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UPG earnings come in at .07 EPS, the one analyst expected .12

May 08, 2007 – Comments (0)

UPG earnings come in at .07 EPS, the one analyst expected .12
but how much leverage can you give to only one estimate, UPG already has fallen from $7 at IPO to $5.20 at close yesterday, making the earnings miss priced into the stock. Whats not priced into the stock is UPG bright future, the company said its well-positioned to significantly expand its business going forward.
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UPG Reiterates Guidance for 2007

UPG continues to expect 10% growth for the full-year 2007 in net sales and operating income (excluding charges relating to stock-based compensation). These expectations are based on organic growth from existing customers. UPG believes that other factors, including major new product rollouts or new customer contracts or acquisitions, could have a positive impact on revenues and earnings.

"From a strategic level, we continued to expand our product lines and target new customer accounts. We are excited about our recently announced contract with Monitronics International, one of the fastest growing alarm monitoring companies in the U.S. and remain sharply focused on new third-party logistics opportunities. With our expanded warehouse space and the implementation of the warehouse management system currently in progress, we believe we are well-positioned to significantly expand our business going forward," he concluded.
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Universal Power Group Reports First Quarter 2007 Financial Results
Monday May 7, 7:51 pm ET
Revenues Increased 13.5%

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 first quarter ended March 31, 2007. For the quarter, sales increased 13.5% to $23.5 million, compared to $20.7 million in the prior year period.

Revenues from sources other than Brinks rose 43%, driven by increases in high volume products, as well as price increases implemented by UPG to offset higher cost of goods sold. The strength in these sales was partly offset by a modest decline in Brinks revenues to $12.5 million, compared to $13.0 million.

Gross profit increased to $3.4 million, or 14.6% of sales, compared to $2.9 million, or 14.1% of sales. The slight increase in gross margin reflects growth and a mix of higher margin products. Operating income for the first quarter of 2007 rose by 6.4% to $804,000, up from $756,000 in the first quarter of 2006.

Net income was approximately $368,000, or $0.07 per share, compared to $338,000, or $0.11 per share, in the prior year period. The year over year comparisons reflect a 67% increase in diluted shares outstanding as a result of the company's December 2006 initial public offering.

Randy Hardin, President and CEO, commented, "We are pleased with our results in the first quarter, which has historically been the slowest quarter for UPG. As expected, we faced continued cost pressures from our suppliers due to rising raw material costs, and we are implementing price increases to partly offset these higher costs. We are also focused on driving growth of higher margin products and services. To that point, investments we are making in the future growth of UPG, along with higher costs associated with being a public company, resulted in higher G&A expenses in the quarter. However, we believe these investments will translate into increased and higher margin sales for UPG over the long term. As an example, we recently announced a new cellular sales team and the launch of our cellular battery and accessory lines, which should help us to penetrate the cellular market, a rapidly growing category that carries higher gross margins.

"From a strategic level, we continued to expand our product lines and target new customer accounts. We are excited about our recently announced contract with Monitronics International, one of the fastest growing alarm monitoring companies in the U.S. and remain sharply focused on new third-party logistics opportunities. With our expanded warehouse space and the implementation of the warehouse management system currently in progress, we believe we are well-positioned to significantly expand our business going forward," he concluded.

UPG Reiterates Guidance for 2007

UPG continues to expect 10% growth for the full-year 2007 in net sales and operating income (excluding charges relating to stock-based compensation). These expectations are based on organic growth from existing customers. UPG believes that other factors, including major new product rollouts or new customer contracts or acquisitions, could have a positive impact on revenues and earnings.

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 UPG website at www.upgi.com.



Contact:

Investor Contacts:
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.