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ZNCM purchased another 10,000 shares of UPG at $1.20 on 03/10/09.
ZNCM purchased a tiny bit of UPG on 2/3 and on 2/5.
Universal Power Group Launches Power Sports Battery Line
Thursday February 5, 7:32 pm ET
UPG Debuts Adventure Power® Products at Dealer Expos Show Feb. 13-16 in Indianapolis
CARROLLTON, Texas--(BUSINESS WIRE)--Universal Power Group, Inc. (NYSE Alternext US: UPG) is launching a complete line of power sports batteries at the upcoming 41st annual Dealernews International Powersports Dealer Expo in Indianapolis, adding another key category to its growing list of product offerings.
The Adventure Power® series is a complete line of batteries designed for motorcycles, scooters, ATV's, PWC, snowmobiles, and American V-Twins. These batteries are designed, engineered and tested in accordance with JASA's JIS D 5302, the internationally accepted standard for power sports batteries.
UPG's Adventure Power® line includes a specially designed series of batteries for American V-Twin motorcycles, making UPG one of the few companies able to offer a battery to suit the unique needs of this large and demanding market. In 2008, approximately 660,000 motorcycles were sold in the U.S., according to the Motorcycle Industry Council. Harley-Davidson, the largest and oldest manufacturer of motorcycles in this segment, has enjoyed a near 50% market share of all new street motorcycles sold in the U.S. every year for most of the 21st century, and UPG has a battery to fit every model made since 1964.
UPG will be displaying its Adventure Power series at the Dealernews International Powersports Dealer Expo on February 13-16 at the Indianapolis Convention Center, Booth 5711.
"Given the market opportunity, this is another exciting product launch for UPG in 2009," said Ian Edmonds, interim president and CEO of UPG. "Through new product launches, strategic alliances and acquisitions, we continue to penetrate new markets, such as the hunting accessories and automotive power accessories, and now motorcycles and power sports. As we increase our product offerings, we can offer our retail and strategic partners a more complete line of batteries and power accessories, while also giving UPG opportunities to add services and new distribution outlets. Additionally, our Adventure Power® series is a solid example of UPG’s growing product development capabilities, which are vital to the continued growth of our core business.”
About Universal Power Group, Inc.
Universal Power Group, Inc. (NYSE Alternext US: UPG), is a leading provider of third-party logistics and supply chain management services, and a distributor of batteries and power accessories to various markets. UPG's supply chain services include procurement, warehousing, inventory management, distribution, fulfillment and value-added services such as sourcing, custom battery pack assembly, coordination of battery recycling efforts, custom kitting, and product design and development. UPG's range of product offerings include proprietary brands of industrial and consumer batteries of all chemistries, chargers, cellular and Bluetooth accessories, jump-starters, 12-volt accessories, solar panels, and security products. 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 that are described from time to time in the Company's filings with Securities and Exchange Commission. Historical financial results are not necessarily indicative of future performance.
Contact:
Universal Power Group, Inc.
Mimi Tan, SVP, 469-892-1122
tanm@upgi.com
or
Investor Relations:
Lambert, Edwards & Associates
Jeff Tryka, 616-233-0500
or
Ryan McGrath, 616-233-0500
rmcgrath@lambert-edwards.com
--------------------------------------------------------------------------------
Source: Universal Power Group, Inc.
I think he was fired.
Resignation of the UPG CEO came out of the blue. Not like he found a better job. They had to give him two years severance at full salary ($240,000/year) plus some bennies in return for a non-compete.
Bit of a headscratcher.
Brinks Home Security, UPG's largest customer, is in the IBD 100 at #70. That probably means that things are going well although I haven't examined their situation.
Universal Power Group Completes Acquisition of the Monarch Hunting Line of Products
Thursday January 8, 8:00 am ET
CARROLLTON, Texas--(BUSINESS WIRE)--Universal Power Group, Inc. (NYSE Alternext US: UPG), a leading provider of third-party logistics and supply chain management services and a distributor of batteries and power accessories, today announced that it completed the acquisition of the Monarch Hunting line of products and related assets. The acquisition includes all product lines marketed under the "Monarch," "Monarch Hunting Products" brand names and their derivatives, as well as the related customer base. Financial terms of the transaction were not disclosed.
The high-quality Monarch line of hunting products will extend UPG's existing outdoor product line and customer base. In addition, UPG will leverage its global network of suppliers and extensive experience in supply chain logistics to reduce manufacturing and other supply chain costs for the acquired product lines.
“We are delighted to add the Monarch Hunting line of products to our outdoor lineup while also expanding the distribution of our existing outdoor product line," said Randy Hardin, president and CEO of UPG. "We are integrating the Monarch Hunting products into our hunting and other outdoor accessory product lines, and selling our expanded lines through sporting goods retailers who have relationships with both UPG and Monarch, as well as retailers with whom UPG didn’t previously have a relationship.”
The Monarch Hunting brand is well recognized in the game feeder and hunting market. Founded in the mid-1990s and based in Arlington, Texas, the acquired assets generated revenues of approximately $1.4 million in 2008. Monarch Hunting automatic deer and animal feeders are designed for the seasoned hunter, pro hunter, and outfitter, as well as beginning enthusiasts. For additional product information, please visit www.deerfeeder.com.
About Universal Power Group, Inc.
Universal Power Group, Inc. is a leading provider of third-party logistics and supply chain management services, and a distributor of batteries and power accessories to various markets. UPG's supply chain services include procurement, warehousing, inventory management, distribution, fulfillment, and value-added services such as sourcing, custom battery pack assembly, coordination of battery recycling efforts, custom kitting, and product design and development. UPG's range of product offerings include proprietary brands of industrial and consumer batteries of all chemistries, chargers, cellular and Bluetooth accessories, jump-starters, 12-volt accessories, solar panels, and security products. 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 that are described from time to time in the Company's filings with Securities and Exchange Commission. Historical financial results are not necessarily indicative of future performance.
Contact:
Universal Power Group, Inc.
Mimi Tan, SVP, 469-892-1122
tanm@upgi.com
or
Investor Relations:
Lambert, Edwards & Associates
Jeff Tryka, Ryan McGrath, 616-233-0500
rmcgrath@lambert-edwards.com
--------------------------------------------------------------------------------
Source: Universal Power Group, Inc.
Universal Power Group Partners with Energizer to Aid Motorists
Tuesday January 6, 9:30 am ET
UPG and Energizer to Produce Portable Power Products for Vehicles
CARROLLTON, Texas--(BUSINESS WIRE)--Universal Power Group, Inc. (NYSE Alternext US: UPG) today announced it is working with Energizer Holdings, Inc. to develop a line of efficient, reliable and user-friendly automotive products that can charge portable devices, jump-start a car and even inflate a tire while on the go.
The innovative new Energizer-branded product line, scheduled to appear on retail shelves in summer 2009, includes:
- an inverter that will allow motorists to convert power from the vehicle’s DC adapter to AC and USB outlets.
- a jump starter that will allow stranded motorists to jump-start their vehicles wherever they are, without requiring a second vehicle.
- an all-in-one product that combines the functionality of an inverter and jump-starter and adds an air compressor, so tires can be inflated as needed.
Energizer and UPG, a leading provider of third-party logistics and supply chain management services, and a distributor of batteries and power accessories, are launching three initial SKUs of their new product line at the International Consumer Electronics Show in Las Vegas, January 8-11. Several products within the line, which have suggested retail prices ranging from $39.99 to $139.99, will be on display at the UPG booth, #74437, located in Hall B of the Sands Expo Convention Center. Additional products to be marketed under the Energizer brand are scheduled for introduction in the summer of 2009.
"We are excited to have this opportunity to combine our expertise in portable power and technology with a trusted household brand like Energizer," said Randy Hardin, president and CEO of UPG. "Our partnership represents a trusted brand platform for consumers who expect quality and reliability from their portable power products.”
"Partnering with UPG makes sense for Energizer, our retail partners, and for consumers," said Danielle Kyriakos, director of new business development at Energizer. "At Energizer, we are committed to delivering innovative solutions to power people’s lives. We developed these products with UPG to provide solutions with the user in mind. They were designed to be more user-friendly and less intimidating, giving people the power they need wherever and whenever they need it whether they are at home, on the road, or at a campsite."
The new line of products from Energizer and UPG will be available through automotive, mass merchandise, and other retailers.
About Universal Power Group, Inc.
Universal Power Group, Inc. (NYSE Alternext US: UPG), is a leading provider of third-party logistics and supply chain management services, and a distributor of batteries and power accessories to various markets. UPG's supply chain services include procurement, warehousing, inventory management, distribution, fulfillment, and value-added services such as sourcing, custom battery pack assembly, coordination of battery recycling efforts, custom kitting, and product design and development. UPG's range of product offerings include proprietary brands of industrial and consumer batteries of all chemistries, chargers, cellular and Bluetooth accessories, jump-starters, 12-volt accessories, solar panels, and security products. For more information, please visit the UPG website at www.upgi.com.
About Energizer
Energizer Holdings, Inc. (NYSE: ENR - News), www.energizer.com, headquartered in St. Louis, Missouri, is one of the world’s largest manufacturers of primary batteries, battery-powered devices and flashlights. Energizer, a global leader in the dynamic business of providing portable power geared toward the new digital age, offers a full portfolio of products including the Energizer® MAX® premium alkaline brand; Energizer® Ultimate Lithium; Energizer® Advanced Lithium and Energizer® Rechargeable® batteries and chargers.
The Energizer product line also includes specialty batteries for hearing aids and medical devices, health and fitness devices, as well as for keyless remote entry systems, watches and other uses. Through its flashlight and lighting products unit, Energizer helps bring consumer insight and innovation to these important household devices. Energizer continues its role as a technology leader for on-the-go lifestyles with its Energizer® Energi To Go® line of portable battery-driven power packs for cell phones and for use with iPod devices.
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 that are described from time to time in the Company's filings with Securities and Exchange Commission. Historical financial results are not necessarily indicative of future performance.
Contact:
Universal Power Group, Inc
Mimi Tan, SVP, 469-892-1122
tanm@upgi.com
or
Investor Relations:
Lambert, Edwards & Associates
Jeff Tryka, Ryan McGrath, 616-233-0500
rmcgrath@lambert-edwards.com
--------------------------------------------------------------------------------
Source: Universal Power Group, Inc.
Universal Power Group Signs Licensing Agreement to Develop Line of Energizer-Branded Battery-Powered Products
Monday December 22, 2008, 4:27 pm EST
CARROLLTON, Texas--(BUSINESS WIRE)--Universal Power Group, Inc. (NYSE Alternext US: UPG) today announced that it has entered into a licensing agreement with Eveready Battery Company, Inc., a division of Energizer Holdings, Inc. (NYSE: ENR - News), to develop a line of consumer products under the Energizer® brand for distribution through mass, specialty and automotive stores. The four-year agreement provides UPG with exclusive rights to develop, market and sell Energizer-branded automotive battery chargers and maintainers, and automotive jumpstarters. In addition, UPG will have non-exclusive rights to develop, market and sell Energizer-branded power inverters used primarily in the automotive market.
"We are excited to combine our expertise in portable power products and accessories with a trusted brand like Energizer," said Randy Hardin, president and CEO of UPG. "This partnership brings a great benefit to consumers who expect quality and reliability from their portable power products. This also demonstrates the scope of capabilities we bring to the marketplace – from product development and marketing to sourcing, global supply chain management and logistics. Finally, it adds another well-known brand to our strong roster of relationships.”
The new Energizer product line is scheduled to be introduced at the International Consumer Electronics Show in Las Vegas, Jan. 9-11, 2009. The products are expected to appear on retail shelves in summer 2009.
"Partnering with UPG makes sense for Energizer, our retail partners, and for consumers," said Mike Rivard, general manager, New Business Development. "At Energizer, we are committed to giving people the freedom of having the power they need wherever and whenever they need it, whether they’re at home, on the road, or on a camping trip. This new line of products not only can provide drivers with peace of mind, but delivers the power to charge just about anything on the go. We think consumers will be excited to see these products on shelves soon."
About Universal Power Group, Inc.
Universal Power Group, Inc. is a leading provider of third-party logistics and supply chain management services, and a distributor of batteries and power accessories to various markets. UPG's supply chain services include procurement, warehousing, inventory management, distribution, fulfillment, and value-added services such as sourcing, custom battery pack assembly, coordination of battery recycling efforts, custom kitting, and product design and development. UPG's range of product offerings include proprietary brands of industrial and consumer batteries of all chemistries, chargers, cellular and Bluetooth accessories, jump-starters, 12-volt accessories, solar panels, and security products. For more information, please visit the UPG website at http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.upgi.com%2F&esheet=5859674&lan=en_US&anchor=www.upgi.com&index=1.
