Simula Inc. Reports Fourth Quarter and 2001 Earnings; Conference Call 11:30am EST Today
TEMPE, Ariz.--March 20, 2002--Simula, Inc. (AMEX:SMU) today reported revenues for the quarter ended December 31, 2001 of $28.2 million, compared to $24.6 million for the fourth quarter of 2000, an increase of 15%. Revenue for the year 2001 was $106.8 million, compared to 2000 revenue of $97.3 million, a 10% increase.Actual and Pro-Forma Results
Net income and net income per share for the fourth quarter was approximately $101,000 or $0.01 per diluted share. This compares to net loss and net loss per share of ($8.8) million or ($0.72) per diluted share for the fourth quarter of 2000. The quarter includes operating losses of approximately $435,000 from the Company's Atlanta operation which was sold in November and an additional tax provision of approximately $800,000. Fourth quarter 2001 net income includes the benefit of $775,000 related to the reversal of employee health plan reserves. Pre-tax operating income in the fourth quarter was $1.4 million.
Pro-forma net income and net income per share for the fourth quarter ended December 31, 2001 was approximately $286,000 or $0.02 per diluted share. Proforma adjustments exclude the benefit from reserves noted above, restructuring adjustments, and a normalized tax rate of 37%.
Pro-forma net income and net income per share for the year ended December 31, 2001 was $2.2 million or $0.17 per diluted share, which excludes an extraordinary charge of $2.2 million, net of tax, to write off the unamortized balance of deferred financing fees attributable to early extinguishment of debt and other special items. These special items include restructuring, employee severance, loss on sale of assets, refinancing costs and the reversal of other accruals.
Actual net loss and net loss per share for the year ended December 31, 2001 was ($1.0) million or ($0.08) per diluted share, compared to ($6.0) million or ($0.52) per diluted share in 2000.
Results From Retained Businesses
Results from the Company's retained businesses for the year ended December 31, 2001, are consistent with earlier guidance. In 2001 the Company sold, closed, or consolidated three non-core businesses. Its retained businesses include its core Aerospace and Defense business and Automotive Safety business. For the year ended December 31, 2001, revenue from retained businesses was $101.7 million, and net income and net income per share, including proforma adjustments, from these operations was $3.6 million or $0.28 per share.
"We reported net income in the fourth quarter. This is the first time in many years that the Company has not arrived at year-end to report large fourth quarter write-offs and losses. Significant progress on our turnaround has been delivered as promised," said Brad Forst, President and CEO.
"Restructuring charges, refinancing costs, and write-offs are now behind us," said Forst. "We are extremely proud to report that on a pro-forma basis we are reporting Simula's first profitable year since 1995," he said.
Conference Call
The Company will host a year-end results and outlook conference call today, Wednesday, March 20, at 11:30am EST/ 9:30am MT / 8:30am PT. You may participate live by dialing 800/818-5264 or, you may access the call live via the internet at www.shareholder.com/simula/mediaregister.cfm?mediaID=4285. If you are unable to participate live, the call will be archived for 30 days on our website, www.simula.com.
Guidance
The Company issued its outlook and guidance in its press release dated February 7, 2002.
About Simula
Simula designs and makes systems and devices that save human lives. Its core markets are aerospace and defense systems, and automotive safety systems. Simula's core technologies include inflatable restraints, energy absorbing seating systems, advanced polymer materials, transparent and opaque armor products, personnel protective equipment and parachutes, and crash sensors. More information is available at http://www.simula.com.
SIMULA, INC.
