Alliance Laundry Holdings LLC Reports 3rd Quarter 2007 Earnings



    RIPON, WIS., November 15 /CNW/ - Alliance Laundry Holdings LLC announced
today results for the three and nine months ended September 30, 2007.

    Net revenues for the quarter ended September 30, 2007 increased $18.3
million, or 19.2%, to $113.4 million from $95.1 million for the quarter ended
September 30, 2006. Our net income for the quarter ended September 30, 2007
was $1.2 million as compared to a net loss of $4.0 million for the quarter
ended September 30, 2006. Adjusted EBITDA (see "About Non-GAAP Financial
Measures" below) for the quarter ended September 30, 2007 increased $1.3
million to $16.4 million from $15.1 million for the quarter ended September
30, 2006.

    The overall net revenue increase of $18.3 million was attributable to
higher commercial laundry revenues of $14.4 million, higher consumer laundry
revenue of $0.3 million, higher service parts revenue of $0.5 million, higher
CLD Acquisition related sales of $1.9 million from European operations and
lower worldwide sales eliminations of $1.2 million.

    Net revenues for the nine months ended September 30, 2007 increased $73.4
million, or 28.9%, to $326.9 million from $253.5 million for the nine months
ended September 30, 2006. Our net income for the nine months ended September
30, 2007 was $5.4 million as compared to a net loss of $7.3 million for the
nine months ended September 30, 2006. Adjusted EBITDA (see "About Non-GAAP
Financial Measures" below) for the twelve month period ended September 30,
2007 was $66.8 million.

    In announcing the Company's results, CEO Thomas F. L'Esperance said, "We
are extremely pleased with our top line performance for the quarter and nine
months. Although results have been adversely affected by significantly higher
material costs, our third quarter earnings reflected significant improvement
from increased sales in our base business revenue for North America and
continued strong performance for international sales and CLD Europe."

    L'Esperance concluded, "Based on progress to date, we anticipate that our
operational strategies and modest improvements in material costs in the U.S.
will position us for a strong finish in 2007."

    About Non-GAAP Financial Measures

    In addition to disclosing financial results that are determined in
accordance with generally accepted accounting principles (GAAP), we also
disclose EBITDA and Adjusted EBITDA, which are non-GAAP measures. We have
presented EBITDA and Adjusted EBITDA because certain covenants in our Senior
Credit Facility are tied to ratios based on these measures. "EBITDA"
represents net income (loss) before interest expense, income tax (provision)
benefit and depreciation and amortization, and "Adjusted EBITDA" (as defined
under the Senior Credit Facility) is EBITDA as further adjusted to exclude,
among other things, certain non-recurring expenses and other non-recurring
non-cash charges. EBITDA and Adjusted EBITDA do not represent, and should not
be considered, an alternative to net income or cash flow from operations, as
determined by GAAP, and our calculations thereof may not be comparable to
similarly entitled measures reported by other companies. Our Senior Credit
Facility requires us to satisfy specified financial ratios and tests,
including a maximum of total debt to Adjusted EBITDA and a minimum Adjusted
EBITDA to cash interest expense. To the extent that we fail to maintain either
of these ratios within the limits set forth in the Senior Credit Facility, our
ability to access amounts available under our Revolving Credit Facility would
be limited, our liquidity would be adversely affected and our obligations
under the Senior Credit Facility could be accelerated. In addition, any such
acceleration would constitute an event of default under the indenture
governing the Senior Subordinated Notes (the "Notes Indenture"), and such an
event of default under the Notes Indenture could lead to an acceleration of
our obligations under the Senior Subordinated Notes. A reconciliation of
EBITDA and Adjusted EBITDA with the most directly comparable GAAP measure is
included below for the three and nine months ended September 30, 2007 along
with the components of EBITDA and Adjusted EBITDA.

    About Alliance Laundry Holdings LLC

    Alliance Laundry Holdings LLC is the parent company of Alliance Laundry
Systems LLC (www.comlaundry.com), a leading designer, manufacturer and
marketer in North America of commercial laundry equipment used in laundromats,
multi-housing laundries and on-premise laundries. Under the well-known brand
names of Speed Queen(R), UniMac(R), Huebsch(R), IPSO(R), and Cissell(R), we
produce a full line of commercial washing machines and dryers with load
capacities from 12 to 200 pounds. We have been a leader in the North American
stand-alone commercial laundry equipment industry for more than ten years.
With the addition of our European operations and Alliance Laundry's export
sales to Europe, we believe that we are also a leader in the European
stand-alone commercial laundry equipment industry.

