EVANSVILLE, IN-- United Components, Inc. (UCI) announced revenue of $236.7 million for the quarter ending Dec. 31, 2005. Revenue for the quarter was adjusted downward by $14 million to reflect an increase in the company's warranty reserves. Before this adjustment, revenue was $250.7 million, an increase of 5.2 percent over the year-ago quarter, with increases in all sales channels except heavy-duty.

Net loss for the quarter was $17.6 million, including the effect of the revenue adjustment referenced above, as well as $18.8 million in one time, non-cash charges, primarily related to impairment write downs of a trademark, software assets and property and equipment. For the fourth quarter of 2004, net income was $2.8 million.

Earnings before interest, taxes, depreciation and amortization (EBITDA), as adjusted pursuant to the company's credit agreement for its senior credit facilities, was $28 million for the fourth quarter, compared with $30.2 million for the year-ago quarter.

"We were pleased with our sales performance this quarter and, as expected, our overall performance was affected by continuing higher operating costs, particularly raw materials," said Bruce Zorich, chief executive officer of UCI. "As we exit 2005, we expect the investment we've made in revenue and profitability initiatives throughout the year to lead to a successful 2006."

The company launched several initiatives in 2005 to improve its future performance in light of higher material and operating costs. These initiatives include selected price increases in steel-related products, targeted new business opportunities, and operational enhancements to reduce operating costs and inventory while improving customer fulfillment.

For the full year 2005, revenue was $1,008.8 million, reflecting the $14 million downward adjustment discussed above. Before this adjustment, revenue was $1,022.8 million for the year, flat with the prior year. Net loss was $4.5 million for 2005, including the revenue adjustment and one-time charges previously discussed, compared to net income of $30.8 million for 2004. EBITDA, as adjusted pursuant to the company's credit agreement for its senior credit facilities, was $114.9 million for 2005 and $138.5 million for 2004.

UCI generated $18.3 million in cash during the fourth quarter, ending the year with $26.2 million in cash. As of Dec. 31, 2005, the company's debt stood at $443 million, down from $581 million in June 2003 when the acquisition occurred.

On March 9, UCI announced that it agreed to acquire the capital stock of water pump manufacturer ASC. As announced, the transaction values ASC at $154.7 million, including assumption of certain debt, and also calls for UCI to pay ASC stockholders an additional $4 million in purchase price following the acquisition based upon the achievement of certain operational objectives. Completion of the transaction is subject to regulatory approval and other customary closing conditions.

UCI believes that the acquisition is important strategically for UCI, as it will combine the rapidly growing ASC product line with the long-established and well-respected line of Airtex water pumps. In addition, with ASC's 15-year presence in China, the transaction will immediately provide a proven global sourcing and manufacturing platform for UCI in this increasingly competitive worldwide marketplace.

ASC has grown rapidly over the last several years, reaching revenue of $105.6 million and $15.7 million of adjusted EBITDA, calculated on a basis consistent with that used by UCI. UCI anticipates that the combination of ASC and Airtex will produce a unique global sourcing, manufacturing and flexible delivery platform. UCI expects significant synergy savings with this platform and believes that it can achieve annual EBITDA savings of $10 to $12 million within two years of the integration.

UCI plans to fund the acquisition through an amendment to its existing senior credit facilities, including additional borrowings of approximately $135 million. UCI's total debt to EBITDA leverage ratio stood at approximately 3.9x as of Dec. 31, 2005. UCI expects that its pro forma leverage following the acquisition will be approximately 4.3x, comparable to the leverage for UCI in June 2003 when the company was acquired by the Carlyle Group.

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