Hilite Industries, Inc. Reports Q1 Earnings
22 October 1997
Hilite Industries, Inc. Reports First Quarter Earnings for Fiscal 1998 and Quarterly Cash Dividend Program
CARROLLTON, Texas, Oct. 22 -- Hilite Industries, Inc.
(the "Company" or "Hilite") reported net income for its first
quarter of fiscal 1998 of $792,000 or $0.16 per share, an increase of 96% from
the same period last year of $403,000 or $0.08 per share. In addition, the
Company reported positive earnings from its specialty components and
assemblies division, which had been incurring losses for the previous four
quarters. The Company is also announcing a quarterly cash dividend program,
approved by the Board of Directors, starting with a 2 1/2 cents per share cash
dividend for the second quarter. The Board of Directors set a record date of
November 3, 1997 for the first cash dividend distribution which is expected to
be distributed on or about November 17, 1997. At September 30, 1997, the
Company's stockholders' equity was $22,796,000 or $4.65 per share.
Net sales on a consolidated basis were $21,030,000 for the first
1998 fiscal quarter, a 17% increase over last year's sales of $18,054,000.
Brake valve sales increased 7% to $5,975,000 in the first fiscal quarter of
1998 from $5,587,000 in the prior year. The increase resulted from new
programs which commenced since the first quarter of the prior year such as the
P-90 and W-Car programs for GM and the relief valve for Bosch. Power
transmission component sales increased from $5,170,000 in fiscal 1997 to
$5,759,000 or 11%. This increase is attributable to increased sales of
air-conditioning compressor clutches for the heavy truck industry and
increased schedules for 4-wheel drive transfer case components. First quarter
sales were $9,296,000 for the specialty components and assemblies division, an
increase of 27% over last year's first quarter sales of $7,297,000. In
addition to the impact of repricing certain product lines, the division
benefited from significantly higher sales of certain assemblies to Motorola,
Inc.
Daniel W. Brady, Hilite's Chief Executive Officer, commented: "We are
very pleased with our first quarter results. Both the brake valve and power
transmission components divisions contributed strong sales and profitability.
The specialty components and assemblies division was profitable for the
quarter, well ahead of our plan.
"We continue to execute our plan to restructure the specialty components
and assemblies division. The plan includes streamlining the division's
product lines and the elimination of non-core products which accounted for
fiscal 1997 sales of approximately $8,000,000. These products are expected to
be transferred by the customer to other suppliers by the end of the
1998 fiscal year. The performance of the division may be adversely affected
during this transition. We are also pleased with the progress of the
division's improvements in upgrading its quality, manufacturing and management
systems which are intended to enable the division to qualify for a
QS-9000 rating. Our goal is to qualify for certification by the end of
November, 1997. The Dallas based operations, including the brake valve and
power transmission components divisions, are already QS-9000 certified."
Mr. Brady added, "Considering the improved earnings and outlook for the
Company and with the objective of providing the opportunity for increased
total returns to our stockholders, the Board of Directors approved a modest
quarterly dividend program for distribution in the second quarter. Subsequent
quarterly dividends will depend upon future operating results."
Safe harbor for forward-looking statements: Except for historical
information contained herein, there are forward-looking statements in this
release that are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Forward-looking statements involve
known and unknown risks and uncertainties which may cause the Company's actual
results in future periods to differ very materially from forecasted results.
These risks include, among others, risks associated with automotive production
rates, risks associated with the manufacturing process and production yields
and risks related to technological changes in components which affect the life
of the product. There are no assurances that the restructuring program will
be successful or that the Company will satisfy Ford's requirements in order to
regain Q1 status in the specialty components and assemblies division. These
and other risks are described in the Company's 1O-K filed with the Securities
and Exchange Commission (SEC) on September 29, 1997, copies of which are
available from the SEC or may be obtained upon request from the Company.
Hilite Industries, Inc. designs, manufactures and sells a diversified line
of highly engineered components and assemblies for the automotive industry
including brake proportioning valves, electromagnetic clutches, machined
components such as mounting brackets and pulleys, and specialty components and
assemblies such as stampings, specialty springs and automated assemblies. The
Company's customers include all three domestic automotive companies: Ford
Motor Company, General Motors Corporation and Chrysler Corporation as well as
other automotive companies such as Mitsubishi Motor Sales of America, Inc.,
Honda of America Mfg. Inc., Toyota Motor Sales USA, Inc. and Navistar
International Transportation Corporation. The Company also sells products to
first-tier suppliers of the automotive industry including Borg-Warner
Corporation, Bosch Braking Systems Corporation, Denso of Los Angeles, Inc. and
ITT Automotive of North America, Inc.
For further information call Investor Relations at 972-466-0475 or access
Hilite Industries, Inc.'s website at http://www.hilite-ind.com .
HILITE INDUSTRIES, INC.
Financial Highlights
(In Thousands, Except Share and Per Share Data)
Three Months Ended
September 30,
1997 1996
Income Statement Data:
Net Sales $ 21,030 $ 18,054
Gross Profit 4,064 3,081
Operating Income 1,661 1,052
Net Income 792 403
Earnings Per Share $ 0.16 $ 0.08
Weighted average number of
shares outstanding 4,900 4,900
As of As of
Sept. 30, 1997 June 30, 1997
Balance sheet data:
Working Capital $ 8,916 $ 8,329
Property, plant, equipment, net 26,754 26,323
Total assets 59,515 57,219
Long-term obligations (A) 18,416 18,271
Total liabilities 36,719 35,216
Shareholders' equity 22,796 22,004
(A) Includes non-current portion of long-term debt.
SOURCE Hilite Industries, Inc.