Swisher Hygiene Inc.
Swisher Hygiene Inc. (Form: 8-K, Received: 05/28/2013 08:21:12)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): May 28, 2013

 

 

SWISHER HYGIENE INC.

(Exact name of registrant as specified in its charter)

 

 

Delaware

(State or Other Jurisdiction

of Incorporation)

 

001-35067   27-3819646

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

4725 Piedmont Row Drive, Suite 400

Charlotte, North Carolina

  28210
(Address of Principal Executive Offices)   (Zip Code)

(704) 364-7707

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name or Former Address, If Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2 (b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c))

 

 

 


Item 2.02 Results of Operations and Financial Condition

On May 28, 2013, Swisher Hygiene Inc. (the “Company”) issued a press release announcing its results of operations for the three month period ended March 31, 2013. A copy of the press release is furnished as Exhibit 99.1 to this report.

The information furnished pursuant to this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

The following exhibit is furnished as part of this report:

 

Exhibit
No.
   Description
99.1    Press Release of Swisher Hygiene Inc., dated May 28, 2013, regarding results of operations for the three month period ended March 31, 2013.

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: May 28, 2013     SWISHER HYGIENE INC.
    By:  

/s/ Thomas C. Byrne

      Thomas C. Byrne
      President and Chief Executive Officer

 

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EXHIBIT INDEX

 

Exhibit
No.
   Description
99.1    Press Release of Swisher Hygiene Inc., dated May 28, 2013, regarding results of operations for the three month period ended March 31, 2013.

 

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Exhibit 99.1

SWISHER HYGIENE ANNOUNCES RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 2013

CHARLOTTE, NC – May 28, 2013 – Swisher Hygiene Inc. (“Swisher Hygiene”) (NASDAQ: SWSH, TSX: SWI), a leading provider of essential hygiene and sanitizing products and services, announced today first quarter results for the period ended March 31, 2013. All amounts in this news release are in United States dollars.

First Quarter 2013 Highlights

 

   

Total revenue from continuing operations of $52.0 million for the first quarter of 2013, an 11% decrease compared to the first quarter of 2012.

 

   

Adjusted EBITDA loss of $6.3 million for the first quarter of 2013, based on a net loss from continuing operations before income taxes of $16.8 million, as compared to an Adjusted EBITDA loss of $4.3 million for the first quarter of 2012. For a reconciliation of non-GAAP to GAAP measures, please review the disclosures and table included with this release.

 

   

Basic and diluted loss per share from continuing operations of $0.10 for the first quarter of 2013, compared to basic and diluted loss per share from continuing operations of $0.08 in the first quarter of 2012.

“While our first quarter 2013 results were affected by the review and restatement process, which remains ongoing until we regain compliance with NASDAQ rules following our Annual Meeting on June 5, we saw improved performance as the quarter progressed,” said Thomas Byrne, President and Chief Executive Officer of Swisher Hygiene. “The renewed interest in our corporate account and distributor programs has continued into the second quarter of 2013, and we believe we will be able to considerably improve on our disappointing first quarter performance in the months ahead.”

“During the quarter, we were able to execute on several initiatives designed to benefit future quarters,” continued Mr. Byrne. “We commenced the expansion of our Southeast chemical manufacturing facility while eliminating a second facility in the region, which will reduce costs beginning in June. We also completed the selection and enhancement of our standard product formulas, which is intended to ensure that we provide the best available products to our customers and forms the basis for our SKU rationalization program. We have also commenced our enhanced route consolidation program. These are just a few examples of our continued efforts to simplify and standardize operations, further eliminate costs and improve cash flow.”

First Quarter 2013 Results

For the three months ended March 31, 2013, Swisher Hygiene reported total revenue from continuing operations of $52.0 million, an 11% decrease from $58.2 million in the three months ended March 31, 2012. The revenue decline was primarily due to the loss of two large accounts in a previous quarter, along with customer turnover as Swisher Hygiene integrated smaller acquired operations into its systems and changed their product lines and brands.

