Remy International, Inc. Announces Third Quarter 2010 Results and Initiating a Common Stock Rights Offering

PENDLETON, Ind., Nov 16, 2010 /PRNewswire/ -- Remy International, Inc., a leading worldwide manufacturer, remanufacturer, and distributor of starters and alternators for light and heavy duty applications, locomotive products and hybrid/electric motors, announced today its operating results for the third quarter ending September 30, 2010.  Sales for the third quarter were $280.0 million, EBITDAR was $36.5 million and Net income was $13.8 million.

In comparison, the Company reported 2009 third quarter sales of $223.7 million, EBITDAR of $39.2 million and Net income of $14.6 million.  The 2009 third quarter reported results included a one-time $12.0 million non-cash gain relating to elimination of certain liabilities.  Excluding this one-time event, 2009 EBITDAR was $27.3 million and net income was $2.6 million.

"Remy sales and profits continue to show dramatic improvement over last year.  Our team is focused on growth through innovation, unparalleled customer service and operational excellence.  We are well positioned as the global economy improves and demand increases," said John Weber, Remy International, Inc. President and Chief Executive Officer.

Going forward, Remy will be reporting in two global business segments: Aftermarket and OE.  Aftermarket sales were up 3.8% compared to the same period in 2009.  Aftermarket performance remains strong through operational productivity.  OE sales were up 40% compared to the same period in 2009.  This growth was led by increased global demand.

Remy Electric Motor (Hybrid) sales were down 13% from the third quarter of 2009.  Decreased heavy duty bus sales were partially offset by a doubling of sales on the EP8 light duty application.  New customers and strategic relationships continue to develop.  Specialty vehicle maker AMP signed a long term motor supply agreement for the first-ever plug-in electric crossover vehicle.  Under the agreement, Remy will be the exclusive electric motor supplier.  Jonway/Zap announced a long term motor supply and development agreement with Remy at the World Electric Vehicle Symposium and Exposition (EVS) in Shenzhen, China.  Remy electric motors will be used globally in ZAP cars and sports utility vehicles.  One of Zap's development projects, the Alias electric car, participated this year in the $10 million Progressive Insurance Automotive X PRIZE.  This is a competition for 100 MPG or energy equivalent vehicles and Alias placed among the top finalists and was recognized as the most practical and the most wanted design in the competition.

Both of these applications use the patented Remy HVH250™ motors. It is clear that our ability to demonstrate a billion miles of proven performance is a winner in these markets

Net working capital (accounts receivable plus inventory less accounts payable) for the third quarter 2010 improved 3.2% from third quarter 2009 and increased 5.5% over 2009 year-end.  Remy's cash balance improved $19 million in the third quarter 2010.

"Year to date Remy's continued focus on working capital and cash flow has generated $37 million in free cash flow.  This allows for strategic investments and the opportunity to enhance our capital structure.  With trailing twelve month EBITDAR of $137.3 million, enhanced cash flow and attractive capital markets, we believe it is an ideal time to refinance our debt.  We have engaged several banks to assist us in this refinancing and plan to close by December 23rd," said Fred Knechtel, Remy International, Inc. CFO and Treasurer.

Last quarter, Remy announced an exchange of preferred shares for newly issued shares of common stock.  On October 11, Remy suspended that solicitation.

On November 8th, the Board approved a rights offering to allow holders of common shares to purchase equity in the Company at $11 per share.  Management intends to raise up to $237 million.  These funds will be used to pay accrued dividends, redeem preferred shares and reduce debt.  Current shareholders who participate in the rights offering will have the ability to maintain their percentage ownership in the Company without dilution.  Any shares unsubscribed in the first tranche of this offering will be re-offered to the participating shareholders on a pro-rata basis.

"I am confident that this is the best solution for all stakeholders.  The Board supports these transactions.  They are committed to maximizing value.  As required by our certificate, we will solicit common shareholder approval for any preferred redemption and/or share purchase by a "Related Party".  Solicitation for shareholder approval begins this Thursday, November 18th and we urge our common shareholders to respond quickly," added John Weber.

This press announcement contains forecasts, projections, expectations, or opportunities regarding Remy that are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from anticipated results, including, but not limited to, future financial results and liquidity, development of new products and services, the effect of competitive products or pricing, the effect of commodity and raw material prices, the impact of supply chain cost management initiatives, restructuring risks, customs duty claims, litigation uncertainties and warranty claims, conditions in the automotive industry, foreign currency fluctuations, costs related to re-sourcing and outsourcing products, the effect of economic conditions, and other factors identified in Remy International statements.

2009 EBITDAR and Net Income reflect quarter cost restatements that occurred within 2009 and properly reflect performance in the period in which it occurred.

A copy of the Third Quarter 2010 Financial Report is available on the Remy International Website at http://www.remyinc.com under Investor Relations.

SOURCE Remy International, Inc.