Animal Health International, Inc. Announces Its First Quarter of Fiscal 2010 Results

Tuesday, November 03, 2009 7:52 AM

(Source: PrimeNewswire) tracking

WESTLAKE, Texas, Nov. 3, 2009 (GLOBE NEWSWIRE) -- Animal Health International, Inc. (Nasdaq:AHII) announced today that net sales declined 4.6%, or $7.7 million, to $161.3 million for the three months ended September 30, 2009, compared to $169.0 million for the same quarter last year. Net loss was $0.7 million or $0.03 per fully diluted share. Last year, net income for the first quarter was $0.3 million or $0.01 per fully diluted share.



 * The decrease in net sales was primarily attributable to lower
   spending by production animal customers whose profits have been
   constrained by fluctuating commodity prices and the general
   economic slowdown.
 * Gross margin declined $4.4 million, with $1.4 million due to
   lower sales volume, $1.8 million due to lower margin at our
   largest supplier and $0.6 million due to a one time promotion in
   the first quarter last year of one of our key proprietary brand
   products. Margins in the first quarter were 16.1% of net sales,
   compared to 17.9% in the first quarter last year.
 * Selling, General and Administrative (SG&A) expenses declined
   $2.9 million from the same period last year as a result of lower
   variable selling expense and cost reductions.
 * Earnings before interest, tax, depreciation and amortization
   (EBITDA) for the quarter was $3.4 million, a decrease of
   $1.8 million compared to the same period last year.

At September 30, 2009, the Company's availability under its Revolver totaled $33.1 million, and the Company is in compliance with all of its financial covenants.

Fiscal Year 2010 Guidance

The following statements are based on current information and the Company assumes no obligation to update them. These statements are forward-looking and inherently uncertain.

The Company believes that the economic factors affecting our industry will improve in the next twelve months. Although the exact timing of a recovery is difficult to predict, the Company is currently projecting that conditions will improve in the third quarter of fiscal year 2010. Revenue for the fiscal year ending June 2010 is expected to be $650 to $685 million. EBITDA is estimated to be $22 to $27 million and net income is expected to be $2.3 to $5.3 million or $0.09 to $0.22 per share.

The Company does not expect a significant improvement in its end markets in the second fiscal quarter. Revenue for the second quarter ending December 31, 2009 is expected to be $170 to $175 million. EBITDA is estimated to be $4.5 to $5.5 and net earnings are expected to be between a loss of $0.2 million and a profit of $0.4 million, or -$0.01 to $0.02 per share.

Conference Call

The Company plans to host its investor conference call today at 10:00 a.m. Eastern Time to discuss these results and its business outlook. You can access the conference call by dialing 877-407-9205. Participants will be required to register their name and company affiliation for the conference call. Audio replay will be made available by accessing the Company's web site at www.ahii.com under the Investor Relations tab.

Use of Non-GAAP measures

EBITDA represents net income (loss) before interest expense, income tax expense, depreciation and amortization, stock option expense, and acquisition costs. We present EBITDA as a supplemental performance measure because we believe it facilitates operating performance comparisons from period to period and company to company by backing out potential differences caused by variations in capital structures (affecting interest expense), tax positions (such as the impact on periods or companies of changes in effective tax rates or net operating losses), the age and book depreciation of fixed assets (affecting relative depreciation expense), the non-cash impact of the expensing of stock options and the impact of purchase accounting. Because EBITDA facilitates internal comparisons of our historical financial position and operating performance on a more consistent basis, we also use EBITDA in measuring our performance relative to that of our competitors and in evaluating acquisition opportunities. EBITDA is not a measurement of our financial performance under generally accepted accounting principles in the United States, or GAAP, and should not be considered as an alternative to net income, operating income or any other performance measures derived in accordance with GAAP or as an alternative to cash flow from operating activities as a measure of our profitability or liquidity.

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