Total costs and expenses for the three months ended March 31, 2013 decreased 3% to $68.8 million, compared to $70.9 million in the three months ended March 31, 2012. Excluding $3.9 million and $1.9 million of investigation and review-related expenses in the three months ended March 31, 2013 and 2012, respectively, total costs and expenses decreased 6% compared to the three months ended March 31, 2012.


For the three months ended March 31, 2013 and 2012, respectively:

 

     Q1 2013     Q1 2012  

Cost of sales as a % of revenue

     43.4     43.4

Route expense as a % of revenue

     20.3     18.2

SG&A expense as a % of revenue

     57.6     51.5

SG&A expense (excluding investigation and review-related expenses) as a % of revenue

     50.1     48.3

Cost of sales as a percentage of revenue was comparable with the prior-year quarter. The increase in route and SG&A expenses as a percentage of revenue primarily reflects the decline in revenue in the first quarter 2013 as compared to the prior-year period.

Net loss from continuing operations before income taxes for the three months ended March 31, 2013 was $16.8 million, compared to net loss from continuing operations before income taxes of $13.2 million in the three months ended March 31, 2012.

Adjusted EBITDA loss for the three months ended March 31, 2013 was $6.3 million, compared to an Adjusted EBITDA loss of $4.3 million in the three months ended March 31, 2012.

Cash and Capital Resources

As of March 31, 2013, Swisher Hygiene had $50.6 million of cash on its balance sheet and $11.9 million in outstanding debt. During the first quarter of 2013, Swisher Hygiene repaid $2.5 million of outstanding debt.

Conference Call

Swisher Hygiene will host a conference call to discuss first quarter 2013 results today at 9:00 a.m. Eastern Time.

The conference call can be accessed over the phone by dialing 1-855-541-0980 or for international callers by dialing 1-970-315-0440; please dial-in 10 minutes before the start of the call. A replay will be available two hours after the call and can be accessed by dialing 1-855-859-2056 or for international callers by dialing 1-404-537-3406; the conference ID is 77300676. The replay will be available until Tuesday, June 4, 2013.

In order to access the live webcast, please go to the Investors section of Swisher Hygiene’s website at http://www.swisherhygiene.com and click on the webcast link that will be made available. A replay will be available shortly after the original webcast.

Non-GAAP Financial Measures

This press release and the attached financial tables contain certain non-GAAP financial measures. In addition to net income determined in accordance with GAAP, we use certain non-GAAP measures such as “Adjusted EBITDA” in assessing Swisher Hygiene’s operating performance. Swisher Hygiene believes this non-GAAP measure serves as an appropriate measure to be used in evaluating the performance of its business.

 

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Swisher Hygiene defines Adjusted EBITDA as net loss excluding the impact of income taxes, depreciation and amortization expense, investigation and review related expenses, net interest expense, foreign currency gain and other income, net change on debt related fair value measurements, stock based compensation, severance, and third party costs directly related to merger and acquisitions.

Swisher Hygiene presents Adjusted EBITDA because the company considers it an important supplemental measure of its operating performance and believes it is frequently used by securities analysts, investors and other interested parties in the evaluation of its results. Management uses this non-GAAP financial measure frequently in its decision-making because it provides supplemental information that facilitates internal comparisons to the historical operating performance of prior periods and gives an additional indication of Swisher Hygiene’s core operating performance. Swisher Hygiene includes this non-GAAP financial measure in its earnings announcement in order to provide transparency to its investors and enable investors to better compare its operating performance with the operating performance of its competitors. Adjusted EBITDA should not be considered in isolation from, and is not intended to represent an alternative measure of, revenue, operating results or cash flows from operating activities as determined in accordance with GAAP. Additionally, Swisher Hygiene’s definition of Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies.

