Prestolite Electric Reports First Quarter 2003 Results
ANN ARBOR, Mich.--May 7, 2003--Prestolite Electric Incorporated and its parent, Prestolite Electric Holding, Inc., today announced financial results for the first quarter of 2003. First quarter sales of $42.4 million generated adjusted EBITDA (earnings before interest, taxes, depreciation, amortization and certain other items) of $7.5 million, operating income of $5.6 million and net income of $2.2 million. Sales increased 16% from the first quarter of 2002 while adjusted EBITDA grew 62%. Operating income rose to $5.6 million, 13.2% of sales, from $2.9 million, 7.9% of sales, in the first quarter of 2002. Net income was $2.2 million in first quarter of 2003 compared to a first quarter 2002 net loss of $1.1 million."We were pleased to achieve a 17.8% adjusted EBITDA margin, producing our fifth consecutive quarter of adjusted EBITDA growth," said P. Kim Packard, Prestolite President and CEO. "In North America our sales grew 18% from the first quarter of 2002 and EBITDA grew by 47%. Military sales, sales to original equipment truck manufacturers, and sales from North America into China each rose significantly over the comparable 2002 quarter. Argentina sales rose 18% as the Argentine economy showed signs of stabilizing and local market activity strengthened. Those sales increases, our use of low-cost manufacturing locations, and excellent manufacturing performance at our main U.S. facility combined to lift our profitability to record levels."
Debt, net of cash, increased $4.5 million during the quarter, to $109.5 million. Capital spending during the quarter was $1.1 million. At March 29 the company had unborrowed bank loan commitments totaling $9.3 million in the United States and $3.1 million in the United Kingdom.
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 97.5% of the outstanding shares; management owns the balance.
EBITDA is a widely accepted financial indicator of a company's operating performance, but is not calculated the same by all companies. EBITDA should not be considered by an investor or lender 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. A reconciliation of adjusted EBITDA to operating income is provided at the bottom of the accompanying income statement.
Prestolite Electric Holding, Inc.
Consolidated Unaudited Statement of Operations
(In thousands of dollars)
For the three months ended
--------------------------
Mar 30 Dec 31 Mar 29
2002 2002 2003
-------- -------- --------
Income Statement
----------------
Net sales $36,641 $46,726 $42,377
Cost of goods sold 28,109 35,037 31,086
-------- -------- --------
Gross profit 8,532 11,689 11,291
Percent to sales 23.3% 25.0% 26.6%
Selling, general & administrative 5,555 6,028 5,679
Costs associated with option repurchase &
extension - 334 -
Severance 91 973 22
-------- -------- --------
Operating income 2,886 4,354 5,590
Other (income) expense 67 70 (79)
(Gain) on senior note transactions - (431) -
Loss (gain) on foreign exchange 576 (8) (206)
Real estate provision - 600 -
Interest expense 2,871 2,820 2,726
Minority interest 318 900 555
-------- -------- --------
Pretax income (loss) (946) 403 2,594
Income tax provision (benefit) 159 (518) 404
-------- -------- --------
Net income (loss) (1,105) 921 2,190
Foreign currency translation loss (gain) 4,732 (1,569) (263)
Minimum pension liability - 9,156 -
-------- -------- --------
Net comprehensive income loss) $(5,837) $(6,666) $2,453
======== ======== ========
Income Statement Reconciliation
-------------------------------
Operating income $2,886 $4,354 $5,590
Other income (expense) (67) (70) 79
Costs associated with option repurchase &
extension - 334 -
Severance 91 973 22
Depreciation 1,553 1,620 1,660
Amortization 195 208 185
-------- -------- --------
Adjusted EBITDA $4,658 $7,419 $7,536
======== ======== ========
Percent to sales 12.7% 15.9% 17.8%
Prestolite Electric Holding, Inc.
