REMY INTERNATIONAL INC PENDLETON, Ind., July 30, 2014 /PRNewswire/ -- Remy International, Inc. (NASDAQ: REMY), a leading worldwide manufacturer, remanufacturer, and distributor of starter motors and alternators for light vehicle and commercial vehicle applications, multi-line products and hybrid electric motors, today announced its financial results for the second quarter ended June 30, 2014.
Financial Results Three months ended June 30, Six months ended June 30,
-----------------
2014 2013 2014 2013
---- ---- ---- ----
Net sales $299.3 million $282.3 million $599.6 million $564.1 million
Net income $10.0 million $11.5 million $19.4 million $13.3 million
Diluted earnings per share $0.32 $0.36 $0.62 $0.40
Adjusted net income $10.8 million $13.3 million $22.2 million $22.6 million
Adjusted diluted earnings per share $0.34 $0.42 $0.70 $0.70
Net cash provided by (used in) operating activities $5.1 million $6.4 million $(4.1) million $(9.9) million
Adjusted EBITDA $34.7 million $33.2 million $68.2 million $64.5 million
Second Quarter Highlights
-- Net sales of $299.3 million for the second quarter of 2014, an increase
of 6% compared to $282.3 million for the second quarter of 2013.
-- Adjusted EBITDA of $34.7 million for the second quarter of 2014 compared
to $33.2 million for the second quarter of 2013.
-- Adjusted net income was $10.8 million for the second quarter of 2014
compared to $13.3 million for the second quarter of 2013.
-- On May 9, 2014, Standard & Poor's (S&P) Ratings Services upgraded our
corporate credit rating from B+ to BB- on improved financial metrics
reflecting our leading position in North America as a supplier of
starters and alternators to original equipment manufacturers and the
aftermarket.
-- On July 25, 2014, the Board of Directors declared a quarterly dividend
of $0.10 per share payable on August 29, 2014 to stockholders of record
as of August 15, 2014.
Jay Pittas, Remy International, Inc. President and CEO commented, "The second quarter was a solid one for us with the business performing as expected with higher revenue and profit versus the second quarter of 2013. Our top line growth strategies are succeeding with the trailing three quarter's revenue up 7% versus the prior period. We continue to undertake initiatives to grow the top line and secure new business as well as take steps to improve operating efficiencies. By executing our plan, we will drive superior long-term value for stockholders."
About Remy International, Inc.
Founded by the Remy Brothers in 1896, Remy International, Inc. is a leading global manufacturer and remanufacturer of alternators, starter motors and electric traction motors. Headquartered in Pendleton, IN, with global operations across five continents and 10 countries, Remy International markets products under the Delco Remy(®), Remy(®), World Wide Automotive(® )and USA Industries(®) brands. Known for innovation, efficiency, quality, and best-in-class customer service and support, Remy International's products are integrated by leading industrial, specialty, automotive and heavy-duty OEMs, and aftermarket providers worldwide. We Start the World & Keep It Running(TM).
Conference Call
Remy will host a call with investors and analysts to discuss second quarter 2014 results on Thursday, July 31, 2014 beginning at 9:00 a.m. Eastern Time. A live webcast of the conference call will be available on the Remy Investor Relations website at http://www.remyinc.com. The conference call replay will also be available via webcast through the Remy Investor Relations website at http://www.remyinc.com.
Use of Non-U.S. GAAP Financial Information
Accounting principles generally accepted in the United States (U.S. GAAP) is the standard framework of guidelines for financial accounting. U.S. GAAP includes the standards, conventions, and rules accountants follow in recording and summarizing transactions and in the preparation of financial statements. In addition to reporting financial results in accordance with U.S. GAAP, Remy has provided Adjusted net income, Adjusted diluted earnings per share, and Adjusted EBITDA, non-U.S. GAAP financial measures, which are frequently used by management, analysts, investors and other interested parties. Management believes that the non-U.S. GAAP financial measures presented provide a useful measure of Remy's financial performance since they exclude certain items which do not reflect ongoing operations. A reconciliation of U.S. GAAP net income to Adjusted net income and Adjusted diluted earnings per share is provided herein. Adjusted EBITDA is defined by the Company as net income attributable to common stockholders before (i) interest expense-net, (ii) income tax expense, (iii) depreciation and amortization, (iv) stock-based compensation expense, (v) net income attributable to noncontrolling interest, (vi) restructuring, other charges and other impairment charges, (vii) loss on extinguishment of debt and refinancing fees, (viii) executive officer separation cost, (ix) certain purchase accounting finished goods inventory step-up costs and (x) other adjustments. Adjusted EBITDA as defined by the Company may differ from non-U.S. GAAP measures used by other companies and is not a measurement under U.S. GAAP. There are limitations inherent in non-U.S. GAAP financial measures in that they exclude a variety of charges and credits that are required to be included in a U.S. GAAP presentation, and therefore do not present the full measure of the Company's recorded costs against its revenue. Accordingly, in analyzing Remy's future financial performance, non-U.S. GAAP results presented should be considered together with U.S. GAAP results, rather than as an alternative to U.S. GAAP basis financial measures. Reconciliations of non-U.S. GAAP measures to related U.S. GAAP measures are presented in the financial schedules which accompany this release.
