EX-99.1 2 dex991.htm PRO FORMA STATEMENTS OF OPERATIONS Pro Forma Statements of Operations

Exhibit 99.1

 

Remy International, Inc.

Unaudited Pro Forma Condensed Consolidated Financial Information

 

Following are the unaudited pro forma condensed consolidated statements of operations of Remy International, Inc. for the six months ended June 30, 2004 and the years ended December 31, 2003, December 31, 2002 and December 31, 2001 and the unaudited pro forma condensed consolidated balance sheet of Remy International, Inc. at June 30, 2004. The unaudited pro forma condensed consolidated statements of operations give effect to the disposition of Williams Technologies, Inc. and JAX Reman, L.L.C. and the planned disposition of AutoMatic Transmission International A/S as if they had occurred on January 1, 2001. The unaudited pro forma condensed consolidated balance sheet gives effect to these actions as if they had occurred on June 30, 2004.

 

The unaudited pro forma condensed consolidated statements of operations and balance sheet were derived by adjusting the historical financial statements of Remy International, Inc. The adjustments are based on currently available information and, therefore, the actual effects of the above transactions may differ from the pro forma adjustments. However, management believes that the assumptions provide a reasonable basis for presenting the significant effects of the disposition of Williams Technologies, Inc. and JAX Reman, L.L.C. and the planned disposition of AutoMatic Transmission International A/S. The pro forma adjustments give appropriate effect to those assumptions and are properly applied in the unaudited pro forma condensed consolidated statements of operations and pro forma condensed consolidated balance sheet.

 

The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the notes thereto and Remy International, Inc.’s audited financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2003 and the unaudited financial statements included in its Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2004.


Unaudited Pro Forma Condensed Consolidated Statement of Operations

 

IN THOUSANDS, For the six months ended June 30, 2004


  Historical

  Pro Forma Adjustments

    Pro Forma

    Sale of
Businesses (a)


    Business
Held for
Sale (b)


   

Net sales

  $ 588,765   $ (46,972 )   $ (733 )   $ 541,060

Cost of goods sold

    478,411     (40,788 )     (1,126 )     436,497
   

 


 


 

Gross profit / loss

    110,354     (6,184 )     393       104,563

Selling, general and administrative expenses

    57,401     (722 )     (436 )     56,243

Restructuring charges

    1,795     (421 )     —         1,374
   

 


 


 

Operating income / loss

    51,158     (5,041 )     829       46,946

Interest expense, net

    33,416     (2,988 )     (258 )     30,170

Loss on early extinguishment of debt

    7,939     —         —         7,939
   

 


 


 

Income / loss from continuing operations before income taxes, minority interest and loss from unconsolidated joint ventures

    9,803     (2,053 )     1,087       8,837

Income tax expense

    1,147     (63 )(c)     —   (d)     1,084

Minority interest

    1,370     —         —         1,370

Loss from unconsolidated joint ventures

    768     —         —         768
   

 


 


 

Net income / loss from continuing operations

  $ 6,518   $ (1,990 )   $ 1,087     $ 5,615
   

 


 


 


(a) Represents the combined historical statements of operations of Williams Technologies, Inc. and JAX Reman, L.L.C.
(b) Represents the historical statement of operations of AutoMatic Transmission International A/S.
(c) The income tax provision of the disposed operations reflects state and local income taxes. The Company established a valuation allowance for domestic U.S. deferred tax assets in 2003 which resulted in no domestic U.S. provision on 2004 domestic income.
(d) No income tax benefit was provided on losses in the business held for sale.


Unaudited Pro Forma Condensed Consolidated Statement of Operations

 

IN THOUSANDS, For the year ended December 31, 2003


   Historical

    Pro Forma Adjustments

    Pro Forma

 
     Sale of
Businesses (a)


    Business
Held for
Sale (b)


   

Net sales

   $ 1,053,239     $ (79,423 )   $ (1,022 )   $ 972,794  

Cost of goods sold

     865,403       (72,625 )     (1,456 )     791,322  

Cost of goods sold - special charges:

                                

Core inventory valuation

     104,113       (183 )     —         103,930  

Mexican arbitration award

     14,310       —         —         14,310  
    


 


 


 


Gross profit / loss

     69,413       (6,615 )     434       63,232  

Selling, general and administrative expenses

     98,671       (1,363 )     (538 )     96,770  

Restructuring charges

     49,508       (540 )     —         48,968  
    


 


 


 


