Fuel Systems Solutions Slips To Loss In Q2; Cuts 2014 Revenue Outlook

(RTTNews) - Fuel Systems Solutions Inc.(FSYS) reported that its net loss for the second quarter of 2014 was $44.2 million or $2.20 per share, compared to net income of $2.6 million or $0.13 per share in the second quarter of 2013.

Excluding certain charges, net loss for the second quarter of 2014 was $1.0 million, or $0.05 per share.

The company recorded a non-cash goodwill and long-lived asset impairment charge of $44.3 million in the second quarter, comprised of a goodwill impairment of $39.9 million and a write-down of long-lived assets of $ 4.4 million, relating to both of its operating segments, not including a $1.1 million tax benefit related to the impairment charge. Operating loss for the second quarter of 2014 totaled $47.9 million.

Excluding this charge, operating loss for the second quarter of 2014 totaled $3.6 million compared to operating income of $4.8 million in the second quarter of 2013. The decrease primarily reflected the lower gross profit and certain costs associated with rationalizing the workforce and facilities in its Italian operations.

Revenue for the second quarter dropped to $87.4 million from $111.1 million in the second quarter of 2013. Automotive revenue decreased $18.3 million primarily reflecting lower DOEM and OEM volumes as a result of difficult economic conditions and the loss of certain programs and customers as well as the impact of the competitive aftermarket pressure. Industrial revenue decreased $5.4 million compared to the prior-year period primarily reflecting lower demand for mobile equipment and a decrease in heavy duty sales in Asia. The impact of foreign exchange on the second quarter revenue was negative $0.2 million.

Analysts polled by Thomson Reuters expected the company to report earnings of $0.02 per share and revenues of $89.53 million for the quarter. Analysts' estimates typically exclude special items.

The company currently expects full year 2014 revenue to be in the range of between $335 million to $355 million, and has reduced its expectation for 2014 gross margin to a range of 19% to 21%, and its expectation for 2014 positive cash flow as defined by Adjusted EBITDA to between $4 million and $8 million. Analysts expect the company to report revenues of $347.13 million for fiscal 2014.

The company said in May that it expected full year 2014 revenue to be between $340 million and $360 million, 2014 gross margin of 21% to 23%, and 2014 positive cash flow as defined by Adjusted EBITDA of between $14 million and $20 million.