive adjusted net income of 2 cents per share versus a loss last year.  While this is satisfactory, we understand there is more work to do. We believe that cost and efficiency savings from relocating the parts distribution facility will start in the second quarter and we have already achieved the projected $200,000 quarterly reduction in our interest expense from our recent debt restructuring, which will continue throughout the year. Our current ratio of 2.1 remains healthy, our leverage ratio at 2.6x trailing adjusted EBITDA is well within target range, and we will continue to pay down debt with our cash flow during the year.”

 

 

Conference Call:

 

—  more  —


Management will host a conference call at 4:30 PM Eastern Time today to discuss the results with the investment community. Anyone interested in participating in the call should dial 1-888-394-8218 if calling within the United States or 323-701-0225 if calling internationally. A replay will be available until 11:59 PM ET May 15, 2018 which can be accessed by dialing 844-512-2921 if calling within the United States or 412-317-6671 if calling internationally. Please use passcode 8796131 to access this replay. The call will additionally be broadcast live and archived for 90 days over the internet with accompanying slides, accessible at the investor relations portion of the Company's corporate website, www.asvi.com in the “Investors” section.

About ASV Holdings, Inc. ASV Holdings, Inc. is a designer and manufacturer of compact construction equipment. Its patented Posi-Track rubber tracked, multi-level suspension undercarriage system provides a competitive market differentiator for its Compact Track Loader (CTL) product line with brand attributes of power, performance and serviceability.  It’s wheeled Skid Steer Loaders (SSLs) also share the common brand attributes. Equipment is sold through an independent dealer network throughout North America, Australia, and New Zealand. The company also sells OEM equipment and aftermarket parts. ASV owns and operates a 238,000 square-foot production facility in Grand Rapids, MN.

Forward-Looking Statements

 

This release contains forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “intends” or “continue,” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology. Forward-looking statements in this release include, without limitation: (1) projections of revenue, earnings, capital structure and other financial items, (2) statements of our plans and objectives, (3) statements regarding the capabilities and capacities of our business operations, (4)  statements of expected future economic conditions and the effect on us and on dealers or OEM customers, (5) expected benefits of our cost reduction measures, and (6) assumptions underlying statements regarding us or our business.

Our actual results may differ from information contained in these forward looking-statements for many reasons, including those described in the section entitled “Risk Factors” in our Registration Statement on Form S-1 (SEC File No. 333-216912), which was filed in connection with our initial public offering and our Form 10K for the year ended December 31, 2017, which are available on our EDGAR page at www.sec.gov. These statements are only current predictions and are subject to known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from those anticipated by the forward-looking statements. We discuss many of these risks in greater detail under the heading “Risk Factors” and elsewhere in the Registration Statement on Form S-1. You should not rely upon forward-looking statements as predictions of future events.  Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by law, after the date of this release, we are under no duty to update or revise any of the forward-looking statements, whether as a result of new information, future events or otherwise.

We obtained the industry, market and competitive position data in this release from our own internal estimates and research as well as from industry and general publications and research surveys and studies conducted by third parties. While we believe that each of these studies and publications is reliable, we have not independently verified market and industry data from third-party sources. While we believe our internal company research is reliable and the market definitions we use are appropriate, neither such research nor these definitions have been verified by any independent source.

We from time to time refer to various non-GAAP financial measures in this release.  We believe that this information is useful to understanding our operating results by excluding certain items that may not be indicative of our core operating results and business outlook.  Reference to these non-GAAP financial measures should not be considered as a substitute for, or superior to, results that are presented in a manner consistent with GAAP.  Rather, the non-GAAP financial information should be considered in addition to results that are presented in a manner consistent with GAAP.  A reconciliation of non-GAAP financial measures referred to in this release is provided in the tables at the conclusion of this release.

 

Company Contact

ASV Holdings, Inc.

Darrow Associates Inc.

Andrew RookePeter Seltzberg, Managing Director

Chairman and Chief Executive OfficerInvestor Relations

218-327-5389(516) 419-9915

andrew.rooke@asvi.compseltzberg@darrowir.com

 


ASV Holdings, Inc.