About Energizer
Energizer Holdings, Inc. [NYSE: ENR], http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.energizer.com&esheet=5859674&lan=en_US&anchor=www.energizer.com&index=2, headquartered in St. Louis, Missouri, is one of the world’s largest manufacturers of primary batteries, battery-powered devices and flashlights. Energizer, a global leader in the dynamic business of providing portable power geared toward the new digital age, offers a full portfolio of products including the Energizer® MAX® premium alkaline brand; Energizer® Ultimate Lithium; Energizer® Advanced Lithium and Energizer® Rechargeable batteries and chargers.
The Energizer product line also includes specialty batteries for hearing aids and medical devices, health and fitness devices, as well as for keyless remote entry systems, watches and other uses. Through its flashlight and lighting products unit, Energizer helps bring consumer insight and innovation to these important household devices. Energizer continues its role as a technology leader for on-the-go lifestyles with its Energizer® Energi To Go® line of portable battery-driven power packs for cell phones and for use with iPod devices.
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 that are described from time to time in the Company's filings with Securities and Exchange Commission. Historical financial results are not necessarily indicative of future performance.
Contact:
Company Contacts:
Universal Power Group, Inc
Mimi Tan, SVP, 469-892-1122
tanm@upgi.com
or
Investor Relations:
Lambert, Edwards & Associates
Jeff Tryka, 616-233-0500
or
Ryan McGrath, 616-233-0500
rmcgrath@lambert-edwards.com
Universal Power Group Reports Third Quarter Results
Tuesday November 11, 9:00 am ET
CARROLLTON, Texas--(BUSINESS WIRE)--Universal Power Group, Inc. (AMEX: UPG - News), a leading provider of third-party logistics and supply chain management services, and a distributor of batteries and power accessories, announced its financial results for the third quarter ended Sept. 30, 2008.
UPG reported third quarter net earnings of $0.4 million, or $0.08 per diluted share, on net sales of $30.6 million for the third quarter of 2008, compared with net earnings of $0.7 million, or $0.14 per diluted share, on net sales of $29.8 million in the same quarter of 2007. While higher net sales were offset by higher operating expenses, operating income for the third quarter was unchanged at $1.0 million in both 2008 and 2007. Increased operating expenses were largely attributable to growth initiatives.
Through the first nine months of 2008, UPG’s sales increased 13.3% compared to the nine-month period in 2007. UPG posted net earnings of $0.29 per diluted share for the first nine months of 2008, compared with net earnings of $0.36 per diluted share in the same period of 2007. Operating income for the first nine months was relatively unchanged at $3.2 million in 2008 compared to $3.3 for the same period in 2007.
The net earnings decrease for the third quarter and first nine months of 2008 is due primarily to a decrease in interest income from having cash from UPG’s initial public offering in short-term investments during 2007 and an increase in taxes reflecting UPG’s change in estimates of state taxes. In addition, UPG received a state tax refund of $89,000 during the third quarter of 2007 which contributed to an increase in net earnings for that quarter.
“We were pleased to add new accounts and post increased sales and gross profit during the quarter, however, operating expenses, including personnel and facilities costs associated with our growth initiatives as well as unplanned additional Sarbanes-Oxley compliance costs and non-cash stock compensation, offset the gains,” said Randy Hardin, president and CEO of UPG. “We also secured a contract renewal with Brink's Home Security, extending the third-party logistics services we provide them. Despite the challenging economic environment, we continued to make progress in our expansion and diversification initiatives. In line with our acquisition initiatives, we signed an agreement to acquire Monarch Hunting Products, subject to satisfaction of certain conditions typical in such transactions. The agreement is expected to close in January 2009 and will expand our presence in the hunting and outdoor market by increasing battery and solar panel sales, and adding other outdoor accessory product lines.”
Third Quarter Highlights
UPG reported third quarter 2008 revenues from sources other than Brink’s Home Security, Inc. (BHS) and their dealers rose 13.2% year-over-year to $17.3 million from $15.3 million, reflecting price increases as well as growth of new and existing customer accounts.
Revenue from BHS decreased to $13.4 million, or 7.9%, in the 2008 third quarter, compared to $14.5 million in the third quarter of 2007, which UPG attributes to a slowdown in the housing market. Concentration of revenues with BHS and their dealers fell to 43.5% of total revenues in the third quarter 2008, compared to 48.7% in prior year’s quarter.
UPG’s gross profit grew 8.3% to $4.6 million for the third quarter of 2008, compared with a gross profit of $4.2 million in the third quarter in 2007. Gross margin as a percent of revenues also increased to 15.0% in the third quarter 2008, compared to 14.2% in the comparable 2007 quarter. The increase was due to an improved product mix and price increases to offset higher raw material costs. UPG experienced raw material cost volatility during the third quarter of 2008, and expects continued volatility throughout the remainder of 2008 in raw materials such as lead, copper and zinc.
Recent Developments
In September, UPG entered into an agreement for the purchase of the assets of Monarch Hunting Products. Subject to satisfaction of certain conditions, UPG expects the transaction to close in early Jan. 2009.
Monarch's high-quality line of hunting products, specifically the high margin, big-ticket solar and battery powered game feeders, hunting blinds and other related accessories will be an expansion of UPG's existing outdoor product line. In addition, UPG and Monarch will be able to cross-sell products to sporting goods retailers.
On Nov. 6, 2008 UPG announced its new agreement with BHS to continue providing third-party logistics services. Under the terms of the agreement, UPG is responsible for managing BHS’ product procurement, warehousing, fulfillment and distribution needs, including sourcing of select products such as batteries, transformers, speakers and sirens for BHS’ residential security systems installations. UPG also provides BHS with value-added services such as custom kitting and coordination of battery recycling services. The agreement extends UPG’s services another two years with successive one-year renewal terms.
Outlook
“Growing our gross margins will continue to be challenging, as prices for raw materials remain volatile,” continued Hardin. “We will manage our gross margin through necessary price adjustments, balancing this with our goal of maintaining strong, long-lasting relationships with our customers. We will continue to focus on developing high-margin products and markets, as well as on diversifying our markets to minimize our exposure to the difficult economy. We believe our strong balance sheet and line of credit provides sufficient resources to continue our growth.”
Hardin concluded: “With the uncertainties currently affecting the U.S. and global economies, we’ve decided that we will discontinue providing formal guidance regarding expected growth and results of operations, with the potential for revisiting our decision once economic conditions have sufficiently stabilized. As part of our efforts to provide more communication to our investors and the financial community, we recently appointed the investor relations firm of Lambert, Edwards and Associates to manage and increase our communications on business conditions and management’s outlook.”
Conference Call Information
Universal Power Group will host an investor conference call today, Tuesday, November 11, 2008 at 11:30 am ET (10:30 am CT) to discuss financial results for the third quarter ended September 30, 2008.
Interested parties may access the conference call by dialing 1.800.573.4842; passcode 58216613. The conference call will also be broadcast live on 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 the call via Thomson StreetEvents (www.streetevents.com), a password-protected event management site.
A replay of the teleconference will be made available through November 18, 2008 by calling 1.888.286.8010; passcode 26438694 and an archived webcast will be available at www.upgi.com.
About Universal Power Group, Inc.
Universal Power Group, Inc. is a leading provider of third-party logistics and supply chain management services, and a distributor of batteries and power accessories to various markets. UPG's supply chain services include procurement, warehousing, inventory management, distribution, fulfillment, and value-added services such as sourcing, custom battery pack assembly, coordination of battery recycling efforts, custom kitting, and product design and development. UPG's range of product offerings include proprietary brands of industrial and consumer batteries of all chemistries, chargers, cellular and Bluetooth accessories, jump-starters, 12-volt accessories, solar panels, and security products. 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 that are described from time to time in the Company's filings with Securities and Exchange Commission. Historical financial results are not necessarily indicative of future performance.
UNIVERSAL POWER GROUP, INC.
UNAUDITED BALANCE SHEETS
ASSETS
September 30,
2008
December 31,
2007
CURRENT ASSETS
Cash and cash equivalents $ 1,019,532 $ 691,288
Restricted cash 900,000 —
Accounts receivable:
Trade, net of allowance for doubtful accounts of $157,584 and $129,371 16,170,167 12,593,430
Other 137,884 149,262
Inventories – finished goods, net of allowance for obsolescence of $318,350 and $193,780 28,887,758 32,345,377
Current deferred tax asset 1,098,610 983,114
Prepaid expenses and other current assets 1,193,822 880,907
Total current assets 49,407,773 47,643,378
PROPERTY AND EQUIPMENT
Logistics and distribution systems 1,552,503 1,417,269
Machinery and equipment 495,228 338,220
Furniture and fixtures 595,943 492,267
Leasehold improvements 305,717 272,096
Vehicles 137,336 151,598
3,086,727 2,671,450
Less accumulated depreciation and amortization (1,333,692 ) (985,735 )
Net property and equipment 1,753,035 1,685,715
OTHER ASSETS 99,754 81,459
TOTAL ASSETS $ 51,260,562 $ 49,410,552
UNIVERSAL POWER GROUP, INC.
UNAUDITED BALANCE SHEETS (Continued)
LIABILITIES AND SHAREHOLDERS’ EQUITY
September 30,
2008
December 31,
2007
CURRENT LIABILITIES
Line of credit $ 12,703,441 $ 12,833,031
Accounts payable 12,517,306 12,257,350
Accrued liabilities 1,205,104 537,248
Current portion of notes payable to Zunicom, Inc 1,462,500 731,250
Current portion of capital lease obligations — 6,609
Current portion of deferred rent 43,806 64,446
Total current liabilities 27,932,157 26,429,934
NOTES PAYABLE TO ZUNICOM, INC. (net of current portion)
4,021,875 5,118,750
NON-CURRENT DEFERRED TAX LIABILITY 3,735 25,455
DEFERRED RENT, less current portion 164,904 180,776
Total liabilities 32,122,671 31,754,915
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY
Common stock - $0.01 par value, 50,000,000 shares authorized, 5,000,000 shares issued and outstanding 50,000 50,000
Additional paid-in capital 15,505,693 15,381,684
Retained earnings 3,652,774 2,223,953
Accumulated other comprehensive loss (70,576 ) —
Total shareholders’ equity 19,137,891 17,655,637
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 51,260,562 $ 49,410,552
UNIVERSAL POWER GROUP, INC.
UNAUDITED STATEMENTS OF INCOME
Three Months Ended
September 30,
Nine Months Ended
September 30,
2008 2007 2008 2007
Net sales $ 30,648,315 $ 29,788,479 $ 90,372,517 $ 79,731,401
Cost of sales 26,052,383 25,545,777 76,787,307 67,903,208
Gross profit 4,595,932 4,242,702 13,585,210 11,828,193
Operating expenses 3,595,313 3,198,124 10,366,426 8,534,022
Operating income 1,000,619 1,044,578 3,218,784 3,294,171
Other income (expense)
Interest expense (including $88,471, $88,471, $263,490 and $262,529 to Zunicom, Inc.) (235,701 ) (225,407 ) (737,283 ) (957,661 )
Interest income 56 55,792 569 396,083
Total other expense (235,645 ) (169,615 ) (736,714 ) (561,578 )
Income before provision for income taxes 764,974 874,963 2,482,070 2,732,593
Provision for income taxes (363,369 ) (193,058 ) (1,053,249 ) (949,026 )
Net income $ 401,605 $ 681,905 $ 1,428,821 $ 1,783,567
Net income per share
Basic $ 0.08 $ 0.14 $ 0.29 $ 0.36
Diluted $ 0.08 $ 0.14 $ 0.29 $ 0.36
Weighted average shares outstanding
Basic 5,000,000 5,000,000 5,000,000 5,000,000
Diluted 5,000,000 5,000,980 5,000,000 5,008,102
UNIVERSAL POWER GROUP, INC.
