Unique Fabricating, Inc. Reports First Quarter 2017 Financial Results PR Newswire AUBURN HILLS, Mich., May 10, 2017 AUBURN HILLS, Mich., May 10, 2017 /PRNewswire/ -- Unique Fabricating, Inc. ("Unique" or the "Company")(NYSE MKT: UFAB), which engineers and manufactures multi-material foam, rubber, and plastic components utilized in noise, vibration and harshness management and air/water sealing applications for the automotive and industrial appliance market, today announced its financial results for the first quarter ended April 2, 2017. First Quarter 2017 Financial Highlights o Revenue of $47.9 million in the first quarter 2017, up 19.7% compared to $40.0 million in the first quarter 2016 o Net income of $2.0 million, or $0.21 per basic and diluted share in the first quarter 2017, compared to $1.8 million, or $0.19 per basic and diluted share in the first quarter 2016 o Adjusted EBITDA of $5.4 million in the first quarter 2017, including $1.6 million for non-cash charges specifically related to depreciation and amortization and non-cash stock awards, compared to $4.4 million in the first quarter 2016, including $1.2 million for non-cash charges specifically related to depreciation and amortization and non-cash stock awards^(1) o Adjusted diluted earnings per share of $0.23 in the first quarter 2017 versus $0.21 in the first quarter 2016^(1) o Declared a quarterly cash dividend of $0.15 per share payable on June 7, 2017 for stockholders of record as of May 31, 2017 (1) For a reconciliation of GAAP to Non-GAAP results for Adjusted EBITDA and Adjusted diluted earnings per share please refer to the financial tables below. "We executed well in the first quarter, advancing new product launches and programs according to plan," said John Weinhardt, Chief Executive Officer. "Our product sales increased sequentially each month during the first quarter, which we believe is a solid indication of the market's response to our new and existing products. Operationally, we made investments during the first quarter to scale our production capabilities for our TwinShape ducts in advance of the launch of a new program for a popular mid-size SUV with a major OEM which we believe will benefit our operations beginning in the second quarter of 2017 and into 2018 as additional TwinShape programs come online. New product sales in our industrial businesses are up year over year, as expected." "Independent industry data indicates that the automotive industry continues to experience a shift in the mix of new vehicle sales during the first quarter and initiated a modest slowdown in production when compared to the forecast used to derive our 2017 plan as a result of excess inventory due to declining consumer demand for certain vehicles," continued Weinhardt. "We are monitoring these trends closely, but given the trends we are currently seeing in our new product sales thus far in 2017 and our current visibility into automotive market trends, we are reaffirming our full year outlook for 2017." Weinhardt concluded, "We remain focused on the innovation of new products that support the organic growth of our business with both existing and new customers, while working to advance cross-selling opportunities that capitalize on the operating leverage inherent in our business model. We continue to opportunistically evaluate strategic acquisitions that can augment our product portfolio and accelerate long-term growth, but remain highly selective and focused on accretive acquisitions that adhere to our stringent selection criteria." First Quarter Financial Summary Total revenue for the quarter ended April 2, 2017 increased to $47.9 million, up 19.7%, or $7.9 million from $40.0 million during the same period last year. The increase was driven by the acquisition of Intasco which closed on April 29, 2016, as well as from the introduction of new products and increased market penetration. Gross profit for the quarter period ended April 2, 2017 was $11.1 million, or 23.2% of total revenue, compared to $9.6 million, or 24.0% of total revenues, for the corresponding period last year. The decrease in gross profit as a percentage of sales was primarily a result of an unfavorable product mix and costs incurred in connection with the launch of product technologies new to some of our facilities. Net income for the quarter ended April 2, 2017 was $2.0 million, or $0.21 per basic and diluted share, compared to $1.8 million, or $0.19 per basic and diluted share, in the first quarter of 2016. The increase in net income was primarily due to higher sales quarter over quarter, partially offset by lower gross profit as a percentage of sales as described above. Adjusted EBITDA for the quarter ended April 2, 2017 was $5.4 million compared to $4.4 million in the first quarter of 2016. The increase is primarily a result