Prestolite Electric Reports Results for 2002
ANN ARBOR, Mich.--Feb. 27, 2003--Prestolite Electric Incorporated and its parent, Prestolite Electric Holding, Inc., today announced that 2002 sales of $167.3 million had generated EBITDA (earnings before interest, taxes, depreciation, amortization and the special items discussed below) of $25.4 million and net income of $1.0 million. Sales increased 5% from 2001; EBITDA grew 33%. Net income of $1.0 million in 2002 compared to a 2001 net loss of $11.0 million."We enjoyed excellent performance in 2002 from our operations in North America, China and Argentina," said P. Kim Packard, Prestolite President and CEO. "We are especially pleased that fourth quarter sales of $46.7 million and EBITDA of $7.4 million allowed us to report our fourth quarter in a row of sequential growth in both sales and EBITDA."
Compared to the fourth quarter of 2001, fourth quarter 2002 sales increased 30%; EBITDA grew 72%; and net income of $0.9 million in the fourth quarter of 2002 increased $6.2 million from the net loss reported in the fourth quarter of 2001. The company eliminated the one-month lag previously employed in reporting the results of its operations in China, adding $0.9 million to sales and $0.2 million to EBITDA for the quarter.
Prestolite ended the year with net debt of $105.1 million ($109.5 million of debt net of $4.4 million of cash). At year-end the company had unborrowed loan commitments of $13.5 million in the United States and $2.3 million in the United Kingdom
The company recorded a $1.0 million charge during 2002 to reduce the carrying value of an idle facility and to provide for the estimated costs of a lease guarantee made in conjunction with the 1997 sale of a business to a company now operating under Chapter 11 protection. Personnel reductions in the United Kingdom and a plant closing in Argentina caused severance and restructuring costs of $2.9 million. A decrease in the value of outstanding stock options resulted in a $0.3 million credit to income. The company recognized foreign exchange losses of $1.0 million and adverse translation adjustments of $2.1 million. The translation adjustments (due to the devaluation of the Argentine Peso) were recorded as an element of net comprehensive income, below net income, as was a $9.2 million charge to reflect the company's minimum pension liability. The open market purchase of $1.6 million of the company's senior notes resulted in an extraordinary gain of $0.4 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 Capital Corporation controls 96.7% of the outstanding shares; management owns the balance.
Prestolite Electric Holding, Inc.
Consolidated Unaudited Statement of Operations
(In thousands of dollars)
2000 2001 2002
--------- --------- ---------
Income Statement
----------------
Net sales $171,890 $159,295 $167,261
Cost of goods sold 139,641 127,025 126,543
--------- --------- ---------
Gross profit 32,249 32,270 40,718
Selling, general & administrative 24,713 22,253 22,171
Costs associated with option repurchase
& extension 173 647 (313)
Special charges - see note 3,450 1,500 -
Severance 2,226 4,599 2,853
--------- --------- ---------
Operating income 1,687 3,271 16,007
Other (income) expense (618) 78 (62)
Loss on foreign exchange 1,121 461 1,017
Real estate provision - - 1,000
Interest expense 15,025 13,241 11,252
Minority interest - 950 2,541
--------- --------- ---------
Pretax income (loss), before items
below (13,841) (11,459) 259
Income tax provision (benefit) (4,485) (1,647) (290)
--------- --------- ---------
Income (loss) from continuing
operations (9,356) (9,812) 549
Income from discontinued operations,
net 2,290 - -
Gain (loss) on sale of discontinued
operations, net 14,488 (1,600) -
Gain on senior note purchases, net 4,063 391 431
--------- --------- ---------
Net income (loss) 11,485 (11,021) 980
Foreign currency translation 2,167 7,943 2,119
Minimum pension liability - - 9,156
--------- --------- ---------
Net comprehensive income (loss) $9,318 $(18,964) $(10,295)
========= ========= =========
Income Statement Reconciliation
-------------------------------
Operating income $1,687 $3,271 $16,007
Other income 618 (78) 62
Costs associated with option repurchase
& extension 173 647 (313)
Special charges - see note 3,450 2,020 -
Severance 2,226 4,599 2,853
Depreciation 7,329 7,385 6,044
Amortization 1,395 1,235 745
--------- --------- ---------
EBITDA $16,878 $19,079 $25,398
========= ========= =========
Special charges
---------------
In 2000: Charge and write down associated with the investment in
Ecoair Corp. and two specialty alternator projects.
