IE 11 is not supported. For an optimal experience visit our site on another browser.

Thermon Reports Second Quarter Fiscal 2011 Results

SAN MARCOS, Texas, Nov. 12, 2010 (GLOBE NEWSWIRE) -- Thermon Holding Corp. ("Thermon") today announces its financial results for the second quarter ended Sept. 30, 2010.
/ Source: GlobeNewswire

SAN MARCOS, Texas, Nov. 12, 2010 (GLOBE NEWSWIRE) -- Thermon Holding Corp. ("Thermon") today announces its financial results for the second quarter ended Sept. 30, 2010.

Second Quarter Highlights

  • Record quarterly revenue of $63.5 million, up 42% year over year.
  • Backlog of $85.6 million, up 26% year over year and 9% sequentially.
  • Income from operations of $5.1 million and Adjusted EBITDA of $14.1 million.
  • Strong cash generation, with $15.7 million on hand as of Sept. 30.

Both the Western and Eastern Hemispheres delivered strong results as total revenue for Q2 2011 was an all-time quarterly record of $63.5 million, an increase of 42% from $44.7 million recorded in Q2 2010. Revenue in the Western Hemisphere accounted for 59% of total revenues, while the Eastern Hemisphere accounted for the remaining 41%.

Thermon recorded backlog of $85.6 million at the close of the second quarter, up from $67.9 million in the prior year period and $78.3 million in the prior quarter.

Income from operations was $5.1 million for Q2 2011, down from $11.7 million in Q2 2010. The decrease in income from operations is primarily the result of a $5.7 million increase in amortization of intangible assets and a $2.5 million non-cash increase in cost of sales related to the recent acquisition of Thermon sponsored by CHS Capital LLC (the "Acquisition").

Adjusted EBITDA was $14.1 million, an increase of 14% from $12.4 million in Q2 2010.

As of Sept. 30, 2010, we had $15.7 million in cash as compared to approximately $2.8 million at April 30, 2010 (the close of the Acquisition). We made the first $10 million semi-annual interest payment on our senior secured notes on Nov. 1, 2010.

Gross profit totaled $25.3 million in Q2 2011, an increase of $2.4 million from Q2 2010. Reported gross margin was approximately 40%. These actual results included the $2.5 million non-cash purchase accounting increase in cost of sales mentioned above. Gross margin would have been 44% in Q2 2011 excluding this adjustment, down approximately 7 percentage points as compared to Q2 2010.

"I am extremely pleased with our strong performance in Q2, which included all-time record quarterly revenues coupled with a solid backlog. These results are indicative of our broad installed base and an overall healthy business environment," said Rodney Bingham, Thermon's President and Chief Executive Officer.

Quarterly Report

A quarterly report containing our unaudited financial statements for the three and six month periods ended Sept. 30, 2010 will be made available later today on our Investor Relations website located at and also mailed to registered holders of our senior secured notes.

Conference Call and Webcast Information

Thermon's senior management team, including Rodney Bingham, President and Chief Executive Officer, and Jay Peterson, Chief Financial Officer, will discuss second quarter fiscal 2011 results during a conference call today at 10:00 a.m. (Central Standard Time), which will be simultaneously webcast on Thermon's Investor Relations website located at . Investment community professionals interested in participating in the question-and-answer session may access the call by dialing (877) 312-5421 from within the United States/Canada and (253) 237-1121 from outside of the United States/Canada. A replay of the webcast will be available on Thermon's Investor Relations website beginning two hours after the conclusion of the call and ending at 5:00 p.m. on Nov. 26, 2010.

About Thermon

Thermon Holding Corp., through its worldwide subsidiaries, provides comprehensive heat tracing solutions to global end-markets that include energy, chemical processing, power generation and industrial and commercial infrastructure. Thermon's products provide an external heat source to pipes, vessels and instruments for the purposes of freeze protection, temperature maintenance, environmental monitoring and surface snow and ice melting. For more information, please visit .

