 IRVING, Texas, July 27, 2020 GLOBE NEWSWIRE -- Forterra, Inc. Forterra or the Company NASDAQ: FRTA, a leading manufacturer of water and drainage infrastructure pipe and products in the United States and Eastern Canada, today announced results for the quarter ended June 30, 2020. Second Quarter 2020 Highlights Increased net sales by 3.9 to 426.2 million as compared to 410.2 million in the prior year quarter Increased gross profit by 23.0 to 105.6 million as compared to 85.8 million in the prior year quarter and improved gross profit margin by 390 basis points year-over-year Net income increased to 27.1 million compared to 3.0 million in the prior year quarter Adjusted EBITDA1 increased to 85.9 million as compared to 62.5 million in the prior year quarter, and Adjusted EBITDA margin1 improved by 490 basis points year-over-year During the first half of 2020, improved operating cash flow by 67.5 million and free cash flow1 by 93.6 million year-over-year Repaid 180 million in precautionary first quarter revolver borrowings and amended revolving credit facility to increase borrowing capacity to 350 million and extend maturity to 2025 Completed offering of 500 million senior secured notes due 2025 and used net proceeds to repay a portion of term loan in July Net Leverage Ratio2 reduced to 5.0x from 7.9x a year agoForterra CEO Karl Watson, Jr. commented, Our company performed well in this challenging market environment associated with the COVID-19 pandemic. We continue to demonstrate the operating and financial durability of our business as well as our ability to achieve higher profitability and cash flow. Second quarter revenues were within the range of the preliminary guidance that we provided last month, while Adjusted EBITDA slightly exceeded our estimate. Importantly, we were able to continue to expand our gross profit margins, Adjusted EBITDA margins, and generate higher operating cash flow compared to the prior year period. These results reflect our continued progress towards earning a full and fair return on the products we produce and the capital we have deployed.As financial markets started to show some stability and demand for our products persisted, we repaid the 180 million precautionary borrowings under our ABL revolving credit facility. In addition, we amended our ABL revolving credit facility to increase the capacity from 300 million to 350 million and extend the maturity from 2021 to 2025. Lastly, we recently issued 500 million of senior secured notes that are due in 2025 and used the net proceeds to repay a portion of our term loan. These transactions increase our liquidity and extend our debt maturities, providing us additional flexibility.Mr. Watson continued, While there is still great uncertainty around demand, the shape of economic recovery and the continuing impact of the pandemic, we are encouraged by the results we have achieved during the first half of the year. We remain focused on our five improvement pillars: Health and Safety; Plant-Level Operational Discipline; Enhanced Commercial Capabilities; Working Capital Efficiency; and GA effectiveness. By focusing on these five pillars, we intend to keep our team members safe, further expand unit margins, decrease working capital investment, and use the increased cash flow to reduce our debt.1 A reconciliation of non-GAAP financial measures, including Adjusted EBITDA, Adjusted EBITDA margin, net debt, and free cash flow, to comparable GAAP financial measures is provided in the reconciliation of Non-GAAP measures section of this press release. 2 Ratio represents net debt divided by adjusted EBITDA for the prior twelve-month period. Net debt and adjusted EBITDA are non-GAAP measures and a reconciliation thereof to comparable GAAP financial measures is provided in the reconciliation of Non-GAAP measures section of this press release.Segment Results Drainage Pipe Products Drainage - Key Financial and Operational Statistics: in millions Q2 2020 Q2 2019 Net Sales 235.6 241.7 Gross Profit 61.4 57.7 EBITDA 57.4 49.0 Adjusted EBITDA1 58.8 52.4 Gross Profit Margin26.1 23.9 Adjusted EBITDA Margin124.9 21.7 Drainage net sales decreased slightly by 2.5 to 235.6 million, compared to 241.7 million in the prior year quarter. The decrease in net sales was driven by lower shipment volumes primarily due to certain temporary project delays in the early stages of the COVID-19 pandemic, partially offset by higher average selling prices.Drainage gross profit and gross profit margin were 61.4 million and 26.1, compared to 57.7 million and 23.9, respectively, in the prior year quarter. Higher average selling prices and manufacturing efficiencies, partially offset by increased input costs, resulted in gross profit margin improvement year over