Prestolite Electric Reports Second Quarter 2002 Results
ANN ARBOR, Mich.--Aug. 1, 2002--Prestolite Electric Incorporated and its parent, Prestolite Electric Holding, Inc., today announced financial results for the second quarter of 2002. Second quarter sales of $40.7 million generated earnings before interest, taxes, depreciation and certain nonrecurring costs (EBITDA) of $6.3 million. Sales were 11% higher and EBITDA was 34% higher than the first quarter of 2002. Sales fell 3.5% from the $42.2 million recorded in the second quarter of 2001 while EBITDA rose 18% from $5.3 million in the same period a year ago. Net income was $0.2 million in the second quarter of 2002 of compared to net losses in both the first quarter of 2002 and the second quarter of last year."We were pleased to achieve our second consecutive quarter of sequential sales growth and equally pleased to generate EBITDA above 15% of sales," said P. Kim Packard, company president and CEO. "These achievements reflect strong military equipment volume and increasing commercial original-equipment sales in North America, improvement from the recent past in Argentina, and our ongoing success in China. Going forward we will continue to focus on providing our full-line capabilities to our customers while maintaining emphasis on product development, cost reduction and working capital control."
During the quarter the company recorded a $0.4 million charge related to a lease guarantee made in conjunction with the 1997 sale of a business, a $0.3 million charge for extra warranty associated with 2001 Argentina shipments and a $0.1 million benefit from the demutualization of an insurance carrier. Without these items EBITDA would have been $0.2 million higher, and net income would have been $0.6 million higher.
Net debt declined by $0.8 million during the quarter, to $111.2 million. At the end of June Prestolite had an unused line of credit of $12 million in the U.S. Capital spending of $1.1 million during the second quarter brought first half spending to $2.0 million.
Prestolite Electric Incorporated manufactures alternators and starter motors. These are supplied under the Prestolite Electric, Leece-Neville, and Indiel brand names for original equipment and aftermarket application on a variety of vehicles and industrial equipment. Genstar Investment Corporation controls 96.7% of the outstanding shares; management owns the balance.
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.
Consolidated Unaudited Income Statement Highlights
Second Quarter 2002
(in thousands of dollars)
Three months ending Six months ending
-------------------- -------------------
June 30, June 30, June 30, June 30,
2002 2001 2002 2001
-------- -------- -------- --------
Net sales $ 40,742 $ 42,218 $ 77,383 $ 84,182
Cost of goods sold 30,608 33,882 58,717 67,641
-------- -------- -------- --------
Gross profit 10,134 8,336 18,666 16,541
Selling, general
and administrative 5,541 4,954 11,096 10,577
Severance 89 769 180 1,110
-------- -------- -------- --------
Operating income 4,504 2,613 7,390 4,854
Lease guarantee charge 400 -- 400 --
Other (income) expense (105) 37 (38) 35
Foreign exchange loss 387 7 963 32
Interest expense 2,745 3,247 5,616 6,343
Minority interest expense 582 -- 900 --
-------- -------- -------- --------
Income (loss) from
operations before
income taxes 495 (678) (451) (1,556)
Income tax expense
(benefit) 307 (72) 466 (93)
-------- -------- -------- --------
Income (loss)
from operations 188 (606) (917) (1,463)
Net gain on senior
note purchase -- 391 -- 391
-------- -------- -------- --------
Net income (loss) $ 188 $ (215) $ (917) $ (1,072)
======== ======== ======== ========
Operating income $ 4,504 $ 2,613 $ 7,390 $ 4,854
Other income (expense) 105 (37) 38 (35)
Severance 89 769 180 1,110
Depreciation 1,412 1,650 2,965 3,527
Amortization 144 310 339 625
-------- -------- -------- --------
EBITDA $ 6,254 $ 5,305 $ 10,912 $ 10,081
======== ======== ======== ========
Percent of sales 15.4% 12.6% 14.1% 12.0%
Prestolite Electric Holding, Inc.
