Remy International, Inc. Announces 1st Quarter Results
ANDERSON, Ind., May 12, 2005 -- Remy International, Inc. ("Remy International" or the "Company"), a leading, manufacturer, remanufacturer and distributor of Delco Remy brand heavy duty systems and Remy brand starters and alternators, diesel engines, locomotive products and hybrid power technology, today announced net sales of $281.6 million and Adjusted EBITDA of $20.6 million for the quarter ending March 31, 2005 including two weeks of results from the recent acquisition of Unit Parts Company in March 2005. Net sales increased $12.5 million, or 4.7%, and Adjusted EBITDA decreased $8.1 million, or 28.2%, compared with the first quarter of 2004. Operating income of $14.9 million in the first quarter of 2005 compares with $22.5 million in the same period of 2004.
First Quarter Highlights:
* Significant net sales increases in certain markets over first quarter
2004:
* 52% increase in Powertrain Diesel Product Sales.
* 19% increase in Heavy-Duty OEM Sales.
* 16% increase in Core Services Sales.
* Unit Parts Company Acquisition Completed.
Commenting on the first quarter results, Tom Snyder, President and CEO, stated, "Heavy-Duty OEM and Powertrain Diesel Product sales continue to be robust while sales to Light-Duty OEMs are softening. Our gross margin was negatively impacted by pricing pressures, higher commodity costs and adverse currency fluctuations."
Adjusted EBITDA in the first quarter of 2005 decreased over the same period in 2004 mainly due to lower gross margin and higher product engineering and other costs for the approximately $250 million in new business awards. These awards have been received over the past two years and are scheduled for launch through 2007.
Cash provided by operating activities of $2.6 million in the first quarter of 2005 represents a $10.7 million improvement over the comparable period in 2004. This increase primarily reflects improvements in working capital performance and reduced restructuring payments, offset by lower earnings in the quarter.
The acquisition of Unit Parts Company on March 18, 2005, did not have a significant impact on the Company's results of operations for the first quarter of 2005.
Recent Developments:
In April 2005, the Company was named as a General Motors Supplier of the Year for its overall business performance in providing GM with world-class parts and services.
In May 2005, the Company announced the opening of a new product technology and customer service center in Wroclaw, Poland to support its aggressive growth and significant demand for the Delco Remy brand within European markets. The European facility will consolidate three smaller facilities and will feature a full complement of on-site engineering, purchasing and supplier development serving the Company's growing number of automotive, heavy duty and industrial customers. Key product research, engineering and technical support services will focus on Delco Remy and Remy branded starting motors and alternators, as well as hybrid systems and DC motors.
Future Outlook:
Commenting on 2005, Snyder said, "We are pleased with our progress on the initial integration activities of UPC. However, we do expect to continue being affected by the difficult conditions in the automotive industry but remain confident that our full year 2005 and long-term outlook remains positive."
Reconciliation to GAAP:
For a reconciliation of GAAP financial information to the non-GAAP financial information appearing in this release, please refer to the table following the accompanying Condensed Consolidated Statements of Operations.
First Quarter Conference Call:
Remy International's executive management team will conduct a live conference call on Thursday, May 12 at 10:00 a.m. Eastern Daylight Time to discuss additional details regarding the Company's performance for the first quarter and the outlook for the remainder of 2005. The call may be accessed by dialing 800-762-4758 ten minutes prior to the start of the presentation. A replay of the conference will be archived for two weeks, and may be accessed by dialing 800-475-6701 (USA), 320-365-3844 (International), Access Code 781191.
About Remy International, Inc.:
Remy International, Inc., headquartered in Anderson, Indiana, is a leading, manufacturer, remanufacturer and distributor of Delco Remy brand heavy duty systems and Remy brand starters and alternators, diesel engines, locomotive products and hybrid power technology. The Company also provides a worldwide components core-exchange service for automobiles, light trucks, medium and heavy-duty trucks and other heavy-duty, off-road and industrial applications. Remy was formed in 1994 as a partial divestiture by General Motors Corporation of the former Delco Remy Division, which traces its roots to Remy Electric, founded in 1896.
