Exhibit 99.1
Delco Remy International, Inc. Reclassified 2002 and 2001 Unaudited, Condensed
Consolidated Financial Statements
Delco Remy International, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
Unaudited
(dollars in thousands)
December 31, | ||||||||
2002 | 2001 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 12,426 | $ | 22,584 | ||||
Trade accounts receivable, net | 142,972 | 149,725 | ||||||
Other receivables | 11,594 | 8,767 | ||||||
Inventories | 281,024 | 276,098 | ||||||
Deferred income taxes | 14,423 | 21,175 | ||||||
Assets of discontinued operations | 40,493 | 92,856 | ||||||
Other current assets | 15,317 | 12,794 | ||||||
Total current assets | 518,249 | 583,999 | ||||||
Property and equipment | 290,035 | 273,682 | ||||||
Less accumulated depreciation | (132,995 | ) | (111,453 | ) | ||||
Property and equipment, net | 157,040 | 162,229 | ||||||
Deferred financing costs, net | 17,268 | 12,640 | ||||||
Goodwill, net | 118,962 | 157,682 | ||||||
Investments in joint ventures | 11,891 | 11,144 | ||||||
Deferred income taxes | 13,013 | 10,476 | ||||||
Other assets | 16,396 | 9,061 | ||||||
Total assets | $ | 852,819 | $ | 947,231 | ||||
Liabilities and stockholders’ deficit: | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 138,515 | $ | 126,603 | ||||
Accrued interest | 9,743 | 10,100 | ||||||
Accrued restructuring charges | 5,161 | 16,370 | ||||||
Liabilities of discontinued operations | 17,244 | 14,082 | ||||||
Other liabilities and accrued expenses | 65,482 | 55,338 | ||||||
Current debt | 30,190 | 6,771 | ||||||
Total current liabilities | 266,335 | 229,264 | ||||||
Long-term debt | 596,382 | 593,178 | ||||||
Post-retirement benefits other than pensions | 23,553 | 25,812 | ||||||
Accrued pension benefits | 14,427 | 10,216 | ||||||
Accrued restructuring charges | 4,651 | 9,499 | ||||||
Other non-current liabilities | 12,285 | 6,655 | ||||||
Commitments and contingencies | ||||||||
Minority interest in subsidiaries | 17,850 | 30,107 | ||||||
Redeemable preferred stock | 274,074 | 244,699 | ||||||
Stockholders’ deficit: | ||||||||
Common stock | 3 | 3 | ||||||
Retained deficit | (340,673 | ) | (178,762 | ) | ||||
Accumulated other comprehensive loss | (16,068 | ) | (23,440 | ) | ||||
Total stockholders’ deficit | (356,738 | ) | (202,199 | ) | ||||
Total liabilities and stockholders’ deficit | $ | 852,819 | $ | 947,231 | ||||
Delco Remy International, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
Unaudited
(dollars in thousands)
Three Month Period Ended | Year Ended December 31, | |||||||||||||||||||||||
3/31/02 | 6/30/02 | 9/30/02 | 12/31/02 | 2002 | 2001 | |||||||||||||||||||
Net sales | $ | 248,738 | $ | 269,960 | $ | 257,799 | $ | 250,448 | $ | 1,026,945 | $ | 967,876 | ||||||||||||
Cost of goods sold | 205,612 | 223,904 | 213,782 | 215,472 | 858,770 | 790,632 | ||||||||||||||||||
Special charges—cost of goods sold | — | — | — | — | — | 13,945 | ||||||||||||||||||
Gross profit | 43,126 | 46,056 | 44,017 | 34,976 | 168,175 | 163,299 | ||||||||||||||||||
Selling, general and administrative expenses | 22,969 | 24,423 | 24,874 | 25,385 | 97,651 | 98,413 | ||||||||||||||||||
