ANDERSON, Ind., March 29 /PRNewswire/ -- Remy International, Inc.
("Remy International" or the "Company" and formerly Delco Remy International,
Inc.), a leading worldwide manufacturer and remanufacturer of automotive
electrical, powertrain products and hybrid drive technologies, today announced
net sales of $255.8 million and Adjusted EBITDA of $23.0 million in the fourth
quarter ended December 31, 2004. Net sales increased $11.7 million, or 4.8%,
and Adjusted EBITDA decreased $6.4 million, or 21.7%, compared with the fourth
quarter of 2003. Operating income of $17.2 million in the fourth quarter of
2004 compares with an operating loss of $96.6 million in the same period of
2003. The fourth quarter of 2003 reflects the special charges associated with
the core inventory valuation of $103.9 million and the Mexico Arbitration
award of $14.3 million, along with restructuring charges of $1.7 million.
Fourth Quarter Highlights:
* Significant net sales increases over fourth quarter 2003:
- 31% increase in Powertrain Sales.
- 14% increase in Heavy-Duty OEM Sales.
- 12% increase in Automotive OEM Sales.
* Strong Gross Margins maintained in difficult industry environment.
* Continued investments in technology and global footprint for recently
awarded programs.
Commenting on the fourth quarter results, Thomas J. Snyder, President and
CEO, stated, "We were pleased with our fourth quarter year over year sales
improvements in the face of challenging industry-wide conditions. Our
Automotive and Heavy-Duty OEM and Powertrain groups posted strong sales
improvements for the quarter. Our cost reduction efforts enabled us to
maintain our gross margin despite pricing pressures, higher commodity costs
and adverse currency fluctuations."
Adjusted EBITDA in the fourth quarter of 2004 decreased over the same
period in 2003 partly due to product mix and also due to higher product
engineering and other costs for the approximately $250 million in new business
awards received over the past 24 months that are being launched through 2007.
Net sales of $1,051.2 million for 2004 increased $78.4 million, or 8.1%,
over the comparable period in 2003. Adjusted EBITDA for 2004 increased 2.8%
to $110.3 million as compared to 2003. Operating income of $86.3 million
compares with an operating loss of $82.5 million in 2003. The loss in 2003
reflects the special charges associated with the core inventory valuation of
$103.9 million and the Mexico Arbitration award of $14.3 million, along with
restructuring charges of $49.0 million.
For the year ended December 31, 2004, strong customer demand in the heavy-
duty and industrial sectors, higher Automotive OEM volume from new alternator
business awards and improved remanufactured diesel engine and parts volume,
all contributed to the year over year sales growth, partially offset by lower
sales in the electrical aftermarket.
The Company's year over year gross margin improvement was the result of
cost reductions achieved and strong sales growth. Higher year over year
selling, general and administrative expenses primarily reflect increased
spending on product engineering, systems and marketing related to the new
alternator product lines and recent sales awards.
Cash used in operating activities of $9.4 million in 2004 primarily
reflects the $13.6 million Mexico Arbitration payment. Excluding this
payment, $4.2 million of cash was generated from operating activities.
Recent Developments:
On March 18, 2005, the Company completed the acquisition of substantially
all of the assets and the assumption of certain liabilities of Unit Parts
Company ("UPC"), based in Oklahoma City. UPC is a major supplier to the
automotive aftermarket for new and remanufactured starters and alternators,
offering custom branding, packaging and logistics solutions as well as
complete engineering and support services.
Also in March 2005, the Company amended its Senior Credit Facility to
reflect, among other matters, the acquisition of UPC discussed above.
Additionally, the amendment increases the maximum draw under the asset based
revolving credit facility from $120 million to $145 million, eliminates the
EBITDA and Fixed Charge covenants from the facility and extends the maturity
of the facility to June 30, 2008.
Future Outlook:
Commenting on 2005, Snyder said, "We expect our near term results to be
impacted by the difficult industry environment and the adverse cost impact of
the significant weakening of the U.S. dollar. However, with cost reductions,
new global business awards and the recent acquisition of UPC, our full year
2005 and long-term outlook remains positive."
