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Highlights:
- Integration of ASC Industries with historical water pump operations on track
- Strategic initiatives provide additional operational improvements
- Repayment of $30 million of debt in October using cash flow from operations
EVANSVILLE, IN November 15, 2006 – United Components, Inc. (“UCI”) today announced results for the third quarter ended September 30, 2006. Revenue of $252.4 million increased $28.5 million compared to the year-ago quarter. The quarter included $25.3 million in sales by water pump manufacturer ASC Industries, which was acquired by UCI during the second quarter. The company reported revenue increases in the retail, OEM and heavy duty channels, and declines in the original equipment service and traditional channels.
Net income for the quarter was $2.1 million, including $6.9 million ($4.3 million net of tax) in special charges, primarily costs related to the acquisition of ASC and facilities consolidation costs. Excluding these charges, adjusted net income would have been $6.4 million for the quarter. Adjusted net income for the third quarter of 2005 was $6.6 million, excluding a $0.6 million special charge.
Earnings before interest, taxes, depreciation and amortization, or EBITDA, for UCI’s continuing operations, as adjusted consistent with the company’s historical presentations, was $34.6 million for the third quarter, compared with $29.6 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.
“This was an important quarter for United Components, as we took significant steps to integrate our historical water pump operations with ASC Industries, and continued our initiatives to streamline our business and make operational improvements,” said Bruce Zorich, Chief Executive Officer of UCI. “The water pump integration is right on track, with the combination of the distribution operations being completed ahead of schedule, and the manufacturing integration now underway and on schedule. We are well on the way toward delivering our expected cost savings in the quarters ahead.”
“In addition, the strategic initiatives we have undertaken over the past several quarters have allowed our core business to show continuing improvement in our operating results, even as the overall market is showing softness,” continued Zorich. “These initiatives include targeted new business wins, additional cost reduction projects and consolidation of manufacturing and distribution facilities. We are working to continue this progress and, leveraging ASC’s China operations, expand UCI into an efficient global manufacturer.”
As of September 30, the company’s debt stood at $532.7 million. The company ended the quarter with $41.4 million in cash. In addition, on October 27, the company repaid $30 million of its senior credit facility borrowings with cash flow from operations.
Conference Call
UCI will host a conference call to discuss its results and performance on Thursday, November 16, 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 November 17, 2006, 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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