AUBURN HILLS, MI / ACCESSWIRE / November 8, 2022 / Unique Fabricating, Inc. (NYSE American:UFAB), a leader in engineering and manufacturing multi-material foam, rubber, and plastic components utilized in noise, vibration, and harshness management and air/water sealing applications for the transportation, appliance, medical, and consumer/off-road markets, today announced its financial results for the third quarter ended September 30, 2022.
Third Quarter 2022 Financial Results
- Net sales of $34.5 million, up 15.4% compared to $29.9 million in the third quarter of 2021.
- Total debt decreased $0.7 million to $47.7 million as of September 30, 2022, from $48.4 million as of December 31, 2021.
"We continue to make progress on our comprehensive refinancing initiative. The financing completed in early October combined with yesterday's execution of the amendment to our credit agreement ending the forbearance condition are important steps toward that goal. In addition, we believe this will support our new customer order intake activities," commented Doug Cain, Unique Fabricating's Chief Executive Officer. "Operationally, our team continues to adapt and to adjust to various challenges, delivering for our customers and maintaining cost-discipline. Volumes remained challenged in the third quarter and into the fourth quarter while inconsistent customer production schedules persisted. At this time, our supply chain availability has improved in most areas and the cost curve appears to have flattened. With improvements already made and more in process, we believe that we can continue to navigate these challenges, and that we will emerge as one of the stronger suppliers as the industry normalizes."
ThirdQuarter 2022 Financial Summary
Net sales for the quarter increased $4.6 million, or 15.4%, to $34.5 million when compared to the third quarter of 2021. This increase was primarily driven by higher light vehicle production in North America in the third quarter of 2022 as compared to the same period in 2021. Gross profit for the third quarter of 2022 was $3.0 million, or 8.8% of net sales, compared to $3.3 million, or 11.0% of net sales, for the same period last year.
Selling, general and administrative expenses were $4.4 million, or 12.8% of net sales, compared to $5.7 million, or 19.2% of net sales for the same period last year. The Company also recognized a non-cash goodwill impairment charge of $4.8 million, during the third quarter of 2022.
Net loss was $10.6 million or $0.90 per basic and diluted share in the third quarter of 2022, compared to net loss of $1.9 million or $0.19 per basic and diluted share in the third quarter of 2021. The increase in net loss as compared to the same period last year is the result of $4.2 million higher income tax expense in the third quarter of 2022 related to establishing valuation allowances for deferred tax assets in Mexico and Canada and the one-time $6.1 million gain recognized in the third quarter of 2021 from the forgiveness of the Company's PPP Loan.
Balance Sheet Summary
As of September 30, 2022, the Company had approximately $0.5 million in cash and cash equivalents, compared to $0.7 million in cash and cash equivalents at December 31, 2021. Total debt outstanding as of September 30, 2022 was $47.7 million compared to $48.4 million as of December 31, 2021.
Results Conference Call
Unique Fabricating will host a conference call and live webcast to review the quarterly results and provide a corporate update today at 4:30 p.m. Eastern Time. To access the call, please dial (877) 545-0320 (toll free) or (973) 528-0002 and if requested, reference conference ID 827457. The conference call will also be webcast live on the Investor Relations section of Unique Fabricating's web site at http://ir.uniquefab.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 7 p.m. ET on November 8, 2022 until 11:59 p.m. ET on November 22, 2022 by dialing (877) 481-4010 (United States) or (919) 882-2331 (international) and using the passcode 47037.
About Unique Fabricating, Inc.
Unique Fabricating, Inc. (NYSE American: UFAB) engineers and manufactures components for customers in the transportation, appliance, medical, and consumer markets. 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, engine covers, fender stuffers, air ducts, acoustical insulation, door water shields, gas tank pads, light gaskets, topper pads, mirror gaskets, glove box liners, personal protection equipment, and packaging. The Company is headquartered in Auburn Hills, Michigan. For more information, visit http://www.uniquefab.com.
