Prestolite Electric Announces Third Quarter 2000 Results
3 November 2000
Prestolite Electric Announces Third Quarter 2000 Results
ANN ARBOR, Mich.--Nov. 2, 2000--Prestolite Electric Incorporated and its parent, Prestolite Electric Holding, Inc., today reported sales from continuing operations of $42.7 million and net income of $16.1 million for the three months ended September 30, 2000. Nine-month sales and net income were $131.2 million and $11.5 million, respectively.Sales for the third quarter declined by 2.1% from the second quarter of 2000 and 9.8% from the third quarter of 1999. However, third quarter earnings before interest, taxes, depreciation and the special items mentioned below (EBITDA) rose 74.7% from the second quarter of 2000 and 2.5% from the third quarter of 1999, to $5.2 million. The improvement in EBITDA resulted primarily from cost reduction actions. EBITDA for the third quarter reached 12.2% of sales compared to 6.9% in the previous quarter and 10.7% of sales in the third quarter last year. Nine-month sales of $131.2 million and EBITDA of $11.6 million represent declines of 8.2% and 24.4%, respectively, from the same period last year.
Third quarter 2000 net income of $16.1 million included several special items. Prestolite reported a pretax gain of $24.3 million on the previously-reported August sale of three businesses. The company purchased $19.1 million, face value, of its senior notes on the open market for $13.2 million, resulting in a pretax gain of $5.9 million. These two items are reported on an after tax basis ($15.2 million for the gain-on-sale and $3.7 million for the note purchase gain) in the financial statements. The company recorded a pretax charge during the quarter of $3.4 million related to two specialty alternator projects, including $3.1 million to write down its investment in and license from Ecoair Corp. Prestolite recorded $0.4 million for redundancy costs and $0.2 million covering the repurchase of stock options, primarily from employees previously associated with the businesses sold in August. Net income of $11.5 million for the nine months ended September 30, 2000 compares to a loss of $1.6 million for the first nine months of 1999.
P. Kim Packard, Prestolite president and CEO said, "We believe our sales decline represents general weakness of the markets into which we sell. However, we are gratified to see the results of our cost reduction efforts reflected in our financial performance. The sale of our direct current motor, switch, and battery chargers businesses during the third quarter strengthened our balance sheet and is allowing us to focus attention on our core alternator and starter business."
Prestolite Electric Holding, Inc.
Consolidated Unaudited Statement of Operations
Third Quarter 2000
(In thousands of dollars)
Three months ending Nine months ending
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Sep 30 Oct 2 Sep 30 Oct 2
2000 1999 2000 1999
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Net sales from
continuing operations $ 42,709 $ 47,335 $ 131,173 $ 142,931
Cost of goods sold 34,326 38,004 107,300 114,416
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Gross profit 8,383 9,331 23,873 28,515
Selling, general
& administrative 5,571 7,265 19,658 21,827
Costs associated with
option repurchase 168 -- 168 --
Charge and write-down
related to two speciality
alternator projects 3,450 -- 3,450 --
Redundancy 419 -- 2,119 --
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Operating income (loss) (1,225) 2,066 (1,522) 6,688
Other (income) (73) (360) (419) (1,298)
Loss on foreign exchange 106 -- 720 --
Interest expense 3,656 4,029 11,958 11,915
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(Loss) from continuing operations
before income taxes
and extraordinary items (4,914) (1,603) (13,781) (3,929)
Income tax provision
(benefit) (2,315) (26) (4,241) (71)
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(Loss) from continuing
operations (2,599) (1,577) (9,540) (3,858)
Income (loss) from
discontinued
operations, net (52) 774 2,299 2,238
Gain on sale of
discontinued
operations, net 15,096 -- 15,096 --
Extraordinary item -
gain on senior note
purchases, net 3,667 -- 3,667 --
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Net income (loss) $ 16,112 $ (803) $ 11,522 $ (1,620)
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Operating income (loss) $ (1,225) $ 2,066 $ (1,522) $ 6,688
Other income 73 360 419 1,298
Costs associated with
option repurchase 168 -- 168 --
Specialty alternator charge 3,450 -- 3,450 --
Redundancy 419 -- 2,119 --
Depreciation 1,960 2,254 5,913 6,201
Amortization 347 383 1,054 1,166
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EBITDA from continuing
operations $ 5,192 $ 5,063 $ 11,601 $ 15,353
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