SMC Corporation Reports Second Quarter Results
24 July 1997
SMC Corporation Reports Second Quarter Results
HARRISBURG, Ore., July 24 -- SMC Corporation
today reported its results for the second quarter of 1997. For the quarter
ended June 30, 1997, net sales were relatively unchanged at $49.0 million,
compared to $48.7 million in 1996. Second quarter unit sales decreased 2% to
444 units from 455 units in the prior year. Net income decreased to $164,000
from $1.6 million reported a year earlier. 1997 second quarter earnings per
share were $.02 on 6.6 million shares outstanding, compared to 1996's $.24
per share, on 6.7 million shares outstanding. The decline in earnings
resulted from increased competition in the high line RV market and from the
Company's investment in start-up operations in Eastern Oregon.
For the six months ended June 30, 1997, revenues were $99.1 million, up 8%
from 1996 revenues of $91.8 million for the same period. 1997 year-to-date
income was $1.4 million, down 53% from 1996's earnings of $2.9 million. Year-
to-date earnings per share were $.21 per share in 1997, down from $.44 per
share in 1996.
"This quarter has been a difficult one for our portion of the RV market,"
said Jay L. Howard, president of SMC Corporation. "Retail unit sales in the
motorized class A market are down over 12% over the past three months,
compared to last year. In spite of that market decline, SMC was able to
maintain its sales momentum, reporting revenues at slightly above last year.
This difficult market, coupled with high dealer inventories resulted in
significant discounting to dealers during the quarter to sell out model year
end products. However, we are encouraged by a very successful FMCA show in
early July, which resulted in record sales for the Company. We are hopeful
that the RV market is rebounding," stated Howard.
SMC Corporation commenced manufacturing of Class C motor coaches at its
Harney County Operations site in early 1997. The Company intends to gradually
increase production during 1997. This facility is expected to become
profitable in 1998, as production rates increase and the workforce becomes
fully trained.
SMC Corporation is one of the largest high line motor coach manufacturers
in the United States. Headquartered in Harrisburg, Oregon, the Company has
six locations in Oregon and one in Kansas.
Forward Looking Statements: The statements in this report regarding
increased competition and start-up of a new production facility are forward-
looking statements. A number of factors could cause actual results to differ
materially from these statements, including delays in full operation of the
production facility, a general slowdown in the economy or the RV market
specifically, or new products from competitors. Please also refer to the
Company's SEC reports, including, but not limited to its Form 10Q Quarterly
Report for the quarter ended June 30, 1997 and its Form 10K Annual Report for
the year ended December 31, 1996.
SMC CORPORATION
CONSOLIDATED STATEMENT OF INCOME
Unaudited
Three Months Ended Year-To-Date Ended
6/30/96 6/30/97 6/30/96 6/30/97
Net sales 48,731,000 48,977,000 91,833,000 99,065,000
Cost of sales 41,790,000 43,695,000 78,919,000 87,186,000
Gross profit 6,941,000 5,282,000 12,914,000 11,879,000
Operating expenses:
Sales, general and
administrative 4,128,000 4,781,000 7,816,000 9,182,000
Income from operations2,813,000 501,000 5,098,000 2,697,000
Interest expense 141,000 202,000 299,000 475,000
Other expense (income)(13,000) 25,000 (49,000) (36,000)
Income before provision
for income taxes 2,685,000 274,000 4,848,000 2,258,000
Provision for income
taxes 1,072,000 110,000 1,940,000 904,000
Net income 1,613,000 164,000 2,908,000 1,354,000
Net income per share 0.24 0.02 0.44 0.21
Shares used in per
share calculation 6,661,000 6,563,000 6,612,000 6,564,000
SOURCE SMC Corporation
