Associated Materials ends Q2 with $62.2 million borrowing availability

By Lisa Kerner

Charlotte, N.C., Aug. 29 - Associated Materials, LLC ended its second quarter on June 30 with $6.4 million of cash and cash equivalents and about $62.2 million of available borrowing capacity under its ABL facilities.

Outstanding letters of credit as of June 30 totaled about $7.5 million, and they primarily secured deductibles of various insurance policies, according to a form 10-Q filed with the Securities and Exchange Commission.

As of June 30, there was $105.9 million drawn under Associated Materials' ABL facilities. The weighted average interest rate for borrowings under the ABL facilities was 4.4% for the quarter.

The company's liquidity reflects improvements to the inventory management process and the strategic management of vendor terms, as well as a focus on driving collections, chief financial officer Paul Morrisroe said during said the company's second-quarter earnings call on Wednesday.

Financial highlights

Associated Materials' net sales were up 1.3% at $314.4 million from the prior quarter.

Gross profit grew about $400,000 to $80.7 million for the quarter, while adjusted EBITDA rose 3.3% to $36 million.

Working capital as a percentage of sales was 14% for the second quarter versus 17.2% for the prior-year period.

For the first six months of the year, Associated Materials used cash of $35.2 million versus $65.2 million for same period last year.

Cash flows used in operating activities included income tax payments of $9 million, compared with $6.6 million of income tax payments for the same period in 2011.

Net cash of $1.8 million used in investing activities during the six-month period consisted of capital expenditures primarily related to various enhancements at the company's manufacturing facilities.

For the first six months, net cash used in financing activities included borrowings of $117.3 million under Associated Materials' ABL facilities offset by repayments of $85.2 million and payments of financing costs of about $100,000.

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