Universal Automotive: 30% Sales Increase And Completion of 2001 Restructuring
ALSIP, Ill., April 2 Universal Automotive today announced its financial results for the quarter and fiscal year ended December 31, 2001. Revenues for the quarter ended December 31, 2001 were $17,635,000, a 30% increase over revenues of $13,609,000 for the quarter ended December 31, 2000. Net loss for the quarter ended December 31, 2001 was $1,667,000, representing $0.27 basic and diluted EPS compared to a net loss of $ 2,307,000 and $0.27 basic and diluted EPS for the quarter ended December 31, 2000. The net loss for the quarter include one-time charges of $1,142,000, including a one-time sales discount to a major customer of $350,000, the write-off of expired barter credits of $276,000 and moving, shutdown and other expenses of $516,000.
Exclusive of these one-time charges, the proforma net loss for the quarter was $525,000, or $0.10 per share. Revenues for fiscal 2001 were $71,823,000, a 3% increase over revenues of $69,944,000 for fiscal 2000. Net loss for fiscal 2001 was $2,978,000, with $0.45 basic diluted EPS compared to a net loss of $2,260,000 and $.32 basic and diluted EPS for fiscal 2000. Without these fourth quarter one-time charges, the proforma net loss for the year was $1,836,000, or $.30 per share. Gross margin was 9.6% for the quarter ended December 31, 2001 and 17.4% for fiscal 2001. The quarter ended December 31, 2001 included a one-time sales discount to a major client in the amount of $350,000, which adversely affected margins for the quarter and the year. Exclusive of this extraordinary sales discount, pro-forma gross margin for the quarter ended December 31, 2001 was 11.4% and for fiscal 2001 was 17.8%.
``2001 represented a turning point for Universal Automotive as we completed many of operational, management and financial restructuring goals,'' stated Arvin Scott, President and CEO of Universal Automotive. ``In 2001, we moved our manufacturing plant from Laredo, Texas, to Cuba, Missouri, which we believe will yield strong savings in 2002, including substantial savings on freight costs. We replaced certain managers in our manufacturing facilities and administrative offices in order to improve overall efficiency within our operations. In addition, we added management depth within our corporate finance department with the hiring of our new Chief Financial Officer, Robert Zimmer in November.
``On the financial front, we significantly improved our balance sheet with the reduction of the FINOVA indebtedness from $4.5 million dollars to $1.5 million dollars, as well as improved our cash position with the $2.8 million strategic investment from Wanxiang. The sale of the Hungarian foundry operations in December 2001 was another positive accomplishment for the company. The 30% revenue growth in the fourth quarter of 2001 over the same period in 2000 is encouraging and a hopeful indication that the most difficult periods are behind us. Given the ongoing consolidation in the aftermarket business and the slump in the national economy, we are pleased to have positive momentum going into 2002.
``We have addressed many of our challenges and have laid a strong foundation for 2002. Industry dynamics such as the trend among aftermarket marketing groups and retailers to support their private label as opposed to the national brands, and the uncertainty associated with several of the major full line brake companies have presented windows of opportunity for the company. Sales growth should be further augmented in 2002 through the introduction of new premium friction products. Profitability should be benefited by elimination of recurring losses from the Hungarian operations ($295,000 in 2001) and increased efficiencies at our domestic manufacturing facilities.
``We expect to see growth in 2002 across all of our revenue categories, with the majority of our growth coming from our higher margin friction line. Gross margins in each product category are expected to remain consistent with historical levels. With the restructuring complete as of the beginning of 2002, we expect to see profitability from our core business. The results of the restructuring are being revealed in the first quarter of 2002. For the first quarter of 2002, traditionally one of the slowest quarters of the year, we expect strong growth of 10% in revenues over comparable 2001 revenues, with positive income from operations. In 2002, we will continue to add to our breadth of products by offering additional classes of product within our existing categories. Along with our product expansion, we are aggressively pursuing additional distribution opportunities for our products within the automotive aftermarket.''
Quarter Ended Year Ended
December 31, December 31,
2001 2000 2001 2000
Net Sales:
Brake Parts $16,067 $12,711 $66,261 $65,310
Non-Brake Parts 1,568 898 5,562 4,634
Total $17,635 $13,609 $71,823 $69,944
Gross Margin:
Brake Parts $1,509 $1,705 $11,859 $12,931
Non Brake Parts 183 84 612 503
Total $1,692 $1,789 $12,471 $13,434
9.6% 13.2% 17.4% 19.2%
Selling, General and
Administrative Expense 2,634 2,844 12,397 12,829
Other Operating Expense 792 320 792 320
(Income) Loss from Hungarian
operations (385) 295
Income (loss) from
operations $(1,349) $(1,375) $(1,013) $285
Other expense (income)
Interest Expense 699 663 2,503 2,593
Loss (Gain) on disposition
of assets 110
Other income ( loss) (9) (273) 148 125
Loss before provision
(benefit) for
income taxes and
extraordinary gain $(2,057) $(2,311) $(3,368) $(2,293)
Income tax provision
(benefit) 440 (4) 440 (33)
Loss before extraordinary
gain from Continuing
Operations $(2,497) $(2,307) $(3,808) $(2,260)
Extraordinary Item:
Gain on debt restructuring 830 830
Net Income (Loss) $(1,667) $(2,307) $(2,978) $(2,260)
Issuance of preferred
stock with beneficial
conversion feature and
warrants 431 431
Net loss available to
common stockholders $(2,098) $(2,307) $(3,409) $(2,260)
Earnings per share
Basic and diluted
Before extraordinary
item $(0.38) $(0.27) $(0.56) $(0.32)
Extraordinary gain 0.11 0 0.11 0
$(0.27) $(0.27) $(0.45) $(0.32)
Weighted average number
of common shares
outstanding 7,553,141 7,008,438
Universal Automotive Industries, Inc. is a manufacturer and distributor of brake rotors, drums, disc brake pads, relined brake shoes, wheel cylinders and brake hoses for the automotive aftermarket.
This press release contains forward looking statements which involve numerous risks and uncertainties. The Company's actual results could differ materially from those anticipated in such forward looking statements as a result of certain factors, including those set forth in the Company's filings with the Securities and Exchange Commission.