Prestolite Electric Reports First Half 1999 Results
2 August 1999
Prestolite Electric Reports First Half 1999 Results
ANN ARBOR, Mich.--July 30, 1999--Prestolite Electric Incorporated and its parent, Prestolite Electric Holding, Inc., today announced that consolidated six-month net sales of $130.5 million generated earnings before interest, taxes, depreciation, and amortization (EBITDA) of $14.0 million. Net sales for the first six months of 1999 declined 11.4% from the first six months of 1998, while EBITDA for the same six months increased 6.5%. Operating income of $6.9 million was 2.6% higher than the $6.7 million reported in the first six months of 1998. Results for the first half of 1998 included charges for restructuring and redundancy and costs associated with an option repurchase. Not including those costs, EBITDA declined by 13.8%. The Company recorded a net loss of $817,000 for the first six months compared to the $807,000 net loss reported in the first six months of 1998.Consolidated second quarter net sales of $65.8 million produced EBITDA of $6.3 million. Net sales declined by 9.7% from the second quarter of 1998 and EBITDA declined 25.8%. Of the $7.1 million decline in sales from the year-earlier quarter, $6.7 million occurred in Argentina. The Company recorded a net loss of $695,000 for the quarter compared to a net profit of $1.5 million in the second quarter of 1998.
"We were disappointed with our second quarter results. They reflect continuing weakness in the Argentina economy, weakness in European demand for our products, and operating problems at two plants. However, second quarter sales in both the United States and South Africa rose from a year ago," said company President Kim Packard. "We intend to introduce a number of new products in the second half and are resolving our operating problems. As a result, we expect significant improvement in our second half performance."
Prestolite Electric Incorporated manufactures alternators, starter motors, direct current motors, battery chargers and switching devices. These are supplied under the Prestolite, Leece-Neville, Hobart, and Indiel 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.
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 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 revisions to forward-looking statements 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.
(including Prestolite Electric Incorporated)
Consolidated Unaudited Financial Highlights
(In thousands of dollars)
For the three months ended For the six months ended
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July 3 July 4 July 3, July 4,
1999 1998 1999 1998
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Net sales $ 65,761 $ 72,848 $ 130,519 $ 147,373
Cost of goods sold 53,794 57,888 104,298 117,919
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Gross profit 11,967 14,960 26,221 29,454
Selling, general
and administrative 9,641 9,832 19,314 19,638
Costs associated with
option repurchase - - - 2,101
Restructuring and
redundancy - - - 980
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Operating income 2,326 5,128 6,907 6,735
Other (income) expense (917) (436) (1,048) (522)
Interest expense 4,114 3,245 7,886 6,526
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Income before
income taxes
and extraordinary item (871) 2,319 69 731
Loss from unconsolidated
subsidiaries 26 116
Provision for
(benefit from)
income taxes (202) 869 770 263
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Income before
extraordinary item (695) 1,450 (817) 468
Extraordinary item - - - 1,275
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Net income (loss) $ (695) $ 1,450 $ (817) $ (807)
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--------- -------- --------- ---------
Operating income $ 2,326 $ 5,128 $ 6,907 $ 6,735
Other income (expense),
incl unconsolidated
subsidiaries 891 436 932 522
Depreciation 2,559 2,607 5,196 5,391
Amortization 497 278 947 486
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EBITDA 6,273 8,449 13,982 13,134
Costs associated with
option repurchase - - - 2,101
Restructuring and
redundancy - - - 980
--------- -------- --------- ---------
EBITDA before
redundancy and
option repurchase $ 6,273 $ 8,449 $ 13,982 $ 16,215
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