Universal Automotive Reports 2004 Second Quarter Financial Results
ALSIP, Ill., Aug. 20, 2004 -- Universal Automotive Industries, Inc. today reported financial results for the second quarter, which include a full quarter of contributions from the company's acquisition of certain assets from TRW Automotive, Inc.
Sales for the 2004 second quarter, increased 45% to $25.9 million from $17.8 million in the second quarter of 2003. The company sustained a net loss of $3.3 million, equal to $0.31 per share, compared with net income of $15,083, or breakeven on a per share basis, for the 2003 second quarter. Per share calculations were based on 10.7 million and 12.2 million shares outstanding for the second quarter of 2004 and 2003, respectively.
"Net sales were substantially higher than in the prior year quarter. As expected, higher costs associated with the integration process combined with rising raw materials and freight costs adversely impacted the bottom line. As a result of industry wide price increases, our customers accepted price increases in the month of July, therefore we are able to offset a portion of the material increases going forward," said Arvin Scott, Universal's president and chief executive officer. "In an effort to lower freight costs, enhance service efficiency and help secure new business, we have begun transitioning certain customer accounts that were serviced from our Alsip, Illinois distribution center to our Parsippany, New Jersey distribution center. Also, we have implemented a number of steps to improve supply chain management, including changing the forecasting technology to a proven process and adding seasoned aftermarket professionals, which we expect will yield significant benefits over the long term.
"The major integration initiatives, which are now behind us, will significantly improve inventory management, eliminate certain redundancies and allow the entire organization to operate as one," Scott said. "We are going into the third quarter a much improved company with solid momentum."
For the first six months of 2004, sales increased 50% to $49.2 million from $32.9 million in the same period a year ago. Net income for the first six months of 2004 was $4.4 million, equal to $0.32 per diluted share, which includes a non-operating, non-cash gain of $9.9 million on the valuation of assets purchased. This compares to a net loss of $959,387, or $0.12 per share, for the first six months of 2003. Per share calculations were based on 13.8 million and 8.2 million shares outstanding for the first six months of 2004 and 2003, respectively.
Conference Call Information and Forward-Looking Statements
On Friday, August 20, 2004, the company will host a conference call with interested parties beginning at 9:00 a.m. (ET) to review the results of operations for the second quarter ended June 30, 2004. Discussion during the conference call may include forward-looking statements regarding such topics as, but not limited to, the company's revenues, margins, operating expenses and any comments the company may make about its future in response to questions from participants on the conference call. The conference call may be heard by any interested party through a live audio Internet broadcast at www.fulldisclosure.com. For those unable to listen to the live broadcast, a
playback of the webcast will be available at both Web sites for one year beginning at approximately 11:00 a.m. (ET), August 20, 2004.
About Universal Automotive Industries, Inc.
Universal, headquartered in the Chicago area, specializes in the distribution and manufacture of brake rotors and other brake parts, under its trademarks UBP - Universal Brake Parts, Evolution and Ultimate in the United States and Canada and its proprietary Autospecialty, ValuMaxx and PowerStop brands. The company also provides TRW-branded brake rotors and drums and suspension products.
UNIVERSAL AUTOMOTIVE INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands,
except per
share amounts) Three Months Ended June 30, Six Months Ended June 30,
2004 2003 2004 2003
Net sales $25,889 $17,839 $49,236 $32,856
Cost of sales 23,615 15,203 44,389 28,472
Gross profit 2,274 2,636 4,847 4,384
Selling, general,
and administrative
expenses 4,995 2,375 9,219 4,866
Loss from operations (2,721) 261 (4,372) (482)
Other (income)/expense
Interest expense 597 249 1,111 488
Gain on valuation of
assets purchased -- -- (9,886) --
Other (4) (4) (13) (11)
593 246 (8,788) 477
Income (loss) before
income taxes (3,314) 15 4,416 (959)
Income tax provision -- -- -- --
Net income (loss) $(3,314) $15 $4,416 $(959)
Comprehensive income
(loss):
Net income (loss): $(3,314) $15 $4,416 $(959)
Earnings (loss)
per share:
Basic $(0.31) $0.00 $0.41 $(0.12)
Diluted $(0.31) $0.00 $0.32 $(0.12)
Weighted average
number of common
shares outstanding:
Basic 10,706 8,225 10,706 8,225
Common stock
equivalents resulting
from:
Conversion of
preferred stock -- 3,014 3,014 --
Warrants and options -- 965 87 --
Diluted 10,706 12,204 13,807 8,225