UNAUDITED STATEMENTS OF CASH FLOWS
Nine Months Ended September 30,
2008 2007
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 1,428,821 $ 1,783,567
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization of property and equipment 403,917 170,358
Provision for bad debts 91,406 76,130
Provision for obsolete inventory 140,000 90,000
Deferred income taxes (137,216 ) (148,488 )
Stock-based compensation 124,009 70,906
Changes in operating assets and liabilities:
Accounts receivable – trade (3,668,143 ) (3,554,903 )
Accounts receivable – other 11,378 (249,329 )
Inventories 3,317,619 (3,507,229 )
Prepaid expenses and other current assets (341,040 ) (215,275 )
Other assets (18,295 ) (61,261 )
Accounts payable 259,956 2,659,233
Accrued liabilities 597,280 577,992
Due from Zunicom, Inc — 186,617
Deferred rent (36,512 ) 32,018
Net cash provided by (used in) operating activities 2,173,180 (2,089,664 )
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (443,112 ) (868,769 )
Deposit in escrow account (900,000 ) —
Net cash used in operating activities (1,343,112 ) (868,769 )
CASH FLOWS FROM FINANCING ACTIVITIES
Net activity on line of credit (129,590 ) (9,331,111 )
Payments on notes payable to Zunicom, Inc (365,625 ) (15,612 )
Payments on capital lease obligations (6,609 ) —
Net cash used in financing activities (501,824 ) (9,346,723 )
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 328,244 (12,305,156 )
Cash and cash equivalents at beginning of period 691,288 13,036,447
Cash and cash equivalents at end of period $ 1,019,532 $ 731,291
SUPPLEMENTAL DISCLOSURES
Interest paid $ 737,283 $ 957,661
Income taxes paid $ 1,182,162 $ 1,061,452
Universal Power Group Secures Major Contract Renewal From Brink's Home Security
Thursday November 6, 5:34 pm ET
CARROLLTON, Texas, Nov. 6 /PRNewswire-FirstCall/ -- Universal Power Group, Inc. (Amex: UPG - News), a leading provider of third-party logistics and supply chain management services, and a distributor of batteries and power accessories, announced that Brink's Home Security, Inc. ("BHS") has renewed its contract with UPG for an initial two-year term with successive one year renewal terms.
UPG is responsible for managing BHS' product procurement, warehousing, fulfillment and distribution needs, including sourcing of select products such as batteries, transformers, speakers and sirens for BHS' residential security systems installations. UPG also provides BHS with value-added services such as custom kitting and coordination of battery recycling services.
"We are pleased with the continued progress of our seven-year relationship with BHS," said Randy Hardin, President and CEO of UPG. "This relationship is a demonstration of our capabilities, as we have not only handled the distribution of BHS products, but we also help BHS source, warehouse and custom kit products. UPG handles the operational complexities of the supply chain, allowing BHS to focus on their business to better serve their 1.3 million residential customers in North America."
About Universal Power Group, Inc.
Universal Power Group, Inc. is a leading provider of third-party logistics and supply chain management services, and a distributor of batteries and power accessories to various markets. UPG's supply chain services include procurement, warehousing, inventory management, distribution, fulfillment, and value-added services such as sourcing, custom battery pack assembly, coordination of battery recycling efforts, custom kitting, and product design and development. UPG's range of product offerings include proprietary brands of industrial and consumer batteries of all chemistries, chargers, cellular and Bluetooth accessories, jump-starters, 12-volt accessories, solar panels, and security products. For more information, please visit the UPG website at www.upgi.com.
About Brink's Home Security
Brink's Home Security Holdings, Inc. (NYSE: CFL - News), headquartered in Irving, Texas, parent company to Brink's Home Security, Inc., is one of the premier providers of security system monitoring services for residential and commercial properties in North America. Brink's Home Security operates in more than 250 metropolitan areas and services approximately 1.3 million customers across the Unites States and Canada. For more information about Brink's Home Security, please visit http://www.brinkshomesecurityholdings.com or http://www.brinkshomesecurity.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 that are described from time to time in the Company's filings with Securities and Exchange Commission. Historical financial results are not necessarily indicative of future performance.
--------------------------------------------------------------------------------
Source: Universal Power Group, Inc.
Universal Power Group Enters into Agreement to Purchase Assets of Monarch Hunting Products
Thursday September 25, 5:35 pm ET
CARROLLTON, Texas--(BUSINESS WIRE)--Universal Power Group, Inc. (AMEX: UPG - News), a leading provider of third-party logistics and supply chain management services, and a global distributor of batteries, security products and related portable power products, announced today that it has entered into an agreement for the purchase of all of the tangible and intangible assets used in connection with the business known as Monarch Hunting Products (“Monarch”). The Monarch product line includes hunting and hunting-related products sold under the names “Monarch”, “Monarch Hunting Products” and derivatives thereof.
Monarch’s high-quality line of hunting products will be a further extension to UPG’s existing outdoors product line, specifically the higher margin, big ticket game feeders, hunting blinds and other related accessories. In addition, UPG and Monarch will be able to cross sell products to sporting goods retailers.
Randy Hardin, President & CEO of UPG, stated, “We are very excited about this acquisition. This is a strategic fit that will enable us to expand our presence in the hunting and outdoor market by integrating the Monarch products into our hunting battery and other outdoor accessory product lines. This further ties into our diversification efforts. It also gives us the ability to further expand distribution of our products.”
Dick Nachlinger, Founder of Monarch, added, “By teaming up with UPG, we will now be able to offer a more complete product line as well as leverage UPG’s fulfillment, sales and marketing expertise.”
The transaction is expected to close in early January 2009.
About UPG
UPG (www.upgi.com) is a leading provider of third-party logistics and supply chain management services and a global distributor of batteries, security products and related portable power products to various industries. UPG's supply chain services include procurement, warehousing, inventory management, distribution, fulfillment, and value-added services such as sourcing, custom battery pack assembly, coordination of battery recycling efforts, kitting and product development. UPG's range of product offerings include proprietary brands of industrial and consumer batteries of all chemistries, chargers, cellular and Bluetooth accessories, related portable power products, 12-volt DC accessories, and security products.
About Monarch
Monarch Hunting Products is a well recognized brand in the game feeder and hunting market. Founded in mid 1990s, Monarch Hunting Products is based in Arlington Texas. Monarch automatic deer and animal feeders are designed for the seasoned hunter, pro hunter, and outfitter as well as the beginning enthusiasts. For more information, please visit www.deerfeeder.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 that are described from time to time in the Company's filings with Securities and Exchange Commission.
Contact:
Investor Contacts:
Universal Power Group, Inc.
Roger Tannery, 469-892-1122
tanneryr@upgi.com
or
Mimi Tan, 469-892-1122
tanm@upgi.com
or
Cameron Associates
Amy Glynn, CFA, 212-554-5464
amy@cameronassoc.com
--------------------------------------------------------------------------------
Source: Universal Power Group, Inc.
I'm listening to the UPG CC replay now. Here are a few highlights:
UPG is guiding for improved GM in Q3 over Q2.
The second half is seasonally stronger than the first half.
They have 2 or 3 acquisitions that they are still looking at.
Mike
Universal Power Group Reports Second Quarter 2008 Financial Results
Monday August 11, 7:30 am ET
CARROLLTON, Texas--(BUSINESS WIRE)--Universal Power Group, Inc. (AMEX: UPG - News), (“UPG”) a leading provider of third-party logistics and supply chain management services and a global distributor of batteries, related portable power and security products, today announced its financial results for the second quarter ended June 30, 2008.
Revenues for the quarter ended June 30, 2008 rose 14.4% to $30.2 million, compared to $26.4 million in the second quarter of 2007. Second quarter revenues from sources other than Brinks Home Security (“Brinks”) rose 35.0% to $16.8 million, from $12.4 million in the prior year period. The increase reflects more focused marketing to both existing and new customer accounts, as well as price increases implemented by UPG to offset higher costs of goods sold. Growth in the Company’s higher margin battery business was driven approximately 21% by volume and 79% by price increases. Revenues from Brinks declined by 3.9% to $13.5 million in the second quarter of 2008, compared to $14.0 million in the prior year period. The concentration of revenues from Brinks fell to 44.6% of total revenues in the second quarter 2008, compared to 53.0% in the second quarter of 2007.
Gross profit grew by 8.9% in the second quarter, to $4.5 million, compared to $4.1 million in the prior year period. As a percentage of sales, the gross profit margin narrowed to 15.0%, from 15.7% in the second quarter of 2007, as the improvement in product mix was offset by higher raw material costs. Also, second quarter 2008 margins did not fully reflect the benefit of price increases, which were implemented slowly due to a very competitive market for commodity influenced products. In addition to pricing, UPG will continue to focus on and develop higher margin products and markets in efforts to maintain or expand the gross margin.
Operating expenses rose 28.6% to $3.5 million in the second quarter of 2008, compared to $2.7 million in the prior year period. Operating expenses were approximately $200,000 above budget due to a number of non-routine costs that fell in the second quarter of 2008; these costs were primarily related to legal and consulting fees, Sarbanes Oxley compliance and employee healthcare programs. UPG had operating income of $1.0 million, or 3.5% of sales, for the second quarter of 2008, compared to $1.4 million, or 5.5% in the second quarter of 2007. Net income in the second quarter of 2008 was $0.5 million, or $0.09 per share, compared to net income of $0.7 million, or $0.15 per share, in the prior year period.
For the six-months ended June 30, 2008, revenues increased by 19.6% to $59.7 million, up from $49.9 million in the prior year period. Operating income was $2.2 million in the first six-months of 2008, modestly below the approximately $2.3 million in operating income generated in the first six-months of 2007. Net income was $1.0 million, or $0.21 per share, compared to $1.1 million, or $0.22 per share, in the prior year period.
Randy Hardin, President and Chief Executive Officer of UPG, commented, “During the second quarter, we continued to focus on increasing our share of the growing battery-related and supply chain management industries through higher penetration of new and existing customers, an expanded product line and a broader geographic reach. We believe that UPG has made a lot of progress on this front since we became public in December 2006.
However, higher raw material costs and higher operating expenses impacted our margins in the second quarter, resulting in lower operating profit. While disappointed with our year over year decline for the quarter, we expect to see an improvement in the balance of the year. Regarding our gross margins, we will continue to take price increases as necessary, balancing this out with our goal to maintain strong and long-lasting relationships with our customers. We also expect operating expenses in the second half of the year to grow more in-line with revenues, which should yield an improvement in our operating margin,” he concluded.
2008 Guidance
UPG continues to expect organic growth in revenues of 12% - 15% for the full-year 2008. UPG believes that operating income growth will be at the low-end of its previously forecasted range of 15% - 18%.
Conference Call Information
Universal Power Group will host an investor conference call today, Monday, August 11, 2008, at 11:30 am EST (10:30 am CST) to discuss financial results for the second quarter of 2008.
Interested parties may access the conference call by dialing 1.866.510.0704; passcode 96261275. The conference call will also be broadcast live on 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 the call via Thomson StreetEvents (www.streetevents.com), a password-protected event management site.
A replay of the teleconference will be made available through August 18, 2008 by calling 1.888.268.8010; passcode 57250431 and an archived webcast will be available at www.upgi.com.
About Universal Power Group, Inc.
Universal Power Group, Inc. is a leading provider of third-party logistics and supply chain management services, and a distributor of batteries, security products and related portable power products to various industries. UPG's supply chain services include procurement, warehousing, inventory management, distribution, fulfillment, and value-added services such as sourcing, custom battery pack assembly, coordination of battery recycling efforts, custom kitting, and product design and development. UPG's range of product offerings include proprietary brands of industrial and consumer batteries of all chemistries, chargers, cellular and Bluetooth accessories, related portable power products, jump-starters, 12-volt DC accessories, and security products. 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", "plan", "plans", to be uncertain and forward-looking. The forward-looking statements contained herein are also subject generally to other risks and uncertainties that are 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.
UNAUDITED BALANCE SHEETS
ASSETS
June 30,
2008
December 31,
2007
CURRENT ASSETS
Cash and cash equivalents $ 545,456 $ 691,288
Accounts receivable:
Trade, net of allowance for doubtful accounts of $124,895 and $129,371 16,183,450 12,593,430
Other 156,979 149,262
Inventories – finished goods, net of allowance for obsolescence of $288,350 and $193,780 28,349,734 32,345,377
Current deferred tax asset 1,094,579 983,114
Prepaid expenses and other current assets 1,397,522 880,907
Total current assets 47,727,720 47,643,378
PROPERTY AND EQUIPMENT
Logistics and distribution systems 1,546,126 1,417,269
Machinery and equipment 495,228 338,220
Furniture and fixtures 492,267 492,267
Leasehold improvements 291,347 272,096
Vehicles 137,336 151,598
2,962,304 2,671,450
Less accumulated depreciation and amortization (1,205,156) (985,735)
Net property and equipment 1,757,148 1,685,715
OTHER ASSETS 108,467 81,459
TOTAL ASSETS $ 49,593,335 $ 49,410,552
UNIVERSAL POWER GROUP, INC.
