Power Solutions International, Inc. Reports First Quarter 2014 Results
Net sales up 27% year over year, 9% sequentially
Adjusted net income of
Net income of
First Quarter 2014 Results
Net sales for the first quarter of 2014 were
"Our robust line of heavy duty engines for the oil and gas market continued to drive growth for PSI," stated
Operating expense in the first quarter of 2014 includes transaction costs of approximately
Operating income was
Winemaster continued, "We are delighted with our recent acquisition of Professional Power Products and the exciting opportunities that it presents to us. PPPI's strong complementary product offering, along with our power system technology and customer relationships, creates a tremendous combination that should position us well for growth in the years ahead."
Other income for the first quarter includes a non-cash gain of
Net income for the first quarter of 2014, which included the warrant revaluation adjustment and transaction costs, was
Net income for the first quarter of 2014, adjusted to remove the warrant revaluation impact and transaction costs was
Summary of Diluted EPS Attributable to Common Stockholders | |||
"Adjusted" removes the impact of warrant revaluation and Q1 2014 transaction costs | |||
Q1 2014 | Q4 2013 | Q1 2013 | |
EPS |
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Adjusted EPS |
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Diluted shares | 11,054,594 | 10,507,769 | 9,100,111 |
Adjusted diluted shares | 11,054,594 | 11,023,685 | 9,359,489 |
Earnings Results Conference Call
The Company will discuss its financial results and outlook in a conference call on
Investors in the U.S. interested in participating in the call should dial +1 (800) 390-5360 and reference passcode 7560325. Those calling from outside the U.S. should dial +1 (719) 325-2275 and also reference passcode 7560325. A telephone replay will be available approximately two hours after the call concludes through
A simultaneous live webcast will be available on the Investor Relations section of the Company's website at www.psiengines.com. The webcast will be archived on the website for one year.
About
PSI develops and delivers complete .97 to 22 liter power systems, including the 8.8 liter engine aimed at the industrial and on-road 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.
PSI recently acquired
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements, regarding the current expectations of
Non-GAAP Financial Measures and Reconciliations
As used herein, "GAAP" refers to generally accepted accounting principles in
Reconciliation of Net Income (Loss) to Adjusted Net Income | |||
(Dollar amounts in thousands) | |||
Three months ended 2014 |
Three months ended March 31, 2013 |
Three months ended December 31,2013 |
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Net income (loss) | $ 2,374 | $ (2,927) | $ (3,752) |
Non-cash (income) expense from warrant revaluation | (233) | 4,846 | 6,373 |
PPPI transaction costs, net of tax | 487 | -- | -- |
Adjusted net income | $ 2,628 |
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$ 2,621 |
Reconciliation of Diluted EPS to Adjusted Diluted EPS | |||
Three months ended March 31, 2014 |
Three months ended March 31, 2013 |
Three months ended December 31, 2013 |
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Earnings (loss) per diluted common share |
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Non-cash (income) expense from warrant revaluation | -- | 0.53 | 0.60 |
PPPI transaction costs, net of tax | 0.05 | -- | -- |
Adjusted earnings per diluted common share |
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$ 0.24 |
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 is 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 earnings per diluted 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 amounts) | ||
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ASSETS | ||
Current assets | ||
Cash | $ 3,649 | $ 6,306 |
Accounts receivable, net | 48,908 | 42,730 |
Inventories, net | 68,748 | 55,986 |
Prepaid expenses and other current assets | 1,466 | 2,173 |
Deferred income taxes | 2,811 | 2,811 |
Total current assets | 125,582 | 110,006 |
Property, plant & equipment, net | 14,264 | 13,104 |
Other noncurrent assets | 3,579 | 3,509 |
