ANDERSON, Ind., Aug. 8 /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 reported its financial results for the three and
six month periods ended June 30, 2006.
Net sales for the second quarter set an all-time record increasing
$59.8 million to $372.2 million, a 19.2% increase, compared with $312.3
million reported in the corresponding period last year. Sales increased in
all product categories as compared to the second quarter of 2005.
Automotive OEM sales increased 36.5% primarily relating to the continued
ramp up of the alternator business and pass through of commodity price
increases. Powertrain sales increased 36.9% due to a strong demand for
diesel engine parts. Heavy duty OEM sales remain strong and were up 6.6%.
Electrical aftermarket sales increased 8.7% due to unusually strong sales
into the retail segment of the automotive aftermarket.
The Company reported an Adjusted EBITDA for the second quarter of $24.7
million, an $18.5 million increase, compared to Adjusted EBITDA of $6.2
million in the second quarter 2005. Higher sales were the largest
contributor to the increase in Adjusted EBITDA, although the Company
continues to benefit from the restructuring actions taken in the prior
year. The second quarter 2005 Adjusted EBITDA was negatively impacted by
the $6.0 million charge related to the probable underpayment of U.S. Import
Duty for prior years and the significant startup and integration costs
incurred in respect to the Company's Mexican Operations.
The Company reported operating income of $12.9 million in the second
quarter 2006, compared with an operating loss of $3.1 million in the second
quarter 2005. Net loss for the second quarter decreased $11.1 million to
$10.3 million compared with a $21.4 million net loss reported in the
corresponding period last year.
Net sales of $723.8 million in the first six months of 2006 increased
$129.9 million, or 21.9%, over the comparable period in 2005. Adjusted
EBITDA for the six months ended June 30, 2006 of $48.6 million increased
$21.8 million and operating income of $28.6 million increased $16.8 million
compared with the same period of 2005.
Net cash used in operating activities for the six months ending June
30, 2006 was $5.9 million, compared with net cash used in operating
activities of $38.0 million for the corresponding period last year. The
cash usage for the first six months of 2006 includes $9.4 million for
previously announced restructuring payments, which were $7.8 million higher
than payments made in the first six months of 2005, including a payment
related to the UAW settlement reached in January 2006. In addition to the
improvement in operating income, continued streamlining of the supply chain
and control of inventory despite the sales increase contributed to the
reduced cash usage. The Company's liquidity at June 30, 2006 was
approximately $101.6 million, consisting of $84.9 million of availability
on its senior credit facility in addition to unrestricted cash of $16.7
million on the consolidated balance sheet. The Company continues to invest
in strategic capital programs, but strong control resulted in $8.2 million
lower capital spending for the first six months of 2006 compared to the
same period in 2005.
Commenting on the second quarter 2006 results, John H. Weber, President
and Chief Executive Officer, stated, "I am pleased with the second quarter
results, which also reflects two consecutive quarters of improvement being
achieved in the fundamental performance of the business. We continue to see
strong sales and improvements in Adjusted EBITDA in our core OEM related
business and remain focused on strong control of cash spending in light of
our difficult capital structure."
In respect to the outlook for the remainder of 2006, Weber commented,
"Conditions in the Electrical aftermarket business represent our largest
challenge for the next six months. As a result, Adjusted EBITDA for 2006 is
expected to fall closer to the lower end of the range of guidance provided
previously. However, due to our increased focus on cash flow and liquidity,
we currently remain optimistic that we will achieve our cash flow goals."
Second Quarter Conference Call:
Remy International's executive management team will host its second
quarter conference call on Tuesday, August 8 at 10:00 a.m. Eastern Daylight
Time to discuss the Company's performance for the second quarter, the
outlook for the remainder of 2006, and other matters. The call may be
accessed by dialing 800-762-4717 ten minutes prior to the start of the
call. A replay of the conference call will be archived for two weeks, and
may be accessed by dialing 800-475-6701 (USA), 320-365-3844
(International), Access Code 838556. A copy of the Company's Second Quarter
Conference Call Opening Commentary will be available on the Remy
International Website at http://www.remyinc.com under Investor Relations,
for approximately 2 weeks.
Use of Non-GAAP Financial Information:
In addition to the results reported in accordance with accounting
principles generally accepted in the United States ("GAAP") included
throughout this news release, the Company has provided information
regarding "Adjusted EBITDA" (a Non-GAAP financial measure). Adjusted EBITDA
represents operating income (loss), plus depreciation and amortization,
restructuring charges (credits) and impairment charges. The Company
believes Adjusted EBITDA is a meaningful measure of performance that is
commonly utilized in the industry to analyze operating performance and
liquidity. Adjusted EBITDA should not be construed as income from
operations, net income or net cash flow from operating activities as
determined by GAAP. For a reconciliation of historical adjusted EBITDA to
GAAP financial information, please refer to the table following the
accompanying condensed statements of operations.
