Remy International Posts Lower Profit
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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowPendleton-based Remy International Inc. (Nasdaq: REMY) is reporting net income of $11.4 million for the second quarter, compared to $17.4 million during the same period last year. Chief Financial Officer Fred Knechtel says the decrease was due to factors including lower light duty and hybrid equipment volumes and one-time refinancing, restructuring and separation costs. August 5, 2013
News Release
PENDLETON, Ind. – Remy International, Inc. (NASDAQ: REMY), a leading worldwide manufacturer, remanufacturer, and distributor of starters and alternators for light vehicle and commercial vehicle applications, locomotive products and hybrid electric motors, today announced its financial results for the second quarter ended June 30, 2013.
Second Quarter Highlights
Net sales of $282.3 million for the second quarter of 2013, a decline of 4 percent compared to $294.8 million for the second quarter of 2012. The decline is due to unfavorable volume / mix in original equipment and hybrid partially offset by favorable aftermarket volume. The second quarter of 2012 benefited from a very strong North American commercial vehicle market and robust aftermarket orders.
Adjusted EBITDA of $33.2 million for the second quarter of 2013 compared to $39.7 million for the second quarter of 2012. Second quarter 2013 results were impacted by planned investments in China and aftermarket businesses plus higher operating costs.
Net income attributable to common stockholders was $11.4 million for the second quarter of 2013 compared to $17.4 million for the second quarter of 2012.
In the second quarter, Remy completed the acquisition of the remaining 49 percent of its Remy Hubei Electric Joint venture from its Chinese joint venture partner thereby giving Remy 100 percent control of the entity. This action as well as our Wuhan plant launch more than double our capacity of alternators and significantly expands our starter capacity in China.
New business awarded and launched during the quarter:
China: Shanghai GM, Dongfeng Peugeot, Chongqing Yuan Huaihai Power Co.
North America: hybrid contract with Odyne
Japan: alternators at ISM Japan (Perkins Shibaura/IHI JV)
India: starter business with CAT India
Global: new 35MT starter launched for Cummins Engine
On August 2, 2013, the Board of Directors declared a quarterly dividend of $0.10 per share payable on August 30, 2013 to shareholders of record as of August 16, 2013.
First Half Highlights
Net sales of $564.1 million for the six months ended June 30, 2013, a decline of 4 percent compared to $587.9 million for the six months ended June 30, 2012. The decline is due to unfavorable volume / mix in original equipment and hybrid partially offset by favorable aftermarket volume.
Adjusted EBITDA of $64.5 million for the six months ended June 30, 2013, compared to $78.1 million for the six months ended June 30, 2012.
Net income attributable to common stockholders was $12.6 million for the six months ended June 30, 2013 compared to $26.2 million for the six months ended June 30, 2012:
2013 results include $9.8 million in non-recurring restructuring and separation cost, and $4.3 million in loss on extinguishment of debt and refinancing fees
2012 results include $3.6 million in restructuring and other charges
Successfully refinanced our Term B Loan with a new $300 million 7-year Term B Loan resulting in 2013 annualized interest savings of $6 million.
Fred Knechtel, Remy International, Inc. Chief Financial Officer, added, “First half financial performance was in line with our expectations. The year-over-year decline was due to lower light duty original equipment and hybrid volumes, softer North American commercial vehicle demand, growth investments, one-time refinancing, restructuring and separation costs. Our operational restructuring and refinancing actions are expected to improve our cost structure for the second half of 2013.”
Jay Pittas, Remy International, Inc. President and CEO commented, “In the second quarter of 2013, we made significant progress executing our business plan to achieve future growth. Our investments to support the aftermarket helped drive increased sales. We completed the acquisition of the outstanding shares of our China Hubei joint venture and started production at our Wuhan facility. These provide increased control over our business, more than double existing alternator capacity and significantly expand our starter capacity in China. During the quarter, we realized the benefits of these investments with several new business awards with key Chinese customers. We remain confident that we have the right strategies in place to achieve long-term success for the Company.”
About Remy
Founded by the Remy Brothers in 1896, Remy International, Inc. is a leading global manufacturer and remanufacturer of alternators, starter motors and electric traction motors. Headquartered in Pendleton, IN, with global operations across five continents and 10 countries, Remy International markets products under the Delco Remy, Remy and World Wide Automotive brands. Known for innovation, efficiency, quality, and best-in-class customer service and support, Remy International's products are integrated by leading industrial, specialty, automotive and heavy-duty OEMs, and aftermarket providers worldwide. We Start the World & Keep It Running.
Source: Remy International Inc.