Power Solutions International, Inc. Reports Fourth Quarter and Full Year 2012 Results
Fourth quarter net sales up 15% year over year, 1% sequentially
Fourth quarter net income of
Fourth quarter adjusted net income of
Fourth Quarter 2012 Results
Net sales for the fourth quarter of 2012 were
Operating income was
Other expense for the fourth quarter includes a non-cash charge of
Net income for the fourth quarter of 2012, which includes the warrant revaluation adjustment and lease termination costs, was
| Summary of Diluted EPS Attributable to Common Stockholders | |||||
| "Adjusted" removes the impact of warrant revaluation and facility consolidation costs | |||||
| Q4 2012 | Q3 2012 | Q4 2011 | Seq. Growth | Y/Y Growth | |
| EPS |
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(60%) | 33% |
| Adjusted EPS |
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5% | 17% |
In addition to the impact of the warrant revaluation adjustment of
Full Year 2012 Results
Sales for 2012 were
"We are pleased with both our fourth quarter and full year performance," stated
Outlook
This outlook reflects the Company's current estimates based on a number of factors, including but not limited to the timing of new product ramps and the impact of global economic conditions on demand growth in its current markets. Please see the "Cautionary Note Regarding Forward-Looking Statements" below for additional risk factors.
Winemaster continued, "We are optimistic about our business prospects for 2013 and 2014, due to the initiatives we are taking to capture many exciting market opportunities. For instance, we expect our new 2.0L and 2.4L engines will gain strong acceptance in the forklift market, and anticipate new customer wins this year that will provide significant revenue growth in 2014 and beyond. Furthermore, we believe our new 8.8L engine is an attractive offering for both off-road and ultimately on-road applications that will also contribute to growth in the years to come."
Fourth Quarter and Full Year Earnings Results Conference Call
The Company will discuss its financial results and outlook in a conference call on
About
PSI develops and delivers complete .97 to 22 liter power systems, including the new 8.8 liter engine aimed at the industrial and on-highway markets including; medium duty fleets, delivery trucks, school buses and garbage/refuse trucks. PSI power systems are currently used worldwide in power generators, forklifts, aerial lifts, and industrial sweepers, as well as in oil and gas, aircraft ground support, agricultural and construction equipment.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements, including statements regarding the current expectations of
Non-GAAP Financial Measures and Reconciliations
As used herein, "GAAP" refers to generally accepted accounting principles in the United States. The Company uses certain numerical measures in this press release which are or may be considered "Non-GAAP financial measures" under Regulation G. The Company has provided below for your reference supplemental financial disclosure for these measures, including the most directly comparable GAAP measures and associated reconciliations.
| Reconciliation of Net Income to Adjusted Net Income | ||
| (Dollar amounts in 000's) | ||
|
Three months ended December 31, 2012 |
Three months ended December 31, 2011 |
|
| Net Income | $ 745 | $ 585 |
| Non-cash expense from warrant revaluation | 1,104 | 1,073 |
| Facility relocation costs | 124 | -- |
| Adjusted Net Income |
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| Reconciliation of Diluted EPS to Adjusted Diluted EPS | ||
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Three months ended December 31, 2012 |
Three months ended December 31, 2011 |
|
| Diluted earnings per common share | $ 0.08 |
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| Non-cash expense from warrant revaluation | 0.12 | 0.12 |
| Facility relocation costs | 0.01 | -- |
| Adjusted diluted earnings per common share |
|
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| Reconciliation of Net Income to Adjusted Net Income | ||
| (Dollar amounts in 000's) | ||
|
Twelve months ended December 31, 2012 |
Twelve months ended December 31, 2011 |
|
| Net Income | $ 6,702 | $ 4,061 |
| Non-cash expense from warrant revaluation | 448 | 382 |
| Facility relocation costs | 305 | -- |
| Adjusted Net Income | $ 7,455 | $ 4,443 |
| Reconciliation of Diluted EPS to Adjusted Diluted EPS | ||
|
Twelve months ended December 31, 2012 |
Twelve months ended December 31, 2011 |
|
| Diluted earnings per common share | $ 0.74 |
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| Non-cash expense from warrant revaluation | 0.04 | 0.04 |
| Facility relocation costs | 0.03 | -- |
| Adjusted diluted earnings per common share | $ 0.81 |
|
The Company believes supplementing its consolidated financial statements presented in accordance with GAAP with non-GAAP measures provides investors with useful information regarding the Company's short-term and long-term trends. Adjusted net income and adjusted diluted earnings per common share are derived from GAAP results by excluding the non-cash impact related to the change in the estimated fair value of the liability associated with the warrants issued in the Company's
Adjusted net income, adjusted diluted earnings per common share and other non-GAAP financial measures used and presented by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. Investors should consider non-GAAP measures in addition to, and not as a substitute for, or as superior to, financial performance measures prepared in accordance with GAAP.
