08.16.10 - Aquilex Holdings LLC Reports Second Quarter 2010 Financial Results
Aquilex Holdings LLC (“Aquilex”) announces today that it has released its financial results for the three and six months ended June 30, 2010. These results are included in Aquilex’s second quarter Form 10-Q Equivalent Report as posted on the Company’s website for which the link is as follows: www.aquilex.com/company/investor-relations.
Aquilex’s revenues for the three and six months ended June 30, 2010 were $105.7 million and $213.3 million, respectively. These represent decreases of 16.1% and 19.6%, respectively, when compared to the corresponding prior year periods. The decline was primarily due to the continued deferral of customers’ repair and maintenance projects into the fall 2010 outage season or into 2011. Additionally, the decrease for the six-month period was due to the impact of extremely weak demand in January and February of 2010 for cleaning services from refinery and fossil fuel power customers. These first-quarter declines were offset by a 13.4% increase in the second quarter of 2010, when compared to the corresponding prior year period, largely due to increased demand for cleaning services related to customers’ turnaround projects.
Consolidated Adjusted EBITDA (see “Note on Use of Consolidated Adjusted EBITDA” below) for the three and six months ended June 30, 2010 was $14.0 million and $28.8 million, respectively. These represent decreases of 37.7% and 34.6%, respectively, when compared to the corresponding prior year periods. In addition to the impact on earnings from the decline in revenues, gross profit margins were also lower in our SRO segment due to an increase in indirect and project execution costs and unfavorable Nuclear field cost management largely occurring at the Davis Besse project. The SRO margin decreases were also a result of an increase in the proportion of revenue deriving from lower margin services provided to customers. In our Industrial Cleaning segment, margins decreased largely as a result of reduced pricing as well as an adverse job mix in the second quarter of 2010 that increased labor costs. Net loss for the three and six months ended June 30, 2010 was $12.6 million and $25.1 million, respectively.
On April 1, 2010, we entered into an amended and restated credit agreement (the “Credit Agreement”) with a syndicate of lenders providing for a term loan facility in an aggregate principal amount of $185 million and a revolving credit facility of up to $50 million. We used the proceeds of the term loan to repay the entire $176 million that had been outstanding under the previous credit facility and to pay certain fees and expenses associated with such repayment and the Credit Agreement. As a result of the repayment, we recognized a loss on extinguishment of $24.4 million resulting from the write-off of the related deferred financing costs, original issue discount amounts and a prepayment penalty.
The foregoing provides only a brief summary of our financial results for the three and six months ended June 30, 2010. For a more detailed discussion please refer to the Form 10-Q Equivalent Report.
Second Quarter 2010 Earnings Conference Call
The Company will host its second quarter 2010 earnings conference call at 9:00 a.m. Eastern Time on Wednesday, August 18, 2010. You are invited to listen to the call, which is available for telephone dial-in. Aquilex President and Chief Executive Officer, L.W. Varner, Jr., and Chief Financial Officer, Jay W. Ferguson, will participate. A recording of the call will also be made available on the Aquilex website. The conference call dial-in number is (800) 701-6414. The conference call identification number is 21477920.
Note on Use of Consolidated Adjusted EBITDA
Consolidated Adjusted EBITDA is a non-GAAP financial measure. We calculate Consolidated Adjusted EBITDA as earnings before interest expense, depreciation and amortization, income taxes and other adjustments described in the Form 10-Q Equivalent Report under “Management’s Discussion and Analysis of Financial Condition and Operating Results – Non-GAAP Measures”.
As we complete the registration process with the Securities and Exchange Commission (SEC) with respect to our obligation to conduct an exchange offer for our Senior Notes, the SEC may require us to report Consolidated Adjusted EBITDA or other financial measures on a different basis than that presented above or we may be required to remove such measures from our future public filings with the SEC
About Aquilex Holdings LLC
Aquilex Holdings LLC is the parent of Aquilex Corporation, a leading provider of critical maintenance, repair and industrial cleaning solutions to the energy industry. Through our divisional and branch offices in the United States and Europe, we provide our services to a diverse global base of over 540 customers, primarily in the oil and gas refining, chemical and petrochemical production, fossil and nuclear power generation and waste-to-energy industries.
Investor Relations Contact: Jay W. Ferguson, Chief Financial Officer (404) 869-5221.