Simula First Quarter Net Income Doubles Prior Year Results
PHOENIX--May 8, 2001--Simula, Inc. (AMEX: SMU) reported first quarter earnings available for common shareholders of $322,461, or $.03 per diluted common share, up 103% from first quarter 2000 earnings of $158,150, or $.01 per diluted common share. First quarter 2001 bore the weight of a $479,000 restructuring charge for severance costs and charges related to closing a facility and integrating that operation into existing operations. Excluding these restructuring charges, first quarter 2001 earnings would have been $632,416, or $.05 per diluted common share.First quarter 2000 earnings per share were reduced by preferred stock dividends of $33,658. In November 2000 the Company retired all remaining preferred stock.
Revenues for the first quarter were $25.5 million, up 4% from $24.6 million reported a year earlier, which included $4.3 million related to Airline Interiors, Inc., (AII), a business the company sold in February 2000. Excluding the effect of AII, quarter to quarter revenues increased by 26%.
First quarter 2001 results were favorably influenced by increased deliveries to Simula's largest automotive industry customer, BMW; by cost containment efforts initiated by management; and by lower depreciation charges.
"Our solid results deliver on the promise to our investors that we would be profitable in the first quarter," said Brad Forst president and CEO.
"We are looking at a good second quarter. Our earnings will begin to show the benefit of the work force reductions and other restructuring efforts that we initiated in the first quarter. However, during the second quarter we will have substantial non-recurring financing due diligence and legal fees related to the initiative to restructure our balance sheet and refinance our debt. We also expect to incur default interest charges related to certain continuing covenant defaults on our senior debt, the nature of which have been previously disclosed, and expenses associated with our decision to accelerate spending for the development and production of a new and advanced auto safety technology," Mr. Forst said.
The Company reaffirmed that restructuring its balance sheet remains the top priority in rebuilding the Company. On April 17, Simula confirmed receipt of a preliminary term sheet and commitment letter for funding to replace its senior debt. Management since then has concluded that the proposal did not represent acceptable terms and is currently considering a number of other alternatives. "We still expect to complete a refinancing in the second or third quarter," Mr. Forst said.
"We are gratified that our investors, customers, vendors and our financial business partners understood that our loss in 2000 was the result of restructuring initiatives that will benefit everyone in the long-term, and that our financial condition remains strong," Mr. Forst said.
SIMULA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
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Three Months Ended
March 31, March 31,
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2001 2000
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Revenue $ 25,535,767 $ 24,558,858
Cost of revenue 16,383,598 16,945,302
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Gross margin 9,152,169 7,613,556
Administrative expenses 5,661,754 5,054,110
Restructuring expenses 479,000 --
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Operating income 3,011,415 2,559,446
Interest expense (2,516,954) (2,263,638)
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Income before taxes 494,461 295,808
Income tax expense (172,000) (104,000)
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Net Income 322,461 191,808
Dividends on preferred stock -- (33,658)
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Net income available to
common shareholder $ 322,461 $ 158,150
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Income per common share - Basic $ 0.03 $ 0.01
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Income per common share - Diluted $ 0.03 $ 0.01
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Weighted average shares - basic 12,190,010 11,180,685
Weighted average shares - diluted 12,585,445 11,201,817