Swisher Hygiene Announces Results for the Three-Month Period Ended March 31, 2012
CHARLOTTE, N.C. - March 11, 2013 // GLOBE NEWSWIRE // - Swisher Hygiene Inc. ("Swisher Hygiene") (Nasdaq:SWSH) (TSX:SWI), a leading provider of essential hygiene and sanitizing products and services, announced today that it has filed its 10-Q for the three-month period ended March 31, 2012. All amounts in this news release are in United States dollars.
First Quarter 2012 Highlights
- The Waste segment, which was sold on November 15, 2012, is reported as discontinued operations beginning in the first quarter of 2012.
- Total revenue from continuing operations of $58.2 million, a 171% increase compared to the prior-year period. Hygiene revenue from company-owned operations, excluding acquisitions, increased 19% from the prior-year period.
- Adjusted EBITDA loss of $4.1 million based on a net loss from continuing operations of $13.3 million. For a reconciliation of non-GAAP to GAAP measures, please review the disclosures and table included with this release.
- Basic and diluted loss per share from continuing operations of $0.08, compared to basic and diluted loss per share from continuing operations of$0.04 in the prior-year period.
"Our progress in filing our outstanding financials continues with today's filing of our first quarter 2012 Form 10-Q and our plan to complete the filings of our second and third quarter 2012 Form 10-Qs as soon as possible," said Thomas Byrne, President and Chief Executive Officer of Swisher Hygiene. "As we review our financial results, it is important to keep in mind that we have reported our Waste segment as discontinued operations and these reported results reflect only our continuing Hygiene operations, which we believe provides more meaningful information to our shareholders."
"In terms of our first quarter 2012 results, we achieved 19% revenue growth from hygiene company-owned operations when excluding acquisitions," continued Mr. Byrne. "While our cost of sales increased as a percentage of our revenue due primarily to entering the wholesale chemical sales business in the latter half of 2011 through our acquisitions of Daley, Cavalier and Kitter, we saw considerable improvement in our route expense as a percentage of revenue through our initial route consolidation initiatives. We remain dedicated to serving our customers nationwide on a day-to-day basis with our comprehensive core chemical program as well as our complementary hygiene and sanitation services, and we look forward to providing additional 2012 results in the near future."
First Quarter 2012 Results
For the three months ended March 31, 2012, Swisher Hygiene reported total revenue from continuing operations of $58.2 million, a 171% increase from $21.5 million in the prior-year period. Hygiene revenue from company-owned operations, excluding acquisitions, increased 19% from the prior-year period.
Total costs and expenses for the three months ended March 31, 2012 increased by 134% to $70.9 million, compared to $30.3 million in the prior-year period. Excluding the impact of acquisition and merger expenses in both periods, and $1.9 million of investigation and review-related expenses in the three months ended March 31, 2012, total costs and expenses increased 61% from the prior-year period.
For the three months ended March 31, 2012 and 2011, respectively:
Q1 2012 Q1 2011
Cost of sales as a % of revenue 43.4% 38.4%
Route expense as a % of revenue 18.2% 24.0%
SG&A expense as a % of revenue 51.5% 63.0%
The increase in cost of sales as a percentage of revenue primarily reflects a change in sales mix towards the chemical product line and entering the wholesale chemical business through Swisher Hygiene's acquisition of Daley International, Cavalier and Kitter in the third quarter of 2011, while the favorable change in route expense as a percentage of revenue reflects the economies of scale realized through route consolidation initiatives.
Net loss from continuing operations for the three months ended March 31, 2012 was $13.3 million, compared to net loss from continuing operations of $5.4 million in the prior-year period.
Adjusted EBITDA loss for the three months ended March 31, 2012 was $4.1 million, compared to an Adjusted EBITDA loss of $3.9 million in the prior-year period.
Non-GAAP Financial Measures
This press release and the attached financial tables contain certain non-GAAP financial measures. In addition to net income determined in accordance with GAAP, we use certain non-GAAP measures such as "Adjusted EBITDA" in assessing our operating performance. We believe this non-GAAP measure serves as an appropriate measure to be used in evaluating the performance of our business.
We define Adjusted EBITDA as net loss excluding the impact of income taxes, depreciation and amortization expense, investigation and review-related expenses, interest expense and income, gains and losses on foreign currency, net loss on debt related fair value measurements, stock-based compensation and costs directly related to mergers and acquisitions.
We present Adjusted EBITDA because we consider it an important supplemental measure of our operating performance and believe it is frequently used by securities analysts, investors and other interested parties in the evaluation of our results. Management uses this non-GAAP financial measure frequently in our decision-making because it provides supplemental information that facilitates internal comparisons to the historical operating performance of prior periods and gives an additional indication of our core operating performance. We include this non-GAAP financial measure in our earnings announcement in order to provide transparency to our investors and enable investors to better compare our operating performance with the operating performance of our competitors. Adjusted EBITDA should not be considered in isolation from, and is not intended to represent an alternative measure of, revenue, operating results or cash flows from operating activities as determined in accordance with GAAP. Additionally, our definition of Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies.
