Lund International Holdings, Inc. Announces Fourth Quarter 2002 Financial Results
DULUTH, Ga., March 5 -- Lund International Holdings, Inc. (OTC Pink Sheets: LUND) announces results of operations for the fourth quarter ended December 29, 2002.
Net sales from continuing operations for the fourth quarter of 2002 were $33,897,000, compared to $36,074,000 for the same period in 2001. This decrease was attributable to declining orders as consumer confidence weakened and customers reduced inventory. For the twelve-month period ended December 29, 2002, net sales from continuing operations were $154,768,000 compared to $143,651,000 for the same period last year. The Company had experienced strong growth in demand for its products through the first three quarters of 2002 due to improving consumer confidence, strong vehicle sales and market share gains. This is in contrast to the first three quarters of 2001 in which the company experienced softness in demand for its products impacted in part from volatility in the cost of fuel and general economic uncertainty.
On November 18, 2002, Lund International announced the acquisition of Nifty Products, a manufacturer of custom molded floor protection accessories for the light truck and automotive industry. The final results of Nifty Products for the period of November 18 through December 29, 2002 are included in the Company's results for the fourth quarter and full year 2002.
Operating loss from continuing operations was ($16,661,000) in the fourth quarter of 2002, compared to operating income of $3,018,000 for the same period in 2001. This loss includes recognition of impaired goodwill of $20,100,000 under SFAS No. 142 related to the Company's 1997 acquisition of Deflecta-Shield Corporation. Excluding the goodwill impairment and a reduction of amortization expense of $1,044,000, operating profits for the fourth quarter decreased by $623,000 due to reduced volume. For the full year, operating profit, excluding the $20,100,100 goodwill impairment, improved from $11,768,000 to $22,653,000 due to increased volume, cost reductions, operating efficiency improvements and a decrease in amortization expense of $4,197,000.
Lund International recorded a net loss of ($18,711,000), or ($1.14) per share, for the fourth quarter of 2002, compared to a net loss of ($8,219,000), or ($0.80) per share, in the fourth quarter of 2001. Included in the loss in the fourth quarter of 2002 is the $20,100,000 impairment charge, and included in the 2001 fourth quarter loss is a charge for discontinued operations of $9,000,000. Including the $20,100,000 charge for impaired goodwill, the net loss from continuing operations was ($18,353,000), or ($1.12) per share compared to net income of $781,000, or $0.08 per share for the fourth quarter of 2001.
For the year ended December 29, 2002, the Company recorded a net loss of ($10,561,000), compared to a net loss of ($32,978,000) for the same period in 2001. The results in 2002 include the impairment charge of $20,100,000, and the results in 2001 include a charge for discontinued operations of $33,979,000, compared to $5,104,000 included in the same period for 2002. For continuing operations in 2002, the net loss decreased to ($5,457,000), or ($0.46) per share, as compared to income from continuing operations of $1,001,000, or $0.10 per share, in 2001. Excluding the impairment charge, income from continuing operations was $14,643,000, or $1.24 per share, for the full year 2002.
Dennis W. Vollmershausen, President and Chief Executive Officer, stated, "After five consecutive quarters of year over year sales growth, our fourth quarter sales, excluding Nifty Products, decreased 10% reflecting softer market demand primarily due to declining consumer confidence and customer inventory reduction. This trend is expected to prevail in 2003 pending elimination of concerns negatively influencing consumer sentiment. Full year sales improved 8% over the prior year due to strong demand in the first half of the year, increased market share for light truck and automotive accessories and the acquisition of Nifty Products in November. Heavy truck accessory market demand continued at depressed levels throughout the year. We continue to make significant operational improvements across the Company which should help to mitigate the impact of the current downturn in demand."
Lund International is a leading designer, manufacturer and marketer of a broad line of accessories for the automotive aftermarket. Its products are sold under the trade names "Lund(R)," "Deflecta-Shield(R)," "Deflecta- Shield(R)" Aluminum, "Autotron(TM)," "Belmor(TM)," "Auto Ventshade(R)" and "Nifty(TM)." The corporate headquarters are at 3700 Crestwood Parkway, N.W., Suite 1000, Duluth, Georgia 30096.
Statements in this press release relating to future or anticipated company operations or results are forward-looking statements made under the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties, which could cause results of operations to differ materially from those anticipated. Among the factors that could cause results of operations to differ materially are the following: inability to obtain expected efficiencies from acquisitions, or to obtain them in a timely manner; consumer preference changes; increased competition; general economic developments and trends; developments and trends in the light truck and automotive accessory market; sales of heavy trucks, which are cyclical; introduction of competitive new products by the Company and acceptance of those new products; increased cost and risks of expansion into new distribution channels. This is not an exhaustive list and the Company may supplement this list in future filings or releases or in connection with the making of forward-looking statements.
