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)
jill@allencaron.com
Len Hall (media)
len@allencaron.com
(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
March 31, 2011
|
|
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
(Unaudited, in thousands)
|
|
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