AETNA Industries, Inc. Reports Third Quarter Results
23 October 1997
AETNA Industries, Inc. Reports Third Quarter Results
CENTER LINE, Mich., Oct. 23 -- AETNA Industries, Inc.
announced financial results for the third quarter and nine months ended
September 28, 1997.
Net sales for the third quarter of 1997 were $45.6 million, or 6.7% lower
than third quarter 1996 sales of $48.9 million. Production sales of $44.5
million in the third quarter of 1997 were up $0.1 million from $44.4 million
in the third quarter of 1996, while tooling and prototype sales were down $3.4
million for the same period. Production sales were favorably impacted by
several new Chrysler car models and increased Chrysler mini-van sales,
partially offset by decreased Jeep Cherokee (XJ) sales. Tooling sales in the
third quarter of 1996 included prototypes for Jeep Cherokee (WJ) platform
work.
Gross profit was $4.6 million, or 10.0% of net sales, for the third
quarter of 1997 compared to $6.0 million, or 12.2% of net sales, for the same
period in 1996. The decrease in gross profit from the prior year was due to
purchasing rather than manufacturing certain parts and due to plant
inefficiencies.
Selling, general and administrative expenses for the third quarter of 1997
were $4.7 million, or 10.2% of net sales, compared to $4.1 million, or 8.3% of
net sales, for the same period in 1996. The increase, as a percentage of
sales, was due to non-recurring merger and acquisition expenses and additional
engineering and quality assurance staff in support of new platforms,
especially the Chrysler Jeep Grand Cherokee, the Saturn Innovate and new CAMI
Sidekick programs.
Net loss for the third quarter of 1997 was $1.7 million compared with a
net loss of $1.2 million for the third quarter of 1996. Net loss for the
third quarter of 1997 was negatively impacted by increased interest expense
due to higher levels of debt outstanding, partially offset by $0.9 million
lower income tax expense and $1.2 million of non-recurring extraordinary costs
recorded in the third quarter of 1996 related to the early retirement of the
Company's subordinated debt.
EBITDA was $1.8 million for the third quarter of 1997 compared to $3.8
million for the same period in 1996.
Capital expenditures for the third quarter of 1997 were $2.5 million
compared to $0.8 million for the same period in the prior year. The major
capital projects during this period have been the construction of Plant 10
which will be used in the production of the new Chrysler Jeep Grand Cherokee
(WJ) and the purchase of land adjacent to Plant 10 as well as the renovation
of Plant 7.
For the nine months ended September 28, 1997, AETNA Industries, Inc.
reported net sales of $149.4 million, down from the $163.8 million reported
for the nine months ended September 29, 1996. Production sales decreased $8.4
million while tooling sales decreased $6.0 million. The decrease in production
sales was principally due to the five week Chrysler strike and the planned
phase outs of two programs: a cargo van floor pan and side rail assemblies and
a small truck door beam job during the second quarter of 1996.
Gross profit was $18.7 million, or 12.5% of net sales, for the nine months
ended September 28, 1997 compared to $22.4 million, or 13.7% of net sales, for
the same period in 1996. The decrease in gross profit from the prior year was
due to lower sales volumes and purchasing rather than manufacturing certain
parts.
Selling, general and administrative expenses for the nine months ended
September 28, 1997 were $12.4 million, or 8.3% of net sales, compared to $11.4
million, or 7.0% of net sales, for the same period in 1996. As a percentage
of sales, the increase was due to the interruption of production sales during
the Chrysler strike and additional engineering and quality assurance staff in
support of new platforms.
Net loss for the nine months ended September 28, 1997 was $1.1 million
compared with net income of $1.7 million for the same period in 1996. Net loss
for the nine months ended September 28, 1997 was negatively impacted by the
Chrysler strike and increased interest expense due to higher levels of debt
outstanding, partially offset by $2.5 million decreased income tax expense and
$1.2 million of non-recurring extraordinary costs recorded in the third
quarter of 1996 related to the early retirement of the Company's subordinated
debt.
EBITDA was $11.8 million for the nine months ended September 28, 1997,
compared to $4.9 million from $16.7 million for the same period in 1996.
Capital expenditures for the nine months ended September 28, 1997 were
$8.5 million as compared to $3.6 million for the same period in 1996. The
major capital projects during 1997 have been the construction of Plant 10
which will be used in the production of the new Chrysler Jeep Grand Cherokee
(WJ) and the renovation of Plant 7.
As part of its growth strategy, the company continues to seek and review
acquisition candidates.
AETNA INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands)
Three Months Ended Nine Months Ended
September September September September
28, 29, 28, 29,
1997 1996 1997 1996
Net sales $45,599 $48,861 $149,388 $163,805
Cost of sales 41,022 42,886 130,709 141,358
Selling, general
& administrative expenses 4,656 4,050 12,448 11,421
Operating income (loss) (79) 1,925 6,231 11,026
Interest expense, net 2,716 2,269 7,986 6,401
Income (loss) before
income taxes (2,795) (344) (1,755) 4,625
Income tax provision
(credit) (1,119) (346) (702) 1,816
Income (loss) before
extraordinary item (1,676) 2 (1,053) 2,809
Extraordinary item (net of
income taxes of $594) -- 1,153 -- 1,153
Net income (loss) $(1,676) $(1,151) $(1,053) $1,656
AETNA INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
September 28, December 29,
1997 1996
ASSETS
Current Assets
Cash $173 $4,011
Accounts receivable
(less allowance for doubtful
accounts of $346 and $510, respectively) 42,153 32,753
Inventories, including tooling 12,351 10,348
Other current assets 1,086 969
Total current assets 55,763 48,081
Property, plant and equipment, net 53,298 49,434
Deferred costs and other assets 6,336 5,769
Cost in excess of net assets acquired 25,173 25,774
$140,570 $129,058
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities
Accounts payable $30,489 $24,958
Accrued expenses 10,910 12,104
Current portion of long-term debt 8,427 --
Total current liabilities 49,826 37,062
Long-term debt, less current portion 85,000 85,000
Deferred income taxes 7,937 8,136
Stockholder's equity
Common stock - $.01 par value; 1,000 issued and
outstanding
Contributed capital 9,024 9,024
Retained earnings (accumulated deficit) (11,217) (10,164)
(2,193) (1,140)
$140,570 $129,058
SOURCE AETNA industries, Inc.