R&B, Inc. Reports Sales and Earnings for the Second Quarter Ended June 25, 2005
COLMAR, Pa., July 29 -- R&B, Inc., today announced financial results for the second quarter ended June 25, 2005. Sales increased 7% to $68.6 million from $64.3 million in the same period last year. Net income in the second quarter of 2005 was $4.6 million compared to net income of $5.3 million in the same period last year. Diluted earnings per share in the second quarter of 2005 decreased 14% to $0.25 from $0.29 in the same period last year.
For the six months ended June 25, 2005, sales increased 8% to $129.8 million from $120.3 million in the same period last year. Net income for the first six months of 2005 was $8.1 million compared to net income of $8.6 million in the same period last year. Diluted earnings per share for the first six months of 2005 decreased 6% to $0.44 compared to $0.47 in the same period last year.
Prior year earnings per share and common stock information have been adjusted to reflect the 2-for-1 stock split that occurred in March of 2005.
The sales increases in 2005 are primarily the result of increased sales volume from new products. Net income was down due to lower gross margins and increases in selling, general and administrative expenses ("SG&A"). Gross margins declined as a result of a continued mix shift to lower margin automotive hard parts. SG&A increased at rates in excess of the sales increase due to the Company's decision to invest additional resources in new product development and promotional support.
Mr. Richard Berman, Chairman, President and Chief Executive Officer, said, "Our year over year increase in SG&A costs is primarily the result of increased product development costs associated with our previously-announced strategy of delivering twice as many new parts in half the time by the end of 2006. The benefits of this strategy continue to be affirmed by our customers as they increase their sales and profits with our dynamic new product offering. We are committed to this high level of support. There is a current negative impact on profitability as we make these investments, which we believe will be more than offset by future sales growth, customer satisfaction and overall opportunities for the business."
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.
Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. Readers are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date hereof. Factors that cause actual results to differ materially include, but are not limited to, those factors discussed in the Company's Annual Report on Form 10-K under "Business - Risk Factors."
Visit our Home Page: http://www.rbinc.com/ R&B, INC. AND SUBSIDIARIES Consolidated Statements of Operations (in thousands, except per-share amounts) 13 Weeks 13 Weeks Second Quarter (unaudited) 6/25/05 Pct. 6/26/04 Pct. Net sales $68,611 100.0 $64,277 100.0 Cost of goods sold 43,668 63.6 39,317 61.2 Gross profit 24,943 36.4 24,960 38.8 Selling, general and administrative expenses 16,925 24.7 15,846 24.6 Income from operations 8,018 11.7 9,114 14.2 Interest expense, net 682 1.0 769 1.2 Income before income taxes 7,336 10.7 8,345 13.0 Provision for income taxes 2,708 4.0 3,028 4.7 Net income $4,628 6.7 $5,317 8.3 Earnings per share Basic $0.26 - $0.30 - Diluted $0.25 - $0.29 - Average shares outstanding Basic 17,927 - 17,691 - Diluted 18,464 - 18,387 - 26 Weeks 26 Weeks Year-to-date (unaudited) 6/25/05 Pct. 6/26/04 Pct. Net sales $129,842 100.0 $120,282 100.0 Cost of goods sold 82,206 63.3 74,707 62.1 Gross profit 47,636 36.7 45,575 37.9 Selling, general and administrative expenses 33,548 25.8 30,504 25.4 Income from operations 14,088 10.9 15,071 12.5 Interest expense, net 1,289 1.0 1,530 1.2 Income before income taxes 12,799 9.9 13,541 11.3 Provision for income taxes 4,717 3.7 4,906 4.1 Net income $8,082 6.2 $8,635 7.2 Earnings per share Basic $0.45 - $0.49 - Diluted $0.44 - $0.47 - Average shares outstanding Basic 17,906 - 17,608 - Diluted 18,457 - 18,325 - R&B, INC. AND SUBSIDIARIES Consolidated Balance Sheets (in thousands) 6/25/05 12/25/04 Assets: (Unaudited) Cash and cash equivalents $2,061 $7,152 Accounts receivable 66,827 60,962 Inventories 70,521 61,436 Prepaid expenses and other 9,855 10,026 Total current assets 149,264 139,576 Property & equipment 27,311 25,698 Goodwill 29,424 29,410 Other assets 720 720 Total assets $206,719 $195,404 Liability & Shareholders' Equity: Current portion of long-term debt $9,058 $9,045 Accounts payable 15,039 15,599 Accrued expenses and other 11,649 13,347 Total current liabilities 35,746 37,991 Long-term debt and other 32,026 25,714 Deferred income taxes 7,245 6,472 Shareholders' equity 131,702 125,227 Total Liabilities and Equity $206,719 $195,404 Selected Cash Flow Information (unaudited): (in thousands) 13 Weeks 26 Weeks 6/25/05 6/26/04 6/25/05 6/26/04 Depreciation and amortization $1,448 $1,155 $2,774 $2,235 Capital Expenditures $1,953 $3,450 $4,113 $5,212