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Fuel Systems Solutions: Q2 2009 Results
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Fuel Systems Solutions, Inc. reported results for its second quarter ended June 30, 2009.
Mariano Costamagna, Fuel Systems' CEO, said, "Our quarterly results demonstrate we are successfully executing our plan to be a leader in alternative fuel systems and complementary services for transportation and industrial vehicles. Our expanded delayed original equipment manufacturer (DOEM) capacity delivered record quarterly systems installations of 37,000 and our business is on track to exceed 120,000 conversions in 2009, more than doubling the nearly 58,000 conversions in 2008. Demand for alternative fuel vehicles is strong in Europe and will undoubtedly return worldwide as global markets improve. As such, during the quarter, we raised $30 million to continue to invest in opportunities in existing and adjacent businesses like our Teleflex Power Systems, Distribuidora Shopping S.A., and FuelMaker Corporation asset acquisitions and global automotive expansions."
Recent Operational Highlights
* Reached 37,000 DOEM conversions in the second quarter 2009, up from 30,000 conversions in the first quarter 2009.
* Completed the acquisition of Teleflex Power Systems for $14.5 million in August.
-- Two of Teleflex's Power Systems' three lines of business complement the global transportation and industrial businesses. The technology and testing equipment augment Fuel Systems' existing capabilities and the patents and certifications further build upon the company's intellectual property portfolio.
-- The third business, anti-idling auxiliary power units (APUs), expands the product line with solutions that generate power for parked heavy-duty class-8 trucks and diesel locomotives.
* Purchased compressed natural gas (CNG) refueling products, including the home appliance Phill(tm), for $7.0 million from FuelMaker Corporation in May, expanding Fuel Systems' ability to serve consumers, small-to-medium fleets and commercial fleets.
* Acquired the remaining minority interest of WMTM joint venture in Brazil further streamlining its corporate structure, and maximizing operating flexibility.
* Enhanced U.S. Automotive fleet strategy for liquid propane gas (LPG) and CNG vehicles by signing a non-exclusive distribution agreement with privately-held, CleanFUEL USA, to market and sell Fuel Systems' kits in the U.S. market.
Matthew Beale, Fuel Systems' President, CFO and Secretary, said, "Our DOEM business performed better than expected, which partially offset the impact of the global recession on our transportation aftermarket and industrial business. In fact, if the Euro to U.S. Dollar exchange rate had remained constant, our quarterly revenue would have been up slightly compared to last year. More notably, our DOEM business has achieved a critical mass that made an important contribution to the improvement of gross margins. These results combined with our acquisitions have driven us to increase annual revenue guidance to between $370 million to $380 million."
Recent Corporate Highlights
* Completed $30 million registered direct common stock offering for general corporate purposes and to help fund its growth strategy.
* Appointed Mike Helfand, Senior Vice President Finance and Chief Accounting Officer, and named Matthew Beale Chief Financial Officer in addition to President and Secretary.
* Announced corporate headquarters' relocation to New York City to increase efficiencies managing global operations.
Financial Results
Revenue for the second quarter of 2009 was $92.3 million, compared to $98.3 million in the second quarter of 2008. The decrease in revenues was due to negative foreign exchange impact of approximately $10.2 million, or 10%. The increase in transportation DOEM revenue offset the lower demand in the industrial market. Gross profit for the second quarter 2009 was $28.6 million, or 31% of revenue, compared to $28.6 million, or 29% of revenue, a year ago, reflecting the operating efficiencies achieved by reaching a critical mass. Operating income for the second quarter of 2009 totaled $12.5 million, or 14% of revenue, compared to $10.2 million, or 10% of revenue, in the second quarter of 2008. Net income for the second quarter 2009 was $7.4 million, or $0.46 per diluted share, compared to $4.6 million, $0.29 per diluted share, which included a non-cash goodwill impairment charge of $3.9 million, in the second quarter of 2008.
