Power Solutions International, Inc. Reports Third Quarter 2012 Results
Net Sales Up 21% Year Over Year, 3% Sequentially
Net Income of
"Our company reported strong results this quarter while also preparing for substantial future growth," stated
Third Quarter 2012 Financial Results
Net sales for the third quarter of 2012 were
Gross profit for the third quarter of 2012 was
Operating expense increased to 10.7% of sales in the third quarter, compared to 9.9% of sales in the third quarter of 2011. The increase was driven by larger investments in research and development, as well as greater general and administrative expenses associated with becoming a publicly traded company.
Operating expense in the third quarter of 2012 also includes costs of
Operating income of
Other (income) expense for the third quarter includes a non-cash gain of
Net income for the third quarter of 2012, which includes the warrant revaluation adjustment and facility relocation costs, was
Summary of Diluted EPS Attributable to Common Stockholders "Adjusted" removes all impact of warrant revaluation and facility relocation costs |
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Q3 2012 | Q2 2012 | Q3 2011 | Seq. Growth | Y/Y Growth | |
EPS |
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(39%) | 5% |
Adjusted EPS |
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(5%) | 54% |
Comparisons of per share results for the third quarter 2012 compared to the third quarter 2011 are impacted by the simplified capital structure under which the Company is now operating. As previously reported, all of the Company's outstanding shares of preferred stock were converted into common stock as of
Third Quarter 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 live call should dial +1 (888) 293-6952. Those calling from outside the U.S. should dial +1 (719) 325-2258. Passcode 2874780 should be entered for both. 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 http://www.powersint.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-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 millions) |
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Three months ended September 30, 2012 |
Three months ended September 30, 2011 |
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Net Income |
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Non-cash expense from warrant revaluation | (0.2) | (0.6) |
Facility relocation costs | 0.2 | 0.0 |
Adjusted Net Income |
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Reconciliation of Diluted EPS to Adjusted Diluted EPS | ||
Three months ended September 30, 2012 |
Three months ended September 30, 2011 |
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Diluted earnings per common share |
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Non-cash expense from warrant revaluation | (0.02) | (0.06) |
Facility relocation costs | 0.02 | 0.00 |
Adjusted diluted earnings per common share |
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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 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) | |||
September 30, 2012 |
December 31, 2011 |
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ASSETS | |||
Current assets | |||
Cash | $ 655 | $ -- | |
Accounts receivable, net | 31,751 | 29,523 | |
Inventories, net | 44,551 | 33,393 | |
Prepaid expenses and other current assets | 1,023 | 1,291 | |
Deferred income taxes | 2,122 | 1,814 | |
Total current assets | 80,102 | 66,021 | |
Property, plant, & equipment, net | 6,413 | 3,611 | |
Other noncurrent assets | 1,978 | 1,451 | |
Total assets | $ 88,493 | $ 71,083 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Current liabilities | |||
Income taxes payable | $ 729 | $ 564 | |
Current maturities of long-term debt | 23 | 23 | |
Revolving line of credit | -- | 19,666 | |
Accounts payable | 28,867 | 27,574 | |
Accrued liabilities | 3,662 | 4,015 | |
Total current liabilities | 33,281 | 51,842 | |
Revolving line of credit | 29,713 | -- | |
Deferred income taxes | 490 | 490 | |
Private placement warrants | 2,562 | 3,270 | |
Long-term debt, net of current maturities | 20 | 41 | |
Other noncurrent liabilities | 649 | 116 | |
Total liabilities | 66,715 | 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 | 10,651 | 10,154 | |
Retained earnings | 15,367 | 9,410 | |
Treasury stock, at cost, 830,925 shares at |
