Autocam Reports Fourth Quarter and Annual Results
7 August 1997
Autocam Reports Fourth Quarter and Annual Results
KENTWOOD, Mich., Aug. 7 -- Autocam Corporation
today reported its operating results for the quarter and year
ended June 30, 1997.
The Kentwood, Michigan-based manufacturer of precision-machined parts
reported net income for the year ended June 30, 1997 of $5,410,966, or
94 cents per share, on sales of $61,986,238, versus net income of $5,589,047,
or 97 cents per share, on sales of $57,711,295 for fiscal 1996. For the
fourth quarter, Autocam reported net income of $1,385,642, or 24 cents per
share, on sales of $16,011,122, compared with net income of $1,589,036, or
27 cents per share, on sales of $14,679,590 for the same period in fiscal
1996. Fiscal 1996 per share amounts have been adjusted to reflect a 5% share
dividend issued on November 28, 1996 to shareholders of record on November 12,
1996.
"Although we did not produce the improvements in sales and earnings that
we expected at the beginning of the year, we are encouraged by the number and
quality of the orders we are receiving from current and new customers,"
Autocam President John C. Kennedy said.
Sales of fuel system components increased 23% and 27% for the fourth
quarter and year ended June 30, 1997, respectively, versus the same periods in
fiscal 1996, driven primarily by demand from new customers. "As we previously
reported, earnings were negatively impacted in the second half of the year by
project start-up costs associated with new fuel system programs," Kennedy
said. "Although it is common for margins to be lower on new program start-
ups, third and fourth quarter margins were adversely affected by machine tools
which were delivered late, and once received, did not produce parts at the
rate and to the quality specifications that were expected." Kennedy indicated
that in order to meet customer demand for these components, the Company was
forced to employ less-efficient work-around manufacturing processes in lieu of
the production processes which relied on the machine tools in question. These
machines were qualified for production in June 1997. As expected, margins on
these programs improved during the fourth quarter, and Kennedy expects this
trend to continue in fiscal 1998.
The Company experienced a reduction in sales of braking system components
during fiscal 1997. However, with the June 1997 acquisition of the net assets
of The Hamilton Group, a precision manufacturer primarily of valve rods and
push rod assemblies for automotive braking systems, the Company has secured
approximately $12,000,000 in sales of these components in fiscal 1998. A
majority of these sales will come from a customer for which the Company
already manufactures a significant amount of fuel system components. "We are
very excited about adding Hamilton's product line which broadens our product
offerings to the braking industry and expands our relationship with a key
common customer," Kennedy said.
Sales of medical device components experienced strong growth throughout
fiscal 1997, increasing 63% over fiscal 1996 levels. The Company has
benefited from increased penetration by its largest medical customer into
foreign markets and the continued expansion of Autocam's product offerings in
the area of cardiovascular surgical device components. Also, the Company has
been shipping components to companies developing innovative cardiovascular
surgery devices and coronary implants commonly known as stents.
Demand continued to decrease in fiscal 1997 for certain computer
electronics components which were no longer used in customers' new generation
systems. The Company expects to reverse this trend over the next year as
significant orders exist to provide high-volume, high-precision metal
components used in the production of thermoplates for computer
microprocessors. The Company began shipping these components in August 1997,
and if customers take delivery of the product as forecasted, sales of computer
electronics components will increase substantially throughout fiscal 1998.
Kennedy said that the first quarter of fiscal 1998 started slowly due to
model year changeover and targeted labor dispute shutdowns at the Company's
largest customer. He added, however, that new computer electronics business
and the integration of the Company's recent acquisition should yield strong
positive sales and earnings comparisons starting in the second fiscal quarter.
Operating cash flows for the year ended June 30, 1997 were $13.6 million.
Such funds were used primarily to purchase equipment for new fuel system
programs and reduce debt obligations. The Company expects to purchase
$16 million in equipment and invest $2 million in facilities in fiscal 1998 in
order to meet new customer demands. Nearly 30% of the planned equipment
additions will be acquired subject to commitments from new computer
electronics customers to reimburse the Company for any underutilization of
such equipment over a period of two to three years.