For the six-month period ending June 30, 2009, total revenues were $172.4 million, compared to $192.9 million for the first half of 2008. Net income for the first half of 2009 was $14.5 million, or $0.90 per diluted share, compared to $10.8 million, including the impairment charge of $3.9 million, or $0.69 per diluted share, for the first half of 2008.
Company Outlook
Based on the current market outlook, margin improvements and acquisitions, the company expects 2009 revenue to be between $370 million and $380 million. The company is targeting 2009 gross margin between 28% and 30% and 2009 operating margin to be between 11% and 13%.
Conference Call
The company will host a conference call on August 7th at 8:00 a.m. Pacific Time / 11:00 a.m. Eastern Time to discuss its second quarter 2009 financial results. To listen to the call live, please dial 877-356-8063 at least 10 minutes before the start of the conference. International participants may dial 706-679-2544. The pass code for the conference call will be 18966890. The call is also being webcast and can be accessed from the "Investor Relations" section of the company's website at www.fuelsystemssolutions.com. A telephone replay will be available until midnight ET on August 21st by dialing 800-642-1687 or 706-645-9291 and entering pass code 18966890#. A replay will also be available at the web address above for 90 days.
Forward-Looking Statements
This press release contains certain forward-looking statements that involve risks and uncertainties, including, without limitation, expressed or implied statements concerning the company's sales and its ability to achieve 2009 revenue between $370 million and $380 million with gross profit margin between 28 percent and 30 percent and operating margin between 11 percent and 13 percent, as well as the success of products and the success and integration of recent acquisitions. Such statements represent only our opinions and predictions. The Company's actual results may differ materially. Factors that may cause the Company's results to differ include, but are not limited to, risks that we cannot integrate the acquired assets into our business promptly and efficiently, that the patents or certifications acquired are insufficient or not useable by us, that expected sales do not materialize, that changes in emissions regulations may not significantly increase demand for the Company's products, the global economic downturn may reduce customers' demand for new automobiles and/or our products, and that all closing conditions will be met, original equipment automobile manufacturers do not adopt the Company's fuel systems as expected, that expected sales not based on long-term contracts will materialize, that changes in emissions regulations will not significantly impact demand for the Company's products, that a global economic downturn may reduce customers' demand for our products, that reduction in oil prices will reduce the demand for our products and that currency fluctuations will reduce our revenue or financial condition. Readers also should consider the risk factors set forth in the Company's reports filed with the Securities and Exchange Commission, including, but not limited to, those contained in the "Risk Factors" section of the Company's Annual Report on Form 10-K, for the year ended December 31, 2008. The Company does not undertake to update or revise any of its forward-looking statements or guidance even if experience or future changes show that the indicated results or events will not be realized.
About Fuel Systems Solutions
Fuel Systems Solutions (Nasdaq:FSYS) is a leading designer, manufacturer and supplier of proven, cost-effective alternative fuel components and systems for use in transportation and industrial applications. Fuel Systems' components and systems control the pressure and flow of gaseous alternative fuels, such as propane and natural gas, used in internal combustion engines. These components and systems feature the company's advanced fuel system technologies, which improve efficiency, enhance power output and reduce emissions by electronically sensing and regulating the proper proportion of fuel and air required by the internal combustion engine. In addition to the components and systems, the company provides engineering and systems integration services to address unique customer requirements for performance, durability and configuration. The company is composed of two operating subsidiaries: IMPCO Technologies and BRC. IMPCO Technologies is a leader in the heavy duty, industrial, power generation and stationary engines sectors. BRC is a leader in the light duty and automobile alternative fuel sectors and has established alliances with several major automobile manufacturers for OEM projects. Additional information is available at www.fuelsystemssolutions.com.
