Delco Remy International Reports Sales and Earnings
18 November 1998
Delco Remy International Reports Sales and Earnings for the First Quarter of Fiscal 1999
ANDERSON, Ind., Nov. 18 -- Delco Remy International, Inc.
, a leading supplier of aftermarket and OEM electrical systems and
powertrain/drivetrain products for automotive and heavy duty applications,
today reported its financial results for the fiscal quarter ended October 31,
1998.
Net income for the first quarter was $5.4 million compared to $3.1 million
in the first quarter of fiscal 1998. Adjusted earnings per share of $.21
compares to $.12 in the first quarter of fiscal 1998. (Adjusted shares
outstanding assumes the exercise of all warrants and that all shares were
outstanding for all periods.) Diluted earnings per share of $.21 compares to
$.18 for the same period last year. Net sales of $232.8 million increased
$23.8 million, or 11%, over last year.
Sales growth was driven by improved demand in the Company's aftermarket
and OEM businesses, including the benefits of acquisitions. Demand for
aftermarket electrical systems and powertrain/drivetrain products was at
higher levels due to the addition of new customers and distribution. Sales of
the Company's OEM automotive products were slow following the end of the GM
strike but demand was strong in the last two months of the quarter. Heavy
Duty OEM sales volume improved slightly from a strong first quarter in fiscal
year 1998.
On November 13, the Company acquired Williams Technologies, Inc.
("Williams"), a leading remanufacturer of automatic transmissions and torque
converters for automotive and medium and heavy duty truck applications. The
primary market for Williams is the dealer network of major North American and
foreign original equipment vehicle manufacturers.
Harold K. Sperlich, Chairman, stated, "We continue to make solid progress
with our strategy for growing the business and completing our restructuring.
The acquisition of Williams is an excellent addition to our remanufactured
drivetrain products for the aftermarket."
In conjunction with the acquisition of Williams, the Company increased its
Senior Credit Facility from $180 million to $300 million. The credit facility
will be used to fund future growth opportunities and for general corporate
purposes.
Delco Remy International designs, manufactures, remanufactures and
distributes electrical, powertrain/drivetrain and related components for
automobiles and light trucks, medium and heavy duty trucks and other heavy
duty vehicles. The Company's products include starter motors, alternators,
engines, transmissions, fuel system and traction control systems. The Company
serves the aftermarket and the original equipment manufacturer market,
principally in North America, as well as in Europe, Latin America and Asia
Pacific.
Statements in the press announcement, which are not historical facts, are
forward-looking statements that involve certain risks and uncertainties,
including, but not limited to risks associated with the uncertainty of future
financial results, acquisitions, additional financing requirements,
development of new products and services, the effect of competitive products
or pricing, the effect of economic conditions and other uncertainties detailed
in the Company's filings with the Securities and Exchange Commission.
DELCO REMY INTERNATIONAL INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(in millions, except for per share amounts)
Three Month Period
Ended October 31
1998 1997
Net sales $232.8 $209.0
Cost of goods sold 191.0 170.9
Gross profit 41.8 38.1
Selling, engineering and
administrative expenses 23.2 20.9
Operating income 18.6 17.2
Interest expense 10.4 10.5
Income before income taxes, minority
interest in income of subsidiaries,
income from unconsolidated joint
ventures and preferred dividend
requirement of subsidiary 8.2 6.7
Income taxes 3.2 2.7
Minority interest in income
of subsidiaries 0.8 0.5
Income from unconsolidated
joint ventures (1.2) --
Preferred dividend requirement
of subsidiary -- 0.4
Net income $5.4 $3.1
Basic earnings per common share $0.23 $0.21
Diluted earnings per common share $0.21 $0.18
Adjusted earnings per common share $0.21 $0.12
Adjusted weighted shares
outstanding (A) 25,900 25,900
(A) Adjusted weighted shares outstanding for October, 1997 assumes the
exercise of all warrants and that shares issued under the Initial Public
Offering, the conversion of the Junior Subordinated Debt and the
acquisition of Ballantrae were outstanding.
DELCO REMY INTERNATIONAL INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions)
October 31, July 31,
1998 1998
ASSETS
Current Assets
Cash and cash equivalents $8.5 $8.1
Trade accounts receivable, net 150.4 126.9
Inventories 198.9 198.4
Other current assets 45.4 36.2
Total Current Assets 403.2 369.6
Property and equipment, net 159.8 158.0
Goodwill, net 115.3 115.4
Deferred financing costs 10.5 10.8
Net assets held for disposal 14.6 14.9
Other assets 18.7 16.3
Total Assets $722.1 $685.0
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $92.7 $85.8
Other accrued liabilities 42.5 46.9
Accrued restructuring charges 29.9 35.5
Current portion of long-term debt 3.4 2.0
Total Current Liabilities 168.5 170.2
Long-term debt 423.1 393.8
Other noncurrent liabilities 30.3 26.3
Minority interest in subsidiaries 11.2 10.5
Stockholders' equity 89.0 84.2
Total Liabilities and Stockholders' Equity $722.1 $685.0