ANDERSON, Ind., July 29 /PRNewswire/ -- Remy International, Inc. ("Remy
International" or the "Company"), a leading manufacturer, remanufacturer and
distributor of Delco Remy brand heavy-duty systems and Remy brand starters and
alternators, diesel engines, locomotive products and hybrid power technology,
today announced net sales of $312.3 million and Adjusted EBITDA of $6.2
million for the quarter ending June 30, 2005. Net sales increased $40.3
million, or 14.8%, and Adjusted EBITDA decreased $24.7 million, or 80.0%,
compared with the second quarter of 2004. An operating loss of $3.1 million
in the second quarter of 2005 compares with operating income of $24.4 million
in the same period of 2004.
The net sales increase of $40.3 million in the second quarter mainly
reflects a full quarter of results from our recent acquisition of Unit Parts
Company ("UPC") in March 2005 and continued strong Powertrain Diesel Product
sales.
In the second quarter of 2005, the Company notified U.S. Customs of a
probable underpayment of a U.S. duty and recorded a charge of $6.0 million for
the periods 2000-2004 on remanufactured starters and alternators imported into
the U.S. The Company intends to appeal any assessment.
Additionally in the quarter, the Company incurred significant costs in its
Mexican operations arising from the insourcing of components for its Original
Equipment Manufacturing operations, the implementation of a new ERP system and
the integration costs relating to the UPC acquisition. Costs in the quarter
were substantially higher than anticipated.
Commenting on the second quarter results, Tom Snyder, President and CEO,
stated, "Market softness in our North American automotive and electrical
aftermarket businesses continue to adversely impact our results. As we have
previously indicated, commodity price pressures and the weak dollar have
reduced our gross margins. Moreover, the second quarter performance was
impacted by the startup and integration cost discussed above. We do believe,
however, that the majority of issues we faced, particularly with respect to
the systems implementation, are behind us and the majority of insourcing
projects are now complete."
Adjusted EBITDA in the second quarter of 2005 decreased over the same
period in 2004 mainly due to lower gross margins as discussed above and higher
selling, general and administrative costs as previously announced.
Net sales of $593.9 million in the first six months of 2005 increased
$52.8 million, or 9.8%, over the comparable period in 2004. Adjusted EBITDA
for the six months ended June 30, 2005 of $26.8 million declined $32.8 million
and operating income of $11.8 million declined $35.2 million compared with the
same period of 2004.
Cash used in operating activities of $38.0 million in the first six months
of 2005 represents a $27.6 million increase over the comparable period in
2004, reflecting lower earnings and the discontinuance of one of our
accelerated receivable programs. At June 30, 2005, the Company had
approximately $66.0 million of availability on its senior credit facility in
addition to $21.7 million in cash on the balance sheet.
Recent Developments:
The Company has announced a realignment of management responsibilities.
This realignment will enable the Company to increase its focus on improving
operational and financial performance.
Additionally, the Company has commenced new actions to reduce overhead and
other costs and expects to record a restructuring charge related to these
actions of approximately $4.0 million in the third quarter of 2005.
Future Outlook:
Commenting on 2005, Snyder said, "Clearly we are disappointed with our
second quarter results. We continue to be affected by the difficult
conditions in the automotive industry. We believe that the actions taken in
the second and early third quarter combined with the synergies from the UPC
integration will generate significant improvements in the third quarter
compared with our second quarter results."
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.
Second Quarter Conference Call:
Remy International's executive management team will conduct a live
conference call on Friday, July 29 at 11:00 a.m. Eastern Daylight Time to
discuss additional details regarding the Company's performance for the second
quarter and the outlook for the remainder of 2005. The call may be accessed
by dialing 888-428-4474 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
790887.
