Prestolite Electric Announces 2002 First Quarter Results
ANN ARBOR, Mich.--May 7, 2002--Prestolite Electric Incorporated and its parent, Prestolite Electric Holding Inc., today released 2002 first quarter financial results. First quarter sales of $36.6 million fell 12.6% from the first quarter of 2001 while earnings before interest, taxes, depreciation and amortization (EBITDA) declined 2.4% to $4.7 million. Compared to the fourth quarter of 2001, sales increased 1.9% while EBITDA grew 7.9%. The $1.1 million net loss for the quarter compares to a net loss of $0.9 million in the first quarter of 2001 and a net loss from continuing operations of $3.7 million in the fourth quarter of 2001.The sales and EBITDA declines were attributable to the company's operations in Argentina. The Argentine peso was pegged at one peso per dollar throughout 2001. Allowed to float freely beginning in early 2002, the value of the peso averaged $0.53 during the first quarter of 2002. As reported in U.S. dollars, first quarter sales from Argentina to external customers dropped 77%, from $8.7 million in 2001 to $2.0 million in 2002. All other Prestolite sales rose 4.0% from the first quarter of 2001. Despite the sales decline, EBITDA from Argentine operations fell only 19%, from $669,000 in the first quarter of 2001 to $543,000 in the first quarter of 2002.
"We were happy to see North American sales grow by 15% from the year-ago quarter as the result of improved aftermarket activity, the benefit of our standard position at International Truck, and increased military volume," said P. Kim Packard, company president and CEO. "While the decline in the value of the peso has hurt our reported sales, it has also made our Argentine operations much more competitive and our lower costs are creating a number of new sales opportunities."
Debt, net of cash, increased by $2.6 million during the quarter, to $112.0 million. Major contributors to the increase included the $4.8 million senior note semi-annual interest payment and the acquisition of a tax-favored subsidiary in Argentina for 4 million pesos. In dollars, that transaction consisted of $0.2 million of cash and $1.2 million of future payments (recorded as debt). At March 31 the company had unused lines of credit totaling $10.0 million in North America and $2.0 million in the United Kingdom.
Prestolite Electric Incorporated manufactures alternators and starter motors in the United States, United Kingdom, Argentina, South Africa and China. These are supplied under the Prestolite, Leece-Neville, and Indiel brand names for original equipment and aftermarket application on a variety of vehicles and industrial equipment. Genstar Capital Corporation and management own the equity of the company.
EBITDA is a widely accepted financial indicator of a company's ability to service debt, but is not calculated the same by all companies. EBITDA should not be considered by an investor as an alternative to net income as an indicator of a company's operating performance or as an alternative to cash flow as a measure of liquidity. This release contains forward-looking statements that involve risks and uncertainties regarding the anticipated financial and operating results of the Company. The Company undertakes no obligation to publicly release any revisions to any forward-looking statements contained herein to reflect events or circumstances occurring after the date of this release. The Company's actual results may differ materially from those projected in forward-looking statements made by, or on behalf of, the Company.
Prestolite Electric Holding, Inc.
(Including Prestolite Electric Incorporated)
Consolidated Unaudited Operating Results
(Thousands of Dollars)
For the three months ended
---------------------------------
Mar 30 Apr 1 Dec 31
2002 2001 2001
--------- --------- ---------
Net sales $36,641 $41,964 $35,969
Cost of goods sold 28,109 33,759 28,304
--------- --------- ---------
Gross profit 8,532 8,205 7,665
Percent of sales 23.3% 19.6% 21.3%
Selling, general and
administrative 5,555 5,488 6,053
Option extension charge - - 647
Severance 91 341 1,362
--------- --------- ---------
Operating income 2,886 2,376 (397)
Other (income) expense 67 133 89
Foreign exchange losses 576 25 442
Minority interest expense 318 - 552
Interest expense 2,871 3,096 3,397
--------- --------- ---------
Income (loss) before taxes (946) (878) (4,877)
Income tax provision (benefit) 159 (21) (1,156)
--------- --------- ---------
Income (loss) before
extraordinary item (1,105) (857) (3,721)
Gain (loss) on sale of
discontinued operations - - (1,600)
--------- --------- ---------
Net income (loss) $ (1,105) $ (857) $ (5,321)
========= ========= =========
Operating income $2,886 $2,376 $ (397)
Other income (expense) (67) (133) (89)
Option extension charge - - 647
UK inventory reserve change - - 520
Severance 91 341 1,362
Depreciation 1,553 1,877 1,970
Amortization 195 315 304
--------- --------- ---------
EBITDA from
continuing operations $4,658 $4,776 $4,317
========= ========= =========
Percent of sales 12.7% 11.4% 12.0%
Prestolite Electric Holding, Inc.