Under SEC rules, we are required to provide a reconciliation of non-GAAP measures to the most directly comparable GAAP measures. Accordingly, the following is a reconciliation of Adjusted EBITDA to our net losses for the three months ended March 31, 2012 and 2011:
Three Months Ended March 31,
(in thousands) 2012 2011
Net loss from continuing operations $(13,260) $(4,707)
Income tax expense (benefit) 80 (5,730)
Depreciation and amortization expense 4,976 2,122
Interest expense, net 581 334
(Gain) loss on foreign currency (3) 35
Realized and unrealized (gain) loss on convertible debt (29) 1,961
Stock-based compensation 1,583 802
Investigation and review-related professional fees 1,874 —
Acquisition and merger expenses 120 1,264
Adjusted EBITDA $(4,078) $(3,919)
Cautionary Statement on Forward-Looking Information
All statements other than statements of historical fact contained in this press release constitute "forward-looking information" or "forward-looking statements" within the meaning of the U.S. federal securities laws and the Securities Act (Ontario) and are based on the expectations, estimates and projections of management as of the date of this press release unless otherwise stated. All statements other than historical facts are, or may be, deemed to be forward looking statements. The words "plans," "expects," "is expected," "scheduled," "estimates," or "believes," or similar words or variations of such words and phrases or statements that certain actions, events or results "may," "could," "would," "might," or "will be taken," "occur," and similar expressions identify forward-looking statements.
Certain information in this press release is forward-looking information. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by Swisher Hygiene as of the date of such statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies. All of these assumptions have been derived from information currently available to Swisher Hygiene including information obtained by Swisher Hygiene from third-party sources. These assumptions may prove to be incorrect in whole or in part. All of the forward-looking statements made in this press release are qualified by the above cautionary statements and those made in the "Risk Factors" section of Swisher Hygiene's Annual Report on Form 10-K for the year ended December 31, 2011, filed with the Securities and Exchange Commission, available on www.sec.gov, and with Canadian securities regulators available on Swisher Hygiene's SEDAR profile at www.sedar.com, and Swisher Hygiene's other filings with the Securities and Exchange Commission and with Canadian securities regulators available on Swisher Hygiene's SEDAR profile at www.sedar.com. The forward-looking information set forth in this press release is subject to various assumptions, risks, uncertainties and other factors that are difficult to predict and which could cause actual results to differ materially from those expressed or implied in the forward-looking information. Swisher Hygiene disclaims any intention or obligation to update or revise any forward-looking statements to reflect subsequent events and circumstances, except to the extent required by applicable law.
About Swisher Hygiene Inc.
Swisher Hygiene Inc. is a NASDAQ and TSX listed company that provides essential hygiene and sanitation solutions to customers throughout much of North America and internationally through its global network of company-owned operations, franchises and master licensees operating in countries across Europe and Asia. These essential solutions include cleaning and sanitizing chemicals, foodservice and laundry products, restroom hygiene programs and a full range of related products and services. This broad set of offerings is designed to promote superior cleanliness and sanitation in all commercial environments, enhancing the safety, satisfaction and well-being of employees and patrons. Swisher Hygiene's customers include a wide range of commercial enterprises, with a particular emphasis on the foodservice, hospitality, retail, industrial and healthcare industries.
|SWISHER HYGIENE INC. AND SUBSIDIARIES|
|CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS|
|(In thousands, except share and per share data)|
|Three Months Ended March 31,|
|Franchise and other||294||1,393|
|Costs and expenses|
|Cost of sales||25,247||8,242|
|Selling, general, and administrative||29,969||13,535|
|Acquisition and merger expenses||120||1,264|
|Depreciation and amortization||4,976||2,122|
|Total costs and expenses||70,906||30,318|
|Loss from continuing operations||(12,754)||(8,843)|
|Other expense, net||(426)||(2,260)|
|Net loss from continuing operations before income taxes||(13,180)||(11,103)|
|Income tax (expense) benefit||(80)||5,730|
|Net loss from continuing operations||(13,260)||(5,373)|
|Loss from discontinued operations, net of tax||(1)||(625)|
|Foreign currency translation adjustment||(4)||242|
|Loss per share from continuing operations|
|Basic and diluted||$(0.08)||$(0.04)|
|Loss per share from discontinued operations|
|Basic and diluted||$(0.00)||$(0.01)|
|Weighted-average common shares used in the computation of loss per share|
|Basic and diluted||174,832,128||122,780,115|
Swisher Hygiene Inc.
Source: Swisher Hygiene Inc.