Exhibit 99.1
Remy International, Inc.
Unaudited Pro Forma Condensed Consolidated Financial Information
Following are the unaudited pro forma condensed consolidated statements of operations of Remy International, Inc. for the six months ended June 30, 2004 and the years ended December 31, 2003, December 31, 2002 and December 31, 2001 and the unaudited pro forma condensed consolidated balance sheet of Remy International, Inc. at June 30, 2004. The unaudited pro forma condensed consolidated statements of operations give effect to the disposition of Williams Technologies, Inc. and JAX Reman, L.L.C. and the planned disposition of AutoMatic Transmission International A/S as if they had occurred on January 1, 2001. The unaudited pro forma condensed consolidated balance sheet gives effect to these actions as if they had occurred on June 30, 2004.
The unaudited pro forma condensed consolidated statements of operations and balance sheet were derived by adjusting the historical financial statements of Remy International, Inc. The adjustments are based on currently available information and, therefore, the actual effects of the above transactions may differ from the pro forma adjustments. However, management believes that the assumptions provide a reasonable basis for presenting the significant effects of the disposition of Williams Technologies, Inc. and JAX Reman, L.L.C. and the planned disposition of AutoMatic Transmission International A/S. The pro forma adjustments give appropriate effect to those assumptions and are properly applied in the unaudited pro forma condensed consolidated statements of operations and pro forma condensed consolidated balance sheet.
The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the notes thereto and Remy International, Inc.’s audited financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2003 and the unaudited financial statements included in its Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2004.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
IN THOUSANDS, For the six months ended June 30, 2004 | Historical | Pro Forma Adjustments | Pro Forma | |||||||||||
Sale of Businesses (a) | Business Held for Sale (b) | |||||||||||||
Net sales | $ | 588,765 | $ | (46,972 | ) | $ | (733 | ) | $ | 541,060 | ||||
Cost of goods sold | 478,411 | (40,788 | ) | (1,126 | ) | 436,497 | ||||||||
Gross profit / loss | 110,354 | (6,184 | ) | 393 | 104,563 | |||||||||
Selling, general and administrative expenses | 57,401 | (722 | ) | (436 | ) | 56,243 | ||||||||
Restructuring charges | 1,795 | (421 | ) | — | 1,374 | |||||||||
Operating income / loss | 51,158 | (5,041 | ) | 829 | 46,946 | |||||||||
Interest expense, net | 33,416 | (2,988 | ) | (258 | ) | 30,170 | ||||||||
Loss on early extinguishment of debt | 7,939 | — | — | 7,939 | ||||||||||
Income / loss from continuing operations before income taxes, minority interest and loss from unconsolidated joint ventures | 9,803 | (2,053 | ) | 1,087 | 8,837 | |||||||||
Income tax expense | 1,147 | (63 | )(c) | — | (d) | 1,084 | ||||||||
Minority interest | 1,370 | — | — | 1,370 | ||||||||||
Loss from unconsolidated joint ventures | 768 | — | — | 768 | ||||||||||
Net income / loss from continuing operations | $ | 6,518 | $ | (1,990 | ) | $ | 1,087 | $ | 5,615 | |||||
(a) | Represents the combined historical statements of operations of Williams Technologies, Inc. and JAX Reman, L.L.C. |
(b) | Represents the historical statement of operations of AutoMatic Transmission International A/S. |
(c) | The income tax provision of the disposed operations reflects state and local income taxes. The Company established a valuation allowance for domestic U.S. deferred tax assets in 2003 which resulted in no domestic U.S. provision on 2004 domestic income. |
(d) | No income tax benefit was provided on losses in the business held for sale. |
Unaudited Pro Forma Condensed Consolidated Statement of Operations
IN THOUSANDS, For the year ended December 31, 2003 | Historical | Pro Forma Adjustments | Pro Forma | |||||||||||||
Sale of Businesses (a) | Business Held for Sale (b) | |||||||||||||||
Net sales | $ | 1,053,239 | $ | (79,423 | ) | $ | (1,022 | ) | $ | 972,794 | ||||||
Cost of goods sold | 865,403 | (72,625 | ) | (1,456 | ) | 791,322 | ||||||||||
Cost of goods sold - special charges: | ||||||||||||||||
Core inventory valuation | 104,113 | (183 | ) | — | 103,930 | |||||||||||
Mexican arbitration award | 14,310 | — | — | 14,310 | ||||||||||||
Gross profit / loss | 69,413 | (6,615 | ) | 434 | 63,232 | |||||||||||
