Raytech Corporation Announces Third Quarter Results for 2003
SHELTON, Conn.--Nov. 1, 20034, 2003--Raytech Corporation today announced a net loss for the thirteen-week period ended September 28, 2003 of $17.1 million or $.41 per basic share as compared to a loss of $3.2 million or $.08 per basic share for the same period in the prior year. The loss for the period reflected a loss from operating activities of $3.1 million due primarily to lower sales and gross profits in the Wet Friction segment caused by the weak economic environment. In addition, the Company recorded a $5.5 million charge for environmental issues relating to a facility in Indiana. Also, the Company recorded certain adjustments relating to the recoverability of certain deferred tax assets in future periods. The adjustments of $23.7 million to provide a valuation allowance against certain of the deferred tax assets resulted in an equal adjustment reducing the deferred payable to the trust. The results of these tax adjustments reflected an increase of $23.7 million in other income and a tax provision of $32.1 million, resulting in a net income adjustment of a decrease of $8.4 million for the period.The Company recorded a net loss for the thirty-nine-week period ended September 28, 2003 of $18.7 million or $.45 per basic share compared to a loss of $.8 million or $.02 per basic share for the same period in the prior year. The loss reflects a loss from operating activities of $2.8 million due primarily to lower sales and lower gross margin in the Wet Friction segment resulting from the weak economic climate. In addition, the Company has recorded a charge for environmental issues relating to a facility in Indiana of $7.3 million for the thirty-nine-week period. The Company also recorded adjustments relating to the recoverability of certain deferred tax assets in future periods as described previously. The results of these tax adjustments for the thirty-nine-week period ended September 28, 2003 reflected an increase of $23.7 million in other income and a tax provision of $31.7 million resulting in a net income adjustment of a decrease of $8.0 million.
The net sales for the thirteen-week period of $47.9 million compares to net sales in the same period in the prior year of $51.7 million, a decrease of $3.8 million. The net sales for the thirty-nine-week period of $157.7 million compares to $159.8 for the same period in the prior year, a decrease of $2.1 million. The sales decrease in both periods is due primarily to lower sales in the Company's Wet Friction segment, which provides product to domestic OEM manufacturers. The segment recorded sales declines of $5.6 million and $8.8 million for the thirteen- and thirty-nine-week periods, respectively. These sales declines have affected gross profits negatively in this segment. The reduced sales in the Wet Friction segment have been partially offset by improved sales in the Dry Friction segment.
The Company has implemented cost reduction programs aimed at improving profitability in future quarters and has recorded $2.4 million of savings year-to-date. The Company continues to review its cost structure in an effort to improve net income.
Raytech Corporation is a recognized world leader in the production of wet and dry clutch, power transmission and brake systems as well as specialty engineered polymer matrix composite products and related services for vehicular applications, including automotive OEM, heavy duty on-and-off highway vehicles and aftermarket vehicular power transmission systems. Through three technology and research centers and six manufacturing operations worldwide, Raytech develops and delivers energy absorption, power transmission and custom-engineered components focusing on niche applications where its expertise and technological excellence provide a competitive edge.
Raytech Corporation, headquartered in Shelton, Connecticut, operates manufacturing facilities in the U.S., Germany, England and China as well as technology and research centers in Michigan, Indiana and Germany. The Company's operations are strategically situated in close proximity to major customers and within easy reach of geographical areas with demonstrated growth potential.
Raytech common stock is listed on the New York Stock Exchange and trades under the symbol "RAY." Company information may be accessed on our Internet website http://www.raytech.com.
RAYTECH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(000's omitted, except share data)
Comparative results are as follows:
For the 13 Weeks Ended
September 28, 2003 September 29, 2002
------------------- ------------------
(Unaudited)
Net sales $ 47,878 $ 51,740
Net loss $(17,066) $ (3,189)
Basic loss per share:
Loss per share $ (.41) $ (.08)
Weighted average shares 41,737,306 41,650,223
Diluted loss per share:
Loss per share $ (.41) $ (.08)
Weighted average shares 41,737,306 41,650,223
For the 39 Weeks Ended
September 28, 2003 September 29, 2002
-------------------- -------------------
(Unaudited)
Net Sales $157,706 $159,754
Net loss $(18,678) $ (789)
Basic loss per share:
Loss per share $ (.45) $ (.02)
Weighted average shares 41,724,187 41,580,320
Diluted loss per share:
Loss per share $ (.45) $ (.02)
Weighted average shares 41,724,187 41,580,320