EARNINGS SUMMARY
Three Months Twelve Months
Ended Ended
December 31, December 31,
2001 2000 2001 2000
Reported Results:
Revenue $28,222,953 $24,594,308 $106,794,159 $97,295,471
Operating
income 3,954,267 (8,307,748) 13,432,794 482,535
Net earnings
(loss)
available to
common
shareholders 100,780 (8,775,154) (1,033,294) (6,003,198)
Effective tax rate 93% 28% 41% 22%
Diluted EPS $ 0.01 $ (0.72) $ (0.08) $ (0.52)
Proforma results
excluding special
items: (1) to (19)
Revenue $28,222,953 $24,594,308 $105,794,159 $93,905,471
Operating
income 2,995,267 (1,592,355) 12,969,794 5,738,009
Net earnings
(loss) available
to common
shareholders 285,881 (3,366,151) 2,149,011 (3,565,074)
Effective tax rate 37% 28% 37% 28%
Diluted EPS $ 0.02 $ (0.28) $ 0.17 $ (0.30)
SIMULA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------------ -------------------------
2001 2000 2001 2000
---------- ---------- ----------- ----------
Revenue $28,222,953 $24,594,308 $106,794,159 $97,295,471
Cost of revenue 19,783,204 18,402,267 70,294,828 65,224,828
Gross margin 8,439,749 6,192,041 36,499,331 32,070,643
Administrative
expenses 4,669,482 9,664,865 21,683,537 24,823,103
Restructuring
charge (112,000) 375,000 367,000 375,000
Employee
severance
expenses 35,000 292,538 473,000 2,222,619
Write-off of
long lived
assets -- 4,167,386 -- 4,167,386
Loss on sale of
subsidiary (107,000) -- 543,000 --
---------- ---------- ----------- ----------
Operating
income 3,954,267 (8,307,748) 13,432,794 482,535
Interest
expense (2,541,487) (2,480,203) (10,350,188) (9,974,864)
---------- ---------- ----------- ----------
Income before
taxes,
discontinued
operations
and extraordinary
item 1,412,780 (10,787,951) 3,082,606 (9,492,329)
Income tax
(expense)
benefit (1,312,000) 3,038,000 (1,933,000) 2,584,000
---------- ---------- ----------- ----------
Income before
discontinued
operations and
extraordinary
item 100,780 (7,749,951) 1,149,606 (6,908,329)
Discontinued
operations,
net of tax -- (421,000) -- 879,000
Extraordinary
item, net of tax -- 383,183 (2,182,900) 1,108,933
---------- ---------- ----------- ----------
Net Income 100,780 (7,787,768) (1,033,294) (4,920,396)
Preferred stock
dividends -- 987,386 -- 1,082,802
---------- ---------- ----------- ----------
Net earnings
available for
common
shareholders $ 100,780 $(8,775,154) $ (1,033,294) $(6,003,198)
========== ========== =========== ==========
Income (loss)
per common
share -- basic
Income before
discontinued
operations and
extraordinary
item $ 0.01 $ (0.72) $ 0.09 $ (0.70)
Earning from
discontinued
operations -- (0.03) -- 0.08
Extraordinary
(loss) gain on
early retirement
of debt -- 0.03 (0.18) 0.10
---------- ---------- ----------- ----------
$ 0.01 $ (0.72) $ (0.09) $ (0.52)
========== ========== =========== ==========
Income (loss)
per common
share -- diluted
Income before
discontinued
operations and
extraordinary
item $ 0.01 $ (0.72) $ 0.09 $ (0.70)
Earning from
discontinued
operations -- (0.03) -- 0.08
Extraordinary
(loss) gain on
early retirement
of debt -- 0.03 (0.17) 0.10
---------- ---------- ----------- ----------
$ 0.01 $ (0.72) $ (0.08) $ (0.52)
========== ========== =========== ==========
Weighted average
shares
-- basic 12,572,841 12,108,036 12,300,297 11,450,810
Weighted average
shares
-- diluted 13,179,814 12,108,036 12,855,792 11,450,810
1. Fourth quarter 2001 includes the benefit of reversing $0.2
million ($0.1 million after taxes, or $0.01 per diluted share)
in restructuring reserves related to the Company's new airline
seat manufacturing operation which was disposed of in the
first quarter 2000 and a favorable adjustment to estimated net
realizable value reserve related to the Company's airline
softgoods operation sold in November 2001.