About Non-GAAP Financial Measures
The Third Amendment to Forbearance Agreement suspended the Minimum Consolidated EBITDA Covenant for the remainder of the forbearance period. To keep the reader informed on how our performance measures against potential future financial covenants, we are disclosing the reconciliation of net income (loss), as reported, to Operating EBITDA, a non-GAAP financial measure which is similar to financial measurements used in the past to measure the Company's performance against previously required financial covenants. There can be no assurance as to the requirements or form of future financial covenants, including that the example we are providing will be incorporated into any covenant or measure of our performance in the future or as to the use or calculation of Operating EBITDA or any other non-GAAP financial measure. Operating EBITDA, as determined and measured by Unique Fabricating, is defined as net income (loss) before interest expense, income taxes, depreciation and amortization, and before certain items, as applicable, such as non-cash stock compensation, severance, restructuring, impairment of goodwill and other intangibles, acquisition and integration costs, gains (losses) on the sale or exchange of assets other than in the ordinary course of business, gains (losses) on extinguishment of debt, and certain expenses related to our Forbearance Agreement including financial advisor fees, legal expenses, amendment fees, and risk advisory and mitigation costs. Operating EBITDA as presented, should not be considered a substitute for results prepared in accordance with U.S. GAAP and should not be considered an alternative to net income (loss), which is the most directly comparable financial measure to Operating EBITDA that is prepared in accordance with U.S. GAAP. Operating EBITDA, as determined and measured by Unique Fabricating, should also not be compared to similarly titled measures reported by other companies. Certain of the adjustments and add backs to Operating EBITDA are recurring in nature and are cash expenses, which we believe limits the usefulness of Operating EBITDA as a measurement of the Company's performance.
Customer Order Intake ("COI") reflects anticipated future sales from formally awarded programs and is based on expected production volumes for the life of the program. The calculation of Customer Order Intake does not reflect the impact of lost business and discontinued programs and may be impacted by various assumptions embedded in the respective calculation, including, among other things, actual production levels on new programs and the timing of program launches.
Non-GAAP financial measures may have limitations as analytical tools, and should not be considered in isolation as a substitute for analysis of Unique Fabricating's results as reported under U.S. 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 results for the third quarter of 2022 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 net sales, 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 December 31, 2021, as filed with the Securities and Exchange Commission and in particular the Section entitled "Risk Factors", as well as any updates to those risk factors included 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.
UNIQUE FABRICATING INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited - dollars in thousands)
|
|
|
September 30,
2022 |
|
|
December 31,
2021 |
|
|
Assets
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$ |
480 |
|
|
$ |
742 |
|
|
Accounts receivable, net of reserves of approximately $0.5 million and $1.3 million at September 30, 2022 and December 31, 2021, respectively
|
|
|
25,437 |
|
|
|
23,469 |
|
|
