Mariano Costamagna, chief executive officer of Fuel Systems, stated, As we anticipated, the first quarter of 2009 proved to be a difficult market. However, to grow our business, we invested in 2008 and continue to make progress in 2009. As a result of our investments, we increased our annual OEM installation rate and exceeded 30,000 vehicles in the first quarter. Our U.S. Automotive Division is gaining traction, and the integration of our Distribuidora Shopping subsidiary in Argentina is progressing as scheduled. In addition, we expanded our engine building capabilities for our next generation fuel injection industrial fuel systems that comply with the new 2010 emissions standards. Throughout the first quarter and in April, management continued to implement cost reductions including selective headcount reductions in both the transportation and industrial businesses, as appropriate. We expect all of these actions will improve our productivity.
Matthew Beale, Fuel Systems’ president, stated, Last week, we agreed to acquire natural gas vehicle (NGV) refueling technology, patents and certifications, including the home refueling appliance marketed under the Phill(tm) brand. The addition will expand our line of turn-key refueling equipment, which we believe will create new opportunities to promote the adoption of NGVs in developing markets and further penetrate existing markets.
We remain excited about the medium-term growth drivers in our markets and will continue to invest and position Fuel Systems to capitalize on those opportunities. To ensure we have maximum flexibility to do so, we intend to file a universal shelf registration statement that would allow us to issue a variety of security types necessary to support our growth strategy, concluded Beale.
First Quarter 2009 Financial Results:
The decrease in revenues was primarily due to lower demand in the industrial forklift market and a negative foreign exchange impact of about $9.8 million, or 10.9%. Gross profit for the 2009 first quarter reached $24.3 million, or 30.4% of revenue, compared to $27.5 million, or 29.1% of revenue, in the year earlier period. Operating income for the first quarter of 2009 totaled $11.4 million, or 14.2% of revenue, compared to $13.4 million, or 14.2% of revenue, in the first quarter of 2008.
Company Outlook:
Based on the current market outlook, the company reaffirms its guidance and anticipates 2009 revenue to be between $330 million and $360 million. The revenue guidance assumes a stronger US dollar that is anticipated to negatively impact 2009 annual revenue by about 12.0%. The company anticipates the gross and operating margins to be impacted from the planned investment in its business. Therefore, the company is targeting 2009 gross margin between 25% and 27% and 2009 operating margin to be between 10% and 12%.
