R&B, Inc. Reports 2003 First Quarter Earnings of $0.25 Per Share vs. $0.24 in Prior Year
COLMAR, Pa., May 2 -- R&B, Inc., today announced financial results for the first quarter ended March 29, 2003. For the first fiscal quarter ended March 29, 2003, sales decreased 2% to $50.3 million from $51.1 million in the same period last year. Sales increased 1% after excluding $1.5 million in prior year sales associated with the Company's specialty fastener business that was sold in the second quarter of 2002. Diluted earnings per share in the first fiscal quarter increased to $0.25 from $0.24 in the same period last year. Net income in the first fiscal quarter totaled $2.2 million, up 4% compared to net income of $2.1 million in the prior year.
Sales volume in 2003 increased as a result of shipments to a new customer for the Company's Allparts brake business, but was largely offset by a lower level of new product introductions and line updates during the quarter, and inventory reduction initiatives by certain customers. As indicated previously, the Company may experience fluctuations in its sales levels from quarter to quarter due to the timing of new product introductions and orders placed by its customers. The level of new initiative sales activity is expected to increase over the remaining three quarters of the year as higher levels of new product introductions and product line updates are planned.
Net debt (total debt less cash and short-term investments) increased $1.9 million to $36.2 million at quarter end from $34.3 million at the beginning of the year. Inventory growth due to a seasonal build in inventory levels and management's decision to increase inventory safety stocks given recent world events contributed to the higher net borrowing levels.
Mr. Richard Berman, Chairman, President and Chief Executive Officer, said, "While sales growth for the quarter was lower than our annual target, our focus on OE Dealer "Exclusive" replacement parts and recent new product introductions continue to be well received by our customers. We remain committed to accelerating opportunities for our customers and our businesses. The cornerstones of this strategy are continued investment in new product development, initiatives designed to create and grow aftermarket demand for new and existing products, and supply chain excellence to ensure that the right parts are available at the right time. We are confident that these efforts will continue to provide a solid base for future growth."
The Company confirmed that its strategic plan provides for compounded annual sales growth of between 4% and 8% and compounded annual growth in fully diluted earnings per share of between 8% and 13% over the next two years. Management no longer issues specific quarterly or annual sales and earnings guidance.
R&B, Inc. is a leading supplier of OE Dealer "Exclusive" automotive replacement parts, automotive hardware and brake products to the automotive aftermarket and household hardware to the general merchandise markets. R&B's products are marketed under more than thirty proprietary brand names, through its Motormite, Dorman, Allparts, Scan-Tech, MPI and Pik-A-Nut businesses.
Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. Readers are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date hereof. Factors that cause actual results to differ materially include, but are not limited to, those factors discussed in the Company's Annual Report on Form 10-K under "Business - Risk Factors."
R&B, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(in thousands, except per-share amounts)
13 Weeks 13 Weeks
First Quarter (unaudited) 3/29/03 Pct. 3/30/02 Pct.
Net sales $50,272 100.0 $51,080 100.0
Cost of goods sold 31,674 63.0 32,674 64.0
Gross profit 18,598 37.0 18,406 36.0
Selling, general and
administrative expenses 14,260 28.4 14,085 27.5
Income from operations 4,338 8.6 4,321 8.5
Interest expense, net 891 1.7 1,025 2.0
Income before income taxes 3,447 6.9 3,296 6.5
Provision for income taxes 1,222 2.5 1,149 2.3
Net income $2,225 4.4 $2,147 4.2
Earnings per share
Basic $0.26 - $0.25 -
Diluted $0.25 - $0.24 -
Average shares outstanding
Basic 8,521 - 8,474 -
Diluted 8,981 - 8,900 -
R&B, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands)
3/29/03 12/28/02
Assets: (Unaudited)
Cash and short term investments $ 17,010 $ 19,171
Accounts receivable 48,446 48,769
Inventories 51,808 47,217
Prepaid expenses and other 8,828 9,046
Total current assets 126,092 124,203
Property & equipment 16,287 16,591
Goodwill 28,681 28,607
Other assets 917 727
Total assets $171,977 $170,128
Liability & Shareholders' Equity:
Current portion of long-term debt $9,439 $9,291
Accounts payable 13,143 11,813
Accrued expenses and other 9,458 11,759
Total current liabilities 32,040 32,863
Long-term debt 43,785 44,218
Deferred income taxes 3,899 3,475
Shareholders' equity 92,253 89,572
Total Liabilities and Equity $171,977 $170,128
Selected Cash Flow Information:
(in thousands)
13 Weeks 13 Weeks
(Unaudited) 3/29/03 3/30/02
Depreciation and amortization $1,192 $1,586
Capital expenditures 885 486