In 2001: $1,500k additional charge for bad debt expense in
Argentina and, as part of the Income Statement
Reconciliation, $520k to revise the U.K. provision for
excess inventory.
Prestolite Electric Holding, Inc.
Consolidated Unaudited Balance Sheet Highlights
(In thousands of dollars)
Dec. 31 Dec. 31
2001 2002
--------- ---------
Cash $2,907 $4,386
Accounts receivable, net 24,900 28,264
Inventory, net 40,889 38,699
Prepaid and other current assets 4,280 2,675
--------- ---------
Total current assets 72,976 74,024
Property, plant and equipment, net 33,831 33,032
Investments 577 577
Intangible assets, net 7,091 7,441
Other long term assets 4,184 3,435
Net assets of discontinued operations 5,714 1,976
--------- ---------
Total assets $124,373 $120,485
========= =========
Current debt $7,236 $4,315
Accounts payable 18,351 16,118
Accrued liabilities 14,007 15,006
--------- ---------
Total current liabilities 39,594 35,439
Long-term debt 105,008 105,125
Other non-current liabilities 1,754 9,955
--------- ---------
Total liabilities 146,356 150,519
Minority interest 3,367 5,908
Cumulative translation adjustment (11,470) (13,589)
Minimum pension liability - (9,156)
Other shareholders equity (13,880) (13,197)
--------- ---------
Total liabilities and equity $124,373 $120,485
========= =========
Debt Summary:
Bank debt
U.S. float $319 $130
U.S. revolver 470 -
United Kingdom 9,140 7,177
Argentina 125 -
South Africa 747 990
--------- ---------
Sub-total 10,801 8,297
Senior notes 100,108 98,533
Argentina - Mosal - 1,040
Capital leases & other 1,335 1,570
--------- ---------
Total debt 112,244 109,440
Less:cash (2,907) (4,386)
--------- ---------
Net debt 109,337 105,054
Argentina - discounted receivables 263 -
--------- ---------
Total $109,600 $105,054
========= =========
Sales and EBITDA by Country by Quarter
(Millions of Dollars)
2001
2000 ------ ------ -------- ------- -------
Sales Total Q1 Q2 Q3 Q4 Total
------- ------ ------ -------- ------- -------
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
Elim & Adj (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
Corp & 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%
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."
Sales and EBITDA by Country by Quarter
(Millions of Dollars)
2002
------ -------- ------ ------- -------
Sales 1Q Q2 Q3 Q4 Total
------ -------- ------ ------- -------
United States $22.2 $23.8 $25.4 $26.1 $97.5
United Kingdom 8.5 8.9 9.0 9.8 36.2
Argentina 3.8 3.8 4.0 4.3 15.9
South Africa 1.5 2.1 2.1 1.6 7.3
China (net) 2.8 4.1 4.2 5.5 16.6
Elim & Adj (2.1) (2.0) (1.5) (0.6) (6.2)
------ -------- ------ ------- -------
Continuing $36.7 $40.7 $43.2 $46.7 $167.3
====== ======== ====== ======= =======
EBITDA
United States $3.6 $4.0 $4.5 $4.8 $16.9
United Kingdom 1.2 1.4 1.3 0.8 4.7
Argentina 0.5 0.9 1.0 1.2 3.6
South Africa 0.1 0.2 0.2 (0.4) 0.1
China (net) 0.7 1.4 1.5 2.1 5.7
Corp & Other (1.5) (1.6) (1.4) (1.1) (5.6)
------ -------- ------ ------- -------
Continuing $4.6 $6.3 $7.1 $7.4 $25.4
====== ======== ====== ======= =======
EBITDA Percentage
United States 16.2% 16.8% 17.7% 18.4% 17.3%
United Kingdom 14.1% 15.7% 14.4% 8.2% 13.0%
Argentina 13.2% 23.7% 25.0% 27.9% 22.6%
South Africa 6.7% 9.5% 9.5% (25.0%) 1.4%
China (net) 25.0% 34.1% 35.7% 38.2% 34.3%
Total 12.5% 15.5% 16.4% 15.8% 15.2%
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."