The Company announced that it will pay its regular quarterly cash dividend
of 2 cents per common share on August 25, 1997 to shareholders of record on
August 11, 1997.
The Company also announced the addition of Kim Korth to its Board of
Directors, replacing Jerry Meyers who has left the Board to concentrate on
other business interests. Ms. Korth is President of International Resource
Network, Inc., a leading consulting firm to global automotive suppliers. "Kim
brings a unique quality to our Board in that she has significant experience in
automotive market research and consultation. She has worked with over 200
companies since founding IRN in 1983; that experience will aid us as we
strengthen our position as a premier supplier of precision metal components,"
Kennedy said.
This release contains forward-looking statements relating to future
financial results. Actual results may differ materially as a result of
factors over which the Company has no control. These risk factors and
additional information are included in the Company's reports on Form 10-K on
file with the Securities and Exchange Commission.
Autocam manufactures precision-machined parts used in automotive fuel and
braking systems, automotive electric motor assemblies, medical devices, and
computer electronics. Autocam's common stock trades on the Nasdaq National
Market under the symbol "ACAM." For more information on the Company, visit
our Internet website at http://www.autocam.com.
AUTOCAM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended
June 30,
1997 1996
$$ % $$ %
Sales $16,011,122 100.0% $14,679,590 100.0%
Cost of sales 12,707,245 79.4% 11,080,745 75.5%
Gross profit 3,303,877 20.6% 3,598,845 24.5%
Selling, general and
administrative 860,521 5.4% 831,715 5.7%
Other operating expenses 51,875 0.3% 51,875 0.4%
Income from
operations 2,391,481 14.9% 2,715,255 18.5%
Interest and other expense,
net 326,539 2.0% 322,150 2.2%
Income before tax
provision 2,064,942 12.9% 2,393,105 16.3%
Tax provision 679,300 4.2% 804,069 5.5%
Net income $1,385,642 8.7% $1,589,036 10.8%
Net income per share $0.24 $0.27
Weighted average shares
outstanding 5,781,082 5,781,419
For the Year Ended
June 30,
1997 1996
$$ % $$ %
Sales $61,986,238 100.0% $57,711,295 100.0%
Cost of sales 48,617,727 78.4% 44,231,105 76.6%
Gross profit 13,368,511 21.6% 13,480,190 23.4%
Selling, general and
administrative 3,577,373 5.8% 3,373,622 5.8%
Other operating
expenses 207,500 0.3% 207,500 0.4%
Income from
operations 9,583,638 15.5% 9,899,068 17.2%
Interest and other expense,
net 1,345,533 2.2% 1,396,155 2.4%
Income before tax
provision 8,238,105 13.3% 8,502,913 14.7%
Tax provision 2,827,139 4.6% 2,913,866 5.0%
Net income $5,410,966 8.7% $5,589,047 9.7%
Net income per share $0.94 $0.97
Weighted average shares
outstanding 5,777,999 5,778,300
CONSOLIDATED CONDENSED BALANCE SHEETS
June 30, June 30,
1997 1996
Assets:
Cash and equivalents $2,507,252 $1,466,751
Accounts receivable 8,846,759 7,467,834
Inventories 5,444,420 4,171,233
Other current assets 722,020 662,223
Total current assets 17,520,451 13,768,041
Fixed assets, net 53,291,418 40,801,512
Goodwill and other intangible
assets 6,491,583 4,893
Other assets 6,384,590 5,237,776
Total assets $83,688,042 $59,812,222
Liabilities and shareholders' equity:
Current maturities of long-term
debt $5,905,541 $3,738,689
Accounts payable 4,398,050 4,124,240
Accrued liabilities 2,962,153 1,377,912
Total current liabilities 13,265,744 9,240,841
Long-term obligations, net of current
maturities 25,191,778 12,086,326
Other liabilities 8,615,550 7,199,206
Shareholders' equity 36,614,970 31,285,849
Total liabilities and shareholders'
equity $83,688,042 $59,812,222
SOURCE Autocam Corporation