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Fuel Systems Solutions Inc. Reports Operating Results (10-K)

March 03, 2011 | About:
10qk

10qk

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Fuel Systems Solutions Inc. (FSYS) filed Annual Report for the period ended 2010-12-31.

Fuel Systems Solutions Inc. has a market cap of $545.5 million; its shares were traded at around $27.8 with a P/E ratio of 8.2 and P/S ratio of 1.2. Fuel Systems Solutions Inc. had an annual average earning growth of 87.6% over the past 5 years.Hedge Fund Gurus that owns FSYS: Paul Tudor Jones of The Tudor Group, Joel Greenblatt of Gotham Capital, Bruce Kovner of Caxton Associates. Mutual Fund and Other Gurus that owns FSYS: Ronald Muhlenkamp of Muhlenkamp Fund, RS Investment Management, Chuck Royce of Royce& Associates.

Highlight of Business Operations:

The World Energy Outlook 2009 projects the global primary energy demand to grow by 40% between 2007 and 2030 at an average annual rate of 1.5% per year. Even though the earths energy resources are adequate to meet this demand, the amount of investment that will be needed to exploit these resources will be higher than in the past. World Energy Outlook 2009 estimated that an investment of $26.0 trillion is needed through 2030. According to the World Energy Outlook 2009, world oil resources are judged to be sufficient to meet the projected growth in demand to 2030; however, a supply-side crunch involving an abrupt escalation in oil prices cannot be ruled out. Consequently, natural gas remains a key fuel in the electric power and industrial sectors. Consumption of natural gas worldwide is expected to rise from 106 trillion cubic feet in 2007 to 152 trillion cubic feet in 2030. Gaseous fuels such as propane and natural gas, have significant reserves available worldwide that are less costly to refine compared to crude oil and have historically been less expensive than liquid fuels. According to the U.S. Geological Surveys World Petroleum Assessment 2000, a significant volume of natural gas remains to be discovered. China and India, the worlds most heavily populated nations, are actively developing their infrastructure to facilitate natural gas consumption and imports.

In 2010, one customer represented 14.6% of the consolidated sales. In 2009, two customers represented 13.0% and 11.6% of our consolidated sales, respectively. In 2008, one customer represented 10.7% of our consolidated sales. During 2010, 2009 and 2008, sales to our top ten customers accounted for 53.0%, 62.0% and 36.3% of our consolidated sales, respectively. If our largest customer or several of these key customers were to reduce their orders substantially, we would suffer a decline in sales and profits, and those declines could be substantial.

During the years 2010, 2009 and 2008, sales to distributors accounted for 49.4%, 35.5%, and 60.5%, respectively, of our net revenue, and sales to OEM customers accounted for 50.6%, 64.5%, and 39.5%, respectively, of our net revenue.

We manufacture and assemble a majority of our products at our facilities in Santa Ana, California, Union City, Indiana, Kitchener, Canada, Beccar, Argentina and Cherasco, Italy and to a lesser extent at some of our other international facilities. Current manufacturing operations consist primarily of mechanical assembly and light machining. We rely on outside suppliers for parts and components and obtain components for products from a variety of domestic and foreign automotive and electronics suppliers, die casters, stamping operations, specialized diaphragm manufacturers and machine shops. During 2010, one supplier represented 10.3% of the consolidated raw materials and services. During 2009, one supplier represented 12.4% of the consolidated raw materials and services. During 2008, no suppliers represented more than 10.0% of the consolidated purchases of raw materials and services.

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