Forward Looking Statements
This press release contains forward-looking statements. Forward-looking statements provide our current expectations or forecasts of future events. Forward-looking statements include statements about our expectations, beliefs, plans, objectives, intentions, assumptions and other statements that are not historical facts. Such forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from anticipated results. We undertake no obligation to publicly revise any forward-looking statement to reflect circumstances or events to reflect the new information, future events, or otherwise. The risks and uncertainties which forward-looking statements are subject to include, but are not limited to, future financial results and liquidity, 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, customs duty claims, litigation uncertainties and warranty claims, conditions in the automotive industry, foreign currency fluctuations, costs related to re-sourcing and outsourcing products, the effect of economic conditions, and other risks identified in the "Special note regarding forward-looking statements", "Risk Factors" and other sections of the Company's previously filed most recent Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission.
A copy of the second quarter 2014 Form 10-Q will be available on the Remy International Website at:
http://www.remyinc.com under "Investor Relations".
Investor Contact: Fred Knechtel, Sr. Vice President, CFO and Treasurer
Knechtel.Fred@remyinc.com
(765) 778-6871
Remy International, Inc.
Index of consolidated financial
information
Consolidated balance sheets as of
June 30, 2014 (unaudited) and
December 31, 2013 A-2
Consolidated statements of
operations (unaudited) for the
three and six months ended June 30,
2014 and June 30, 2013 A-3
Consolidated statements of cash
flows (unaudited) for the six
months ended June 30, 2014 and June
30, 2013 A-4
Reconciliation of non-U.S. GAAP
financial measures (unaudited) for
the three and six months ended June
30, 2014 and June 30, 2013 A-5
The accompanying unaudited consolidated financial information and reconciliation schedules should be read in conjunction with the Remy International, Inc. Annual Report on Form 10-K for the year ended December 31, 2013 and Quarterly Reports on Form 10-Q for the periods ended March 31, 2014 and June 30, 2014, each of which were filed with the United States Securities and Exchange Commission.
Remy International, Inc.
Consolidated balance sheets
June 30, December 31,
(In thousands, except share information) 2014 2013
--------------------------------------- ---- ----
Assets: (unaudited)
Current assets:
Cash and cash equivalents $56,150 $114,884
Trade accounts receivable (less allowances of $1,885 and $1,583) 243,087 191,548
Other receivables 19,484 21,023
Inventories 188,098 159,340
Deferred income taxes 36,244 36,329
Prepaid expenses and other current assets 15,225 11,151
------ ------
Total current assets 558,288 534,275
Property, plant and equipment 261,390 249,326
Less accumulated depreciation and amortization (114,971) (103,715)
-------- --------
Property, plant and equipment, net 146,419 145,611
Deferred financing costs, net of amortization 3,467 3,802
Goodwill 285,433 271,418
Intangibles, net 107,916 89,909
Other noncurrent assets 78,506 72,040
------ ------
Total assets $1,180,029 $1,117,055
========== ==========
Liabilities and Equity:
Current liabilities:
Short-term debt $7,390 $2,369
Current maturities of long-term debt 3,389 3,392
Accounts payable 199,580 168,491
Accrued interest 113 92
Accrued restructuring 153 1,026
Other current liabilities and accrued expenses 120,012 110,179
------- -------
Total current liabilities 330,637 285,549
Long-term debt, net of current maturities 292,310 293,835
Postretirement benefits other than pensions 1,515 1,628
Accrued pension benefits 17,993 19,103
Deferred income taxes 811 1,000
Other noncurrent liabilities 28,123 24,783
Equity:
Remy International, Inc. stockholders' equity:
Common stock, Par value of $0.0001; 31,995,332 shares outstanding at 3 3
June 30, 2014, and 31,981,544 shares outstanding at December 31, 2013
Treasury stock, at cost; 457,107 treasury shares at June 30, 2014, and (3,982) (1,477)
267,924 treasury shares at December 31, 2013
Additional paid-in capital 324,322 320,687
Retained earnings 226,504 213,418
Accumulated other comprehensive loss (38,207) (41,474)
------- -------
Total Remy International, Inc. stockholders' equity 508,640 491,157
Total liabilities and equity $1,180,029 $1,117,055
========== ==========
Remy International, Inc.