Reconciliation to GAAP:
For a reconciliation of GAAP financial information to the non-GAAP
financial information appearing in this release, please refer to the table
following the accompanying Condensed Consolidated Statements of Operations.
Fourth Quarter Conference Call:
Remy International's executive management team will conduct a live
conference call on Tuesday, March 29 at 10:00 a.m. Eastern Standard Time to
discuss additional details regarding the Company's performance for the fourth
quarter and the outlook for 2005. The call may be accessed by dialing
800-553-0327 ten minutes prior to the start of the presentation. A replay of
the conference will be archived for two weeks, and may be accessed by dialing
800-475-6701 (USA), 320-365-3844 (International), Access Code 775425.
About Remy International, Inc.:
Remy International, Inc., headquartered in Anderson, Indiana, is a leading
manufacturer, remanufacturer and distributor of Delco Remy brand heavy-duty
systems and Remy brand starters and alternators, diesel engines and hybrid
power technology. The Company also provides a worldwide components core-
exchange service for automobiles, light trucks, medium and heavy-duty trucks
and other heavy-duty, off-road and industrial applications. Remy was formed
in 1994 as a partial divestiture by General Motors Corporation of the former
Delco Remy Division, which traces its roots to Remy Electric, founded in 1896.
Caution Regarding Forward-Looking Statements:
This press announcement contains statements relating to future results of
the Company that are "forward-looking statements" as defined in the Private
Securities Litigation Reform Act of 1995 (the "Act") or by the Securities and
Exchange Commission ("SEC") in its rules, regulations and releases. The
Company desires to take advantage of the "safe harbor" provisions in the Act
for forward-looking statements made in this press announcement. Any
statements set forth in this press announcement with regard to its
expectations as to financial results and other aspects of its business may
constitute forward-looking statements. These statements relate to the
Company's future plans, objectives, expectations and intentions and may be
identified by words like "believe," "expect," "may," "will," "should," "seek,"
or "anticipate," and similar expressions. The Company cautions readers that
any such forward-looking statements are based on assumptions that the Company
believes are reasonable, but are subject to a wide range of risks 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 commodity prices, the effect of economic conditions and other
uncertainties detailed from time to time in the Company's filings with the
SEC. Due to these uncertainties, the Company cannot assure readers that any
forward-looking statements will prove to have been correct.
Remy International Web Site: http://www.RemyInc.com
Remy International, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
Three Months Twelve Months
IN THOUSANDS, For the three
and twelve months
ended December 31, 2004 2003 2004 2003
(unaudited)
Net sales $255,834 $244,096 $1,051,165 $972,794
Cost of goods sold 209,936 198,507 850,672 791,322
Cost of goods sold - special
charges:
Core inventory valuation - 103,930 - 103,930
Mexico arbitration award - 14,310 - 14,310
Gross profit (loss) 45,898 (72,651) 200,493 63,232
Selling, general and
administrative expenses 29,289 22,219 113,263 96,770
Restructuring (credits)
charges (574) 1,705 942 48,968
Operating income (loss) 17,183 (96,575) 86,288 (82,506)
Interest expense, net 13,859 14,028 58,237 55,454
Loss on early extinguishment
of debt - - 7,939 -
Income (loss) from continuing
operations before income taxes,
minority interest and loss
(income) from unconsolidated
joint ventures 3,324 (110,603) 20,112 (137,960)
Income tax expense 919 25,188 5,367 36,682
Minority interest 659 (2,368) 2,798 (143)
Loss (income) from unconsolidated
joint ventures (113) 518 588 6,427
Net income (loss) from continuing
operations 1,859 (133,941) 11,359 (180,926)
Discontinued operations:
Income (loss) from discontinued
operations, net of tax 188 (4,138) 1,154 (8,019)