FUEL SYSTEMS SOLUTIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
June 30, Dec. 31,
2009 2008
-------- --------
ASSETS
Current assets:
Cash and cash equivalents $ 53,051 $ 26,477
Accounts receivable less allowance for doubtful
accounts of $5,709 and $3,293 at June 30, 2009
and December 31, 2008, respectively 91,203 70,009
Inventories:
Raw materials and parts 42,034 38,925
Work-in-process 1,021 1,700
Finished goods 51,195 50,253
Inventory on consignment with unconsolidated
affiliates 629 1,732
-------- --------
Total inventories 94,879 92,610
Deferred tax assets, net 5,518 5,734
Other current assets 6,522 5,749
Related party receivables 176 69
-------- --------
Total current assets 251,349 200,648
-------- --------
Equipment and leasehold improvements:
Dies, molds and patterns 4,141 3,889
Machinery and equipment 32,914 25,996
Office furnishings and equipment 12,386 11,198
Automobiles and trucks 2,783 2,235
Leasehold improvements 9,096 8,098
-------- --------
61,320 51,416
Less accumulated depreciation and amortization 27,210 23,744
-------- --------
Net equipment and leasehold improvements 34,110 27,672
Goodwill 49,519 41,295
Deferred tax assets, net 242 174
Intangible assets, net 19,151 10,021
Investment in unconsolidated affiliates 3,451 3,334
Other assets 2,525 4,183
-------- --------
Total Assets $360,347 $287,327
======== ========
FUEL SYSTEMS SOLUTIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
June 30, Dec. 31,
2009 2008
-------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 41,287 $ 65,224
Accrued expenses 52,942 34,212
Current revolving lines of credit 12,212 2,413
Current portion of term loans and other loans 8,043 4,470
Current portion of capital leases 266 192
Deferred tax liabilities, net 11 112
Related party payables 6,982 11,263
-------- --------
Total current liabilities 121,743 117,886
Term loans and other loans 21,301 4,689
Capital leases 181 238
Other liabilities 6,092 6,258
Deferred tax liabilities 6,806 4,301
-------- --------
Total liabilities 156,123 133,372
-------- --------
Stockholders' equity:
Preferred stock, $0.001 par value, authorized
1,000,000 shares; none issued and outstanding at
June 30, 2009 and December 31, 2008 -- --
Common stock, $0.001 par value, authorized
200,000,000 shares; 17,597,095 issued and
17,582,062 outstanding at June 30, 2009; and
15,801,745 issued and 15,749,783 outstanding at
December 31, 2008 18 16
Additional paid-in capital 257,144 220,270
Shares held in treasury, 15,033 and 51,962 shares
at June 30, 2009 and December 31, 2008,
respectively (649) (1,399)
Accumulated deficit (64,889) (79,354)
Accumulated other comprehensive income 12,600 14,422
-------- --------
Total stockholders' equity 204,224 153,955
-------- --------
Total Liabilities and Stockholders' Equity $360,347 $287,327
======== ========
FUEL SYSTEMS SOLUTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share and per share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------------ ------------------------
2009 2008 2009 2008
----------- ----------- ----------- -----------
Revenue $ 92,323 $ 98,284 $ 172,405 $ 192,884
Cost of revenue 63,698 69,704 119,443 136,820
----------- ----------- ----------- -----------
Gross profit 28,625 28,580 52,962 56,064
Operating expenses:
Research and
development
expense 3,303 2,702 6,214 5,530
Selling, general
and
administrative
expense 12,699 11,659 22,658 22,830
Goodwill
impairment loss -- 3,907 -- 3,907
Amortization
of intangible
assets 144 98 253 191
----------- ----------- ----------- -----------
Total operating
expenses 16,146 18,366 29,125 32,458
----------- ----------- ----------- -----------
Operating income 12,479 10,214 23,837 23,606
Other income
(expense), net 836 (43) 1,552 (1,164)
Interest expense,
net (524) (200) (908) (392)
----------- ----------- ----------- -----------
Income before
income taxes and
equity share in
income (loss) of
unconsolidated
affiliates 12,791 9,971 24,481 22,050
Equity share in
income (loss) of
unconsolidated
affiliates 193 (91) 306 77
Income tax expense (5,589) (4,878) (10,322) (10,418)