Condensed Statements of Operations

(In thousands, except par value and per share data)

 

 

 

For the Three Months Ended March 31,

 

 

 

2018

 

 

2017

 

 

 

Unaudited

 

 

Unaudited

 

Net sales

 

$

29,870

 

 

$

28,010

 

 

 

 

 

 

 

 

 

 

Cost of goods sold

 

 

25,928

 

 

 

23,650

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

3,942

 

 

 

4,360

 

 

 

 

 

 

 

 

 

 

Research and development costs

 

 

471

 

 

 

537

 

Selling, general and administrative expense

 

 

3,407

 

 

 

2,713

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

64

 

 

 

1,110

 

 

 

 

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

 

-

 

Interest expense

 

 

(458

)

 

 

(878

)

Other income (expense)

 

 

6

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Total other expense

 

 

(452

)

 

 

(878

)

 

 

 

 

 

 

 

 

 

(Loss) income before taxes

 

 

(388

)

 

 

232

 

 

 

 

 

 

 

 

 

 

Income tax benefit

 

 

(81

)

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

$

(307

)

 

$

232

 

 

 

 

 

 

 

 

 

 

(Loss) earnings per share:

 

 

 

 

 

 

 

 

Basic net (loss) income per share

 

$

(0.03

)

 

$

0.03

 

Diluted net (loss) income per share

 

$

(0.03

)

 

$

0.03

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

Basic weighted average common shares outstanding

 

 

9,816

 

 

 

8,000

 

Diluted weighted average common shares outstanding

 

 

9,816

 

 

 

8,000

 

 

 

 

 

 

 

 

 

 

Pro forma (C corporation basis):

 

 

 

 

 

 

 

 

Pro forma tax expense

 

N/A

 

 

$

84

 

Pro forma net income

 

N/A

 

 

$

148

 

 

 

 

 

 

 

 

 

 

Pro forma earnings per share:

 

 

 

 

 

 

 

 

Basic net income per share

 

N/A

 

 

$

0.02

 

Diluted net income per share

 

N/A

 

 

$

0.02

 


 

 

 

ASV Holdings, Inc.

Balance Sheets

(In thousands, except par value)

 

 

March 31,

 

 

December 31,

 

 

 

2018

 

 

2017

 

 

 

Unaudited

 

 

Unaudited

 

ASSETS

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

 

Cash

 

$

4

 

 

$

3

 

Trade receivables, net

 

 

17,044

 

 

 

18,276

 

Receivables from affiliates

 

 

33

 

 

 

76

 

Inventory, net

 

 

28,029

 

 

 

26,691

 

Prepaid income tax

 

 

997

 

 

 

896

 

Prepaid expenses and other

 

 

325

 

 

 

591

 

Total current assets

 

 

46,432

 

 

 

46,533

 

 

 

 

 

 

 

 

 

 

NON-CURRENT ASSETS

 

 

 

 

 

 

 

 

Property, plant and equipment, net

 

 

13,613

 

 

 

13,797

 

Intangible assets, net

 

 

22,640

 

 

 

23,277

 

Goodwill

 

 

30,579

 

 

 

30,579

 

Deferred financing costs - revolving loan facility

 

 

280

 

 

 

298

 

Other long-term assets

 

 

13

 

 

 

13

 

Deferred tax asset

 

 

624

 

 

 

624

 

Total assets

 

$

114,181

 

 

$

115,121

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Note payable - current portion

 

$

2,000

 

 

$

2,000

 

Trade accounts payable

 

 

14,600

 

 

 

15,174

 

Payables to affiliates

 

 

1,200

 

 

 

1,063

 

Accrued compensation and benefits

 

 

932

 

 

 

1,483

 

Accrued warranties

 

 

1,666

 

 

 

1,869

 

Accrued product liability- short term

 

 

553

 

 

 

778

 

Accrued other

 

 

1,128

 

 

 

1,039

 

Total current liabilities

 

 

22,079

 

 

 

23,406

 

 

 

 

 

 

 

 

 

 

NON-CURRENT LIABILITIES

 