Consolidated Unaudited Balance Sheet Highlights
(In thousands of dollars)
Dec 31 Dec 31 Mar 29
2001 2002 2003
--------- --------- ---------
Cash $2,907 $4,386 $3,400
Accounts receivable, net 24,900 28,264 30,279
Inventory, net 40,889 38,699 43,237
Prepaid and other current assets 4,280 2,675 2,914
--------- --------- ---------
Total current assets 72,976 74,024 79,830
Property, plant and equipment, net 33,831 33,032 31,686
Investments 577 577 577
Intangible assets, net 7,091 7,441 7,479
Other long term assets 4,184 3,435 3,872
Net assets of discontinued operations 5,714 1,976 2,151
--------- --------- ---------
Total assets $124,373 $120,485 $125,595
========= ========= =========
Current debt $7,236 $4,315 $8,398
Accounts payable 18,351 16,118 17,849
Accrued liabilities 14,007 15,006 11,756
--------- --------- ---------
Total current liabilities 39,594 35,439 38,003
Long-term debt 105,008 105,125 104,535
Other non-current liabilities 1,754 9,955 10,084
--------- --------- ---------
Total liabilities 146,356 150,519 152,622
Minority interest 3,367 5,908 6,462
Cumulative translation adjustment (11,470) (13,589) (13,326)
Minimum pension liability - (9,156) (9,156)
Other shareholders equity (13,880) (13,197) (11,007)
--------- --------- ---------
Total liabilities and equity $124,373 $120,485 $125,595
========= ========= =========
Debt Summary:
Bank debt
U.S. float $319 $130 $963
U.S. revolver 470 - 3,585
United Kingdom 9,140 7,177 5,931
Argentina 125 - -
South Africa 747 990 1,498
--------- --------- ---------
Sub-total 10,801 8,297 11,977
Senior notes 100,108 98,533 98,533
Argentina - Mosal - 1,040 1,010
Capital leases & other 1,335 1,570 1,413
--------- --------- ---------
Total debt 112,244 109,440 112,933
Less cash (2,907) (4,386) (3,400)
--------- --------- ---------
Net debt 109,337 105,054 109,533
Argentina - discounted receivables 263 - -
--------- --------- ---------
Total $109,600 $105,054 $109,533
========= ========= =========
Sales and EBITDA by Country by Quarter
(Millions of Dollars)
2000 2001
Total Total
Sales --------- ---------
United States $80.6 $77.7
United Kingdom 44.2 38.0
Argentina 40.8 33.9
South Africa 12.9 9.4
China (net) - 5.3
Elim & Adj (6.6) (5.0)
--------- ---------
Continuing $171.9 $159.3
========= =========
EBITDA
United States $12.2 $13.3
United Kingdom 5.6 5.8
Argentina 2.4 1.0
South Africa 0.7 0.5
China (net) - 2.0
Corp & Other (4.0) (3.5)
--------- ---------
Continuing $16.9 $19.1
========= =========
EBITDA Percentage
United States 15.1% 17.1%
United Kingdom 12.7% 15.3%
Argentina 5.9% 2.9%
South Africa 5.4% 5.3%
China (net) - 37.7%
Total 9.8% 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
------------------------------------------
Q1 Q2 Q3 Q4 Total
Sales ------- ------- ------- ------- ----------
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."
Sales and EBITDA by Country by Quarter
(Millions of Dollars)
2003
-------------------
Q1 LTM
Sales --------- ---------
United States $26.3 $101.6
United Kingdom 9.4 37.1
Argentina 4.5 16.6
South Africa 2.1 7.9
China (net) 1.8 15.6
Elim & Adj (1.7) (5.8)
--------- ---------
Continuing $42.4 $173.0
========= =========
EBITDA
United States $5.3 $18.6
United Kingdom 1.5 5.0
Argentina 1.0 4.1
South Africa - -
China (net) 1.0 6.0
Corp & Other (1.3) (5.4)
--------- ---------
Continuing $7.5 $28.3
========= =========
EBITDA Percentage
United States 20.2% 18.3%
United Kingdom 16.0% 13.5%
Argentina 22.2% 24.7%
South Africa - -
China (net) 55.6% 38.5%
Total 17.7% 16.4%
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."