Safety Components International, Inc. Announces Third Quarter Results
10 February 1998
Safety Components International, Inc. Announces Third Quarter Results
Company Meets Analyst's EPS Expectations
FORT LEE, N.J., Feb. 10 -- Safety Components International,
Inc. , one of the world's leading manufacturers of automotive
airbag fabric and cushions, today reported results for the third quarter and
nine months ended December 31, 1997. Sales for the third quarter increased 92
percent to $47,370,000 from $24,662,000 for the previous year's comparable
quarter. The company reported net income of $1,386,000, or $0.28 per share,
for the quarter, compared to net income of $1,420,000, or $0.28 per share, for
the same period of the prior year. Earnings before interest, taxes,
depreciation and amortization (EBITDA) increased $2,948,000, or 78 percent, to
$6,716,000, or $1.33 per share, for the third quarter of fiscal 1998, compared
to $3,768,000, or $0.75 per share, in the comparable 1997 quarter.
Sales for the nine months ended December 31, 1997, increased 97 percent to
$117,727,000 from $59,711,000 for the same period in the prior year. The
company reported net income of $4,103,000, or $0.82 per share, for the first
nine months of fiscal 1998, compared to net income of $3,421,000, or $0.68 per
share, for the same period in the prior year. EBITDA for the nine-month
period increased $8,129,000, or 96 percent, to $16,604,000, or $3.30 per
share, from $8,475,000, or $1.68 per share, for the comparable period the
prior year.
It should be noted that for the quarter ended December 31, 1997, interest
expense as a percentage of revenue increased to 6 from 2 percent for the third
quarter of fiscal 1997. Interest expense as a percentage of revenue for the
nine months ended December 31, 1997, increased to 5 percent from 1 percent for
the same nine months the prior year. The increase in interest expense for
both the three and nine-month periods is attributable to $90 million in senior
subordinated debt issued in connection with the company's acquisition in July
1997 of the Air Restraint and Industrial Fabrics Division of JPS Automotive,
L.P., now Safety Components Fabric Technologies.
"We are pleased to report that while decreased prices and the devaluation
of the mark impacted our European airbag division sales, domestic sales were
strong," stated Robert A. Zummo, president and chief executive officer of
Safety Components International, Inc. "The company's performance and
significant growth over the last year, are attributable to the successful
acquisition and integration of Phoenix, Valentec and Safety Components Fabric
Technologies divisions. The company's vertical integration efforts and
management's focus on increasing the content per airbag module of components
supplied, at lower prices, are also contributors to the company's success."
The company also announced the award of a significant automotive airbag
order from a major module supplier in January 1998. Total annual volume
should approximate 700,000 airbag cushions and $9.7 million in annual revenues
on six different programs. Total orders from this new customer now aggregate
1.1 million airbag cushions and $14.7 million in annual revenues. "The award
of this contract not only solidifies Safety Components' relationship with one
of the largest worldwide airbag module integrators, it also secures our
position as an industry leader," added Zummo. Prior to commencement of
production by Safety Components, approval of certain automobile manufactures
will be required.
This release contains forward-looking statements. There are certain
important factors that could cause results to materially differ from those
anticipated from the statements made above. These factors include, but are
not limited to, dependence of revenues upon several major module suppliers;
the continued performance by the Safety Components Fabric Technologies
division at or above historical levels; worldwide economic conditions;
approval by automobile manufacturers of airbag cushions currently in
production; pricing pressures; and the ability to satisfy the customer on
timeliness and quality. Additional information on these and other factors
that could potentially affect the company's financial results may be found in
the company's filings with the Securities and Exchange Commission.
Safety Components International, Inc. is a leading, low-cost supplier of
automotive airbag fabric and cushions with operations in North America, Europe
and Asia. The company is also a leading manufacturer of value-added synthetic
fabrics used in a variety of niche industrial and commercial applications. In
addition, Safety Components supplies metal airbag components to its airbag
customers utilizing its machining and stamping capabilities gained from years
as a military ordnance manufacturer and continues as a systems integrator and
manufacturer for ordnance programs.
Safety Components International, Inc.
Consolidated Statements of Operations
(in thousands, except per share data)
Three Months Ended Nine Months Ended
December 31, December 31,
1997 1996 1997 1996
Net sales $47,370 $24,662 $117,727 $59,711
Cost of sales,
excluding depreciation 38,370 18,996 93,632 46,818
Depreciation 1,517 386 3,655 1,245
Gross profit 7,483 5,280 20,440 11,648
Selling and marketing expenses 132 502 1,043 1,199
General and administrative
expenses 2,152 1,396 6,448 3,219
Amortization of goodwill 474 232 1,063 386
Income from operations 4,725 3,150 11,886 6,844
Other (income) expense, net (10) 119 79 192
Interest expense 2,726 445 5,373 695
Income before income taxes 2,009 2,586 6,434 5,957
Provision for income taxes 623 1,166 2,331 2,536
Net income $1,386 $1,420 $4,103 $3,421
Net income per share $0.28 $0.28 $0.82 $0.68
EBITDA $6,716 $3,768 $16,604 $8,475
EBITDA per share $1.33 $0.75 $3.30 $1.68
Weighted average number
of shares outstanding 5,031 5,053 5,024 5,057
SOURCE Safety Components International, Inc.