Financial Highlights
· Financials are tracking broadly in line with the guidance provided by management in its 7 June 2019 trading update, with full year revenue expectations of between US$ 83.0m – 87.0m
· H1 2019 results highlight the flexibility of the Company's operating model that allows for rapid adjustment of costs to align with product demand
· The Company is proceeding with long-term growth investments made possible by a strong balance sheet and positive cash flows
· In line with the Board's outlook for the remainder of the financial year, the Board has declared a US$ 0.0575 per share interim dividend representing a 4.5% increase compared to H1 2018
|
|
H1 2019 US$ |
H1 2018 US$ |
% Change |
|
Revenue |
$ 39.0m |
$ 45.0m |
-13.3% |
|
Adjusted EBITDA(1,2) |
$ 11.2m |
$ 14.5m |
-22.8% |
|
Adjusted EBITDA margin(1,2) |
29% |
32% |
-300bps |
|
Profits before tax |
$ 10.5m |
$ 13.6m |
-22.8% |
|
Adjusted net income(1,3) |
$ 8.0m |
$ 10.4m |
-23.1% |
|
Diluted adjusted net income per share(1,3) |
$ 0.14 |
$ 0.18 |
-22.2% |
|
Cash flow from operations |
$ 4.4m |
$ 12.3m |
-64.2% |
|
Net cash position (4) |
$ 15.1m |
$ 20.7m |
-27.1% |
|
Interim dividend per share |
$ 0.0575 |
$ 0.055 |
4.5% |
Operational Highlights
· SkyScreed® 25 gaining traction in the currently unaddressed high-rise structural market segment with the first sale completed in H1 2019 and a full pipeline of sales opportunities
· Completed acquisition of Line Dragon® to augment Somero's SP-16 Line Pulling & Placing System product offering
· Expansion of the Houghton Michigan Operations and Support Offices to accommodate growth from new products is underway and tracking with the previously reported project cost of US$ 3.5m
· Expansion of Fort Myers Training Facility to support future expansion of training classes and product demonstration events continues
Notes:
1. The Company uses non-US GAAP financial measures in order to provide supplemental information regarding the Company's operating performance. See further information regarding non-GAAP measures below.
2. Adjusted EBITDA as used herein is a calculation of the Company's net income plus tax provision, interest expense, interest income, foreign exchange gain/(loss), other expense, depreciation, amortization, and stock-based compensation.
3. Adjusted net income as used herein is a calculation of net income plus amortization of intangibles and excluding the tax impact of stock option and restricted stock units (“RSU”) settlements and other special items.
4. Net cash is defined as cash and cash equivalents less borrowings under bank obligations.
Jack Cooney, CEO of Somero, said:
“As announced in June, our first six months of 2019 fell short of our full year expectations at the beginning of the year, primarily due to extraordinarily heavy rainfall during H1 2019 in the US that depressed sales in our largest market. The US non-residential construction market remains very healthy, and we are pleased to note that as the weather improves, we expect to see improvement in H2.
Whilst towards the end of the period, trading in Europe and the Middle East fell below the prior year in part due to the timing of certain contracts, we remain confident to deliver improved H2 2019 results, broadly in line with guidance for the full year, notwithstanding the wider macro pressures in Europe, particularly Germany, the Middle East and Australia. Pleasingly, a number of our other markets delivered growth, alongside growth from new products.
Despite our disappointment with H1 2019 trading, we do not see a fundamental change in our end-markets and maintain a positive outlook for the remainder of 2019 particularly as our customers in the US return to more typical levels of productivity. Our confidence is based on our close customer contacts through which we can assess customer workloads, backlogs and business outlook.
We continued to make long-term investments and to add key talent to the organization, striking the right balance of leveraging our flexible operating model to control costs and protect profits with making strategically important investments to grow the business over the long-term. With this operating flexibility and confident outlook in hand, we remain committed to continued sales execution in our core markets, progressing on our new product initiatives, and making sound strategic investments for medium to long-term growth, to deliver strong profits and healthy cash flows to our shareholders.”