Dallas, Sept. 12 - Reddy Ice Holdings, Inc. today announced that it had recently completed the divestiture of its bottled water business and substantially all of its cold storage business for total gross proceeds of $20.25 million. The businesses disposed of generated revenue and Adjusted EBITDA of approximately $9.0 million and $1.6 million, respectively, for the twelve months ended June 30, 2007.
"These businesses were sold at attractive valuations and the successful completion of the transactions represent a continuation of our strategy to focus on the growth of our core ice business," commented Chief Executive Officer Jimmy C. Weaver. "We would like to thank the employees of those operations for their years of hard work and wish them future success."
The Company's existing senior credit agreement requires that the net proceeds from the sale of the Company's non-ice businesses must be used either to repay term borrowings under the credit facility or to make acquisitions and/or capital expenditures within twelve months of the receipt of such proceeds. The Company is currently reviewing its options with regards to the use of the net proceeds. Milkie Ferguson Investments, Inc. acted as the Company's financial advisor on the sale of the non-ice businesses.
To date in the third quarter of 2007, the Company has completed three additional acquisitions for an aggregate purchase price of approximately $2.8 million. Annual revenues and Adjusted EBITDA associated with these acquisitions are approximately $2.1 million and $0.7 million, respectively.
Annual Revenue, EBITDA and Net Income Guidance for 2007 Adjusted
The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially. These statements do not include the potential impact of any mergers, acquisitions or other business combinations, or divestitures that may be completed after September 12, 2007. These revised projections for 2007 include the effects of the sale of substantially all of the Company's non-ice businesses and the 2007 impact of the acquisitions completed through the date of this press release. These revised projections for 2007 do not give effect to the previously announced potential acquisition of the Company by funds managed by GSO Capital Partners LP or to any costs associated with the potential acquisition.
Revenues in 2007 are now expected to range between $335 million and $345 million and net income to range from $14.6 million to $19.7 million. Diluted net income per share is expected to be in the range of $0.66 to $0.90. Adjusted EBITDA for 2007 is expected to be in the range of $85 million to $90 million. Excluding the impact of the proceeds of the sale of the non-ice businesses, Available Cash, as defined in the Company's credit agreement, is expected to range from $48.7 million to $58.1 million in 2007, with Available Cash per diluted share ranging from $2.21 to $2.64.
Expected capital
expenditures and proceeds from dispositions for the full year 2007 have not changed from the Company's prior guidance.
In accordance with generally accepted accounting principles, the income from operations and gain on sale of those businesses, both net of tax, will be reported separately in the Company's consolidated financial statements as "discontinued operations." As a result of this reclassification, the Company's projected full year 2007 revenues and Adjusted EBITDA were reduced by $11 million and $2.5 million, respectively.
About the Company
Reddy Ice is the largest manufacturer and distributor of packaged ice in the United States. With over 2,000 year-round employees, the Company sells its products primarily under the widely known Reddy Ice(R) brand to approximately 82,000 locations in 31 states and the District of Columbia. The Company provides a broad array of product offerings in the marketplace through traditional direct store delivery, warehouse programs, and its proprietary technology, The Ice Factory(R). Reddy Ice serves most significant consumer packaged goods channels of distribution, as well as restaurants, special entertainment events, commercial users and the agricultural sector.