FSS Industrial Operations
Revenue from FSS Industrial was $31.9 million compared to $33.7 million the same quarter a year ago. The impact of foreign exchange on FSS Industrial was a negative $0.6 million; in constant currency, first quarter FSS Industrial revenue decreased 3.5%, primarily reflecting lower revenue from the heavy duty business in Asia. FSS Industrial first quarter 2013 operating income was $2.5 million, compared to operating income of $4.6 million in the same period a year ago. FSS Industrial first quarter 2013 EBITDA was $2.7 million, compared to $5.5 million a year ago, which reflects the above-mentioned revenue reduction in Asia and an overall change in the business mix.
The Company is reaffirming its previous outlook and continues to expect full year 2013 revenue to be between $400 million and $420 million, 2013 gross margin of 21% to 23%, and 2013 operating margin of 2% to 4%. This outlook is based upon the following expectations:
- Automotive operations – growth in OEM and DOEM programs, particularly in the US and Italy, combined with contributions from Asia and Latin American automotive markets; partially offset by a slower transportation aftermarket given increasingly aggressive competition in developing countries and Europe.
- Industrial operations – growth in APU market, aided by the launch of new battery products; slight growth in stationery equipment and mobile industrial markets overall with a mix of stable and weaker geographies.
- A comparable margin performance in 2013 relative to 2012 as the Company focuses on achieving greater operational efficiencies given some margin compression expected from an increasingly competitive environment; continued selected investments in key leading edge technologies.