    Safe Harbor for Forward-Looking Statements

    With the exception of the reported actual results, this press release
contains predictions, estimates and other forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Act of 1934, as amended. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
that may cause actual results, performance or achievements of our business to
differ materially from those expressed or implied by such forward-looking
statements. Although we believe that our plans, intentions and expectations
reflected in such forward-looking statements are based on reasonable
assumptions, we can give no assurance that such plans, intentions,
expectations, objectives or goals will be achieved. Important factors that
could cause actual results to differ materially from those included in
forward-looking statements include: impact of competition; continued sales to
key customers; possible fluctuations in the cost of raw materials and
components; possible fluctuations in currency exchange rates, which affect the
competitiveness of our products abroad; possible fluctuation in interest
rates, which affects our earnings and cash flows; the impact of substantial
leverage and debt service on us; possible loss of suppliers; risks related to
our asset backed facilities; dependence on key personnel; labor relations;
potential liability for environmental, health and safety matters; potential
future legal proceedings and litigation; and other risks listed from time to
time in the Company's reports, including, but not limited to the Company's
most recent Annual Report on Form 10-K/A for the year ended December 31, 2006.

    Financial information for Alliance Laundry Holdings LLC for the three and
nine months ended September 30, 2007.

    

                        ALLIANCE LAUNDRY HOLDINGS LLC
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (unaudited)
                               (in thousands)

                                                            December 31,
                                             September 30,      2006
                                                 2007        (Restated)
                                             -------------  -------------
                     Assets
     Current assets:
      Cash and cash equivalents              $      10,613  $      11,221
      Accounts receivable, net                      26,737         24,523
      Inventories, net                              61,400         51,915
      Beneficial interests in securitized
       accounts receivable                          28,579         28,641
      Deferred income tax asset, net                 2,729          3,202
      Prepaid expenses and other                     3,187          4,804
                                             -------------  -------------
       Total current assets                        133,245        124,306

     Notes receivable, net                           3,528          4,018
     Property, plant and equipment, net             71,924         73,789
     Goodwill                                      183,078        180,269
     Beneficial interests in securitized
      financial assets                              20,138         18,055
     Deferred income tax asset, net                 10,677         10,677
     Debt issuance costs, net                        8,703         10,318
     Intangible assets, net                        148,857        152,890
                                             -------------  -------------
       Total assets                          $     580,150  $     574,322
                                             -------------  -------------

        Liabilities and Member(s)' Equity
     Current liabilities:
      Current portion of long-term debt and
       capital lease obligations             $         230  $         526
      Revolving credit facility                          -              -
      Accounts payable                              34,802         27,636
      Deferred income tax liability, net                 -            216
      Other current liabilities                     34,710         37,085
                                             -------------  -------------
       Total current liabilities                    69,742         65,463

     Long-term debt and capital lease
      obligations:
      Senior credit facility                       215,000        224,000
      Senior subordinated notes                    149,500        149,430
      Other long-term debt and capital lease
       obligations                                   2,140          2,159

     Deferred income tax liability, net              6,502          6,137
     Other long-term liabilities                    10,693         10,742
                                             -------------  -------------
       Total liabilities                           453,577        457,931

     Commitments and contingencies
     Member(s)' equity                             126,573        116,391
                                             -------------  -------------
      Total liabilities and member(s)'
       equity                                $     580,150  $     574,322
                                             -------------  -------------
    

    
                        ALLIANCE LAUNDRY HOLDINGS LLC
               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (unaudited)
                                (in thousands)

                                 Three Months Ended    Nine Months Ended
                                 ------------------- ---------------------
                                                               September
                                                                   30,
                                 September September September    2006
                                    30,       30,       30,
                                   2007      2006      2007    (Restated)
                                 --------- --------- --------- -----------