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| Condensed Consolidated Balance Sheets (Unaudited) | ||
| (Dollar amounts in thousands, except per share amount) | ||
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December 31, 2012 |
December 31, 2011 |
|
| ASSETS | ||
| Current assets | ||
| Cash | $ 543 | $ -- |
| Accounts receivable, net | 37,480 | 29,523 |
| Inventories, net | 39,968 | 33,393 |
| Prepaid expenses and other current assets | 1,910 | 1,291 |
| Deferred income taxes | 2,176 | 1,814 |
| Total current assets | 82,077 | 66,021 |
| Property, plant, & equipment, net | 7,145 | 3,611 |
| Other noncurrent assets | 1,543 | 1,451 |
| Total assets | $ 90,765 | $ 71,083 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities | ||
| Accounts payable | $ 26,579 | $ 27,574 |
| Income taxes payable | 1,074 | 564 |
| Accrued liabilities | 5,011 | 4,015 |
| Revolving line of credit | -- | 19,666 |
| Current maturities of long-term debt | -- | 23 |
| Total current liabilities | 32,664 | 51,842 |
| Revolving line of credit | 30,942 | -- |
| Deferred income taxes | 136 | 490 |
| Long-term debt, net of current maturities | -- | 41 |
| Private placement warrants | 3,666 | 3,270 |
| Other noncurrent liabilities | 623 | 116 |
| Total liabilities | 68,031 | 55,759 |
| Commitments and contingencies | -- | -- |
| Stockholders' equity | ||
|
Series A convertible preferred stock—$0.001 par value. Authorized: 114,000 shares. Issued and outstanding: -0- shares at |
-- | -- |
|
Common stock—$0.001 par value. Authorized: 50,000,000 shares. Issued: 9,909,212 and 9,895,462 shares at |
10 | 10 |
| Additional paid-in-capital | 10,862 | 10,154 |
| Retained earnings | 16,112 | 9,410 |
|
Treasury stock, at cost, 830,925 shares at |
(4,250) | (4,250) |
| Total stockholders' equity | 22,734 | 15,324 |
| Total liabilities and stockholders' equity | $ 90,765 | $ 71,083 |
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| Condensed Consolidated Statements of Operations (Unaudited) | ||||
| (Dollar amounts in thousands, except per share amounts) | ||||
|
Three months ended December 31, 2012 |
Three months ended December 31, 2011 |
Twelve months ended December 31, 2012 |
Twelve months ended December 31, 2011 |
|
| Net sales | $ 52,452 | $ 45,489 | $ 202,342 | $ 154,969 |
| Cost of sales | 44,006 | 38,087 | 168,425 | 128,541 |
| Gross profit | 8,446 | 7,402 | 33,917 | 26,428 |
| Operating expenses | ||||
| Research & development and engineering | 1,832 | 1,445 | 7,377 | 4,713 |
| Selling and service | 1,325 | 1,891 | 5,925 | 6,666 |
| General and administrative | 2,275 | 1,467 | 8,299 | 5,244 |
| Total operating expense | 5,432 | 4,803 | 21,601 | 16,623 |
| Operating income | 3,014 | 2,599 | 12,316 | 9,805 |
| Other (income) expense | ||||
| Interest expense | 257 | 215 | 1,023 | 1,340 |
| Loss on debt extinguishment | -- | -- | -- | 485 |
| Other (income) expense, net | 1,010 | 1,079 | 448 | 1,146 |
| Total other (income) expense | 1,267 | 1,294 | 1,471 | 2,971 |
| Income before income taxes | 1,747 | 1,305 | 10,845 | 6,834 |
| Income tax provision | 1,002 | 720 | 4,143 | 2,773 |
| Net income | $ 745 | $ 585 | $ 6,702 | $ 4,061 |
| Undistributed earnings | $ 745 | $ 585 | $ 6,702 | $ 4,061 |