----------- ----------- ----------- -----------
Net income 7,395 5,002 14,465 11,709
Less: Net income
attributable to
noncontrolling
interests -- 394 -- 875
----------- ----------- ----------- -----------
Net income
attributable to
Fuel Systems $ 7,395 $ 4,608 $ 14,465 $ 10,834
=========== =========== =========== ===========
Net income per
share
attributable
to Fuel Systems:
Basic $ 0.46 $ 0.30 $ 0.90 $ 0.70
=========== =========== =========== ===========
Diluted $ 0.46 $ 0.29 $ 0.90 $ 0.69
=========== =========== =========== ===========
Number of shares
used in per share
calculation:
Basic 16,160,857 15,611,190 16,092,091 15,565,358
=========== =========== =========== ===========
Diluted 16,223,095 15,749,806 16,159,752 15,692,418
=========== =========== =========== ===========
FUEL SYSTEMS SOLUTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended
June 30,
------------------
2009 2008
-------- --------
Net income $ 14,465 $ 11,709
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization expense 3,699 3,180
Amortization of intangibles 1,902 1,456
Provision for doubtful accounts (171) 121
Provision for inventory reserve 2,658 1,041
Provision for loan to unconsolidated affiliate -- 1,091
Goodwill impairment loss -- 3,907
Equity share in income of unconsolidated
affiliates (298) (77)
Dividends from unconsolidated affiliates 196 230
Unrealized (gain) loss on foreign exchange (1,389) 1,094
Loss on disposal of asset 41 79
Stock-based compensation expense 101 191
Changes in assets and liabilities:
Increase in accounts receivable (18,495) (10,370)
(Increase) decrease in inventory 3,872 (15,220)
(Increase) decrease in other current assets 301 (2,432)
Increase (decrease) in deferred income taxes (90) (1,560)
Increase (decrease) in accounts payable (25,528) 13,471
Increase in accrued expenses 14,391 12,745
Decrease in other assets 344 10
Increase (decrease) in long term liabilities (338) 685
Receivables from/payables to related party, net (3,172) 3,911
-------- --------
Net cash (used in) provided by operating activities (7,511) 25,262
-------- --------
Cash flows from investing activities:
Purchase of equipment and leasehold improvements (6,706) (4,950)
Purchase of noncontrolling interest in
consolidated subsidiary -- (227)
Investment in joint venture 10 --
Acquisitions, net of cash acquired of $0.7 million (12,615) --
Purchase of intangible asset -- (193)
Proceeds from sale of assets 35 3
-------- --------
Net cash used in investing activities (19,276) (5,367)
-------- --------
Cash flows from financing activities:
Borrowing (Payment) on revolving lines of
credit, net 9,359 (3,307)
Payments on term loans (3,967) (2,045)
Proceeds from term loans 19,757 --
Payment of capital lease obligations (202) (247)
Proceeds from issuance of common stock, net of
expenses of $2.3 million 27,713 --
Proceeds from exercise of stock options
and warrants -- 1,466
(Purchase of)/proceeds from the sale of common
shares held in trust, net (28) (72)
Dividends paid to noncontrolling interest in
consolidated subsidiaries -- (900)
-------- --------
Net cash provided by (used in) financing activities 52,632 (5,105)
-------- --------
Net increase in cash 25,845 14,790
Effect of exchange rate changes on cash 729 2,056
-------- --------
Net increase in cash and cash equivalents 26,574 16,846
Cash and cash equivalents at beginning of period 26,477 26,797
-------- --------
Cash and cash equivalents at end of period $ 53,051 $ 43,643
======== ========
Supplemental disclosure of cash flow information:
Non-cash financing activities:
Acquisition of equipment under capital lease $ -- $ 20
======== ========
Issuance of 1,382 shares and 5,321 shares of
restricted stock in 2009 and 2008, respectively $ 15 $ 99
======== ========
Issuance of 282,932 shares of common stock for the
acquisition of Distribuidora Shopping $ 8,654 $ --
======== ========
Issuance of 39,868 shares from treasury stock for
the acquisition of Distribuidora Shopping $ 1,220 $ --
======== ========
CONTACT:
Fuel Systems Solutions, Inc.