year. Consequently, Drainage EBITDA, Adjusted EBITDA1 and Adjusted EBITDA margin1 were 57.4 million, 58.8 million and 24.9, respectively, as compared to the prior year quarter of 49.0 million, 52.4 million and 21.7, respectively.Water Pipe Products Water - Key Financial and Operational Statistics: in millions Q2 2020 Q2 2019 Net Sales 190.6 168.5 Gross Profit 44.2 28.1 EBITDA 39.7 25.0 Adjusted EBITDA1 42.7 25.4 Gross Profit Margin23.2 16.7 Adjusted EBITDA Margin122.4 15.1 Water net sales increased by 13.1 to 190.6 million, compared to 168.5 million in the prior year quarter. The increase in net sales was primarily driven by higher average selling price while shipment volumes were relatively flat year-over-year.Water gross profit and gross profit margin increased to 44.2 million and 23.2, respectively, compared to 28.1 million and 16.7, respectively, in the prior year quarter. Water EBITDA, Adjusted EBITDA1 and Adjusted EBITDA margin1 increased to 39.7 million, 42.7 million and 22.4, respectively, compared to 25.0 million, 25.4 million and 15.1, respectively, in the prior year quarter. The improvements in gross profit, gross profit margin, EBITDA, Adjusted EBITDA and Adjusted EBITDA margin were primarily driven by higher average selling prices, also aided by lower raw material costs.Corporate and Other Corporate - Second Quarter 2020 Results Corporate EBITDA and Adjusted EBITDA1 losses were 20.5 million and 15.6 million, respectively, in the second quarter of 2020 compared to 20.0 million and 15.4 million, respectively, in the prior year quarter. The Company remains focused on lowering corporate overhead expenses as a percentage of sales.Balance Sheet, Liquidity and Cash Flow Balance sheet, liquidity and cash flow were improved during the first six months of 2020 as compared to prior year, as the tables below summarize:Cash and Debt Balance in millions June 30, 2020 December 31, 2019 June 30, 2019 Cash and cash equivalents 52.5 34.8 16.8 Outstanding borrowings under revolving credit facility 39.0 Outstanding term loan balance 1,101.6 1,123.4 1,216.6 Cash Flow Information in millions Six Months Ended June 30, 2020 2019 Operating cash inflow outflow 40.2 27.3 Investing cash inflow outflow 1.5 24.5 Financing cash inflow outflow 23.6 32.4 Free cash inflow outflow1 41.7 51.9 During the second quarter, the Company fully repaid the 180 million previously borrowed under its revolving credit facility. In addition, in June 2020, the Company amended its revolving credit facility by i increasing the size of the revolving credit facility from 300 million to 350 million of aggregate commitments, ii extending the maturity date to June 17, 2025, and iii modifying the interest rates on outstanding borrowings to reflect current market conditions. As of June 30, 2020, there were no outstanding borrowings under the revolving credit facility and available borrowing capacity was 261.9 million. Given the improvements in cash generation and liquidity, the Company has resumed capital projects that had been put on hold during the second quarter and now expects full year capital expenditures in the range of 35 million to 45 million.In July 2020, the Company completed the offering of 500 million senior secured notes at an annual interest rate of 6.5. The senior secured notes have a five-year term and will mature in July 2025. Net proceeds of 492.5 million from this offering were utilized to repay a portion of the Companys term loan. During the second quarter, the Company continued voluntary prepayments of its term loan in the amount of 10.5 million. Subsequent to the repayment and other second quarter repayments, the term loan now has a balance of 609.1 million that will mature in October 2023.The Companys net leverage ratio2 as of June 30, 2020 was 5.0x, compared to 6.1x at December 31, 2019 and 7.9x at June 30, 2019, and the Company remains committed to its communicated plan to reduce leverage to between 3.0x and 3.5x over the next several years.OutlookRegarding the Companys outlook, Mr. Watson stated, While we are pleased with the robust quarterly results, our visibility into the remainder of 2020 and beyond is still clouded by the uncertainly surrounding the impact of the COVID-19 pandemic with respect to sales volumes, funding of projects, and the overall economy. Based on recent trends in our backlogs, along with other factors, we expect shipment volumes in the second half of the year to continue to be lower than the prior year level as they were during the first half. That said, we believe we are favorably positioned to confront any future market challenges just as we have this quarter.Conference Call and Webcast InformationForterra will host a conference call to review its second quarter 2020 results on July 28 at 10:00 a.m. 