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Highlights:
- Realignment of UCI continues with final divestiture of non-core business and acquisition and
ongoing integration of ASC Industries
- Strategic initiatives provide significant operational improvements
- Repayment of $30 million of debt during the quarter, and an additional $40 million in the first
quarter of 2007, using primarily cash flow from operations
EVANSVILLE, IN March 21, 2007 – United Components, Inc. (“UCI”) today announced results for the fourth quarter ended December 31, 2006. Revenue of $222.7 million increased $31.8 million compared to the year-ago quarter. The quarter included $20.5 million in sales by water pump manufacturer ASC Industries, which was acquired by UCI during the second quarter. On a comparable basis (excluding ASC sales), the company reported revenue increases in the retail and heavy duty channels, a decline in the OEM channel, with sales flat in the traditional and original equipment service channels.
On November 30, the company completed the sale of its Flexible Lamps lighting systems operations for about $39 million in cash. Flexible Lamps, as well as the company’s former Neapco and Pioneer operations that were sold in the second quarter, are accounted for as discontinued operations for all periods presented.
Net income from continuing operations for the quarter was $2.1 million, including $7.2 million ($4.5 million net of tax) in special charges, primarily costs related to the acquisition of ASC. Excluding these charges, adjusted net income from continuing operations would have been $6.6 million for the quarter. Adjusted net income from continuing operations for the fourth quarter of 2005 was $1.8 million, excluding $20.2 million in special charges net of tax.
Earnings before interest, taxes, depreciation and amortization, or EBITDA, for UCI’s continuing operations, as adjusted consistent with the company’s historical presentations, was $30.7 million for the fourth quarter, compared with $24.8 million for 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.
“United Components finished 2006 on a strong note, both operationally and strategically,” said Bruce Zorich, Chief Executive Officer of UCI. “In a very competitive market, our initiatives in facilities consolidation, procurement and targeted revenue growth allowed us to achieve an improvement in performance over last year. Strategically, with the divestiture of our last non-core business, Flexible Lamps, and the continued success of our integration of ASC, we believe the new UCI is well positioned for growth in 2007 and beyond.”
“As we head into 2007, we are focused on expanding UCI into an efficient global manufacturer,” continued Zorich. “Building on our ongoing targeted new business efforts in North America, we have identified a number of international opportunities for sales growth. In addition, continuing to leverage ASC’s China operations, we are working on global sourcing and manufacturing initiatives across all of our businesses.”
As of December 31, the company’s debt stood at $500.6 million, after a debt repayment of $30 million of its senior credit facility borrowings in October. The company ended the quarter with $31.5 million in cash. In addition, during the first quarter of 2007, the company has repaid an additional $40 million of its senior credit facility borrowings, primarily with cash flow from operations.
For the full year 2006, revenue was $906.1 million. Net income from continuing operations was $6.1 million for 2006, including $18.8 million in special charges net of tax, primarily costs relating to the acquisition of ASC and facilities consolidation costs, compared to a net loss from continuing operations of $7.6 million for 2005, including $22.9 million in special charges net of tax, primarily related to impairment write-downs of a trademark, software assets and property and equipment. EBITDA, as adjusted consistent with the company’s historical presentations, was $122.1 million for 2006 and $103.2 million for 2005.
Conference Call
UCI will host a conference call to discuss its results and performance on Thursday, March 22, 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 (641) 297-7667.
A replay of the call will be available here from March 23, 2007, for a ninety-day period.
About United Components, Inc
United Components, 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, including those discussed in Item 1A of UCI’s 2005 Annual Report on Form 10-K and in its other SEC filings, 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.
For More Information, Contact:
Charlie Dickson, Chief Financial Officer (812) 867-4726
Dave Barron, (812) 867-4727
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