Unique Fabricating Inc. saw steady revenue but a drop in net income in its fourth quarter and year-end financial statements.
For 2018, Auburn Hills, Mich.-based Unique, a manufacturer of multi-material foam, rubber and plastic components, reported net sales of $174.9 million, down just $400,000 compared to 2017, according to a company news release.
"Unique grew sales in the fourth quarter and reached the higher end of our revised revenue guidance range for the year despite lower than expected North American production volumes, as manufacturers continue to adjust production schedules to correspond with the continued consumer preferences for light trucks versus traditional passenger cars," CEO John Weinhardt said in a statement.
The company's growing presence in the light truck market, along with some operational efficiencies reached earlier in the year, let Unique better respond to the changing market conditions.
Weinhardt said the move was overshadowed by an increase on federal income tax on foreign sourced income and the timing of an interest rate swap as part of the terms of a senior secured credit facility the company amended in November, both of which negatively impacted Unique's earnings.
The decrease in revenue for the year primarily was driven by overexposure to the traditional passenger car segment as well as a decline in North American auto production year over year of about 1 percent, Unique said. Despite that decline, Unique's sales to the automotive market increased by 2 percent.
Net income for the full year was $3.7 million, down 16 percent from 2017. The decrease comes primarily because of the restructuring process, along with gross profit decreases and higher interest expense thanks to higher interest rates and higher average outstanding debt balances, as well as the unfavorable mark-to-market on the new interest rate swap.
Total revenue for the fourth quarter decreased to $39.8 million, down 4.4 percent from the same period in 2017, Unique said. The decrease primarily was driven by the loss of business with two major non-automotive customers because of the closure of Unique's Fort Smith, Ark., facility in 2018, as well as extended plant holiday shutdowns by some customers to reduce vehicle inventory levels.
The firm reported a net loss of $200,000 for the fourth quarter compared to net income of $2.1 million in the final quarter of 2017. The decrease comes from lower sales resulting in a gross profit decline, higher interest expense because of higher outstanding debt balances and interest rates, as well as a non-cash unfavorable mark-to-market on a new interest rate swap, and unfavorable tax expense, Unique said.