UCI Holdings Limited Reports Results of Operations for Second Quarter 2013

UCI Holdings Limited Reports Results of Operations for Second Quarter 2013

LAKE FOREST, Ill.--(BUSINESS WIRE)-- UCI Holdings Limited, the parent company of UCI International, Inc. ("UCI"), today announced UCI's results for the second quarter ended June 30, 2013. Net sales increased by 7.6% to $252.4 million from the $234.6 million reported for the second quarter of 2012. The company, a leading manufacturer of vehicle replacement parts, reported that net sales increased in the OEM (original equipment manufacturer), OES (new car dealer service), traditional and heavy duty channels, with a small decline in the retail channel. Net sales for the second quarter of 2013 also included $18.8 million in related party sales to FRAM Group, compared to $16.3 million for the second quarter of 2012.

Earnings before interest, taxes, depreciation and amortization, or EBITDA, as adjusted, was $30.4 million for the second quarter of 2013, compared to $33.2 million in the year-ago quarter. The reconciliation of net income to adjusted EBITDA, a non-GAAP measure of financial performance, is set forth in Schedule A.


Net income for the second quarter of 2013 was $1.7 million, including $1.3 million, net of tax, in special items, consisting primarily of restructuring costs, costs related to implementation of our cost sharing and manufacturing arrangements with FRAM Group, and business optimization costs, offset by the collection of tax refunds. Net loss for the second quarter of 2012 was $4.4 million, including $7.8 million, net of tax, in special items, consisting primarily of business optimization costs, restructuring costs, costs related to implementation of our cost sharing and manufacturing arrangements with FRAM Group and costs of defending class action litigation.

"We were pleased with the uptick in sales volume for the second quarter, including the initial launch of new OEM products" said Bruce Zorich, Chief Executive Officer of UCI. "Operationally, while we continued to make good progress on our cost reduction initiatives, for the quarter these savings were offset by lower customer pricing, higher material costs, startup costs for our OEM rollouts and increased sales of lower margin products."

As of June 30, 2013, the company's cash on hand was $66.6 million and total debt was $692.6 million.

Conference Call

UCI will host a conference call to discuss its results and performance on Thursday, August 8, at 11:00 a.m. Eastern Time (ET). Interested parties are invited to listen to the call by telephone. Domestic callers can dial (800) 637-1381. International callers can dial (502) 498-8424.

A replay of the call will be available from August 9 for a 14 day period, at www.uciholdings.com. Click on the UCI 2013 2nd Quarter Results button.

About UCI International, Inc.

UCI International, Inc. is among North America's largest and most diversified companies servicing the vehicle replacement parts market. We supply a broad range of products to the automotive, trucking, marine, mining, construction, agricultural and industrial vehicle markets. Our customer base includes leading aftermarket companies, as well as a diverse group of original equipment manufacturers.

Forward Looking Statements

All statements, other than statements of historical facts, included in this press release and the attached report that address activities, events or developments that UCI expects, believes or anticipates will or may occur in the future are forward-looking statements. Forward-looking statements give UCI's current expectations and projections relating to the financial condition, results of operations, plans, objectives, future performance and business of UCI and its subsidiaries. These statements can be identified by the fact that they do not relate strictly to historical or current facts. They are subject to uncertainties and factors relating to UCI's operations and business environment, all of which are difficult to predict and many of which are beyond UCI's control. UCI cautions investors that these uncertainties and factors could cause UCI's actual results to differ materially from those stated in the forward-looking statements. UCI cautions that investors should not place undue reliance on any of these forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made, and except as required by law, UCI undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances.

    
UCI Holdings Limited
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)
(in thousands)
  
 
Three Months Ended June 30,Six Months Ended June 30,
2013201220132012
Net sales$252,411$234,601$498,268$496,232
Cost of sales 203,315  181,525  401,940  376,159 
Gross profit49,09653,07696,328120,073
Operating expenses
Selling and warehousing(17,999)(16,886)(36,079)(34,484)
General and administrative(10,300)(15,412)(26,025)(31,120)
Amortization of acquired intangible assets(5,543)(5,528)(11,087)(11,054)
Restructuring costs, net(1,789)(3,771)(2,109)(3,767)
Antitrust litigation costs (16) (354) (40) (884)
Operating income13,44911,12520,98838,764
Other expense
Interest expense, net(10,683)(13,844)(24,138)(27,712)
Miscellaneous, net 674  (1,356) (657) (2,880)
Income (loss) before income taxes3,440(4,075)(3,807)8,172
Income tax (expense) benefit (1,779) (308) 411  (5,702)
Net income (loss) 1,661  (4,383) (3,396) 2,470 
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments(161)(2,967)(296)(236)
Pension and OPEB liability, net of tax 688  151  1,320  15,589 
Total other comprehensive income (loss) 527  (2,816) 1,024  15,353 
Comprehensive income (loss)$2,188 $(7,199)$(2,372)$17,823 
 
  
UCI Holdings Limited
Condensed Consolidated Balance Sheets
(in thousands)
  
