United Components Reports Results of Operations for Third Quarter 2009
http://www.businesswire.com/news/home/20091111005813/en
EVANSVILLE, Ind.--(Business Wire)--
United Components, Inc. ("UCI"), a leading manufacturer of vehicle replacement
parts, today announced results for the third quarter ended September 30, 2009.
UCI reported revenue of $228.9 million for the quarter, a 4.9% increase over the
$218.1 million in revenue for the year-ago quarter. The company reported a
revenue increase in the retail, traditional, original equipment service and OEM
channels, and a decline in the heavy duty channel.
Net income attributable to UCI for the quarter was $13.1 million, including $0.9
million, net of tax, in special charges, consisting of costs related to
restructuring of operations, defending class action litigation, reductions in
force and obtaining new business. Excluding these charges, adjusted net income
attributable to UCI would have been $14.0 million for the quarter. Adjusted net
income attributable to UCI for the third quarter of 2008 was $7.2 million,
excluding $2.8 million in special charges, net of tax.
Earnings before interest, taxes, depreciation and amortization, or EBITDA, as
adjusted consistent with the company`s historical presentations, was $38.4
million for the third quarter, compared with $30.1 million for the year-ago
quarter. The reconciliation of net income to adjusted EBITDA, a non-GAAP measure
of financial performance, is set forth in Schedule A.
"We`re very pleased to report improved results for the third quarter, from both
a top line and an operational perspective," said Bruce Zorich, Chief Executive
Officer of UCI. "After more than a year of being adversely affected by the worst
economic climate in memory, the positive trends we have seen in recent months
have resulted in a five percent increase in year-over-year sales. On the
operational side, our ongoing cost-saving initiatives allowed us to post
significant increases in gross margins and more than a 27 percent improvement in
EBITDA."
"While we are still not through the difficult economic environment, the trends
we are seeing for our business, such as a continuing increase in miles driven,
are positive," continued Zorich. "In addition, we are not letting up on our
focus on operational excellence and cost-saving initiatives. We believe that
this focus, plus the continuing positive trends and selected growth strategies,
have us very well positioned to take advantage of the opportunities that we see
in the coming quarters."
As of September 30, the company`s debt stood at $424.7 million. The company
ended the quarter with $115.1 million in cash.
Conference Call
UCI will host a conference call to discuss its results and performance on
Thursday, November 12, at 11:00 a.m. Eastern Time (ET). Interested parties are
invited to listen to the call by telephone. Domestic callers can dial (800)
637-1381. International callers can dial (502) 498-8424.
A replay of the call will be available from November 13, 2009, for a ninety day
period, at www.ucinc.com. Click on the UCI 2009 3rd Quarter Results button.
About United Components, Inc.
United Components, Inc. is among North America`s largest and most diversified
companies servicing the vehicle replacement parts market. We supply a broad
range of products to the automotive, trucking, marine, mining, construction,
agricultural and industrial vehicle markets. Our customer base includes leading
aftermarket companies as well as a diverse group of original equipment
manufacturers.
Forward Looking Statements
All statements, other than statements of historical facts, included in this
press release and the attached report that address activities, events or
developments that UCI expects, believes or anticipates will or may occur in the
future are forward-looking statements. Forward-looking statements give UCI`s
current expectations and projections relating to the financial condition,
results of operations, plans, objectives, future performance and business of UCI
and its subsidiaries. These statements can be identified by the fact that they
do not relate strictly to historical or current facts. They are subject to
uncertainties and factors relating to UCI`s operations and business environment,
all of which are difficult to predict and many of which are beyond UCI`s
control. UCI cautions investors that these uncertainties and factors, including
those discussed in Item 1A of UCI`s 2008 Annual Report on Form 10-K and in its
other SEC filings, could cause UCI`s actual results to differ materially from
those stated in the forward-looking statements. UCI cautions that investors
should not place undue reliance on any of these forward-looking statements.
Further, any forward-looking statement speaks only as of the date on which it is
made, and except as required by law, UCI undertakes no obligation to update any
forward-looking statement to reflect events or circumstances after the date on
which it is made or to reflect the occurrence of anticipated or unanticipated
events or circumstances.
United Components, Inc.
