Walbro Corporation Reports Second Quarter Results
16 July 1997
Walbro Corporation Reports Second Quarter Results
CASS CITY, Mich., July 16 -- L.E. Althaver, Chairman and
Chief Executive Officer, Walbro Corporation , reported sales of
$l53,841,000 for the second quarter ended June 30, 1997, compared with
$155,086,000 for the second quarter of 1996.
Net income was $1,184,000 for the second quarter of 1997 compared with
$4,824,000 for the same period in 1996. The Company posted net income per
share of $.14 for the second quarter of 1997, compared with $.56 for the same
period in 1996. Average shares outstanding for the second quarter were
8,669,264 in 1997 and 8,658,608 in 1996.
"Sales of automotive products were down compared with the same period of
1996, reflecting a reduction of vehicle sales in the U.S. during the second
quarter," Althaver said. "Automotive shipments were affected by the 29-day
strike at Chrysler Corporation's Mound Road engine plant. That strike reduced
Walbro's sales by approximately $3.6 million in the second quarter, while
reducing earnings by approximately $1 million, or 11 cents per share, after
all related costs."
"In-sourcing by a major customer of products formerly supplied by Walbro
continued during the second quarter, but has now been completed," he said.
"Walbro's overseas joint ventures performed well during the second
quarter. However, the strong dollar continued to negatively affect the
profitability of all European and Japanese operations during the period," the
Walbro chief executive noted.
"The second quarter saw an increase in sales of small engine ignition
systems and float-feed carburetors. In addition, Walbro's sales of automotive
and small engine aftermarket products were strong during the quarter," he
added.
"Start-up expenses remained at high levels at Walbro's new manufacturing
facility in China and at the Company's joint venture in Korea," Althaver said.
"However, profitability at Walbro's new fuel tank facility in Brazil is
improving as production levels increase."
"Construction of Walbro's new Meriden, Connecticut, facility is now
complete, and production of fuel storage and delivery systems for the new 1998
Dodge Durango is scheduled to begin in August," he said.
"The first major '98 model year plastic fuel tank program was launched at
Walbro's Ossian, Indiana, facility in late June," Althaver noted. "The second
and third programs are scheduled to launch in late July. The fourth '98
program has been delayed until December."
"Heavy investment in hiring and training of production and technical
personnel to support these launches contributed to lower earnings during the
second quarter," Althaver said.
"Indeed, the past several years have been a time of significant expense as
Walbro's physical and human resources were expanded to support future business
and to implement Walbro's systems strategy. These expenditures have had a
substantial effect on earnings in recent quarters.
"However, Walbro's systems strategy is beginning to pay off," he said.
"Walbro can now produce the entire fuel storage and delivery system, with
substantial increased value per vehicle, as we will do for the Dodge Durango.
Or, we can assemble a system using a combination of Walbro and outside
components, and ship it to the customer."
"We anticipate that earnings will gradually improve beginning in the
second half of 1997 as new production contracts begin. As additional new
business with increased Walbro content phases in, we are confident that the
value of our investment in plants and people will become apparent through
improved earnings and continued growth," Althaver concluded.
Walbro Corporation is a designer and manufacturer of precision fuel
systems and products for automotive and small engine markets. Walbro
Corporation is headquartered in Cass City, Michigan, and has subsidiaries and
joint ventures throughout the world, including North and South America, Europe
and Asia. Walbro common stock is traded on the Nasdaq National Market under
the symbol WALB.
This press release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. Actual results may
differ materially from anticipated results due to certain risks and
uncertainties, including but not limited to general economic conditions in the
markets in which Walbro operates, fluctuations in the production of vehicles
for which Walbro is a supplier, labor disputes involving Walbro or its
significant customers, risks associated with conducting business in foreign
countries and other risks detailed from time to time in the Company's
Securities and Exchange Commission filings.
WALBRO CORPORATION
(In thousands, except share data)
Three Months Ended Six Months Ended
June 30 June 30
1997 1996 1997 1996
Net Sales $153,841 $155,086 $307,861 $308,052
Net income 1,184 4,824 3,546 9,358
Net Income Per Share .14 .56 .41 1.08
Average Shares
Outstanding 8,669,264 8,658,608 8,665,882 8,645,755
EBITDA* 15,158 17,274 32,906 34,199
* Earnings before interest and taxes, plus depreciation and amortization.
SOURCE Walbro Corporation