Starcraft's Third Quarter Revenues, Net Income Double
GOSHEN, Ind.--Aug. 4, 2003--Starcraft Corporation today announced results for its fiscal third quarter ended June 29, 2003, and the comparable year-earlier period as follows:-- Net sales more than doubled to $62.1 million;
-- Net income increased 109% to $4.1 million; and
-- Earnings per diluted share increased to $0.77 per share, from $0.36 per share.
"The pickup and SUV segment of the automotive market remained remarkably strong during the 2003 model year, enabling Starcraft to continue to generate strong sales growth from its design, engineering and component installation services," according to Kelly L. Rose, Chairman and Chief Executive Officer of Starcraft. "We are continuing to seek ways to apply the expertise we have developed throughout our organization to new vehicle platforms and new customers."
Net sales for the quarter ended June 30, 2003, were $62.1 million, up 111% from $29.4 million for the prior year. Net income was $4.1 million ($0.85 per basic and $0.77 per diluted share), up 109% from prior year earnings of $1.9 million ($0.42 per basic and $0.36 per diluted share).
The provision for income taxes was $2.7 million for the fiscal third quarter, compared with $99,000 in the same 2002 period. Tax expense in 2003 resulted from Canadian taxes on Tecstar's new operation in Whitby, Ontario. The Company's U.S. federal taxable income was offset by tax loss carryforwards generated in prior years.
Starcraft's net sales for the nine months ended June 29, 2003 were $149.2 million, up $75.7 million or 103% from the previous year. Net income was $8.9 million ($1.89 per basic and $1.73 per diluted share), up 128% from prior year earnings of $3.9 million ($0.86 per basic and $0.76 per diluted share).
Rose said that Tecstar has received several new contracts for engineering, design and installation services for the 2004 model year, which begins in September 2003:
-- Later this month, Tecstar will begin installing ZR2 model upfit packages for specific models of the Chevrolet Blazer at its plant in Bridgewater, N.J.
-- Beginning in the first quarter of fiscal 2004, Tecstar will offer a 20" wheel to GM dealers. The wheel will be engineered to GM's specifications and will be distributed through GM's parts subsidiary directly to GM dealers for installation. The custom wheel will fit GM's 800 series trucks including Suburbans, Tahoes, Silverados, Yukons and Escalades. GM recently announced its intention to provide certified custom wheels directly to its dealer base.
Starcraft expects that the programs will be in production by the end of the calendar year and increase fiscal 2004 sales by approximately $6 million.
As previously reported, Tecstar's program to provide upfit packages for certain pickup truck models at its Shreveport, La., plant was completed at the end of 2003 model year production. This program provided 5.4% of the company's net sales for the first nine months of fiscal 2003. Tecstar will not be the supplier of this package on GM's replacement vehicle in Shreveport for model year 2004. As additional opportunities exist for the Shreveport facility, the decision to maintain the Shreveport facility will be made in the 2004 fiscal first quarter.
Tecstar has been awarded a contract to engineer the components for new special edition vehicles on the Chevrolet Trailblazer and GMC Envoy. GM expects to implement production vehicles for these new models in the mid-2004 or early 2005 model years.
In addition, in July 2003 Tecstar purchased the assets of Troy Tooling, Inc., a low volume specialty manufacturer of RIM and plastic products for interior and exterior applications primarily for automotive customers. Troy Tooling, located in Rochester Hills, Michigan, operates in a 24,000 square foot facility generating approximately $2 million in annual sales with ten employees. The purchase price includes an option to buy the real estate. Troy Tooling will be an integral part of the company's aftermarket parts strategy.
Rose said Starcraft expects to exceed previously issued financial guidance for the fiscal year ending September 29, 2003. Revised earnings guidance for fiscal 2003 is net sales of approximately $195 million, up 86% from fiscal 2002 and earnings per share in the range of $2.40 to $2.50 per basic share ($2.20 to $2.30 fully diluted), compared with EPS of $0.65 per basic share and $0.55 per diluted share, respectively, in fiscal 2002. The 2002 results included a charge of $0.46 per basic share and $0.39 per diluted share related to the redemption of certain stock warrants and options.