Matthew Beale, President, CFO & Secretary
(714) 656-1300
Fuel Systems Solutions, Inc. reported results for its second quarter ended June 30, 2009.
Mariano Costamagna, Fuel Systems' CEO, said, "Our quarterly results demonstrate we are successfully executing our plan to be a leader in alternative fuel systems and complementary services for transportation and industrial vehicles. Our expanded delayed original equipment manufacturer (DOEM) capacity delivered record quarterly systems installations of 37,000 and our business is on track to exceed 120,000 conversions in 2009, more than doubling the nearly 58,000 conversions in 2008. Demand for alternative fuel vehicles is strong in Europe and will undoubtedly return worldwide as global markets improve. As such, during the quarter, we raised $30 million to continue to invest in opportunities in existing and adjacent businesses like our Teleflex Power Systems, Distribuidora Shopping S.A., and FuelMaker Corporation asset acquisitions and global automotive expansions."
Recent Operational Highlights
* Reached 37,000 DOEM conversions in the second quarter 2009, up from 30,000 conversions in the first quarter 2009.
* Completed the acquisition of Teleflex Power Systems for $14.5 million in August.
-- Two of Teleflex's Power Systems' three lines of business complement the global transportation and industrial businesses. The technology and testing equipment augment Fuel Systems' existing capabilities and the patents and certifications further build upon the company's intellectual property portfolio.
-- The third business, anti-idling auxiliary power units (APUs), expands the product line with solutions that generate power for parked heavy-duty class-8 trucks and diesel locomotives.
* Purchased compressed natural gas (CNG) refueling products, including the home appliance Phill(tm), for $7.0 million from FuelMaker Corporation in May, expanding Fuel Systems' ability to serve consumers, small-to-medium fleets and commercial fleets.
* Acquired the remaining minority interest of WMTM joint venture in Brazil further streamlining its corporate structure, and maximizing operating flexibility.
* Enhanced U.S. Automotive fleet strategy for liquid propane gas (LPG) and CNG vehicles by signing a non-exclusive distribution agreement with privately-held, CleanFUEL USA, to market and sell Fuel Systems' kits in the U.S. market.
Matthew Beale, Fuel Systems' President, CFO and Secretary, said, "Our DOEM business performed better than expected, which partially offset the impact of the global recession on our transportation aftermarket and industrial business. In fact, if the Euro to U.S. Dollar exchange rate had remained constant, our quarterly revenue would have been up slightly compared to last year. More notably, our DOEM business has achieved a critical mass that made an important contribution to the improvement of gross margins. These results combined with our acquisitions have driven us to increase annual revenue guidance to between $370 million to $380 million."
Recent Corporate Highlights
* Completed $30 million registered direct common stock offering for general corporate purposes and to help fund its growth strategy.
* Appointed Mike Helfand, Senior Vice President Finance and Chief Accounting Officer, and named Matthew Beale Chief Financial Officer in addition to President and Secretary.
* Announced corporate headquarters' relocation to New York City to increase efficiencies managing global operations.
Financial Results
Revenue for the second quarter of 2009 was $92.3 million, compared to $98.3 million in the second quarter of 2008. The decrease in revenues was due to negative foreign exchange impact of approximately $10.2 million, or 10%. The increase in transportation DOEM revenue offset the lower demand in the industrial market. Gross profit for the second quarter 2009 was $28.6 million, or 31% of revenue, compared to $28.6 million, or 29% of revenue, a year ago, reflecting the operating efficiencies achieved by reaching a critical mass. Operating income for the second quarter of 2009 totaled $12.5 million, or 14% of revenue, compared to $10.2 million, or 10% of revenue, in the second quarter of 2008. Net income for the second quarter 2009 was $7.4 million, or $0.46 per diluted share, compared to $4.6 million, $0.29 per diluted share, which included a non-cash goodwill impairment charge of $3.9 million, in the second quarter of 2008.
