PDF - Somero Enterprises

Net income to EBITDA reconciliation and net income before amortisation reconciliationSomeroSomero Enterprises Group Enterprises Inc. SomeroCombined (2) Enterprises Inc.1 January 2005 11 August 2005through through For the year ended 12 months ended10 August 2005 31 December 2005 31 December 2005 31 December 2006US$ 000 US$ 000 US$ 000 US$ 000EBITDA reconciliationNet income 3,081 962 4,043 5,381Tax provision 1,681 548 2,229 2,856Interest expense 307 1,162 1,469 3,714Interest income (383) – (383) (157)Foreign exchange gain 90 40 130 (247)Other expense (37) 288 251 325Depreciation 278 207 485 382Amortisation 581 1,001 1,582 2,383Stock based compensation – – – 59EBITDA 5,598 4,208 9,806 14,696Net income before amortisation reconciliationNet income 3,081 962 4,043 5,381Amortisation 581 1,001 1,582 2,383Net income before amortisation 3,662 1,963 5,625 7,764Notes:References to “Net Income Before Amortisation” in this document are to Somero’s net income plus amortisation of intangibles. Although net income before amortisation is not ameasure of operating income, operating performance or liquidity under US GAAP, this financial measure is included because management believes it will be useful to investors whencomparing Somero’s results of operations both before and after the Somero Acquisition, including by eliminating the effects of increases in amortisation of intangibles that haveoccurred as a result of the write-up of these assets in connection with the Somero Acquisition. Net income before amortisation should not, however, be considered in isolation oras a substitute for operating income as determined by US GAAP, or as an indicator of operating performance, or of cash flows from operating activities as determined in accordancewith US GAAP. Since net income before amortisation is not a measure determined in accordance with US GAAP and is thus susceptible to varying calculations, net income beforeamortisation, as presented, may not be comparable to other similarly titled measures of other companies. A reconciliation of net income to EBITDA and Net Income BeforeAmortisation is presented above.RevenuesSomero’s consolidated revenues for the 12 months ended 31 December 2006 were US$55.9m, which represented a 32.1%increase from US$42.3m in consolidated revenues for the 12 months ended 31 December 2005. Somero’s revenues consistprimarily of sales of new large line products (the SXP Large Laser Screed and its predecessors), sales of new small line products(the CopperHead and PowerRake) and other revenues, which consist of, among other things, revenue from sales of spare parts,refurbished machines and accessories. The overall increase in revenues for the 12 months ended 31 December 2006 ascompared to the 12 month period ended 31 December 2005 was driven by growth in each of large line sales, small line salesand other revenues. The table below shows the breakdown between large line sales, small line sales and other revenues duringthe 12 months ended 31 December 2005 (unaudited) and 2006:12 months ended31 December 2005 12 months ended(unaudited) 31 December 2006Percentage ofPercentage of(US$ in millions) net sales (US$ in millions) net salesLarge line sales 17,705 41.8% 25,394 45.4%Small line sales 12,515 29.6% 15,930 28.5%Other revenues 12,098 28.6% 14,570 26.1%Total 42,318 100% 55,894 100%15Somero Enterprises, Inc.Annual Report and Accounts 2006