Under SEC rules, Swisher Hygiene is required to provide a reconciliation of non-GAAP measures to the most directly comparable GAAP measures. Accordingly, the following is a reconciliation of Adjusted EBITDA to Swisher Hygiene’s net losses for the three months ended March 31, 2013 and 2012:

 

     Three months ended March 31,  
     2013     2012  
     (In thousands)  

Net loss from continuing operations

   $ (17,240   $ (13,260

Income tax expense

     427        80   

Depreciation and amortization expense

     5,649        4,976   

Interest expense, net

     87        581   

Foreign currency loss(gain)

     1        (3

Realized and unrealized gain on fair value of convertible debt and earnouts

     —          (29

Severance

     146        425   

Stock based compensation

     754        949   

Investigation and review-related expenses

     3,923        1,874   

Acquisition and merger expenses

     —          120   
  

 

 

   

 

 

 

Adjusted EBITDA for continuing operations

   $ (6,253   $ (4,287
  

 

 

   

 

 

 

Cautionary Statement on Forward-Looking Information

All statements other than statements of historical fact contained in this press release, on the conference call and in the webcast constitute “forward-looking information” or “forward-looking statements” within the meaning of the U.S. federal securities laws and the Securities Act (Ontario) and are based on the expectations, estimates and projections of management as of the date of this press release, on the conference call and in the webcast unless otherwise stated. All statements other than historical facts are, or may be, deemed to be forward looking statements. The words “plans,” “expects,” “is expected,” “scheduled,” “estimates,” or “believes,” or similar words or variations of such words and phrases or statements that certain actions, events or results “may,” “could,” “would,” “might,” or “will be taken,” “occur,” and similar expressions identify forward-looking statements.

Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by Swisher Hygiene as of the date of such statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies. All of these assumptions have been derived from information currently available to Swisher Hygiene including

 

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information obtained by Swisher Hygiene from third-party sources. These assumptions may prove to be incorrect in whole or in part. All of the forward-looking statements made in this press release, on the conference call and in the webcast are qualified by the above cautionary statements and those made in the “Risk Factors” section of Swisher Hygiene’s Annual Report on Form 10-K for the year ended December 31, 2012, filed with the Securities and Exchange Commission, available on www.sec.gov, and with Canadian securities regulators available on Swisher Hygiene’s SEDAR profile at www.sedar.com, and Swisher Hygiene’s other filings with the Securities and Exchange Commission and with Canadian securities regulators available on Swisher Hygiene’s SEDAR profile at www.sedar.com. The forward-looking information set forth in this press release, on the conference call and in the webcast is subject to various assumptions, risks, uncertainties and other factors that are difficult to predict and which could cause actual results to differ materially from those expressed or implied in the forward-looking information. Swisher Hygiene disclaims any intention or obligation to update or revise any forward-looking statements to reflect subsequent events and circumstances, except to the extent required by applicable law.

About Swisher Hygiene Inc.

Swisher Hygiene Inc. is a NASDAQ and TSX listed company that provides essential hygiene and sanitizing solutions to customers throughout much of North America and internationally through its network of company-owned operations, franchises and master licensees. These solutions include essential products and services that are designed to promote superior cleanliness and sanitation in commercial environments, while enhancing the safety, satisfaction and well-being of employees and patrons. These solutions are typically delivered by employees on a regularly scheduled basis and involve providing Swisher Hygiene’s customers with: (i) consumable products such as detergents, cleaning chemicals, soap, paper and supplies, together with the rental and servicing of dish machines and other equipment for the dispensing of those products; (ii) the rental of facility service items requiring regular maintenance and cleaning, such as floor mats, mops, bar towels, and linens; and (iii) manual cleaning of their facilities. Swisher Hygiene serves customers in a wide range of end-markets, with a particular emphasis on the foodservice, hospitality, retail and healthcare industries.

For Further Information, Please Contact:

Swisher Hygiene Inc.

Investor Contact :

Amy Simpson

Phone: (704) 602-7116

Garrett Edson, ICR

Phone: (203) 682-8331

Media Contact :

Alecia Pulman, ICR

Phone: (203) 682-8224

 

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SWISHER HYGIENE INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

(In thousands, except share and per share data)

 

     Three Months Ended March 31,  
     2013     2012  

Revenue

    

Products

   $ 46,037      $ 50,849   

Services

     5,744        7,009   

Franchise and other

     241        294   
  

 

 

   

 

 

 

Total revenue

     52,022        58,152   
  

 

 

   

 

 

 

Costs and expenses

    

Cost of sales (exclusive of route expenses and related depreciation and amortization)