For the six-month period ending June 30, 2009, total revenues were $172.4 million, compared to $192.9 million for the first half of 2008. Net income for the first half of 2009 was $14.5 million, or $0.90 per diluted share, compared to $10.8 million, including the impairment charge of $3.9 million, or $0.69 per diluted share, for the first half of 2008.
Company Outlook
Based on the current market outlook, margin improvements and acquisitions, the company expects 2009 revenue to be between $370 million and $380 million. The company is targeting 2009 gross margin between 28% and 30% and 2009 operating margin to be between 11% and 13%.
Conference Call
The company will host a conference call on August 7th at 8:00 a.m. Pacific Time / 11:00 a.m. Eastern Time to discuss its second quarter 2009 financial results. To listen to the call live, please dial 877-356-8063 at least 10 minutes before the start of the conference. International participants may dial 706-679-2544. The pass code for the conference call will be 18966890. The call is also being webcast and can be accessed from the "Investor Relations" section of the company's website at www.fuelsystemssolutions.com. A telephone replay will be available until midnight ET on August 21st by dialing 800-642-1687 or 706-645-9291 and entering pass code 18966890#. A replay will also be available at the web address above for 90 days.
Forward-Looking Statements
This press release contains certain forward-looking statements that involve risks and uncertainties, including, without limitation, expressed or implied statements concerning the company's sales and its ability to achieve 2009 revenue between $370 million and $380 million with gross profit margin between 28 percent and 30 percent and operating margin between 11 percent and 13 percent, as well as the success of products and the success and integration of recent acquisitions. Such statements represent only our opinions and predictions. The Company's actual results may differ materially. Factors that may cause the Company's results to differ include, but are not limited to, risks that we cannot integrate the acquired assets into our business promptly and efficiently, that the patents or certifications acquired are insufficient or not useable by us, that expected sales do not materialize, that changes in emissions regulations may not significantly increase demand for the Company's products, the global economic downturn may reduce customers' demand for new automobiles and/or our products, and that all closing conditions will be met, original equipment automobile manufacturers do not adopt the Company's fuel systems as expected, that expected sales not based on long-term contracts will materialize, that changes in emissions regulations will not significantly impact demand for the Company's products, that a global economic downturn may reduce customers' demand for our products, that reduction in oil prices will reduce the demand for our products and that currency fluctuations will reduce our revenue or financial condition. Readers also should consider the risk factors set forth in the Company's reports filed with the Securities and Exchange Commission, including, but not limited to, those contained in the "Risk Factors" section of the Company's Annual Report on Form 10-K, for the year ended December 31, 2008. The Company does not undertake to update or revise any of its forward-looking statements or guidance even if experience or future changes show that the indicated results or events will not be realized.
About Fuel Systems Solutions
Fuel Systems Solutions (Nasdaq:FSYS) is a leading designer, manufacturer and supplier of proven, cost-effective alternative fuel components and systems for use in transportation and industrial applications. Fuel Systems' components and systems control the pressure and flow of gaseous alternative fuels, such as propane and natural gas, used in internal combustion engines. These components and systems feature the company's advanced fuel system technologies, which improve efficiency, enhance power output and reduce emissions by electronically sensing and regulating the proper proportion of fuel and air required by the internal combustion engine. In addition to the components and systems, the company provides engineering and systems integration services to address unique customer requirements for performance, durability and configuration. The company is composed of two operating subsidiaries: IMPCO Technologies and BRC. IMPCO Technologies is a leader in the heavy duty, industrial, power generation and stationary engines sectors. BRC is a leader in the light duty and automobile alternative fuel sectors and has established alliances with several major automobile manufacturers for OEM projects. Additional information is available at www.fuelsystemssolutions.com.
