Prestolite Electric Reports Record Results for 1998
24 February 1999
Prestolite Electric Reports Record Results for 1998
ANN ARBOR, Mich.--Feb. 23, 1999--Prestolite Electric Incorporated and its parent, Prestolite Electric Holding, Inc., today announced that consolidated 1998 net sales of $282.8 million had generated earnings before interest, taxes, depreciation, amortization and special charges (EBITDA) of $31.4 million. Both were at record levels for the company. Net sales increased 65% from 1997 while EBITDA rose more than 96%. Operating income for 1998 was $16.8 million, producing net income of $0.2 million.The net sales increase resulted from Prestolite's January 1998 acquisition of three business units (located in the United Kingdom, Argentina, and South Africa) from LucasVarity. With the acquired operations included on a pro forma basis, 1997 net sales, EBITDA, and net income would have been $300.3 million, $24.8 million, and a $4.0 million loss, respectively. Net sales declined 5.8% from pro forma results for 1997, while EBITDA increased 26.7%. An improved gross margin and reduced selling, general and administrative expense both contributed to the profit improvement.
Net income for the year totaled $3.3 million before three one-time adjustments. Those include a pretax charge of $2.1 million related to the repurchase of options, a pre-tax charge of $0.7 million for restructuring and an after-tax charge of $1.3 million associated with the first quarter debt refinancing. Net income for the year after those three items was $0.2 million.
Company President Kim Packard commented, "We are pleased with our results for 1998. In addition to our record sales and profit performance, EBITDA before special items was 11.1% of sales, also a record for the company. With the integration of the Lucas acquisition generally finished and a number of exciting product development efforts nearing completion, we look forward to an excellent year in 1999."
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. Genstar Capital Corporation and management own the equity of the company.
Prestolite Electric Holding, Inc. changed its name from "PEI Holding, Inc." on December 31, 1998.
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.
Prestolite Electric Holding, Inc. Consolidated Unaudited Financial Highlights (In thousands of dollars) 1997 1997 Pro 1998 Actual Forma Actual --------- ---------- ---------- Statement of Operations ----------------------- Sales $171,700 $300,287 $282,801 Cost of goods sold 137,792 246,649 224,561 --------- ---------- ---------- Gross profit 33,908 53,638 58,240 Selling, general & administrative 23,188 40,992 38,648 Costs associated with option repurchase - - 2,101 Restructuring and redundancy - 1,656 711 --------- ---------- ---------- Operating income 10,720 10,990 16,780 Other income (expense) (210) 454 197 Income (loss) from unconsolidated affiliates - - (133) Interest expense 5,384 12,642 13,494 --------- ---------- ---------- Income from continuing operations before income taxes and extraordinary item 5,126 (1,198) 3,350 Provision for income taxes 2,303 1,159 1,845 --------- ---------- ---------- Income from continuing operations 2,823 (2,357) 1,505 Income from discontinued operation, net (1,673) (1,673) - Extraordinary item - - (1,275) --------- ---------- ---------- Net income (loss) $ 1,150 $ (4,030) $ 230 --------- ---------- ---------- --------- ---------- ---------- Operating income $10,720 $10,990 $16,780 Other income (expense) (210) 454 197 Income (loss) from unconsolidated affiliates - - (133) Depreciation 4,930 11,225 10,316 Amortization 571 518 1,470 --------- ---------- ---------- 16,011 23,187 28,630 Costs associated with option repurchase - - 2,101 Restructuring and redundancy - 1,656 711 --------- ---------- ---------- EBITDA $16,011 $24,843 $31,442 --------- ---------- ---------- --------- ---------- ----------