Exhibit 99.1
(Debtor-in-possession)
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts) (Unaudited)
Three Months Ended | Six Months Ended | |||||||||||||||
June 26, 2020 | June 28, 2019 | June 26, 2020 | June 28, 2019 | |||||||||||||
Net sales | $ | 56,212 | $ | 92,475 | $ | 140,244 | $ | 185,390 | ||||||||
Cost of goods sold | 49,198 | 71,809 | 115,055 | 141,128 | ||||||||||||
Gross profit | 7,014 | 20,666 | 25,189 | 44,262 | ||||||||||||
Selling and administrative expenses | 25,268 | 19,847 | 49,738 | 38,916 | ||||||||||||
(Gain) loss on disposals of property, plant and equipment-net | (4 | ) | — | 17 | 8 | |||||||||||
Restructuring | 789 | 1,127 | 1,543 | 2,493 | ||||||||||||
Operating (loss) income | (19,039 | ) | (308 | ) | (26,109 | ) | 2,845 | |||||||||
Interest expense-net | (8,025 | ) | (8,327 | ) | (15,480 | ) | (16,532 | ) | ||||||||
Reorganization items-net | (270 | ) | — | (270 | ) | — | ||||||||||
Equity income | 54 | 38 | 79 | 122 | ||||||||||||
Other income-net | — | (333 | ) | 253 | (269 | ) | ||||||||||
Loss from continuing operations before income taxes | (27,280 | ) | (8,930 | ) | (41,527 | ) | (13,834 | ) | ||||||||
Tax (benefit) provision | (49 | ) | 805 | (606 | ) | 1,154 | ||||||||||
Net loss from continuing operations | (27,231 | ) | (9,735 | ) | $ | (40,921 | ) | $ | (14,988 | ) | ||||||
Net loss from discontinued operations, net of tax | (306 | ) | (3,381 | ) | (1,216 | ) | (5,184 | ) | ||||||||
Net loss | (27,537 | ) | (13,116 | ) | $ | (42,137 | ) | $ | (20,172 | ) | ||||||
Accretion of dividends on preferred stock | — | 828 | 879 | 1,640 | ||||||||||||
Net loss allocable to common shareholders of Jason Industries | $ | (27,537 | ) | $ | (13,944 | ) | $ | (43,016 | ) | $ | (21,812 | ) | ||||
Basic and diluted net loss per share allocable to common shareholders of Jason Industries: | ||||||||||||||||
Net loss per share from continuing operations | $ | (0.92 | ) | $ | (0.37 | ) | $ | (1.43 | ) | $ | (0.59 | ) | ||||
Net loss per share from discontinued operations | (0.01 | ) | (0.12 | ) | (0.04 | ) | (0.18 | ) | ||||||||
Basic and diluted net loss per share | $ | (0.93 | ) | $ | (0.49 | ) | $ | (1.47 | ) | $ | (0.77 | ) | ||||
Weighted average number of common shares outstanding: | ||||||||||||||||
Basic and diluted | 29,600 | 28,439 | 29,256 | 28,204 |
1
(Debtor-in-possession)
Condensed Consolidated Balance Sheets
(In thousands, except share and per share amounts) (Unaudited)
June 26, 2020 | December 31, 2019 | |||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 34,026 | $ | 84,526 | ||||
Accounts receivable-net | 33,907 | 33,085 | ||||||
Inventories-net | 49,141 | 49,943 | ||||||
Other current assets | 10,600 | 7,433 | ||||||
Total current assets | 127,674 | 174,987 | ||||||
Property, plant and equipment - net | 67,483 | 70,276 | ||||||
Right-of-use operating lease assets | 19,376 | 20,910 | ||||||
Goodwill | 47,129 | 45,684 | ||||||
Other intangible assets-net | 63,019 | 64,590 | ||||||
Other assets-net | 10,502 | 10,654 | ||||||
Total assets | $ | 335,183 | $ | 387,101 | ||||
Liabilities and Shareholders’ Deficit | ||||||||
Current liabilities | ||||||||
Current portion of long-term debt | $ | 358,245 | $ | 5,800 | ||||
Current portion of operating lease liabilities | 4,755 | 4,275 | ||||||
Accounts payable | 20,292 | 22,914 | ||||||
Accrued compensation and employee benefits | 9,258 | 8,551 | ||||||
Accrued interest | 7,278 | 79 | ||||||
Other current liabilities | 12,364 | 13,783 | ||||||
Total current liabilities | 412,192 | 55,402 | ||||||
Long-term debt | 13,898 | 378,950 | ||||||
Long-term operating lease liabilities | 17,616 | 19,136 | ||||||