 

 

 

 

 

 

 

Revolving loan facility

 

 

13,594

 

 

 

12,511

 

Note payable - long term, net

 

 

12,181

 

 

 

12,664

 

Other long-term liabilities

 

 

689

 

 

 

739

 

Total liabilities

 

 

48,543

 

 

 

49,320

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Preferred stock, $0.001 par value, 5,000 authorized, none outstanding at March 31, 2018 and December 31, 2017, respectively

 

 

 

 

 

 

Common stock, $0.001 par value, 50,000 authorized, 9,818 and 9,806 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively

 

 

10

 

 

 

10

 

Additional paid-in capital

 

 

65,578

 

 

 

65,434

 

Retained earnings

 

 

50

 

 

 

357

 

Total Stockholders' Equity

 

 

65,638

 

 

 

65,801

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$

114,181

 

 

$

115,121

 

 

 


ASV Holdings, Inc.

Statements of Cash Flows

(In thousands)

 

 

 

For the Three Months Ended March 31,

 

 

 

2018

 

 

2017

 

 

 

Unaudited

 

 

Unaudited

 

OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

Net (loss) income

 

$

(307

)

 

$

232

 

Adjustments to reconcile to net (loss) income to net cash

 

 

 

 

 

 

 

 

provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation

 

 

547

 

 

 

584

 

Amortization

 

 

637

 

 

 

637

 

Share-based compensation

 

 

149

 

 

 

46

 

Loss on sale of fixed assets

 

 

 

 

 

38

 

Amortization of deferred finance cost

 

 

35

 

 

 

56

 

Bad debt expense

 

 

37

 

 

 

1

 

Inventory reserves

 

 

93

 

 

 

 

Changes in operating assets and liabilities

 

 

 

 

 

 

 

 

Trade receivables

 

 

1,195

 

 

 

(1,394

)

Net trade receivables/payables from affiliates

 

 

180

 

 

 

291

 

Inventory

 

 

(1,464

)

 

 

2,348

 

Prepaid expenses

 

 

165

 

 

 

(381

)

Trade accounts payable

 

 

(574

)

 

 

(430

)

Accrued expenses

 

 

(844

)

 

 

(1,316

)

Other long-term liabilities

 

 

(50

)

 

 

420

 

 

 

 

 

 

 

 

 

 

Net cash (used in) provided by operating activities

 

 

(201

)

 

 

1,132

 

 

 

 

 

 

 

 

 

 

INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

Decrease in restricted cash

 

 

 

 

 

536

 

Purchase of property and equipment

 

 

(330

)

 

 

(38

)

 

 

 

 

 

 

 

 

 

Net cash (used in) provided by investing activities

 

 

(330

)

 

 

498

 

 

 

 

 

 

 

 

 

 

FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Principal payments on term debt

 

 

(500

)

 

 

(538

)

Debt issuance costs incurred

 

 

 

 

 

(9

)

Shares repurchased for income tax withholding on share-based compensation

 

 

(51

)

 

 

 

Net borrowings (payments) on revolving credit facilities

 

 

1,083

 

 

 

(1,646

)

 

 

 

 

 

 

 

 

 

Net cash provided by (used in) financing activities

 

 

532

 

 

 

(2,193

)

 

 

 

 

 

 

 

 

 

NET CHANGE IN CASH

 

 

1

 

 

 

(563

)

 

 

 

 

 

 

 

 

 

Cash at beginning of period

 

 

3

 

 

 

572

 

 

 

 

 

 

 

 

 

 

Cash at end of period

 

$

4

 

 

$

9

 

 

 

 

 

 

 

 

 


Supplemental Information

Cautionary Statement Regarding Non-GAAP Measures

This release contains references to “EBITDA” and “Adjusted EBITDA.” EBITDA is defined for the purposes of this release as net income or loss before interest, income taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA less the gain or loss related to non-recurring events. Management believes that EBITDA and Adjusted EBITDA are useful supplemental measures of our operating performance and provide meaningful measures of overall corporate performance exclusive of our capital structure and the method and timing of expenditures associated with building and placing our products. EBITDA is also presented because management believes that it is frequently used by investment analysts, investors and other interested parties as a measure of financial performance. Adjusted EBITDA is also presented because management believes that it provides a measure of our recurring core business.