Special charges—selling, general and administrative expenses | — | — | — | — | — | 16,081 | ||||||||||||||||||
Restructuring (credits) charges | (4,375 | ) | — | — | — | (4,375 | ) | 30,098 | ||||||||||||||||
Operating income | 24,532 | 21,633 | 19,143 | 9,591 | 74,899 | 18,707 | ||||||||||||||||||
Interest expense, net | (13,876 | ) | (15,480 | ) | (12,889 | ) | (14,171 | ) | (56,416 | ) | (50,800 | ) | ||||||||||||
Non-recurring merger and tender offer expenses | — | — | — | — | — | (4,194 | ) | |||||||||||||||||
Income (loss) from continuing operations before income taxes, minority interest, loss from unconsolidated joint ventures and cumulative effect of change in accounting principle | 10,656 | 6,153 | 6,254 | (4,580 | ) | 18,483 | (36,287 | ) | ||||||||||||||||
Income tax expense (benefit) | 3,430 | 2,415 | 2,190 | 467 | 8,502 | (6,737 | ) | |||||||||||||||||
Minority interest | (1,803 | ) | (1,732 | ) | (1,286 | ) | 576 | (4,245 | ) | (9,254 | ) | |||||||||||||
Loss from unconsolidated joint ventures | (1,200 | ) | (270 | ) | (1,230 | ) | (1,130 | ) | (3,830 | ) | (2,925 | ) | ||||||||||||
Net income (loss) from continuing operations before cumulative effect of change in accounting principle | 4,223 | 1,736 | 1,548 | (5,601 | ) | 1,906 | (41,729 | ) | ||||||||||||||||
Discontinued operations: | ||||||||||||||||||||||||
Loss from discontinued operations, net of tax | (3,322 | ) | (6,387 | ) | (12,556 | ) | (9,753 | ) | (32,018 | ) | (30,918 | ) |
Loss on disposal of business, net of tax | — | (22,933 | ) | (3,539 | ) | (1,776 | ) | (28,248 | ) | — | ||||||||||||||
Total loss from discontinued operations, net of tax | (3,322 | ) | (29,320 | ) | (16,095 | ) | (11,529 | ) | (60,266 | ) | (30,918 | ) | ||||||||||||
Cumulative effect of change in accounting principle, net | (74,176 | ) | — | — | — | (74,176 | ) | — | ||||||||||||||||
Net loss | (73,275 | ) | (27,584 | ) | (14,547 | ) | (17,130 | ) | (132,536 | ) | (72,647 | ) | ||||||||||||
Preferred dividends | 6,759 | 7,623 | 7,427 | 7,566 | 29,375 | 20,971 | ||||||||||||||||||
Net loss attributable to common stockholders | $ | (80,034 | ) | $ | (35,207 | ) | $ | (21,974 | ) | $ | (24,696 | ) | $ | (161,911 | ) | $ | (93,618 | ) | ||||||
EBITDA: | ||||||||||||||||||||||||
Income (loss) before tax | $ | 10,656 | $ | 6,153 | $ | 6,254 | $ | (4,580 | ) | $ | 18,483 | $ | (36,287 | ) | ||||||||||
Interest expense, net | 13,876 | 15,480 | 12,889 | 14,171 | 56,416 | 50,800 | ||||||||||||||||||
Depreciation and amortization | 6,387 | 6,710 | 6,767 | 7,422 | 27,286 | 30,375 | ||||||||||||||||||
Restructuring (credits) charges | (4,375 | ) | — | — | — | (4,375 | ) | 30,098 | ||||||||||||||||
Special charges | — | — | — | — | — | 30,026 | ||||||||||||||||||
EBITDA | $ | 26,544 | $ | 28,343 | $ | 25,910 | $ | 17,013 | $ | 97,810 | $ | 105,012 | ||||||||||||
EBITDA is not a measure of performance under accounting principles generally accepted in the United States (GAAP). The Company believes EBITDA is a meaningful measure of performance that is commonly utilized in the industry to analyze operating performance, liquidity and entity valuation. EBITDA should not be construed as income from operations, net income or net cash flow from operating activities as determined by GAAP.
