Thirteenth graph of release should read: A replay of the conference call
will be made available through May 16, 2012 by calling 1.888.286.8010,
passcode 29414875, and an archived webcast will be available at www.upgi.com
(sted A replay of the conference call will be made available through
April 4, 2012 by calling 1.888.286.8010, passcode 22446913, and an
archived webcast will be available at www.upgi.com).
The corrected release reads:
UNIVERSAL POWER GROUP REPORTS FIRST QUARTER 2012 RESULTS
Universal Power Group, Inc. (NYSE Amex: UPG), a Texas-based distributor
and supplier of batteries and related power accessories, and a
third-party logistics provider, today announced financial results for
the first quarter ended March 31, 2012.
For the first quarter, UPG reported net income of $0.3 million, or $0.06
per diluted share, on net sales of $26.4 million, compared with net
income of $0.4 million, or $0.08 per diluted share, on net sales of
$21.6 million in the first quarter of 2011.
“In the first quarter, UPG saw steady improvement in Chinese battery
production and resolution of supply chain issues from last year. As our
manufacturing partners improved production levels, we were able to
fulfill customer backlog orders and generate higher sales,” stated Ian
Edmonds, UPG’s President and Chief Executive Officer. “Although we are
pleased that our core business is once again growing and we are able to
deliver on our commitments to customers, we faced some pricing
volatility and extended price concessions that reduced our gross
margins. We view these steps as investments in the long-term
relationships we’ve built with our clients that should help position us
for stronger growth as the last of the issues with China are resolved.”
First Quarter Results
Net sales for the first quarter increased 22.3 percent, to $26.4
million, from $21.6 million in the first quarter of 2011. The increase
in net sales in the 2012 first quarter was primarily driven by an
increase in sales of core batteries and related power accessories, as a
significant supply chain disruption in China began to be resolved. The
increase in sales was the result of fulfillment of customer order
backlogs, as well as new customer orders. Net sales were also higher as
a result of the inclusion of sales from ProTechnologies, Inc. (PTI),
which UPG acquired on April 20, 2011.
Gross profit increased to $4.7 million in the quarter, compared with
$4.3 million in the first quarter of 2011, due mainly to the higher
sales levels. As a percent of sales, gross margin decreased to 17.7% in
the first quarter of 2012, from 20.0% in the prior year as a result of
higher product costs resulting from the supply chain disruptions in
China. Operating expenses increased to $4.2 million in the first quarter
of 2012, from $3.5 million in the first quarter of 2011. The increase in
operating expenses included higher personnel and sales representative
costs, increased professional fees, including litigation expenses on
matters that were settled in the first quarter, as well as increased
marketing, travel and facility expenses. First-quarter operating
expenses of 2012 also included the expenses of PTI, which were not
included in results for the first quarter of 2011.
Primarily as a result of the increase in operating expenses, operating
income fell to $0.5 million for the current quarter, compared with
operating income of $0.8 million in the first quarter 2011. Interest
expense was $0.1 million in the first quarter, which was flat when
compared with the prior year. As a result, UPG generated pre-tax income
of $0.5 million for the first quarter of 2012 compared to a pre-tax
income of $0.6 million in the prior year. The Company reported net
income of $0.3 million, or $0.06 per diluted share, compared to net
income of $0.4 million, or $0.08 per diluted share in the first quarter
of 2011.
Balance Sheet and Financial Position
At March 31, 2012 inventory was $24.2 million, virtually unchanged from
the December 31, 2011 levels. Although manufacturing delays and
increased delivery lead times associated with the Chinese supply chain
issues began to stabilize in the first quarter, the supply chain
improvements were not sufficient to enable UPG to rebuild inventories to
normal levels. UPG anticipates that continued improvements in the supply
chain will enable the Company to fulfill remaining backlog orders and
rebuild inventory levels through the second quarter.
