Hilite Industries, Inc. Announces Q2 Earnings
28 January 1998
Hilite Industries, Inc. Reports Strong Second Quarter Earnings and Announcement of New Board Member
CARROLLTON, Texas, Jan. 28 -- Hilite Industries, Inc.
(the "Company" or "Hilite") reported net income for its second
quarter of fiscal 1998 of $939,000 or $0.19 per share, an increase of
$1,718,000 from the loss reported for the same period last year of $779,000 or
$(0.16) per share. Income for the six months ended December 31, 1997 was
$1,731,000 or $0.35 per share, an increase of $2,106,000 over the loss
reported last year of $375,000 or $(0.08) per share. In addition, the
Company's Board of Directors approved a cash dividend of 2-1/2 cents per share
for the second quarter. The Board of Directors set a record date of
February 9, 1998, for the cash dividend distribution which is expected to be
distributed on or about February 23, 1998. Subsequent quarterly dividends
will depend upon future operating results. At December 31, 1997, the
Company's stockholders' equity was $23,612,000 or $4.82 per share.
For the second quarter of the 1998 fiscal year consolidated net sales
were $20,626,000 compared to $16,373,000 for last year, an increase of
$4,253,000 or 26%. Consolidated net sales for the six months ended
December 31, 1997 were $41,656,000 compared to consolidated sales of
$34,426,000 for the same period in 1996, representing an increase of
$7,229,000 or 21%.
The Company also announced that Mr. John F. Creamer, Jr. has been elected
to the Company's Board of Directors on January 27, 1998. Mr. Creamer's
credentials include: Director, Echlin, Inc., an aftermarket and OE supplier
in the automotive industry; Director, R&B, Inc., a supplier of fasteners for
the automotive industry; President and owner of Distribution Marketing
Services, Inc., a consulting firm to the automotive aftermarket; and President
of the Automotive Warehouse Distributors Association, a trade association for
the automotive aftermarket.
Daniel W. Brady, Hilite's Chief Executive Officer, commented: "We are very
pleased with the significant improvements in the Company's sales and earnings
for the second quarter and six months of fiscal 1998. The Company's
restructuring plan for the specialty components and assemblies division, which
involves re-pricing some products and eliminating unprofitable products, while
improving systems, processes and quality, is well underway and having a
positive impact on the Company. Sales for the division are up by 46% and 36%
for the quarter and six month periods, respectively, due to price increases
and strong sales of non-automotive parts. Sales are expected to be lower for
the division in the next two quarters because of the products being
eliminated.
"Both the brake valve and power transmission components divisions
contributed strong sales and earnings. Brake valve division sales increased
21% for the quarter and 14% for the six month periods while the power
transmission components division sales increased 3% and 8% for the three and
six month periods, respectively. Both divisions are implementing programs for
previously announced new business which we expect to provide for positive
growth in the next several quarters.
"We are also especially pleased that Jack Creamer has agreed to join
Hilite's Board of Directors. He is well-known in the automotive industry and
brings valuable experience to Hilite. In addition to his Director
responsibilities, Mr. Creamer will consult with the Company on business
development and marketing issues."
The Company also announced that it has been notified by a Ford Motor
Company division that a part manufactured by the Company's specialty
components and assemblies division may be involved in an Owner Notification
Program regarding a fuel gauge accuracy problem with certain 1997 model year
vehicles. Based upon information currently available to the Company,
management believes that this matter will be resolved in a manner not
materially adverse to the Company.
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 starting up new
products and risks related to technological changes in components which affect
the life of the product. There are no assurances that the restructuring
program for the specialty components and assemblies division will be
successful or that the Company will be successful in its attempt to regain Q1
status from Ford. Further, there can be no assurance that the Ford Owner
Notification Program, mentioned above, will be resolved in a manner consistent
with the Company's expectations or without affecting the Company's attempt to
regain its Q1 status. These and other risks are described in the Company's
10-K filed with the Securities and Exchange Commission (SEC) on September 29,
1997 and Forms 10-Q filed quarterly with the SEC, 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. 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 Six Months Ended
December 31, December 31,
1997 1996 1997 1996
Income Statement Data:
Brake Valves $ 6,585 $ 5,422 $12,560 $11,008
Power Transmission Components 4,839 4,690 10,598 9,860
Specialty Comp. and Assemblies 9,202 6,261 18,498 13,558
Net Sales 20,626 16,373 41,656 34,426
Gross Profit 4,221 1,120 8,285 4,098
Operating Income 1,913 (868) 3,574 184
Net Income 939 (779) 1,731 (375)
Earnings Per Share $ 0.19 $ (0.16) $ 0.35 $ (0.08)
Weighted average number of
shares outstanding 4,900 4,900 4,900 4,900
As of As of
Dec. 31, 1997 June 30, 1997
Balance sheet data:
Working Capital $10,347 $ 8,329
Property, plant, equipment, net 25,910 26,323
Total assets 57,884 57,219
Long-term obligations (A) 18,029 18,271
Total liabilities 34,273 35,216
Shareholders' equity 23,612 22,004
(A) Includes noncurrent portion of long-term debt
SOURCE Hilite Industries, Inc.