Consolidated Unaudited Balance Sheet Highlights
(Thousands of dollars)
June 29 Mar 30 Dec. 31
2002 2002 2001
--------- --------- ---------
Cash $ 2,093 $ 1,827 $ 2,907
Accounts receivable, net 28,100 27,370 24,900
Inventory, net 38,914 38,227 40,889
Prepaid and other
current assets 3,187 2,573 4,280
--------- --------- ---------
Total current assets 72,294 69,997 72,976
Property, plant and
equipment, net 32,229 31,888 33,831
Investments 577 577 577
Intangible assets, net 7,544 7,236 7,091
Other long term assets 2,961 3,478 4,184
Net assets of
discontinued operations 2,389 2,526 5,714
--------- --------- ---------
Total assets $ 117,994 $ 115,702 $ 124,373
========= ========= =========
Current debt $ 8,286 $ 8,381 $ 7,236
Accounts payable 17,001 18,188 18,351
Accrued liabilities 13,137 10,232 14,007
--------- --------- ---------
Total current liabilities 38,424 36,801 39,594
Long-term debt 105,008 105,441 105,008
Other non-current
liabilities 802 971 1,754
--------- --------- ---------
Total liabilities 144,234 143,213 146,356
Minority interest 4,255 3,676 3,367
Cumulative translation
adjustment (15,698) (16,202) (11,470)
Other shareholders equity (14,797) (14,985) (13,880)
--------- --------- ---------
Total liabilities
and equity $ 117,994 $ 115,702 $ 124,373
========= ========= =========
Debt Summary:
Bank debt
U.S. float $ 717 $ 545 $ 319
U.S. revolver 230 2,493 470
United Kingdom 9,018 7,493 9,140
Argentina -- -- 125
South Africa 851 834 747
China 362 -- --
--------- --------- ---------
Sub-total 11,178 11,365 10,801
Senior notes 100,108 100,108 100,108
Argentina - Mosal 909 1,189 --
Capital leases & other 1,099 1,160 1,335
--------- --------- ---------
Total debt 113,294 113,822 112,244
Less: cash (2,093) (1,827) (2,907)
--------- --------- ---------
Net debt 111,201 111,995 109,337
Argentina - discounted
receivables -- -- 263
--------- --------- ---------
Total $ 111,201 $ 111,995 $ 109,600
========= ========= =========
Prestolite Electric Holding, Inc.
Sales and EBITDA by Country by Quarter
(Millions of Dollars)
2 0 0 1
---------------------------------------------
2000 Q1 Q2 Q3 Q4 Total
-------- -------- -------- -------- -------- ---------
Sales
United States $ 80.6 $ 19.2 $ 19.8 $ 19.3 $ 19.4 $ 77.7
United Kingdom 44.2 11.1 8.9 9.0 9.0 38.0
Argentina 40.8 9.4 12.2 7.7 4.6 33.9
South Africa 12.9 2.8 2.5 2.2 1.9 9.4
China (net) -- -- -- 2.3 3.0 5.3
Eliminations
& Adjustments (6.6) (0.5) (1.2) (1.4) (1.9) (5.0)
-------- -------- -------- -------- -------- ---------
Continuing $ 171.9 $ 42.0 $ 42.2 $ 39.1 $ 36.0 $ 159.3
======== ======== ======== ======== ======== =========
EBITDA
United States $ 12.2 $ 3.1 $ 3.3 $ 3.6 $ 3.3 $ 13.3
United Kingdom 5.6 1.7 1.5 1.4 1.2 5.8
Argentina 2.4 0.7 1.3 (0.1) (0.9) 1.0
South Africa 0.7 0.1 0.2 -- 0.2 0.5
China (net) -- -- -- 0.7 1.3 2.0
Corporate &
Other (4.0) (0.8) (1.0) (0.9) (0.8) (3.5)
-------- -------- -------- -------- -------- ---------
Continuing $ 16.9 $ 4.8 $ 5.3 $ 4.7 $ 4.3 $ 19.1
======== ======== ======== ======== ======== =========
EBITDA Percentage
United States 15.1% 16.1% 16.7% 18.7% 17.0% 17.1%
United Kingdom 12.7% 15.3% 16.9% 15.6% 13.3% 15.3%
Argentina 5.9% 7.4% 10.7% (1.3%) (19.6%) 2.9%
South Africa 5.4% 3.6% 8.0% -- 10.5% 5.3%
China (net) -- -- -- 30.4% 43.3% 37.7%
Total 9.8% 11.4% 12.6% 12.0% 11.9% 12.0%
2 0 0 2
----------------------------
1Q Q2 Total
-------- -------- --------
Sales
United States $ 22.2 $ 23.7 $ 45.9
United Kingdom 8.5 9.0 17.5
Argentina 3.8 3.8 7.6
South Africa 1.5 2.1 3.6
China (net) 2.8 4.1 6.9
Eliminations
& Adjustments (2.2) (2.0) (4.2)
-------- -------- --------
Continuing $ 36.6 $ 40.7 $ 77.3
======== ======= ========
EBITDA
United States $ 3.6 $ 4.0 $ 7.6
United Kingdom 1.2 1.4 2.6
Argentina 0.5 0.9 1.4
South Africa 0.1 0.2 0.3
China (net) 0.7 1.4 2.1
Corporate & Other (1.5) (1.6) (3.1)
-------- -------- --------
Continuing $ 4.6 $ 6.3 $ 10.9
======== ======= ========
EBITDA Percentage
United States 16.2% 16.9% 16.6%
United Kingdom 14.1% 15.6% 14.9%
Argentina 13.2% 23.7% 18.4%
South Africa 6.7% 9.5% 8.3%
China (net) 25.0% 34.1% 30.4%
Total 12.6% 15.5% 14.1%
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."