CEVA Holdings LLC Results for the Second Quarter ended 30 June 2013
Adjusted EBITDA doubles to $80 million compared to previous quarter
Transformational recapitalization strengthens balance sheet, eliminating $1.6 billion of debt
Cost cutting program delivering expected results
Hoofddorp, the Netherlands, 8 August, 2013 – CEVA Holdings LLC (“CEVA”), one of the world’s leading non‐asset based supply chain management companies, today reported results for the three months ended 30 June 2013 that saw the company’s Adjusted EBITDA double from the prior quarter, reflecting operating improvements that include benefits from reductions in cost from previously announced plans.
Key Financials ($ millions)
Three months ended
Adjusted EBITDA 1
1Excludes the impact of specific items which are significant non-recurring items such as restructuring and certain legal expenses.
22012 Adjusted for the impact of disposals
“I am pleased to report that the steps we are taking to restructure the company’s balance sheet and address its cost base are already delivering strong results,” said CEVA CEO Marvin O. Schlanger. “In the face of executing our recapitalization and relatively difficult market conditions, we were able to double Adjusted EBITDA sequentially and approach our results from last year.
“We have created momentum in the marketplace as our customers recognize that CEVA is better positioned to meet the challenges ahead and better able to leverage our unique capabilities to meet their needs. We will continue to focus on increasing our sales to take advantage of our stronger position.”
Revenue decreased by 6.2% to $2,148 million for the three months ended 30 June 2013 compared to $2,291 million for the same period a year earlier, driven by lower FM volumes. Revenue in Freight Management declined 11.7% mainly due to lower Airfreight volumes as market conditions remained challenging. Revenues in Contract Logistics declined by 1.4% (adjusted for the impact of disposals) as a strong performance in the U.S. was offset by the impact of several contracts that were terminated as part of our cost reduction program. In addition we experienced lower volumes in several markets, notably in parts of Europe.
Adjusted EBITDAof $80 million was double what the company generated in the previous quarter (Q1: $40 million) reflecting the impact of recent cost control measures, operating improvements and seasonal volume increases. Adjusted EBITDA increased 34.9% in Contract Logistics where higher margins in the Americas and Europe offset lower volumes in some Asian markets. In Freight Management, Adjusted EBITDA declined 43.6% year-on-year mainly due to lower Airfreight volumes.
On 2 May 2013 CEVA completed the successful recapitalization of its balance sheet, eliminating approximately 50% of consolidated net debt and cutting its annual cash interest costs roughly by half. As a consequence net debt at the end of the period was $1,608 million (31 December 2012: $3,301 million). Cash and committed credit facilitiesalso improved significantly to $656 million (31 December 2012: $391 million).
CEVA – Making business flow CEVA, one of the world’s leading non-asset based supply chain management companies, designs and implements industry leading solutions for large and medium-size national and multinational companies. Approximately 49,000 employees in more than 160 countries are dedicated to delivering effective and robust supply chain solutions across a variety of sectors where CEVA applies its operational expertise to provide best-in-class services across its integrated network. For more information, please visit www.cevalogistics.com
All commentary based on actual results unless stated otherwise
These results reflect two changes from previous financial reporting results. Following the restructuring of the company, a new holding company was formed: CEVA Holdings LLC. The company is now reporting results in U.S. dollars as that is the functional currency of CEVA Holdings LLC.
SAFE HARBOR STATEMENT: This news release may contain forward-looking statements. These statements include, but are not limited to, discussions regarding industry outlook, CEVA’s expectations regarding the performance of its business, its liquidity and capital resources, its guidance for 2013 and beyond, and the other non-historical statements. These statements can be identified by the use of words such as “believes” “anticipates,” “expects,” “intends,” “plans,” “continues,” “estimates,” “predicts,” “projects,” “forecasts,” and similar expressions. All forward-looking statements are based on management’s current expectations and beliefs only as of the date of this press release and, in addition to the assumptions specifically mentioned in the above paragraphs, there are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements, including the effect of local and national economic, credit and capital market conditions, a downturn in the industries in which we operate (including the automotive industry and the airfreight business), risks associated with CEVA’s global operations, fluctuations and increases in fuel prices, CEVA’s substantial indebtedness, restrictions contained in its debt agreements and risks that it will be unable to compete effectively. Further information concerning CEVA and its business, including factors that potentially could materially affect CEVA’s financial results, is contained in CEVA’s annual and quarterly reports, available on CEVA’s website, which investors are strongly encouraged to review. Should one or more of these risks or uncertainties materialize or the consequences of such a development worsen, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those forecasted or expected. CEVA disclaims any intention or obligation to update publicly or revise such statements, whether as a result of new information, future events or otherwise.
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