Starcraft will hold an investor teleconference on Wednesday, August 6, 2003, at 2:00 p.m. EDT to discuss third quarter results. Investors may participate in the teleconference call by calling (800) 299-7635 by 1:50 p.m. EDT and providing the conference ID #50336994. A tape replay of the call will be available two hours after the conclusion of the conference through Tuesday, August 12, 2003 by dialing (888) 286-8010 and providing the conference ID #50336994.
Starcraft Corporation, through its joint-venture ownership interest in Tecstar, LLC, is a leading supplier to the OEM automotive supply market. It also supplies after-market parts and accessories to wholesale and retail customers throughout North America.
This news release contains forward-looking statements regarding Starcraft's business operations and outlook, including projections of revenues and earnings. Investors are cautioned that actual results may differ materially from such forward-looking statements. Forward-looking statements involve risks and uncertainties including, but not limited to, the level of customer demand, competitive pressures, integrating acquisitions, labor and operational issues, dependence on and compliance with GM customer contracts, and other important factors detailed in the Company's Form 10-K for fiscal 2002 filed with the Securities and Exchange Commission.
STARCRAFT CORPORATION
CONSOLIDATED FINANCIAL RESULTS
THIRD QUARTER, FISCAL 2003
Dollars in Thousands, except EPS
---------------------------------------------------------------------
Three Months Ended Nine Months Ended
------------------ -------------------
Statement of Operations June 29, June 30, June 29, June 30,
(unaudited): 2003 2002 2003 2002
------------------------------- --------- -------- --------- --------
Net Sales $62,117 $29,403 $149,170 $73,484
Cost of Goods Sold 46,910 21,832 114,625 55,083
--------- -------- --------- --------
Gross Profit 15,207 7,571 34,545 18,401
Selling and Promotion Expenses 526 490 1,377 1,369
General and Administrative
Expenses 3,695 3,536 12,206 9,220
Operating Income 10,986 3,545 20,962 7,812
Nonoperating (Expense) Income:
Interest, Net (91) (133) (307) (369)
Other, Net (1) 124 18 190
--------- -------- --------- --------
(92) (9) (289) (179)
Income Before Income Taxes
and Minority Interest 10,894 3,536 20,673 7,633
Income Taxes 2,680 99 3,121 261
--------- -------- --------- --------
Income After Income Taxes
and Before Minority Interest 8,214 3,437 17,552 7,372
Minority Interest in Income of
Subsidiary 4,161 1,500 8,641 3,463
--------- -------- --------- --------
NET INCOME $4,053 $1,937 $8,911 $3,909
========= ======== ========= ========
Basic Earnings Per Share $0.85 $0.42 $1.89 $0.86
========= ======== ========= ========
Dilutive Earnings Per Share $0.77 $0.36 $1.73 $0.76
========= ======== ========= ========
Weighted Average Number of
Basic Common Shares
Outstanding 4,753 4,592 4,725 4,525
========= ======== ========= ========
Weighted Average Number of
Dilutive Common Shares
Outstanding 5,235 5,358 5,156 5,150
========= ======== ========= ========
----------------------------------------------------------------------
June 29, Sept. 29, June 29, Sept. 29,
2003 2002 2003 2002
Balance ----------- --------- ----------- ---------
Sheets: (Unaudited) (Audited) (Unaudited) (Audited)
------------- ----------- --------- ----------- ---------
Current Current
Assets: Liabilities:
Notes
Payable to
Related
Cash $4,483 $284 Parties $0 $1,474
Accounts and Accounts
Notes Payable,
Receivable 36,790 22,781 Trade 26,840 18,058
Accrued
Inventories 9,316 8,204 Expenses 7,202 4,534
----------- ---------
Other
Current Total Current
Assets 3,297 1,863 Liabilities 34,042 24,066
----------- ---------
Total Current Long-term
Assets 53,886 33,132 Debt 11,639 12,704
Property and
Equipment, Minority
net 8,842 5,524 Interest 8,133 1,991
Shareholders'
Other Assets 723 436 Equity 9,637 331
----------- --------- ----------- ---------
$63,451 $39,092 $63,451 $39,092
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