Fuel Systems Solutions Reports Second Quarter 2013 Results

     Second Quarter Revenue of $111.1 Million Operating Income of $4.8 Million; Affirms Outlook

NEW YORK, N.Y., August 8, 2013 -- Fuel Systems Solutions, Inc. (Nasdaq: FSYS) reported results for its second quarter ended and six months ended June 30, 2013.

Mariano Costamagna, Fuel Systems’ CEO, said, “Second quarter results reflected normal seasonal trends as we focused on executional efficiency and competing effectively in difficult markets. Greater DOEM revenues in our Automotive segment than last year, primarily due to an increasingly meaningful contribution from US Automotive, offset lower aftermarket kits sales, which continue to be pressured by a difficult economy and increasing competition, particularly in Europe. Our Industrial mobile and stationery engine business was solid and drove this segment’s growth in the quarter, despite softer results from the heavy duty market in Asia. Although our gross profit margin was impacted by these factors, our operating margin in the quarter benefitted by the consolidation of our automotive operational processes, which is streamlining our operating expenses and manufacturing efforts. Overall, Fuel Systems is tracking toward its full year 2013 objectives. For the second half of 2013, we will remain focused on maximizing profitability while continuing to strategically invest in our brands, our technology, our product offerings, and broadening our customer relationships.”

Second Quarter 2013 Financial Results

Revenue for the second quarter of 2013 was $111.1 million compared to $109.0 million in the second quarter of 2012. The impact of foreign exchange on second quarter revenue was a negative $1.2 million; excluding the effect of foreign exchange, second quarter revenue increased 3.0% compared to the prior year.

Gross profit for the second quarter of 2013 was $25.8 million, or 23.2% of revenue, compared to $29.1 million, or 26.7% of revenue, in the second quarter of 2012, primarily reflecting the combination of the decreased aftermarket contributions and lower margin in the US DOEM market partially offset by a positive impact from the industrial markets. Operating income for the second quarter of 2013 totaled $4.8 million, or 4.3% of revenue, compared to operating income of $6.2 million, or 5.7% of revenue, in the second quarter of 2012, reflecting the lower margin of the current business mix partially offset by lower operating expenses.

EBITDA for the second quarter of 2013 was $7.3 million, or 6.6% of revenue, compared to $10.7 million, or 9.8% of revenue, in the second quarter of 2012, primarily reflecting the abovementioned revenue and cost variances. EBITDA is a non-GAAP measure. See “Non-GAAP Measures” below for a discussion of this metric.

The tax rate for the second quarter of 2013 was 34.5% compared to (8.3) % in the prior year quarter, in which a tax benefit of approximately $5.0 million, or $0.25 per share, was recognized. The Company expects its effective tax rate for 2013 to be approximately 40% resulting from the current mix of business by tax jurisdiction.

Net income for the second quarter of 2013 was $2.6 million, or $0.13 per diluted share, compared to net income of $7.1 million, or $0.36 per diluted share, in the second quarter of 2012. Excluding the abovementioned second quarter 2012 $0.25 per diluted share tax benefit, net income was $0.11 per diluted share in the prior year quarter.

FSS Automotive Operations

FSS Automotive second quarter 2013 revenue was $78.0 million, compared to $78.3 million from the same quarter a year ago. The impact of foreign exchange on FSS Automotive was a negative $0.6 million; in constant currency, second quarter FSS Automotive revenue was unchanged from the prior year reflecting the increased DOEM and compressor revenues that were offset by the declining aftermarket activity. FSS Automotive second quarter 2013 operating income was $2.8 million compared to operating income of $5.2 million in the same period a year ago. FSS Automotive second quarter 2013 EBITDA was $5.2 million, compared to $8.8 million in the same period a year ago.

FSS Industrial Operations

FSS Industrial second quarter 2013 revenue was $33.1 million compared to $30.7 million from the same quarter a year ago. The impact of foreign exchange on FSS Industrial was a negative $0.6 million; in constant currency, second quarter FSS Industrial revenue increased 10.0% from the prior year, reflecting overall growth in the North American markets for mobile and stationary engines slightly offset by a decline in the heavy duty Asian market. FSS Industrial second quarter 2013 operating income was $3.7 million compared to operating income of $2.3 million in the same period a year ago. FSS Industrial second quarter 2013 EBITDA was $3.7 million, compared to $3.0 million in the same period a year ago, which reflects incremental margin on the increased revenue discussed above.

Six Months Ended June 30, 2013 Financial Results

Total revenue for the first half of 2013 was $209.7 million, compared to $206.3 million for the first half of 2012. Net income for the first half of 2013 was $1.9 million, or $0.09 per diluted share, compared to $5.9 million, or $0.30 per diluted share, for the first half of 2012. EBITDA for the first half of 2013 was $11.7 million compared to $16.1 million for the first half of 2012.

