Revised Outlook for 2021
The Company anticipates its sales for the full year of 2021 will be at least 20 percent above 2020 levels as a result of anticipated growth across all of its end markets, with expectations for its energy and industrial end markets to provide a greater contribution in the second half of the year. During the second half of 2021, the fourth quarter is anticipated to exhibit a significantly higher sales growth rate versus the other quarters in 2021 and the Company anticipates that its gross profit as a percentage of sales will improve meaningfully in the quarter versus the first half of 2021. Also, during the second half of 2021, the Company expects to see a substantial decline in legal costs related to its obligation to indemnify certain former officers and employees of the Company. Notwithstanding this positive outlook, which is being driven in part by expectations for improved economic conditions within the United States and across various of the Company’s markets, the Company cautions that significant uncertainty still remains as a result of the ongoing COVID-19 pandemic, supply chain challenges, and other factors.
Management Comments
Lance Arnett, chief executive officer, commented, “We are pleased with the overall demand improvement during the quarter, which led to healthy year-over-year sales growth. As we look to the remainder of the year, we anticipate a greater contribution from our energy and industrial end markets which is expected to drive a higher growth rate in the second half versus what we experienced in the first half. We are also continuing in our efforts to mitigate the impact of higher material costs and tariffs through price increases and other measures and we expect better gross margin and profitability in the fourth quarter.”
Arnett concluded, “We appreciate the additional support that Weichai provided to us through the additional Shareholder’s Loan that we closed on in July. In addition to continuing our collaboration efforts with them to expand our product portfolio, we’ll also continue to work closely with them as we explore longer-term financing opportunities.”
About Power Solutions International, Inc.
Power Solutions International, Inc. (PSI) is a leader in the design, engineering and manufacture of a broad range of advanced, emission-certified engines and power systems. PSI provides integrated turnkey solutions to leading global original equipment manufacturers and end-user customers within the energy, industrial and transportation end markets. The Company’s unique in-house design, prototyping, engineering and testing capabilities allow PSI to customize clean, high-performance engines using a fuel agnostic strategy to run on a wide variety of fuels, including natural gas, propane, gasoline, diesel and biofuels.
PSI develops and delivers complete power systems that are used worldwide in stationary and mobile power generation applications supporting standby, prime, demand response, microgrid, and co-generation power (CHP) applications; and industrial applications that include forklifts, agricultural and turf, arbor care, industrial sweepers, aerial lifts, irrigation pumps, ground support, and construction equipment. In addition, PSI develops and delivers powertrains purpose-built for medium-duty trucks and buses including school and transit buses, work trucks, terminal tractors, and various other vocational vehicles. For more information on PSI, visit www.psiengines.com.