Universal Automotive Industries, Inc. Announces Record Second Quarter Results
CHICAGO, Aug. 12 Universal Automotive Industries, Inc.today announced that sales for the second quarter of 2002 increased 2.1% to $20.4 million as compared to the second quarter of 2001 sales of $19.9 million. For the six months ended June 30, 2002, sales were $38.1 million, a 5.7% increase over the comparable 2001 period. The Company's core brake business continues to experience strong growth fueled by increased economic activity and expansion of the Company's friction business.
Net income for the quarter ended June 30, 2002 doubled over the comparable prior year period. Net income for the quarter was $517,000 ($0.06 per primary share) as compared to a $203,000 ($0.03 per primary share) for the quarter ended June 30, 2001.
Year to date net income was $669,000 ($0.08 per primary share) as compared to a loss of $882,000 ($0.12 per primary share) for the comparable period of 2001. The increased profitability was driven by increased margin on its core business, higher efficiencies and increased overhead absorption at the Company's manufacturing facilities, cost reduction and containment efforts and the elimination of losses related to the Hungarian foundry which was sold effective December 31, 2001.
According to Arvin Scott, President and CEO:
We are pleased that we are reaping the benefits of our restructuring efforts of the last 18 months. Improved productivity at our plants combined with greater throughput are contributing to profitability; however, continuous improvement is required to meet the expectations of the plant associates and management teams.
Our new line of Ceramic and Ultimate premium friction products combined with the dedication and terrific efforts of the Universal Automotive team will provide the fuel to continue the positive results. We continue to explore areas to control costs, increase market share and build strong customer relations. We are confident that our earnings forecast for 2002 will be achieved.
Gross profit for the second quarter of $4.0 million (19.6% of net sales) is up $300,000 as compared to the gross profit of $3.7 million (18.7% of net sales) in the comparable quarter of 2001. Year to date gross profit of $7.2 million (19.0% of net sales) is up $ 1.1 million as compared to the gross profit of $6.1 million (17.0% of net sales) in the comparable period of 2001. Approximately 50% of this increase is attributed to increased sales with the remaining 50% a result of cost containment efforts, increased efficiencies and overhead absorption at the Company's manufacturing facilities over 2001 levels.
Robert W. Zimmer, CFO, commented, "We continue to see improvements in the overall manufacturing and cost structure of the business. Manufacturing backlogs continue strong and the introduction of new products will further utilize the manufacturing infra-structure available within the organization."
Selling, general and administrative expenses for the quarter increased $110,000 to $2.92 million (14.3% of net sales) from $ 2.81 million (14.0% of net sales) over the comparable prior year period. Year to date selling, general and administrative expense increased $123,000 to $5.62 million (14.8% of net sales) from $5.50 million (15.3% of net sales) over the comparable prior year period. Increased freight costs on the higher sales levels are offset by cost savings initiatives and other cost reduction efforts.
Other income expense for the quarter decreased $178,000 to $563,000 from $741,000. Year to date other expense decreased $568,000 to $929,000 from $1.49 million. Interest expense decreased $232,000 for the quarter and $461,000 year to date as a result of the restructuring of the Finova subordinated debt and reduced interest rates on the revolving loan indebtedness. In addition, included in the results for the quarter and six months ended June 30, 2002 was $160,000 and $175,000, respectively, relating to expenses incurred in connection with the termination of the strategic alliance agreement with Competition Friction. Also included in the results for the quarter and six months ended June 30, 2001 was $187,000 and $342,000, respectively, of losses related to the discontinued Hungarian foundry.
The Company, headquartered in the Chicago area, specializes in distribution and manufacture of brake rotors and other brake parts, under its trademarks "UBP - Universal Brake Parts," and "Ultimate" in the United States and Canada.
This news release contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, which are intended to
be covered by safe harbors created hereby. Such forward-looking statements
involve known and unknown risks, uncertainties (including those risk factors
referenced in the Company's filings with the Securities and Exchange
Commission), and other factors that may cause the actual results, performance
or achievements of the Company to be materially different from any future
results, performance, or achievements of the Company expressed or implied by
such forward-looking statements.
UNIVERSAL AUTOMOTIVE INDUSTRIES, INC.
Summary of Financial Results
($000's) except per share data
Three Months Ended Six Months Ended
June 30 June 30
2002 2001 2002 2001
Net sales:
Brake Parts $18,489 $18,844 $34,754 $33,720
Commodities 1,935 1,155 3,315 2,308
Total 20,424 19,999 38,069 36,028
Gross Profit 4,000 3,741 7,216 6,110
% 19.6% 18.7% 19.0% 17.0%
Selling, general and
administrative expense 2,919 2,808 5,618 5,495
Income from operations 1,081 933 1,598 615
Other (Income) Expense:
Interest expense 403 635 754 1,215
Loss on discontinued
operations - 187 - 342
Other 160 (81) 175 (60)
Total 563 741 929 1,497
Pretax income (loss) 518 192 669 (882)
Income tax provision
(benefit) 0 (11) 0 0
Net income (loss) $518 $203 $669 $(882)
Earnings per share:
Basic $0.06 $0.03 $0.08 $(0.12)
Diluted $0.05 $0.03 $0.06 $(0.12)
Weighted average shares
outstanding;
Basic 8,185,921 7,473,682 8,170,955 7,384,542
Diluted 10,967,102 7,869,872 11,222,249 7,384,542