Remy International, Inc. Announces Second Quarter 2013 Results

PENDLETON, Ind., Aug. 5, 2013 /PRNewswire/ -- 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% 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% of its Remy Hubei Electric Joint venture from its Chinese joint venture partner thereby giving Remy 100% 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% 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™.

Conference Call

Remy will host a call with investors and analysts to discuss second quarter 2013 results on Tuesday, August 6, 2013 beginning at 9 a.m. Eastern Time.  A live webcast of the conference call will be available on the Remy Investor Relations website at http://www.remyinc.com.  The conference call replay will also be available via webcast through the Remy Investor Relations website at http://www.remyinc.com. 

Use of Non-U.S. GAAP Financial Information

Accounting principles generally accepted in the United States (U.S. GAAP) is the standard framework of guidelines for financial accounting. U.S. GAAP includes the standards, conventions, and rules accountants follow in recording and summarizing transactions and in the preparation of financial statements. In addition to reporting financial results in accordance with U.S. GAAP, Remy has provided Adjusted EBITDA, a non-U.S. GAAP financial measure, which is frequently used by management, analysts, investors and other interested parties.  Management believes that the non-U.S. GAAP financial measure presented provides a useful measure of Remy's financial performance since it excludes certain items which do not reflect ongoing operations including costs associated with restructuring costs, impairment of assets related to capital investments, interest on our debt and non-cash stock-based compensation charges.  Adjusted EBITDA is defined by the Company as net income attributable to common stockholders before (i) interest expense–net, (ii) income tax expense, (iii) depreciation and amortization, (iv) stock-based compensation expense, (v) net income attributable to noncontrolling interest, (vi) restructuring, other charges and other impairment charges, (vii) loss on extinguishment of debt and refinancing fees, (viii) executive officer separation cost and (ix) other adjustments.   Adjusted EBITDA as defined by the Company may differ from non-U.S. GAAP measures used by other companies and is not a measurement under U.S. GAAP.  There are limitations inherent in non-U.S. GAAP financial measures in that they exclude a variety of charges and credits that are required to be included in a U.S. GAAP presentation, and therefore do not present the full measure of the Company's recorded costs against its revenue.  Accordingly, in analyzing Remy's future financial performance, non-U.S. GAAP results presented should be considered together with U.S. GAAP results, rather than as an alternative to U.S. GAAP basis financial measures. Reconciliations of non-U.S. GAAP measures to related U.S. GAAP measures are presented in the financial schedules which accompany this release.

Forward Looking Statements

This press release contains forward-looking statements.  Forward-looking statements provide our current expectations or forecasts of future events. Forward-looking statements include statements about our expectations, beliefs, plans, objectives, intentions, assumptions and other statements that are not historical facts.  Such forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from anticipated results.  We undertake no obligation to publicly revise any forward-looking statement to reflect circumstances or events to reflect the new information, future events, or otherwise. The risks and uncertainties which forward-looking statements are subject to include, but are not limited to, future financial results and liquidity, development of new products and services, the effect of competitive products or pricing, the effect of commodity and raw material prices, the impact of supply chain cost management initiatives, restructuring risks, customs duty claims, litigation uncertainties and warranty claims, conditions in the automotive industry, foreign currency fluctuations, costs related to re-sourcing and outsourcing products, the effect of economic conditions, and other risks identified in the "Special note regarding forward-looking statements", "Risk Factors" and other sections of the Company's previously filed most recent Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission.

A copy of the second quarter 2013 Form 10-Q will be available on the Remy International Website at: http://www.remyinc.com under Investor Relations.

Investor Contact: 
Eric Struik, Vice President of Finance
Struik.Eric@remyinc.com
(765) 778-6749

SOURCE Remy International, Inc.