Operating income / loss

     (78,766 )     (4,712 )     972       (82,506 )

Interest expense, net

     62,151       (6,343 )     (354 )     55,454  
    


 


 


 


Loss from continuing operations before income taxes, minority interest and loss from unconsolidated joint ventures

     (140,917 )     1,631       1,326       (137,960 )

Income tax expense

     36,814       (132 )(c)     —   (d)     36,682  

Minority interest

     (143 )     —         —         (143 )

Loss from unconsolidated joint ventures

     6,427       —         —         6,427  
    


 


 


 


Net loss from continuing operations

   $ (184,015 )   $ 1,763     $ 1,326     $ (180,926 )
    


 


 


 



(a) Represents the combined historical statements of operations of Williams Technologies, Inc. and JAX Reman, L.L.C.
(b) Represents the historical statement of operations of AutoMatic Transmission International A/S.
(c) The income tax provision of the disposed operations reflects state and local income taxes. The Company established a valuation allowance for domestic U.S. deferred tax assets in 2002 which resulted in no domestic U.S. provision on the 2003 domestic income of Williams Technologies, Inc. and JAX Reman, L.L.C.
(d) No income tax benefit was provided on losses in the business held for sale.


Unaudited Pro Forma Condensed Consolidated Statement of Operations

 

IN THOUSANDS, For the year ended December 31, 2002


   Historical

    Pro Forma Adjustments

    Pro Forma

 
     Sale of
Businesses (a)


    Business
Held for
Sale (b)


   

Net sales

   $ 1,026,945     $ (93,691 )   $ (618 )   $ 932,636  

Cost of goods sold

     858,770       (78,549 )     (1,245 )     778,976  
    


 


 


 


Gross profit / loss

     168,175       (15,142 )     627       153,660  

Selling, general and administrative expenses

     97,651       (2,512 )     (103 )     95,036  

Restructuring credit

     (4,375 )     —         —         (4,375 )
    


 


 


 


Operating income / loss

     74,899       (12,630 )     730       62,999  

Interest expense, net

     56,416       (5,724 )     (163 )     50,529  
    


 


 


 


Income / loss from continuing operations before income taxes, minority interest and loss from unconsolidated joint ventures

     18,483       (6,906 )     893       12,470  

Income tax expense

     8,502       (276 )(c)     —   (d)     8,226  

Minority interest

     4,245       —         —         4,245  

Loss from unconsolidated joint ventures

     3,830       —         —         3,830  
    


 


 


 


Net income / loss from continuing operations

   $ 1,906     $ (6,630 )   $ 893     $ (3,831 )
    


 


 


 



(a) Represents the combined historical statements of operations of Williams Technologies, Inc. and JAX Reman, L.L.C.
(b) Represents the historical statement of operations of AutoMatic Transmission International A/S.
(c) The income tax provision of the disposed operations reflects state and local income taxes. The Company established a valuation allowance for domestic U.S. deferred tax assets in 2001 which resulted in no domestic U.S. provision on the 2002 domestic income of Williams Technologies, Inc. and JAX Reman, L.L.C.
(d) No income tax benefit was provided on losses in the business held for sale.


Unaudited Pro Forma Condensed Consolidated Statement of Operations

 

IN THOUSANDS, For the year ended December 31, 2001


  

Historical


    Pro Forma Adjustments

   

Pro Forma


 
     Sale of
Businesses (a)


    Business
Held for
Sale (b)


   

Net sales

   $ 967,876     $ (90,250 )   $ (330 )   $ 877,296  

Cost of goods sold

     790,632       (78,378 )     (490 )     711,764  

Cost of goods sold - special charges:

                                

Unusual warranty cost

     13,945       —         —         13,945  
    


 


 


 


Gross profit / loss

     163,299       (11,872 )     160       151,587  

Selling, general and administrative expenses

     98,413       (769 )     (214 )     97,430  

Special charges - selling, general and administrative expenses

     16,081       —         —         16,081  

Restructuring charges

     30,098       —         —         30,098  
    


 


 


 


Operating income / loss

     18,707       (11,103 )     374       7,978  

Interest expense, net

     50,800       (4,675 )     (39 )     46,086  

Non-recurring merger and tender offer expenses

     4,194       —         —         4,194  
    


 


 


 


Income / loss from continuing operations before income taxes, minority interest and loss from unconsolidated joint ventures

     (36,287 )     (6,428 )     413       (42,302 )