| Undistributed earnings allocable to Series A convertible preferred shares | $ -- | $ -- | $ -- | $ 2,513 |
| Undistributed earnings allocable to common shares | $ 745 | $ 585 | $ 6,702 | $ 1,548 |
| Weighted-average common shares outstanding | ||||
| Basic | 9,078,287 | 9,335,491 | 9,068,846 | 3,512,534 |
| Diluted | 9,078,287 | 9,335,491 | 9,068,846 | 3,512,534 |
| Undistributed earnings per common share | ||||
| Basic | $ 0.08 | $ 0.06 | $ 0.74 | $ 0.44 |
| Diluted | $ 0.08 | $ 0.06 | $ 0.74 | $ 0.44 |
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| Condensed Consolidated Statements of Cash Flows (Unaudited) | ||
| (Dollar amounts in thousands) | ||
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Twelve months ended December 31, 2012 |
Twelve months ended December 31, 2011 |
|
| Cash flows from operating activities | ||
| Net income | $ 6,702 | $ 4,061 |
| Adjustments to reconcile net income to net cash used in operating activities | ||
| Depreciation and amortization | 1,105 | 820 |
| Deferred income taxes | (716) | (870) |
| Equity based compensation expense | 478 | -- |
| Increase (decrease) in accounts receivable allowances | -- | (249) |
| Increase in valuation of private placement warrants | 448 | 382 |
| Loss on disposal of assets | 111 | 6 |
| Loss on debt extinguishment | -- | 485 |
| (Increase) decrease in operating assets | ||
| Accounts receivable | (7,957) | (12,992) |
| Inventories | (6,575) | (1,225) |
| Prepaid and other current assets | (619) | (410) |
| Other noncurrent assets | 84 | 173 |
| Increase (decrease) in operating liabilities | ||
| Accounts payable | 2,473 | 7,365 |
| Accrued liabilities | 924 | 1,609 |
| Income taxes payable | 510 | (55) |
| Other noncurrent liabilities | 91 | (73) |
| Net cash used in operating activities | (2,941) | (973) |
| Cash flows from investing activities | ||
| Purchases of property, plant, equipment and other assets | (3,890) | (1,557) |
| Increase in cash surrender value of life insurance | (8) | (13) |
| Net cash used in investing activities | (3,898) | (1,570) |
| Cash flows from financing activities | ||
| Increase (decrease) in cash overdraft | (3,780) | 3,251 |
| Increase (decrease) in revolving line of credit | 11,276 | (20,305) |
| Initial proceeds from borrowings under prior line of credit | -- | 18,338 |
| Proceeds from issuance of preferred stock with warrants | -- | 18,000 |
| Proceeds from exercise of private placement warrants | 178 | -- |
| Proceeds from long-term debt | -- | 43 |
| Payments on long-term debt and capital lease obligations | (64) | (7,880) |
| Repurchase of common stock | -- | (4,250) |
| Cash paid for transaction and financing fees | (228) | (4,654) |
| Net cash provided by financing activities | 7,382 | 2,543 |
| Increase in cash | 543 | -- |
| Cash at beginning of the year | -- | -- |
| Cash at end of the year | $ 543 | $ -- |
| Supplemental disclosures of cash flow information | ||
| Cash paid for interest | $ 912 | $ 1,163 |
| Cash paid for income taxes | $ 4,353 | $ 3,695 |
CONTACT:Source:Power Solutions International, Inc. Dan Gorey Chief Financial Officer +1 (630) 451-2290 dan.gorey@psiengines.comICR, LLC Gary Dvorchak Senior Vice President +1 (310) 954-1123 gary.dvorchak@icrinc.com
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