Deferred income taxes | 6,973 | 7,534 | ||||||
Other long-term liabilities | 17,166 | 16,938 | ||||||
Total liabilities | 467,845 | 477,960 | ||||||
Shareholders’ Deficit | ||||||||
Preferred stock | 44,827 | 43,950 | ||||||
Jason Industries common stock | 3 | 3 | ||||||
Additional paid-in capital | 155,079 | 155,023 | ||||||
Retained deficit | (303,329 | ) | (261,192 | ) | ||||
Accumulated other comprehensive loss | (29,242 | ) | (28,643 | ) | ||||
Total shareholders’ deficit | (132,662 | ) | (90,859 | ) | ||||
Total liabilities and shareholders’ deficit | $ | 335,183 | $ | 387,101 |
2
(Debtor-in-possession)
Condensed Consolidated Statements of Cash Flows
(In thousands) (Unaudited)
Six Months Ended | ||||||||
Includes cash flow activities from both continuing and discontinued operations | June 26, 2020 | June 28, 2019 | ||||||
Cash flows from operating activities | ||||||||
Net loss | $ | (42,137 | ) | $ | (20,172 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation | 7,281 | 14,702 | ||||||
Amortization of intangible assets | 4,088 | 5,970 | ||||||
Amortization of deferred financing costs and debt discount | 1,672 | 1,475 | ||||||
Non-cash operating lease expense | 2,300 | 4,080 | ||||||
Equity income | (79 | ) | (122 | ) | ||||
Deferred income taxes | (545 | ) | (588 | ) | ||||
Loss on disposals of property, plant and equipment-net | 17 | 8 | ||||||
Loss on divestitures | 841 | — | ||||||
Dividends from joint venture | — | 728 | ||||||
Share-based compensation | 1,028 | 1,670 | ||||||
Net increase (decrease) in cash, net of acquisitions and dispositions, due to changes in: | ||||||||
Accounts receivable | (1,302 | ) | (7,457 | ) | ||||
Inventories | 863 | (481 | ) | |||||
Other current assets | (3,174 | ) | (300 | ) | ||||
Accounts payable | (2,503 | ) | 976 | |||||
Accrued compensation and employee benefits | 718 | (3,173 | ) | |||||
Accrued interest | 7,199 | (9 | ) | |||||
Accrued income taxes | 257 | (59 | ) | |||||
Operating lease liabilities, net | (1,809 | ) | (4,114 | ) | ||||
Other-net | (1,192 | ) | (2,019 | ) | ||||
Total adjustments | 15,660 | 11,287 | ||||||
Net cash used in operating activities | (26,477 | ) | (8,885 | ) | ||||
Cash flows from investing activities | ||||||||
Proceeds from disposals of property, plant and equipment | 70 | 216 | ||||||
Payments for property, plant and equipment | (4,501 | ) | (6,334 | ) | ||||
Payments for divestiture, net of cash divested and liabilities assumed by buyer | (1,325 | ) | — | |||||
Acquisition of business, net of cash acquired | (3,965 | ) | (10,474 | ) | ||||
Acquisitions of patents | (1 | ) | (19 | ) | ||||
Net cash used in investing activities | (9,722 | ) | (16,611 | ) | ||||
Cash flows from financing activities | ||||||||
Payments of deferred financing costs | (110 | ) | (308 | ) | ||||
Payments of First and Second Lien term loans | (10,775 | ) | (1,550 | ) | ||||
Proceeds from other long-term debt | 6,240 | 2,591 | ||||||
Payments of other long-term debt | (4,202 | ) | (3,925 | ) | ||||
Payments of finance lease obligation | (181 | ) | (160 | ) | ||||
Value added tax paid from building sale | — | (707 | ) | |||||
Payment of forbearance fees | (5,015 | ) | — | |||||
Other financing activities-net | (95 | ) | (567 | ) | ||||
Net cash used in financing activities | (14,138 | ) | (4,626 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | (163 | ) | (136 | ) | ||||
Net decrease in cash and cash equivalents | (50,500 | ) | (30,258 | ) | ||||
Cash and cash equivalents, beginning of period | 84,526 | 58,169 | ||||||
Cash and cash equivalents, end of period | $ | 34,026 | $ | 27,911 |
3
Jason Industries, Inc.