FUEL SYSTEMS SOLUTIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
June 30, Dec. 31,
2009 2008
-------- --------
ASSETS
Current assets:
Cash and cash equivalents $ 53,051 $ 26,477
Accounts receivable less allowance for doubtful
accounts of $5,709 and $3,293 at June 30, 2009
and December 31, 2008, respectively 91,203 70,009
Inventories:
Raw materials and parts 42,034 38,925
Work-in-process 1,021 1,700
Finished goods 51,195 50,253
Inventory on consignment with unconsolidated
affiliates 629 1,732
-------- --------
Total inventories 94,879 92,610
Deferred tax assets, net 5,518 5,734
Other current assets 6,522 5,749
Related party receivables 176 69
-------- --------
Total current assets 251,349 200,648
-------- --------
Equipment and leasehold improvements:
Dies, molds and patterns 4,141 3,889
Machinery and equipment 32,914 25,996
Office furnishings and equipment 12,386 11,198
Automobiles and trucks 2,783 2,235
Leasehold improvements 9,096 8,098
-------- --------
61,320 51,416
Less accumulated depreciation and amortization 27,210 23,744
-------- --------
Net equipment and leasehold improvements 34,110 27,672
Goodwill 49,519 41,295
Deferred tax assets, net 242 174
Intangible assets, net 19,151 10,021
Investment in unconsolidated affiliates 3,451 3,334
Other assets 2,525 4,183
-------- --------
Total Assets $360,347 $287,327
======== ========
FUEL SYSTEMS SOLUTIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
June 30, Dec. 31,
2009 2008
-------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 41,287 $ 65,224
Accrued expenses 52,942 34,212
Current revolving lines of credit 12,212 2,413
Current portion of term loans and other loans 8,043 4,470
Current portion of capital leases 266 192
Deferred tax liabilities, net 11 112
Related party payables 6,982 11,263
-------- --------
Total current liabilities 121,743 117,886
Term loans and other loans 21,301 4,689
Capital leases 181 238
Other liabilities 6,092 6,258
Deferred tax liabilities 6,806 4,301
-------- --------
Total liabilities 156,123 133,372
-------- --------
Stockholders' equity:
Preferred stock, $0.001 par value, authorized
1,000,000 shares; none issued and outstanding at
June 30, 2009 and December 31, 2008 -- --
Common stock, $0.001 par value, authorized
200,000,000 shares; 17,597,095 issued and
17,582,062 outstanding at June 30, 2009; and
15,801,745 issued and 15,749,783 outstanding at
December 31, 2008 18 16
Additional paid-in capital 257,144 220,270
Shares held in treasury, 15,033 and 51,962 shares
at June 30, 2009 and December 31, 2008,
respectively (649) (1,399)
Accumulated deficit (64,889) (79,354)
Accumulated other comprehensive income 12,600 14,422
-------- --------
Total stockholders' equity 204,224 153,955
-------- --------
Total Liabilities and Stockholders' Equity $360,347 $287,327
======== ========
FUEL SYSTEMS SOLUTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share and per share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------------ ------------------------
2009 2008 2009 2008
----------- ----------- ----------- -----------
Revenue $ 92,323 $ 98,284 $ 172,405 $ 192,884
Cost of revenue 63,698 69,704 119,443 136,820
----------- ----------- ----------- -----------
Gross profit 28,625 28,580 52,962 56,064
Operating expenses:
Research and
development
expense 3,303 2,702 6,214 5,530
Selling, general
and
administrative
expense 12,699 11,659 22,658 22,830
Goodwill
impairment loss -- 3,907 -- 3,907
Amortization
of intangible
assets 144 98 253 191
----------- ----------- ----------- -----------
Total operating
expenses 16,146 18,366 29,125 32,458
----------- ----------- ----------- -----------
Operating income 12,479 10,214 23,837 23,606
Other income
(expense), net 836 (43) 1,552 (1,164)
Interest expense,
net (524) (200) (908) (392)
----------- ----------- ----------- -----------
Income before
income taxes and
equity share in
income (loss) of
unconsolidated
affiliates 12,791 9,971 24,481 22,050
Equity share in
income (loss) of
unconsolidated
affiliates 193 (91) 306 77
Income tax expense (5,589) (4,878) (10,322) (10,418)
----------- ----------- ----------- -----------
Net income 7,395 5,002 14,465 11,709
Less: Net income
attributable to
noncontrolling
interests -- 394 -- 875
----------- ----------- ----------- -----------
Net income
attributable to