June 30,December 31,
20132012
(unaudited)(audited)
Assets
Current assets
Cash and cash equivalents$66,637$78,917
Accounts receivable, net231,562227,542
Related party receivables23,21619,872
Inventories174,612175,291
Assets held for sale1,647-
Deferred tax assets29,74928,877
Other current assets 33,499  27,105 
Total current assets560,922557,604
Property, plant and equipment, net160,042160,174
Goodwill308,964309,102
Other intangible assets, net387,333399,585
Deferred financing costs, net16,07417,483
Other long-term assets 4,149  3,732 
Total assets$1,437,484 $1,447,680 
 
Liabilities and shareholder's equity
Current liabilities
Accounts payable$126,034$132,803
Current maturities of long-term debt3,1693,177
Related party payables1,155734
Accrued expenses and other current liabilities 114,537  115,453 
Total current liabilities244,895252,167
Long-term debt, less current maturities689,373690,748
Pension and other post-retirement liabilities117,722120,093
Deferred tax liabilities114,467110,965
Other long-term liabilities 2,238  2,546 
Total liabilities1,168,6951,176,519
Contingencies
Shareholder's equity
Common stock320,038320,038
Retained deficit(8,639)(5,243)
Accumulated other comprehensive loss (42,610) (43,634)
Total shareholder's equity 268,789  271,161 
Total liabilities and shareholder's equity$1,437,484 $1,447,680 
 
  
UCI Holdings Limited
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
   
 
Six Months Ended June 30,
20132012
Net cash provided by operating activities$5,420 $18,836 
Cash flows from investing activities:
Capital expenditures(16,192)(20,804)
Proceeds from sale of property, plant and equipment 23  1,968 
Net cash used in investing activities (16,169) (18,836)

Cash flows from financing activities:

Debt repayments(1,533)(1,691)
Equity contribution -  38 
Net cash used in financing activities(1,533)(1,653)
Effect of exchange rate changes on cash 2  (36)
Net decrease in cash and cash equivalents(12,280)(1,689)
Cash and cash equivalents at beginning of period 78,917  67,697 
Cash and cash equivalents at end of period$66,637 $66,008 
 

Reconciliation of EBITDA to Adjusted EBITDA

EBITDA, a measure used by our strategic owner to measure operating performance, is defined as net income (loss) for the period plus income tax expense (benefit), net interest expense, depreciation expense of property, plant and equipment and amortization expense of identifiable intangible assets. Adjusted EBITDA presented herein is also a financial measure used by our strategic owner to measure operating performance. Additionally, Adjusted EBITDA is used in the calculation of compliance with certain covenants in the Senior Secured Credit Facilities and the indenture governing the Senior Notes. Adjusted EBITDA is calculated as EBITDA adjusted to exclude items of a significant or unusual nature that cannot be attributed to ordinary business activities, such as business optimization costs, restructuring costs and costs related to implementation of cost sharing arrangements with FRAM Group. EBITDA and Adjusted EBITDA are not presentations in accordance with GAAP, or measures of our financial condition, liquidity or profitability and should not be considered as a substitute for net income (loss), operating profit or any other performance measures derived in accordance with GAAP or as a substitute for cash flow from operating activities as a measure of our liquidity in accordance with GAAP. Additionally, EBITDA and Adjusted EBITDA are not intended to be measures of free cash flow, as they do not take into account certain items such as interest and principal payments on our indebtedness, working capital needs, tax payments and capital expenditures. We believe that the inclusion of EBITDA and Adjusted EBITDA is appropriate to provide additional information to investors about our operating performance and to provide a measure of operating results unaffected by differences in capital structures, capital investment cycles and ages of related assets among otherwise comparable companies. We additionally believe that issuers of high yield debt securities also present EBITDA and Adjusted EBITDA because investors, analysts and rating agencies consider these measures useful. In addition, Adjusted EBITDA is used to determine our compliance with certain covenants, including the fixed charge coverage ratio used for purposes of debt incurrence under the indenture governing the Senior Notes and certain other agreements governing our indebtedness. Because not all companies calculate EBITDA and Adjusted EBITDA identically, this presentation of EBITDA and Adjusted EBITDA may not be comparable to other similarly titled measures used by other companies.

    

Schedule A

Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA
(dollars in millions)
 
Three Months Ended June 30,Six Months Ended June 30,
2013201220132012
Net income (loss)$1.7$(4.4)$(3.4)$2.5
Income tax expense (benefit)1.80.3(0.4)5.7
Net interest expense10.613.824.127.7
Depreciation and amortization expense 13.4  12.8  26.2  25.8 
EBITDA27.522.546.561.7
 
Business optimization costs0.94.25.96.5
Cost related to implementation of cost sharing and
manufacturing arrangements with FRAM Group1.8
Read Full Story

Can't get enough business news?

Sign up for Finance Report by AOL and get everything from retailer news to the latest IPOs delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

Markets

DJIA21,644.88131.710.61%
NASDAQ6,416.826.010.09%
S&P 5002,479.9510.040.41%
NIKKEI 22519,955.20-20.47-0.10%
HANG SENG26,852.055.220.02%
DAX12,264.3155.360.45%
USD (per EUR)1.170.000.13%
USD (per CHF)0.950.000.28%
JPY (per USD)111.590.360.32%
GBP (per USD)1.300.000.06%
More to Explore
Tue, Jul 25
Set Your Location
City, State, or Zip