Power Solutions International, Inc. Reports Second Quarter 2013 Results
Net Sales Up 18% Year over Year, 12% Sequentially
Net Loss of
Adjusted Net Income of
Second Quarter 2013 Results
Net sales for the second quarter of 2013 were
Operating income was
Other expense for the second quarter included a non-cash charge of
The net loss for the second quarter of 2013, which included the warrant revaluation adjustment and loss on debt extinguishment, was
Net income for the second quarter of 2013, adjusted to remove the warrant revaluation impact and loss on debt extinguishment, was
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Summary of Diluted EPS Attributable to Common Stockholders "Adjusted" removes the impact of warrant revaluation and loss on debt extinguishment |
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| Q2 2013 | Q1 2013 | Q2 2012 | Seq. Growth | Y/Y Growth | |
| EPS |
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-- | -- |
| Adjusted EPS | $ 0.23 | $ 0.21 |
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10% | 10% |
| Diluted shares | 9,243,773 | 9,100,111 | 9,064,537 | -- | -- |
| Adjusted diluted shares | 9,663,732 | 9,359,489 | 9,064,537 | -- | -- |
"We are pleased with our performance this quarter, with sales increasing 18% from last year and over 12% from the first quarter," stated
Second Quarter 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-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 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.
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Reconciliation of Net (Loss) Income to Adjusted Net Income (Dollar amounts in millions) |
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Three months ended 2013 |
Three months ended 2012 |
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| Net (loss) income | $ (2,100) | $ 2,961 |
| Non-cash expense (income) from warrant revaluation | 4,207 | (1,050) |
| Loss on debt extinguishment | 162 | -- |
| Adjusted net income | $ 2,269 | $ 1,911 |
| Reconciliation of Diluted EPS to Adjusted Diluted EPS | ||
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Three months ended 2013 |
Three months ended 2012 |
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| (Loss) earnings per diluted common share | $ (0.23) | $ 0.33 |
| Non-cash expense (income) from warrant revaluation | 0.44 | (0.12) |
| Loss on debt extinguishment | 0.02 | -- |
| Adjusted earnings per diluted common share | $ 0.23 | $ 0.21 |
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 data) | ||
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| ASSETS | ||
| Current assets | ||
| Cash | $ 1,435 | $ 543 |
| Accounts receivable, net | 35,062 | 37,480 |
| Inventories, net | 47,932 | 39,968 |
| Prepaid expenses and other current assets | 2,536 | 1,910 |
| Deferred income taxes | 2,176 | 2,176 |
| Total current assets | 89,141 | 82,077 |
| Property, plant, & equipment, net | 9,937 | 7,145 |
| Other noncurrent assets | 1,281 | 1,543 |
| TOTAL ASSETS | $ 100,359 | $ 90,765 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities | ||
| Accounts payable | $ 23,459 | $ 26,579 |
| Income taxes payable | 227 | 1,074 |
| Accrued liabilities | 4,919 | 5,011 |
| Total current liabilities | 28,605 | 32,664 |
| Long-term obligations | ||
| Revolving line of credit | 37,199 | 30,942 |
| Deferred income taxes | 136 | 136 |
| Private placement warrants | 9,920 | 3,666 |
| Other noncurrent liabilities | 599 | 623 |
| TOTAL LIABILITIES | 76,459 | 68,031 |
| COMMITMENTS AND CONTINGENCIES | -- | -- |
| STOCKHOLDERS' EQUITY | ||
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Series A convertible preferred stock—$0.001 par value. Authorized: 114,000 shares. Issued and outstanding: -0- shares at |
-- | -- |
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Common stock—$0.001 par value. Authorized: 50,000,000 shares. Issued: 10,118,379 and 9,909,212 shares at |
10 | 10 |
| Additional paid-in-capital | 17,055 | 10,862 |
| Retained earnings | 11,085 | 16,112 |
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Treasury stock, at cost, 830,925 shares at |
(4,250) | (4,250) |
| TOTAL STOCKHOLDERS' EQUITY | 23,900 | 22,734 |
| TOTAL LIABILITIES STOCKHOLDERS' EQUITY | $ 100,359 | $ 90,765 |
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| Condensed Consolidated Statements of Operations (Unaudited) | ||||