of earnings generated from higher sales. Please refer to the financial tables below for a reconciliation of GAAP to Non-GAAP results. Adjusted diluted earnings per share for the quarter ended April 2, 2017 was $0.23 compared to $0.21 in the first quarter of 2016. The increase is primarily a result of higher earnings, partially offset by the margin decline described above and an increase in weighted average shares outstanding. The diluted weighted average shares outstanding increased from approximately 9.8 million in the first quarter last year to approximately 9.9 million in the first quarter this year. Please refer to the financial tables below for a reconciliation of GAAP to Non-GAAP results. Further non-cash purchase accounting impacts associated with the Company's acquisitions are detailed in the Purchase Accounting Impacts and Other Effects table below accompanying this release. Balance Sheet Summary As of April 2, 2017 the Company had approximately $713,000 in cash and cash equivalents, as compared to January 1, 2017 when the Company had $706,000 in cash and cash equivalents. Total debt outstanding as of April 2, 2017 was $56.1 million compared to $50.6 million as of January 1, 2017. As of January 1, 2017, the Company had $3.3 million of available unused capacity, further subject to borrowing base restrictions and outstanding letters of credit, under its $30.0 million revolving credit facility. 2017 Outlook Management reaffirms expectations for: o Full year 2017 revenue of $183 million to $187 million o Full year 2017 adjusted diluted earnings per share of $0.90 to $0.94 o Full year 2017 adjusted EBITDA of $22.0 million to $23.0 million Declaration of Dividends Unique's Board of Directors approved payment of a quarterly cash dividend of $0.15 per share on May 10, 2017. The dividend will be paid on June 7, 2017 to stockholders of record as of the close of business on May 31, 2017. Quarterly Results Conference Call Unique Fabricating will host a conference call and live webcast to discuss these results today at 9:00 a.m. Eastern Time. To access the call, please dial 1-877-705-6003 (toll-free) or 1-201-493-6725 and reference conference ID 13655797. The conference call will also be webcast live on the Investor Relations section of the company's website at http://uniquefab.investorroom.com Following the conclusion of the live call, a replay of the webcast will be available on the Investor Relations section of the Company's website for at least 90 days. A telephonic replay of the conference call will also be available from 12:00PM ET on May 10, 2017 until 11:59PM ET on May 17, 2017 by dialing 1-844-512-2921 (United States) or 1-412-317-6671 (international) and using the pin number 13661150. About Unique Fabricating, Inc. Unique Fabricating, Inc. (NYSE MKT: UFAB) engineers and manufactures components for customers in the automotive and industrial appliance market. The Company's solutions are comprised of multi-material foam, rubber, and plastic components and utilized in noise, vibration and harshness (NVH) management, acoustical management, water and air sealing, decorative and other functional applications. Unique leverages proprietary manufacturing processes including die cutting, thermoforming, compression molding, fusion molding, and reaction injection molding to manufacture a wide range of products including air management products, heating ventilating and air conditioning (HVAC), seals, fender stuffers, air ducts, acoustical insulation, door water shields, gas tank pads, light gaskets, topper pads, mirror gaskets and glove box liners. The Company is headquartered in Auburn Hills, Michigan. For more information, visit http://www.uniquefab.com/. About Non-GAAP Financial Measures We present Adjusted EBITDA and Adjusted Diluted Earnings Per Share in this press release to provide a supplemental measure of our operating performance. We define Adjusted EBITDA as earnings before interest expense, income tax expense, depreciation and amortization expense, non-cash stock award, non-recurring integration expense, non-recurring step-up of inventory basis to fair market value, non-recurring IPO costs, transaction fees related to our acquisitions, restructuring expenses, and one-time consulting and licensing ERP system implementation costs as we implement a new ERP system at all locations. We calculate Adjusted Diluted Earnings Per Share based upon earnings before non-cash stock awards, non-recurring expenses, transaction fees, and restructuring expenses, including the tax impact associated with these adjusting items. We believe that Adjusted EBITDA and Adjusted Diluted Earnings Per Share are useful performance measures used by us to facilitate a comparison of our operating performance and earnings on a consistent basis from period-to-period and to provide for