UNIDYNE Corporation Reports Q1 1998 Results
18 May 1998
UNIDYNE Corporation Reports First Quarter 1998 Results EXTON, Pa., May 18 -- UNIDYNE Corporation
today announced the results of its first quarter ended March 31, 1998,
highlighted by strong sales of its vehicle emissions testing systems.
The Exton, Pa.-based manufacturer of dynamometers, emissions testing
equipment and specialized electric motors and drives reported a 52% increase
in net sales to $6.3 million in the 1998 first quarter, compared with net
sales of $4.1 million for the same period last year. The increase reflects
UNIDYNE's continuing ramp-up of its emissions testing equipment and the
addition of its wholly owned subsidiary Sabina Industries, which was acquired
in September 1997.
For the first quarter ended March 31, 1998, UNIDYNE reported a net loss of
$258,000, or $0.03 per share, compared with a net loss of $131,000, or
$0.02 per share, in the 1997 first quarter. The Company attributed the net
loss to its continuing market and product development efforts as it prepares
to capitalize on the upcoming demand for vehicle emissions testing systems.
"We have started the year off on a solid note as we build on our strong
sales performance achieved in 1997," said C. Eugene Hutcheson, UNIDYNE
Chairman and Chief Executive Officer. "We are pleased with our preparation
and progress in the critical emissions testing market and are optimistic that,
as other state testing programs come on line in 1998 and the market
opportunity expands, UNIDYNE will be well-positioned as a key player."
Hutcheson added: "UNIDYNE's ability to be a benefactor of the new
business available in vehicle emissions testing is a key ingredient to our
growth and return to profitability. We are confident in our role as a leading
innovator and look to the future with great optimism."
For the first quarter of 1998, UNIDYNE's gross profit as a percentage of
sales increased to 38.6%, compared with 33.9% in the prior year period. The
Company attributed the margin improvement to its increased sales levels and
overhead absorption.
Selling and administrative expense as a percentage of sales increased to
42.5% as compared with 32.8% of sales in the prior year quarter. The increase
reflects the Company's additional investments in sales, service and
administrative personnel to support its growth into the emerging emissions
testing market, as well as the addition of expenses from its Sabina
subsidiary.
UNIDYNE also said its planned acquisition of Bridgeview, Ill.-based ELA
Machine Co., Inc., d.b.a. H&R Manufacturing, announced in March 1998, has not
yet been finalized and did not contribute to its first quarter 1998 results.
H&R Manufacturing is a leading manufacturer and re-manufacturer of engineered
production machinery, equipment and systems.
In 1997, UNIDYNE was the first approved supplier of emissions testing
equipment and software in Pennsylvania, the first state in the country to
implement the Environmental Protection Agency's (EPA) new mandated enhanced
testing program. The program requires repair shops and service centers to use
new, more comprehensive testing equipment like that manufactured by UNIDYNE.
The Company is currently selling and installing emissions test systems for
programs in Pennsylvania and Virginia.
Exton, Penn.-based UNIDYNE Corporation and its subsidiaries manufacture,
sell, service and finance a variety of products including vehicle emissions
testing systems, specialized electric motors, and variable speed drives and
controls. UNIDYNE also manufactures engine and chassis dynamometer testing
systems for a variety of large industrial customers, focused on the automotive
and heavy equipment industries. The Company employs 280 people at facilities
in Kenosha, Wisc., San Francisco, Calif., Anaheim, Calif. and Exton, Penn.
The statements contained in this news release include certain predictions
and projections that may be considered forward-looking statements under
securities law. These statements involve a number of important risks and
uncertainties that could cause actual results to differ materially, including,
but not limited to, the performance of the emissions testing industry, certain
customers and affiliated companies, as well as other economic, competitive,
governmental and technological factors involving the Company's operations,
markets, services, products and prices.
UNIDYNE CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(unaudited)
Three Months Ended
March 31,
1998 1997
Net sales $6,267 $4,111
Cost of sales 3,845 2,716
Gross Income 2,422 1,395
Selling and administrative
expense 2,667 1,347
Research and development expense 25 138
Income (loss) from operations (270) (90)
Interest expense `160 128
Income (loss) before
income taxes (430) (218)
Income tax (benefit) provision (172) (87)
Net (loss) $(258) $(131)
Preferred Dividends (87) (87)
Loss applicable to
common stockholders $(345) $(218)
Basic and diluted (loss)
per share $(0.04) $(0.03)
Weighted average number of
shares of common stock
outstanding 9,335,352 8,533,116