Fuel Systems $ 7,395 $ 4,608 $ 14,465 $ 10,834
=========== =========== =========== ===========
Net income per
share
attributable
to Fuel Systems:
Basic $ 0.46 $ 0.30 $ 0.90 $ 0.70
=========== =========== =========== ===========
Diluted $ 0.46 $ 0.29 $ 0.90 $ 0.69
=========== =========== =========== ===========
Number of shares
used in per share
calculation:
Basic 16,160,857 15,611,190 16,092,091 15,565,358
=========== =========== =========== ===========
Diluted 16,223,095 15,749,806 16,159,752 15,692,418
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FUEL SYSTEMS SOLUTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended
June 30,
------------------
2009 2008
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Net income $ 14,465 $ 11,709
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization expense 3,699 3,180
Amortization of intangibles 1,902 1,456
Provision for doubtful accounts (171) 121
Provision for inventory reserve 2,658 1,041
Provision for loan to unconsolidated affiliate -- 1,091
Goodwill impairment loss -- 3,907
Equity share in income of unconsolidated
affiliates (298) (77)
Dividends from unconsolidated affiliates 196 230
Unrealized (gain) loss on foreign exchange (1,389) 1,094
Loss on disposal of asset 41 79
Stock-based compensation expense 101 191
Changes in assets and liabilities:
Increase in accounts receivable (18,495) (10,370)
(Increase) decrease in inventory 3,872 (15,220)
(Increase) decrease in other current assets 301 (2,432)
Increase (decrease) in deferred income taxes (90) (1,560)
Increase (decrease) in accounts payable (25,528) 13,471
Increase in accrued expenses 14,391 12,745
Decrease in other assets 344 10
Increase (decrease) in long term liabilities (338) 685
Receivables from/payables to related party, net (3,172) 3,911
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Net cash (used in) provided by operating activities (7,511) 25,262
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Cash flows from investing activities:
Purchase of equipment and leasehold improvements (6,706) (4,950)
Purchase of noncontrolling interest in
consolidated subsidiary -- (227)
Investment in joint venture 10 --
Acquisitions, net of cash acquired of $0.7 million (12,615) --
Purchase of intangible asset -- (193)
Proceeds from sale of assets 35 3
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Net cash used in investing activities (19,276) (5,367)
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Cash flows from financing activities:
Borrowing (Payment) on revolving lines of
credit, net 9,359 (3,307)
Payments on term loans (3,967) (2,045)
Proceeds from term loans 19,757 --
Payment of capital lease obligations (202) (247)
Proceeds from issuance of common stock, net of
expenses of $2.3 million 27,713 --
Proceeds from exercise of stock options
and warrants -- 1,466
(Purchase of)/proceeds from the sale of common
shares held in trust, net (28) (72)
Dividends paid to noncontrolling interest in
consolidated subsidiaries -- (900)
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Net cash provided by (used in) financing activities 52,632 (5,105)
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Net increase in cash 25,845 14,790
Effect of exchange rate changes on cash 729 2,056
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Net increase in cash and cash equivalents 26,574 16,846
Cash and cash equivalents at beginning of period 26,477 26,797
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Cash and cash equivalents at end of period $ 53,051 $ 43,643
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Supplemental disclosure of cash flow information:
Non-cash financing activities:
Acquisition of equipment under capital lease $ -- $ 20
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Issuance of 1,382 shares and 5,321 shares of
restricted stock in 2009 and 2008, respectively $ 15 $ 99
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Issuance of 282,932 shares of common stock for the
acquisition of Distribuidora Shopping $ 8,654 $ --
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Issuance of 39,868 shares from treasury stock for
the acquisition of Distribuidora Shopping $ 1,220 $ --
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CONTACT:
Fuel Systems Solutions, Inc.
Matthew Beale, President, CFO & Secretary
(714) 656-1300