Condensed Consolidated Income Statements (unaudited)
(in thousands)
Three Months ended September 30, Nine Months ended September 30,
2009 2008 2009 2008
Net sales $ 228,913 $ 218,136 $ 666,197 $ 676,695
Cost of sales 173,099 170,621 521,847 531,430
Gross profit 55,814 47,515 144,350 145,265
Operating expense
Selling and warehousing (14,051 ) (15,679 ) (42,435 ) (47,210 )
General and administrative (11,058 ) (13,028 ) (34,521 ) (38,367 )
Amortization of acquired intangible assets (1,398 ) (1,545 ) (4,359 ) (4,802 )
Restructuring costs, net (394 ) (196 ) (1 ) (684 )
Operating income 28,913 17,067 63,034 54,202
Other expense
Interest expense, net (7,220 ) (8,282 ) (23,012 ) (25,838 )
Management fee expense (500 ) (500 ) (1,500 ) (1,500 )
Miscellaneous, net (1,011 ) (920 ) (4,165 ) (2,429 )
Income before income taxes 20,182 7,365 34,357 24,435
Income tax expense (7,200 ) (3,164 ) (12,696 ) (9,772 )
Net income 12,982 4,201 21,661 14,663
Less: loss attributable to noncontrolling interest (132 ) (239 ) (511 ) (559 )
Net income attributable to United Components, Inc. $ 13,114 $ 4,440 $ 22,172 $ 15,222
United Components, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
September 30, December 31,
2009 2008
Assets (unaudited) (audited)
Current assets
Cash and cash equivalents $ 115,065 $ 46,612
Accounts receivable, net 271,209 261,624
Inventories, net 128,312 159,444
Deferred tax assets 26,171 24,245
Other current assets 21,285 19,452
Total current assets 562,042 511,377
Property, plant and equipment, net 154,938 167,906
Goodwill 241,461 241,461
Other intangible assets, net 68,516 74,606
Deferred financing costs, net 2,004 2,649
Restricted cash 9,400 ---
Other long-term assets 6,028 1,823
Total assets $ 1,044,389 $ 999,822
Liabilities and equity
Current liabilities
Accounts payable $ 105,800 $ 104,416
Short-term borrowings 6,111 25,199
Current maturities of long-term debt 262 422
Accrued expenses and other current liabilities 110,425 85,730
Total current liabilities 222,598 215,767
Long-term debt, less current maturities 418,333 418,025
Pension and other postretirement liabilities 74,970 79,832
Deferred tax liabilities 6,526 3,560
Due to parent 26,405 17,535
Other long-term liabilities 7,970 2,540
Total liabilities 756,802 737,259
Equity 287,587 262,563
Total liabilities and equity $ 1,044,389 $ 999,822
United Components, Inc.
Condensed Consolidated Statements of Cash Flows (unaudited)
(in thousands)
Nine Months ended September 30,
2009 2008
Net cash provided by operating activities $ 105,619 $ 24,551
Cash flows from investing activities
Capital expenditures (10,893 ) (25,977 )
Proceeds from sale of property, plant and equipment 2,483 366
Increase in restricted cash (9,400 ) ---
Net cash used in investing activities (17,810 ) (25,611 )
Cash flows from financing activities
Issuances of debt 9,728 22,798
Debt repayments (29,142 ) (21,718 )
Net cash (used in) generated by financing activities (19,414 ) 1,080
Effect of currency exchange rate changes on cash 58 68
Net increase in cash and cash equivalents 68,453 88
Cash and cash equivalents at beginning of year 46,612 41,440
Cash and cash equivalents at end of period $ 115,065 $ 41,528
EBITDA and Adjusted EBITDA
EBITDA and Adjusted EBITDA are presented because they are believed to be
frequently used by parties interested in United Components, Inc. ("UCI").
Management believes that EBITDA and Adjusted EBITDA provide useful information
to investors because they facilitate an investor`s comparison of UCI`s operating
results to that of companies with different capital structures and with cost
basis in assets that have not been revalued and written-up in an allocation of a
recent acquisition`s purchase price.
The calculation of Adjusted EBITDA, presented on Schedule A, reflects the
calculation of EBITDA as used in the amended and restated credit agreement for
UCI`s senior credit facility. The adjusted EBITDA required by the credit
agreement is used to measure compliance with covenants of that agreement such as
interest coverage.
EBITDA and Adjusted EBITDA are not measures of financial performance under
United States generally accepted accounting principles ("U.S. GAAP") and should
not be considered alternatives to net income, operating income or any other
performance measures derived in accordance with U.S. GAAP or as an alternative
to cash flow from operating activities as a measure of liquidity.
Schedule A
Reconciliation of Net Income to EBITDA and Adjusted EBITDA
(dollars in millions)
2009 2008
Q1 Q2 Q3 Sept Q1 Q2 Q3 Sept
YTD YTD
Net income attributable to United Components, Inc. $ 1.6 $ 7.5 $ 13.1 $ 22.2 $ 6.8 $ 4.0 $ 4.4 $ 15.2
Interest, net of minority interest 8.0 7.8 7.2 23.0 9.1 8.4 8.3 25.8
Income tax expense, net of minority interest 1.2 4.3 7.3 12.8 4.2 2.4 3.3 9.9
Depreciation, net of minority interest 7.1 7.1 6.9 21.1 6.7 6.8 6.6 20.1
Amortization 2.1 2.2 2.1 6.4 2.2 2.3 2.3 6.8
EBITDA 20.0 28.9 36.6 ` 85.5 29.0 23.9 24.9 77.8
Special items:
Restructuring (gains) costs, net 0.2 (0.6 ) 0.4 -- 0.4 0.1 0.2 0.7
Reduction in force severance 1.0 1.2 0.4 2.6 -- -- 0.3 0.3
Establishment of new facilities in China 0.4 0.1 -- 0.5 1.4 1.3 0.3 3.0
Cost of defending class action litigation 0.5 0.3 0.3 1.1 -- 1.5 1.7 3.2
One-time warranty expense -- -- -- -- -- 5.8 -- 5.8
New business changeover and sales commitment costs 2.4 1.1 0.2 3.7 1.1 0.8 2.0 3.9
Non-cash charges (stock options) 0.2 -- -- 0.2 0.2 0.2 0.2 0.6
Management fee 0.5 0.5 0.5 1.5 0.5 0.5 0.5 1.5
Adjusted EBITDA $ 25.2 $ 31.5 $ 38.4 $ 95.1 $ 32.6 $ 34.1 $ 30.1 $ 96.8
United Components, Inc.
Mark Blaufuss, Chief Financial Officer, 812-867-4726
Copyright Business Wire 2009