    Net revenues:
     Equipment and service parts  $111,396  $92,529   $320,856  $ 248,738
     Equipment financing, net        1,981    2,601      6,013      4,802
                                 --------- --------- --------- -----------
    Net revenues                   113,377   95,130    326,869    253,540
    Cost of sales                   86,479   74,257    244,380    196,162
                                 --------- --------- --------- -----------
    Gross profit                    26,898   20,873     82,489     57,378
                                 --------- --------- --------- -----------

    Selling, general and
     administrative expense         15,728   13,010     47,761     36,837
    Securitization, impairment
     and other costs                    32    1,647        782      5,571
                                 --------- --------- --------- -----------
    Total operating expenses        15,760   14,657     48,543     42,408
                                 --------- --------- --------- -----------
      Operating income              11,138    6,216     33,946     14,970

    Interest expense                 9,410    9,591     25,871     22,833
    Other expense, net                   -      120          -        480
                                 --------- --------- --------- -----------
      Income (loss) before taxes     1,728   (3,495)     8,075     (8,343)
    Provision (benefit) for
     income taxes                      523      532      2,631     (1,050)
                                 --------- --------- --------- -----------
      Net income (loss)           $  1,205  $(4,027)  $  5,444  $  (7,293)
                                 --------- --------- --------- -----------
    

    
                        ALLIANCE LAUNDRY HOLDINGS LLC
               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (unaudited)
                                (in thousands)

                                                   Nine Months Ended
                                              ----------------------------
                                                             September 30,
                                              September 30,      2006
                                                  2007        (Restated)
                                              -------------  -------------

    Cash flows from operating activities:
     Net income (loss)                         $     5,444    $    (7,293)
     Adjustments to reconcile net income
      (loss) to net cash
      provided by operating activities:
       Depreciation and amortization                14,222         16,420
       Non-cash interest expense                       719            316
       Non-cash executive unit compensation          2,706          1,215
       Non-cash trademark impairment                     -          1,400
       Non-cash inventory expense                        -          2,726
       Deferred income taxes                           160         (1,584)
       Loss on sale of property, plant and
        equipment                                       70            175
       Changes in assets and liabilities:
          Accounts receivable                       (1,912)         5,383
          Inventories                               (8,875)       (13,722)
          Other assets                                (228)        (3,768)
          Accounts payable                           6,561          3,126
          Other liabilities                         (5,657)        (2,076)
                                              -------------  -------------
       Net cash provided by operating
        activities                                  13,210          2,318
                                              -------------  -------------

    Cash flows used in investing activities:
     Additions to property, plant and
      equipment                                     (5,931)        (4,046)
     Acquisition of businesses, net of cash
      acquired                                           -        (77,933)
     Proceeds on disposition of assets               1,178          1,129
                                              -------------  -------------
       Net cash used in investing activities        (4,753)       (80,850)
                                              -------------  -------------

    Cash flows (used in) provided by
     financing activities:
     Principal payments on long-term debt           (9,428)        (8,023)
     Net increase in revolving line of credit
      borrowings                                         -          6,000
     Proceeds from senior term loan                      -         60,000
     Issuance of common stock                            -         23,493
     Repurchase of common stock                          -            (30)
     Debt financing costs                                -         (1,334)
                                              -------------  -------------
       Net cash (used in) provided by
        financing activities                        (9,428)        80,106
                                              -------------  -------------

    Effect of exchange rate changes on cash
     and cash equivalents                              363            549
                                              -------------  -------------

    (Decrease) increase in cash and cash
     equivalents                                      (608)         2,123
    Cash and cash equivalents at beginning of
     period                                         11,221          5,075
                                              -------------  -------------
    Cash and cash equivalents at end of
     period                                    $    10,613    $     7,198
                                              -------------  -------------

    Supplemental disclosure of cash flow
     information:
     Cash paid for interest                    $    25,488    $    23,878
     Cash paid for income taxes                      1,442             79
    

    Reconciliation of Net income (loss) to EBITDA and Adjusted EBITDA, and
reconciliation of Adjusted EBITDA to Net Cash Provided by (Used in) Operating
Activities for the Three and Nine Months Ended September 30, 2007 (Dollars in
Thousands):

    
                                                           Three Months
                                             Three Months      Ended
                                                 Ended     September 30,
                                             September 30,     2006
                                                 2007       (Restated)
                                             ------------- -------------


