Delco Remy International Reports Record Sales and Earnings
25 August 1999
Delco Remy International Reports Record Sales and Earnings For the Fourth Quarter and Fiscal Year 1999
ANDERSON, Ind., Aug. 25 -- 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 record sales and earnings for the fourth quarter and fiscal
year ending July 31, 1999.
Net income for the fourth quarter was $8.9 million, or $.34 per share,
compared to adjusted net income of $2.6 million, or $.10 per share, reported
for the same period last year. Net sales for the fourth quarter were
$249.8 million, compared to $196.0 million for the prior year. Sales growth
was attributable to stronger market demand for the Company's aftermarket and
original equipment products as well as acquisitions. Additionally, the
Company believes it is increasing market penetration for its aftermarket
products due to new distribution, a broad product offering and technology
synergies with its OE business.
For fiscal year 1999, net income was $28.3 million, or $1.09 per share,
compared to adjusted net income of $15.6 million, or $.60 per share for last
year. Net sales for fiscal year 1999 were $953.7 million, up 17 percent over
the $815.3 million reported the previous year.
Adjustments to net income for fiscal year 1998 were restructuring charges
(fourth quarter) and non-recurring charges associated with the Company's IPO
and senior notes offering (second quarter). Additionally, reported net sales
and earnings for the fourth quarter of 1998 were impacted by a strike at
General Motors. The Company estimates that the General Motors strike reduced
net sales by $22.3 million and net income by $5.3 million, or $.20 per share.
After considering all adjustments in 1998, including the General Motors
strike, net sales for the fourth quarter increased by 14 percent and earnings
per share grew 14 percent. For fiscal year 1999, sales increased at a rate of
14 percent and earnings per share grew at 36 percent, after adjustments and
the impact of the General Motors strike.
During fiscal year 1999 the Company generated free cash flow of
$14.1 million which was used to repay debt.
Harold K. Sperlich, Chairman, commented, "We are very pleased with the
record sales and earnings for the fourth quarter and fiscal year 1999. We are
making excellent progress with top line growth, margin improvement and cash
flow."
The Board of Directors of Delco Remy International, Inc. is pleased to
announce that Mr. Thomas J. Snyder, currently President and Chief Operating
Officer, will become Chief Executive Officer of the Company, effective
January 1, 2000. Mr. Harold K. Sperlich will continue to serve the Company
and the shareholders as Chairman of the Board.
Mr. Sperlich said, "The Board is very pleased with the progress the
company has made since its inception five years ago and with the leadership
that Mr. Snyder has provided during this period as President and Chief
Operating Officer. The Company is well positioned to grow and prosper in the
years ahead. The continuity of leadership this move will provide, along with
the depth and excellence of our total team, should serve the Company and the
shareholders well as we continue to solidify our position in the new
millennium."
Delco Remy International designs, manufactures, remanufactures and
distributes electrical, powertrain/drivetrain and related components for
automobiles, 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 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, 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 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 Twelve Month Period
Ended July 31 Ended July 31
1999 1998 1999 1998
Net sales $249.8 $ 196.0 $953.7 $ 815.3
Cost of goods sold 196.9 160.6 759.8 657.9
Gross profit 52.9 35.4 193.9 157.4
Selling, engineering
and administrative
expenses 26.4 21.3 100.3 86.4
Amortization of goodwill
and intangibles 1.4 1.1 4.8 3.9
Restructuring charges -- 26.5 -- 26.5
Operating income (loss) 25.1 (13.5) 88.8 40.6
Interest and other
non-operating
expense (11.2) (10.3) (45.5) (40.7)
Income (loss) 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 13.9 (23.8) 43.3 (0.1)
Income tax expense
(benefit) 5.0 (9.8) 16.5 (0.1)
Minority interest in
income of subsidiaries (1.6) (0.9) (3.9) (2.4)
Income from unconsolidated
joint ventures 1.6 1.3 5.4 2.5
Preferred dividend
requirement of
subsidiary -- -- -- (0.7)
Deemed dividend on
preferred stock
conversion -- -- -- (1.6)
Income (loss) before
extraordinary item 8.9 (13.6) 28.3 (2.2)
Extraordinary item
(write-off of debt
issuance costs) -- -- -- (1.8)
Net income (loss) $8.9 $(13.6) $28.3 $(4.0)
Basic earnings per
common share:
Income (loss) before
extraordinary item $0.37 $(0.57) $1.19 $(0.11)
Extraordinary item
(write-off of debt
issuance costs) -- -- -- (0.09)
Net income (loss) $0.37 $(0.57) $1.19 $(0.20)
Diluted earnings per
common share:
Income (loss) before
extraordinary item $0.34 $(0.57) $1.09 $(0.11)
Extraordinary item
(write-off of debt
issuance costs) -- -- -- (0.09)
Net income (loss) $0.34 $(0.57) $1.09 $(0.20)
Adjusted net income:
Net income (loss) $8.9 $(13.6) $28.3 $(4.0)
Restructuring charges
(net of tax benefit) -- 16.2 -- 16.2
Deemed dividend on
preferred stock
conversion -- -- -- 1.6
Extraordinary item
(write-off of debt
issuance costs) -- -- -- 1.8
Adjusted net income $8.9 $2.6 $28.3 $15.6
Adjusted earnings per
common share $0.34 $0.10 $1.09 $0.60
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)
As of July 31
1999 1998
ASSETS
Current Assets
Cash and cash equivalents $15.3 $8.1
Trade accounts receivable, net 148.0 126.9
Inventories 232.0 198.4
Other current assets 33.4 36.2
Total Current Assets 428.7 369.6
Property and equipment, net 185.7 158.0
Goodwill, net 137.4 115.4
Deferred financing costs 11.2 10.8
Net assets held for disposal 9.7 14.9
Other assets 10.3 16.3
Total Assets $ 783.0 $ 685.0
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 119.3 $85.8
Other accrued liabilities 48.9 46.9
Accrued restructuring charges 5.9 35.5
Current portion of long-term debt 11.9 2.0
Total Current Liabilities 186.0 170.2
Long-term debt 435.4 393.8
Other noncurrent liabilities 32.4 26.3
Minority interest in subsidiaries 19.8 10.5
Stockholders' Equity 109.4 84.2
Total Liabilities and Stockholders' Equity $ 783.0 $ 685.0