MADISON, N.C. — Remington Arms Company, Inc. reported financial results October 27, including adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) and net income, for the quarter and year-to-date periods ended September 30, 2008.
Adjusted EBITDA was $17.8 million for the three months ended September 30, 2008 as compared to Adjusted EBITDA of $21.1 million for the three months ended September 30, 2007. Adjusted EBITDA was $49.7 million for the year-to-date period ended September 30, 2008 as compared to Adjusted EBITDA of $48.5 million for the year-to-date period ended September 30, 2007.
Net income was $2.9 million for the three months ended September 30, 2008 as compared to a net loss of $5.6 million for the three months ended September 30, 2007. Net income was $1.3 million for the year-to-date period ended September 30, 2008 as compared to a net loss of $0.4 million for the year-to-date period ended September 30, 2007.
Third Quarter Highlights
- Net sales increased by 10.6% to $174.0 million for the three months ended September 30, 2008, as compared to net sales of $157.3 million for the three months ended September 30, 2007. Net sales increased by15.9% to $428.0 million for the year-to-date period ended September 30, 2008, as compared to net sales of $369.4 million for the year-to-date period ended September 30, 2007.
- Gross margin increased by 71.4% to $40.8 million for the three months ended September 30, 2008, as compared to $23.8 million for the three months ended September 30, 2007. Gross margin increased by 32.5% to $102.8 million for the year-to-date period ended September 30, 2008, as compared to $77.6 million for the year-to-date period ended September 30, 2007. The increases in gross margin were primarily driven by 2008 not incurring the cost of rolling out a purchase accounting adjustment related to inventory of $15.7 million and $21.5 million for the third quarter and year-to-date periods, respectively.
- Selling, general and administrative expense increased by 14.8% to $28.7 million for the three months ended September 30, 2008, as compared to $25.0 million for the three months ended September 30, 2007. Selling, general and administrative expense increased by 24.1% to $77.8 million for the year-to-date period ended September 30, 2008, as compared to $62.7 million for the year-to-date period ended September 30, 2007.
- The outstanding amount on the revolving credit facility is $116.8 million at September 30, 2008 compared to $39.7 million at September 30, 2007. The increase in the outstanding amount is due to the company borrowing approximately $60.0 million of incremental funds as a cautionary measure in response to the uncertainty that developed in the financial markets during September 2008. Cash on hand of $77.1 million is invested in a treasury reserve fund. The company has not repaid the amounts as of the date of this press release.
As of September 30, 2008, the company was in compliance with its financial covenants and had additional availability of $29.5 million.
