In this issue ...
Fenix Parts, Inc. recently announced its first quarter 2016 results. The company reported that it increased revenues by 9 percent - compared with 2015’s fourth quarter revenues - but also reported a net loss of $41 million, which includes significant non-cash amortization and other charges, including a goodwill impairment charge of approximately $43.3 million initially triggered by a decline in the company’s stock price. In a release issued by Fenix Parts, the company stated it has continued strong growth in parts sold to repair shop customers and sales at Ocean County, Butler and Tri-City, the companies acquired in the second half of 2015.
“We were pleased with our first quarter revenue growth as favorable industry dynamics and the continued execution of our growth initiatives drove sales of recycled OEM parts at nearly all of our facilities - including at the three locations we acquired in the back half of 2015,” said Kent Robertson, CEO of Fenix Parts. “We will remain focused on capturing organic growth opportunities and realizing synergies. As a result of these efforts, the continued strength in our OEM parts business and the recent stabilization in the commodity market, Fenix Parts is better positioned for the future.”
Consolidated net revenues of Fenix Parts were $32.8 million for the first quarter of 2016 compared to $30.2 million in the fourth quarter of 2015 and $31.4 million on a combined pro forma basis in the first quarter of 2015. Sales of recycled OEM products were $28.8 million for the first quarter of 2016, up from $26.7 million for the fourth quarter of 2015 and $27.3 million in the first quarter of 2015, including sales contributed by Ocean County, Butler and Tri-City during both periods.
Sales from other ancillary activities, which include the sale of commodities, were approximately $4.0 million in the first quarter of 2016 compared to $3.5 million in the fourth quarter of 2015 and $4.1 million in the first quarter of 2015. While commodity prices improved slightly during the first quarter of 2016 as compared to the fourth quarter of 2015, they are still substantially lower than the first quarter of 2015.
Reported Operating Loss for the first quarter of 2016 was $44.2 million. Reported Net Loss, after a $3.3 million benefit for income taxes, was $41.0 million. After factoring in net adjustments of $43.5 million during the period, Adjusted Operating Loss was $0.7 million for the first quarter of 2016. Some of the adjustments included fair market value adjustment, depreciation, share-based compensation, a reduction in cost of goods sold, to name a few.
For additional information, the complete release can be found at www.fenixparts.com.
B & R Auto Wrecking’s headquarters in Corvallis, Ore. was damaged by fire on July 5, 2016. According to a local news affiliate, KPTV (www.kptv.com) the fire caused $1 million in damage. Investigators said it started when an employee was draining a gasoline tank and the fuel ignited, that spread to the main building.
Brian Perlenfein, the company’s senior business advisor, sent out a release that said no one was hurt and everyone made it out safely. He also said the location will remain open under normal business hours and the company was planning to being the remodel stage soon to get the showroom and sales floor back.
The National Highway Traffic Safety Administration (NHTSA) stated that new test data shows that Honda and Acura vehicles – from 2001 – 2003 make years - are at a higher risk of ruptures from defective Takata air bag inflators. The department wants to ensure that any unrepaired vehicles are found and fixed before they cause further injuries or fatalities.
“With as high as a 50 percent chance of a dangerous air bag inflator rupture in a crash, these vehicles are unsafe and need to be repaired immediately,” said U.S. Transportation Secretary Anthony Foxx. “Folks should not drive these vehicles unless they are going straight to a dealer to have them repaired immediately, free of charge.”
The higher-risk inflators are in certain 2001-2003 Honda and Acura vehicles:
- 2001 - 2002 Honda Civic
- 2001 - 2002 Honda Accord
- 2002 - 2003 Acura TL
- 2002 Honda CR-V
- 2002 Honda Odyssey
- 2003 Acura CL
- 2003 Honda Pilot
According to NHTSA, the air bag inflators in these particular vehicles contain a manufacturing defect which greatly increases the potential for dangerous rupture when a crash causes the air bag to deploy. Ruptures are far more likely in inflators in vehicles that have spent significant periods of time in areas of high absolute humidity — particularly Florida, Texas, other parts of the Gulf Coast, and Southern California. Testing of the inflators from these vehicles show rupture rates as high as 50 percent in a laboratory setting.
The vehicles in question were recalled between 2008 and 2011. Honda has reported that more than 70 percent of this higher-risk population of vehicles has already been repaired, but approximately 313,000 vehicles with this very dangerous defect remain unrepaired. The risk posed by the airbag inflators in these vehicles is grave, and it is critical they be repaired now to avoid more deaths and serious injuries.
Drivers of these vehicles should immediately visit www.SaferCar.gov to check whether their vehicle has any outstanding safety recalls. Those that do should contact their nearest dealer to schedule a no-cost immediate repair. Replacement parts for these vehicles are available immediately.
Nearly 70 million Takata air bag inflators are or will be under recall by 2019, in the largest and most complex auto safety recall in U.S. history. A combination of time, environmental moisture and fluctuating high temperatures contributes to the degradation of the ammonium nitrate propellant in the inflators. Such degradation can cause the propellant to burn too quickly, rupturing the inflator module and sending shrapnel through the air bag and into the vehicle occupants
The Automotive Recyclers of Indiana (ARI) will hold its annual event at the Hilton Indianapolis Hotel & Suites in Indianapolis, Ind. on August 19 - 20, 2016.
The event will feature education, exhibitors and an auto recycling roundtable. Visit www.indianaautorecyclers.com for more information.
July 27, 2016: Listings for The Locator Magazine.
August 1, 2016: Display ads for The Locator Magazine.
August 4, 2016: The Locator Magazine goes to press.