UNAUDITED BALANCE SHEETS (Continued)
LIABILITIES AND SHAREHOLDERS’ EQUITY
June 30,
2008
December 31,
2007
CURRENT LIABILITIES
Line of credit $ 12,009,608 $ 12,833,031
Accounts payable 11,863,316 12,257,350
Accrued liabilities 919,105 537,248
Current portion of notes payable to Zunicom, Inc 1,462,500 731,250
Current portion of capital lease obligations 663 6,609
Current portion of deferred rent 62,808 64,446
Total current liabilities 26,318,000 26,429,934
NOTES PAYABLE TO ZUNICOM, INC 4,387,500 5,118,750
NON-CURRENT DEFERRED TAX LIABILITY 8,642 25,455
DEFERRED RENT, less current portion 148,162 180,776
Total liabilities 30,862,304 31,754,915
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY
Common stock - $0.01 par value, 50,000,000 shares authorized, 5,000,000 shares issued and outstanding 50,000 50,000
Additional paid-in capital 15,429,863 15,381,684
Retained earnings 3,251,168 2,223,953
Total shareholders’ equity 18,731,031 17,655,637
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 49,593,335 $ 49,410,552
UNIVERSAL POWER GROUP, INC.
UNAUDITED STATEMENTS OF INCOME
Three Months Ended June 30, Six Months Ended June 30,
2008 2007 2008 2007
Net sales $ 30,199,945 $ 26,403,048 $ 59,724,201 $ 49,942,922
Cost of sales 25,684,726 22,258,190 50,734,924 42,357,431
Gross profit 4,515,219 4,144,858 8,989,277 7,585,491
Operating expenses 3,470,952 2,699,388 6,771,113 5,335,898
Operating income 1,044,267 1,445,470 2,218,164 2,249,593
Other income (expense)
Interest expense (including $87,510, $87,510, $174,058 and $174,058 to Zunicom, Inc.) (247,267) (365,165) (501,582) (732,254)
Interest income 513 167,377 513 340,291
Total other expense (246,754) (197,788) (501,069) (391,963)
Income before provision for income taxes 797,513 1,247,682 1,717,095 1,857,630
Provision for income taxes (326,952) (513,977) (689,880) (755,968)
Net income $ 470,561 $ 733,705 $ 1,027,215 $ 1,101,662
Net income per share
Basic $ 0.09 $ 0.15 $ 0.21 $ 0.22
Diluted $ 0.09 $ 0.15 $ 0.21 $ 0.22
Weighted average shares outstanding
Basic 5,000,000 5,000,000 5,000,000 5,000,000
Diluted 5,000,000 5,002,114 5,000,000 5,005,707
UNIVERSAL POWER GROUP, INC.
UNAUDITED STATEMENTS OF CASH FLOWS
Six Months Ended June 30,
2008 2007
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 1,027,215 $ 1,101,662
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization of property and equipment 266,006 103,864
Provision for bad debts 62,300 55,034
Provision for obsolete inventory 110,000 60,000
Deferred income taxes (128,278) (94,024)
Stock-based compensation 48,179 46,816
Change in operating assets and liabilities:
Accounts receivable – trade (3,652,320) (1,896,896)
Accounts receivable – other (7,717) (304,246)
Inventories 3,885,643 (1,065,356)
Prepaid expenses and other current assets (535,365) (717,284)
Other assets (27,008) (37,500)
Accounts payable (394,034) 2,100,359
Accrued liabilities 381,857 466,983
Due from Zunicom, Inc — 186,617
Deferred rent (34,252) (15,027)
Net cash provided by (used in) operating activities 1,002,226 (8,998)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment (318,689) (142,836)
CASH FLOWS FROM FINANCING ACTIVITIES
Net activity on line of credit (823,423) 408,510
Payments on capital lease obligations (5,946) (10,928)
Net cash (used in) provided by financing activities (829,369) 397,582
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (145,832) 245,748
Cash and cash equivalents at beginning of period 691,288 13,036,447
Cash and cash equivalents at end of period $ 545,456 $ 13,282,195
SUPPLEMENTAL DISCLOSURES
Interest paid $ 501,582 $ 732,254
Income taxes paid $ 653,971 $ 524,960
Zunicom Announces Amendment to Compass Bank Subordination Agreement
Wednesday June 18, 8:30 am ET
DALLAS, TX--(MARKET WIRE)--Jun 18, 2008 -- Zunicom, Inc. (OTC BB:ZNCM.OB - News) announced today that Zunicom and Compass Bank have amended the Subordination Agreement dated as of June 19, 2007 to allow Zunicom to utilize in its discretion all principal and interest payments received by Zunicom from Universal Power Group, Inc. ("UPG") on two-6% UPG promissory notes dated December 20, 2006 in the aggregate principal amount of $5.85 million payable to Zunicom (the "UPG Notes"). The original Agreement with the Bank required Zunicom to hold all payments received from UPG on the UPG Notes in trust for the benefit of the Bank until all indebtedness of UPG to the Bank was paid. As amended, the Agreement now provides that so long as UPG is not in default on any loan agreement with the Bank, UPG shall pay to Zunicom all scheduled interests and principal payments on the UPG Notes and allows Zunicom in its discretion to utilize or spend any such amounts received from UPG.
The UPG Notes provide for quarterly interest payments on the unpaid principal balances of the UPG Notes and 16 quarterly principal payments in the aggregate amount of $365,625 beginning September 20, 2008. UPG has timely made all quarterly interest payments to Zunicom on the UPG Notes.
About Zunicom, Inc.
Zunicom, Inc. (www.zunicom.com) through its wholly owned subsidiary, AlphaNet Hospitality Systems, Inc. (www.alphanet.net), provides business communication services to the hospitality industry. Zunicom owns 2,000,000 shares of the common stock of Universal Power Group, Inc. (AMEX:UPG - News) that represents 40% of the issued and outstanding shares of UPG common stock as of this date.
Forward-Looking Statement Disclaimer
This release contains a number of forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. 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 expresses 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 that are described from time to time in the Company's filings with Securities and Exchange Commission.
Contact:
Contact:
Zunicom, Inc.
Carl A. Generes
214.352.8674
972.715.5700-fax
cgeneres@genereslaw.com
--------------------------------------------------------------------------------
Source: Zunicom, Inc.
I don't know anything but I do recall that ZNCM is looking for companies to acquire. My guess is the rumor is probably true but I really don't know one way or the other.
Mike
There's a rumor being floated on the YAHOO board that zncm if buying two Texas companies. Anyone out there know anything? Thanks...Ron
It was a nice day for ZNCM. It was up $0.10 to $0.55 on volume of 21,500 shares. It is about time someone noticed this stock!
Mike
The 10-Q is out. They had diluted EPS of $0.042! That included a gain on sale of assets. I calculate that BV is now $0.98/share. Using a $4.11 price for UPG, the liquidation value of ZNCM is $1.03.
Value will be recognized sooner or later!
Mike
Using today's closing price for UPG of $4.30 I get a liquidation value for ZNCM of $1.05/share. That valuation is the book value of the ZNCM shares plus the value of UPG shares in excess of the value on ZNCM books. While in the short term I've been wrong on the valuation of this stock I think in the long term I will be nicely rewarded.
I would expect that ZNCM will report earnings of roughly $0.015/share in Q1 which should be reported this week.
Mike
Universal Power Group Reports First Quarter 2008 Financial Results
Monday May 5, 7:00 am ET
-- Revenues Grew 25.4%
-- Gross Margins Expanded to 15.2% from 14.6%
-- Operating Margins Expanded to 4.0% from 3.4%
-- Operating Income Rose 46.0%
-- Net Income and EPS Increased by 51.3%
CARROLLTON, Texas--(BUSINESS WIRE)--Universal Power Group, Inc. (AMEX: UPG - News), (“UPG”) a leading provider of third-party logistics and supply chain management services and a global distributor of batteries, related portable power and security products, today announced its financial results for the first quarter ended March 31, 2008.
Revenues for the period ended March 31, 2008 rose 25.4% to $29.5 million, compared to $23.5 million in the first quarter of 2007. First quarter revenues from sources other than Brink’s Home Security (“Brink’s”) rose 45.5% to $16.0 million, from $11.0 million in the first quarter of 2007. The increase reflects more focused marketing to both existing and new customer accounts, as well as price increases implemented by UPG to offset higher costs of goods sold. Growth in the Company’s higher margin battery business was driven approximately 46% by volume and 54% by price increases in the first quarter. Revenues from Brink’s increased by 7.7% to $13.5 million in the first quarter of 2008, compared to $12.5 million in the prior year period. Importantly, as a result of the rapid growth in the non-Brink’s business, the concentration of revenues from Brink’s fell to 46% of total revenues in the first quarter 2008, compared to 53% in the first quarter of 2007.
Gross margin for the first quarter of 2008 expanded to 15.2%, from 14.6% in the first quarter of 2007, as the improvement in product mix, including the reduced concentration of Brink’s and price increases, offset higher raw material costs. Operating expenses rose 25.2% to $3.3 million in the first quarter of 2008, compared to $2.6 million in the prior year period. UPG had an operating profit of $1.2 million, or 4.0% of sales, for the first quarter of 2008, up 46.0% from an operating profit of $0.8 million, or 3.4% in the first quarter of 2007. Net income in the first quarter of 2008 rose 51.3% to $0.6 million, or $0.11 per share, compared to net income of $0.4 million, or $0.07 per share, in the prior year period.
Commenting on the first quarter, Randy Hardin, President and Chief Executive Officer of UPG, stated, “Our strong first quarter results largely reflect the continued strength of our non-Brink’s business, with those revenues up 46%. This has helped to not only reduce the concentration of our Brink’s revenues within the total company, but also to maintain and even improve our gross margin during a time in which we continue to face higher raw material costs. It is notable that the concentration of our Brink’s business fell in the first quarter, even with a 7.7% increase in Brink’s. We remain optimistic about the growth prospects for both of our areas of focus – Brink’s and batteries – and we expect to see strong organic growth in 2008. Additionally, we are continuing to explore growth opportunities with new third party logistics customers and acquisitions.”
UPG Reiterates 2008 Guidance
UPG continues to expect organic growth in revenues of 12% - 15% and operating income growth of 15% - 18% for the full-year 2008.
Conference Call Information
Universal Power Group will host an investor conference call today, Monday, May 5, 2008, at 11:30 am EST (10:30 am CST) to discuss financial results for the first quarter of 2008.
Interested parties may access the conference call by dialing 1.866.825.1692; passcode 21310331. The conference call will also be broadcast live on 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 the call via Thomson StreetEvents (www.streetevents.com), a password-protected event management site.
A replay of the teleconference will be made available through May 12, 2008 by calling 1.888.268.8010; passcode 23679759 and an archived webcast will be available at www.upgi.com.
About Universal Power Group, Inc.
Universal Power Group, Inc. is a leading provider of third-party logistics and supply chain management services, and a distributor of batteries, security products and related portable power products to various industries. UPG's supply chain services include procurement, warehousing, inventory management, distribution, fulfillment, and value-added services such as sourcing, custom battery pack assembly, coordination of battery recycling efforts, custom kitting, and product design and development. UPG's range of product offerings include proprietary brands of industrial and consumer batteries of all chemistries, chargers, cellular and Bluetooth accessories, related portable power products, jump-starters, 12-volt DC accessories, and security products. 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 that are described from time to time in the Company's filings with Securities and Exchange Commission. Historical financial results are not necessarily indicative of future performance.
Definitely a strong quarter for UPG. I'm quite happy with the results.
Mike
UPG earnings (0.11) seem solid to me. I guess they haven't had a problem passing on rising copper/lead costs; and given their reitteration of guidance, they don't seem to think it will be a future problem. Nice to see both Brinks and Batteries grow, with batteries getting the better.
High tangible book. The one negative is they're holding a lot of debt.
Anyway, never sure what shareprice will do, but I'm satisfied. And their stronger two qtrs are coming up.
Best.
The ZNCM 10-K was filed tonight. They lost $0.015/share in Q4 primarily because they had tax in Q4 and none in the prior three quarters. Earnings from UPG were also slightly lower than Q3. Alphanet lost $142K vs $159K that was lost in Q3 so Alphanet improved.
The report is a bit of a disappointment because of the loss. However, the value of ZNCM is primarily in the UPG assets (notes and shares) which aren't changed in value by this report.
I'm looking forward to whatever action ZNCM takes to acquire a company and/or dispose of AlphaNet.
Mike
mike,
I can't say this was a great qtr for upg; but I was prepared for much worse considering where the stock price was/is. And since the market has been giving UPG a crappy multiple, I'm not too optimistic about the stock price short term.
However, considering the economy, I was thrilled that UPG had the confidence to guide for a strong year going forward. If they are able to hit their guidance, there should be some very nice quarters coming up. I think that the next reporting qtr is also seasonally weaker (please comment if you disagree), but q2 and q3 should be very strong.
Best.
That was a good quarter for UPG considering that Q4 and Q1 are seasonally weaker quarters for them. I especially like the guidance of operating income growth of 15-18% which implies EPS for 2008 that is north of $0.50/share. I think that patience will eventually be rewarded.
