Noble International Announces a 44% Increase in Second Quarter Net Income From Continuing Operations
WARREN, Mich., July 21 -- Noble International, Ltd. (the "Company") today announced net income from continuing operations of $2.5 million, an increase of 44% from the previous year, or $0.30 per diluted share for the three months ended June 30, 2003. Net income from continuing operations for the six months ended June 30, 2003 was $4.5 million or $0.55 per diluted share, an increase of 45% from the prior year.
The increase in net income was primarily the result of the increased production volumes, expanded production on additional platforms and increased production efficiencies. Included in the net income from continuing operations for the first quarter of 2003 is a restructuring charge of $0.4 million, net of tax, or $0.05 per diluted share related to severance commitments for staff reductions from continuing operations. In the second quarter, an additional charge of $0.4 million, or $0.04 per diluted share, net of tax, was taken in discontinued operations for post closing expenses related to the divestiture of its non-core businesses. This amount includes the Company's estimates for trailing expenses that may be incurred in the future.
Revenue from continuing operations for the three months ended June 30, 2003 increased 32% to $41.2 million from $31.2 million for the same period in 2002. Revenue for the six months ended June 30, 2003 increased 40% to $82.0 million from $58.5 million for the same period in 2002. The increase in revenue was primarily the result of higher production volumes on certain vehicles, higher steel sales and sales from new product launches.
Commenting on the results of the second quarter and six months, Jay J. Hansen, Chief Financial Officer, stated, "We are pleased with the results from our continuing operations in the second quarter and first half of 2003. Revenues continue to grow and we have been successful in converting that revenue to net income. EBITDA for the first six months has increased 39% to $11.3 million from $8.1 million last year. We have also reduced debt by 16% in the last nine months while funding approximately $11.5 million in capital expenditures, primarily invested to support new business being launched. In addition, we continue to explore ways to convert non-core real estate and business assets into cash. Along with the realization of the financial benefits from previous sales, we anticipate these efforts will produce cash which will be utilized for debt repayment and redeployment into our laser business over the next twelve months."
Commenting on the outlook for the automotive market, Christopher L. Morin, President and Chief Operating Officer, stated, "We are excited about the company's performance in the first six months of 2003 and are optimistic about the remainder of the year. Our automotive market outlook for the remainder of 2003 correlates to an annual production volume of 15.5 to 15.8 million vehicles. While we experienced some slight softening in the later part of June, we believe that it was temporary and related to an earlier than expected annual summer shutdown. Based upon the vehicle platforms on which we have content, at this time we do not see significant production decreases in the third and fourth quarters. Our production launches of new business remain on track at this time and are proceeding on schedule. In addition, we continue to win new business in a growing market segment and expect to maintain our leading market position. In the second quarter, Noble was awarded several new programs totaling more than $7.5 million in annual value-added revenue. This represented more than 50% of the new business awarded and, included among this new business, is a new transplant relationship. A portion of the new business awarded is business for which we anticipate initially shipping parts to Australia from the U.S., but we eventually expect to establish a facility in Australia. We continue to look to expand on our laser welding technology base through R&D. In addition, we will continue to explore options involving strategic acquisitions and joint ventures related to our core technology in laser welding. In summary, our goal is to continue and expand upon our industry leadership in technology, quality, delivery and products offered."
The company will hold its semi-annual conference call in October along with the earnings announcement for the third quarter of 2003.
SAFE HARBOR STATEMENT
Noble International, Ltd. is a leading supplier of automotive parts, component assemblies and value-added services to the automotive industry. As an automotive supplier, Noble provides design, engineering, manufacturing, complete program management and other services to the automotive market. Noble delivers integrated component solutions, technological leadership and product innovation to original equipment manufacturers (OEMs) and Tier I automotive parts suppliers thereby helping its customers increase their productivity while controlling costs.