a more complete understanding of factors and trends affecting our business than measures under generally accepted accounting principles in the United States of America (GAAP) can provide alone. Our board and management also use Adjusted EBITDA as one of the primary methods for planning and forecasting overall expected performance and for evaluating on a quarterly and annual basis actual results against such expectations, and as a performance evaluation metric in determining achievement of certain compensation programs and plans for Company management. In addition, the financial covenants in our senior secured credit facility are based on Adjusted EBITDA, as presented in this press release, subject to dollar limitations on certain adjustments and certain other addbacks permitted by our senior secured credit facility. These non-GAAP financial measures may have limitations as analytical tools, and these measures should not be considered in isolation as a substitute for analysis of Unique Fabricating's results as reported under GAAP. Safe Harbor Statement Except for the historical information contained herein, the matters discussed in this news release include forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties. Forward-looking statements relate to future events or to future financial performance and involve known and unknown risks, uncertainties, and other factors that may cause the Company's or the Company's industry's actual results, levels of activity, performance or achievements including statements relating to the Company's 2017 Outlook to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by this press release. Words such as "may," "will," "could," "would," "should," "anticipate," "predict," "potential," "continue," "expects," "intends," "plans," "projects," "believes," "estimates," "outlook," and similar expressions are used to identify these forward looking statements. Such forward-looking statements include statements regarding, among other things, our expectations about revenue, Adjusted EBITDA, and adjusted diluted earnings per share. All such forward-looking statements are based on management's present expectations and are subject to certain factors, risks and uncertainties that may cause actual results, outcome of events, timing and performance to differ materially from those expressed or implied by such statements. These risks and uncertainties include, but are not limited to, those discussed in our Annual Report on Form 10-K, for the year ended January 1, 2017 filed with the Securities and Exchange Commission and in particular the Section entitled "Risk Factors" in the Annual Report on Form 10-K, as well as any updates to those risk factors filed from time to time in our periodic and current reports filed with the Securities and Exchange Commission. All statements contained in this press release are made as of the date of this press release, and Unique Fabricating does not intend to update this information, unless required by law. Reference to the Company's website above does not constitute incorporation of any of the information thereon into this press release. Investor Contact: Hayden IR Brett Maas/Rob Fink 646-536-7331/646-415-8972 firstname.lastname@example.org UNIQUE FABRICATING, INC. Consolidated Statements of Operations (unaudited) Thirteen Weeks Thirteen Weeks Ended April 2, Ended April 3, 2017 2016 Net sales $ 47,857,096 $ 39,982,504 Cost of sales 36,749,935 30,382,558 Gross profit 11,107,161 9,599,946 Selling, general, and administrative expenses 7,591,704 6,554,601 Restructuring expenses — 35,054 Operating income 3,515,457 3,010,291 Non-operating income (expense) Investment income — — Other income, net 14,216 49 Interest expense (615,696) (341,122) Total non-operating expense, net (601,480) (341,073) Income – before income taxes 2,913,977 2,669,218 Income tax expense 867,140 835,567 Net income $ 2,046,837 $ 1,833,651 Net income per share Basic $ 0.21 $ 0.19 Diluted $ 0.21 $ 0.19 Cash dividends declared per share $ 0.15 $ 0.15 UNIQUE FABRICATING, INC. Consolidated Balance Sheets (unaudited) April 2, January 1, 2017 2017 Assets Current assets Cash and cash equivalents $ 712,710 $ 705,535 Accounts receivable – net 31,464,447 26,887,945 Inventory – net 17,141,608 16,731,608 Prepaid expenses and other current assets: Prepaid expenses and other 3,400,130 2,087,069 Refundable taxes 833,034 783,139 Total current assets 53,551,929 47,195,296 Property, plant, and equipment – net 22,405,278 21,197,922 Goodwill 28,871,179 28,871,179 Intangible assets– net 22,728,653 23,758,342 Other assets Investments – at cost 1,054,120 1,054,120 Deposits and other assets 302,615 266,369 Deferred tax asset 281,857 193,577 Total assets $ 129,195,631 $ 122,536,805 Liabilities and Stockholders' Equity Current liabilities Accounts payable $ 14,272,927 $ 13,451,816 Current maturities of long-term debt 2,402,173 2,405,446 Income taxes payable 320,868 610,825 Accrued compensation 2,419,542 2,734,155 Other accrued liabilities 933,930 1,065,740 Other liabilities 10,111 168,880 Total current liabilities 20,359,551 20,436,862 Long-term debt – net of current portion 27,444,666 28,029,041 Line of credit-net 26,273,788 20,176,058 Deferred tax liability 4,400,821 3,836,281 Total liabilities 78,478,826 72,478,242 Stockholders' Equity Common stock, $0.001 par value – 15,000,000 shares authorized and 9,754,609 and 9,719,772 9,755 9,720 issued and outstanding at April 2, 2017 and January 1, 2017, respectively Additional paid-in-capital 45,596,380 45,525,237 Retained earnings 5,110,670 4,523,606 Total stockholders' equity 50,716,805 50,058,563 Total liabilities and stockholders' equity $ 129,195,631 $ 122,536,805 UNIQUE FABRICATING, INC. Consolidated Statements of Cash Flows (unaudited) Thirteen Weeks Ended Thirteen Weeks Ended April 2, 2017 April 3, 2016 Cash flows from operating activities Net income $ 2,046,837 $ 1,833,651 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization 1,528,843 1,132,356 Amortization of debt issuance costs 33,019 24,780 (Gain) loss on sale of assets (625) 3,067 Bad debt adjustment 32,931 31,837 Gain on derivative instrument (195,016) (2,515) Stock option expense 37,508 39,098 Deferred income taxes 476,260 (15,103) Changes in operating assets and liabilities that provided (used) cash: Accounts receivable (4,609,433) (5,402,983) Inventory (410,000) 778,215 Prepaid expenses and other assets (1,362,955) 152,493 Accounts payable 1,374,548 741,232 Accrued and other liabilities (736,380) 171,481 Net cash used in operating (1,784,463) (512,391) activities Cash flows from investing activities Purchases of property and equipment (1,708,386) (655,136) Proceeds from sale of property and 2,500 — equipment Net cash used in investing (1,705,886) (655,136) activities Cash flows from financing activities Net change in bank overdraft (553,437) 784,082 Payments on term loans (603,272) — Proceeds from revolving credit 6,080,336 3,075,686 facilities Pay-off of old senior credit — (629,678) facility term debt Proceeds from exercise of stock 33,670 103,987 options and warrants Distribution of cash dividends (1,459,773) (1,443,954) Net cash provided by financing 3,497,524 1,890,123 activities Net increase (decrease) in cash and 7,175 722,596 cash equivalents Cash and cash 705,535 726,898 equivalents – beginning of period Cash and cash equivalents – end of $ 712,710 $ 1,449,494 period Supplemental disclosure of cash flow Information – cash paid for Interest $ 575,280 $ 318,483 Income taxes $ 493,065 $ 75,965 UNIQUE FABRICATING, INC. Reconciliation of GAAP Net Income to Adjusted EBITDA Thirteen Weeks Thirteen Weeks Ended April 2, Ended April 3, 2016 2017 GAAP Net income $ 2,046,837 $ 1,833,651 Plus: Interest expense, net 615,696 341,122 Plus: Income tax expense 867,140 835,567 Plus: Depreciation and amortization 1,528,843 1,132,356 Plus: Non-cash stock award 37,508 39,099 Plus: Non-recurring integration expenses 2,829 12,486 Plus: Transaction fees 23,235 185,375 Plus: Restructuring expenses — 35,054 Plus: One-time consulting and licensing ERP $ 238,124 $ — system implementation costs Adjusted EBITDA $ 5,360,212 $ 4,414,710 UNIQUE FABRICATING, INC. Reconciliation of GAAP Net Income to Adjusted Diluted Earnings Per Share Thirteen Weeks Thirteen Weeks Ended April 2, Ended April 3, 2017 2016 GAAP Net income $ 2,046,837 $ 1,833,651 Plus: Non-cash stock award 37,508 39,099 Plus: Non-recurring integration expenses 2,829 12,486 Plus: Transaction fees 23,235 185,375 Plus: Restructuring expenses — 35,054 Plus: One-time consulting and licensing ERP 238,124 — system implementation costs Less: Tax impact (18,918) (85,151) Adjusted Net income $ 2,329,615 $ 2,020,514 Diluted weighted average shares outstanding 9,916,687 9,833,049 Net income per share Diluted - GAAP $ 0.21 $ 0.19 Diluted - Adjusted $ 0.23 $ 0.21 UNIQUE FABRICATING, INC. Purchase Accounting Impacts and Other Effects Thirteen Weeks Thirteen Weeks Ended April 2, Ended April 3, 2017 2016 Non-cash purchase accounting impacts Customer relationships amortization $ 836,071 $ 605,175 Trade name amortization 72,926 55,664 Non-compete amortization 44,162 44,162 Unpatented technology 76,529 — Less: Tax impact (309,979) (220,694) Net income effect $ 719,709 $ 484,307 Net income per share impact GAAP - Basic $ 0.07 $ 0.05 GAAP - Diluted $ 0.07 $ 0.05 To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/unique-fabricating-inc-reports-first-quarter-2017-financial-results-300454718.html SOURCE Unique Fabricating, Inc. Website: http://uniquefab.com
Unique Fabricating, Inc. Reports First Quarter 2017 Financial Results
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