Remy International Web Site: http://www.remyinc.com/ Remy International, Inc. and Subsidiaries Condensed Consolidated Statements of Operations IN THOUSANDS, For the three months ended March 31, 2005 2004 (unaudited) Net sales $281,568 $269,028 Cost of goods sold 236,209 218,758 Gross profit 45,359 50,270 Selling, general and administrative expenses 31,257 26,914 Restructuring (credit) charge (799) 813 Operating income 14,901 22,543 Interest expense, net 15,392 14,601 Income (loss) from continuing operations before income taxes, minority interest and loss (income) from unconsolidated joint ventures (491) 7,942 Income tax expense 1,350 1,240 Minority interest 1,093 548 Loss (income) from unconsolidated joint ventures (83) 454 Net (loss) income from continuing operations (2,851) 5,700 Discontinued operations: Loss from discontinued operations, net of tax (201) (552) Gain on disposal of discontinued operations, net of tax 155 108 Net loss from discontinued operations, net of tax (46) (444) Net (loss) income (2,897) 5,256 Accretion for redemption of preferred stock - 8,552 Net loss attributable to common stockholders $(2,897) $(3,296) Adjusted EBITDA: Operating income $14,901 $22,543 Depreciation and amortization 6,534 5,393 Restructuring (credit) charge (799) 813 Adjusted EBITDA $20,636 $28,749 Remy International, Inc. and Subsidiaries Condensed Consolidated Balance Sheets March 31, December 31, IN THOUSANDS, At 2005 2004 Assets: Current assets: Cash and cash equivalents $23,085 $62,545 Trade accounts receivable, net 176,097 154,333 Inventories 284,041 217,912 Other current assets 32,789 30,667 Total current assets 516,012 465,457 Property, plant and equipment, net 160,290 137,293 Goodwill, net 168,245 106,400 Other assets 58,126 46,608 Total assets $902,673 $755,758 Liabilities and Stockholders' Deficit: Current liabilities: Accounts payable $206,483 $170,776 Accrued restructuring 11,553 6,451 Deferred income taxes 2,611 3,065 Other liabilities and accrued expenses 138,539 95,166 Current maturities of long-term debt 28,539 22,890 Total current liabilities 387,725 298,348 Long-term debt, net of current portion 629,856 610,330 Accrued restructuring 3,158 4,407 Other non-current liabilities 80,651 34,775 Minority interest 10,985 10,498 Total stockholders' deficit (209,702) (202,600) Total liabilities and stockholders' deficit $902,673 $755,758 Remy International, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows IN THOUSANDS, For the three months ended March 31, 2005 2004 Cash Flows from Operating Activities: Net loss attributable to common stockholders $(2,897) $(3,296) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Discontinued operations 46 444 Depreciation and amortization 6,534 5,393 Non-cash interest expense 852 1,028 Accretion for redemption of preferred stock - 8,552 Minority interest and loss from unconsolidated joint ventures, net 1,010 1,002 Deferred income taxes (427) 2 Restructuring (credit) charge (799) 813 Cash payments for restructuring charges (509) (6,409) Changes in accounts receivable, inventory and accounts payable, net (5,054) (19,043) Other, net 3,811 3,377 Net cash provided by (used in) operating activities of continuing operations 2,567 (8,137) Cash Flows from Investing Activities: Acquisitions, net of cash acquired (56,014) - Net proceeds on sale of businesses 156 108 Purchases of property, plant and equipment (10,860) (5,915) Net cash used in investing activities of continuing operations (66,718) (5,807) Cash Flows from Financing Activities: Net borrowings under revolving line of credit and other 25,176 11,678 Distributions to minority interests - (1,010) Net cash provided by financing activities of continuing operations 25,176 10,668 Effect of exchange rate changes on cash (252) 244 Cash flows of discontinued operations (233) (1,050) Net decrease in cash and cash equivalents (39,460) (4,082) Cash and cash equivalents at beginning of year 62,545 21,207 Cash and cash equivalents at end of period $23,085 $17,125