Alliance Laundry Holdings LLC Reports 1st Quarter 2008 Earnings

Business Wire, May 12, 2008

RIPON, Wis. -- Alliance Laundry Holdings LLC announced today results for the three months ended March 31, 2008.

Net revenues for the quarter ended March 31, 2008 increased $13.4 million, or 13.8%, to $109.9 million from $96.5 million for the quarter ended March 31, 2007. Our net income for the quarter ended March 31, 2008 was $1.9 million as compared to $1.5 million for the quarter ended March 31, 2007. Adjusted EBITDA (see "About Non-GAAP Financial Measures" below) for the quarter ended March 31, 2008 increased $2.0 million to $17.7 million from $15.7 million for the quarter ended March 31, 2007.

The overall net revenue increase of $13.4 million was attributable to higher commercial laundry revenues of $13.5 million, higher service parts revenue of $0.6 million and higher European Operations revenue of $1.6 million, partially offset by higher worldwide sales eliminations of $2.3 million. The increase in commercial laundry revenues includes $8.6 million of higher North American commercial equipment revenue, $4.7 million of higher international revenue and $0.1 million of higher earnings from our off-balance sheet equipment financing program.

Included in our net income for the quarter ended March 31, 2008 was a $2.9 million non-cash charges for adjustments in the fair values of interest rate swap agreements. Included in the first quarter of 2007 was a similar charge of $0.3 million. Gross profit as a percentage of net revenues increased to 29.3% for the quarter ended March 31, 2008 from 27.7% for the quarter ended March 31, 2007, driven by higher sales volume and selling prices, partially offset by higher raw material and product distribution costs.

In announcing the Company's results, CEO Thomas F. L'Esperance said, "I am pleased to be able to report the best first quarter the Company has ever had, particularly given the overall economic conditions we're experiencing in the United States. Net Revenues in all of our major U.S. sales channels were up year over year."

"These results are a remarkable testament to the strength of our brands, the quality of out products, the resiliency of the markets we serve and our employees' unrivaled commitment to our Customer One program," said L'Esperance.

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 before interest expense, income tax provision 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 months ended March 31, 2008 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.