REMY INTERNATIONAL, INC. - 10-Q Quarterly Report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2004

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO .

COMMISSION FILE NO. 1-13683

REMY INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)


Delaware		35-1909253
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2902 Enterprise Drive Anderson, Indiana		46013
(Address of principal executive offices)		(Zip Code)

(765) 778-6499

(Registrant’s telephone number, including area code)

DELCO REMY INTERNATIONAL, INC.

(Former name, former address and former fiscal year, if changed since last report)

INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS.

Yes x No ¨

INDICATE BY CHECK MARK WHETHER THE REGISTRANT IS AN ACCELERATED FILER (AS DEFINED IN RULE 12B-2 OF THE EXCHANGE ACT).

Yes ¨ No x

INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE REGISTRANT’S CLASSES OF COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE.


		Outstanding as of August 2, 2004
Common Stock – Class A		1,000.00
Common Stock – Class B		2,485,337.48
Common Stock – Class C		16,687.00

Remy International, Inc. and Subsidiaries

INDEX


		Page
PART I	FINANCIAL INFORMATION

Item 1	Financial Statements

	Condensed Consolidated Balance Sheets	3

	Condensed Consolidated Statements of Operations	4

	Condensed Consolidated Statements of Cash Flows	5

	Notes to Condensed Consolidated Financial Statements	6

Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26

Item 3	Quantitative and Qualitative Disclosures About Market Risk	36

Item 4	Controls and Procedures	36

PART II	OTHER INFORMATION

Item 1	Legal Proceedings	37

Item 2	Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities	39

Item 3	Defaults Upon Senior Securities	39

Item 4	Submission of Matters to a Vote of Security Holders	39

Item 5	Other Information	39

Item 6	Exhibits and Reports on Form 8-K	39

SIGNATURES		40

EXHIBIT INDEX		41

PART I FINANCIAL INFORMATION

Item 1.

Financial Statements

Remy International, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets


IN THOUSANDS, At	June 30, 2004			December 31, 2003
	(unaudited)
Assets:
Current assets:
Cash and cash equivalents	$	23,184		$	21,328
Trade accounts receivable, net		173,349			151,221
Other receivables		14,967			15,076
Inventories		237,319			214,764
Other current assets		11,394			13,845

Total current assets		460,213			416,234
Property, plant and equipment		321,658			311,455
Less accumulated depreciation		186,423			175,709

Property, plant and equipment, net		135,235			135,746
Deferred financing costs, net		16,757			13,968
Goodwill, net		138,073			132,571
Investments in joint ventures		5,455			5,721
Other assets		20,234			19,736

Total assets	$	775,967		$	723,976

Liabilities and Stockholders’ Deficit:
Current liabilities:
Accounts payable	$	180,656		$	161,828
Accrued interest		7,428			9,837
Accrued restructuring		5,260			10,826
Liabilities of discontinued operations		906			1,565
Other liabilities and accrued expenses		115,670			123,385
Current maturities of long-term debt		24,161			31,397

Total current liabilities		334,081			338,838
Long-term debt, net of current portion (Note 7)		647,301			593,103
Deferred income taxes		—			644
Post-retirement benefits other than pensions		16,806			16,431
Accrued pension benefits		13,128			13,073
Accrued restructuring		8,053			8,801
Other non-current liabilities		7,786			6,918
Commitments and contingencies
Minority interest		9,953			15,193
Redeemable preferred stock		324,877			306,969
Stockholders’ deficit:
Common stock:
Class A shares		—			—
Class B shares		3			3
Class C shares		—			—
Retained deficit		(571,280	)		(560,193	)
Accumulated other comprehensive loss		(14,741	)		(15,804	)

Total stockholders’ deficit		(586,018	)		(575,994	)

Total liabilities and stockholders’ deficit	$	775,967		$	723,976

See notes to the condensed consolidated financial statements.

Remy International, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited)


	Three Months						Six Months
IN THOUSANDS, *For the three & six months ended June 30,*	2004			2003			2004			2003
Net sales	$	295,578		$	272,132		$	588,765		$	528,702
Cost of goods sold		237,944			221,116			478,411			434,255

Gross profit		57,634			51,016			110,354			94,447
Selling, general and administrative expenses		29,823			25,207			57,401			51,429
Restructuring charges (credits)		700			(485	)		1,795			44,600

Operating income (loss)		27,111			26,294			51,158			(1,582	)
Interest expense, net		17,214			16,772			33,416			30,888
Loss on early extinguishment of debt (Note 7)		7,939			—			7,939			—

Income (loss) from continuing operations before income taxes, minority interest and loss from unconsolidated joint ventures		1,958			9,522			9,803			(32,470	)
Income tax (benefit) expense		(290	)		4,904			1,147			10,164
Minority interest		822			972			1,370			759
Loss from unconsolidated joint ventures		314			5,012			768			5,727

Net income (loss) from continuing operations		1,112			(1,366	)		6,518			(49,120	)
Discontinued operations:
Income (loss) from discontinued operations, net of tax		346			(640	)		88			(4,387	)
Gain on disposal of discontinued operations, net of tax		107			—			215			2,417

Net income (loss) from discontinued operations, net of tax		453			(640	)		303			(1,970	)

Net income (loss)		1,565			(2,006	)		6,821			(51,090	)
Accretion for redemption of preferred stock		9,356			8,385			17,908			15,941

Net loss attributable to common stockholders	$	(7,791	)	$	(10,391	)	$	(11,087	)	$	(67,031	)

See notes to the condensed consolidated financial statements.

Remy International, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)


IN THOUSANDS, *For the six months ended June 30,*	2004			2003
Cash Flows from Operating Activities:
Net loss attributable to common stockholders	$	(11,087	)	$	(67,031	)
Adjustments to reconcile net loss to net cash used in operating activities:
Loss (income) from discontinued operations		(88	)		4,387
Gain on disposal of discontinued operations		(215	)		(2,417	)
Depreciation		10,812			12,058
Amortization		1,482			742
Non-cash interest expense		2,263			2,370
Loss on early extinguishment of debt (Note 7)		7,939			—
Accretion for redemption of preferred stock		17,908			15,941
Minority interest		1,370			759
Loss from unconsolidated joint ventures		768			5,727
Deferred income taxes		(2,545	)		2,941
Post-retirement benefits other than pensions		375			(6,094	)
Accrued pension benefits		55			2,046
Restructuring charges		1,795			44,600
Cash payments for restructuring charges		(7,830	)		(11,850	)
Changes in operating assets and liabilities, net of acquisitions and restructuring charges:
Accounts receivable		(21,986	)		(21,398	)
Inventories		(22,562	)		(25,364	)
Accounts payable		19,478			472
Other current assets and liabilities		(3,555	)		12,164
Other non-current assets and liabilities, net		(2,880	)		1,786

Net cash used in operating activities of continuing operations		(8,503	)		(28,161	)
Cash Flows from Investing Activities:
Acquisitions, net of cash acquired		(19,263	)		(4,919	)
Net proceeds on sale of businesses		216			27,876
Purchases of property, plant and equipment		(9,735	)		(8,966	)

Net cash (used in) provided by investing activities of continuing operations