Delco Remy International, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
Unaudited
(dollars in thousands)
Three Month Period Ended 3/31/02 | Six Month Period Ended 6/30/02 | Nine Month Period Ended 9/30/02 | Year Ended December 31, | |||||||||||||||||
2002 | 2001 | |||||||||||||||||||
Operating activities: | ||||||||||||||||||||
Net loss | $ | (73,275 | ) | $ | (100,859 | ) | $ | (115,406 | ) | $ | (132,536 | ) | $ | (72,647 | ) | |||||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||||||||||||
Cumulative effect of change in accounting principle | 74,176 | 74,176 | 74,176 | 74,176 | — | |||||||||||||||
Loss from discontinued operations | 3,322 | 9,709 | 22,265 | 32,018 | 30,918 | |||||||||||||||
Loss on disposal of discontinued operations | — | 22,933 | 26,472 | 28,248 | — | |||||||||||||||
Depreciation | 6,365 | 13,025 | 19,462 | 26,029 | 24,371 | |||||||||||||||
Amortization | 22 | 72 | 402 | 1,257 | 6,004 | |||||||||||||||
Minority interest | 1,803 | 3,535 | 4,821 | 4,245 | 9,254 | |||||||||||||||
Loss from unconsolidated joint ventures | 1,200 | 1,470 | 2,700 | 3,830 | 2,925 | |||||||||||||||
Deferred income taxes | 2,030 | (1,682 | ) | 2,238 | 4,788 | (26,700 | ) | |||||||||||||
Post-retirement benefits other than pensions | (3,803 | ) | (3,143 | ) | (2,259 | ) | (2,259 | ) | 3,018 | |||||||||||
Accrued pension benefits | 780 | 83 | (944 | ) | 4,211 | �� | 5,792 | |||||||||||||
Non-cash interest expense | 588 | 1,566 | 2,663 | 4,093 | 1,802 | |||||||||||||||
Changes in operating assets and liabilities, net of acquisitions and non-cash special charges: | ||||||||||||||||||||
Accounts receivable | (15,276 | ) | (28,996 | ) | (23,389 | ) | 6,753 | (15,615 | ) | |||||||||||
Inventories | (2,582 | ) | (4,195 | ) | (5,225 | ) | (4,440 | ) | (5,583 | ) | ||||||||||
Accounts payable | 11,751 | 29,170 | 5,216 | 11,912 | (8,888 | ) | ||||||||||||||
Other current assets and liabilities | 6,448 | 3,806 | 14,533 | 4,184 | 730 | |||||||||||||||
Restructuring (credits) charges | (4,375 | ) | (4,375 | ) | (4,375 | ) | (4,375 | ) | 30,098 | |||||||||||
Cash payments for restructuring charges | (6,868 | ) | (9,312 | ) | (13,806 | ) | (15,815 | ) | (6,227 | ) | ||||||||||
Non-cash special charges | — | — | — | — | 30,026 | |||||||||||||||
Other non-current assets and liabilities, net | (670 | ) | (1,233 | ) | (159 | ) | (1,063 | ) | 5,246 | |||||||||||
Net cash provided by operating activities of continuing operations | 1,636 | 5,750 | 9,385 | 45,256 | 14,524 | |||||||||||||||
Investing activities: | ||||||||||||||||||||
Acquisitions, net of cash acquired | (7,324 | ) | (7,399 | ) | (13,918 | ) | (17,258 | ) | (28,888 | ) | ||||||||||
Purchases of property and equipment | (3,497 | ) | (9,147 | ) | (13,474 | ) | (19,176 | ) | (18,538 | ) | ||||||||||
Investments in joint ventures | (2,000 | ) | (3,000 | ) | (3,000 | ) | (3,000 | ) | (8,662 | ) | ||||||||||
Net cash used in investing activities of continuing operations | (12,821 | ) | (19,546 | ) | (30,392 | ) | (39,434 | ) | (56,088 | ) | ||||||||||
Financing activities: | �� | |||||||||||||||||||
Proceeds from issuance of long-term debt | — | 144,769 | 144,769 | 144,769 | 157,291 | |||||||||||||||
Retirement of long-term debt | — | (144,769 | ) | (144,769 | ) | (144,769 | ) | (17,790 | ) | |||||||||||
Net borrowings (repayments) under revolving line of credit and other | 5,441 | 37,453 | 37,889 | 15,329 | (63,728 | ) | ||||||||||||||
Deferred financing costs | (1,408 | ) | (6,803 | ) | (8,011 | ) | (7,816 | ) | (5,561 | ) | ||||||||||
Merger and tender offer costs | — | — | — | — | (5,318 | ) | ||||||||||||||
Distributions to minority interests | — | (1,800 | ) | (1,800 | ) | (1,800 | ) | (762 | ) | |||||||||||
Net cash provided by financing activities of continuing operations | 4,033 | 28,850 | 28,078 | 5,713 | 64,132 | |||||||||||||||
Effect of exchange rate changes on cash | (60 | ) | 1,925 | 1,282 | 1,976 | (643 | ) | |||||||||||||
Cash flows of discontinued operations | (4,360 | ) | (6,703 | ) | (20,382 | ) | (23,669 | ) | (20,804 | ) | ||||||||||
Net (decrease) increase in cash and cash equivalents | (11,572 | ) | 10,276 | (12,029 | ) | (10,158 | ) | 1,121 | ||||||||||||
Cash and cash equivalents at beginning of period | 22,584 | 22,584 | 22,584 | 22,584 | 21,463 | |||||||||||||||
Cash and cash equivalents at end of period | $ | 11,012 | $ | 32,860 | $ | 10,555 | $ | 12,426 | $ | 22,584 | ||||||||||