(Debtor-in-possession)
Condensed Consolidated Statements of Cash Flows
(In thousands) (Unaudited)
Six Months Ended | ||||||||
Includes cash flow activities from both continuing and discontinued operations | June 26, 2020 | June 28, 2019 | ||||||
Supplemental disclosure of cash flow information | ||||||||
Cash paid during the period for: | ||||||||
Interest | $ | 6,359 | $ | 15,126 | ||||
Income taxes, net of refunds | $ | (62 | ) | $ | 2,107 | |||
Acquisition-related transaction costs used in operating activities | $ | 65 | $ | 339 | ||||
Divestiture-related transaction costs used in operating activities | $ | 1,500 | $ | — | ||||
Other strategic alternatives costs used in operating activities | $ | 14,059 | $ | — | ||||
Non-cash lease activities: | ||||||||
Right-of-use operating assets obtained in exchange for operating lease obligations | $ | 820 | $ | 2,674 | ||||
Right-of-use finance assets obtained in exchange for finance lease obligations | $ | — | $ | 147 | ||||
Non-cash investing activities: | ||||||||
Property, plant and equipment acquired through additional liabilities | $ | 701 | $ | 834 | ||||
Non-cash financing activities: | ||||||||
Non-cash forbearance fee paid in kind | $ | 4,953 | $ | — | ||||
Non-cash preferred stock created from dividends declared | $ | 877 | $ | 1,635 |
4
(Debtor-in-possession)
Quarterly Financial Information by Segment
(In thousands) (Unaudited)
2019 | 2020 | |||||||||||||||||||||||||||||||||||||||
1Q | 2Q | 3Q | 4Q | FY | 1Q | 2Q | 3Q | 4Q | YTD | |||||||||||||||||||||||||||||||
Industrial | ||||||||||||||||||||||||||||||||||||||||
Net sales | $ | 49,737 | $ | 54,993 | $ | 48,860 | $ | 47,927 | $ | 201,517 | $ | 48,389 | $ | 34,339 | $ | 82,728 | ||||||||||||||||||||||||
Adjusted EBITDA | 6,841 | 5,927 | 5,004 | 3,173 | 20,945 | 4,178 | 442 | 4,620 | ||||||||||||||||||||||||||||||||
Adjusted EBITDA % net sales | 13.8 | % | 10.8 | % | 10.2 | % | 6.6 | % | 10.4 | % | 8.6 | % | 1.3 | % | 5.6 | % | ||||||||||||||||||||||||
Engineered Components | ||||||||||||||||||||||||||||||||||||||||
Net sales | $ | 43,179 | $ | 37,482 | $ | 27,290 | $ | 28,429 | $ | 136,380 | $ | 35,643 | $ | 21,873 | $ | 57,516 | ||||||||||||||||||||||||
Adjusted EBITDA | 5,988 | 4,428 | 2,206 | 2,476 | 15,098 | 4,418 | (278 | ) | 4,140 | |||||||||||||||||||||||||||||||
Adjusted EBITDA % net sales | 13.9 | % | 11.8 | % | 8.1 | % | 8.7 | % | 11.1 | % | 12.4 | % | (1.3 | )% | 7.2 | % | ||||||||||||||||||||||||
Corporate | ||||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | (2,070 | ) | $ | (2,758 | ) | $ | (3,347 | ) | $ | (3,050 | ) | $ | (11,225 | ) | $ | (2,873 | ) | $ | (2,639 | ) | $ | (5,512 | ) | ||||||||||||||||
Consolidated - Continuing Operations | ||||||||||||||||||||||||||||||||||||||||
Net sales | $ | 92,916 | $ | 92,475 | $ | 76,150 | $ | 76,356 | $ | 337,897 | $ | 84,032 | $ | 56,212 | $ | 140,244 | ||||||||||||||||||||||||
Adjusted EBITDA | 10,759 | 7,597 | 3,863 | 2,599 | 24,818 | 5,723 | (2,475 | ) | 3,248 | |||||||||||||||||||||||||||||||
Adjusted EBITDA % net sales | 11.6 | % | 8.2 | % | 5.1 | % | 3.4 | % | 7.3 | % | 6.8 | % | (4.4 | )% | 2.3 | % |
5
Jason Industries, Inc.
