- Revenue of €1,604 million, down 6% reflecting difficult market conditions
- Balance sheet strengthened by transformational recapitalization completed in second quarter
- Cost cutting program starting to deliver results
- Sales wins continue at strong rate.
Hoofddorp, the Netherlands, 21 May, 2013 – CEVA Group Plc (“CEVA” or the “Company”), one of the world’s leading non-asset based supply chain management companies, today reports results for the three months ended 31 March, 2013.
“The weak economic conditions impacting the global logistics industry continued to weigh on customer sentiment during the first quarter, impacting both revenue and Adjusted EBITDA,” said Marvin O. Schlanger, CEO of CEVA. “This is disappointing; however, we have now taken significant and decisive action to strengthen the company’s balance sheet through a major capital restructuring.”
Schlanger adds: “We continue to focus our efforts on implementing the previously announced cost-reduction program. We remain confident that, aided by the strength of our new capital structure, we can drive revenues across the business to position CEVA for profitable growth in the future. Business Development successes in the quarter met our target and will benefit future quarters. ”
The Company reported Adjusted EBITDA1 of €31 million for the three months ended 31 March 2013, down from €66 million in first quarter 2012. Excluding the 2012 impact from divested businesses,Adjusted EBITDA for the first quarter 2012 would have been €57 million. Results were impacted by a variety of factors, including overall soft global logistics markets; the loss of Airfreight volume as some businesses transitioned to Ocean transport; the exposure to Eurozone markets; and underperforming CL contracts, which the Company addressed in a large manner in the quarter. During the first quarter 2013, the Company completed the sale of its Pallecon Container business for approximately €135 million.
Revenues decreased by 6.3% to €1,604 million for the three months ended 31 March 2013 compared to €1,712 million for the three months ended 31 March 2012. Revenues in Freight Management declined by 6.8%, driven by softness in Airfreight volumes as market conditions continued to be challenging, partly compensated by growth in Ocean revenues. Revenues in the Company’s Contract Logistics segment declined by 5.9% driven in part by the sale of CEVA’s Pallecon Container business at the start of 2013; the impact of several contracts that were terminated as part of the cost reduction program that was launched during the last quarter of 2012; and lower volumes in several key markets, notably Europe.
On 2 May, 2013 CEVA announced the successful recapitalization of its balance sheet and new capital raise. This major transaction has strengthened CEVA’s balance sheet by eliminating approximately €1.3 billion of consolidated net debt. The transaction also reduces CEVA’s annual cash interest costs by over €130 million (approx. 50%) and provides access to more than €230 million of new capital infusion for investment in the company’s business plan.
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All commentary based on actual results unless stated otherwise.
1Adjusted EBITDA excludes the impact of specific items which are significant non-recurring items such as restructuring and certain legal expenses. Previously, this measure of performance was called EBITDA before specific items.
CEVA - Making business flow
CEVA Logistics, 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 50,000 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
SAFE HARBOR STATEMENT:
This news release may contain forward-looking statements. These statements include, but are not limited to, discussions regarding industry outlook, the Company’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 the Company’s global operations, fluctuations and increases in fuel prices, the Company’s substantial indebtedness, restrictions contained in its debt agreements and risks that it will be unable to compete effectively. Further information concerning the Company and its business, including factors that potentially could materially affect the Company’s financial results, is contained in the Company’s annual and quarterly reports, available on the Company’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.