Accounts receivable increased to $15.9 million, from $13.0 million at
the end of 2011. Accounts payable increased by $3.4 million, to $10.2
million during the period. Total working capital increased to $20.3
million, from $19.9 million at the end of 2011. For the first three
months of 2012, net cash used in operations was $1.1 million compared to
$4.9 million provided by operating activities in the first three months
of 2011. Operating cash flow for the first quarter of 2012 reflects a
$3.0 million increase in accounts receivable and a $1.8 million increase
in prepaid expenses and other current assets, which were partially
offset by a $3.4 million increase in accounts payable.
Sale of Monarch Subsidiary
On May 4, 2012, UPG closed on the sale of its Monarch Outdoor
Adventures, LLC (Monarch) subsidiary, a manufacturer and retailer of
hunting products including battery and solar powered deer feeders,
hunting blinds, stands and accessories which UPG acquired in January,
2009. Monarch’s revenue and assets are not material to UPG’s
consolidated financial results, and UPG’s management decided to divest
the business to better focus the Company’s resources on its core
business of batteries and related power accessories.
Edmonds concluded: “We started 2012 with the continuing effects of the
industry-wide supply issues in China, but we made considerable progress
in moving beyond them as we experienced a significant improvement in
sales over the fourth quarter of 2011. As our supply chain gets back to
more normal levels of activity, we expect that our sales and gross
margins will improve. We remain encouraged by our efforts to grow the
business, with sales to new customers supporting our growth in the first
quarter, along with continued strong performance by PTI. We also
completed the recent sale of Monarch, which is consistent with our
strategy to refocus on our core competencies and promote the long-term
growth of our business.”
Conference Call Information
Universal Power Group will host an investor conference call today,
Wednesday, May 9, 2012 at 11:30 a.m. ET (10:30 a.m. CT) to discuss the
Company’s financial results for the first quarter ended March 31, 2012.
Interested parties may access the conference call by dialing
1.866.770.7120; passcode 78510038. The conference call will also be
broadcast live at www.upgi.com
and through the Thomson StreetEvents Network. Individual investors can
listen to the call at www.earnings.com,
Thomson’s individual investor portal. Institutional investors can access
a webcast of the call via Thomson StreetEvents (www.streetevents.com),
a password-protected event management site.
A replay of the conference call will be made available through May 16,
2012 by calling 1.888.286.8010, passcode 29414875, and an archived
webcast will be available at www.upgi.com.
About Universal Power Group, Inc.
Universal Power Group, Inc. (NYSE Amex: UPG) is a leading supplier and
distributor of batteries and power accessories, and a provider of supply
chain and other value-added services. UPG's product offerings include
proprietary brands of industrial and consumer batteries of all
chemistries, chargers, jump-starters, 12-volt accessories, and solar and
security products. UPG's supply chain services include procurement,
warehousing, inventory management, distribution, fulfillment and
value-added services such as sourcing, battery pack assembly and
coordinating battery recycling efforts, as well as product development.
For more information, please visit the UPG website at www.upgi.com.
Forward-Looking Statements
Statements in this press release that are not statements of historical
or current fact constitute "forward-looking statements." Such
forward-looking statements involve known and unknown risks,
uncertainties and other unknown factors that could cause the Company's
actual operating results to be materially different from any historical
results or from any future results expressed or implied by such
forward-looking statements. In addition to statements that explicitly
describe these risks and uncertainties, readers are urged to consider
statements that contain terms such as "believes," "belief," "expects,"
"expect," "intends," "intend," "anticipate," "anticipates," "plans,"
"plan," to be uncertain and forward-looking. The forward-looking
statements contained herein are also subject generally to other risks
and uncertainties described from time to time in the Company's filings
with the Securities and Exchange Commission. Historical financial
results are not necessarily indicative of future performance.