The Thermon logo is available at

Non-GAAP Financial Measures

Disclosure in this release of EBITDA and Adjusted EBITDA, which are "non-GAAP financial measures" as defined under the rules of the Securities and Exchange Commission, are intended as supplemental measures of our performance that are not required by, or presented in accordance with, U.S. generally accepted accounting principles ("GAAP"). Neither EBITDA nor Adjusted EBITDA should be considered as an alternative to net income, income from continuing operations or any other performance measure derived in accordance with GAAP or as an alternative to cash flows from operating activities or any other liquidity measure derived in accordance with GAAP.  EBITDA represents net income before income taxes, interest income, interest expense and depreciation expense and amortization of other intangible assets. Adjusted EBITDA represents EBITDA before other non-cash charges not included in EBITDA such as amortization of stock compensation and other unusual non-recurring transactions not associated with the ongoing operations of Thermon. 

We believe these measures are frequently used by securities analysts, investors and other interested parties in the evaluation of high yield issuers, many of which present EBITDA and Adjusted EBITDA when reporting their results. Our presentation of EBITDA and Adjusted EBITDA should not be construed to imply that our future results will be unaffected by unusual or nonrecurring items. EBITDA and Adjusted EBITDA have limitations as analytical tools, and you should not consider either of these measures in isolation or as a substitute for analyses of our income or cash flows as reported under GAAP.  We compensate for these limitations by relying primarily on our GAAP results and using EBITDA and Adjusted EBITDA only for supplemental purposes. Please see our financial statements and the related notes thereto included in our quarterly report for the three and six month periods ended September 30, 2010.  For a description of how EBITDA and Adjusted EBITDA are calculated from our net income (loss) and a reconciliation of our EBITDA and Adjusted EBITDA to net income (loss), see the section of this release titled "Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA."

Forward-Looking Statements

This release may include forward-looking statements within the meaning of the U.S. federal securities laws in addition to historical information. These forward-looking statements include, without limitation, statements regarding our industry, business strategy, plans, goals and expectations concerning our market position, future operations, margins, profitability, capital expenditures, liquidity and capital resources and other financial and operating information. Forward-looking statements reflect our current expectations regarding future events, results or outcomes. These expectations may or may not be realized. Some of these expectations may be based upon assumptions, data or judgments that prove to be incorrect. In addition, our business and operations involve numerous risks and uncertainties, many of which are beyond our control, which could result in our expectations not being realized or otherwise materially affect our financial condition, results of operations and cash flows.

Actual events, results and outcomes may differ materially from our expectations due to a variety of factors. Although it is not possible to identify all of these factors, they include, among others, the following: general economic conditions and cyclicality in the markets we serve; future growth of energy and chemical processing capital investments; changes in relevant currency exchange rates; our ability to comply with the complex and dynamic system of laws and regulations applicable to international operations; a material disruption at any of our manufacturing facilities; our dependence on subcontractors and suppliers; our ability to obtain standby letters of credit, bank guarantees or performance bonds required to bid on or secure certain customer contracts; competition from various other sources providing similar heat tracing products and services, or other alternative technologies, to customers; our ability to attract and retain qualified management and employees, particularly in our overseas markets; our ability to continue to generate sufficient cash flow to satisfy our liquidity needs; and the extent to which federal, state, local and foreign governmental regulation of energy, chemical processing and power generation products and services limits or prohibits the operation of our business. Any one of these factors or a combination of these factors could materially affect our future results of operations and could influence whether any forward-looking statements contained in this release ultimately prove to be accurate. See also the section captioned "Risk Factors" in our quarterly report regarding the additional factors that have impacted or may impact our business and operations. Our forward-looking statements are not guarantees of future performance, and actual results and future performance may differ materially from those suggested in any forward-looking statements. We do not intend to update these statements unless we are required to do so under applicable securities laws.

CONTACT: Thermon Sarah Alexander (512) 396-5801 Investor.Relations@thermon.com