Standard Products Reports Record Second Quarter Results -- Earnings Up 38 Percent
26 January 1998
Standard Products Reports Record Second Quarter Results -- Earnings Up 38 Percent
DEARBORN, Mich., Jan. 26 -- The Standard Products Co.
today announced that net income for its second quarter of fiscal
1998, ended December 31, 1997, increased by 38 percent over the same period
last year. Net income for the quarter was $8.8 million, or $0.52 diluted
earnings per share of common stock, on sales of $282.5 million. Both the
revenue and net income amounts are the largest for any second quarter in the
Company's history. The results compare with net income of $6.3 million, or
$0.38 diluted earnings per share, on sales of $266.6 million in the second
quarter a year ago.
The improvement in second quarter performance was greatly aided by a
strong increase in year-over-year vehicle production in North America.
General Motors volumes were up over last year's strike-impacted figures and
Chrysler truck production also increased significantly over last year.
"Although we cannot count on further gains in vehicle production levels,
we clearly benefited from the increase that occurred in the second quarter,"
said Ron Roudebush, chief executive officer. "This increase, coupled with our
ongoing operating improvements, resulted in record earnings for the quarter.
We also showed continued earnings improvement in our Brazilian subsidiary,
which is encouraging given the current economic situation in Brazil."
These positive results more than offset costs associated with a
substantial number of new program launches at the Company's U.K. subsidiary
and an increase in general and administrative expenses. The performance of
the Company's NISCO joint venture showed improvement over the first quarter;
however, results were not as strong as anticipated.
Second quarter sales for the Company's Transportation Equipment segment
were $248.7 million, a 6.3 percent increase from 1997 second quarter sales of
$233.9 million. In North America, net sales increased by 3.5 percent from
$144.3 million to $149.4 million. This increase was driven by various General
Motors platforms as well as the Ford Windstar and Chrysler minivan, Jeep
Cherokee and Dodge/Plymouth Neon.
The Company's European automotive group saw second quarter sales decrease
$1.0 million, or 1.8 percent, from $59.2 million to $58.2 million. The
decline was caused equally by lower volumes in the U.K. and currency effects
from the French franc.
Sales in Brazil for the second quarter increased by $9.3 million, from
$11.5 million to $20.8 million.
Holm Industries, the Company's subsidiary that produces seals for the
appliance and building industries, showed a 10.4 percent sales increase during
the quarter, primarily a result of increases in appliance production.
The Company's Tread Rubber segment reported an increase in sales for the
quarter of 7.8 percent, primarily related to raw materials sales to the
Company's automotive group. The Company produces an increasing portion of the
rubber used by its automotive business.
Standard Products manufactures sealing, trim 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 truck-tire retread industry.
THE STANDARD PRODUCTS COMPANY
Consolidated Earnings Summary (Unaudited) (000 omitted)
Three Months Six Months
Periods ended December 28, 1997 1996 1997 1996
Net sales $282,544 $266,620 $528,717 $532,231
Costs and expenses:
Cost of goods sold 243,240 243,924 462,176 475,243
Selling, general and
administrative expenses 19,832 16,901 37,156 34,204
Interest expense 3,202 3,223 6,158 6,728
Other (income) expense 1,421 (251) 3,806 (1,210)
Income before taxes on income 14,849 11,823 19,421 17,266
Provision for taxes on income 6,088 5,479 7,849 9,525
Net income $8,761 $6,344 $11,572 $7,741
Per share of common stock: *
Basic $0.52 $0.38 $0.69 $0.46
Diluted $0.52 $0.38 $0.68 $0.46
Dividends $0.17 $0.17 $0.34 $0.34
Average shares outstanding:
Basic 16,849 16,807 16,838 16,800
Diluted 16,926 16,831 16,907 16,821
* Reflects the adoption of SFAS No. 128, the new accounting standard for
earnings per share.
SOURCE Standard Products Co.