However, EBITDA and Adjusted EBITDA are not recognized earnings measures under generally accepted accounting principles of the United States (“U.S. GAAP”) and do not have a standardized meaning prescribed by U.S. GAAP. Therefore, EBITDA and Adjusted EBITDA may not be comparable to similar measures presented by other issuers. Investors are cautioned that EBITDA and Adjusted EBITDA should not be construed as alternatives to net income or loss or other income statement data (which are determined in accordance with U.S. GAAP) as an indicator of our performance or as a measure of liquidity and cash flows. Management’s method of calculating EBITDA and Adjusted EBITDA may differ materially from the method used by other companies and accordingly, may not be comparable to similarly titled measures used by other companies.


 

Reconciliation of EBITDA to Adjusted EBITDA (in millions except percentages)  

 

 

 

 

 

 

 

 

 

 

 

 

For the Quarter Ended March 31,

 

 

 

2018

 

2017

 

Net (loss) income

 

($0.3)

 

$0.2

 

Interest expense

 

                            0.5

 

                            0.9

 

Depreciation & amortization

 

                            1.2

 

                            1.2

 

Income tax benefit

 

                          (0.1)

 

                              -  

 

EBITDA (1)

 

$1.3

 

$2.3

 

% of Sales

 

4.2%

 

8.3%

 

 

 

 

 

 

 

EBITDA

 

$1.3

 

$2.3

 

Costs of ConExpo trade show (2)

 

                              -  

 

                            0.1

 

Revision to accrual for legal proceeding expenses less
   legal costs (3)

 

                              -  

 

                          (0.2)

 

Stock compensation and transaction related compensation costs (4)

 

                            0.1

 

                            0.1

 

Aftermarket parts distribution center relocation (5)

 

                            0.6

 

                              -  

 

Adjusted EBITDA (6)

 

$2.0

 

$2.4

 

Adjusted EBITDA as % of net revenues

 

6.8%

 

8.5%

 

Pro-forma adjustment for public company costs

 

                              -  

 

                          (0.4)

 

Pro-forma Adjusted EBITDA* (7)

 

$2.0

 

$2.0

 

% of Sales

 

6.7%

 

7.1%

 


The Company converted to a C corporation in May 2017, so the three months ended March 31, 2017 include a pro forma adjustment for approximately $0.4 million of public company costs not included in EBITDA.

 

(1)

EBITDA is defined as income or loss before interest, income taxes, depreciation and amortization. EBITDA is not a recognized measure under U.S. GAAP and does not have a standardized meaning prescribed by U.S. GAAP. Therefore, EBITDA may not be comparable to similar measures presented by other companies. The table above reconciles net income to EBITDA. See “—Cautionary Statements Regarding Non-GAAP Measures” for further information regarding EBITDA.

(2)

Costs associated with the 2017 ConExpo trade show.  The ConExpo show, which is held every three years, was held in Las Vegas in March of this year. This show is an international gathering place for the construction industries. It is estimated that 130,000 professionals from around the world attended the show.

(3)

Revision to accrual for legal proceeding expenses is included in Adjusted EBITDA since it is an adjustment in the period to an accrual established at the formation of the Joint Venture and is not representative of the operating activity in the reported period. This adjustment was due to the settlement of a legal claim lower than the accrued cost.

(4)

Stock compensation and IPO transaction related compensation costs.

(5)

Aftermarket Parts Distribution Center relocation costs are restructuring costs related to the movement of the ASV aftermarket parts operation from Southaven Memphis to a facility adjacent to the Company principal premises in Grand Rapids MN, which commenced in quarter four of 2017 and was completed in quarter one of 2018.

