Unique Fabricating announces fourth quarter and full year results

Auburn Hills, MI – Unique Fabricating, Inc. announced its financial results for the fourth quarter and year ended December 31, 2021.

Fourth Quarter 2021 Financial Results: Net sales of $30.1 million compared to $35.0 million in the fourth quarter of 2020. Net loss of $1.5 million or $0.13 per basic and diluted share compared to net loss of $82.0 thousand or $0.01 per basic and diluted share in the fourth quarter of 2020. Net debt(1) decreased $1.9 million to $47.7 million as of December 31, 2021, from $49.6 million as of December 31, 2020; the 2020 amount includes the forgiven $6.0 million PPP loan. Interest expense increased $0.1 million to $0.7 million compared to prior year of $0.6 million.

“The strengthened and realigned management team of Unique Fabricating continues to address the industry-wide issues impacting each of our markets with a comprehensive approach, designed to weather these challenges and position the Company well as more normal production levels return,” commented Doug Cain, Unique Fabricating’s Chief Executive Officer. “Central to this approach is our continued focus on remaining responsive and flexible in supporting our customers, including increasing capacity and, where possible, securing take over business opportunities. I am proud of how our team has responded by maintaining strong customer service and earning additional customer certifications, such as the prestigious Ford Q1, while winning new business in each of the markets we serve. As with many suppliers who have already communicated quarterly operating results, our operations were negatively impacted in the fourth quarter by the lower demand and increased costs of manufacturing inputs as well as ongoing shortages of certain raw materials and labor negatively impacting all levels of the supply chain. While we do expect continued challenges through 2022, related to the chip shortage and other well-documented factors, we are seeing improving supply chain availability and higher demand volumes albeit with increasing costs.”

“We are increasingly confident that we have established a solid foundation for profitable growth as conditions normalize,” added Mr. Cain. “Cost recovery initiatives have mitigated a portion of the market impact of higher input costs and we continue to review specific programs for targeted cost recovery. Our efforts to expand our addressable market by reaching new consumer goods customers, has helped us to diversify our revenue streams. The market shift to electric vehicles presents incremental opportunities for us, as EVs demand parts we manufacture to address noise, vibration, weight reduction, and climate control efficiency. We have been awarded parts on multiple new EVs, and we expect EV-related revenue to grow from approximately 5% in 2022 to 6% in 2023.”

Net sales for the fourth quarter were $30.1 million, down $4.9 million from $35.0 million in the fourth quarter last year due to the ongoing impact of supply shortages adversely affecting our customers’ production levels. Gross profit for the 2021 quarter was $3.0 million, or 9.8% of net sales, compared to $5.0 million, or 14.4% of net sales, for the same period last year. The decrease in both gross profit and gross profit as a percentage of net sales reflects the inefficiencies of our current operating environment, including lower operating leverage because of lower sales volumes and higher manufacturing costs, partially offset by our cost recovery efforts.

Net loss of $1.5 million or $0.13 per basic and diluted share for the fourth quarter of 2021compared to net loss of $82.0 thousand or $0.01 per basic and diluted share in the fourth quarter of 2020. The net loss is the result of $4.9 million lower net sales in the fourth quarter of 2021 compared to the fourth quarter of 2020. Income tax benefit was $1.1 million in the fourth quarter of 2021 compared to a tax benefit of $2.3 million in the fourth quarter of 2020.

Net sales for 2021 were $125.7 million compared to $120.2 million in 2020, a 4.5% increase. The increase in net sales in 2021 as compared to 2020 is primarily the result of new program launches and the Company’s cost recovery efforts to pass some cost increases to our customers through price increases, which more than offset the impact of the decrease in North American light vehicle production volumes in 2021 as compared to 2020. Gross profit was $16.7 million, or 13.3% of net sales for 2021, compared to $20.7 million, or 17.2% of net sales last year. The decrease in gross profit and gross profit margin is reflective of the operating inefficiencies resulting from customer release cancellations and reductions due to supply shortages affecting our customers and higher material, freight and labor costs, partially offset by the impact of our cost recovery efforts.

Net loss was $7.0 million or $0.67 per basic and diluted share in 2021 compared to a net loss of $5.7 million or $0.58 per basic and diluted share in 2020. Income tax benefit was $0.9 million for 2021 compared to an income tax benefit of $3.8 million for 2020.

As of December 31, 2021, the Company had approximately $0.7 million in cash and cash equivalents, compared to December 31, 2020 when the Company had $0.8 million in cash and cash equivalents. Total debt outstanding as of December 31, 2021 was $48.4 million compared to $50.4 million as of December 31, 2020. Included in total debt at December 31, 2020 was the $6.0 million Paycheck Protection Program (PPP) loan, which as previously reported was fully forgiven, including accrued interest, during 2021.