Selling, general and administrative expenses | 98,671 | (1,363 | ) | (538 | ) | 96,770 | ||||||||||
Restructuring charges | 49,508 | (540 | ) | — | 48,968 | |||||||||||
Operating income / loss | (78,766 | ) | (4,712 | ) | 972 | (82,506 | ) | |||||||||
Interest expense, net | 62,151 | (6,343 | ) | (354 | ) | 55,454 | ||||||||||
Loss from continuing operations before income taxes, minority interest and loss from unconsolidated joint ventures | (140,917 | ) | 1,631 | 1,326 | (137,960 | ) | ||||||||||
Income tax expense | 36,814 | (132 | )(c) | — | (d) | 36,682 | ||||||||||
Minority interest | (143 | ) | — | — | (143 | ) | ||||||||||
Loss from unconsolidated joint ventures | 6,427 | — | — | 6,427 | ||||||||||||
Net loss from continuing operations | $ | (184,015 | ) | $ | 1,763 | $ | 1,326 | $ | (180,926 | ) | ||||||
(a) | Represents the combined historical statements of operations of Williams Technologies, Inc. and JAX Reman, L.L.C. |
(b) | Represents the historical statement of operations of AutoMatic Transmission International A/S. |
(c) | The income tax provision of the disposed operations reflects state and local income taxes. The Company established a valuation allowance for domestic U.S. deferred tax assets in 2002 which resulted in no domestic U.S. provision on the 2003 domestic income of Williams Technologies, Inc. and JAX Reman, L.L.C. |
(d) | No income tax benefit was provided on losses in the business held for sale. |
Unaudited Pro Forma Condensed Consolidated Statement of Operations
IN THOUSANDS, For the year ended December 31, 2002 | Historical | Pro Forma Adjustments | Pro Forma | |||||||||||||
Sale of Businesses (a) | Business Held for Sale (b) | |||||||||||||||
Net sales | $ | 1,026,945 | $ | (93,691 | ) | $ | (618 | ) | $ | 932,636 | ||||||
Cost of goods sold | 858,770 | (78,549 | ) | (1,245 | ) | 778,976 | ||||||||||
Gross profit / loss | 168,175 | (15,142 | ) | 627 | 153,660 | |||||||||||
Selling, general and administrative expenses | 97,651 | (2,512 | ) | (103 | ) | 95,036 | ||||||||||
Restructuring credit | (4,375 | ) | — | — | (4,375 | ) | ||||||||||
Operating income / loss | 74,899 | (12,630 | ) | 730 | 62,999 | |||||||||||
Interest expense, net | 56,416 | (5,724 | ) | (163 | ) | 50,529 | ||||||||||
Income / loss from continuing operations before income taxes, minority interest and loss from unconsolidated joint ventures | 18,483 | (6,906 | ) | 893 | 12,470 | |||||||||||
Income tax expense | 8,502 | (276 | )(c) | — | (d) | 8,226 | ||||||||||
Minority interest | 4,245 | — | — | 4,245 | ||||||||||||
Loss from unconsolidated joint ventures | 3,830 | — | — | 3,830 | ||||||||||||
Net income / loss from continuing operations | $ | 1,906 | $ | (6,630 | ) | $ | 893 | $ | (3,831 | ) | ||||||
(a) | Represents the combined historical statements of operations of Williams Technologies, Inc. and JAX Reman, L.L.C. |
(b) | Represents the historical statement of operations of AutoMatic Transmission International A/S. |
(c) | The income tax provision of the disposed operations reflects state and local income taxes. The Company established a valuation allowance for domestic U.S. deferred tax assets in 2001 which resulted in no domestic U.S. provision on the 2002 domestic income of Williams Technologies, Inc. and JAX Reman, L.L.C. |
(d) | No income tax benefit was provided on losses in the business held for sale. |
Unaudited Pro Forma Condensed Consolidated Statement of Operations
IN THOUSANDS, For the year ended December 31, 2001 | Historical | Pro Forma Adjustments | Pro Forma | |||||||||||||
Sale of Businesses (a) | Business Held for Sale (b) | |||||||||||||||
Net sales | $ | 967,876 | $ | (90,250 | ) | $ | (330 | ) | $ | 877,296 | ||||||
Cost of goods sold | 790,632 | (78,378 | ) | (490 | ) | 711,764 | ||||||||||
Cost of goods sold - special charges: | ||||||||||||||||
Unusual warranty cost | 13,945 | — | — | 13,945 | ||||||||||||
Gross profit / loss | 163,299 | (11,872 | ) | 160 | 151,587 | |||||||||||
Selling, general and administrative expenses | 98,413 | (769 | ) | (214 | ) | 97,430 | ||||||||||
Special charges - selling, general and administrative expenses | 16,081 | — | — | 16,081 | ||||||||||||
Restructuring charges | 30,098 | — | — | 30,098 | ||||||||||||
Operating income / loss | 18,707 | (11,103 | ) | 374 | 7,978 | |||||||||||
Interest expense, net | 50,800 | (4,675 | ) | (39 | ) | 46,086 | ||||||||||
Non-recurring merger and tender offer expenses | 4,194 | — | — | 4,194 | ||||||||||||
Income / loss from continuing operations before income taxes, minority interest and loss from unconsolidated joint ventures | (36,287 | ) | (6,428 | ) | 413 | (42,302 | ) | |||||||||
