Walbro Corporation Reports 1997 Results
12 February 1998
Walbro Corporation Reports 1997 Results
CASS CITY, Mich., Feb. 12 -- L. E. Althaver, Chairman,
President and Chief Executive Officer, Walbro Corporation ,
reported sales of $619,905,000 for the year ended December 31, 1997, compared
with $585,388,000 for 1996. The Company posted a net loss of $36,627,000 for
1997, compared with net income of $11,229,000 for 1996.
The Company posted a net loss per share of $4.23 for 1997, compared with
net income of $1.30 for 1996. Average shares outstanding were 8,661,432 in
1997 and 8,608,837 in 1996.
"Sales of Walbro's automotive products in North America were up
approximately 8 percent in 1997," Althaver said. "Sales of small engine
products for outdoor power equipment and marine applications also rose
approximately 8 percent in 1997, and aftermarket sales were up 17 percent for
the year."
"While Walbro attained an increase in sales in 1997, a wide range of
factors resulted in a disappointing year in terms of earnings," Althaver said
in announcing the results.
"Much of the loss for the year is attributable to fourth quarter charges
of $27 million related to the restructuring and other actions announced in
November," Althaver said. "While this restructuring significantly affected
results in 1997, it will allow us to better focus on our core activities,
eliminate under-performing operations, lower our cost structure and enhance
shareholder value."
"Fourth quarter results were also affected by a non-recurring charge of
approximately $6 million pretax for warranty reserve," Althaver noted.
"The in-sourcing of fuel pumps and modules by a major domestic automotive
customer affected the first half of 1997," Althaver said. "In addition, a
29-day strike at Chrysler Corporation's Mound Road engine plant reduced
earnings in the second quarter."
"Steel fuel rail shipments were down for the year, due to a market shift
to plastic rails. Walbro is divesting itself of its steel fuel rail plant in
Ligonier, Indiana, as part of the restructuring," the chief executive noted.
"We will continue to manufacture plastic rails at our plant in Meriden,
Connecticut."
"Our fuel tank plant in Ossian, Indiana, ran below capacity in 1997, but
will ramp up to more efficient production levels in 1998," he said.
"Currency exchange rates affected Walbro's automotive and small engine
operations in Europe and Asia in 1997, reducing both sales and profits. Sales
of automotive fuel tanks in Europe were down 6 percent, primarily due to
exchange rates," the Walbro executive noted.
"Walbro's operations in Korea, Mexico and Argentina all incurred
significant start-up costs during 1997," Althaver said.
"Our new fuel tank plant near Sao Paulo, Brazil, reached full production
by the third quarter of 1997. However, the Brazilian economy suffered serious
disruption during the fourth quarter, causing that plant to operate at a loss
in that period," he said. "We expect to return to efficient production levels
in 1998."
"Walbro's two carburetor plants in China operated at reduced levels during
part of 1997, as manufacturers of two-wheeled vehicles temporarily reduced
production levels to control inventory levels. We expect significant
improvement in 1998," he said.
"While 1997 was a difficult year, we anticipate a gradual turnaround in
1998, beginning with the first quarter and continuing throughout the year as
new programs come on-stream and production levels rise in our facilities,"
Althaver said.
"We are confident that, aided by our restructuring, our focus on core
activities and our renewed emphasis on the bottom line, the coming year will
begin to pay off the significant investment in plants, equipment and people
that we have made over the past few years, and will enhance stockholder value
in the process."
Walbro Corporation is a designer and manufacturer of precision fuel
systems and products for automotive and small engine markets. Walbro
Corporation is headquartered in Cass City, Michigan, and has subsidiaries and
joint ventures throughout the world, including North and South America, Europe
and Asia. Walbro common stock is traded on the Nasdaq National Market under
the symbol WALB.
This press release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. Actual results may
differ materially from anticipated results due to certain risks and
uncertainties, including but not limited to general economic conditions in the
markets in which Walbro operates, fluctuations in the production of vehicles
for which Walbro is a supplier, labor disputes involving Walbro or its
significant customers, risks associated with conducting business in foreign
countries and other risks detailed from time to time in the Company's
Securities and Exchange Commission filings.
WALBRO CORPORATION
(in thousands, except share data)
Three Months Ended Twelve Months Ended
December 31 December 31
1997 1996 1997 1996
Net Sales $165,521 $144,887 $619,905 $585,388
Net Income (38,987) (475) (36,627) 11,229
Net Income Per Share (4.50) (.05) (4.23) 1.30
Average Shares
Outstanding 8,673,034 8,639,311 8,661,432 8,608,837
EBITDA* ($29,212) $11,323 $17,879 $57,255
* Earnings before interest and taxes, plus depreciation and amortization.
Walbro Corporation's Annual Meeting will be held at 11 a.m. EDT on
Wednesday, April 29, 1998 at Walbro Corporation's North American Regional
Headquarters, 1227 Centre Drive, Auburn Hills, Michigan.
SOURCE Walbro Corporation