Delco Remy International Reports Strong Sales and Earnings Growth
16 February 1999
Delco Remy International Reports Strong Sales and Earnings Growth for the Second Quarter of Fiscal 1999
ANDERSON, Ind., Feb. 16 -- 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 second fiscal quarter ended
January 31, 1999.
Adjusted net income for the second quarter was $5.8 million, or $.23 per
share, a 41% and 44% improvement, respectively, over the adjusted net income
of $4.1 million, or $.16 per share, reported in the same quarter last year.
Adjustments to net income are non-recurring charges associated with the
Company's IPO and senior notes offering in the second quarter of fiscal 1998.
Adjusted shares outstanding assumes the exercise of all warrants and that all
shares were outstanding for all periods.
Net sales for the second quarter were up 15% to $222.3 million, compared
to net sales of $193.3 million for the prior year. Sales growth was driven by
stronger demand in the Company's aftermarket and OEM businesses, including the
benefits of acquisitions. The Company's aftermarket electrical and
powertrain/drivetrain products reported solid sales improvement attributable
to stronger market demand and the addition of new customers and distribution.
Sales of the Company's OEM products improved, driven by higher demand from
automotive and heavy duty customers.
For the first six months of fiscal 1999, adjusted net income was
$11.2 million, or $.43 per share, a 58% and 54% improvement, respectively,
over adjusted net income of $7.1 million, or $ .28 per share, for the same
period last year. Net sales for the first half of fiscal 1999 were
$455.1 million, up 13% over the $402.3 million reported the prior year.
Harold K. Sperlich, Chairman, commented, "We are very pleased with the
progress made during the second quarter. We are seeing excellent results from
our initiatives to grow the business and improve our profitability. The
integration of our recent acquisition, Williams Technologies, is going very
well."
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, torque converters, fuel systems 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 this 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 STATEMENTS OF OPERATIONS
(in millions, except for per share amounts)
Three Month Period Six Month Period
Ended January 31 Ended January 31
1999 1998 1999 1998
Net sales $222.3 $193.3 $455.1 $402.3
Cost of goods sold 175.0 154.1 366.0 325.0
Gross profit 47.3 39.2 89.1 77.3
Selling, engineering and
administrative expenses 26.5 21.2 49.7 42.1
Operating income 20.8 18.0 39.4 35.2
Interest expense (11.3) (10.2) (21.7) (20.7)
Income before income
taxes, minority interest
in income of subsidiaries,
income from unconsolidated
joint ventures, preferred
dividend requirement of
subsidiary and deemed
dividend on preferred
stock conversion 9.5 7.8 17.7 14.5
Income taxes 3.7 3.0 6.9 5.8
Minority interest in income
of subsidiaries (0.8) (0.5) (1.6) (1.0)
Income from unconsolidated
joint ventures 0.8 -- 2.0 --
Preferred dividend requirement
of subsidiary -- (0.2) -- (0.6)
Deemed dividend on preferred
stock conversion -- (1.6) -- (1.6)
Income before extraordinary
item 5.8 2.5 11.2 5.5
Extraordinary item (write-off
of debt issuance costs) -- (1.8) -- (1.8)
Net income $5.8 $0.7 $11.2 $3.7
Basic earnings per
common share:
Income before extraordinary
item $0.25 $0.13 $0.47 $0.33
Extraordinary item
(write-off of debt
issuance costs) -- (0.10) -- (0.11)
Net income $0.25 $0.04 $0.47 $0.22
Diluted earnings per
common share:
Income before extraordinary
item $0.23 $0.12 $0.43 $0.29
Extraordinary item
(write-off of debt
issuance costs) -- (0.09) -- (0.09)
Net income $0.23 $0.03 $0.43 $0.19
Adjusted net income:
Net income $5.8 $0.7 $11.2 $3.7
Deemed dividend on
preferred stock
conversion -- 1.6 -- 1.6
Extraordinary item
(write-off of debt
issuance costs) -- 1.8 -- 1.8
Adjusted net income $5.8 $4.1 $11.2 $7.1
Adjusted earnings per
common share $0.23 $0.16 $0.43 $0.28
Adjusted weighted shares
outstanding (A) 25.9 25.9 25.9 25.9
(A) -- Adjusted weighted shares outstanding assumes exercise of all
warrants and that all shares were outstanding for all periods.
DELCO REMY INTERNATIONAL INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions)
January 31, July 31,
1999 1998
ASSETS
Current Assets
Cash and cash equivalents $10.1 $8.1
Trade accounts receivable, net 139.9 126.9
Inventories 220.8 198.4
Other current assets 45.9 36.2
Total Current Assets 416.7 369.6
Property and equipment, net 173.0 158.0
Goodwill, net 133.4 115.4
Deferred financing costs 12.1 10.8
Net assets held for disposal 14.5 14.9
Other assets 19.6 16.3
Total Assets $769.3 $685.0
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $94.0 $85.8
Other accrued liabilities 46.5 46.9
Accrued restructuring charges 24.9 35.5
Current portion of long-term debt 3.4 2.0
Total current liabilities 168.8 170.2
Long-term debt 461.7 393.8
Other noncurrent liabilities 31.2 26.3
Minority interest in subsidiaries 12.0 10.5
Stockholders' equity 95.6 84.2
Total Liabilities and
Stockholders' Equity $769.3 $685.0