Inventory, net
|
|
|
12,521 |
|
|
|
13,770 |
|
|
Prepaid expenses and other current assets:
|
|
|
|
|
|
|
|
|
|
Prepaid expenses and other
|
|
|
6,114 |
|
|
|
3,270 |
|
|
Refundable taxes
|
|
|
1,925 |
|
|
|
3,738 |
|
|
Total current assets
|
|
|
46,477 |
|
|
|
44,989 |
|
|
Property, plant, and equipment, net
|
|
|
21,062 |
|
|
|
22,567 |
|
|
Goodwill
|
|
|
- |
|
|
|
16,996 |
|
|
Intangible assets
|
|
|
4,208 |
|
|
|
5,161 |
|
|
Other assets
|
|
|
|
|
|
|
|
|
|
Operating leases
|
|
|
10,068 |
|
|
|
9,776 |
|
|
Investments, at cost
|
|
|
1,054 |
|
|
|
1,054 |
|
|
Deposits and other assets
|
|
|
901 |
|
|
|
755 |
|
|
Deferred tax asset
|
|
|
351 |
|
|
|
2,379 |
|
|
Total assets
|
|
$ |
84,121 |
|
|
$ |
103,677 |
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$ |
13,310 |
|
|
$ |
10,056 |
|
|
Current maturities of long-term debt
|
|
|
25,398 |
|
|
|
28,884 |
|
|
Income taxes payable
|
|
|
46 |
|
|
|
303 |
|
|
Revolver, current maturities
|
|
|
22,343 |
|
|
|
19,541 |
|
|
Accrued compensation
|
|
|
1,516 |
|
|
|
1,149 |
|
|
Other accrued liabilities
|
|
|
3,258 |
|
|
|
3,478 |
|
|
Total current liabilities
|
|
|
65,871 |
|
|
|
63,411 |
|
|
Other long-term liabilities:
|
|
|
|
|
|
|
|
|
|
Other liabilities
|
|
|
8,830 |
|
|
|
9,139 |
|
|
Total liabilities
|
|
|
74,701 |
|
|
|
72,550 |
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
|
|
Common stock, $0.001 par value: 25,000,000 shares authorized and 11,733,147 issued and outstanding at September 30, 2022 and December 31, 2021
|
|
|
12 |
|
|
|
12 |
|
|
Additional paid-in-capital
|
|
|
50,474 |
|
|
|
50,349 |
|
|
Accumulated deficit
|
|
|
(41,066 |
) |
|
|
(19,234 |
) |
|
Total stockholders' equity
|
|
|
9,420 |
|
|
|
31,127 |
|
|
Total liabilities and stockholders' equity
|
|
$ |
84,121 |
|
|
$ |
103,677 |
|
UNIQUE FABRICATING INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited - dollars in thousands, except per share amounts)
|
|
|
Three Months Ended
September 30,
|
|
|
Nine Months Ended
September 30,
|
|
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
Net sales
|
|
$ |
34,503 |
|
|
$ |
29,909 |
|
|
$ |
104,847 |
|
|
$ |
95,603 |
|
|
Cost of sales
|
|
|
31,454 |
|
|
|
26,629 |
|
|
|
91,777 |
|
|
|
81,845 |
|
|
Gross profit
|
|
|
3,049 |
|
|
|
3,280 |
|
|
|
13,070 |
|
|
|
13,758 |
|
|
Selling, general, and administrative expenses
|
|
|
4,433 |
|
|
|
5,741 |
|
|
|
13,646 |
|
|
|
17,636 |
|
|
Impairment
|
|
|
4,833 |
|
|
|
5,115 |
|
|
|
16,996 |
|
|
|
5,115 |
|
|
Operating loss
|
|
|
(6,217 |
) |
|
|
(7,576 |
) |
|
|
(17,572 |
) |
|
|
(8,993 |
) |
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other, net
|
|
|
176 |
|
|
|
6,041 |
|
|
|
206 |
|
|
|
6,080 |
|
|
Interest expense
|
|
|
(789 |
) |
|
|
(843 |
) |
|
|
(1,952 |
) |
|
|
(2,305 |
) |
|
Other income (expense), net
|
|
|
(613 |
) |
|
|
5,198 |
|
|
|
(1,746 |
) |
|
|
3,775 |
|
|
Loss before income taxes
|
|
|
(6,830 |
) |
|
|
(2,378 |
) |
|
|
(19,318 |
) |
|
|
(5,218 |
) |
|
Income tax expense (benefit)
|
|
|
3,722 |
|
|
|
(522 |
) |
|
|
2,514 |
|
|
|
216 |
|
|
Net loss
|
|
$ |
(10,552 |
) |
|
$ |
(1,856 |
) |
|
$ |
(21,832 |
) |
|
$ |
(5,434 |
) |
|
Net loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$ |
(0.90 |
) |
|
$ |
(0.19 |
) |
|
$ |
(1.86 |
) |
|
$ |
(0.55 |
) |
|
Diluted
|
|
$ |
(0.90 |
) |
|
$ |
(0.19 |
) |
|
$ |
(1.86 |
) |
|
$ |
(0.55 |
) |
UNIQUE FABRICATING INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited - dollars in thousands)
|
|
Nine Months Ended
September 30,
|
|
|
|
|
2022 |
|
|
2021 |
|
|
Cash Flows from Operating Activities:
|
|
|
|
|
|
|
|
Net loss
|
|
$ |
(21,832 |
) |
|
$ |
(5,434 |
) |
|
Adjustments to reconcile net loss to net cash provided by (used for) operating activities:
|
|
|
|
|
|
|
|