LUND INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)
December 29, December 30,
2002 2001
ASSETS
Current assets:
Cash and cash equivalents $724 $436
Accounts receivable, net 28,802 26,212
Inventories 13,706 12,307
Other 2,394 1,386
Assets held for disposal --- 3,360
Total current assets 45,626 43,701
Property and equipment, net 18,960 16,878
Intangibles, net 78,424 96,325
Other 1,521 2,201
Assets held for disposal --- 6,453
Total assets $144,531 $165,558
LUND INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS, CONTINUED
(Unaudited)
(in thousands)
Dec. 29, Dec. 30,
2002 2001
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable, trade $5,633 $6,400
Accrued expenses 14,724 14,097
Long-term debt, current portion 11,034 23,297
Liabilities held for disposal --- 2,721
Total current liabilities 31,391 46,515
Long-term debt, less current portion 65,767 60,741
Other 316 395
Liabilities held for disposal --- 289
Total liabilities $97,474 $107,940
Commitments and contingencies
Stockholders' equity:
Preferred stock-Series B, $.01 par value;
Authorized 363 shares; 78 issued and
outstanding $1 $1
Preferred stock-Series C, $.01 par value;
Authorized 30 shares; None and 10 issued and
outstanding --- ---
Common stock, $.10 par value; Authorized 25,000
shares; 21,105 and 10,267 issued and outstanding 2,110 1,027
Additional paid-in capital 72,969 74,053
Accumulated deficit (28,023) (17,462)
Total stockholders' equity 47,057 57,619
Total liabilities and stockholders' equity $144,531 $165,558
LUND INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per share data)
Three Months Ended
December 29, December 30,
2002 2001
Net sales $33,897 $36,074
Cost of goods sold 22,779 24,333
Gross profit 11,118 11,741
Operating expenses
General and administrative 2,936 3,643
Selling and marketing 3,846 3,345
Research and development 765 559
Impairment of intangibles 20,100 ---
Amortization of intangibles 132 1,176
Total operating expenses 27,779 8,723
Operating (loss) income (16,661) 3,018
Interest expense (2,131) (2,206)
Other expense, net of interest income (63) (1)
(Loss) income from continuing operations
before income taxes (18,855) 811
Income tax (benefit) expense (502) 30
(Loss) income from continuing operations (18,353) 781
Loss on discontinued operations (358) (9,000)
Net loss $(18,711) $(8,219)
Basic net (loss) earnings per share:
(Loss) earnings from continuing operations $(1.12) $0.08
Discontinued operations (0.02) (0.88)
Net loss $(1.14) $(0.80)
Diluted net (loss) earnings per share:
(Loss) earnings from continuing operations $(1.12) $0.03
Discontinued operations (0.02) (0.30)
Net (loss) earnings $(1.14) $(0.27)
Weighted average common shares 16,461 10,267
Weighted average common and common share
equivalents 16,461 30,431
LUND INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per share data)
Twelve Months Ended
December 29, December 30,
2002 2001
Net sales $154,768 $143,651
Cost of goods sold 102,935 97,997
Gross profit 51,833 45,654
Operating expenses
General and administrative 11,247 13,826
Selling and marketing 14,594 13,221
Research and development 2,832 2,135
Impairment of intangibles 20,100 ---
Amortization of intangibles 507 4,704
Total operating expenses 49,280 33,886
Operating income 2,553 11,768
Interest expense (8,191) (10,607)
Other expense, net of interest income (231) (40)
(Loss) income from continuing operations
before income taxes (5,869) 1,121
Income tax (benefit) expense (412) 120
(Loss) income from continuing operations (5,457) 1,001
Loss on discontinued operations (5,104) (33,979)
Net loss $(10,561) $(32,978)
Basic net (loss) earnings per share:
(Loss) earnings from continuing operations $(0.46) $0.10
Discontinued operations (0.43) (3.43)
Net loss $(0.89) $(3.33)
Diluted net (loss) earnings per share:
(Loss) earnings from continuing operations $(0.46) $0.06
Discontinued operations (0.43) (2.02)
Net loss $(0.89) $(1.96)
Weighted average common shares 11,816 9,899
Weighted average common and common share
equivalents 11,816 16,829
LUND INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Twelve Months Ended
December 29, December 29,
2002 2001
Cash flows from operating activities:
Net loss $(10,561) $(32,978)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation 3,982 4,084
Amortization of intangibles 507 4,704
Amortization of debt acquisition costs 1,144 1,144
Impairment of goodwill 20,100 ---
(Reduction in) provision for
doubtful accounts (248) 518
(Reduction in) provision for
inventory reserves (1,087) 628
Loss (gain) on disposal of property
and equipment 137 (4)
Discontinued operations 5,104 33,980
Changes in operating assets and liabilities:
Accounts receivable (756) (4,057)
Inventories 672 1,297
Other assets (1,049) (978)
Accounts payable, trade (768) 509
Accrued expenses 217 1,246
Net cash provided by operating activities 17,394 10,093
Cash flows from investing activities:
Purchase of Nifty Products (7,360) (2,354)
Purchases of property and equipment (3,745) (2,354)
Assets held for disposal 1,698 (3,340)
Proceeds from sales of property and equipment 22 27
Net cash used in investing activities (9,385) (5,667)
Cash flows from financing activities:
Payment of long-term debt (45,738) (48,253)
Proceeds from long-term debt 38,017 37,409
Proceeds from issuance of preferred stock --- 5,000
Net cash used in financing activities (7,721) (5,844)
Net increase (decrease) in cash and
temporary cash investments 288 (1,418)
Cash and temporary cash investments:
Beginning of period 436 1,854
End of period $724 $436
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