Total FSS Automotive revenue for the first six months of 2013 was $144.6 million compared to $141.9 million for the same period a year ago. Automotive operating income was $3.1 million for the first half of 2013 compared to $3.8 million for the first half of 2012. FSS Automotive EBITDA for the first half of 2013 was $8.5 million compared to $10.9 million for the first half of 2012.

Total FSS Industrial revenue for the first six months of 2013 was $65.1 million compared to $64.4 million for the same period a year ago. Industrial operating income was $6.1 million for the first half of 2013 compared to $6.9 million for the first half of 2012. FSS Industrial EBITDA for the first half of 2013 was $6.4 million compared to $8.6 million for the first half of 2012.

Company Outlook

The Company is reaffirming its previous outlook and continues to expect full year 2013 revenue to be between $400 million and $420 million, 2013 gross margin of 21% to 23%, and 2013 operating margin of 2% to 4%. This outlook is based upon the following expectations:

Non-GAAP Measures

To provide investors and others with additional information regarding Fuel Systems’ results, in addition to the results presented in accordance with generally accepted accounting principles, or GAAP, in this press release, Fuel Systems presents EBITDA, which is a non-GAAP measure. A reconciliation of this non-GAAP measure to the closest GAAP financial measure is presented in the financial tables below under the heading “Non-GAAP FINANCIAL MEASURE RECONCILIATION”. EBITDA is determined by adding the following items to Net Income, the closest GAAP financial measure: Depreciation & Amortization; Interest income, net; and Benefit (Provision) for Income Taxes. Fuel Systems’ management believes this non-GAAP financial measure offers additional insight into the Company’s ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of trends in the business, as it excludes certain non-cash items. This non-GAAP financial measure also can provide useful information to investors and others in understanding and evaluating Fuel Systems’ operating results and future prospects when comparing financial results across accounting periods and to those of peer companies. Fuel Systems may not define this non-GAAP financial measure in a manner similar to other companies.

Conference Call

The Company will host a conference call today, August 8^th at 11:00 a.m. Eastern Time / 8:00 a.m. Pacific Time to discuss its second quarter 2013 financial results and other matters. To listen to the call live, please dial 877-356-8063 at least 10 minutes before the start of the conference. International participants may dial 706-679-2544. The conference ID will be 18004915. The call will be webcast and can be accessed from the “Investor Relations” section of the Company’s website at www.fuelsystemssolutions.com. A telephone replay will be available until midnight Eastern Time on August 13^th by dialing 855-859-2056 or 404-537-3406 and entering pass code 18004915. A replay will also be available at the web address above for 90 days.

Forward-Looking Statements

This press release contains certain forward-looking statements that involve risks and uncertainties, including, without limitation, expressed or implied statements concerning the Company's outlook for 2013, as well as its position in the market place, the success of its products and its effective tax rate for the year. Such statements represent only our opinions and predictions. The Company's actual results may differ materially. Factors that may cause the Company's results to differ include, but are not limited to, a further slowing of economic activity, our ability to reduce our cost structure and expenses as anticipated; the unpredictable nature of the developing alternative fuel US automotive market; customer dissatisfaction with the Company’s products or services; the inability of the Company to deliver its products on schedule; the availability of gaseous fueling infrastructure in our markets globally; the price differential between alternative gaseous fuels and gasoline; unanticipated economic uncertainties caused by political instability in certain of the local markets we do business in; the growth of non-gaseous alternative fuel products and other new technologies; currency rate fluctuations and devaluations; our ability to promptly realign costs with current market conditions; unanticipated litigations; differences in the tax policies of each country from which the Company derives income that would impact our effective tax rate; potential changes in tax policies and government incentives and their effect on the economic benefits of our products to consumers; the continued weakness in financial and credit markets and the economy; and the repeal or implementation of government regulations relating to reducing vehicle emissions. Readers also should consider the risk factors set forth in the Company's reports filed with the Securities and Exchange Commission, including, but not limited to, those contained in the "Risk Factors" section of the Company's Annual Report on Form 10-K, for the year ended December 31, 2012. The Company does not undertake to update or revise any of its forward-looking statements.

About Fuel Systems Solutions

Fuel Systems Solutions (Nasdaq: FSYS) is a leading designer, manufacturer and supplier of proven, cost-effective alternative fuel components and systems for use in transportation and industrial applications. Fuel Systems’ components and systems control the pressure and flow of gaseous alternative fuels, such as propane and natural gas, used in internal combustion engines. These components and systems feature the Company’s advanced fuel system technologies, which improve efficiency, enhance power output and reduce emissions by electronically sensing and regulating the proper proportion of fuel and air required by the internal combustion engine. In addition to the components and systems, the Company provides engineering and systems integration services to address unique customer requirements for performance, durability and configuration. Additional information is available at www.fuelsystemssolutions.com.

Company Contact:

Pietro Bersani, Chief Financial Officer Fuel Systems Solutions, Inc. (646) 502-7170

– Tables Follow –

FUEL SYSTEMS SOLUTIONS, INC.

NON-GAAP FINANCIAL MEASURE RECONCILIATION (In thousands) (Unaudited)