Power Solutions International, Inc. Reports Fourth Quarter and Full Year 2013 Results
Fourth quarter net sales up 17% year over year
Fourth quarter adjusted net income of
Fourth quarter net loss of
Fourth Quarter 2013 Results
Net sales for the fourth quarter of 2013 were
Operating income was
Other expense for the fourth quarter includes a non-cash charge of
The net loss for the fourth quarter of 2013, which included the warrant revaluation adjustment, was
Net income for the fourth quarter of 2013, adjusted to remove the warrant revaluation impact was
Summary of Diluted EPS Attributable to Common Stockholders "Adjusted" removes the impact of warrant revaluation and facility consolidation costs(Q4 2012) |
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Q4 2013 | Q3 2013 | Q4 2012 | |
EPS |
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Adjusted EPS |
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Diluted shares | 10,507,769 | 10,266,176 | 9,078,287 |
Adjusted diluted shares | 11,023,685 | 10,770,687 | 9,078,287 |
"Our solid performance in the fourth quarter capped a very successful year for PSI," stated
Full Year 2013 Results
Net sales for 2013 were
2014 Outlook
The Company reiterates its previously issued outlook for sales growth in 2014. The Company continues to expect sales for the year in a range of
Winemaster concluded, "PSI has both the market opportunity and the product offering to achieve our goals in 2014 and beyond. Demand remains robust for our large power systems in the oil and gas industry, and we expect this end market to significantly contribute to growth again in 2014. Our recently announced supply agreement with
This outlook reflects the Company's current estimates based on a number of factors, including but not limited to the timing of new product ramp-ups 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.
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 (888) 695-0612 and reference passcode 3365163. Those calling from outside the U.S. should dial +1 (719) 457-2619 and reference passcode 3365163. 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 new 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.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements, including the statements under "2014 Outlook" and other 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 (Loss) Income to Adjusted Net Income (Dollar amounts in thousands) |
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Three months ended December 31, 2013 |
Three months ended December 31, 2012 |
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Net (loss) income | $ (3,752) | $ 745 |
Non-cash expense from warrant revaluation | 6,373 | 1,104 |
Facility consolidation costs | -- | 124 |
Adjusted net income | $ 2,621 |
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Reconciliation of Diluted EPS to Adjusted Diluted EPS | ||
Three months ended December 31, 2013 |
Three months ended December 31, 2012 |
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(Loss) earnings per diluted common share |
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Non-cash expense from warrant revaluation | 0.60 | 0.12 |
Facility consolidation costs | -- | 0.01 |
Adjusted earnings per diluted common share |
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Reconciliation of Net (Loss) Income to Adjusted Net Income (Dollar amounts in thousands) |
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Twelve months ended December 31, 2013 |
Twelve months ended December 31, 2012 |
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Net (loss) income | $ (18,760) | $ 6,702 |
Non-cash expense from warrant revaluation | 28,031 | 448 |
Facility consolidation costs | -- | 305 |
Loss on debt extinguishment | 162 | -- |
Adjusted net income | $ 9,433 | $ 7,455 |
Reconciliation of Diluted EPS to Adjusted Diluted EPS | ||
Twelve months ended December 31, 2013 |
Twelve months ended December 31, 2012 |
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(Loss) earnings per diluted common share | $ (1.92) |
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Non-cash expense from warrant revaluation | 2.82 | 0.04 |
Facility consolidation costs | -- | 0.03 |
Loss on debt extinguishment | 0.02 | -- |
Adjusted earnings per diluted common share | $ 0.92 |
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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 earnings per diluted 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 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 | $ 6,306 | $ 543 |
Accounts receivable, net | 42,730 | 37,480 |
Inventories, net | 55,986 | 39,968 |
Prepaid expenses and other current assets | 2,173 | 1,910 |
Deferred income taxes | 2,811 | 2,176 |
Total current assets | 110,006 | 82,077 |
Property, plant & equipment, net | 13,104 | 7,145 |
Other noncurrent assets | 3,509 | 1,543 |