| (Dollar amounts in thousands, except per share data) | ||||
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Three months ended June 30, 2013 |
Three months ended June 30, 2012 |
Six months ended June 30, 2013 |
Six months ended June 30, 2012 |
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| Net sales | $ 59,138 | $ 50,115 | $ 111,714 | $ 98,187 |
| Cost of sales | 47,954 | 41,283 | 91,361 | 81,126 |
| Gross profit | 11,184 | 8,832 | 20,353 | 17,061 |
| Operating expenses: | ||||
| Research & development and engineering | 2,289 | 1,808 | 4,060 | 3,535 |
| Selling and service | 2,089 | 1,583 | 3,969 | 3,285 |
| General and administrative | 2,966 | 2,048 | 5,404 | 3,812 |
| Total operating expense | 7,344 | 5,439 | 13,433 | 10,632 |
| Operating income | 3,840 | 3,393 | 6,920 | 6,429 |
| Other expense (income): | ||||
| Interest expense | 241 | 290 | 435 | 517 |
| Loss on debt extinguishment | 270 | -- | 270 | -- |
| Private placement warrant expense (income) | 4,207 | (1,050) | 9,053 | (457) |
| Other (income) expense, net | (17) | 59 | (17) | 94 |
| Total other expense (income) | 4,701 | (701) | 9,741 | 154 |
| (Loss) Income before income taxes | (861) | 4,094 | (2,821) | 6,275 |
| Income tax provision | 1,239 | 1,133 | 2,206 | 2,164 |
| Net (loss) income | $ (2,100) | $ 2,961 | $ (5,027) | $ 4,111 |
| Weighted-average common shares outstanding: | ||||
| Basic | 9,243,773 | 9,064,537 | 9,171,942 | 9,064,537 |
| Diluted | 9,243,773 | 9,064,537 | 9,171,942 | 9,064,537 |
| (Loss) earnings per common share: | ||||
| Basic | $ (0.23) | $ 0.33 | $ (0.55) | $ 0.45 |
| Diluted | $ (0.23) | $ 0.33 | $ (0.55) | $ 0.45 |
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| Condensed Consolidated Statements of Cash Flows (Unaudited) | ||
| (Dollar amounts in thousands) | ||
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Six months ended June 30, 2013 |
Six months ended June 30, 2012 |
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| Cash flows from operating activities | ||
| Net (loss) income | $ (5,027) | $ 4,111 |
| Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ||
| Depreciation and amortization | 749 | 469 |
| Deferred income taxes | -- | (308) |
| Equity-based compensation expense | 675 | 56 |
| (Decrease) increase in accounts receivable allowances | (10) | 50 |
| Increase (decrease) in valuation of private placement warrants | 9,053 | (457) |
| Loss on disposal of assets | 2 | 95 |
| Loss on debt extinguishment | 270 | -- |
| (Increase) decrease in operating assets: | ||
| Accounts receivable | 2,428 | 3,281 |
| Inventories | (7,964) | (15,782) |
| Prepaid expenses and other assets | (185) | (567) |
| Increase (decrease) in operating liabilities: | ||
| Accounts payable | (4,251) | 9,714 |
| Accrued liabilities | (92) | (49) |
| Income taxes payable | (847) | 249 |
| Other noncurrent liabilities | (7) | (53) |
| Net cash (used in) provided by operating activities | (5,206) | 809 |
| Cash flows from investing activities | ||
| Purchases of property, plant and equipment | (2,617) | (1,280) |
| Net cash used in investing activities | (2,617) | (1,280) |
| Cash flows from financing activities | ||
| Decrease in cash overdraft | -- | (3,780) |
| Initial proceeds from borrowings under revolving line of credit | 38,995 | -- |
| Advances from revolving line of credit - noncurrent obligation | 59,807 | 26,750 |
| Repayments from revolving line of credit - noncurrent obligation | (53,600) | (26,060) |
| Repayment of prior revolving line of credit | (38,945) | -- |
| Net change in revolving line of credit - current obligation | -- | 4,249 |
| Payments on long-term debt and capital lease obligations | -- | (13) |
| Proceeds from exercise of private placement warrants | 2,719 | -- |
| Cash paid for financing and transaction fees | (261) | (98) |
| Net cash provided by financing activities | 8,715 | 1,048 |
| Net change in cash | 892 | 577 |
| Cash at beginning of period | 543 | -- |
| Cash at end of period | $ 1,435 | $ 577 |
| Supplemental disclosures of cash flow information | ||
| Cash paid for interest | $ 468 | $ 406 |
| Cash paid for income taxes | $ 3,054 | $ 2,270 |
CONTACT:Source:Power Solutions International, Inc. Daniel P. 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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