Remy International, Inc. Announces First Quarter 2006 Results
ANDERSON, Ind., May 10, 2006 -- 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 reported its financial results for the three month period ended March 31, 2006.
Net sales for the first quarter increased $70 million to $351.6 million, a 24.9% increase, compared with $281.6 million reported in the corresponding period last year. The increase reflects the full quarter impact of the Unit Parts Company acquisition in March 2005, as well as a 39.4% increase in Powertrain sales and a 22.7% increase in OEM sales.
The Company reported an adjusted EBITDA for the first quarter of $24.0 million, a $3.4 million increase, compared to adjusted EBITDA of $20.6 million in the first quarter 2005. The increase in adjusted EBITDA primarily reflects the sales increases discussed above combined with savings from our cost savings programs undertaken in 2005.
The Company reported an operating income of $15.7 million in the first quarter 2006, compared with operating income of $14.9 million in the first quarter 2005.
Net loss for the first quarter increased $5.2 million to $8.1 million compared with $2.9 million reported in the corresponding period last year.
Net cash used in operating activities for the first quarter ending March 31, 2006 was $8.6 million, compared with cash provided by operating activities of $2.6 million for the corresponding period last year. The cash usage in the first quarter of 2006 includes $7.7 million for previously announced restructuring payments including the UAW settlement reached in January 2006. The Company's liquidity at March 31, 2006 was approximately $106.4 million, consisting of $86.6 million of availability on its senior credit facility in addition to unrestricted cash of $19.8 million on the consolidated balance sheet.
Future Outlook:
Commenting on the 1st Quarter 2006 results, John H. Weber, President and Chief Executive Officer, stated, "Our results for the quarter were in line with our expectations. We are beginning to realize returns on our cost savings efforts to date and continue to identify additional opportunities. Focus, hard work and execution will enable us to deliver our previously announced full year 2006 targets."
The Company reaffirms its prior guidance and believes that full year 2006 sales and adjusted EBITDA will be in the ranges of $1,275 to $1,300 million and $90 to $110 million, respectively, with adjusted EBITDA comprised of $60 to $80 million of operating income and about $30 million of depreciation and amortization. The Company expects net cash provided by operating activities for 2006 will be in the range of $10 to $20 million including cash usage for restructuring payments. Capital expenditures for 2006 are expected to be approximately $35 million.
First Quarter Conference Call:
Remy International's executive management team will host its first quarter conference call on Wednesday, May 10 at 10:00 a.m. Eastern Time to discuss the Company's performance for the first quarter, the outlook for the remainder of 2006, and other matters. The call may be accessed by dialing 800-762-4717 ten minutes prior to the start of the call. A replay of the conference call will be archived for two weeks, and may be accessed by dialing 800-475-6701 (USA), 320-365-3844 (International), Access Code 828668. A copy of the Company's First Quarter Conference Call Opening Commentary will be available on the Remy International Website at http://www.remyinc.com/ under Investor Relations, for approximately 2 weeks.
Use of Non-GAAP Financial Information:
In addition to the results reported in accordance with accounting principles generally accepted in the United States ("GAAP") included throughout this news release, the Company has provided information regarding "Adjusted EBITDA" (a Non-GAAP financial measure). Adjusted EBITDA represents operating income (loss), plus depreciation and amortization, restructuring charges (credits) and impairment charges. The Company believes Adjusted EBITDA is a meaningful measure of performance that is commonly utilized in the industry to analyze operating performance and liquidity. Adjusted EBITDA should not be construed as income from operations, net income or net cash flow from operating activities as determined by GAAP. For a reconciliation of historical adjusted EBITDA to GAAP financial information, please refer to the table following the accompanying condensed statements of operations.
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 Website: http://www.remyinc.com/
Remy International, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months
IN THOUSANDS, For the three months
ended March 31, 2006 2005
Net sales $351,589 $281,568
Cost of goods sold 301,623 236,209
Gross profit 49,966 45,359
Selling, general and administrative expenses 33,355 31,257
Restructuring charges (credits) 945 (799)
Operating income 15,666 14,901
Interest expense 20,491 15,392
Loss from continuing operations before income
taxes, minority interest and income from
unconsolidated joint ventures (4,825) (491)
Income tax expense 2,263 1,350
Minority interest 1,106 1,093
Income from unconsolidated joint ventures (56) (83)
Net loss from continuing operations (8,138) (2,851)
Discontinued operations:
Loss from discontinued operations, net of tax (70) (201)
Gain on disposal of discontinued operations,
net of tax 108 155
Net income (loss) from discontinued operations,
net of tax 38 (46)
Net loss attributable to common stockholders $(8,100) $(2,897)
Adjusted EBITDA:
Operating income $15,666 $14,901
Depreciation and amortization 7,352 6,534
Restructuring charges (credits) 945 (799)
Adjusted EBITDA $23,963 $20,636
Remy International, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
March 31, December 31
IN THOUSANDS, At 2006 2005
(Unaudited)
Assets:
Current assets:
Cash and cash equivalents $21,587 $20,022
Trade accounts receivable, net 207,310 184,818
Inventories 272,034 261,821
Other current assets 31,427 20,492
Total current assets 532,358 487,153
Property, plant and equipment, net 177,486 174,531
Goodwill, net 156,650 156,650
Other assets 51,304 52,841
Total assets $917,798 $871,175
Liabilities and Stockholders' Deficit:
Current liabilities:
Accounts payable $218,173 $194,123
Accrued restructuring 5,881 12,669
Other liabilities and accrued expenses 137,635 124,173
Current maturities of long-term debt 28,305 27,501
Total current liabilities 389,994 358,466
Long-term debt, net of current portion 734,240 714,181
Accrued restructuring 481 481
Other non-current liabilities 88,737 90,800
Minority interest 12,698 11,558
Total stockholders' deficit (308,352) (304,311)
Total liabilities and stockholders' deficit $917,798 $871,175
Remy International, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
IN THOUSANDS, For the three months
ended March 31, 2006 2005
Cash Flows from Operating Activities:
Net loss attributable to common stockholders $(8,100) $(2,897)
Adjustments to reconcile net loss to net cash
used in operating activities:
Discontinued operations (38) 46
Depreciation and amortization 7,352 6,534
Non-cash interest expense 1,778 852
Minority interest and loss from
unconsolidated joint ventures, net 1,050 1,010
Deferred income taxes 590 (427)
Restructuring charges 945 (799)
Cash payments for restructuring charges (7,733) (509)
Changes in accounts receivable,
inventory and accounts payable, net (6,555) (5,054)
Other, net 2,159 3,811
Net cash (used in) provided by operating
activities of continuing operations (8,552) 2,567
Cash Flows from Investing Activities:
Acquisitions, net of cash acquired (2,101) (56,014)
Net proceeds on sale of businesses 108 156
Purchases of property, plant and equipment (6,499) (10,860)
Investments in joint ventures - -
Net cash used in investing activities
of continuing operations (8,492) (66,718)
Cash Flows from Financing Activities:
Net borrowings under revolving line of credit
and other 18,605 25,176
Net cash provided by financing activities of
continuing operations 18,605 25,176
Effect of exchange rate changes on cash 239 (252)
Cash flows of discontinued operations (235) (233)
Net increase (decrease) in cash and cash
equivalents 1,565 (39,460)
Cash and cash equivalents at beginning of year 20,022 62,545
Cash and cash equivalents at end of period $21,587 $23,085