Certain statements made by Noble International, Ltd. in this release and other periodic oral and written statements, including filings with the Securities and Exchange Commission, are "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, as well as statements which address operating performance, events or developments that we believe or expect to occur in the future, including those that discuss strategies, goals, outlook or other non- historical matters, or which relate to future sales or earnings expectations, cost savings, awarded sales, volume growth, earnings or a general belief in our expectations of future operating results, are forward-looking statements. The forward-looking statements are made on the basis of management's assumptions and estimations. As a result, there can be no guarantee or assurance that these assumptions and expectations will in fact occur. The forward-looking statements are subject to risks and uncertainties that may cause actual results to materially differ from those contained in the statements. Some, but not all of the risks, include our ability to obtain future sales; our ability to successfully integrate acquisitions; changes in worldwide economic and political conditions, including adverse effects from terrorism or related hostilities including increased costs, reduced production or other factors; costs related to legal and administrative matters; our ability to realize cost savings expected to offset price concessions; inefficiencies related to production and product launches that are greater than anticipated; changes in technology and technological risks; increased fuel costs; work stoppages and strikes at our facilities and that of our customers; the presence of downturns in customer markets where the Company's goods and services are sold; financial and business downturns of our customers or vendors; and other factors, uncertainties, challenges, and risks detailed in Noble's public filings with the Securities and Exchange Commission. Noble does not intend or undertake any obligation to update any forward-looking statements. For more information see www.nobleintl.com .
NOBLE INTERNATIONAL, LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited, in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
2003 2002 2003 2002
Net sales $41,197 $31,227 $82,045 $58,515
Cost of sales 34,100 25,588 68,273 48,419
Gross margin 7,097 5,639 13,772 10,096
Selling, general and
administrative expenses 3,070 3,010 6,499 5,253
Operating profit 4,027 2,629 7,273 4,843
Interest income 209 234 364 478
Interest expense (698) (130) (1,044) (406)
Other, net 271 22 269 18
Earnings from continuing
operations before income
taxes $3,809 $2,755 $6,862 $4,933
Income tax expense 1,306 1,013 2,324 1,793
Preferred stock dividends - - - 10
Earnings on common shares
from continuing operations 2,503 1,742 4,538 3,130
Discontinued operations:
Earnings (loss) from
discontinued operations (375) 214 (1,182) 435
Loss on sale of discontinued
operations - - (677) -
Net earnings on common
shares $2,128 $1,956 $2,679 $3,565
Basic earnings per common
share:
Earnings per share from
continuing operations $0.32 $0.26 $0.59 $0.46
Earnings (loss) from
discontinued operations (0.05) 0.03 (0.15) 0.06
Loss on sale of discontinued
operations - - (0.09) -
Basic earnings per common
share $0.28 $0.29 $0.35 $0.53
Diluted earnings per common
share
Earnings per share from
continuing operations $0.30 $0.24 $0.55 $0.43
Earnings (loss) from
discontinued operations (0.04) 0.03 (0.13) 0.05
Loss on sale of discontinued
operations - - (0.08) -
Diluted earnings per common
share $0.26 $0.26 $0.34 $0.48
Dividends declared and paid $0.08 $0.08 $0.16 $0.16
Basic weighted average common
shares outstanding 7,723,710 6,773,880 7,723,296 6,740,327
Diluted weighted average
common shares outstanding 8,935,602 8,145,505 8,921,814 8,094,139
EBITDA - Continuing Operations $6,228 $4,297 $11,274 $8,128
NOBLE INTERNATIONAL, LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, December 31,
2003 2002
(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $1,150 $1,154
Accounts receivable, trade - net 32,115 22,992
Note receivable 2,573 -
Inventories 14,886 9,363
Deferred income taxes 7,142 6,217
Income taxes refundable 250 250
Prepaid expenses 4,564 2,555
Total Current Assets 62,680 42,531
Property, Plant & Equipment, net 51,402 47,762
Other Assets:
Goodwill, net 15,690 15,690
Covenants not to compete, net 283 383
Note receivable, long term 3,833 -
Other assets, net 10,241 10,487
Total Other Assets 30,047 26,560
Assets Held for Sale 1,084 13,098
Total Assets $145,213 $129,951
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $27,846 $19,830
Accrued liabilities 6,376 5,685
Current maturities of long-term
debt 12,437 8,414
Income taxes payable 1,117 -
Total Current Liabilities 47,776 33,929
Long-Term Liabilities:
Deferred income taxes 2,028 2,006
Convertible subordinated debentures 12,028 16,037
Long-term debt, excluding current
maturities 39,140 33,234
Total Long-Term Liabilities 53,196 51,277
Liabilities Held for Sale - 2,684
Stockholders' Equity
Common stock 9 9
Additional paid-in capital 32,949 32,874
Retained earnings 11,194 9,755
Accumulated comprehensive loss, net 89 (577)
Total Stockholders' Equity 44,241 42,061
Total Liabilities & Stockholders'
Equity $145,213 $129,951