     22,565        25,247   

Route expenses

     10,571        10,594   

Selling, general, and administrative expenses

     29,979        29,969   

Acquisition and merger expenses

     —          120   

Depreciation and amortization

     5,649        4,976   
  

 

 

   

 

 

 

Total costs and expenses

     68,764        70,906   
  

 

 

   

 

 

 

Loss from continuing operations

     (16,742     (12,754

Other expense, net

     (71     (426
  

 

 

   

 

 

 

Net loss from continuing operations before income taxes

     (16,813     (13,180

Income tax expense

     (427     (80
  

 

 

   

 

 

 

Net loss from continuing operations

     (17,240     (13,260

Loss from discontinued operations, net of tax

     —          (1
  

 

 

   

 

 

 

Net loss

     (17,240     (13,261

Net loss attributable to non-controlling interest

     —          —     
  

 

 

   

 

 

 

Net loss attributable to Swisher Hygiene Inc.

     (17,240     (13,261

Comprehensive loss

    

Employee benefit plan adjustment, net of tax

     —          —     

Foreign currency translation adjustment

     1        (4
  

 

 

   

 

 

 

Comprehensive loss

   $ (17,239   $ (13,265
  

 

 

   

 

 

 

Loss per share

    

Basic and diluted (continuing operations)

   $ (0.10   $ (0.08
  

 

 

   

 

 

 

Basic and diluted (discontinued operations)

   $ —        $ (0.00
  

 

 

   

 

 

 

Weighted-average common shares used in the computation of loss per share

    

Basic and diluted

     175,157,404        174,832,128   
  

 

 

   

 

 

 

 

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SWISHER HYGIENE INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except share data)

 

     March 31,
2013
    December 31,
2012
 
ASSETS   

Current assets

    

Cash and cash equivalents

   $ 50,585      $ 61,419   

Restricted cash

     5,490        5,390   

Accounts receivable (net of allowance for doubtful accounts of $2,218 at March 31, 2013 and $2,335 at December 31, 2012)

     19,820        21,225   

Inventory

     15,845        15,327   

Receivable due from sale of discontinued operations

     12,500        12,500   

Deferred income taxes

     794        1,995   

Other assets

     4,361        4,804   
  

 

 

   

 

 

 

Total current assets

     109,395        122,660   

Property and equipment, net

     48,713        48,348   

Goodwill

     106,358        106,358   

Other intangibles, net

     45,714        47,821   

Deferred income taxes

     160        —     

Other noncurrent assets

     2,308        2,498   
  

 

 

   

 

 

 

Total assets

   $ 312,648      $ 327,685   
  

 

 

   

 

 

 
LIABILITIES AND EQUITY   

Current liabilities

    

Accounts payable and accrued expenses

   $ 32,610      $ 27,993   

Long-term debt and obligations due within one year

     8,045        9,145   
  

 

 

   

 

 

 

Total current liabilities

     40,655        37,138   
  

 

 

   

 

 

 

Long-term debt and obligations

     3,841        5,284   

Deferred income taxes

     4,058        4,673   

Other long-term liabilities

     3,436        3,447   
  

 

 

   

 

 

 

Total noncurrent liabilities

     11,335        13,404   
  

 

 

   

 

 

 

Commitments and contingencies

    

Equity

    

Swisher Hygiene Inc. stockholders’ equity

    

Preferred stock, par value $0.001, authorized 10,000,000 shares; no shares issued and outstanding at March 31, 2013 and December 31, 2012

     —          —     

Common stock, par value $0.001, authorized 600,000,000 shares; 175,157,404 shares issued and outstanding at March 31, 2013 and December 31, 2012

     175        175   

Additional paid-in capital

     386,206        385,452   

Accumulated deficit

     (124,747     (107,507

Accumulated other comprehensive loss

     (998     (999
  

 

 

   

 

 

 

Total Swisher Hygiene Inc. stockholders’ equity

     260,636        277,121   

Non-controlling interest

     22        22   
  

 

 

   

 

 

 

Total equity

     260,658        277,143   
  

 

 

   

 

 

 

Total liabilities and equity

   $ 312,648      $ 327,685   
  

 

 

   

 

 

 

 

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