Consolidated statements of operations
(Unaudited)
Three months ended June 30, Six months ended June 30,
--------------------------- -------------------------
(In thousands, except per share amounts) 2014 2013 2014 2013
--------------------------------------- ---- ----
Net sales $299,293 $282,349 $599,587 $564,076
Cost of goods sold 241,147 227,648 486,974 454,396
------- ------- ------- -------
Gross profit 58,146 54,701 112,613 109,680
Selling, general, and administrative expenses 35,929 32,415 69,268 72,565
Restructuring and other charges 79 2,128 393 2,809
--- ----- --- -----
Operating income 22,138 20,158 42,952 34,306
Interest expense-net 5,390 3,731 11,026 10,068
Loss on extinguishment of debt and refinancing fees - - - 4,256
--- --- --- -----
Income before income taxes 16,748 16,427 31,926 19,982
Income tax expense 6,792 4,963 12,503 6,675
----- ----- ------ -----
Net income 9,956 11,464 19,423 13,307
Less net income attributable to noncontrolling interest - 96 - 659
--- --- --- ---
Net income attributable to common stockholders $9,956 $11,368 $19,423 $12,648
====== ======= ======= =======
Basic earnings per share:
Earnings per share $0.32 $0.36 $0.62 $0.41
Weighted average shares outstanding 31,514 31,239 31,447 31,173
====== ====== ====== ======
Diluted earnings per share:
Earnings per share $0.32 $0.36 $0.62 $0.40
===== ===== ===== =====
Weighted average shares outstanding 31,593 31,364 31,571 31,314
====== ====== ====== ======
Dividends declared per common share $0.10 $0.10 $0.20 $0.20
===== ===== ===== =====
Remy International, Inc.
Consolidated statements of cash flows
(Unaudited)
Six months ended June 30,
-------------------------
(In thousands) 2014 2013
------------- ---- ----
Cash flows from operating activities:
Net income $19,423 $13,307
Adjustments to reconcile net income to cash used in operating activities:
Depreciation and amortization 18,816 17,022
Amortization of debt issuance costs 500 613
Loss on extinguishment of debt and refinancing fees - 4,256
Stock-based compensation 2,561 3,246
Deferred income taxes 981 (3,409)
Accrued pension and postretirement benefits, net (997) (416)
Restructuring and other charges 393 2,809
Cash payments for restructuring charges (1,266) (4,949)
Other 273 (801)
Changes in operating assets and liabilities, net of restructuring charges:
Accounts receivable (40,969) (27,010)
Inventories (13,998) (9,187)
Accounts payable 22,548 (6,206)
Other current assets and liabilities, net 1,647 7,231
Other noncurrent assets and liabilities, net (13,974) (6,446)
------- ------
Net cash used in operating activities (4,062) (9,940)
Cash flows from investing activities:
Purchases of property, plant and equipment (11,627) (13,239)
Net proceeds on sale of assets 80 303
Acquisition of USA Industries, Inc., net of cash acquired of $109 (40,070) -
------- ---
Net cash used in investing activities (51,617) (12,936)
Cash flows from financing activities:
Change in short-term debt and revolver 4,930 (5,750)
Payments made on long-term debt, including capital leases (1,693) (288,874)
Proceeds from issuance of long-term debt - 299,250
Dividend payments on common stock (6,548) (6,331)
Purchase of treasury stock (2,505) (1,248)
Debt issuance costs - (3,476)
Purchase of and distributions to noncontrolling interest - (18,902)
Other 1,142 -
----- ---
Net cash used in financing activities (4,674) (25,331)
Effect of exchange rate changes on cash and cash equivalents 1,619 (2,480)
----- ------
Net decrease in cash and cash equivalents (58,734) (50,687)
Cash and cash equivalents at beginning of period 114,884 111,733
------- -------
Cash and cash equivalents at end of period $56,150 $61,046
======= =======
Supplemental information:
Noncash investing and financing activities:
Purchases of property, plant and equipment in accounts payable $2,816 $1,825
Remy International, Inc.
Reconciliation of non-U.S. GAAP financial measures
(Unaudited)
Adjusted EBITDA
Adjusted EBITDA is not a measure of performance defined in accordance with U.S. GAAP. We use adjusted EBITDA as a supplement to our U.S. GAAP results in evaluating our business. Other companies in our industry define adjusted EBITDA differently from us and, as a result, our measure is not comparable to similarly titled measures used by other companies in our industry.
We define adjusted EBITDA as net income attributable to common stockholders before interest expense-net, income tax expense, depreciation and amortization, stock-based compensation expense, net income attributable to noncontrolling interest, restructuring, other charges and other impairment charges, loss on extinguishment of debt and refinancing fees, executive officer separation cost, certain purchase accounting finished goods inventory step-up costs and other adjustments as set forth in the reconciliations provided below.
Adjusted EBITDA is one of the key factors upon which we assess performance. As an analytical tool, adjusted EBITDA assists us in comparing our performance over various reporting periods on a consistent basis because it excludes items that we do not believe reflect our ongoing operating performance.