TOTAL ASSETS | $ 126,619 | $ 90,765 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Current liabilities | ||
Accounts payable | $ 24,444 | $ 26,579 |
Income taxes payable | 167 | 1,074 |
Compensation and benefits | 3,758 | 2,396 |
Accrued liabilities | 4,016 | 2,615 |
Total current liabilities | 32,385 | 32,664 |
Long-term obligations | ||
Revolving line of credit | 17,933 | 30,942 |
Deferred income taxes | 304 | 136 |
Private placement warrants | 24,525 | 3,666 |
Other noncurrent liabilities | 1,051 | 623 |
TOTAL LIABILITIES | 76,198 | 68,031 |
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: 11,352,812 and 9,909,212 shares at |
11 | 10 |
Additional paid-in-capital | 57,308 | 10,862 |
(Accumulated deficit) retained earnings | (2,648) | 16,112 |
Treasury stock, at cost, 830,925 shares at |
(4,250) | (4,250) |
TOTAL STOCKHOLDERS' EQUITY | 50,421 | 22,734 |
TOTAL LIABILITIES STOCKHOLDERS' EQUITY | $ 126,619 | $ 90,765 |
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Condensed Consolidated Statements of Operations (Unaudited) | ||||
(Dollar amounts in thousands, except per share amounts) | ||||
Three months ended 2013 |
Three months ended 2012 |
Twelve months ended 2013 |
Twelve months ended 2012 |
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Net sales | $ 61,500 | $ 52,452 | $ 237,842 | $ 202,342 |
Cost of sales | 49,699 | 44,006 | 193,316 | 168,425 |
Gross profit | 11,801 | 8,446 | 44,526 | 33,917 |
Operating expenses: | ||||
Research & development and engineering | 3,129 | 1,832 | 10,439 | 7,377 |
Selling and service | 1,735 | 1,325 | 7,545 | 5,925 |
General and administrative | 3,012 | 2,275 | 11,575 | 8,299 |
Total operating expense | 7,876 | 5,432 | 29,559 | 21,601 |
Operating income | 3,925 | 3,014 | 14,967 | 12,316 |
Other expense (income): | ||||
Interest expense | 87 | 257 | 657 | 1,023 |
Loss on debt extinguishment | -- | -- | 270 | -- |
Private placement warrant expense | 6,373 | 1,104 | 28,031 | 448 |
Other (income) expense, net | 46 | (94) | 10 | -- |
Total other expense | 6,506 | 1,267 | 28,968 | 1,471 |
(Loss) Income before income taxes | (2,581) | 1,747 | (14,001) | 10,845 |
Income tax provision | 1,171 | 1,002 | 4,759 | 4,143 |
Net (loss) income | $ (3,752) | $ 745 | $ (18,760) | $ 6,702 |
Weighted-average common shares outstanding: | ||||
Basic | 10,507,769 | 9,078,287 | 9,779,457 | 9,068,846 |
Diluted | 10,507,769 | 9,078,287 | 9,779,457 | 9,068,846 |
(Loss) earnings per common share: | ||||
Basic | $ (0.36) | $ 0.08 | $ (1.92) | $ 0.74 |
Diluted | $ (0.36) | $ 0.08 | $ (1.92) | $ 0.74 |
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Condensed Consolidated Statements of Cash Flows (Unaudited) | ||
(Dollar amounts in thousands) | ||
Twelve months ended 2013 |
Twelve months ended 2012 |
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Cash flows from operating activities | ||
Net (loss) income | $ (18,760) | 6,702 |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 1,568 | 1,105 |
Deferred income taxes | (467) | (716) |
Share-based compensation expense | 1,268 | 478 |
Increase in accounts receivable allowances | 10 | -- |
Increase in valuation of private placement warrants | 28,031 | 448 |
Loss on investment in joint venture | 39 | -- |
Loss on disposal of assets | 72 | 111 |
Loss on debt extinguishment | 270 | -- |
(Increase) decrease in operating assets: | ||
Accounts receivable | (5,260) | (7,957) |
Inventories | (16,018) | (6,575) |
Prepaid expenses and other assets | (1,785) | (535) |
Increase (decrease) in operating liabilities: | ||
Accounts payable | (3,687) | 2,473 |
Accrued liabilities | 2,763 | 924 |
Income taxes payable | (445) | 510 |
Other noncurrent liabilities | (34) | 91 |
Net cash used in operating activities | (12,435) | (2,941) |
Cash flows from investing activities | ||
Purchases of property, plant and equipment | (6,007) | (3,890) |
Investment in joint venture | (500) | -- |
Increase in cash surrender value of life insurance | (7) | (8) |
(6,514) | (3,898) | |
Cash flows from financing activities | ||
Decrease in cash overdraft | -- | (3,780) |
Proceeds from stock offering | 36,750 | -- |
Net change in revolving line of credit | (13,009) | 11,276 |
Payments on long-term debt and capital lease obligations | -- | (64) |
Proceeds from exercise of private placement warrants | 4,412 | 178 |
Payment of withholding taxes for net settlement of share-based awards | (2,063) | -- |
Excess tax benefit from exercise of share-based awards | 1,642 | -- |
Cash paid for financing and transaction fees | (3,020) | (228) |
Net cash provided by financing activities | 24,712 | 7,382 |
Net change in cash | 5,763 | 543 |
Cash at beginning of period | 543 | -- |
Cash at end of period | $ 6,306 | 543 |
Supplemental disclosures of cash flow information | ||
Cash paid for interest | $ 660 | 912 |
Cash paid for income taxes | $ 4,869 | 4,353 |
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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