Prestolite Electric Reports First Quarter Results
29 May 1998
Prestolite Electric Reports First Quarter Results
ANN ARBOR, Mich., May 28 -- Prestolite Electric Incorporated
and its parent, PEI Holding, Inc. announced recently consolidated first
quarter sales of $74.5 million and operating income of $1.6 million.
Operating income before option repurchase and redundancy costs was $4.7
million. Sales rose 68% from the first quarter of 1997 because of the January
1998 acquisition from LucasVarity plc. of three business units (located in the
United Kingdom, Argentina, and South Africa). The acquisition, repayment of
existing debt, and repurchase of shares, options and warrants were funded by
the proceeds of a $125 million senior note offering placed in January. In
conjunction with the acquisition, refinancing, and securities repurchase, the
Company recorded a $2.1 million charge for option repurchase costs, a $1.0
million restructuring as charge for actions to be taken at an existing company
facility, and a $1.3 million net-of-tax extraordinary item related to the
prepayment of existing debt and the redemption of warrants. Those charges
caused a net loss for the quarter of $2.3 million compared to net income of
$1.2 million for the first quarter of 1997.
Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)
and before restructuring and option repurchase charges for the quarter totaled
$7.8 million, an increase of 67% from the first quarter of 1997. With the
operations acquired from Lucas included on a pro forma basis, first quarter
1997 sales and EBITDA (before redundancy charges) would have been $74.5
million and $6.0 million, respectively. While sales equaled those of the pro
forma first quarter of 1997, EBITDA increased 30%.
Commenting on the results, president and chief executive officer Kim
Packard stated, "We are pleased with our performance in the first quarter and
with the businesses we acquired from LucasVarity in January. While we have
not yet seen significant benefit from the cost reductions being implemented in
those operations or from the synergy that the acquired units have with
existing Prestolite operations, we are confident that the acquisition will
benefit the Company in many ways."
Prestolite Electric Incorporated manufactures alternators, starter motors,
direct current motors, battery chargers and switching devices. These are
supplied under the Prestolite, Leece-Neville, and Butec brand names for
original equipment and aftermarket application on a variety of vehicles and
industrial equipment. The equity of the company is owned by Genstar Capital
Corporation and management.
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.
PEI Holding, Inc.
doing business as
Prestolite Electric Incorporated
Consolidated Unaudited Financial Highlights
(In thousands of dollars)
For the three months ended
April 4 April 5 April 5
1998 1997 1997*
Net Sales $74,525 $44,302 $74,521
Cost of Goods Sold 60,031 35,346 60,420
Gross Profit 14,494 8,956 14,101
Selling, General, and Administrative 9,806 5,629 10,799
Costs Associated with Option Repurchase 2,101 - -
Restructuring and Redundancy 980 - 261
Operating Income 1,607 3,327 3,041
Other (Income) Expense (86) 20 (74)
Interest Expense 3,281 1,433 3,160
Income from Continuing Operations before
Income Taxes and Extraordinary Item (1,588) 1,874 (45)
Provision for Income Taxes (606) 747 413
Income from Continuing Operations (982) 1,127 (458)
Income from Discontinued Operation, net - 26 26
Extraordinary Item 1,275 - -
Net Income (Loss) $(2,257) $1,153 $(432)
Operating Income $1,607 $3,327 $3,041
Costs Associated with Option Repurchase 2,101 - -
Restructuring and Redundancy 980 - 261
Other (Income) Expense 86 (20) 74
Depreciation 2,784 1,201 2,483
Amortization 208 153 116
EBITDA Before Redundancy $7,766 $4,661 $5,975
* Pro forma as though the acquisition of three businesses from Lucas
Industries had occurred at the beginning of 1997.