Mike
Universal Power Group Reports Fourth Quarter and Full-Year 2007 Financial Results
Monday March 24, 7:00 am ET
CARROLLTON, Texas--(BUSINESS WIRE)--Universal Power Group, Inc. (AMEX: UPG - News), a leading provider of third-party logistics and supply chain management services and a global distributor of batteries, security products and related portable power products, today announced its financial results for the fourth quarter and full-year ended December 31, 2007.
Revenues in the fourth quarter of 2007 rose 17.2% to $28.8, compared to $24.6 million in the fourth quarter of 2006. Fourth quarter 2007 revenues from sources other than Brink’s Home Security (“Brink’s”) rose 35% to $14.9 million from $11.0 million in the fourth quarter of 2006. The increase reflects more focused marketing to both existing and new customer accounts, as well as price increases implemented by UPG to offset higher costs of goods sold. Growth in the Company’s higher margin battery business was driven 25% by volume and 75% by price increases in the fourth quarter. Fourth quarter revenues from Brink’s increased to $13.9 million, up 2.5% compared to $13.6 million in the fourth quarter of 2006.
Gross margin for the fourth quarter of 2007 improved slightly to 14.4%, compared to 14.2% in the comparable period in 2006, as the improvement in product mix and price increases offset higher raw material costs. Operating expenses were $3.2 million in the fourth quarter of 2007, compared to $4.7 million in the prior year period. Of note, the Company recorded a non-cash stock option expense $2.2 million in the fourth quarter of 2006. Excluding the $2.2 million charge in the fourth quarter of 2006, the increase in operating expenses for the fourth quarter of 2007 was primarily due to increased costs of being a public company. Operating profit for the fourth quarter of 2007 was $0.9 million, compared to an operating loss of $1.2 million in 2006. Universal Power Group generated net income of $0.4 million, or $0.08 per share, in the fourth quarter of 2007, compared to a net loss of $0.9 million, or $0.29 per share, in the prior year period. Excluding stock-based compensation expense and the related tax effects for the fourth quarter of 2006, UPG recorded net income of $0.5 million.
Full-Year 2007 Results
For the full-year 2007, revenues increased 17.2% to $108.5 million, up from $92.6 million for the full-year 2006. Gross margin widened to 14.7%, from 14.2% in 2006, as improved product mix and increased selling prices more than offset the higher raw material costs. Growth in the Company’s higher margin battery business was driven 49% by volume and 51% by price increases in the full year. Operating expenses for the full-year 2007 were $11.8 million, compared to $11.8 million in 2006; this includes the non-cash charges of $0.1 million and $2.2 million for 2007 and 2006, respectively. Again, excluding the $2.2 million non-cash charge in 2006, the increase in operating expenses for 2007 was primarily due to increased costs of being a public company. Operating profit in 2007 was $4.2 million, compared to $1.4 million in 2006. Net income was $2.2 million, or $0.44 per share, compared to net income of $0.3 million, or $0.07 per share, in 2006. Excluding stock-based compensation expense and the related tax effects, net income in 2006 was $1.6 million, or $0.38 per diluted share.
Randy Hardin, President and Chief Executive Officer of Universal Power Group, commented, “Overall, we are pleased with our performance in 2007, with revenues up 17% for both the fourth quarter and the year. Our non-Brink’s business continued more rapid growth, generating a 35% increase in revenues in the fourth quarter. Importantly, this growth in our higher margin business helped us to essentially maintain our gross margins, despite the increases we saw in raw material prices throughout the year. We also experienced higher operating expenses in the quarter and the year, of which a significant portion was related to being a public company.
“Looking out into 2008, we continue to see strong demand for our products and services. Our financial results announced today indicate that we have been successful in increasing our penetration to new and existing customers, and we expect this trend to continue. Moreover, as raw material costs stabilize, we would expect our improving product mix and our focus on bringing in new, higher margin customers, to ultimately lead to higher margins at Universal Power Group. In summary, we are excited about the year ahead, and we look forward to reporting our progress to you in future quarters.”
UPG Provides Guidance for 2008
UPG currently expects organic growth in revenues for the full year 2008 of 12% - 15% and operating income growth of 15% - 18%.
Conference Call Information
Universal Power Group will host an investor conference call today, Monday, March 24, 2008, at 11:30 am EDT (10:30 am CDT) to discuss financial results for the fourth quarter and full-year ended December 31, 2007.
Interested parties may access the conference call by dialing 1.888.680.0865; passcode 58072343. The conference call will also be broadcast live on 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 the call via Thomson StreetEvents (www.streetevents.com), a password-protected event management site.
A replay of the teleconference will be made available through March 31, 2008 by calling 1.888.286.8010; passcode 97849605 and an archived webcast will be available at www.upgi.com.
About Universal Power Group, Inc.
Universal Power Group, Inc. is a leading provider of third-party logistics and supply chain management services, and a distributor of batteries, security products and related portable power products to various industries. UPG's supply chain services include procurement, warehousing, inventory management, distribution, fulfillment, and value-added services such as sourcing, custom battery pack assembly, coordination of battery recycling efforts, custom kitting, and product design and development. UPG's range of product offerings include proprietary brands of industrial and consumer batteries of all chemistries, chargers, cellular and Bluetooth accessories, related portable power products, jump-starters, 12-volt DC accessories, and security products. 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 that are described from time to time in the Company's filings with Securities and Exchange Commission. Historical financial results are not necessarily indicative of future performance.
UNIVERSAL POWER GROUP, INC.
UNAUDITED BALANCE SHEETS
ASSETS
December 31,
2007 2006
CURRENT ASSETS
Cash and cash equivalents $ 691,288 $ 13,036,447
Accounts receivable:
Trade, net of allowance for doubtful accounts
of $129,371 and $114,257 12,593,430 10,171,055
Other (including $0 and $186,617
from related parties) 149,262 211,854
Inventories - finished goods, net of
allowance for obsolescence of
$193,780 and $200,715 32,345,377 22,571,534
Current deferred tax asset 983,114 1,087,163
Prepaid expenses and other current assets 880,907 571,073
Total current assets 47,643,378 47,649,126
PROPERTY AND EQUIPMENT
Logistics and distribution systems 1,417,269 349,388
Machinery and equipment 338,220 246,514
Furniture and fixtures 492,267 288,457
Leasehold improvements 272,096 188,691
Vehicles 151,598 151,598
2,671,450 1,224,648
Less accumulated depreciation and
amortization (985,735) (787,554)
Net property and equipment 1,685,715 437,094
OTHER ASSETS 81,459 33,073
TOTAL ASSETS $ 49,410,552 $ 48,119,293
UNIVERSAL POWER GROUP,INC.
UNAUDITED BALANCE SHEETS (Continued)
LIABILITIES AND SHAREHOLDERS'EQUITY
December 31,
2007 2006
CURRENT LIABILITIES
Line of credit $ 12,833,031 $ 14,573,595
Accounts payable 12,257,350 11,529,002
Accrued liabilities 537,248 540,839
Current portion of payable to Zunicom, Inc 731,250 --
Current portion of capital lease obligations 6,609 18,726
Current portion of deferred rent 64,446 15,423
Total current liabilities 26,429,934 26,677,585
CAPITAL LEASE OBLIGATIONS, less current
portion -- 6,613
NOTES PAYABLE TO ZUNICOM, INC , less current
portion 5,118,750 5,850,000
NON-CURRENT DEFERRED TAX LIABILITY 25,455 64,663
DEFERRED RENT, less current portion 180,776 206,975
Total liabilities 31,754,915 32,805,836
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Common stock - $0.01 par value, 50,000,000
shares authorized, 5,000,000 shares issued
and outstanding 50,000 50,000
Additional paid-in capital 15,381,684 15,263,457
Retained earnings 2,223,953 --
Total shareholders' equity 17,655,637 15,313,457
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 49,410,552 $ 48,119,293
UNIVERSAL POWER GROUP, INC.
UNAUDITED STATEMENTS OF INCOME
Three Months Ended December 31, Year Ended December 31,
2007 2006
2007 2006
Net sales $ 28,785,696 $ 24,566,568 $ 108,517,097 $ 92,583,521
Cost of sales 24,638,527 21,083,622 92,541,735 79,426,270
Gross profit 4,147,169 3,482,946 15,975,362 13,157,251
Operating expenses 3,227,404 4,706,955 11,761,427 11,803,071
Operating income (loss) 919,765 (1,224,009) 4,213,935 1,354,180
Other income (expense)
Interest expense (237,418) (237,553) (1,195,079) (833,731)
Interest income - 22,077 396,083 40,109
Total other expense (237,418) (215,476) (798,996) (793,622)
Income (loss) before provision for income taxes 682,347 (1,439,485) 3,414,939 560,558
Provision for income taxes (241,960) 559,090 (1,190,986) (272,645)
Net income (loss) $ 440,387 $ (880,395) $ 2,223,953 $ 287,913
Net income (loss) per share
Basic $ 0.08 $ ( 0.29) $ 0.44 $ 0.10
Diluted $ 0.08 $ (0.29) $ 0.44 $ 0.07
Weighted average shares outstanding
Basic 5,000,000 3,088,889 5,000,000 3,021,918
Diluted 5,000,000 3,088,889 5,001,305 4,174,817
UNIVERSAL POWER GROUP, INC.
UNAUDITED STATEMENTS OF CASH FLOWS
Year Ended December 31,
2007 2006
CASH FLOWS FROM OPERATING
ACTIVITIES
Net income $ 2,223,953 $ 287,913
Adjustments to reconcile net income to
net cash provided by (used in)
operating activities:
Depreciation and amortization of
property and equipment 235,681 154,197
Provision for bad debts 93,980 126,127
Provision for obsolete inventory 45,000 50,000
Deferred income taxes 64,841 (888,928 )
Stock-based compensation 118,227 2,175,035
Non-cash tax expense -- 952,864
Changes in operating assets and
liabilities:
Accounts receivable - trade (2,516,355 ) (1,892,093 )
Accounts receivable - other (124,025 ) 88,982
Inventories (9,818,843 ) (3,511,256 )
Prepaid expenses and other current
assets (309,834 ) 1,850
Other assets (85,886 ) 35,208
Accounts payable 728,347 (858,885 )
Accrued liabilities (3,590 ) 316,688
Due to Zunicom, Inc. 186,617 (334,711 )
Deferred rent 22,824
(30,749
)
Net cash provided by (used in)
operating activities (9,139,063 ) (3,327,758 )
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of property and equipment (1,446,802 ) (94,496 )
CASH FLOWS FROM FINANCING
ACTIVITIES
Net activity on line of credit (1,740,564 ) 5,312,160
Net proceeds from IPO -- 11,955,223
Payments on capital lease obligations (18,730 ) (20,977 )
Payment of dividends to Zunicom, Inc. --
(964,000
)
Net cash provided by (used in)
financing activities (1,759,294
)
16,282,406
UNIVERSAL POWER GROUP, INC.
UNAUDITIED STATEMENTS OF CASHFLOWS (CONTINUED)
Year Ended December 31,
2007 2006
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS $ (12,345,159) $ 12,860,152
Cash and cash equivalents at beginning
of year
13,036,447 176,295
Cash and cash equivalents at end of
year $ 691,288 $ 13,036,447
SUPPLEMENTAL DISCLOSURES
Income taxes paid $ 1,356,108 $ 72,939
Interest paid $ 1,205,657 $ 833,731
SUPPLEMENTAL SCHEDULE OF
NONCASH INVESTING AND
FINANCING ACTIVITIES
Payable to Zunicom, Inc. converted to note
payable $ -- $ 2,850,000
Dividends due to Zunicom, Inc $ -- $ 3,000,000
Zunicom Announces Future Plans
Tuesday March 18, 7:33 pm ET
DALLAS, TX--(MARKET WIRE)--Mar 18, 2008 -- Zunicom, Inc. (OTC BB:ZNCM.OB - News) announced today that management plans to seek investment opportunities through acquisition or combination transactions with businesses that share Zunicom's interest in growth and appreciation of shareholder value.
Management has received several inquiries from shareholders regarding the advisability of Zunicom distributing to shareholders its 2,000,000 shares of common stock of Universal Power Group ("UPG Shares"). The Board has given serious consideration to such a distribution. In reviewing the income tax consequences to both Zunicom and its shareholders, the trading volume in UPG shares, the current market conditions and Zunicom's prospective investment opportunities, the Board has determined that it would not be advisable to distribute the UPG Shares at this time.
About Zunicom, Inc.