Adjusted EBITDA should not be considered as an alternative to net income as an indicator of our performance, as an alternative to net cash provided by operating activities as a measure of liquidity, or as an alternative to any other measure prescribed by U.S. GAAP. There are limitations to using non-U.S. GAAP measures such as adjusted EBITDA. Although we believe that adjusted EBITDA may make an evaluation of our operating performance more consistent because it removes items that do not reflect our ongoing operations, adjusted EBITDA excludes certain financial information that some may consider important in evaluating our performance.
The following table sets forth a reconciliation of adjusted EBITDA to its most directly comparable U.S. GAAP measure, net income attributable to common stockholders.
Three months ended June 30, Six months ended June 30,
(In thousands) 2014 2013 2014 2013
------------- ---- ---- ---- ----
Net income attributable to common stockholders $9,956 $11,368 $19,423 $12,648
Adjustments:
Interest expense-net 5,390 3,731 11,026 10,068
Income tax expense 6,792 4,963 12,503 6,675
Depreciation and amortization 10,161 8,809 18,816 17,022
Stock-based compensation expense 1,342 1,749 2,561 3,246
Net income attributable to noncontrolling interest - 96 - 659
Restructuring and other charges 79 2,128 393 2,809
Loss on extinguishment of debt and refinancing fees - - - 4,256
Executive officer separation - - - 7,000
Purchase accounting finished goods inventory step-up 965 - 3,474 -
Other 49 368 49 104
--- --- --- ---
Total adjustments 24,778 21,844 48,822 51,839
Adjusted EBITDA $34,734 $33,212 $68,245 $64,487
======= ======= ======= =======
Remy International, Inc.
Reconciliation of non-U.S. GAAP financial measures
(Unaudited)
Adjusted net income and adjusted diluted earnings per share
Management believes adjusted net income and adjusted diluted earnings per share, which are non-GAAP measures, are useful in evaluating the ongoing operating performance of the Company. We define adjusted net income as net income before restructuring, other charges and other impairment charges, loss on extinguishment of debt and refinancing fees, executive officer separation cost, purchase accounting related charges and other adjustments as set forth in the reconciliations provided below. Adjusted diluted earnings per share is defined as adjusted net income attributable to common stockholders divided by the weighted average number of diluted shares outstanding for the period. Other companies in our industry define adjusted net income and adjusted diluted earnings per share differently from us and, as a result, our measures are not comparable to similarly titled measures used by other companies in our industry.
The following table sets forth a reconciliation of adjusted net income to its most directly comparable U.S. GAAP measure, net income:
(In thousands, except per share amounts) Three months Six months
ended June 30, ended June 30,
--- -------------- --------------
2014 2013 2014 2013
---- ---- ---- ----
Net income $9,956 $11,464 $19,423 $13,307
Adjustments:
Purchase accounting related charges (a) 1,291 - 4,083 -
Restructuring and other charges (b) 79 2,128 393 2,809
Loss on extinguishment of debt and refinancing fees (c) - - - 4,256
Executive officer separation (d) - - - 7,000
Tax impact of Non-GAAP adjustments (e) (513) (273) (1,669) (4,752)
Total adjustments 857 1,855 2,807 9,313
--- ----- ----- -----
Adjusted net income 10,813 13,319 22,230 22,620
Less net income attributable to noncontrolling interest - 96 - 659
Adjusted net income attributable to common stockholders $10,813 $13,223 $22,230 $21,961
======= ======= ======= =======
Basic earnings per share:
Weighted average shares outstanding 31,514 31,239 31,447 31,173
====== ====== ====== ======
Earnings per share $0.32 $0.36 $0.62 $0.41
=====
Adjusted earnings per share $0.34 $0.42 $0.71 $0.70
===== ===== ===== =====
Diluted earnings per share:
Weighted average shares outstanding 31,593 31,364 31,571 31,314
====== ====== ====== ======
Earnings per share $0.32 $0.36 $0.62 $0.40
=====
Adjusted earnings per share $0.34 $0.42 $0.70 $0.70
===== ===== ===== =====
(a) Represents the elimination of
finished goods inventory step-up,
customer relationships amortization
and lease intangible amortization
related to the USA Industries
acquisition.
(b) Represents the elimination of
restructuring and other charges.
(c) Represents the loss on extinguishment
of debt and refinancing fees as a
result of the refinancing of our
Term B Loan syndication.
(d) Represents the lump sum cash payment
pursuant to the terms of the
Transition, Noncompetition and
Release Agreement with John H.
Weber, our former President and
Chief Executive Officer, effective
February 28, 2013.
(e) Represents the tax impact of Non-
GAAP adjustments by using the
appropriate tax rate of the
jurisdictions where the charges were
incurred.
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SOURCE Remy International, Inc.