Income tax expense / benefit

     (6,737 )     1,472 (c)     —   (d)     (5,265 )

Minority interest

     9,254       —         —         9,254  

Loss from unconsolidated joint ventures

     2,925       —         —         2,925  
    


 


 


 


Net income / loss from continuing operations

   $ (41,729 )   $ (7,900 )   $ 413     $ (49,216 )
    


 


 


 



(a) Represents the combined historical statements of operations of Williams Technologies, Inc. and JAX Reman, L.L.C.
(b) Represents the historical statement of operations of AutoMatic Transmission International A/S.
(c) During 2001, the Company provided a significant valuation allowance on deferred tax assets. This adjustment reflects the effect of removing deferred tax liabilities of the disposed operations.
(d) No income tax benefit was provided on losses in the business held for sale.


Unaudited Pro Forma Condensed Consolidated Balance Sheet

 

IN THOUSANDS, At June 30, 2004


   Historical

    Pro Forma Adjustments

    Pro Forma

 
     Sale of
Businesses (a)


    Business
Held for
Sale (d)


   

Assets:

                                

Current assets:

                                

Cash and cash equivalents

   $ 23,184     $ 101,893 (b)   $ (153 )   $ 124,924  

Trade accounts receivable, net

     173,349       (10,475 )     (163 )     162,711  

Other receivables

     14,967       (235 )     (34 )     14,698  

Inventories

     237,319       (23,326 )     (687 )     213,306  

Assets of discontinued operations

     —         650       686       1,336  

Other current assets

     11,394       (227 )     (14 )     11,153  
    


 


 


 


Total current assets

     460,213       68,280       (365 )     528,128  

Property, plant and equipment

     321,658       (18,998 )     (386 )     302,274  

Less accumulated depreciation

     186,423       (8,775 )     (251 )     177,397  
    


 


 


 


Property, plant and equipment, net

     135,235       (10,223 )     (135 )     124,877  

Deferred financing costs, net

     16,757       —         —         16,757  

Goodwill, net

     138,073       (31,709 )     —         106,364  

Investments in joint ventures

     5,455       —         —         5,455  

Other assets

     20,234       (75 )     —         20,159  
    


 


 


 


Total assets

   $ 775,967     $ 26,273     $ (500 )   $ 801,740  
    


 


 


 


Liabilities and Stockholders’ Deficit:

                                

Current liabilities:

                                

Accounts payable

   $ 180,656     $ (14,973 )   $ (89 )   $ 165,594  

Accrued interest

     7,428       —         —         7,428  

Accrued restructuring

     5,260       (252 )     —         5,008  

Liabilities of discontinued operations

     906       866       1,583       3,355  

Other liabilities and accrued expenses

     115,670       (4,740 )     (105 )     110,825  

Current maturities of long-term debt

     24,161       —         —         24,161  
    


 


 


 


Total current liabilities

     334,081       (19,099 )     1,389       316,371  

Long-term debt, net of current portion

     647,301       —         (89 )     647,212  

Post retirement benefits other than pensions

     16,806       —         —         16,806  

Accrued pension benefits

     13,128       —         —         13,128  

Accrued restructuring

     8,053       —         —         8,053  

Other non-current liabilities

     7,786       —         —         7,786  

Minority interest

     9,953       —         —         9,953  

Redeemable preferred stock

     324,877       —         —         324,877  

Common stock

     3       —         —         3  

Retained deficit

     (571,280 )     45,372 (c)     (1,800 )(e)     (527,708 )

Accumulated other comprehensive loss

     (14,741 )     —         —         (14,741 )
    


 


 


 


Total stockholders’ deficit

     (586,018 )     45,372       (1,800 )     (542,446 )
    


 


 


 


Total liabilities and stockholders’ deficit

   $ 775,967     $ 26,273     $ (500 )   $ 801,740  
    


 


 


 



(a) Represents the combined historical balance sheets of Williams Technologies, Inc. and JAX Reman, L.L.C. and the estimated net proceeds and estimated net gain on the sale of these businesses.
(b) Includes the estimated net proceeds on the sale of Williams Technologies, Inc. and JAX Reman L.L.C. of $101.9 million.
(c) Represents the estimated net gain on the sale of Williams Technologies, Inc. and JAX Reman L.L.C.
(d) Represents the historical balance sheet of AutoMatic Transmission International A/S and the effect of the estimated loss on disposal of this business.
(e) Represents the estimated net loss on disposal of AutoMatic Transmission International A/S.