|
|
Impairment of goodwill
|
|
|
16,996 |
|
|
|
5,115 |
|
|
Depreciation and amortization
|
|
|
3,433 |
|
|
|
4,271 |
|
|
Amortization of debt issuance costs
|
|
|
169 |
|
|
|
158 |
|
|
Loss on sale of assets
|
|
|
- |
|
|
|
(12 |
) |
|
Bad debt adjustment
|
|
|
(47 |
) |
|
|
(197 |
) |
|
Gain on derivative instrument
|
|
|
(736 |
) |
|
|
(412 |
) |
|
Stock option expense
|
|
|
125 |
|
|
|
332 |
|
|
Accrued in-kind interest on long term debt
|
|
|
152 |
|
|
|
25 |
|
|
Deferred income taxes
|
|
|
2,028 |
|
|
|
(679 |
) |
|
Changes in operating assets and liabilities that provided (used) cash:
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(1,921 |
) |
|
|
(1,626 |
) |
|
Inventory
|
|
|
1,249 |
|
|
|
(5,031 |
) |
|
Prepaid expenses and other assets
|
|
|
(1,177 |
) |
|
|
2,608 |
|
|
Accounts payable
|
|
|
3,300 |
|
|
|
3,125 |
|
|
Other assets and liabilities, net
|
|
|
25 |
|
|
|
154 |
|
|
Net cash provided by (used for) operating activities
|
|
|
1,764 |
|
|
|
(3,603 |
) |
|
Cash Flows from Investing Activities:
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
(1,048 |
) |
|
|
(2,432 |
) |
|
Proceeds from sale of property, plant, and equipment
|
|
|
- |
|
|
|
100 |
|
|
Net cash used for investing activities
|
|
|
(1,048 |
) |
|
|
(2,332 |
) |
|
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
|
|
|
Net change in bank overdraft
|
|
|
27 |
|
|
|
(710 |
) |
|
Payments on term loans and capital expenditure line
|
|
|
(3,684 |
) |
|
|
(2,597 |
) |
|
Payments on revolving credit facilities
|
|
|
(43,727 |
) |
|
|
(30,087 |
) |
|
Proceeds from revolving credit facilities
|
|
|
46,406 |
|
|
|
35,671 |
|
|
Proceeds from the issuance of common stock and warrants
|
|
|
- |
|
|
|
4,044 |
|
|
Net cash provided by (used for) financing activities
|
|
|
(978 |
) |
|
|
6,321 |
|
|
Cash and Cash Equivalents:
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
(262 |
) |
|
|
386 |
|
|
Cash and cash equivalents at beginning of period
|
|
|
742 |
|
|
|
760 |
|
|
Cash and cash equivalents at end of period
|
|
$ |
480 |
|
|
$ |
1,146 |
|
|
Supplemental Disclosure of Cash Flow Information:
|
|
|
|
|
|
|
|
|
|
Cash paid for interest
|
|
$ |
2,383 |
|
|
$ |
2,178 |
|
|
Cash paid for income taxes
|
|
$ |
641 |
|
|
$ |
761 |
|
UNIQUE FABRICATING INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Unaudited - dollars in thousands)
RECONCILIATION OF NET LOSS TO OPERATING EBITDA
The following is a reconciliation of net loss, as reported, which is a U.S. GAAP measure of our operating results, to Operating EBITDA, a non-GAAP measure, for the three and nine months ended September 30, 2022:
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2022 |
|
|
Nine Months Ended September 30, 2022 |
|
|
|
|
(dollars in thousands) |
|
|
Net loss
|
|
$ |
(10,552 |
) |
|
$ |
(21,832 |
) |
|
Plus:
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
789 |
|
|
|
1,952 |
|
|
Income tax expense
|
|
|
3,722 |
|
|
|
2,514 |
|
|
Depreciation and amortization
|
|
|
1,094 |
|
|
|
3,433 |
|
|
Non-cash stock awards
|
|
|
42 |
|
|
|
125 |
|
|
Impairment of goodwill
|
|
|
4,833 |
|
|
|
16,996 |
|
|
Forbearance agreement fees (a)
|
|
|
324 |
|
|
|
750 |
|
|
Operating EBITDA
|
|
$ |
252 |
|
|
$ |
3,938 |
|
_________________________________
(a) Represents costs and expenses incurred in connection with the Company's Forbearance Agreement including financial advisor fees, lenders' and Agent's legal expenses, amendment fees, and risk advisory and mitigation costs.
Investor Inquiries:
Rob Fink, FNK IR
+1 (646) 809-0408
rob@fnkir.com
SOURCE: Unique Fabricating, Inc.
View source version on accesswire.com:
https://www.accesswire.com/724600/Unique-Fabricating-Inc-Reports-Third-Quarter-2022-Financial-Results