Zunicom, Inc. (www.zunicom.com), through its wholly owned subsidiary, AlphaNet Hospitality Systems, Inc. (www.alphanet.net), provides business communication services to the hospitality industry. Zunicom owns 2,000,000 shares of the common stock of Universal Power Group, Inc. (AMEX:UPG - News) that represents 40% of the issued and outstanding shares of UPG common stock as of this date.
Forward-Looking Statement Disclaimer
This release contains a number of forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. 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 expresses 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 that are described from time to time in the Company's filings with Securities and Exchange Commission.
Contact:
Contact:
Zunicom, Inc.
Carl A. Generes
214.352.8674
972.715.5700-fax
cgeneres@genereslaw.com
--------------------------------------------------------------------------------
Source: Zunicom, Inc.
Easy come, easy go.
Well that was short-lived buying if I ever saw it. UPG down 9.18% today. Yikes.
It is interesting that UPG is getting some strong buying activity and is up today on a day when microcaps in general are down quite a bit. Someone has decided that UPG is a buy. Hmmmmmm.
Mike
mike,
thanks for the info, I appreciate it.
In general, UPG's sales are domestic but they do have some international sales. From the 10-Q: "The Company’s customers are primarily located in the United States. However, a portion of the Company’s sales are to customers located in the United Kingdom, Australia, Ireland, China and Canada. The Company’s growth strategy is to further develop new business in Europe and Latin America and to establish logistics centers in strategic domestic and global locations to service these accounts."
Here is a description of Brinks Home Security: BHS, which has approximately 3,600 employees, is one of the largest and most successful residential alarm companies in North America. In 2007, BHS had revenues of approximately $484 million and operating profit totaling $114.2 million. BHS operates in all 50 states, the District of Columbia and several markets in two western provinces in Canada. BHS's ability to provide "an outstanding customer service experience," as awarded by J. D. Power and Associates, has created a loyal customer base that includes approximately 1.2 million systems under monitoring contracts. Through its dedication to high quality customer service, BHS maintains one of the highest subscriber retention rates among major residential alarm companies.
My guess is that they cover all of BHS but that seems to imply only a small international business in Canada.
Here is a link that describes the last agreement with Brinks:
http://yahoo.brand.edgar-online.com/fetchFilingFrameset.aspx?FilingID=4799615&Type=HTML
Mike
Thanks Mike, I appreciate you posting the Brinks info. Do you by any chance know if UPG's sales are restricted to Brinks US, or are they international?
Best.
Brinks posted a strong Q4 result on Jan 31st. This bodes well for UPG and ZNCM since a large percentage of their revenue was from Brinks.
Mike
-----------
The Brink's Company Reports Higher Fourth-Quarter and Full-Year Earnings
Thursday January 31, 8:30 am ET
International Operations Drive Strong Earnings Growth in Fourth Quarter Brink's, Inc. and Brink's Home Security Deliver Record Full-Year Profits Management Expects Higher Profits in 2008
RICHMOND, Va., Jan. 31 /PRNewswire-FirstCall/ -- The Brink's Company (NYSE: BCO - News), a global leader in security-related services, reported fourth- quarter income from continuing operations of $54.4 million or $1.16 per share, up from $39.6 million or 85 cents per share in last year's fourth quarter. The increased earnings were driven primarily by strong profit growth at Brink's, Incorporated ("Brink's"). Profits at Brink's Home Security ("BHS") improved slightly over year-ago results.
Fourth-quarter revenue was $882.8 million, up 18.5% (11% on a constant currency basis) from $745.1 million in the fourth quarter of 2006. Approximately 60% of fourth-quarter 2007 revenue was generated outside North America ("international operations"). Operating profit was $90.0 million, up 40.2% from $64.2 million in the year-ago period. The positive effect of translating Brink's international earnings into U.S. dollars added approximately $5 million to operating profit in the fourth quarter of 2007.
Michael T. Dan, chairman, president and chief executive officer of The Brink's Company, said: "I'm pleased to report that we concluded another solid year with a very strong fourth-quarter performance, and I believe we are well- positioned for further growth in earnings and cash flow in 2008. At Brink's, Incorporated, the strong improvement in fourth-quarter earnings was driven by revenue and profit growth in our European and Latin American operations and significantly lower safety and security costs worldwide. The outlook for continued improvement from international operations is promising, and our cash logistics business should drive profit growth in North America. Our financial goal for this business in 2008 is to deliver annual organic revenue growth in the high-single-digit percentage range with operating profit margins at or above 8%. Looking beyond this year, to the end of 2010, our goal is to sustain this rate of revenue growth while boosting operating margins to 10%.
"Fourth-quarter profits at BHS were up slightly versus last year's strong fourth-quarter due primarily to ongoing weakness in the housing sector and higher marketing expenditures. Despite the unfavorable market conditions, strong cost controls helped BHS achieve record profits for the full year and our revenue and subscriber base continued to grow. Looking ahead, and assuming continued weakness in housing, we believe we can deliver 10% or better increases in revenue and profit in 2008 while growing our subscriber base in the high-single-digit percentage range."
Dan added: "The Brink's Company's outstanding fourth quarter and full-year results once again demonstrate the earnings potential of our two businesses, and the internal trends we're seeing point to continued strength in 2008. We have a very strong balance sheet, and are therefore able to pursue additional growth in our two security businesses as we seek opportunities to leverage our brand and expertise into new security-related markets. We are well-positioned to deliver substantial growth in earnings and cash flow in 2008 and beyond. As long as we continue to execute, and we have a demonstrated track record of doing so, I'm confident that the market will recognize this and shareholders will be rewarded. At the same time, we are reviewing, with the help of our advisors, alternative options that may further enhance value. The alternatives under review cover our current strategy and existing proposals from shareholders, including additional share repurchases. If our board determines that any of these options, or some combination thereof, is in the best interests of all of our shareholders, we will pursue it at the appropriate time."
Full-Year 2007 Results
Full-year 2007 revenue from continuing operations was $3.2 billion, up 15.2% (10% on a constant currency basis) from $2.8 billion in 2006. In 2007, approximately 57% of total revenue was generated outside North America. Full- year operating profit was $274.0 million, up 30.8% from $209.5 million in 2006. The positive effect of translating Brink's international earnings into U.S. dollars added approximately $9 million to operating profit in 2007. Income from continuing operations was $148.6 million or $3.16 per share in 2007, up 31.4% from $113.1 million or $2.24 per share in 2006.
The improved year-over-year results reflect strong revenue and profit growth in both operating units, especially in Brink's international operations, and lower costs related to former operations.
Business Unit Performance: Fourth-Quarter 2007 Versus 2006
Brink's, Incorporated ("Brink's")
Brink's, the company's secure transportation and cash management unit, had fourth-quarter revenue of $756.8 million, up 19.7% (11% on a constant currency basis) from $632.1 million in the year-ago quarter. Operating profit rose 39.4% to $76.4 million, up from $54.8 million last year. Results improved in all regions, with particular strength in Europe and Latin America. The fourth-quarter operating profit margin was 10.1%, up from the 8.7% margin earned in the year-ago quarter. Lower safety and security costs were another key factor in the improved results.
Capital expenditures during the quarter totaled $48.4 million, bringing full-year capital spending to $141.6 million. Capital spending at Brink's in 2008 is expected to be between $155 million and $165 million.
Brink's North America
Fourth-quarter revenue in North America was $231.8 million, up 7.7% from $215.3 million in the fourth quarter of 2006. Operating profit was $19.6 million, up 10.1% from $17.8 million in the year-ago quarter due to lower employee benefit and safety and security costs, which more than offset the effects of reduced activity in ground operations and Global Services and higher selling and marketing expenses in the U.S. The operating profit margin for the quarter was 8.5%, up from 8.3% in last year's fourth quarter.
Brink's International
Fourth-quarter revenue from international operations was $525.0 million, up 26% (14% on a constant currency basis) from $416.8 million in 2006, reflecting increases in all regions. Fourth-quarter operating profit, including a $4 million benefit from foreign exchange, rose 53.5% to $56.8 million, up from $37.0 million last year. The improvement was due primarily to higher profits in Europe and Latin America, from higher volumes and operating improvements. Results were also helped by significantly lower safety and security costs. The operating profit margin for international operations was 10.8%, up from 8.9% in last year's fourth quarter.
EMEA (Europe, Middle East, Africa): Fourth-quarter revenue for EMEA was $328.5 million, up 21.0% (8% on a constant currency basis) from $271.5 million in 2006. Operating profit grew substantially over the year-ago quarter due primarily to improved performance in several European countries. Despite strong fourth-quarter results, the operating environment in Europe continues to be challenging due to several factors including competitive pricing pressures, various regulatory and labor issues, and higher security threats. The company is highly focused on turnaround efforts in underperforming countries and will continue its aggressive pursuit of operating efficiencies.
Latin America: Fourth-quarter revenue in Latin America increased 36.3% (27% on a constant currency basis) to $179.3 million, up from $131.5 million in 2006. Operating profit was up significantly over last year due primarily to improved performance in Brazil, Colombia and Chile.
Asia-Pacific: Fourth-quarter revenue in Asia-Pacific was $17.2 million versus $13.8 million last year. Operating profit increased over the year-ago period due to improved Global Services results in several countries.
Brink's Home Security ("BHS")
Fourth-quarter revenue at BHS was $126.0 million, up 11.5% from $113.0 million in 2006 due primarily to continued growth in the subscriber base and higher average monitoring rates. BHS ended the quarter with more than 1.2 million subscribers, up 8.8% from the year-ago level. Monthly recurring revenue rose 12.4% to $37.2 million (see Non-GAAP Reconciliations for a reconciliation of monthly recurring revenue to reported revenue).
Operating profit was $29.7 million, up 2.4% from $29.0 million last year. The fourth-quarter operating profit margin was 23.6%, down from 25.7% due primarily to higher sales and marketing expenses and a continued ramp-up of spending to support growth in the commercial market.
BHS installed approximately 44,100 systems for new customers during the quarter, a year-over-year installation growth rate of 0.9%, and had 20,400 disconnects. The low installation growth rate reflects ongoing weakness in the housing market.
The annualized disconnect rate of 6.7% for the quarter increased over the year-ago rate of 6.1%. The disconnect rate in 2008 is expected to range between 6.5% and 7.0%.
Fourth-quarter capital expenditures at BHS totaled $42.6 million, bringing full-year capital spending to $177.8 million. Total capital spending at BHS in 2008 is expected to be between $185 million and $195 million.
Recent Events
On November 28, Monitor Group, an international consulting firm, was retained to assist in the company's ongoing re-examination of strategic alternatives. The company expects the board to consider analyses and recommendations from Monitor Group and other advisors during the first quarter.
On September 14, the board of directors authorized the purchase of up to $100 million of the company's outstanding common shares. During the fourth quarter, the company purchased 60,500 shares for $3.6 million or $60.30 per share. Thus far in 2008, through January 25, an additional 165,000 shares were purchased for $9.0 million or $54.06 per share. From September 14 through January 25, a total of 225,500 shares were purchased under this authorization at an average price of $55.73 per share for a total cost of $12.6 million.
Costs Related to Former Operations Included in Continuing Operations
Fourth-quarter expenses related to former operations totaled $3.3 million, down from $7.3 million in 2006 due primarily to lower postretirement medical expenses, which are expected to decline further in 2008. The company has a Voluntary Employees' Beneficiary Association trust ("VEBA"), which is an investment vehicle used to fund the company's obligations for company-sponsored medical coverage for former coal miners and their dependents. The VEBA had assets valued at approximately $460 million on December 31, 2007.
Obligations Related to the Company's Primary U.S. Pension Plan and
Company-Sponsored Retiree Medical Benefits
As a result of an increase in the discount rate used to value the associated liabilities as of December 31, 2007 and investment performance in 2007, the company anticipates a significant improvement in the funded status of its primary U.S. pension plan and the company-sponsored retiree medical benefits plans.
Taxes
The effective income tax rate of 31.0% for the fourth quarter of 2007 was higher than the year-ago rate of 28.0% due to audit results and a change in the mix of income and losses by jurisdiction.
The effective income tax rate of 37.4% for full-year 2007 was lower than the prior-year rate of 38.7% largely because of a change in the mix of income and losses by jurisdiction. In addition, FASB Interpretation 48 (FIN 48), which became effective in 2007, established different measurement criteria for uncertain income tax positions. The company expects the effective tax rate for full-year 2008 to be in the range of 37% to 39%.
Discontinued Operations
The fourth-quarter loss from discontinued operations was less than 1 cent per share versus income of $87.0 million or $1.86 per share in the fourth quarter of 2006. The year-ago quarter included a gain from an adjustment to the company's Health Benefit Act obligations as a result of the enactment of the Tax Relief and Health Care Act of 2006.
Net Income
Fourth-quarter net income, which includes results from continuing and discontinued operations, was $54.4 million or $1.15 per share versus $126.6 million or $2.71 per share in 2006.
