PSI sees decline in 4Q net sales

WOOD DALE - A drop in its oil and gas divisions led Power Solutions International to a decline in its fourth quarter 2015 sales, the company reported.

The manufacturer of alternative fuel and conventional power systems reported fourth quarter net sales of $96.7 million, compared to $103.9 million in the fourth quarter of 2014 and $112.1 million in the third quarter of 2015. The company said the decline was driven by a reduction of approximately $38.8 million from the oil and gas end market, but was partially offset by increased revenue of approximately $21.7 million in the company's on-road end market, including sales from Powertrain Integration that was acquired on May 19, 2015.

"The second half of 2015 was challenging, but we consider our performance in 2015 to be a sound basis to move forward," said CEO Gary Winemaster. "We set a record high in sales, including meaningful revenue diversification from our on-road product as it moves from development into commercialization.

"We achieved this record while integrating three acquisitions, and facing head winds in some of our larger end-markets," he added. "While we experienced some margin compression due to a change in mix and operating inefficiencies, we developed plans to address these inefficiencies and are confident the execution of these plans will improve our business. Moving forward, we are very excited about our shift to full engine manufacturing, as it secures our supply to our customers and enables the introduction of proprietary engines, the first of which is our 8.8 liter."

Operating loss of $738,000 in the current quarter compares to operating income of $9,111,000 in the fourth quarter of 2014 and $1,388,000 in the third quarter of 2015. The company recognized an income tax benefit in the fourth quarter of 2015 which includes an estimated benefit of $1.2 million resulting from the recognition of a federal research tax credit for the full year ended 2015.