(4,250) | (4,250) | |
Total stockholders' equity | 21,778 | 15,324 | |
Total liabilities and stockholders' equity | $ 88,493 | $ 71,083 |
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Condensed Consolidated Statements of Operations (Unaudited) | ||||
(Dollar amounts in thousands, except per share amounts) | ||||
Three months ended September 30, 2012 |
Three months ended September 30, 2011 |
Nine months ended September 30, 2012 |
Nine months ended September 30, 2011 |
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Net sales | $ 51,703 | $ 42,798 | $ 149,890 | $ 109,480 |
Cost of sales | 43,293 | 36,236 | 124,419 | 90,454 |
Gross profit | 8,410 | 6,562 | 25,471 | 19,026 |
Operating expenses | ||||
Research & development and engineering | 2,010 | 1,260 | 5,545 | 3,268 |
Selling and service | 1,315 | 1,608 | 4,600 | 4,775 |
General and administrative | 2,212 | 1,351 | 6,024 | 3,777 |
Total operating expense | 5,537 | 4,219 | 16,169 | 11,820 |
Operating income | 2,873 | 2,343 | 9,302 | 7,206 |
Other (income) expense | ||||
Interest expense | 249 | 195 | 766 | 1,125 |
Loss on debt extinguishment | -- | -- | -- | 485 |
Other (income) expense, net | (199) | (591) | (562) | 67 |
Total other (income) expense | 50 | (396) | 204 | 1,677 |
Income before income taxes | 2,823 | 2,739 | 9,098 | 5,529 |
Income tax provision | 977 | 838 | 3,141 | 2,053 |
Net income | $ 1,846 | $ 1,901 | $ 5,957 | $ 3,476 |
Undistributed earnings | $ 1,846 | $ 1,901 | $ 5,957 | $ 3,476 |
Undistributed earnings allocable to Series A convertible preferred shares | $ -- | $ 1,115 | $ -- | $ 2,881 |
Undistributed earnings allocable to common shares | $ 1,846 | $ 786 | $ 5,957 | $ 595 |
Weighted-average common shares outstanding | ||||
Basic | 9,068,024 | 4,072,968 | 9,065,699 | 1,571,549 |
Diluted | 9,068,024 | 4,072,968 | 9,065,699 | 1,571,549 |
Undistributed earnings per common share | ||||
Basic | $ 0.20 | $ 0.19 | $ 0.66 | $ 0.38 |
Diluted | $ 0.20 | $ 0.19 | $ 0.66 | $ 0.38 |
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Condensed Consolidated Statements of Cash Flows (Unaudited) | ||
(Dollar amounts in thousands) | ||
Nine months ended September 30, 2012 |
Nine months ended September 30, 2011 |
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Cash flows from operating activities | ||
Net income | $ 5,957 | $ 3,476 |
Adjustments to reconcile net income to net cash used in operating activities | ||
Depreciation and amortization | 748 | 604 |
Deferred income taxes | (308) | (128) |
Equity-based compensation | 267 | -- |
Increase (decrease) in accounts receivable allowances | 57 | (43) |
Decrease in valuation of private placement warrants | (656) | (690) |
Loss on disposal of assets | 95 | -- |
Loss on debt extinguishment | -- | 485 |
(Increase) decrease in operating assets | ||
Accounts receivable | (2,285) | (10,379) |
Inventories | (11,158) | (407) |
Prepaid and other current assets | 268 | (243) |
Other noncurrent assets | (359) | 403 |
Increase (decrease) in operating liabilities | ||
Accounts payable | 4,878 | 4,376 |
Accrued liabilities | (425) | 415 |
Income taxes payable | 165 | (431) |
Other noncurrent liabilities | 113 | -- |
Net cash used in operating activities | (2,643) | (2,562) |
Cash flows from investing activities | ||
Purchases of property, plant, equipment and other assets | (2,900) | (699) |
Increase in cash surrender value of life insurance | -- | (12) |
Net cash used in investing activities | (2,900) | (711) |
Cash flows from financing activities | ||
(Decrease) increase in cash overdraft | (3,780) | 1,661 |
Increase (decrease) in revolving line of credit | 10,047 | (22,791) |
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 | (21) | (7,875) |
Cash paid for transaction and financing fees | (226) | (4,103) |
Net cash provided by financing activities | 6,198 | 3,273 |
Net change in cash | 655 | -- |
Cash at beginning of period | -- | -- |
Cash at end of period | $ 655 | $ -- |
Supplemental disclosures of cash flow information | ||
Cash paid for interest | $ 666 | $ 933 |
Cash paid for income taxes | $ 3,290 | $ 2,630 |
CONTACT:Source:Power Solutions International, Inc. Dan Gorey Chief Financial Officer +1 (630) 451-2290 dgorey@powergreatlakes.comICR, LLC Gary Dvorchak Senior Vice President +1 (310) 954-1123 gary.dvorchak@icrinc.com
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