This release contains both historical and forward-looking information. Words such as "anticipates," "estimates," "expects," "projects," "intends," "plans," "believes," "may," "should" and similar expressions may identify forward-looking information. Forward-looking information in this document includes, but is not limited to, expected revenue growth, cash flow and earnings for The Brink's Company and its subsidiaries in 2008 and through 2010, including annual percentage revenue growth and operating profit margin at Brink's and revenue, profit and subscriber growth at BHS, the outlook for Brink's international operations and the cash logistics business in North America, growth opportunities in the two security businesses and the leveraging of the Brink's brand and expertise in new security-related markets, market recognition of the Company's efforts, the review of alternative strategic options by Monitor Group, expected capital expenditures for 2008, turnaround efforts and the aggressive pursuit of operating efficiencies in European countries, ongoing weakness in the housing market, the disconnect rate at BHS, the funded status of the Company's primary U.S. pension plan and the company-sponsored retiree medical benefits plans and the anticipated annual effective tax rate for 2008. The forward-looking information in this document is subject to known and unknown risks, uncertainties and contingencies, which could cause actual results, performance or achievements to differ materially from those that are anticipated.
These risks, uncertainties and contingencies, many of which are beyond the control of The Brink's Company and its subsidiaries, include, but are not limited to the ability to identify and execute further cost and operational improvements and efficiencies in the core businesses, the impact of continuing initiatives to control costs and increase profitability, the ability of the businesses to cost effectively match customer demand with appropriate resources, the willingness of Brink's and BHS' customers to absorb future price increases and the actions of competitors, the Company's ability to identify strategic opportunities and integrate them successfully, acquisitions and dispositions made in the future, Brink's ability to integrate recent acquisitions, the results of the pending strategic review, recently initiated shareholder initiatives, corporate expenses due to shareholder initiatives, decisions by the Company's Board of Directors, Brink's ability to perform currency conversion cash handling services in Venezuela successfully and without adverse operational issues, regulatory and labor issues and higher security threats in European countries, the impact of restructuring and other actions responding to current market conditions in European countries, the return to profitability of operations in jurisdictions where Brink's has recorded valuation adjustments, the input of governmental authorities regarding the non-payment of customs duties and value-added tax, the stability of the Venezuelan economy and changes in Venezuelan policy regarding exchange rates for dividend remittances, variations in costs or expenses and performance delays of any public or private sector supplier, service provider or customer, positions taken by insurers with respect to claims made and the financial condition of insurers, safety and security performance, Brink's loss experience, changes in insurance costs, costs associated with information technology and other ongoing contractual obligations, the willingness of police departments to respond to alarms, BHS' ability to maintain subscriber growth, the number of household moves, the level of home sales or new home construction, potential instability in housing credit markets, the willingness of BHS' customers to pay for private response personnel or other alternatives to police responses to alarms, estimated reconnection experience at BHS, costs associated with the purchase and implementation of cash processing and security equipment, changes in the scope or method of remediation or monitoring of the Company's former coal operations, the funding levels, accounting treatment and investment performance of the company's pension plans and the VEBA, retirement experience, whether the Company's assets or the VEBA's assets are used to pay benefits, projections regarding the number of participants in and beneficiaries of the Company's employee and retiree benefit plans, the funding and benefit levels of multi-employer plans, actual medical and legal expenses relating to benefits, changes in inflation rates (including medical inflation) and interest rates, changes in mortality and morbidity assumptions, mandatory or voluntary pension plan contributions, discovery of new facts relating to civil suits, the addition of claims or changes in relief sought by adverse parties, the cash, debt and tax position and growth needs of the Company, the demand for capital by the Company and the availability and cost of such capital, the satisfaction or waiver of limitations on the use of proceeds contained in various of the Company's financing arrangements, the nature of the Company's hedging relationships, the financial performance of the Company, utilization of third-party advisors and the ability of the Company to hire and retain corporate staff, changes in employee obligations, overall domestic and international economic, political, social and business conditions, capital markets performance, the strength of the U.S. dollar relative to foreign currencies, foreign currency exchange rates, changes in estimates and assumptions underlying the Company's critical accounting policies, anticipated return on assets, inflation, the promulgation and adoption of new accounting standards and interpretations, seasonality, pricing and other competitive industry factors, labor relations, fuel and copper prices, new government regulations and interpretations of existing regulations, legislative initiatives, judicial decisions, variations in costs or expenses and the ability of counterparties to perform. The information included in this release is representative only as of the date of this release, and The Brink's Company undertakes no obligation to update any information contained in this release.
About The Brink's Company
The Brink's Company (NYSE: BCO - News) is a global leader in security-related services that operates two businesses: Brink's, Incorporated and Brink's Home Security. Brink's, Incorporated is the world's premier provider of secure transportation and cash management services. Brink's Home Security is one of the largest and most successful residential alarm companies in North America. For more information, please visit The Brink's Company website at www.brinkscompany.com or call toll free 877-275-7488.
Conference Call
The Brink's Company will host a conference call today, January 31, at 11:00 a.m. eastern time to discuss this press release. Interested parties can listen to the conference call by dialing (877) 407-0778 (domestic) or (201) 689-8565 (international), or via live webcast at www.brinkscompany.com. Please dial in at least five minutes prior to the start of the call. Dial-in replay will be available through February 14, 2008, by calling (877) 660-6853 (domestic) or (201) 612-7415 (international). The conference account number is 286 and the conference ID for the replay is 269393. A webcast replay will also be available at www.brinkscompany.com.
Contact:
Investor Relations
804-289-9709
THE BRINK'S COMPANY
and subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Ended Years Ended
December 31, December 31,
(In millions, except per
share amounts) 2007 2006 2007 2006
Revenues $882.8 745.1 3,219.0 2,793.3
Expenses:
Operating expenses 659.0 557.5 2,450.8 2,131.3
Selling, general and
administrative expenses 135.8 124.3 498.8 458.4
Total expenses 794.8 681.8 2,949.6 2,589.7
Other operating
income, net 2.0 0.9 4.6 5.9
Operating profit 90.0 64.2 274.0 209.5
Interest expense (2.9) (2.2) (10.9) (12.1)
Interest and other
income, net 3.8 2.9 10.5 16.9
Income from continuing
operations before
income taxes
and minority interest 90.9 64.9 273.6 214.3
Provision for income taxes 28.2 18.2 102.2 82.9
Minority interest 8.3 7.1 22.8 18.3
Income from
continuing operations 54.4 39.6 148.6 113.1
Income (loss) from
discontinued operations,
net of tax - 87.0 (11.3) 474.1
Net income $54.4 126.6 137.3 587.2
Basic earnings per
common share:
Continuing operations $1.17 0.86 3.19 2.26
Discontinued
operations - 1.88 (0.24) 9.49
Net income 1.17 2.74 2.95 11.75
Diluted earnings per
common share:
Continuing operations $1.16 0.85 3.16 2.24
Discontinued
operations - 1.86 (0.24) 9.39
Net income 1.15 2.71 2.92 11.64
Weighted-average common
shares outstanding:
Basic 46.7 46.2 46.5 50.0
Diluted 47.1 46.7 47.0 50.5
THE BRINK'S COMPANY
and subsidiaries
(Unaudited)
Three Months Ended Years Ended
December 31, December 31,
(In millions) 2007 2006 2007 2006
Segment Information
Revenues:
Brink's $756.8 632.1 2,734.6 2,354.3
Brinks Home Security 126.0 113.0 484.4 439.0
Revenues $882.8 745.1 3,219.0 2,793.3
Operating profit:
Brink's $76.4 54.8 223.3 184.1
Brinks Home Security 29.7 29.0 114.2 100.3
Business segments 106.1 83.8 337.5 284.4
Corporate (12.8) (12.3) (49.6) (48.4)
Former operations (3.3) (7.3) (13.9) (26.5)
Operating profit $90.0 64.2 274.0 209.5
Supplemental Financial Information
Brink's:
Revenues:
North America $231.8 215.3 886.3 830.0
International 525.0 416.8 1,848.3 1,524.3
Revenues $756.8 632.1 2,734.6 2,354.3
Operating profit:
North America $19.6 17.8 70.4 69.9
International 56.8 37.0 152.9 114.2
Operating profit $76.4 54.8 223.3 184.1
Brink's Home Security:
Revenues $126.0 113.0 484.4 439.0
Operating profit:
Recurring services $54.0 49.8 206.4 184.3
Investment in new
subscribers (24.3) (20.8) (92.2) (84.0)
Operating profit $29.7 29.0 114.2 100.3
Monthly recurring
revenues (a) $37.2 33.1
Annualized
disconnect rate 6.7% 6.1% 7.0% 6.4%
Number of subscribers
(in thousands):
Beginning of period 1,200.2 1,098.3 1,124.9 1,018.8
Installations 44.1 43.7 180.8 175.0
Disconnects (20.4) (17.1) (81.8) (68.9)
End of period 1,223.9 1,124.9 1,223.9 1,124.9
Average number of
subscribers 1,213.1 1,112.2 1,176.1 1,072.5
(a) see "Non-GAAP Reconciliations" below.
THE BRINK'S COMPANY
and subsidiaries
Supplemental Financial Information (continued)
(Unaudited)
COSTS OF FORMER OPERATIONS INCLUDED IN CONTINUING OPERATIONS
Three Months Ended Years Ended
December 31, December 31,
(In millions) 2007 2006 2007 2006
Company-sponsored
postretirement benefits
other than pensions $0.9 2.9 4.2 13.1
Black lung 0.6 0.9 3.8 3.7
Pension 0.6 1.2 1.7 4.0
Administrative, legal
and other
expenses, net 1.5 2.6 4.9 7.0
Gains on sale of
property and equipment
and other income (0.3) (0.3) (0.7) (1.3)
Costs of former
operations $3.3 7.3 13.9 26.5
INCOME (LOSS) FROM DISCONTINUED OPERATIONS
Three Months Ended Years Ended
December 31, December 31,
(In millions) 2007 2006 2007 2006
Brink's United Kingdom
domestic cash handling
operations:
Gain on sale $0.8 - 1.5 -
Results of operations - (2.0) (13.9) (10.0)
BAX Global:
Gain on sale - (1.0) - 586.7
Results of
operations -
January 2006 - - - 7.0
Adjustments to
contingent liabilities
of former operations:
Health Benefit Act
liabilities (a) 1.7 149.4 1.7 148.3
Other (2.1) (2.4) (1.8) 9.3
Income (loss) from
discontinued operations
before income taxes 0.4 144.0 (12.5) 741.3
Provision (benefit)
for income taxes 0.4 57.0 (1.2) 267.2
Income (loss) from
discontinued operations $- 87.0 (11.3) 474.1
(a) The "Tax Relief and Health Care Act of 2006" was enacted in the
fourth quarter of 2006, resulting in a significant reduction in
estimated future premiums owed to the UMWA Combined Benefit Fund.
THE BRINK'S COMPANY
and subsidiaries
Supplemental Financial Information (continued)
(Unaudited)
SELECTED CASH FLOW INFORMATION
Three Months Ended Years Ended
December 31, December 31,
(In millions) 2007 2006 2007 2006
Depreciation and
amortization:
Brink's $30.2 23.5 109.6 92.3
Brink's Home Security 20.3 17.9 77.7 67.6
Corporate - 0.2 0.4 0.7
Depreciation and
amortization $50.5 41.6 187.7 160.6
Capital expenditures:
Brink's $48.4 33.7 141.6 113.5
Brink's Home Security:
Security systems 40.3 37.7 165.2 150.1
Other 2.3 2.9 12.6 13.8
Corporate - - 0.2 0.3
Capital expenditures $91.0 74.3 319.6 277.7
Other Brink's Home
Security cash flow
information:
Impairment charges
from subscriber
disconnects $12.5 11.4 50.4 47.1
Amortization of
deferred revenue (8.6) (7.6) (34.2) (31.2)
Deferral of subscriber
acquisition costs
(current year payments) (5.8) (5.9) (23.8) (24.4)
Deferral of revenue
from new subscribers
(current year receipts) 11.6 11.4 47.4 44.9
THE BRINK'S COMPANY
and subsidiaries
NON-GAAP RECONCILIATIONS
(Unaudited)
Monthly Recurring Revenues
A reconciliation of monthly recurring revenues to reported Brink's Home
Security revenues follows:
Years Ended
December 31,
(In millions) 2007 2006
December:
Monthly recurring revenues ("MRR") (a) $37.2 33.1
Amounts excluded from MRR:
Amortization of deferred revenue 2.8 2.5
Other revenues (b) 1.6 2.1
Revenues on a GAAP basis $41.6 37.7
Revenues (GAAP basis):
December $41.6 37.7
January - November 442.8 401.3
January - December $484.4 439.0
(a) MRR is calculated based on the number of subscribers at period end
multiplied by the average fee per subscriber received in the last
month of the period for contracted monitoring and maintenance
services.