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, locomotive
products 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 and integration costs, additional financing
requirements, development of new products and services, the effect of
competitive products or pricing, the effect of commodity prices, restructuring
risks, enterprise resource planning implementation risks, customs duty claims,
conditions in the automotive industry, foreign currency fluctuations, costs
related to re-sourcing and outsourcing products, 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
(Unaudited)
Three Months Six Months
IN THOUSANDS, For the
three and six months
ended June 30, 2005 2004 2005 2004
Net sales $312,341 $272,032 $593,909 $541,060
Cost of goods sold 281,831 217,739 518,040 436,497
Gross profit 30,510 54,293 75,869 104,563
Selling, general and
administrative expenses 32,336 29,329 63,593 56,243
Restructuring charges 1,299 561 500 1,374
Operating (loss) income (3,125) 24,403 11,776 46,946
Interest expense 17,495 15,569 32,887 30,170
Loss on early
extinguishment of debt - 7,939 - 7,939
Income (loss) from
continuing operations
before income taxes,
minority interest and
loss (income) from
unconsolidated joint
ventures (20,620) 895 (21,111) 8,837
Income tax expense
(benefit) 221 (156) 1,571 1,084
Minority interest 1,025 822 2,118 1,370
Loss (income) from
unconsolidated joint
ventures (48) 314 (131) 768
Net (loss) income
from continuing
operations (21,818) (85) (24,669) 5,615
Discontinued operations:
Income (loss) from
discontinued operations,
net of tax (93) 1,543 (294) 991
Gain on disposal of
discontinued operations,
net of tax 524 107 679 215
Net income from
discontinued operations,
net of tax 431 1,650 385 1,206
Net (loss) income (21,387) 1,565 (24,284) 6,821
Accretion for redemption
of preferred stock - 9,356 - 17,908
Net loss attributable to
common stockholders $(21,387) $(7,791) $(24,284) $(11,087)
Adjusted EBITDA:
Operating (loss) income $(3,125) $24,403 $11,776 $46,946
Depreciation and
amortization 7,985 5,879 14,519 11,272
Restructuring charges 1,299 561 500 1,374
Adjusted EBITDA $6,159 $30,843 $26,795 $59,592
Remy International, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
June 30, December 31,
IN THOUSANDS, At 2005 2004
(unaudited)
Assets:
Current assets:
Cash and cash equivalents $21,648 $62,545
Trade accounts receivable, net 187,053 154,333
Inventories 281,270 217,912
Other current assets 23,753 30,667
Total current assets 513,724 465,457
Property, plant and equipment, net 161,031 137,293
Goodwill, net 169,071 106,400
Other assets 55,835 46,608
Total assets $899,661 $755,758
Liabilities and Stockholders' Deficit:
Current liabilities:
Accounts payable $188,178 $170,776
Accrued restructuring 11,816 6,451
Deferred income taxes 2,535 3,065
Other liabilities and accrued expenses 129,111 95,166
Current maturities of long-term debt 27,525 22,890
Total current liabilities 359,165 298,348
Long-term debt, net of current portion 680,220 610,330
Accrued restructuring 3,006 4,407
Other non-current liabilities 78,506 34,775
Minority interest 12,491 10,498
Total stockholders' deficit (233,727) (202,600)
Total liabilities and stockholders' deficit $899,661 $755,758
Remy International, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
IN THOUSANDS, For the six months ended June 30, 2005 2004
Cash Flows from Operating Activities:
Net loss attributable to common stockholders $(24,284) $(11,087)
Adjustments to reconcile net loss to net cash
used in operating activities:
Discontinued operations (385) (1,206)
Depreciation and amortization 14,519 11,272
Non-cash interest expense 2,510 2,263
Loss on early extinguishment of debt - 7,939
Accretion for redemption of preferred stock - 17,908
Minority interest and loss from
unconsolidated joint ventures, net 1,987 2,138
Deferred income taxes (526) (2,545)
Restructuring charges 500 1,374
Cash payments for restructuring charges (1,618) (7,234)
Changes in accounts receivable, inventory and
accounts payable, net (22,813) (22,153)
Other, net (7,846) (8,996)
Net cash used in operating activities
of continuing operations (37,956) (10,327)
Cash Flows from Investing Activities:
Acquisitions, net of cash acquired (56,994) (19,263)
Net proceeds on sale of businesses 503 216
Purchases of property, plant and equipment (19,764) (9,296)
Net cash used in investing activities
of continuing operations (76,255) (28,343)
Cash Flows from Financing Activities:
Proceeds from issuance of long-term debt - 275,000
Retirement of long-term debt - (200,000)
Net borrowings (repayments) under revolving line
of credit and other 74,497 (23,241)
Financing costs (325) (11,491)
Distributions to minority interests - (1,010)
Net cash provided by financing activities
of continuing operations 74,172 39,258
Effect of exchange rate changes on cash (678) 193
Cash flows of discontinued operations (180) 1,035
Net (decrease) increase in cash
and cash equivalents (40,897) 1,816
Cash and cash equivalents at beginning of year 62,545 21,207
Cash and cash equivalents at end of period $21,648 $23,023
SOURCE Remy International, Inc.
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http://www.remyinc.com
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CONTACT:
Investor Relations: Keri Webb of Remy
International, Inc., +1-765-778-6602
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