Clarion Technologies Reports 2001 Q2 Financial Results
HOLLAND, Mich., Aug. 21 Clarion Technologies, Inc.
today announced financial results for 2001's second quarter,
which ended June 30, 2001. The Company's management also detailed steady
progress in driving internal sales growth and restoring profitability.
For the second quarter, Clarion's sales were $27.7 million versus $29.2
million for the year-ago quarter. The lower sales levels reflect decreased
consumer product sales due to program launch delays and decreased automotive
sales due to the general slowdown in the industry. Clarion reported a net
loss after preferred dividends (loss attributable to common shareholders) of
$14.4 million, or $0.61 per share, compared with a loss of $253,000, or $0.01
per share, reported for 2000's second quarter. The reported pretax loss of
$14.0 million for the quarter included $8.0 million in non-cash expenses
comprised of the book-value writedown of one of the Company's manufacturing
facilities to more accurately reflect its current market value ($5.0 million),
amortization and depreciation ($2.1 million), and the writedown of certain
other assets ($0.9 million).
Clarion Technologies' President Bill Beckman commented, "While the weak
automotive market impacted our second-quarter numbers, we are expecting
gradual improvement. This downturn has shut down weaker competitors, and we
are generally finding that Tier 1 suppliers are accelerating their vendor
consolidation programs to drive down costs. Consequently, Clarion is gaining
a significant amount of transferred and new business from some of our major
customers. In the past two months, we have received $17 million in annualized
sales of transferred and new business, and we expect that figure to increase
through the remainder of the year. These projects will be manufactured in our
facilities in South Haven and Caledonia, Michigan. Our vision is to build a
company of such a size that it would allow our major customers to consolidate
their plastic injection-molding needs into Clarion. All of these new and
transferred projects are steps toward realizing that vision. It also shows
that our major customers want Clarion to succeed, and they are working very
closely with us to ensure that."
In the past six months, Clarion has aggressively pursued several operating
initiatives aimed at reducing costs and improving future profitability and
cash flow. These initiatives include:
* Reducing overhead cost structure
* Leveraging the purchasing power of consolidated operations with vendors
* Eliminating unprofitable product lines
* Obtaining price increases from selected customers
Mr. Beckman said, "We are also working on several additional initiatives
that, if properly executed, are anticipated to further secure our financial
position, returning Clarion to profitability and greatly improving our cash
flow and debt position. I am also pleased to report that, following the
quarter's end, Clarion received a cash infusion of approximately $6.3 million,
including nearly $1.3 million from a board member."
Looking ahead, Mr. Beckman commented, "It is easy to see that this has
been a tough year for the entire industry, including Clarion. We truly
believe, though, that the worst is behind us. The downturn has pressed us to
focus on our core business, drive down cost, capture sales opportunities and
take necessary actions including a few write-offs to ensure our future
success. With the support of our major customers, we expect Clarion is
certain not just to survive the downturn but rather to come out much stronger
for it."
Clarion Technologies, Inc.
Financial Highlights
(Unaudited)
In Thousands, Except Per Share Data
Second Quarter Ended Year to Date Ended
June 30, 2001 July 1, 2000 June 30, 2001 July 1, 2000
Net sales $27,723 $29,160 $56,524 $54,245
Cost of sales 29,169 23,370 56,278 44,741
Gross profit
(loss) (1,446) 5,790 246 9,504
Selling, general
and administrative
expenses 3,876 3,185 6,686 5,519
Impairment charge 5,933 -- 7,433 --
Operating income
(loss) (11,255) 2,605 (13,873) 3,985
Interest
expense (2,693) (2,136) (4,930) (3,366)
Other income
(expenses), net (5) 28 (98) 76
Income (loss)
before income
taxes (13,953) 497 (18,901) 695
Provision for
income taxes -- 202 212 320
Net income
(loss) (13,953) 295 (19,113) 375
Preferred stock
dividends
declared (465) (548) (1,019) (1,096)
Loss designated
to common
shareholders
for computing
per share
results $(14,418) $(253) $(20,132) $(721)
Loss per share
(basic and
diluted) $(0.61) $(0.01) $(0.86) $(0.04)
Weighted average
shares
outstanding
(basic and
diluted) 23,547 20,563 23,539 20,223