    Net income (loss)                         $     1,205   $    (4,027)
    Provision for income taxes                        523           532
    Interest expense                                9,410         9,591
    Depreciation and amortization (a)               4,851         5,177
    Non-cash interest income included in
     amortization above                              (544)         (732)
                                             ------------- -------------
    EBITDA                                         15,445        10,541
    Finance program adjustments (b)                  (595)       (1,150)
    Other non-recurring charges (c)                   668         2,815
    Other non-cash charges (d)                        902         2,777
    Other expense (e)                                   -           120
                                             ------------- -------------
    Adjusted EBITDA                                16,420        15,103

    Interest expense                               (9,410)       (9,591)
    Non-cash interest income included
        in amortization above                         544           732
    Other non-cash interest                           377           843
    Finance program adjustments (b)                   595         1,150
    Other non-recurring charges (c)                  (668)       (2,815)
    Deferred taxes                                   (636)         (534)
    Loss on sale of property, plant and
     equipment                                         50            44
    Other expense                                       -          (109)
    Changes in assets and liabilities              (6,629)       (1,609)
                                             ------------- -------------
    Net cash provided by operating activities $       643   $     3,214
                                             ------------- -------------
    

    (a) Depreciation and amortization amounts include amortization of
deferred financing costs included in interest expense.

    (b) We currently operate an off-balance sheet commercial equipment
finance program in which newly originated equipment loans are sold to
qualified special-purpose bankruptcy remote entities. In accordance with GAAP,
we are required to record gains/losses on the sale of these equipment based
promissory notes. In calculating Adjusted EBITDA, management determines the
cash impact of net interest income on these notes. The finance program
adjustments are the difference between GAAP basis revenues (as prescribed by
SFAS No. 125/140) and cash basis revenues.

    (c) Other non-recurring charges are described as follows:

    --  Other non-recurring charges for the quarter ended September 30, 2007
consist of $0.6 million of investigatory and audit costs related to the
restatements which are included in the selling, general and administrative
expense line of our condensed consolidated statements of operations and
$0.1million of costs associated with the closure of the Marianna, Florida
production facility which are included in the securitization, impairment and
other costs line of our condensed consolidated statements of operations.

    --  Other non-recurring charges for the quarter ended September 30, 2006
relate to a periodic accrual of $0.3 million under a one time retention bonus
agreement with certain management employees, $0.9 million of costs related to
the transfer of the Marianna, Florida product lines to Ripon, Wisconsin which
are included in the selling, general and administrative expense line of our
condensed consolidated statements of operations and $1.6 million of costs
associated with the closure of the Marianna, Florida production facility which
are included in the securitization, impairment and other costs line of our
condensed consolidated statements of operations.

    (d) Other non-cash charges are described as follows:

    --  Other non-cash charges for the quarter ended September 30, 2007
consist of $0.9 million of non-cash incentive compensation expense related to
management incentive stock options, which is included in the selling, general
and administrative expense line of our condensed consolidated statements of
operations.

    --  Other non-cash charges for the quarter ended September 30, 2006 are
comprised of $2.7 million of costs associated with the inventory step-up to
fair market value recorded at the CLD Acquisition date, which are included in
the cost of sales line of our condensed consolidated statements of operations,
and $0.1 million of non-cash incentive compensation expense related to
management incentive stock options, which is included in the selling, general
and administrative expense line of our condensed consolidated statements of
operations.

    (e) Other expense is described as follows:

    --  Other expense for the nine months ended September 30, 2006 relates to
$0.1 million of a mark to market loss related to two foreign exchange hedge
agreements. The agreements were entered to control the foreign exchange risk
associated with the initial acquisition price of CLD. The foreign exchange
hedges are included in the other expense, net line of our condensed
consolidated statements of operations.

