EXHIBIT 99.1
COMPANY CONTACTS: INVESTOR RELATIONS:
Universal Power Group, Inc Cameron Associates
469-892-1122 212-554-5464
Mimi Tan, SVP Amy Glynn, CFA
tanm@upgi.com amy@cameronassoc.com
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Roger Tannery, CFO
tanneryr@upgi.com
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UNIVERSAL POWER GROUP REPORTS FIRST QUARTER 2008
FINANCIAL RESULTS
o REVENUES GREW 25.4%
o GROSS MARGINS EXPANDED TO 15.2% FROM 14.6%
o OPERATING MARGINS EXPANDED TO 4.0% FROM 3.4%
o OPERATING INCOME ROSE 46.0%
o NET INCOME AND EPS INCREASED BY 51.3%
CARROLLTON, TEXAS -- MAY 5, 2008 -- Universal Power Group, Inc. (AMEX: UPG),
("UPG") a leading provider of third-party logistics and supply chain management
services and a global distributor of batteries, related portable power and
security products, today announced its financial results for the first quarter
ended March 31, 2008.
Revenues for the period ended March 31, 2008 rose 25.4% to $29.5 million,
compared to $23.5 million in the first quarter of 2007. First quarter revenues
from sources other than Brink's Home Security ("Brink's") rose 45.5% to $16.0
million, from $11.0 million in the first quarter of 2007. The increase reflects
more focused marketing to both existing and new customer accounts, as well as
price increases implemented by UPG to offset higher costs of goods sold. Growth
in the Company's higher margin battery business was driven approximately 46% by
volume and 54% by price increases in the first quarter. Revenues from Brink's
increased by 7.7% to $13.5 million in the first quarter of 2008, compared to
$12.5 million in the prior year period. Importantly, as a result of the rapid
growth in the non-Brink's business, the concentration of revenues from Brink's
fell to 46% of total revenues in the first quarter 2008, compared to 53% in the
first quarter of 2007.
Gross margin for the first quarter of 2008 expanded to 15.2%, from 14.6% in the
first quarter of 2007, as the improvement in product mix, including the reduced
concentration of Brink's and price increases, offset higher raw material costs.
Operating expenses rose 25.2% to $3.3 million in the first quarter of 2008,
compared to $2.6 million in the prior year period. UPG had an operating profit
of $1.2 million, or 4.0% of sales, for the first quarter of 2008, up 46.0% from
an operating profit of $0.8 million, or 3.4% in the first quarter of 2007. Net
income in the first quarter of 2008 rose 51.3% to $0.6 million, or $0.11 per
share, compared to net income of $0.4 million, or $0.07 per share, in the prior
year period.
Commenting on the first quarter, Randy Hardin, President and Chief Executive
Officer of UPG, stated, "Our strong first quarter results largely reflect the
continued strength of our non-Brink's business, with those revenues up 46%. This
has helped to not only reduce the concentration of our Brink's revenues within
the total company, but also to maintain and even improve our gross margin during
a time in which we continue to face higher raw material costs. It is notable
that the concentration of our Brink's business fell in the first quarter, even
with a 7.7% increase in Brink's. We remain optimistic about the growth prospects
for both of our areas of focus - Brink's and batteries - and we expect to see
strong organic growth in 2008. Additionally, we are continuing to explore growth
opportunities with new third party logistics customers and acquisitions."
UPG REITERATES 2008 GUIDANCE
UPG continues to expect organic growth in revenues of 12% - 15% and operating
income growth of 15% - 18% for the full-year 2008.
CONFERENCE CALL INFORMATION
Universal Power Group will host an investor conference call today, Monday, May
5, 2008, at 11:30 am EST (10:30 am CST) to discuss financial results for the
first quarter of 2008.
Interested parties may access the conference call by dialing 1.866.825.1692;
passcode 21310331. The conference call will also be broadcast live on
www.upgi.com and through the Thomson StreetEvents Network. Individual investors
can listen to the call at www.earnings.com, Thomson's individual investor
portal. Institutional investors can access the call via Thomson StreetEvents
(www.streetevents.com), a password-protected event management site.
A replay of the teleconference will be made available through May 12, 2008 by
calling 1.888.268.8010; passcode 23679759 and an archived webcast will be
available at www.upgi.com.
ABOUT UNIVERSAL POWER GROUP, INC.
Universal Power Group, Inc. is a leading provider of third-party logistics and
supply chain management services, and a distributor of batteries, security
products and related portable power products to various industries. UPG's supply
chain services include procurement, warehousing, inventory management,
distribution, fulfillment, and value-added services such as sourcing, custom
battery pack assembly, coordination of battery recycling efforts, custom
kitting, and product design and development. UPG's range of product offerings
include proprietary brands of industrial and consumer batteries of all
chemistries, chargers, cellular and Bluetooth accessories, related portable
power products, jump-starters, 12-volt DC accessories, and security products.
For more information, please visit the UPG website at www.upgi.com.
FORWARD-LOOKING STATEMENTS
Statements in this press release that are not statements of historical or
current fact constitute "forward-looking statements." Such forward-looking
statements involve known and unknown risks, uncertainties and other unknown
factors that could cause the Company's actual operating results to be materially
different from any historical results or from any future results expressed or
implied by such forward-looking statements. In addition to statements that
explicitly describe these risks and uncertainties, readers are urged to consider
statements that contain terms such as "believes," "belief," "expects," "expect,"
"intends," "intend," "anticipate," "anticipates," "plans," "plan," to be
uncertain and forward-looking. The forward-looking statements contained herein
are also subject generally to other risks and uncertainties that are described
from time to time in the Company's filings with Securities and Exchange
Commission. Historical financial results are not necessarily indicative of
future performance.
UNIVERSAL POWER GROUP, INC.
UNAUDITED BALANCE SHEETS
ASSETS
MARCH 31, DECEMBER 31,
2008 2007
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CURRENT ASSETS
Cash and cash equivalents..................................... $483,668 $ 691,288
Accounts receivable:
Trade, net of allowance for doubtful accounts of $95,740 and
$129,371.................................................. 14,069,810 12,593,430
Other....................................................... 138,393 149,262
Inventories - finished goods, net of allowance for
obsolescence of $258,350 and $193,780....................... 31,295,610 32,345,377
Current deferred tax asset.................................... 996,278 983,114
Prepaid expenses and other current assets..................... 1,059,667 880,907
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Total current assets........................................ 48,043,426 47,643,378
PROPERTY AND EQUIPMENT
Logistics and distribution systems............................ 1,477,640 1,417,269
Machinery and equipment....................................... 346,670 338,220
Furniture and fixtures........................................ 492,267 492,267
Leasehold improvements........................................ 272,096 272,096
Vehicles...................................................... 137,336 151,598
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2,726,009 2,671,450
Less accumulated depreciation and amortization................ (1,092,866) (985,735)
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Net property and equipment.................................. 1,633,143 1,685,715
OTHER ASSETS..................................................... 63,124 81,459
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TOTAL ASSETS..................................................... $49,739,693 $49,410,552
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UNIVERSAL POWER GROUP, INC.
UNAUDITED BALANCE SHEETS (CONTINUED)
LIABILITIES AND SHAREHOLDERS' EQUITY
MARCH 31, DECEMBER 31,
2008 2007
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CURRENT LIABILITIES
Line of credit................................................ $12,695,419 $12,833,031
Accounts payable.............................................. 11,784,803 12,257,350
Accrued liabilities........................................... 925,049 537,248
Current portion of payable to Zunicom, Inc.................... 1,096,875 731,250
Current portion of capital lease obligations.................. 3,452 6,609
Current portion of deferred rent.............................. 64,446 64,446
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Total current liabilities................................... 26,570,044 26,429,934
NOTES PAYABLE TO ZUNICOM, INC., less current portion............. 4,753,125 5,118,750
NON-CURRENT DEFERRED TAX LIABILITY............................... 17,201 25,455
DEFERRED RENT, less current portion.............................. 162,942 180,776
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Total liabilities........................................... 31,503,312 31,754,915
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Common stock - $0.01 par value, 50,000,000 shares authorized,
5,000,000 shares issued and outstanding..................... 50,000 50,000
Additional paid-in capital.................................... 15,405,774 15,381,684
Retained earnings............................................. 2,780,607 2,223,953
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Total shareholders' equity.................................. 18,236,381 17,655,637
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY....................... $49,739,693 $49,410,552
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UNIVERSAL POWER GROUP, INC.
UNAUDITED STATEMENTS OF INCOME
THREE MONTHS ENDED MARCH 31,
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2008 2007
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Net sales........................................................ $29,524,256 $23,539,873
Cost of sales.................................................... 25,050,198 20,099,238
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Gross profit..................................................... 4,474,058 3,440,635
Operating expenses............................................... 3,300,161 2,636,510
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Operating income................................................. 1,173,897 804,125
Other income (expense)...........................................
Interest expense (including $86,548 and $86,548 to Zunicom,
Inc.)....................................................... (254,315) (367,089)
Interest income............................................... -- 172,914
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Total other expense......................................... (254,315) (194,175)
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Income before provision for income taxes......................... 919,582 609,950
Provision for income taxes....................................... (362,928) (241,991)
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Net income....................................................... $ 556,654 $ 367,959
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Net income per share
Basic....................................................... $ 0.11 $ 0.07
Diluted..................................................... $ 0.11 $ 0.07
Weighted average shares outstanding
Basic....................................................... 5,000,000 5,000,000
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Diluted..................................................... 5,000,000 5,000,870
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UNIVERSAL POWER GROUP, INC.
UNAUDITED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31,
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2008 2007
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CASH FLOWS FROM OPERATING ACTIVITIES
Net income.................................................... $ 556,654 $ 367,959
Adjustments to reconcile net income to net cash used in
operating activities:
Depreciation and amortization of property and equipment.... 130,768 44,171
Provision for bad debts.................................... 32,165 9,476
Provision for obsolete inventory........................... 80,000 30,000
Deferred income taxes...................................... (21,418) (2,070)
Stock-based compensation................................... 24,090 46,289
Change in operating assets and liabilities:
Accounts receivable - trade................................ (1,508,545) (939,828)
Accounts receivable - other................................ 10,869 (314,610)
Inventories................................................ 969,767 312,750
Prepaid expenses and other current assets.................. (188,135) (186,991)
Other assets............................................... 18,335 (43,750)
Accounts payable........................................... (472,547) (746,024)
Accrued liabilities........................................ 387,801 310,597
Due to Zunicom, Inc........................................ -- 186,617
Deferred rent.............................................. (17,834) (12,413)
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Net cash provided by (used in) operating activities........... 1,970 (937,827)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment......................... (68,821) (69,319)
CASH FLOWS FROM FINANCING ACTIVITIES
Net activity on line of credit............................. (137,612) 1,066,000
Payments on capital lease obligations...................... (3,157) (5,426)
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Net cash (used in) provided by financing activities.......... (140,769) 1,060,574
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NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS........ (207,620) 53,428
Cash and cash equivalents at beginning of period.............. 691,288 13,036,447
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Cash and cash equivalents at end of period.................... 483,668 $13,089,875
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SUPPLEMENTAL DISCLOSURES $ 254,315 $ 367,089
Interest paid.............................................. =================== =================
$ 22,971 $ 21,408
Income taxes paid.......................................... =================== =================