(Debtor-in-possession)
Reconciliation of GAAP to Non-GAAP Measures
(In thousands) (Unaudited)
Organic Sales Growth
2Q 2020 | ||||||||||||
Industrial | Engineered Components | Jason Consolidated | ||||||||||
Net sales | ||||||||||||
Organic sales growth | (37.7 | )% | (41.6 | )% | (39.2 | )% | ||||||
Currency impact | (1.4 | )% | — | % | (0.8 | )% | ||||||
Acquisitions | 1.5 | % | — | % | 0.8 | % | ||||||
Growth as reported | (37.6 | )% | (41.6 | )% | (39.2 | )% |
YTD 2020 | ||||||||||||
Industrial | Engineered Components | Jason Consolidated | ||||||||||
Net sales | ||||||||||||
Organic sales growth | (24.9 | )% | (28.7 | )% | (26.4 | )% | ||||||
Currency impact | (1.6 | )% | — | % | (0.9 | )% | ||||||
Acquisitions | 5.5 | % | — | % | 2.9 | % | ||||||
Growth as reported | (21.0 | )% | (28.7 | )% | (24.4 | )% |
6
(Debtor-in-possession)
Reconciliation of GAAP to Non-GAAP Measures
Adjusted EBITDA
(In thousands) (Unaudited)
2019 | 2020 | |||||||||||||||||||||||||||||||||||||||
1Q | 2Q | 3Q | 4Q | FY | 1Q | 2Q | 3Q | 4Q | YTD | |||||||||||||||||||||||||||||||
Net loss from continuing operations | $ | (5,253 | ) | $ | (9,734 | ) | $ | (11,576 | ) | $ | (16,868 | ) | $ | (43,431 | ) | $ | (13,690 | ) | $ | (27,231 | ) | $ | (40,921 | ) | ||||||||||||||||
Interest expense-net | 8,205 | 8,327 | 8,169 | 8,277 | 32,978 | 7,455 | 8,025 | 15,480 | ||||||||||||||||||||||||||||||||
Tax provision (benefit) | 349 | 805 | 770 | 2,092 | 4,016 | (557 | ) | (49 | ) | (606 | ) | |||||||||||||||||||||||||||||
Depreciation and amortization | 5,180 | 5,609 | 5,460 | 5,986 | 22,235 | 5,490 | 5,879 | 11,369 | ||||||||||||||||||||||||||||||||
EBITDA | 8,481 | 5,007 | 2,823 | (513 | ) | 15,798 | (1,302 | ) | (13,376 | ) | (14,678 | ) | ||||||||||||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||||||||||||||||||
Restructuring (1) | 1,366 | 1,127 | 917 | 544 | 3,954 | 754 | 789 | 1,543 | ||||||||||||||||||||||||||||||||
Transaction-related and strategic alternatives expenses (2) | 239 | 402 | 28 | 336 | 1,005 | 4,517 | 8,417 | 12,934 | ||||||||||||||||||||||||||||||||
Integration and other restructuring costs (3) | (58 | ) | 398 | (261 | ) | 1,311 | 1,390 | 1,206 | 1,198 | 2,404 | ||||||||||||||||||||||||||||||
Share-based compensation (4) | 723 | 663 | 348 | 634 | 2,368 | 527 | 501 | 1,028 | ||||||||||||||||||||||||||||||||
Loss (gain) on disposals of property, plant and equipment-net (5) | 8 | — | 8 | 287 | 303 | 21 | (4 | ) | 17 | |||||||||||||||||||||||||||||||
Total adjustments | 2,278 | 2,590 | 1,040 | 3,112 | 9,020 | 7,025 | 10,901 | 17,926 | ||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 10,759 | $ | 7,597 | $ | 3,863 | $ | 2,599 | $ | 24,818 | $ | 5,723 | $ | (2,475 | ) | $ | 3,248 |
(1) | Restructuring includes costs associated with exit or disposal activities as defined by GAAP related to facility consolidation, including one-time employee termination benefits, costs to close facilities and relocate employees, and costs to terminate contracts other than financing and operating leases. |
(2) | Transaction-related and strategic alternatives expenses primarily consist of professional fees and other expenses related to acquisitions, divestitures, financing activities, and costs relating to the Company's strategic alternative process and reorganization items, including executive retention agreements. |
(3) | During 2020, integration and other restructuring costs included $2.2 million of integration costs related to two acquisitions in the industrial segment and $0.2 million of lease expense related to facility consolidations in the industrial segment. During 2019, integration and other restructuring costs included $0.6 million of accelerated lease expense related to planned facility consolidations in the engineered components and industrial segments and $0.9 million of integration costs related to an acquisition in the industrial segment. This was offset by $0.8 million due to the reclassification to earnings of a foreign currency translation gain for the wind down and substantial dissolution of certain U.K. entities. |
(4) | Represents non-cash share based compensation expense from continuing operations for awards under the Company’s 2014 Omnibus Incentive Plan. |
(5) | During 2019, loss on disposals of property, plant and equipment included for the fourth quarter of 2019 a loss of $0.3 million on the sale of a former Schaffner building in the industrial segment. |
7