(b) Revenues that are not pursuant to monthly contractual billings.
The company uses MRR as one factor in the evaluation of BHS' performance
and believes the presentation of MRR is useful to investors because the
measure is widely used in the industry to assess the amount of recurring
revenues from subscriber fees that a monitored security business produces.
This supplemental non-GAAP information should be reviewed in conjunction
with the company's consolidated statements of operations.
Net Debt (Cash) reconciled to GAAP measures
December 31,
(In millions) 2007 2006
Short-term debt $15.1 33.4
Long-term debt 97.5 136.8
Debt 112.6 170.2
Less cash and cash equivalents (196.4) (137.2)
Net Debt (Cash) $(83.8) 33.0
Net Debt (Cash) is utilized by management as a measure of the company's
financial leverage and the company believes that investors also may find
Net Debt (Cash) to be helpful in evaluating the financial leverage of the
company. This supplemental non-GAAP information should be reviewed in
conjunction with the company's consolidated balance sheets in the
company's report on Form 10-K for the year ended December 31, 2007.
THE BRINK'S COMPANY
and subsidiaries
NON-GAAP RECONCILIATIONS (continued)
(Unaudited)
Brink's, Incorporated Organic Revenue Growth
Three Months Ended % change from Years Ended % change from
(In millions) December 31, prior period December 31, prior period
2005 revenues $548.4 8 2,113.3 12
Effects on revenue of:
Organic Revenue Growth 52.0 9 173.5 8
Acquisitions and
dispositions, net 7.8 1 39.3 2
Changes in currency
exchange rates 23.9 5 28.2 1
2006 revenues 632.1 15 2,354.3 11
Effects on revenue of:
Organic Revenue Growth 62.7 10 212.9 9
Acquisitions and
dispositions, net 6.6 1 24.8 1
Changes in currency
exchange rates 55.4 9 142.6 6
2007 revenues $756.8 20 2,734.6 16
The supplemental Brink's, Incorporated Organic Revenue Growth information
presented above is non-GAAP financial information that management uses to
evaluate results of existing operations without the effects of
acquisitions, dispositions and currency exchange rates. The company
believes that this information may be helpful to investors in
understanding the performance of the company's operations. The limitation
of this measure is that the effects of acquisitions, dispositions and
changes in values of foreign currencies cannot be completely separated
from changes in prices (which include the effects of inflation) and volume
of a unit's base business. This supplemental non-GAAP information does
not affect net income or any other reported amounts. This supplemental
non-GAAP information should be reviewed in conjunction with the company's
consolidated statements of operations.
Tax Estimates
The financial information set forth in this release, including tax-related
items, reflects estimates based on information available at this time.
While The Brink's Company believes these estimates to be appropriate,
these amounts could differ materially from actual reported amounts in The
Brink's Company's Form 10-K for the year ended December 31, 2007. In
particular, determining The Brink's Company's actual tax balances and
provisions as of December 31, 2007, and for the year then ended require
extensive internal and external review of tax data (including
consolidating and reviewing the tax provisions of numerous domestic and
foreign entities) which is being completed in the ordinary course of
preparing The Brink's Company's Form 10-K.
Important Information
In connection with its 2008 annual meeting of shareholders, The Brink's
Company plans to file with the Securities and Exchange Commission (SEC)
and mail to its shareholders eligible to vote at the 2008 annual meeting
of shareholders a definitive proxy statement. THE COMPANY ADVISES ITS
SECURITY HOLDERS TO READ THE DEFINITIVE PROXY STATEMENT AND OTHER RELEVANT
DOCUMENTS FOR THE 2008 ANNUAL MEETING OF SHAREHOLDERS WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Security
holders may obtain a free copy of the definitive proxy statement and other
documents that the company files with the SEC at the SEC's website at
http://www.sec.gov. The definitive proxy statement and these other
documents may also be obtained free of charge from The Brink's Company
upon request by contacting the Corporate Secretary at 1801 Bayberry Court,
P. O. Box 18100, Richmond, Virginia 23226-8100.
Certain Information Regarding Participants
The Brink's Company, its directors and named executive officers may be
deemed to be participants in the solicitation of proxies from the
company's security holders in connection with its 2008 annual meeting of
shareholders. Security holders may obtain information regarding the names,
affiliations and interests of such individuals in the company's Annual
Report on Form 10-K for the fiscal year ended December 31, 2006 and its
definitive proxy statement dated March 23, 2007, each of which has been
filed with the SEC. Additional information regarding such individuals will
be included in the definitive proxy statement for the 2008 annual meeting
of shareholders. To the extent holdings of the company's securities have
changed from the amounts included in the definitive proxy statement dated
March 23, 2007, such changes have been reflected on Forms 4 and 5 filed
with the SEC and will be reflected in the definitive proxy statement for
the 2008 annual meeting of shareholders.
--------------------------------------------------------------------------------
Source: The Brink's Company
Universal Power Group Enters into Agreement with Amphenol - Tuchel Electronics
Tuesday February 12, 8:00 am ET
UPG to be Sole Provider of Amphenol Sealed Lead-Acid Battery Connectors to the Medical Mobility Market
CARROLLTON, Texas--(BUSINESS WIRE)--Universal Power Group, Inc. (AMEX: UPG - News), a leading provider of third-party logistics and supply chain management services, and a global distributor of batteries, security products and related portable power products, announced today that it has entered into a manufacturing and sales agreement with Amphenol – Tuchel Electronics (“Amphenol”), a division of Amphenol Corporation, under which Amphenol will design, develop and manufacture connectors for UPG’s line of sealed lead-acid (“SLA”) batteries.
The Amphenol connectors will be sold under the UPG UNIVERSAL™ brand. Outfitting UPG’s SLA batteries with these connectors is expected to reduce the risk of injuries resulting from improper installation of batteries, as the connectors eliminate the need for specific tools typically required to remove and install the batteries. In addition, they will reduce the time required to change out the batteries. SLA batteries are used in a broad spectrum of markets, including automotive, marine, security, consumer electronics, electric wheelchairs and other mobility items. Under the agreement, UPG will be the exclusive provider of Amphenol connectors to the wheelchair and medical mobility markets during the base term. The base term is three years and the agreement is renewable for successive one-year terms.
Randy Hardin, President & CEO of UPG, stated, “We are very excited about this partnership with Amphenol, one of the largest manufacturers of interconnect products in the world. Standard SLA batteries currently sold into the medical mobility market require specific tools in order to safely change out the batteries. By outfitting our batteries with Amphenol customized connectors, the risk of injury and installation time is significantly reduced, as the connectors enable a technician or even a layperson to properly change out batteries without the use of tools. By marketing our batteries with customized connectors to leading medical mobility providers, we believe we have the opportunity to differentiate and strengthen the UPG brand name in the important medical mobility market.”
Ken Beller, General Manager of Amphenol’s North American Automotive Division, stated, “We believe that the medical mobility market currently lacks a solution to safely change out batteries, which can lead to injuries for the end-user. Our customized connectors, which will be marketed alongside UPG’s SLA batteries, should address the need in the marketplace for improved product safety. Since a reputation for quality and safety will be critical in the success of these value-added connectors, we are pleased to partner with a highly regarded firm such as Universal Power Group.”
About UPG
UPG (www.upgi.com) is a leading provider of third-party logistics and supply chain management services and a global distributor of batteries, security products and related portable power products to various industries. UPG's supply chain services include procurement, warehousing, inventory management, distribution, fulfillment, and value-added services such as sourcing, custom battery pack assembly, coordination of battery recycling efforts, kitting and product development. UPG's range of product offerings include proprietary brands of industrial and consumer batteries of all chemistries, chargers, cellular and Bluetooth accessories, related portable power products, 12-volt DC accessories, and security products.
About Amphenol
Amphenol Corporation (NYSE: APH - News) is one of the world's leading producers of electronic and fiber optic connectors, cable and interconnect systems. Amphenol’s products are engineered and manufactured in the Americas, Europe, and Asia and sold by a worldwide sales and marketing organization. Amphenol has a diversified presence as a leader in high growth segments of the interconnection market including: Military, Commercial Aerospace, Automotive, Broadband Communication, Industrial, Information Technology and Data Communications Equipment, Mobile Devices and Wireless Infrastructure.
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 that are described from time to time in the Company's filings with Securities and Exchange Commission.
Contact:
Investors:
Universal Power Group, Inc.
Mimi Tan, 469-892-1122
tanm@upgi.com
or
Cameron Associates
Amy Glynn, CFA, 212-554-5464
amy@cameronassoc.com
--------------------------------------------------------------------------------
Source: Universal Power Group, Inc.
ZNCM made a nice move yesterday and that has continued today. The last trade is $0.62.
Mike
Over 145K shares of UPG were purchased today in the $4.00-$4.01 range. Someone is willing to stake a large position at that price!
Mike
I added more ZNCM shares today. I think ZNCM is way, way oversold.
Mike
Thanks MikeS :)
I appreciate it
added you a mark to check your other investments as well ;)
ZNCM filed their 10-Q and posted earnings of $0.02/share.
Mike
ok
thanks very much for your help Mike :)
I really appreciate it.
ZNCM is receiving interest from loans (notes) to UPG. ZNCM also reports their share of UPG profits on their P&L. If UPG shares are dividend to ZNCM shareholders, then the reporting of UPG profits will not occur anymore but the interest from the loans will continue until the loans are paid off by UPG. I don't think that ZNCM will sell the shares in the open market because that would tank the price of UPG shares. Rather, I think they will dividend them to ZNCM shareholders. Then the ZNCM shareholders can either sell the shares or hold the shares.
Mike
I dont imagine they would sell the shares and give the proceeds to the shareholders. it would tank UPG pps.
If they give all to the shareholders, ZNCM wont have a participation in UPG anymore and wont receive payments from them.
I guess a big part of the O/S is personally owned by ZNCM owners and thus would personaly own UPG shares instead of owning them through ZNCM. So they dont mind losing a subsidiary for the company.
Am i right?
UPG was a 100% owned subsidiary of ZNCM. UPG did an IPO last year. Prior to the IPO there were 3M shares. UPG sold 2M additional shares and 1M of ZNCM's UPG shares were also sold. So, that is why ZNCM owns 2M shares of UPG. UPG is not going to give shares to ZNCM shareholders. Rather, ZNCM may dividend the 2M UPG shares that they already own to ZNCM shareholders. There was already an $0.80 cash dividend paid to ZNCM shareholders with the proceeds of the sale of their 1M UPG shares in the IPO.
Mike
ZNCM liquidation value is valued to be more than 1.25$ per share!So ZNCM is currently trading much less than its book value and without a P/E ratio too!
1 more question: Why would UPG give ZNCM shareholders a dividend in shares? A dividend that is the 2M shares ZNCM owns in UPG?
ZNCM owns 2M shares of UPG which is roughly 40% of UPG. I suspect that eventually UPG will dividend the UPG shares to ZNCM holders. The current BV of ZNCM is $0.95/share. The book value of the 2M UPG shares is $6,961,649. The current price for UPG shares is $4.80 which means that the market value of those shares is $9.6M or roughly $2.64M more than book value. That translates to an additional value of roughly $0.29/share. Thus, the liquidation value of ZNCM is more like $1.24/share. If the 2M UPG shares were given to ZNCM shareholders via a dividend, they could sell the UPG shares and capture that premium. In the interim, while we are waiting for that to happen, ZNCM is continuing to make money from UPG via their interest payments. ZNCM may never reach its full value in the upper $1.20s, but it certainly is worth more than $0.76/share.
I think the reason that there is little iHub interest in ZNCM is that it is a boring company to watch. Other than their UPG holdings, all they have is the tiny Alphanet division. I don't mind boring if it makes me money.
Mike
What do you mean by:
"If they ever decide to dividend UPG shares it will run over $1 for sure." 0.76 to 1$? not more than that?
How much of UPG does Zunicom have? It also has 100% of Alphanet. Is alphanet trading too?
It looks undervalued. I need to DD it to make sure.
How come there is no interest on IHUB?
O/S 7 million?
A/S 10 million?
Any tip on why UPG went don in Feb and March 2007?
In my estimation this stock is undervalued. It is trading at less than book value and much less than the liquidation value. The liquidation value is higher because of the UPG stock which became more valuable today on a positive reaction to earnings. I expect this stock to be over $1 sometime in the next year but I'm not sure when. If they ever decide to dividend UPG shares it will run over $1 for sure.
Mike
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