TOTAL ASSETS | $ 143,425 | $ 126,619 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Current liabilities | ||
Accounts payable | $ 32,518 | $ 24,444 |
Income taxes payable | 418 | 167 |
Accrued compensation and benefits | 1,967 | 3,758 |
Other accrued liabilities | 3,277 | 4,016 |
Total current liabilities | 38,180 | 32,385 |
Long-term obligations | ||
Revolving line of credit | 26,159 | 17,933 |
Deferred income taxes | 304 | 304 |
Private placement warrants | 22,066 | 24,525 |
Other noncurrent liabilities | 851 | 1,051 |
TOTAL LIABILITIES | 87,560 | 76,198 |
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: 11,393,064 and 11,352,812 shares at |
11 | 11 |
Additional paid-in-capital | 60,378 | 57,308 |
Accumulated deficit | (274) | (2,648) |
Treasury stock, at cost, 830,925 shares at |
(4,250) | (4,250) |
TOTAL STOCKHOLDERS' EQUITY | 55,865 | 50,421 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 143,425 | $ 126,619 |
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Condensed Consolidated Statements of Operations (Unaudited) | ||
(Dollar amounts in thousands, except per share amounts) | ||
Three months ended March 31, 2014 |
Three months ended March 31, 2013 |
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Net sales | $ 66,735 | $ 52,576 |
Cost of sales | 54,805 | 43,407 |
Gross profit | 11,930 | 9,169 |
Operating expenses: | ||
Research & development and engineering | 3,598 | 1,771 |
Selling and service | 1,827 | 1,880 |
General and administrative | 2,984 | 2,438 |
Total operating expenses | 8,409 | 6,089 |
Operating income | 3,521 | 3,080 |
Other (income) expense: | ||
Interest expense | 99 | 194 |
Private placement warrant (income) expense | (233) | 4,846 |
Other (income) expense, net | 23 | -- |
Total other (income) expense | (111) | 5,040 |
Income (loss) before income taxes | 3,632 | (1,960) |
Income tax provision | 1,258 | 967 |
Net income (loss) | $ 2,374 | $ (2,927) |
Weighted-average common shares outstanding: | ||
Basic | 10,542,460 | 9,100,111 |
Diluted | 11,054,594 | 9,100,111 |
Earnings (loss) per common share: | ||
Basic | $ 0.23 | $ (0.32) |
Diluted | $ 0.19 | $ (0.32) |
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Condensed Consolidated Statements of Cash Flows (Unaudited) | ||
(Dollar amounts in thousands) | ||
Three months ended March 31, 2014 |
Three months ended March 31, 2013 |
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Cash flows from operating activities | ||
Net income (loss) | $ 2,374 | $ (2,927) |
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 488 | 364 |
Non-cash interest expense | 14 | 18 |
Share-based compensation expense | 321 | 207 |
Decrease in accounts receivable allowances | (8) | (16) |
Increase in inventory reserves | 183 | 368 |
(Decrease) increase in valuation of private placement warrant liability | (233) | 4,846 |
Loss on investment in joint venture | 33 | -- |
(Increase) decrease in operating assets: | ||
Accounts receivable | (6,170) | 809 |
Inventories | (12,945) | (1,946) |
Prepaid expenses and other assets | 580 | 485 |
Increase (decrease) in operating liabilities: | ||
Accounts payable | 7,220 | (4,852) |
Accrued compensation and benefits and other accrued liabilities | (2,530) | (665) |
Income taxes payable | 418 | 914 |
Other noncurrent liabilities | (367) | 14 |
Net cash used in operating activities | (10,622) | (2,381) |
Cash flows from investing activities | ||
Purchases of property, plant, equipment and other assets | (784) | (667) |
Net cash used in investing activities | (784) | (667) |
Cash flows from financing activities | ||
Advances from revolving line of credit - noncurrent obligation | 14,126 | 27,503 |
Repayments of revolving line of credit - noncurrent obligation | (5,900) | (26,500) |
Proceeds from exercise of private placement warrants | 523 | 1,797 |
Net cash provided by financing activities | 8,749 | 2,800 |
Decrease in cash | (2,657) | (248) |
Cash at beginning of period | 6,306 | 543 |
Cash at end of period | $ 3,649 | $ 295 |
Supplemental disclosures of cash flow information | ||
Cash paid for interest | $ 86 | $ 201 |
Cash paid for income taxes | $ -- | $ 55 |
CONTACT:Source:Power Solutions International, Inc. Daniel P. Gorey Chief Financial Officer +1 (630) 451-2290 dan.gorey@psiengines.comICR, LLC Gary T. Dvorchak , CFA Senior Vice President +1 (310) 954-1123 gary.dvorchak@icrinc.com
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