Consolidated Unaudited Balance Sheet Highlights
(Thousands of dollars)
Mar 30 Dec. 31 Dec. 31
2002 2001 2000
--------- ---------- ----------
Cash $ 1,827 $ 2,907 $10,181
Accounts receivable, net 27,370 24,900 31,098
Inventory, net 38,227 40,889 42,293
Prepaid and other current assets 2,573 4,280 2,938
--------- ---------- ----------
Total current assets 69,997 72,976 86,510
Property, plant and equipment, net 31,888 33,831 37,517
Investments 577 577 577
Intangible assets, net 7,236 7,091 7,970
Other long term assets 3,478 4,184 5,752
Net assets of discontinued
operations 2,526 5,714 5,993
--------- ---------- ----------
Total assets $115,702 $124,373 $144,319
========= ========== ==========
Current debt $ 8,381 $ 7,236 $ 6,302
Accounts payable 18,188 18,351 18,744
Accrued liabilities 10,232 14,007 14,835
--------- ---------- ----------
Total Current liabilities 36,801 39,594 39,881
Long-term debt 105,441 105,008 106,733
Other non-current liabilities 953 1,754 2,321
Deferred tax liabilities 18 - 2,467
--------- ---------- ----------
Total liabilities 143,213 146,356 151,402
Minority interest 3,676 3,367 -
Cumulative Translation
Adjustment (16,202) (11,470) (3,527)
Other shareholders equity (14,985) (13,880) (3,556)
--------- ---------- ----------
Total liabilities and equity $115,702 $124,373 $144,319
========= ========== ==========
Debt Summary:
Bank debt
U.S. Float $ 545 $ 319 $ -
U.S.: Revolver 2,493 470 -
United Kingdom 7,493 9,140 7,064
Argentina - 125 1,356
South Africa 834 747 1,126
--------- ---------- ----------
Sub-total 11,365 10,801 9,546
Senior notes 100,108 100,108 101,883
Argentina - Mosal 1,189 - -
Capital leases & Other 1,160 1,335 1,606
Total debt 113,822 112,244 113,035
Less:cash (1,827) (2,907) (10,181)
--------- ---------- ----------
Net debt 111,995 109,337 102,854
Argentina - discounted
receivables - 263 3,957
--------- ---------- ----------
Total $111,995 $109,600 $106,811
========= ========== ==========
Prestolite Electric Holding, Inc.
Sales and EBITDA by Quarter
(Millions of Dollars)
2 0 0 1
----------------------------------- 2002
Sales 2000 Q1 Q2 Q3 Q4 Total 1Q
------- ------ ------ ------ ------ ------- ------
United States $ 80.6 $ 19.2 $ 19.8 $ 19.3 $ 19.4 $ 77.7 $ 22.2
United Kingdom 44.2 11.1 8.9 9.0 9.0 38.0 8.5
Argentina 40.8 9.4 12.2 7.7 4.6 33.9 3.8
South Africa 12.9 2.8 2.5 2.2 1.9 9.4 1.5
China (net) - - - 2.3 3.0 5.3 2.8
Eliminations &
Adjustments (6.6) (0.5) (1.2) (1.4) (1.9) (5.0) (2.2)
------- ------ ------ ------ ------ ------- ------
Continuing $ 171.9 $ 42.0 $ 42.2 $ 39.1 $ 36.0 $ 159.3 $ 36.6
======= ====== ====== ====== ====== ======= ======
EBITDA
United States $ 12.2 $ 3.1 $ 3.3 $ 3.6 $ 3.3 $ 13.3 $ 3.6
United Kingdom 5.6 1.7 1.5 1.4 1.2 5.8 1.2
Argentina 2.4 0.7 1.3 (0.1) (0.9) 1.0 0.5
South Africa 0.7 0.1 0.2 - 0.2 0.5 0.1
China (net) - - - 0.7 1.3 2.0 0.7
Corporate & Other (4.0) (0.8) (1.0) (0.9) (0.8) (3.5) (1.4)
------- ------ ------ ------ ------ ------- ------
Continuing $ 16.9 $ 4.8 $ 5.3 $ 4.7 $ 4.3 $ 19.1 $ 4.7
======= ====== ====== ====== ====== ======= ======
EBITDA Percentage
United States 15.1% 16.1% 16.7% 18.7% 17.0% 17.1% 16.2%
United Kingdom 12.7% 15.3% 16.9% 15.6% 13.3% 15.3% 14.1%
Argentina 5.9% 7.4% 10.7% (1.3%) (19.6%) 2.9% 13.2%
South Africa 5.4% 3.6% 8.0% - 10.5% 5.3% 6.7%
China (net) 30.4% 43.3% 37.7% 25.0%
Total 9.8% 11.4% 12.6% 12.0% 12.0% 12.0% 12.7%
Sales above include intercompany sales for Argentina and South Africa
and include sales to China (PEBL) for the United States and the United
Kingdom. Certain sales adjustments allocated to country for 10-Q
segment reporting are here included in "Eliminations & Adjustments."