2. Fourth quarter 2001 includes the benefit of reversing $0.8
million ($0.5 million after taxes, or $0.04 per diluted share)
related to the Company's employee health plan reserve.
3. Third quarter 2001 includes charges to operating income of
$0.5 million ($0.3 million after taxes, or $0.03 per diluted
share) related to the realignment of senior management and
reduction of management personnel at a commercial business
held for sale, and an additional reserve required to reflect
the net commercial assets held for sale at their estimated
realizable value.
4. Third quarter 2001 includes a reversal of $0.3 million ($0.2
million after taxes, or $0.02 per diluted share) related to a
$0.4 million lease termination reserve for building repair
costs recorded in the fourth quarter 2000. During the third
quarter 2001, the Company settled the building repair claim
with the previous lessor and obtained a settlement and
release.
5. Through the third quarter 2001, the Company has incurred
default interest of $0.8 million ($0.5 million after taxes, or
$0.04 per diluted share) related to it's Senior Secured Notes
which were refinanced September 25, 2001.
6. In the third quarter 2001, the Company recorded a loss of $2.2
million, net of $1.6 million tax benefit, or $0.18 per diluted
share, on early extinguishment of debt related to the
refinancing of it's Senior Secured Notes.
7. Second quarter 2001 includes the affect of approximately $1.0
million ($0.6 million after taxes, $0.05 per diluted share) in
CABS development revenue with no significant related costs as
they had been expensed in prior years while CABS was under
development. The recognition of development revenue was due to
the award of the CABS manufacturing contract which included a
component for development.
8. The second quarter of 2001 includes a charge of $0.6 million
($0.4 million net of taxes, $0.03 per diluted share) related
to the write down of commercial assets held for sale to their
estimated net realizable value.
9. The second quarter 2001 includes charges totaling $0.3 million
($0.2 million after taxes, $0.02 per diluted share) related to
costs incurred in connection with the Company's refinancing
efforts of it's Senior Secured Notes.
10. The first quarter 2001 includes a restructuring charge of $0.5
million ($0.3 million net of taxes, $0.03 per diluted share)
related to head count reductions across the Company's business
segments, and the consolidation of two of it's business units.
11. The fourth quarter of 2000 includes a charge of $0.4 million
($0.3 million after taxes, $0.02 per diluted share) of
additional restructuring charges related to lease and contract
obligations of the Company's new airline seat manufacturing
operation it disposed of in the first quarter 2000.
12. The fourth quarter of 2000 includes a charge of $0.3 million
($0.2 million after taxes, $0.02 per diluted share) of
additional executive severance.
13. Fourth quarter 2000 includes a charge of $0.4 million ($0.3
million after taxes, $0.02 per diluted share) for leased
building roof repairs.
14. Fourth quarter 2000 includes a charge of $4.2 million ($3.0
million after taxes, $0.25 per diluted share) related to the
write-off of long-lived assets.
15. The fourth quarter of 2000 includes a charge of $1.5 million
($1.1 million after taxes, $0.09 per diluted share) related to
the termination of the Company's self funded employee health
plan.
16. The third quarter of 2000 includes revenue of $3.4 million
($2.5 million after taxes, $0.22 per diluted share) related to
a license payment and legal settlement it reached with
Autoliv, Inc.
17. The third quarter of 2000 includes a charge of $1.9 million
($1.4 million after taxes, $0.13 per diluted share) for
executive severance in connection with the change of
management.
18. The third quarter 2000 includes a gain of $1.3 million, net of
$0.7 million tax expense, or $0.11 per diluted share, for the
recovery on a note receivable obtained in connection with the
sale of the Company's rail and mass transit seating operation
in 1999. The note receivable had previously been written off
due to the uncertainty of its ultimate collectability and is
being accounted for on a cost recovery basis.
19. The third quarter 2000 includes a gain of $0.7 million, net of
$0.4 million tax expense, or $0.06 per diluted share, related
to the early extinguishment of $1.6 million of the Company's
8% Convertible Notes which were repurchased in the open market
at approximately 45% of face value.