Unique Fabricating, Inc. Reports First Quarter 2017 Financial Results

    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
ufab@haydenir.com

 

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

 

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SOURCE Unique Fabricating, Inc.

Website: http://uniquefab.com
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