UNIVERSAL POWER GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
(Amounts in thousands)
March 31, 2012
December 31, 2011
(unaudited)
CURRENT ASSETS
Cash and cash equivalents
$
356
$
283
Accounts receivable:
Trade, net of allowance for doubtful accounts of $409 (unaudited)
and $384
15,937
12,972
Other
393
442
Inventories – finished goods, net of allowance for obsolescence of
$440 (unaudited) and $830
24,164
24,174
Current deferred tax asset
823
972
Income tax receivable
661
721
Prepaid expenses and other current assets
3,199
1,426
Total current assets
45,533
40,990
PROPERTY AND EQUIPMENT
Logistics and distribution systems
1,881
1,871
Machinery and equipment
1,044
1,044
Furniture and fixtures
513
511
Leasehold improvements
394
389
Vehicles
171
171
Total property and equipment
4,003
3,986
Less accumulated depreciation and amortization
(3,203
)
(3,128
)
Net property and equipment
800
858
GOODWILL
1,387
1,387
INTANGIBLES, net
467
527
OTHER ASSETS
108
100
NON-CURRENT DEFERRED TAX ASSET
233
213
2,195
2,227
TOTAL ASSETS
$
48,528
$
44,075
UNIVERSAL POWER GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
LIABILITIES AND SHAREHOLDERS’ EQUITY
(Amounts in thousands)
March 31, 2012
December 31, 2011
(unaudited)
CURRENT LIABILITIES
Line of credit
$
13,923
$
12,654
Accounts payable
10,220
6,845
Income taxes payable
18
—
Accrued liabilities
966
1,213
Current portion of settlement accrual
—
241
Current portion of capital lease and note obligations
114
119
Current portion of deferred rent
—
14
Total current liabilities
25,241
21,086
LONG-TERM LIABILITIES
Capital lease and note obligations, less current portion
204
229
Total long-term liabilities
204
229
TOTAL LIABILITIES
25,445
21,315
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY
Common stock - $0.01 par value, 50,000,000 shares authorized,
5,020,000 shares issued and outstanding
50
50
Additional paid-in capital
16,342
16,339
Retained earnings
6,711
6,419
Accumulated other comprehensive loss
(20
)
(48
)
Total shareholders’ equity
23,083
22,760
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
$
48,528
$
44,075
UNIVERSAL POWER GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands except per share data)
Three Months Ended March 31,
2012
2011
Net sales
$
26,410
$
21,587
Cost of sales
21,734
17,278
Gross profit
4,676
4,309
Operating expenses
4,167
3,536
Operating income
509
773
Other income (expense)
Interest expense
(144
)
(141
)
Other, net
125
—
(19
)
(141
)
Income before provision for income taxes
490
632
Provision for income taxes
(198
)
(229
)
Net income
$
292
$
403
Earnings per share
Basic
$
0.06
$
0.08
Diluted
$
0.06
$
0.08
Weighted average shares outstanding
Basic
5,020
5,020
Diluted
5,202
5,046
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
(Amounts in thousands)
Three Months Ended March 31,
2012
2011
Net income
$
292
$
403
Amortization of hedging instrument
28
29
Comprehensive income
$
320
$
432
UNIVERSAL POWER GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
Three Months Ended March 31,
2012
2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net income
$
292
$
403
Items not requiring (providing) cash:
Depreciation and amortization
135
155
Provision for bad debts
23
45
Provision for obsolete inventory
140
180
Deferred income taxes
129
159
Stock-based compensation
3
15
Changes in operating assets and liabilities
Accounts receivable – trade
(2,988
)
1,745
Accounts receivable – other
49
(21
)
Inventories
(130
)
1,376
Income taxes receivable/payable
78
(537
)
Prepaid expenses and other current assets
(1,773
)
289
Accounts payable
3,375
1,145
Accrued liabilities
(219
)
136
Settlement accrual
(241
)
(197
)
Deferred rent
(14
)
(19
)
Net cash provided by (used in) operating activities
(1,141
)
4,874
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment
(17
)
—
Net cash used in investing activities
(17
)
—
CASH FLOWS FROM FINANCING ACTIVITIES
Net activity on line of credit
1,269
(4,963
)
Payments on capital lease and note obligations
(38
)
(6
)
Net cash provided by (used in) financing activities
1,231
(4,969
)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
73
(95
)
Cash and cash equivalents at beginning of period
283
215
Cash and cash equivalents at end of period
$
356
$
120
SUPPLEMENTAL DISCLOSURES
Income taxes paid
$
7
$
617
Interest paid
$
144
$
106
