Delco Remy International Reports Record Fiscal Third Quarter Results
26 May 2000
Delco Remy International Reports Record Fiscal Third Quarter Results ANDERSON, Ind., May 23 Delco Remy International, Inc.
, a leading supplier of aftermarket and OEM electrical systems and
powertrain/drivetrain products for automotive and heavy duty industrial
applications, today reported record sales and earnings for the third quarter
of fiscal year 2000 ending April 30, 2000.
Highlights for the third quarter include:
* Net sales growth of 10 percent
* Earnings per share growth of 22 percent
* Completed the acquisitions of M&M Knopf and Elmot
* Named new Chief Financial Officer
* Named new e-Commerce Director
Net sales were $274.9 million, up 10 percent from the $248.8 million
reported for the third quarter of fiscal 1999. The increase was driven by
incremental sales from the Company's acquisitions in fiscal 2000 and the
fourth quarter of fiscal 1999 and strong demand from automotive and heavy duty
OEM customers and for powertrain/drivetrain products in the aftermarket.
Operating income increased 31 percent to $31.9 million in the third
quarter, from $24.4 million in the same quarter of 1999, and operating margins
improved to 11.6 percent from 9.8 percent.
Net income for the quarter of $10.2 million, or $.39 per share, compared
to net income of $8.2 million, or $.32 per share, reported for the same period
last year, an increase of 25 percent and 22 percent, respectively.
For the first nine months of fiscal 2000, net sales increased $108.2
million, or 15 percent, and net income and earnings per share of $25.1 million
and $.97, respectively, grew 29 percent.
Cash generated from operating activities through nine months of $43.4
million compares with $8.0 million generated in the same period last year.
This increase reflects earnings growth and control of working capital.
Thomas J. Snyder, President and CEO, commented, "We are very excited with
the results of our record third quarter. Our performance is a result of
productivity improvements in our base business and our ability to successfully
integrate our strategic acquisitions. These two factors have driven
continuing margin expansion. During the quarter we acquired M&M Knopf, the
world's largest company in automotive component recovery and exchange. Knopf
has contacts with salvage yards and other remanufacturers and will improve
Delco Remy's inventory strategy. In addition, our purchase of Elmot in Poland
will expand our presence as a low cost manufacturer in Eastern Europe. This
quarter marks our tenth consecutive quarter of achieving or exceeding investor
expectations."
Delco Remy International, Inc., headquartered in Anderson, Indiana, is a
leading global manufacturer and remanufacturer of OEM and aftermarket
electrical, powertrain and drivetrain components for automotive, medium and
heavy truck, agriculture and construction industries. Delco Remy
International, Inc. began business in August 1994 as a partial divestiture of
the Delco Remy division of General Motors. The Company now serves major OEM
and aftermarket customers worldwide, with manufacturing and marketing
facilities in North America, Europe, South America and Asia-Pacific.
Statements in this press announcement, which are not historical, are
forward-looking statements that involve certain risks and uncertainties,
including, but not limited to risks associated with the uncertainty of future
financial results, acquisitions, additional financing requirements,
development of new products and services, the effect of competitive products
or pricing, the effect of economic conditions and other uncertainties detailed
from time to time in the Company's filings with the Securities and Exchange
Commission.
DELCO REMY INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except for per share data)
Three Month Period Nine Month Period
Ended April 30 Ended April 30
2000 1999 2000 1999
Net sales $274.9 $248.8 $812.1 $703.9
Cost of goods sold 210.3 196.3 629.4 562.9
Gross profit 64.6 52.5 182.7 141.0
Selling, general and
administrative
expenses 31.1 27.1 92.8 73.9
Amortization of
goodwill and
intangibles 1.6 1.0 4.5 3.4
Operating income 31.9 24.4 85.4 63.7
Interest and other
non-operating
expense (12.8) (12.7) (36.7) (34.3)
Income before income taxes,
minority interest in
income of subsidiaries
and income from
unconsolidated
joint ventures 19.1 11.7 48.7 29.4
Income tax expense 7.3 4.6 18.5 11.5
Minority interest in
income of subsidiaries (1.6) (0.7) (5.1) (2.3)
Income from
unconsolidated
joint ventures -- 1.8 -- 3.8
Net income $10.2 $8.2 $25.1 $19.4
Basic earnings
per common share $0.42 $0.34 $1.04 $0.81
Diluted earnings per
common share $0.39 $0.32 $0.97 $0.75
Weighted average
shares outstanding
(thousands):
Basic 24,241 23,860 24,224 23,826
Diluted 26,000 25,845 25,988 25,873
DELCO REMY INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions)
April 30, July 31,
2000 1999
ASSETS
Current Assets
Cash and cash equivalents $15.4 $15.3
Trade accounts receivable, net 168.8 148.0
Inventories 276.1 232.2
Other current assets 37.8 33.4
Total Current Assets 498.1 428.9
Property and equipment, net 207.2 195.2
Goodwill, net 167.8 137.4
Deferred financing costs 9.9 11.2
Other assets 12.2 10.0
Total Assets $895.2 $782.7
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $137.1 $119.3
Other accrued liabilities 60.2 48.7
Accrued restructuring charges 5.5 5.9
Current debt 5.0 12.6
Total Current Liabilities 207.8 186.5
Long-term debt 500.6 435.0
Other noncurrent liabilities 31.9 31.9
Minority interest in subsidiaries 24.3 19.8
Stockholders' Equity 130.6 109.5
Total Liabilities and Stockholders' Equity $895.2 $782.7
DELCO REMY INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
Nine Month Period
Ended April 30
2000 1999
Operating activities:
Net income $25.1 $19.4
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 20.8 13.6
Amortization 4.5 3.4
Change in net working capital (10.4) (27.7)
Other, net 3.4 (0.7)
Net cash provided by operating activities 43.4 8.0
Investing activities:
Acquisitions, net of cash acquired (67.6) (41.8)
Purchases of property and equipment (28.8) (18.0)
Net cash used in investing activities (96.4) (59.8)
Financing activities:
Net borrowings under revolving line of credit
and other 54.9 51.8
Distributions to minority interests (1.2) --
Net cash provided by financing activities 53.7 51.8
Effect of exchange rate changes on cash (0.6) (0.4)
Net increase (decrease) in cash and
cash equivalents 0.1 (0.4)
Cash and cash equivalents at beginning of period 15.3 8.1
Cash and cash equivalents at end of period $15.4 $7.7
