Standard Products Reports Record 4th Quarter Earnings
29 July 1997
Standard Products Reports Record 4th Quarter Earnings
DEARBORN, Mich., July 29 -- The Standard Products Co.
today announced results for its fourth quarter ended June 30, 1997
and the full 1997 fiscal year. Net income for the quarter was $19.3 million,
or $1.15 per share of common stock, a record for any quarter in the company's
history. This compares with net income of $15.5 million, or $0.93 per share,
in the fourth quarter last year. Sales for the fourth quarter were $294.3
million compared with a record $303.1 million in the fourth quarter of fiscal
1996.
For the entire 1997 fiscal year, Standard Products reported record sales
of $1,108.3 million, compared with $1,083.9 million in fiscal 1996. Net
income for the year was $27.5 million, or $1.64 per share, compared with $14.6
million, or $0.87 per share, last year.
The full-year results include a third-quarter charge against earnings of
$17.7 million, pre-tax, or $0.63 per share, related to the previously
announced closing of two U.S. automotive parts plants. In addition, the
Company expensed costs related to the closings that did not qualify for
immediate accrual of approximately $0.03 per share in the third quarter and
$0.03 per share in the fourth quarter. Excluding these charges, income for
the fiscal year was $39.1 million, or $2.33 per share.
Fourth quarter sales for the North American Automotive segment declined
$17.9 million, or 10.4 percent from the same period last year. The decline was
due to a reduction in the North American car-build, particularly on the
Chrysler Neon and minivan, Chevrolet Lumina and Ford Taurus/Sable. Sales were
also negatively impacted by a United Auto Workers' strike against Chrysler.
However, the effect of the strike on profits was minimized by actions taken to
reduce costs.
Sales in Brazil for the quarter were $17.8 million, more than double the
volume reported in the fourth quarter of fiscal 1996. Sales in the European
Automotive segment declined 4.1 percent, or roughly $2.7 million, from the
same period in fiscal 1996. This decline resulted primarily from currency
trends related to the French franc. Volumes in Europe were flat compared to
the same period last year.
Sales at Holm Industries for the quarter and the full year were slightly
ahead of the comparable periods a year ago. Sales in the Tread Rubber segment
were essentially flat for the quarter but ahead 7.1 percent for the year.
"These latest results show that we are now reaping the rewards from the
major programs we launched in 1995 and 1996 and from our investments in new
facilities, new equipment and enhanced product engineering and development
capabilities," said James S. Reid, Jr., chairman of the board. "Except for
the charges related to the plant closings, net income for the year would have
been the highest in our history."
He continued, "We expect to see continued improvement in our Brazilian
operation in fiscal 1998. Sales in Brazil increased substantially during
1997, and we anticipate further increases in fiscal 1998 because of additional
production volumes of the Fiat Palio in Brazil and Argentina and new business
that we anticipate receiving from other Brazilian automakers. We are on
schedule in bringing our joint venture plant in Mexico into production in the
fall of this year, and we are considering a number of attractive opportunities
around the globe."
Standard Products manufactures sealing, trimming and vibration control
systems for the automotive original equipment industry in North and South
America and Europe. Its Holm Industries subsidiary produces seals for
residential refrigerators, freezers, doors and windows. Its Oliver Rubber
subsidiary manufactures tread rubber and equipment for the retread industry.
THE STANDARD PRODUCTS COMPANY
Consolidated Earnings Summary (Unaudited) (000 omitted)
Three Months Twelve Months
Period ended June 30 1997 1996 1997 1996
Net sales $294,263 $303,139 $1,108,268 $1,083,920
Costs and expenses:
Cost of goods sold 244,555 $259,710 962,812 975,438
Selling, general and
administrative expenses 16,786 16,434 68,559 69,616
Nonrecurring charge 0 0 17,661 0
Interest expense 3,162 3,365 12,914 14,944
Other (income) expense 845 (2,393) (137) (4,602)
Income (loss) before
taxes on income $28,915 $26,023 $46,459 $28,524
Provision for taxes on income 9,640 10,490 18,929 13,947
Net income $19,275 $15,533 $27,530 $14,577
Earnings per common share $1.15 $0.93 $1.64 $0.87
Average shares outstanding 16,809 16,776 16,804 16,758
SOURCE The Standard Products Co.