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 and liquidity, the incremental
liquidity provided by the term loan is subject to borrowing base and other
limitations on the Company's ability to borrow under its revolving credit
facilities or otherwise, dispositions, acquisitions and integration costs,
additional financing requirements, development of new products and
services, the effect of competitive products or pricing, the effect of
commodity and raw material prices, the impact of supply chain cost
management initiatives, restructuring risks, enterprise resource planning
implementation risks, customs duty claims, litigation uncertainties,
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 is under no obligation to (and
expressly disclaims any such obligation to) update or alter any forward-
looking statements whether as a result of new information, future events or
otherwise.
Remy International Website: http://www.remyinc.com .
Remy International, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
June 30, December 31,
IN THOUSANDS, At 2006 2005
(Unaudited)
Assets:
Current assets:
Cash and cash equivalents $18,582 $20,022
Trade accounts receivable, net 215,970 184,818
Inventories 265,803 261,821
Other current assets 34,007 20,492
Total current assets 534,362 487,153
Property, plant and equipment, net 174,886 174,531
Goodwill, net 156,650 156,650
Other assets 55,738 52,841
Total assets $921,636 $871,175
Liabilities and Stockholders'
Deficit:
Current liabilities:
Accounts payable $220,698 $194,123
Accrued restructuring 5,390 12,669
Other liabilities and accrued expenses 145,466 124,173
Current maturities of long-term debt 27,683 27,501
Total current liabilities 399,237 358,466
Long-term debt, net of current portion 735,047 714,181
Accrued restructuring 1,627 481
Other non-current liabilities 88,386 90,800
Minority interest 13,221 11,558
Total stockholders' deficit (315,882) (304,311)
Total liabilities and stockholders'
deficit $921,636 $871,175
Remy International, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Six Months
IN THOUSANDS, For the three & six
months ended June 30, 2006 2005 2006 2005
Net sales $372,178 $312,341 $723,767 $593,909
Cost of goods sold 322,357 281,831 623,981 518,040
Gross profit 49,821 30,510 99,786 75,869
Selling, general and
administrative expenses 33,980 32,336 67,332 63,593
Restructuring charges 2,949 1,299 3,894 500
Operating income (loss) 12,892 (3,125) 28,560 11,776
Interest expense 20,876 17,495 41,367 32,887
Loss from continuing operations
before income taxes, minority
interest and income from
unconsolidated subsidiaries (7,984) (20,620) (12,807) (21,111)
Income tax expense 1,059 221 3,321 1,571
Minority interest 1,496 1,025 2,602 2,118
Income from unconsolidated
subsidiaries (80) (48) (135) (131)
Net loss from continuing
operations (10,459) (21,818) (18,595) (24,669)
Discontinued operations:
Income (loss) from discontinued
operations, net of tax 55 (93) (15) (294)
Gain on disposal of discontinued
operations, net of tax 108 524 215 679
Net income from discontinued
operations, net of tax 163 431 200 385
Net loss attributable to common
stockholders $(10,296) $(21,387) $(18,395) $(24,284)
Adjusted EBITDA:
Operating income (loss) $12,892 $(3,125) $28,560 $11,776
Depreciation and amortization 8,812 7,984 16,164 14,518
Restructuring charges 2,949 1,299 3,894 500
Adjusted EBITDA $24,653 $6,158 $48,618 $26,794
Remy International, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
IN THOUSANDS, For the six months
ended June 30, 2006 2005
Cash Flows from Operating
Activities:
Net loss attributable to common
stockholders $(18,395) $(24,284)
Adjustments to reconcile net loss to
net cash used in operating activities:
Discontinued operations (200) (385)
Depreciation and amortization 16,164 14,519
Non-cash interest expense 2,103 2,510
Minority interest and loss from
unconsolidated subsidiaries, net 2,467 1,987
Deferred income taxes 249 (526)
Restructuring charges 3,894 500
Cash payments for restructuring charges (9,436) (1,618)
Changes in accounts receivable,
inventory and accounts payable, net (6,458) (22,813)
Other, net 3,759 (7,846)
Net cash used in operating
activities of continuing operations (5,853) (37,956)
Cash Flows from Investing
Activities:
Acquisitions, net of cash acquired (2,101) (56,994)
Net proceeds on sale of businesses 215 503
Purchases of property, plant and equipment (11,551) (19,764)
Net cash used in investing
activities of continuing operations (13,437) (76,255)
Cash Flows from Financing
Activities:
Net borrowings under revolving line
of credit and other 18,790 74,497
Financing costs - (325)
Distributions to minority interests (986) -
Net cash provided by financing
activities of continuing operations 17,804 74,172
Effect of exchange rate changes on cash 239 (678)
Cash flows of discontinued operations -
operating activities (193) (180)
Net decrease in cash and cash equivalents (1,440) (40,897)
Cash and cash equivalents at
beginning of year 20,022 62,545
Cash and cash equivalents at end of
period $18,582 $21,648
SOURCE Remy International, Inc.
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Related links:
http://www.remyinc.com
http://www.prnewswire.com/comp/111635.html/
CONTACT:
Investor Relations: Keri Webb of Remy
International, Inc., +1-765-778-6602
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