Anchor Glass Container Corporation reported financial results on 12 February 2004 for its 4Q and year ended 31 December 2003.
For the 4Q of 2003, net sales went up 6.5% to USD 167.1 million, from USD…
Anchor Glass Container Corporation reported financial results on 12 February 2004 for its 4Q and year ended 31 December 2003. For the 4Q of 2003, net sales went up 6.5% to USD 167.1 million, from USD 156.9 million in the prior year, reflecting a continuation of the stronger sales growth that began in the 3Q. Capital spending for the quarter totaled USD 38.7 million as the company carried out major reconstruction on the furnace in the Lawrenceburg, Indiana plant and on two of the three furnaces in the Salem, New Jersey plant. All three major rebuilds were completed on budget and the rebuilt furnaces are now fully operational. The strong growth in sales for the quarter was driven by a 9.3% increase in unit shipments, principally in the beer category. Robust sales and overall productivity improvements were offset by a significant increase in downtime costs related to the reconstruction of the three furnaces. The company absorbed an increase of approximately 200 machine days of downtime compared to the 4Q of 2002. Results were also affected by a year-over-year increase in the cost of natural gas (USD 2.9 million), and interest expense (USD 3.9 million). As a result of these factors, the company reported a net loss for the quarter of USD 11.3 million. EBITDA (see note below) totalled USD 18.0 million for the quarter. “Sales remained strong during the 4Q, continuing the positive trend from the 3Q,” said Richard M. Deneau, President and Chief Executive Officer. “We completed three more major capital improvement initiatives in the quarter along with several other minor initiatives. Even with these substantial investments, we ended the year undrawn on our revolver loan, so our liquidity position is excellent. These plant enhancements will drive significant productivity improvements in 2004.” For full-year 2003, net sales were USD 709.9 million, compared to USD 715.6 million in the prior year, a small decline of 0.8%. EBITDA declined 3.5% to USD 93.1 million, from USD 96.5 million in the prior year. These results reflect the high cost of natural gas in 2003, which resulted in a year-on-year cost increase of USD 18.0 million. It also includes the substantial increase in downtime incurred during the year as a result of the major capital improvement projects involving five of Anchor“s furnaces. These costs were nearly offset by productivity gains, pricing improvements, lower SG&A costs and reduced rent expenses. “We are looking forward to returning to a normal downtime schedule in 2004,” said Deneau. “We will have approximately 650 fewer days of machine downtime next year. These positive factors, combined with a strong 2004 order book, provide good momentum heading into the new year.” The Board of Directors of Anchor declared a quarterly dividend of USD 0.04 per share of its common stock. The dividend is payable 15 March 2004, to stockholders of record at the close of business on 1 March 2004. Anchor Glass Container Corporation is the third largest manufacturer of glass containers in the United States. It produces a diverse line of flint (clear), amber, green and other colored glass containers for the beer, beverage, food, liquor and flavored alcoholic beverage markets. Note: EBITDA is an amount equal to net income (loss) plus restructuring, net; reorganization items, net; interest expense; income taxes; depreciation and amortization; loss (gain) on fixed asset sales; and other non-cash items. EBITDA is not a presentation made in accordance with generally accepted accounting principles (GAAP) and is not intended to present a superior measure of financial condition or profitability from those determined under GAAP. EBITDA is a primary component of financial covenants under Anchor“s debt agreements. Although management uses this measure, it is not necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation.