Amerigon Reports 2012 First Quarter Results
NORTHVILLE, Mich., May 4, 2012 /PRNewswire/ -- Amerigon Incorporated (NASDAQ-GS: ARGN), a global developer and marketer of innovative thermal management technologies for a broad range of heating and cooling and temperature control applications, today announced its financial results for the first quarter ended March 31, 2012.
On May 16, 2011, Amerigon closed the previously announced acquisition of a majority interest in W.E.T. Automotive Systems AG, a publicly-traded German automotive thermal control and electronic components company. The 2011 first quarter which was completed prior to the acquisition date does not include operating results of W.E.T.
President and CEO Daniel R. Coker said, "Revenues in the first quarter came in as we had projected. We are pleased with the progress made during the quarter and how things are looking for the future, particularly the resources and critical mass gained from the acquisition of W.E.T. In addition, the continuing success of our Climate Control Seat™ system (CCS™) and the growing acceptance of our related products, including our new heated and cooled cup holders and our heated and cooled mattress products, and the progress our advanced development teams are making on our thermoelectric generators are all positive signs that bode well for our future."
Revenues for the 2012 first quarter increased to $129.5 million from $35.8 million in the prior year period. The increase in revenues primarily reflects additional W.E.T. revenue of $100.5 million, including the positive effects of the first Amerigon vehicle program to be produced in a W.E.T. facility, which totaled $7.0 million. This year's first quarter revenues were approximately 4 percent higher than the pro-forma combined results of both Amerigon and W.E.T. Had Amerigon acquired W.E.T. on January 1, 2011, pro-forma combined revenues during the 2011 first quarter would have been $124.5 million. Amerigon historical revenue for this year's first quarter, as presented in an accompanying table, decreased 19 percent to $29.0 million from $35.8 million in the first quarter of 2011, due primarily to the program transfer to W.E.T.
This year's first quarter net income attributable to common shareholders was $2.7 million, or $0.11 per basic and diluted share. Non-cash charges related to the W.E.T. acquisition totaled $1.9 million, or $0.08 per basic and diluted share. In addition, the 2012 first quarter results include convertible preferred stock dividends of $2.2 million, which reduced net income attributable to common shareholders by $0.09 per basic and diluted share. Adjusting for these factors, Amerigon would have reported net income attributable to common shareholders of $0.28 per basic share and $0.27 per diluted share. Net loss attributable to common shareholders for the first quarter of 2011 was $666,000, or $0.03 loss per share, which included acquisition-related fees and expenses totaling $3.8 million. Excluding these charges, Amerigon would have earned $3.1 million, or $0.14 per basic share and $0.13 per diluted share, in the 2011 first quarter. The fees and expenses associated with the W.E.T. acquisition are detailed in the Acquisition Transaction Expenses, W.E.T. Purchase Accounting Impacts and Other Effects table accompanying the release.
Gross margin as a percentage of revenue for this year's first quarter was 25 percent, compared with 29 percent in the first quarter of 2011 (for Amerigon alone). The decrease primarily reflects W.E.T.'s lower gross margin on sales (24.5 percent), and for Amerigon, lower sales volumes and an unfavorable mix of products sold.
Adjusted EBITDA for the first quarter of 2012 was $15.8 million compared with Adjusted EBITDA of $5.2 million for the prior year period, and was $1.0 million higher than Adjusted EBITDA during the fourth quarter 2011 of $14.8 million.
Historical Amerigon financial results and Adjusted EBITDA for the first quarter of 2012 (which are non-GAAP measures) are provided to help shareholders understand Amerigon's results of operations due to the acquisition of W.E.T. These non-GAAP financial measures should be viewed in addition to, and not as an alternative for, Amerigon's reported results prepared in accordance with GAAP.
On March 23, 2012, the Company completed a public offering of 5,290,000 shares of common stock, including the sale of 690,000 shares pursuant to the full exercise of the underwriters' over-allotment option. Net proceeds to the Company from the sale of the shares including the over-allotment option were $75.5 million after the deduction of underwriting discounts and other offering expenses. The Company intends to use the net proceeds from this offering to make future redemption installment payments on, and pay dividends on, its outstanding Series C Convertible Preferred Stock totaling $49.9 million and, to the extent not used for such purposes, to fund debt service, debt retirement and general corporate purposes.
The Company's balance sheet as of March 31, 2012, had total cash and cash equivalents, including the offering proceeds, of $100.6 million, total assets of $465.5 million and shareholders' equity of $202.1 million. Total debt was $73.6 million, and the book value of the unredeemed Series C Convertible Preferred Stock was $43.5 million as of March 31, 2012.
Interest Expense and Revaluation of Derivatives
Interest expense for the first quarter of this year was $1.1 million compared with $9,000 in interest income for the prior year period. Approximately $442,000 in interest expense was related to the debt of W.E.T., and the balance resulted from financing used to fund a portion of the W.E.T. acquisition.
For this year's first quarter, the Company recorded net gains related to the revaluation of derivative financial instruments totaling $1.4 million. The amount included net losses from the derivatives of W.E.T. Derivative gains and losses stem from W.E.T.'s Cash Related Swap (CRS) contract and portfolio of currency derivative instruments.
Research and Development, Selling, General and Administrative Expenses
The 2012 first quarter results include a year-over-year increase in net research and development expenses of $7.3 million reflecting net research and development expenses from W.E.T. totaling $7.4 million.
Selling, general and administrative (SG&A) expenses for this year's first quarter increased $10.6 million primarily due to the SG&A expenses of W.E.T. totaling $9.9 million. Higher wage and benefit costs, consulting, audit and legal expenses also contributed to the increase. SG&A for the 2012 first quarter decreased $2.0 million sequentially from the 2011 fourth quarter primarily due to lower management bonus accruals and a lower foreign currency exchange rate on the Euro-denominated SG&A expenses of W.E.T.
Guidance
The Company expects combined revenues of Amerigon/W.E.T. in the 2012 second quarter to be moderately higher compared with the 2012 first quarter ($129.5 million) and in-line with the Company's full year forecast. Barring unforeseen economic turbulence, 2012 appears to be a strong year for the combined companies. Amerigon is expecting revenue growth for the full year in the range of 10 percent over the combined Amerigon/W.E.T. 2011 revenues (which were $501.2 million on a full year pro-forma basis).
Conference Call
As previously announced, Amerigon is conducting a conference call today to be broadcast live over the Internet at 11:30 AM Eastern Time to review these financial results. The dial-in number for the call is 1-877-941-2068. The live webcast and archived replay of the call can be accessed in the Events page of the Investor section of Amerigon's website at www.amerigon.com.
Note Regarding Use of Non-GAAP Financial Measures
Certain of the information set forth herein, including Adjusted EBITDA and historical Amerigon financial results, may be considered non-GAAP financial measures. Amerigon believes this information is useful to investors because it provides a basis for measuring Amerigon's available capital resources, the operating performance of Amerigon's business and Amerigon's cash flow that would normally be included in the most directly comparable measures calculated and presented in accordance with Generally Accepted Accounting Principles. Amerigon's management uses these non-GAAP financial measures along with the most directly comparable GAAP financial measures in evaluating Amerigon's operating performance, capital resources and cash flow. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP. Reconciliation between net income and EBITDA is provided in the financial tables at the end of this news release.
About Amerigon
Amerigon (NASDAQ-GS:ARGN) is a global developer and marketer of innovative thermal management technologies for a broad range of heating and cooling and temperature control applications. Automotive products based on technologies developed by Amerigon and its majority-owned subsidiary, W.E.T. Automotive Systems AG, include actively heated and cooled seat systems and cup holders, heated and ventilated seat systems, thermal storage bins, heated seat and steering wheel systems, cable systems and other electronic devices. Its advanced technology team is developing more efficient materials for thermoelectrics and systems for waste heat recovery and electrical power generation for the automotive market that may have far-reaching applications for consumer products as well as industrial and technology markets. Amerigon has more than 5,000 employees in facilities in the U.S., Germany, Mexico, China, Canada, Japan, England, Korea and the Ukraine. For more information, go to www.amerigon.com.
Certain matters discussed in this release are forward-looking statements that involve risks and uncertainties, and actual results may be different. Important factors that could cause the Company's actual results to differ materially from its expectations in this release are risks that sales may not significantly increase, additional financing, if necessary, may not be available, new competitors may arise and adverse conditions in the automotive industry may negatively affect its results. The liquidity and trading price of its common stock may be negatively affected by these and other factors. Please also refer to Amerigon's Securities and Exchange Commission filings and reports, including, but not limited to, its Form 10-Q for the period ended March 31, 2012, and its Form 10-K for the year ended December 31, 2011.
Contact: Allen & Caron Inc
Jill Bertotti (investors)
[email protected]
Len Hall (media)
[email protected]
(949) 474-4300
| TABLES FOLLOW
AMERIGON INCORPORATED
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited)
|
||
| Three Months Ended |
||
| March 31, |
||
| 2012 |
2011 |
|
| Product revenues |
$ 129,526 |
$ 35,796 |
| Cost of sales |
97,077 |
25,340 |
| Gross margin |
32,449 |
10,456 |
| Operating expenses: |
||
| Research and development |
10,201 |
2,661 |
| Research and development reimbursements |
(442) |
(192) |
| Net research and development expenses |
9,759 |
2,469 |
| Acquisition transaction expenses |
– |
3,754 |
| Selling, general and administrative |
13,973 |
3,364 |
| Total operating expenses |
23,732 |
9,587 |
| Operating income |
8,717 |
869 |
| Interest income (expense) |
(1,136) |
9 |
| Revaluation of derivatives |
1,360 |
– |
| Foreign currency loss |
(511) |
– |
| Other income |
79 |
227 |
| Earnings before income tax |
8,509 |
1,105 |
| Income tax expense |
2,244 |
1,771 |
| Net income |
6,265 |
(666) |
| Gain (loss) attributable to non-controlling interest |
(1,387) |
– |
| Net income attributable to Amerigon, Inc. |
4,878 |
(666) |
| Convertible preferred stock dividends |
(2,165) |
– |
| Net income (loss) attributable to common shareholders |
$ 2,713 |
$ (666) |
| Basic earnings (loss) per share |
$ 0.11 |
$ (0.03) |
| Diluted earnings (loss) per share |
$ 0.11 |
$ (0.03) |
| Weighted average number of shares – basic |
24,461 |
22,081 |
| Weighted average number of shares – diluted |
25,151 |
22,081 |
| AMERIGON INCORPORATED |
| RESULTS EXCLUDING W.E.T. |
| The following table presents select operations data for the period as reported, amounts for W.E.T. operations and amounts for Amerigon less the W.E.T. amounts representing the historical portion of Amerigon. These Historical Amerigon financial results for the three-month period ended March 31, 2012, which are non-GAAP measures, are provided to help shareholders understand Amerigon's results of operations in light of the acquisition of W.E.T. These non-GAAP financial measures should be viewed in addition to, and not as an alternative for, Amerigon's reported results prepared in accordance with GAAP. |
| Three months ended |
|||||
| Three-month period ended March 31, 2012 |
|||||
| As Reported |
Less: W.E.T. |
Historical Amerigon |
|||
| (In Thousands) |
|||||
| Product revenues |
$ 129,526 |
$ 100,528(1) |
$ 28,998 |
$ 35,796 |
|
| Cost of sales |
97,077 |
75,867 |
21,210 |
25,340 |
|
| Gross margin |
32,449 |
24,661 |
7,788 |
10,456 |
|
| Gross margin percent |
25.1% |
24.5% |
26.9% |
29.2% |
|
| Operating expenses: |
|||||
| Net research and development expenses |
9,759 |
7,395 |
2,364 |
2,469 |
|
| Acquisition transaction expenses |
— |
— |
— |
3,754 |
|
| Selling, general and administrative expenses |
13,973 |
9,944 |
4,029 |
3,364 |
|
| Operating income |
8,717 |
7,322 |
1,395 |
869 |
|
| Earnings before income tax |
8,509 |
7,789 |
720 |
1,105 |
|
| (1) Includes the positive effects of the first Amerigon vehicle program to be produced in a W.E.T. facility, which totaled $7.0 million. |
|||||
| Reconciliation of Adjusted EBITDA to Net Income
|
||
| Three Months Ended March 31, |
||
| 2012 |
2011 |
|
| Net income (loss) |
$ 6,265 |
$ (666) |
| Add Back: |
||
| Income tax expense |
2,244 |
1,771 |
| Interest expense (income) |
1,136 |
(9) |
| Depreciation and amortization |
7,319 |
390 |
| Adjustments: |
||
| Acquisition transaction expense |
- |
3,754 |
| Unrealized currency (gain) loss |
1,524 |
(11) |
| Unrealized revaluation of derivatives |
(2,666) |
- |
| Adjusted EBITDA |
$ 15,822 |
$ 5,229 |
| Use of Non-GAAP Financial Measures
|
| In evaluating its business, Amerigon considers and uses Adjusted EBITDA as a supplemental measure of its operating performance. The Company defines Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, and deferred financing cost amortization, less transaction expenses, debt retirement expenses, unrealized currency (gain) loss and unrealized revaluation of derivatives. Management believes that Adjusted EBITDA is a meaningful measure of liquidity and the Company's ability to service debt because it provides a measure of cash available for such purposes. Management provides an Adjusted EBITDA measure so that investors will have the same financial information that management uses with the belief that it will assist investors in properly assessing the Company's performance on a period-over-period basis. |
| The term Adjusted EBITDA is not defined under GAAP, and is not a measure of operating income, operating performance or liquidity presented in accordance with GAAP. Adjusted EBITDA has limitations as an analytical tool, and when assessing the Company's operating performance, investors should not consider Adjusted EBITDA in isolation, or as a substitute for net income (loss) or other consolidated income statement data prepared in accordance with GAAP. Amerigon compensates for these limitations by relying primarily on its GAAP results and using Adjusted EBITDA only supplementally. |
| AMERIGON INCORPORATED |
|||||||||
| ACQUISITION TRANSACTION EXPENSES, W.E.T. PURCHASE ACCOUNTING IMPACTS AND OTHER EFFECTS |
|||||||||
| (In thousands, except per share data) |
|||||||||
| Current Results |
|||||||||
| 2012 |
2011 |
||||||||
| 3 months |
3 months |
2012 |
2013 |
2014 |
Thereafter |
||||
| Transaction related current expenses |
|||||||||
| Acquisition transaction expenses |
$ - |
$ 3,754 |
$ - |
$ - |
$ - |
$ - |
|||
| Debt retirement expense |
- |
- |
- |
- |
- |
- |
|||
| $ - |
$ 3,754 |
$ - |
$ - |
$ - |
$ - |
||||
| Non-cash purchase accounting impacts |
|||||||||
| Customer relationships amortization |
$ 1,966 |
$ - |
$ 7,865 |
$ 7,865 |
$ 7,865 |
$ 48,431 |
|||
| Technology amortization |
824 |
- |
3,298 |
3,298 |
3,298 |
9,506 |
|||
| Product development costs amortization |
532 |
- |
2,127 |
2,177 |
2,177 |
1,283 |
|||
| Order backlog amortization |
- |
- |
- |
- |
- |
- |
|||
| Inventory fair value adjustment |
- |
- |
- |
- |
- |
- |
|||
| $ 3,322 |
$ - |
$ 13,290 |
$ 13,340 |
$ 13,340 |
$ 59,220 |
||||
| Tax effect |
(769) |
- |
(3,078) |
(3,090) |
(3,090) |
(13,715) |
|||
| Net Income effect |
2,553 |
3,754 |
10,212 |
10,250 |
10,250 |
45,505 |
|||
| Non-controlling interest effect |
(605) |
- |
(2,436) |
(2,445) |
(2,445) |
(10,853) |
|||
| Net income available to shareholders effect |
$ 1,948 |
$ 3,754 |
$ 7,776 |
$ 7,805 |
$ 7,805 |
$ 34,652 |
|||
| Earnings (loss) per share - difference |
|||||||||
| Basic |
$ 0.08 |
$ 0.17 |
|||||||
| Diluted |
0.08 |
0.16 |
|||||||
| Series C Preferred Stock dividend |
$ 2,165 |
$ - |
$ 6,711 |
$ 1,622 |
$ - |
$ - |
|||
| Earnings (loss) per share - difference |
|||||||||
| Basic |
$ 0.09 |
$ - |
|||||||
| Diluted |
0.09 |
- |
|||||||
AMERIGON INCORPORATED |
||||||
| CONSOLIDATED BALANCE SHEETS |
||||||
| (In thousands, except share data) |
||||||
| March 31, |
December 31, |
|||||
| ASSETS |
2012 |
2011 |
||||
| (unaudited) |
||||||
| Current Assets: |
||||||
| Cash & cash equivalents |
$ 100,601 |
$ 23,839 |
||||
| Short-term investments |
– |
– |
||||
| Accounts receivable, net of allowance |
89,905 |
82,395 |
||||
| Inventory: |
||||||
| Raw Materials |
31,752 |
29,073 |
||||
| Work in process |
2,343 |
2,497 |
||||
| Finished goods |
16,125 |
14,774 |
||||
| Inventory |
50,220 |
46,344 |
||||
| Derivative financial instruments |
1,795 |
2,675 |
||||
| Deferred income tax assets |
9,160 |
12,732 |
||||
| Prepaid expenses and other assets |
11,440 |
9,685 |
||||
| Total current assets |
263,121 |
177,670 |
||||
| Property and equipment, net |
45,484 |
44,794 |
||||
| Goodwill |
24,982 |
24,245 |
||||
| Other intangible assets, net |
107,472 |
108,481 |
||||
| Deferred financing costs |
2,250 |
2,441 |
||||
| Deferred income tax assets |
12,675 |
11,402 |
||||
| Other non-current assets |
9,555 |
8,774 |
||||
| Total assets |
$ 465,539 |
$ 377,807 |
||||
| LIABILITIES AND SHAREHOLDERS' EQUITY |
||||||
| Current Liabilities: |
||||||
| Accounts payable |
$ 43,402 |
$ 42,533 |
||||
| Accrued liabilities |
51,489 |
46,293 |
||||
| Current maturities of long-term debt |
15,309 |
14,570 |
||||
| Derivative financial instruments |
3,507 |
5,101 |
||||
| Deferred tax liabilities |
3,316 |
3,218 |
||||
| Total current liabilities |
117,023 |
111,715 |
||||
| Pension benefit obligation |
3,846 |
3,872 |
||||
| Other liabilities |
1,926 |
1,862 |
||||
| Long-term debt, less current maturities |
58,308 |
61,677 |
||||
| Derivative financial instruments |
16,011 |
17,189 |
||||
| Deferred tax liabilities |
22,839 |
23,679 |
||||
| Total liabilities |
219,953 |
219,994 |
||||
| Series C Convertible Preferred Stock |
43,450 |
50,098 |
||||
| Shareholders' equity: |
||||||
| Common Stock: |
||||||
| No par value; 55,000,000 shares authorized, 29,548,163 and |
||||||
| 23,515,571 issued and outstanding at March 31, 2012 and December 31, 2011, respectively |
165,401 |
80,502 |
||||
| Paid-in capital |
23,969 |
23,489 |
||||
| Accumulated other comprehensive income (loss) |
(11,017) |
(14,754) |
||||
| Accumulated deficit |
(23,003) |
(25,716) |
||||
| Total Amerigon Incorporated shareholders' equity |
155,350 |
63,521 |
||||
| Non-controlling interest |
46,786 |
44,194 |
||||
| Total shareholders' equity |
202,136 |
107,715 |
||||
| Total liabilities and shareholders' equity |
$ 465,539 |
$ 377,807 |
||||
| AMERIGON INCORPORATED
|
||
| CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS |
||
| (In thousands) |
||
| (Unaudited) |
||
| Three Months Ended March 31, |
||
| 2012 |
2011 |
|
| Operating Activities: |
||
| Net income |
$ 6,265 |
$ (666) |
| Adjustments to reconcile net income to cash provided by operating activities: |
||
| Depreciation and amortization |
7,576 |
390 |
| Deferred tax provision |
920 |
1,596 |
| Stock compensation |
292 |
357 |
| Defined benefit plan expense |
(105) |
75 |
| Acquisition transaction expenses |
– |
3,754 |
| Gai on revaluation of financial derivatives |
(2,471) |
– |
| Loss on equity investment |
198 |
– |
| Gain on sale of property, plant and equipment |
(8) |
– |
| Provision for doubtful accounts |
523 |
– |
| Excess tax benefit from equity awards |
(459) |
– |
| Changes in operating assets and liabilities: |
||
| Accounts receivable |
(6,104) |
(6,722) |
| Inventory |
(2,498) |
(500) |
| Prepaid expenses and other assets |
(1,659) |
(182) |
| Accounts payable |
581 |
4,062 |
| Accrued liabilities |
3,737 |
(101) |
| Net cash provided by operating activities |
6,788 |
2,063 |
| Investing Activities: |
||
| Distribution paid to non-controlling interest |
(173) |
– |
| Maturities of short-term investments |
– |
9,761 |
| Acquisition transaction costs |
– |
(699) |
| Cash restricted for acquisition |
– |
(182,002) |
| Proceeds from the sale of property, plant and equipment |
14 |
– |
| Purchase of property and equipment |
(3,029) |
(696) |
| Loan to equity investment |
(350) |
– |
| Patent costs |
(336) |
(418) |
| Net cash used in investing activities |
(3,874) |
(174,054) |
| Financing Activities: |
||
| Revolving note borrowings |
– |
19,011 |
| Borrowing of debt |
41 |
68,000 |
| Repayments of debt |
(3,613) |
– |
| Cash paid for financing costs |
– |
(3,890) |
| Proceeds from the sale of Series C Convertible Preferred Stock |
– |
64,514 |
| Proceeds from the sale of embedded derivatives |
– |
2,610 |
| Excess tax benefit from equity awards |
459 |
– |
| Proceeds from non controlling interest |
75,547 |
– |
| Cash paid to Series C Preferred Stock Holders |
(55) |
– |
| Proceeds from the exercise of Common Stock options |
271 |
632 |
| Net cash provided by financing activities |
72,650 |
150,877 |
| Foreign currency effect |
1,198 |
1,114 |
| Net increase (decrease) in cash and cash equivalents |
76,762 |
(20,000) |
| Cash and cash equivalents at beginning of period |
23,839 |
26,584 |
| Cash and cash equivalents at end of period |
$ 100,601 |
$ 6,584 |
| Supplemental disclosure of cash flow information: |
||
| Cash paid for taxes |
$ 536 |
$ – |
| Cash paid for interest |
$ 874 |
$ 6 |
| Supplemental disclosure of non-cash transactions: |
||
| Issuance of Common Stock for Series C Preferred Stock redemption |
$ 7,780 |
$ – |
| Issuance of Common Stock for Series C Preferred Stock dividend |
$ 1,030 |
$ – |
| Common stock issued to Board of Directors and employees |
$ 147 |
$ – |
SOURCE Amerigon Incorporated
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