    
                                                   Nine Months Ended
                                              ----------------------------
                                                             September 30,
                                              September 30,      2006
                                                  2007        (Restated)
                                              -------------  -------------


    Net income (loss)                          $     5,444    $    (7,293)
    Provision (benefit) for income taxes             2,631         (1,050)
    Interest expense                                25,871         22,833
    Depreciation and amortization (a)               14,222         16,422
    Non-cash interest income included in
     amortization above                             (1,615)        (1,654)
                                              -------------  -------------
    EBITDA                                          46,553         29,258
    Finance program adjustments (b)                 (1,494)          (306)
    Other non-recurring charges (c)                  2,136          7,687
    Other non-cash charges (d)                       2,706          5,328
    Other expense (e)                                    -            480
                                              -------------  -------------
    Adjusted EBITDA                                 49,901         42,447

    Interest expense                               (25,871)       (22,833)
    Non-cash interest income included in
     amortization above                              1,615          1,654
    Other non-cash interest                            719            316
    Finance program adjustments (b)                  1,494            306
    Other non-recurring charges (c)                 (2,136)        (7,687)
    Deferred taxes                                  (2,471)          (535)
    Loss on sale of property, plant and
     equipment                                          70            175
    Other expense                                        -           (468)
    Changes in assets and liabilities              (10,111)       (11,057)
                                              -------------  -------------
    Net cash provided by operating activities  $    13,210    $     2,318
                                              -------------  -------------
    

    (a) Depreciation and amortization amounts include amortization of
deferred financing costs included in interest expense.

    (b) We currently operate an off-balance sheet commercial equipment
finance program in which newly originated equipment loans are sold to
qualified special-purpose bankruptcy remote entities. In accordance with GAAP,
we are required to record gains/losses on the sale of these equipment based
promissory notes. In calculating Adjusted EBITDA, management determines the
cash impact of net interest income on these notes. The finance program
adjustments are the difference between GAAP basis revenues (as prescribed by
SFAS No. 125/140) and cash basis revenues.

    (c) Other non-recurring charges are described as follows:

    --  Other non-recurring charges for the nine months ended September 30,
2007 relate to a periodic accrual of $0.1 million under the one time retention
bonus agreement with certain management employees, $0.1 million of costs
related to the transfer of the Marianna, Florida product lines to Ripon,
Wisconsin, $1.2 million of investigatory and audit costs related to the
restatements which are included in the selling, general and administrative
expense line of our condensed consolidated statements of operations and $0.7
million of costs associated with the closure of the Marianna, Florida
production facility which are included in the securitization, impairment and
other costs line of our condensed consolidated statements of operations.

    --  Other non-recurring charges for the nine months ended September 30,
2006 relate to a periodic accrual of $0.9 million under a one time retention
bonus agreement with certain management employees, $2.6 million of costs
related to the transfer of the Marianna, Florida product lines to Ripon,
Wisconsin which are included in the selling, general and administrative
expense line of our condensed consolidated statements of operations and $4.2
million of costs associated with the closure of the Marianna, Florida
production facility which are included in the securitization, impairment and
other costs line of our condensed consolidated statements of operations.

    (d) Other non-cash charges are described as follows:

    --  Other non-cash charges for the nine months ended September 30, 2007
relate to $2.7 million of non-cash incentive compensation expense related to
management incentive stock options, which is included in the selling, general
and administrative expense line of our condensed consolidated statements of
operations.

    --  Other non-cash charges for the nine months ended September 30, 2006
relate to $2.7 million of costs associated with the inventory step-up to fair
market value recorded at the CLD Acquisition date, which are included in the
cost of sales line of our condensed consolidated statements of operations,
$1.2 million of non-cash incentive compensation expense related to management
incentive stock options, which is included in the selling, general and
administrative expense line of our condensed consolidated statements of
operations and a $1.4 million non-cash impairment charge related to the Ajax
trademark, driven by the Company's decision to discontinue sales of AJAX(R)
products. The Ajax impairment is included in the securitization, impairment
and other costs line of our condensed consolidated statements of operations.

    (e) Other expense is described as follows:

    --  Other expense for the nine months ended September 30, 2006 relates to
$0.5 million of a mark to market loss related to two foreign exchange hedge
agreements. The agreements were entered to control the foreign exchange risk
associated with the initial acquisition price of CLD. The foreign exchange
hedges are included in the other expense, net line of our condensed
consolidated statements of operations.




For further information:

For further information: Alliance Laundry Holdings LLC Bruce P. Rounds,
CFO 920-748-1634

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ALLIANCE LAUNDRY HOLDINGS

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