RE: Real Industry, Inc. (RELY) ... fka Signature Group Holdings
Reports First Quarter 2015 Results (5/12/15)
SHERMAN OAKS, Calif.--(BUSINESS WIRE)--Signature Group Holdings, Inc. (NASDAQ:RELY) (“Signature” or the “Company”) today reported financial results for its first quarter ended March 31, 2015.
• Consolidated net earnings of $6.8 million
• Adjusted EBITDA of $7.9 million of Real Alloy business – 33 days
• Completed rights offering on April 28, 2015, with respect to its warrant holders, raising $4.8 million
Management Commentary
Craig Bouchard, Signature’s Chairman and CEO, stated, “The 2015 first quarter results reflect the acquisition of Aleris Corporation’s global recycling and specifications alloy business (now named “Real Alloy”), multiple securities offerings, and the sale of North American Breaker Co., LLC (“NABCO”). In doing so, the Company was transformed from a modest but well-performing operating business into a leader in a critical, growing industry. We are pleased with the ongoing transition effort and have begun to implement Six Sigma Lean initiatives at Real Alloy.
“During the quarter we proposed two new directors for our Board. Patrick Deconinck and William Hall will be fantastic additions. Patrick will chair a newly formed Operations and Lean/Six Sigma Committee of the Board. His career at 3M makes him the perfect candidate for this responsibility. Bill’s experience is full of exceptional operational and industrial accomplishments, and he will participate on this committee as well.
“The 2015 first quarter results include only one month of performance from Real Alloy, and there are a number of one-time impacts resulting from the various transactions that took place during the period. At Signature, we believe in open and transparent communication with our stockholders, and beginning with the 2015 second quarter, we expect to host a quarterly earnings conference call with investors on an ongoing basis.
“Last month we uplisted our common shares to the Nasdaq Global Select Market. This should lead to increased and improved liquidity in our stock, an expanded shareholder base, and ultimately increased shareholder value.”
Real Alloy Acquisition
During the quarter the Company completed its $525 million Real Alloy acquisition after raising $475.8 million in debt and equity, including the issuance of $305 million in senior secured notes by its indirect wholly owned subsidiary, and capped off by a successful $55 million stapled rights offering that was oversubscribed by $42 million.
The Company has begun reporting the financial results of Real Alloy beginning as of the closing date of February 27, 2015. As such, Signature’s 2015 first quarter results include only thirty-three days of Real Alloy results of operations, representing only a fraction of a typical quarter of performance. The second quarter ending June 30, 2015, will be Real Alloy’s first complete quarter as a Signature operation.
The Company continues to make progress on transitioning Real Alloy into Signature, which includes 25 major transition projects involved in its initial Six Sigma program and more than 25 minor projects. John Miller, the Company’s Executive Vice President of Operations who is a master black belt Six Sigma specialist and possesses advanced technical skills developed during his 28-year tenure at 3M, is managing this transition project and will also take on this role for future acquisitions.
First Quarter 2015 Financial Highlights
Signature posted net earnings of $6.8 million in the first quarter of 2015, compared to $0.1 million in the same period in 2014. Total operating revenues were $137.8 million in 2015, compared to $0.1 million in the same prior in 2014. The Company’s earnings were driven by the one month of performance by the Company’s two operating segments Real Alloy North America and Real Alloy Europe, a $7.4 million income tax benefit in continuing operations, as well as a one-time gain of $38.9 million related to the sale of NABCO. These positive results were offset by a number of one-time expenses related to the transactions that took place during the period, including $14.4 million in expenses associated with the Real Alloy acquisition, $4.9 million in incremental interest expense associated with the private placement of Senior Secured Notes, which funded 50 days prior to the closing of the acquisition, and $3.7 million of noncash charges related to the fair value adjustment of acquired inventory as estimated under purchase accounting.
Balance Sheet
At March 31, 2015, Signature’s cash and cash equivalents were $28.6 million, total debt was $324.5 million, and stockholders’ equity was $145.9 million.
Outlook for 2015
Mr. Bouchard concluded, “The Real Alloy transition is our top priority. Our goals include: reducing leverage, reducing COGS by 1% in 2015, completing the transition effort on time and ahead of budgeted expense, and organic growth of the business. As this work successfully rolls out, we will begin to look at incremental growth to our platform through additional accretive acquisitions.”
About Signature Group Holdings, Inc.
Signature is a North America-based holding company seeking to invest its capital in large, well-managed and consistently profitable businesses concentrated primarily in the United States industrial and commercial marketplace. Signature has significant capital resources, and federal net operating loss tax carryforwards of more than $900 million. For more information about Signature, visit its corporate website at www.signaturegroupholdings.com.
http://www.businesswire.com/news/home/20150512005334/en/Signature-Group-Holdings-Reports-Quarter-2015-Results#.VVHpZIktGmQ
- Its not too late to get involved...RELY has nearly $900MM in NOL's ...and is #1 in Market Share in North America and Europe.
- Opening Bell Ceremony tentatively scheduled for 7/15/15.
- Signature Group: An Opportunity to Tag Along With Sam Zell (5/08/15)
http://online.barrons.com/articles/signature-group-an-opportunity-to-tag-along-with-sam-zell-1431133540?mod=BOL_hp_mag
Other recent activity to get anyone interested up to speed;
http://www.businesswire.com/news/home/20150402005474/en/Signature-Group-Holdings-Announces-Hiring-3M-Executive#.VR1XCYktGUk
http://www.sec.gov/Archives/edgar/data/38984/000156459015002520/sggh-pre14a_20150528.htm
http://www.businesswire.com/news/home/20150416006507/en/Signature-Group-Holdings-List-NASDAQ-Stock-Market#.VTBGD4ktGUk
sec.gov
http://www.sec.gov/Archives/edgar/data/38984/000156459015003083/rely-8k_20150428.htm
Marker;
Real Industry (RELY)
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