(6)

Adjusted EBITDA is defined as EBITDA less the gain or loss related to non-recurring events. Adjusted EBITDA is not a recognized measure under U.S. GAAP and does not have a standardized meaning prescribed by U.S. GAAP. Therefore, Adjusted EBITDA may not be comparable to similar measures presented by other companies. The table above reconciles EBITDA to Adjusted EBITDA. See “—Cautionary Statements Regarding Non-GAAP Measures” for further information regarding EBITDA.

(7)

2017 Pro Forma Adjusted EBITDA is defined as Adjusted EBITDA less public company costs

 

Reconciliation of GAAP Net Income to Adjusted Net Income (in millions except shares and EPS)  

 

 

 

 

 

 

 

 

 

 

 

 

For the Quarter Ended March 31,

 

 

 

2018

 

2017

 

Net (loss) income as reported

 

($0.3)

 

$0.2

 

Revision to legal costs accrual

 

                               -  

 

                               -  

 

Aftermarket parts distribution center relocation- net of tax effect

 

                            0.5

 

                               -  

 

Loss on debt extinguishment

 

                               -  

 

                               -  

 

Pro-forma adjustment for public company costs

 

                               -  

 

                          (0.4)

 

Pro-forma income before tax

 

                            0.2

 

                          (0.2)

 

Pro forma (C corporation basis) tax

 

$0.0

 

$0.1

 

Adjusted net income (loss)

 

$0.2

 

($0.1)

 

 

 

 

 

 

 

Weighted average diluted shares outstanding

 

9,816,000

 

8,000,000

 

Basic and Diluted (loss) earnings per share as reported

 

($0.03)

 

$0.03

 

Total EPS Effect

 

$0.05

 

($0.05)

 

Adjusted (pro forma C Corporation) earnings (loss) per share

 

$0.02

 

($0.02)

 

 

*Pro forma adjustments for public company costs and (C corporation basis) tax expense: The company converted from a LLC to a corporation on May 11, 2017. The pro forma adjustments reflect the actual public company costs incurred in 2018 as if the company had been a corporation for the same period in 2017, and a pro forma (C corporation basis) tax charge on 2017 income at a tax rate of 36%.


 

Current Ratio

 

 

March 31, 2018

December 31, 2017

Current Assets

$46,432

$46,533

Current Liabilities

$22,079

$23,406

Current Ratio

2.1

2.0

 

Days Sales Outstanding, (DSO), is calculated by taking the sum of net trade and related party receivables divided by annualized sales per day (sales for the quarter, multiplied by 4, and the sum divided by 365).

 

Days Payables Outstanding, (DPO), is calculated by taking the sum of net trade and related party payables divided by annualized cost of sales per day (cost of goods sold for the quarter, multiplied by 4, and the sum divided by 365).

 

Debt net of deferred financing costs is calculated using the Condensed Consolidated Balance Sheet amounts for 1) deferred financing costs – revolving loan facility, 2) note payable – short term, 3) revolving loan facility and 4) note payable – long term net. Debt to Adjusted EBITDA ratio is calculated by dividing total debt at the balance sheet date by trailing twelve month Adjusted EBITDA.

 

 

 

March 31, 2018

December 31, 2017

Note payable – short term

2,000

2,000

Deferred financing costs – revolving loan facility

(280)

(298)

Revolving loan facility

13,594

12,511

Note payable – long term -net

12,181

12,664

Debt

$27,495

$26,877

 

Inventory turns are calculated by multiplying cost of goods sold for the referenced three-month period by 4 and dividing that figure by inventory as at the referenced period.

 

Net working capital as a % of annualized last quarter’s sales is the sum of accounts receivable and inventory less accounts payable divided by the last quarter’s sales annualized (x4).

 

 

March 31, 2018

December 31, 2017

Accounts receivable

17,077

18,352

Inventory

28,029

26,691

Accounts payable

(15,800)

(16,237)

Net working capital

$29,306

$28,806

Last quarters annualized sales (LQS)

119,480

121,820

Net working capital % of LQS

24.5%

23.6%

 

 

Working capital is calculated as total current assets less total current liabilities

 

 

March 31, 2018

December 31, 2017

Total Current Assets

$46,432

$46,533

Less: Total Current Liabilities

22,079

23,406

Working Capital

$24,353

$23,127