Jason Industries (JASN) Misses Q1 EPS by 6c, Revenues Miss; Offers FY19 Revenue Outlook

Jason Industries (NASDAQ: JASN) reported Q1 EPS of ($0.10), $0.06 worse than the analyst estimate of ($0.04). Revenue for the quarter came in at $142 million versus the consensus estimate of $153.4 million.

Key financial results for the first quarter 2019 versus the year ago period include:

• Net sales of $142.0 million decreased 15.1 percent and included a negative 3.4 percent impact from the divestiture and planned exit of non-core businesses and a negative 1.7 percent from foreign currency translation. Organic sales declined 10.0 percent primarily due to lower overall production volumes, with platform changes in Fiber Solutions, softer end market demand in Engineered Components, and weak European markets in Industrial.
• Net loss of $5.3 million, or $0.22 diluted loss per share, increased $4.5 million and $0.13 per share.
• Adjusted net loss of $3.1 million, or $0.10 adjusted loss per share, increased $0.12 per share.
• Adjusted EBITDA of $14.1 million, or 9.9 percent of net sales, decreased $5.7 million from 11.8 percent of net sales, driven by lower volumes.
• Free cash flow was negative $10.7 million, a decrease of $10.9 million, due to lower adjusted EBITDA, higher working capital, and increased restructuring costs.

“Our results for the quarter reflect mixed end markets and lower volumes with our OEM customers. While we saw continued growth in U.S. industrial markets, the overall economic environment is clearly softer than it was a year ago. However, we are responding to the changing markets and there are many positives happening across the business,” said Brian Kobylinski, chief executive officer of Jason. “We are winning new business and our operations continue to improve. We are excited about the Schaffner acquisition and the synergies we see with our Osborn business.”

Outlook

Kobylinski stated, “We expect continued softness in several end markets to impact our sales results for the year and as such initiated cost reduction actions to preserve our full year EBITDA. Our customers are recognizing our improved operational performance and our team is securing new business that will drive future sales impacting late 2019 and beyond. Despite top line pressure we remain encouraged by our elevated operations, improved customer relationships, new business awards, and are excited about our Schaffner acquisition.”

GUIDANCE:

Jason Industries sees FY2019 revenue of $565-585 million, versus the consensus of $576.8 million.

For earnings history and earnings-related data on Jason Industries (JASN) click here.

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