CEVA Group reported its adjusted earnings before interest, taxes, depreciation and amortization in the first quarter of 2013 were €31 million (about US$39.8 million), plummeting 53 percent from $84.8 million in the first quarter of 2012.
However, excluding the 2012 impact from divested businesses, adjusted EBITDA for the first quarter of 2012 would have been $73.2 million, the Netherlands-based, non-asset-based supply chain management company said in a written statement.
Quarterly revenue decreased by 6.3 percent to $2.1 billion in 2013, compared with $2.2 billion in the same period last year. Freight management revenue in the first quarter dropped 6.8 percent year-over-year, driven by softness in air freight volume, but partly offset by gains in ocean revenue. Revenue in the company’s contract logistics segment fell by 5.9 percent year-over-year, driven in part by the sale of CEVA’s Pallecon Container business in the first quarter of 2013 for about $173.5 million; the impact of several contracts that were terminated as part of the cost reduction program launched in the fourth quarter of 2012; and lower volumes in key markets, notably Europe, CEVA said.
“The weak economic conditions impacting the global logistics industry continued to weigh on customer sentiment during the first quarter, impacting both revenue and adjusted EBITDA,” said Marvin O. Schlanger, CEO of CEVA. “This is disappointing; however, we have now taken significant and decisive action to strengthen the company’s balance sheet through a major capital restructuring.”
CEVA’s recapitalization of its balance sheet and new capital raise eliminated about $1.7 billion of consolidated net debt. The transaction also reduces CEVA’s annual cash interest costs by more than $167.1 million, about 50 percent, and provides access to more than $295.7 million of new capital infusion for investment in the company’s business plan.
“We continue to focus our efforts on implementing the previously announced cost-reduction program,” Schlanger continued. “We remain confident that, aided by the strength of our new capital structure, we can drive revenues across the business to position CEVA for profitable growth in the future. Business development successes in the quarter met our target and will benefit future quarters.”