Gain (loss) on disposal of
discontinued operations,
net of tax 534 (97) 43,911 2,320
Net income (loss) from
discontinued operations,
net of tax 722 (4,235) 45,065 (5,699)
Net income (loss) 2,581 (138,176) 56,424 (186,625)
Accretion for redemption of
preferred stock - 8,477 27,367 32,895
Net income (loss) attributable
to common stockholders $2,581 $(146,653) $29,057 $(219,520)
Adjusted EBITDA:
Operating income (loss) $17,183 $(96,575) $86,288 $(82,506)
Depreciation and
amortization 6,405 6,035 23,046 22,581
Restructuring (credits)
charges (574) 1,705 942 48,968
Special charges - 118,240 - 118,240
Adjusted EBITDA $23,014 $29,405 $110,276 $107,283
Remy International, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
December 31, December 31,
IN THOUSANDS, At 2004 2003
Assets:
Current assets:
Cash and cash equivalents $ 62,545 $ 21,207
Trade accounts receivable, net 154,333 143,439
Inventories 217,912 198,400
Assets of discontinued operations 356 67,397
Other current assets 30,311 28,518
Total current assets 465,457 458,961
Property, plant and equipment, net 137,293 124,803
Goodwill, net 106,400 100,862
Other assets 46,608 39,350
Total assets $ 755,758 $ 723,976
Liabilities and Stockholders' Deficit:
Current liabilities:
Accounts payable $ 170,776 $ 154,350
Accrued restructuring 6,451 10,402
Liabilities of discontinued operations 2,799 11,453
Deferred income taxes 3,065 644
Other liabilities and accrued expenses 92,367 131,336
Current maturities of long-term debt 22,890 31,397
Total current liabilities 298,348 339,582
Long-term debt, net of current portion 610,330 593,003
Accrued restructuring 4,407 8,801
Other non-current liabilities 34,775 36,422
Minority interest 10,498 15,193
Redeemable preferred stock - 306,969
Total stockholders' deficit (202,600) (575,994)
Total liabilities and stockholders'
deficit $ 755,758 $ 723,976
Remy International, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
IN THOUSANDS, For the twelve months ended
December 31, 2004 2003
Cash Flows from Operating Activities:
Net income (loss) attributable to common
stockholders $ 29,057 $ (219,520)
Adjustments to reconcile net income (loss)
to net cash (used in) provided by
operating activities:
Discontinued operations (45,065) 5,699
Depreciation and amortization 23,046 22,581
Non-cash interest expense 3,855 4,473
Loss on early extinguishment of debt 7,939 -
Accretion for redemption of preferred
stock 27,367 32,895
Minority interest and loss from
unconsolidated joint ventures, net 3,386 6,284
Deferred income taxes 2,592 28,085
Restructuring charges 942 48,968
Cash payments for restructuring charges (9,027) (15,333)
Special charges - 118,240
Mexico arbitration settlement (13,622) -
Changes in accounts receivable, inventory
and accounts payable, net (14,986) (12,321)
Other, net (24,835) 5,038
Net cash (used in) provided by operating
activities of continuing operations (9,351) 25,089
Cash Flows from Investing Activities:
Acquisitions, net of cash acquired (25,517) (18,919)
Net proceeds on sale of businesses 104,653 30,058
Purchases of property, plant and equipment (25,347) (16,305)
Investments in joint ventures - (115)
Net cash provided by (used in) investing
activities of continuing operations 53,789 (5,281)
Cash Flows from Financing Activities:
Proceeds from issuance of long-term debt 275,000 10,297
Retirement of long-term debt (200,000) -
Net repayments under revolving line of
credit and other (62,654) (12,547)
Deferred financing costs (15,032) (1,980)
Distributions to minority interests (1,010) -
Net cash used in financing activities
of continuing operations (3,696) (4,230)
Effect of exchange rate changes on cash 1,510 967
Cash flows of discontinued operations (914) (7,653)
Net increase in cash and cash equivalents 41,338 8,892
Cash and cash equivalents at beginning
of year 21,207 12,315
Cash and cash equivalents at end of year $ 62,545 $ 21,207
SOURCE Remy International, Inc.
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CONTACT:
Investor Relations: Keri Webb of Remy
International, Inc., +1-765-778-6602
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