R&B, Inc. Reports Sales and Earnings for the Second Quarter Ended June 26, 2004
COLMAR, Pa., July 30 -- R&B, Inc., today announced financial results for the second quarter ended June 26, 2004. For the second quarter ended June 26, 2004, sales increased 11% to $64.3 million from $58.1 million in the same period last year. Net income in the second quarter of 2004 was $5.3 million compared to net income of $3.5 million in the same period last year. Diluted earnings per share in the second quarter increased 49% to $0.58 from $0.39 in the same period last year.
For the six months ended June 26, 2004, sales increased 11% to $120.3 million from $108.3 million in the same period last year. Diluted earnings per share for the first six months of 2004 increased 47% to $0.94 compared to $0.64 in the same period last year. Net income for the first six months of 2004 was $8.6 million compared to net income of $5.8 million in the same period last year.
Sales volume in 2004 increased as a result of continued sales growth from products introduced within the last twelve months and shipments of the Company's Pik-A-Nut home hardware product line to K-Mart, which became a customer in the third quarter of last year. The favorable effects of foreign currency exchange resulted in a 1% year over year increase in sales.
Mr. Richard Berman, Chairman, President and Chief Executive Officer, said, "Our sales growth in the first half of the year is the direct result of our continued focus on new product development. Our goal is to maintain our leadership position in the aftermarket by further accelerating our rate of new product introductions over the next two years through our 'Driving ReveNEW' initiative. We will distribute over 700,000 copies of our new service dealer guide in the third quarter as part of our continuing awareness program. This offering will highlight many of the exciting new products that we have recently introduced for the service dealer and do-it-yourself markets. We remain committed to our strategy of accelerating opportunities for our customers and our businesses through 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 place at the right time to satisfy demand."
The Company also announced its decision to invest approximately $5.0 million to automate its recently expanded central distribution facility in Warsaw, Kentucky. This initiative, which is expected to be completed shortly after year-end, will also result in approximately $0.6 million in one-time startup and training costs, which are expected to be incurred in the second half of this year. Once completed, this project is expected to generate significant efficiency improvements and improved customer service capabilities for the Company's Dorman business. Total capital spending in 2004 is expected to be between $10.0 and $12.0 million as a result of this initiative, the 77,200-square-foot expansion of the Warsaw facility, increased tooling costs for new products and other capital projects.
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.
R&B, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(in thousands, except per-share amounts)
13 Weeks 13 Weeks
Second Quarter (unaudited) 6/26/04 Pct. 6/28/03 Pct.
Net sales $64,277 100.0 $58,068 100.0
Cost of goods sold 39,317 61.2 36,885 63.5
Gross profit 24,960 38.8 21,183 36.5
Selling, general and
administrative expenses 15,846 24.6 14,811 25.5
Income from operations 9,114 14.2 6,372 11.0
Interest expense, net 769 1.2 884 1.5
Income before income taxes 8,345 13.0 5,488 9.5
Provision for income taxes 3,028 4.7 1,963 3.4
Net income $5,317 8.3 $3,525 6.1
Earnings per share
Basic $0.60 - $0.41 -
Diluted $0.58 - $0.39 -
Average shares outstanding
Basic 8,845 - 8,627 -
Diluted 9,194 - 9,033 -
26 Weeks 26 Weeks
Year-to-date (unaudited) 6/26/04 Pct. 6/28/03 Pct.
Net sales $120,282 100.0 $108,340 100.0
Cost of goods sold 74,707 62.1 68,559 63.3
Gross profit 45,575 37.9 39,781 36.7
Selling, general and
administrative expenses 30,504 25.4 29,071 26.8
Income from operations 15,071 12.5 10,710 9.9
Interest expense, net 1,530 1.2 1,775 1.7
Income before income taxes 13,541 11.3 8,935 8.2
Provision for income taxes 4,906 4.1 3,185 2.9
Net income $8,635 7.2 $5,750 5.3
Earnings per share
Basic $0.98 - $0.67 -
Diluted $0.94 - $0.64 -
Average shares outstanding
Basic 8,804 - 8,564 -
Diluted 9,162 - 8,996 -
R&B, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands)
6/26/04 12/27/03
Assets: (Unaudited)
Cash and short term investments $17,888 $25,082
Accounts receivable 62,267 44,127
Inventories 51,339 51,170
Prepaid expenses and other 9,300 8,849
Total current assets 140,794 129,228
Property & equipment 20,562 17,590
Goodwill 29,026 29,125
Other assets 575 663
Total assets $190,957 $176,606
Liability & Shareholders' Equity:
Current portion of long-term debt $9,049 $8,571
Accounts payable 14,621 10,029
Accrued expenses and other 12,741 12,176
Total current liabilities 36,411 30,776
Long-term debt 34,759 35,213
Deferred income taxes 5,237 4,632
Shareholders' equity 114,550 105,985
Total Liabilities and Equity $190,957 $176,606
Selected Cash Flow Information:
(in thousands) 13 Weeks 26 Weeks
6/26/04 6/28/03 6/26/04 6/28/03
Depreciation and
amortization $1,155 $1,227 $2,235 $2,419
Capital Expenditures $3,450 $1,418 $5,212 $2,303