Unique Fabricating, Inc. Reports Second Quarter 2017 Financial Results

AUBURN HILLS, Mich., Aug. 7, 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 second quarter ended July 2, 2017.

Second Quarter 2017 Financial Highlights

• Revenue of $44.5 million in the second quarter 2017, up 5.9% compared to $42.0 million in the second quarter 2016
• Net income of $1.7 million, or $0.17 per basic and diluted share in the second quarter 2017, compared to $0.6 million, or $0.06 per basic and diluted share in the second quarter 2016
• Adjusted EBITDA of $5.0 million in the second quarter 2017, including $1.6 million for non-cash charges specifically related to depreciation and amortization and non-cash stock awards, compared to $4.3 million in the second quarter 2016, including $1.4 million for non-cash charges specifically related to depreciation and amortization and non-cash stock awards(1)
• Adjusted diluted earnings per share of $0.19 in the second quarter 2017 versus $0.14 in the second quarter 2016(1)
• Declared a quarterly cash dividend of $0.15 per share payable on September 7, 2017 for stockholders of record as of August 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.

"Unique continues to operate efficiently, delivering solid earnings and generating strong cash flows while returning capital to shareholders in the form of an approximate 7.2% dividend yield, despite near-term softness within the auto industry," commented John Weinhardt, Chief Executive Officer. "Our automotive operations benefited materially in the second quarter from investments we have made to advance our production capabilities, resulting in improved gross margins and higher earnings. We have carefully constructed our business to enable rapid response to automotive production fluctuations, reducing our expenses during periods of extended softness or uncertainty. Having said that, we are continuing to invest in engineering and new product development to support and add to the increasing number of new program awards we are receiving for various molded products. However, because of the higher engineering content inherent in our molded products, they are typically sourced eighteen to twenty four months ahead of production, and therefore revenue on these programs will not be realized until these programs launch in 2018 and 2019. The underlying fundamentals of our business remain strong. Over the long-term, we believe we are well-positioned to grow in excess of the automotive market and maintain stable margins, while continuing to generate cash and pay a healthy dividend."

"Increasing U.S. auto inventories and plant shutdowns planned for later this year indicate the auto industry is plateauing in the near-term," continued Weinhardt. "With U.S. inventory at its highest in more than a decade, we continue to monitor the broader auto industry trends and independent industry data closely. Our cost structure is inherently malleable, providing us the flexibility to adapt to cyclical changes in the broader auto industry, as needed. At the same time, the demand for elevating the driving experience and reducing vehicle weight remains strong, and we believe will continue to fuel the innovation of new products and features over the long-term driving demand for our products."

"Given the near-term uncertainty for the broader automotive market, we are updating our expectations for the full-year 2017 to include modest revenue growth that outpaces the expected market growth rate, gross margins in-line with our second quarter 2017 reported results and Adjusted EBITDA to remain relatively flat as we exit 2017," concluded Weinhardt.

Second Quarter Financial Summary

Total revenue for the quarter ended July 2, 2017 increased to $44.5 million, up 5.9%, or $2.5 million from $42.0 million during the same period last year, despite a decline in North American auto production of almost 2% quarter over quarter. 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 July 2, 2017 was $10.7 million, or 24.0% of total revenue, compared to $9.1 million, or 21.6% of total revenues, for the corresponding period last year. The increase in gross profit as a percentage of sales was primarily a result of the investments we have made previously to add capacity and advance our capabilities at our facilities, offset by lower than planned revenues due to lower than anticipated vehicle production volumes during the second quarter as a result of high inventories of certain vehicles at the OEMs.

Net income for the quarter ended July 2, 2017 was $1.7 million, or $0.17 per basic and diluted share, compared to $0.6 million, or $0.06 per basic and diluted share, in the second quarter of 2016. The increase in net income was primarily due to higher sales quarter over quarter as well as higher gross profit as a percentage of sales as described above.

Adjusted EBITDA for the quarter ended July 2, 2017 was $5.0 million compared to $4.3 million in the second quarter of 2016. The increase is primarily a result of earnings generated from higher sales and gross margins. 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 July 2, 2017 was $0.19 compared to $0.14 in the second quarter of 2016. The increase is primarily a result of higher earnings, as described above. 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.

Year to Date Financial Summary

Total revenue for the first six month of 2017 increased to $92.4 million, up 12.6%, or $10.3 million from $82.0 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 first six months of 2017 was $21.8 million, or 23.6% of total revenue, compared to $18.7 million, or 22.8% of total revenues, for the corresponding period last year. The increase in gross profit as a percentage of sales was again primarily a result of the investments we have made previously to add capacity and advance our capabilities at our facilities.

Net income for the first six month of 2017 was $3.7 million, or $0.38 per basic and diluted share, compared to $2.4 million, or $0.25 per basic and diluted share, in the comparable period last year.

Adjusted EBITDA for the first six months of 2017 was $10.4 million compared to $8.7 million in the same period last year. The increase is primarily a result of earnings generated from higher sales and gross margins. Please refer to the financial tables below for a reconciliation of GAAP to Non-GAAP results.

Adjusted diluted earnings per share for the first six months of 2017 was $0.42 compared to $0.35 in the same period last year. The increase is primarily a result of higher earnings, and the margin increase described above. 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 July 2, 2017 the Company had approximately $807,000 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 July 2, 2017 was $55.1 million compared to $50.6 million as of January 1, 2017.

As of July 2, 2017, the Company had $3.2 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

For the full year 2017, Unique Fabricating is updating its outlook with the following guidance:

This outlook is based on expected production of 17.55 million light vehicles for the year, based on independent industry research published in July, and the mix of production by light vehicle platform contained therein.

Declaration of Dividends

Unique's Board of Directors approved payment of a quarterly cash dividend of $0.15 per share on August 7, 2017. The dividend will be paid on September 7, 2017 to stockholders of record as of the close of business on August 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 13667946. 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 August 7, 2017 until 11:59PM ET on August 14, 2017 by dialing 1-844-512-2921 (United States) or 1-412-317-6671 (international) and using the pin number 13667946.

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 IRBrett Maas/Rob Fink646-536-7331/646-415-8972[email protected]

 

 

 

 

 

 

 

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SOURCE Unique Fabricating, Inc.