Income tax expense / benefit | (6,737 | ) | 1,472 | (c) | — | (d) | (5,265 | ) | ||||||||
Minority interest | 9,254 | — | — | 9,254 | ||||||||||||
Loss from unconsolidated joint ventures | 2,925 | — | — | 2,925 | ||||||||||||
Net income / loss from continuing operations | $ | (41,729 | ) | $ | (7,900 | ) | $ | 413 | $ | (49,216 | ) | |||||
(a) | Represents the combined historical statements of operations of Williams Technologies, Inc. and JAX Reman, L.L.C. |
(b) | Represents the historical statement of operations of AutoMatic Transmission International A/S. |
(c) | During 2001, the Company provided a significant valuation allowance on deferred tax assets. This adjustment reflects the effect of removing deferred tax liabilities of the disposed operations. |
(d) | No income tax benefit was provided on losses in the business held for sale. |
Unaudited Pro Forma Condensed Consolidated Balance Sheet
IN THOUSANDS, At June 30, 2004 | Historical | Pro Forma Adjustments | Pro Forma | |||||||||||||
Sale of Businesses (a) | Business Held for Sale (d) | |||||||||||||||
Assets: | ||||||||||||||||
Current assets: | ||||||||||||||||
Cash and cash equivalents | $ | 23,184 | $ | 101,893 | (b) | $ | (153 | ) | $ | 124,924 | ||||||
Trade accounts receivable, net | 173,349 | (10,475 | ) | (163 | ) | 162,711 | ||||||||||
Other receivables | 14,967 | (235 | ) | (34 | ) | 14,698 | ||||||||||
Inventories | 237,319 | (23,326 | ) | (687 | ) | 213,306 | ||||||||||
Assets of discontinued operations | — | 650 | 686 | 1,336 | ||||||||||||
Other current assets | 11,394 | (227 | ) | (14 | ) | 11,153 | ||||||||||
Total current assets | 460,213 | 68,280 | (365 | ) | 528,128 | |||||||||||
Property, plant and equipment | 321,658 | (18,998 | ) | (386 | ) | 302,274 | ||||||||||
Less accumulated depreciation | 186,423 | (8,775 | ) | (251 | ) | 177,397 | ||||||||||
Property, plant and equipment, net | 135,235 | (10,223 | ) | (135 | ) | 124,877 | ||||||||||
Deferred financing costs, net | 16,757 | — | — | 16,757 | ||||||||||||
Goodwill, net | 138,073 | (31,709 | ) | — | 106,364 | |||||||||||
Investments in joint ventures | 5,455 | — | — | 5,455 | ||||||||||||
Other assets | 20,234 | (75 | ) | — | 20,159 | |||||||||||
Total assets | $ | 775,967 | $ | 26,273 | $ | (500 | ) | $ | 801,740 | |||||||
Liabilities and Stockholders’ Deficit: | ||||||||||||||||
Current liabilities: | ||||||||||||||||
Accounts payable | $ | 180,656 | $ | (14,973 | ) | $ | (89 | ) | $ | 165,594 | ||||||
Accrued interest | 7,428 | — | — | 7,428 | ||||||||||||
Accrued restructuring | 5,260 | (252 | ) | — | 5,008 | |||||||||||
Liabilities of discontinued operations | 906 | 866 | 1,583 | 3,355 | ||||||||||||
Other liabilities and accrued expenses | 115,670 | (4,740 | ) | (105 | ) | 110,825 | ||||||||||
Current maturities of long-term debt | 24,161 | — | — | 24,161 | ||||||||||||
Total current liabilities | 334,081 | (19,099 | ) | 1,389 | 316,371 | |||||||||||
Long-term debt, net of current portion | 647,301 | — | (89 | ) | 647,212 | |||||||||||
Post retirement benefits other than pensions | 16,806 | — | — | 16,806 | ||||||||||||
Accrued pension benefits | 13,128 | — | — | 13,128 | ||||||||||||
Accrued restructuring | 8,053 | — | — | 8,053 | ||||||||||||
Other non-current liabilities | 7,786 | — | — | 7,786 | ||||||||||||
Minority interest | 9,953 | — | — | 9,953 | ||||||||||||
Redeemable preferred stock | 324,877 | — | — | 324,877 | ||||||||||||
Common stock | 3 | — | — | 3 | ||||||||||||
Retained deficit | (571,280 | ) | 45,372 | (c) | (1,800 | )(e) | (527,708 | ) | ||||||||
Accumulated other comprehensive loss | (14,741 | ) | — | — | (14,741 | ) | ||||||||||
Total stockholders’ deficit | (586,018 | ) | 45,372 | (1,800 | ) | (542,446 | ) | |||||||||
Total liabilities and stockholders’ deficit | $ | 775,967 | $ | 26,273 | $ | (500 | ) | $ | 801,740 | |||||||
(a) | Represents the combined historical balance sheets of Williams Technologies, Inc. and JAX Reman, L.L.C. and the estimated net proceeds and estimated net gain on the sale of these businesses. |
(b) | Includes the estimated net proceeds on the sale of Williams Technologies, Inc. and JAX Reman L.L.C. of $101.9 million. |
(c) | Represents the estimated net gain on the sale of Williams Technologies, Inc. and JAX Reman L.L.C. |
(d) | Represents the historical balance sheet of AutoMatic Transmission International A/S and the effect of the estimated loss on disposal of this business. |
(e) | Represents the estimated net loss on disposal of AutoMatic Transmission International A/S. |