– Third Quarter 2010 Revenue of $86.1 Million and EPS of $0.29 –
– IMPCO Division Revenue and Profitability Expansion Continue –
NEW YORK, Nov. 4, 2010 (GLOBE NEWSWIRE) -- Fuel Systems Solutions, Inc. (Nasdaq:FSYS) reported results for its third quarter and nine months ended September 30, 2010.
Mariano Costamagna, Fuel Systems' CEO, said, "We achieved third quarter revenue of $86.1 million and maintained gross margins of 29% as improvements in our Industrial business, buoyed by strength in Asia and our other IMPCO markets, helped counteract the impact of seasonality and softer new vehicle market demand in Europe."
Matthew Beale, Fuel Systems' President, CFO and Secretary, said, "We continue to invest in our future growth opportunities and broaden the scope of our transportation business while we manage our business to accommodate current demand levels. The geographic and end market balance in our business generated a more even revenue distribution this quarter, with our IMPCO business delivering an 82% increase in revenue compared to the same period a year ago, and achieving operating profitability for the second consecutive quarter. Our U.S. Automotive division continues to leverage its strong position with OEMs. Our acquisitions of PCI and EvoTek position us to be strong partners with fleet customers and manufacturers as they roll out CNG and LPG versions of key fleet vehicles. The integration of the acquisitions is on track and will complement our efforts in the North American automotive markets."
Third Quarter 2010 Financial Results
Revenue for the third quarter of 2010 was $86.1 million, compared to $116.2 million in the third quarter of 2009. Third quarter 2010 revenue was negatively impacted by approximately $9.7 million of foreign exchange rate fluctuations. The revenue decrease is primarily attributable to a lower level of revenue from DOEM installations after the expiration of the Italian government's 2009 incentive program, partially offset by an increase in the industrial and other automotive business and the contribution of acquisitions made in 2009. Gross profit for the third quarter 2010 was $24.8 million, or 29% of revenue, compared to $39.4 million, or 34% of revenue a year ago, reflecting the reduction in DOEM volumes versus last year partially offset by improved margins in the industrial and other automotive business. Operating income for the period totaled $7.5 million, or 9% of revenue, compared to $23.1 million, or 20% of revenue, in the third quarter of 2009, reflecting lower volumes and gross margin and greater R&D expenses than last year's quarter as the Company invested in new technologies, partially offset by lower SG&A. Net income for the third quarter 2010 was $5.2 million, or $0.29 per diluted share, compared to $15.5 million, or $0.88 per diluted share in the third quarter 2009.
On segment basis, third quarter 2010 revenues from BRC Operations, primarily representing the Company's transportation business, decreased to $53.2 million from $96.8 million in the same quarter a year ago, and revenues from IMPCO Operations, primarily representing the Company's industrial business, increased to $36.3 million from $19.9 million in the same quarter a year ago. BRC third quarter 2010 operating income was $3.7 million compared to $27.9 million in the same quarter a year ago; IMPCO third quarter 2010 operating income of $5.1 million reversed the operating loss of $3.6 million in the same period a year ago. A table presenting operating segment data can be found in the tables below.
Nine Months Ended June 30, 2010 Financial Results
For the nine-month period ended September 30, 2010, total revenue was $347.5 million compared to $288.6 million for the same period a year ago. Net income for the first nine months of 2010 was $40.1 million, or $2.27 per diluted share, compared to $30.0 million, or $1.81 per diluted share, for the same period a year ago.
"Regardless of near-term movements in individual markets, demand continues to build around the world for bi-fuel and dedicated alternative gaseous fuel systems. We are increasingly well-positioned to take advantage of these emerging trends and continue to invest to capture this opportunity," concluded Beale.
Fuel Systems expects fourth quarter revenue to include continued soft European automotive trends and continued strength in the IMPCO business. Therefore, the Company continues to expect full year 2010 revenue to be between $425 million and $450 million. The Company continues to target 2010 gross margin of 29% to 31% and 2010 operating margin of 14% to 16%.
The Company will host a conference call today, November 4th at 11:00 a.m. Eastern Time / 8:00 a.m. Pacific Time to discuss its third quarter 2010 financial results and other matters. To listen to the call live, please dial 877-356-8063 at least 10 minutes before the start of the conference. International participants may dial 706-679-2544. The pass code for the conference call will be 16747996. The call is also being webcast and can be accessed from the "Investor Relations" section of the Company's website at . A telephone replay will be available until midnight ET on November 8th by dialing 800-642-1687 or 706-645-9291 and entering pass code 16747996#. A replay will also be available at the web address above for 90 days.
This press release contains certain forward-looking statements that involve risks and uncertainties, including, without limitation, expressed or implied statements concerning the Company's outlook for the remainder of 2010, as well as its position in the market place, the success of products and the success and integration of recent acquisitions. Such statements represent only our opinions and predictions. The Company's actual results may differ materially. Factors that may cause the Company's results to differ include, but are not limited to, risks that we cannot integrate the acquired assets into our business promptly and efficiently, that the patents or certifications acquired are insufficient or not useable by us, that expected sales do not materialize, that changes in emissions regulations may not significantly increase demand for the Company's products, the global economic downturn may reduce customers' demand for new automobiles and/or our products, original equipment automobile manufacturers do not adopt the Company's fuel systems as expected, that expected sales not based on long-term contracts will materialize, that reduction in oil prices will reduce the demand for our products and that currency fluctuations will reduce our revenue or financial condition. Readers also should consider the risk factors set forth in the Company's reports filed with the Securities and Exchange Commission, including, but not limited to, those contained in the "Risk Factors" section of the Company's Annual Report on Form 10-K, for the year ended December 31, 2009 as well as our Quarterly Reports on Form 10-Q for the period ended June 30, 2010. The Company does not undertake to update or revise any of its forward-looking statements or guidance even if experience or future changes show that the indicated results or events will not be realized.
About Fuel Systems Solutions
Fuel Systems Solutions (Nasdaq:FSYS) is a leading designer, manufacturer and supplier of proven, cost-effective alternative fuel components and systems for use in transportation and industrial applications. Fuel Systems' components and systems control the pressure and flow of gaseous alternative fuels, such as propane and natural gas, used in internal combustion engines. These components and systems feature the Company's advanced fuel system technologies, which improve efficiency, enhance power output and reduce emissions by electronically sensing and regulating the proper proportion of fuel and air required by the internal combustion engine. In addition to the components and systems, the Company provides engineering and systems integration services to address unique customer requirements for performance, durability and configuration. The Company is composed of two operating subsidiaries: IMPCO Technologies and BRC. IMPCO Technologies is a leader in the heavy duty, industrial, power generation and stationary engines sectors and recently established a U.S. Automotive division. BRC is a leader in the light duty and automobile alternative fuel sectors and has established alliances with several major automobile manufacturers for OEM projects. Additional information is available at .
- Tables Follow -
(1) Represents corporate expense not allocated to either of the business segments.