Stimsonite Reports Earnings Turnaround for Fiscal 1997
13 February 1998
Stimsonite Reports Earnings Turnaround for Fiscal 1997, Sales and Earnings Increase in the Fourth Quarter and Debt Reduction
NILES, Ill., Feb. 13 -- Stimsonite Corporation
today reported that earnings for the year ended December 31, 1997 were $3.6
million ($0.42 per share) compared to a loss of $0.8 million ($0.10 per share)
in 1996. Sales during 1997 were $81.4 million compared to $82.7 million in
1996. For the fourth quarter of 1997, the Company reported a net loss of $0.3
million ($0.04 per share) on sales of $17.7 million, compared to a loss of
$4.4 million ($0.50 per share) on sales of $16.2 million in the comparable
period of 1996. As the result of the sale of certain real estate assets
during the year and other favorable patterns in cash flow, outstanding debt
declined $12.7 million ($1.47 per share) during the year.
The full year 1996 loss included (i) a $2.4 million ($0.27 per share)
restructuring charge (net of tax) recorded in the fourth quarter relating to
an anticipated loss on the sale of certain real estate assets and a reduction
in salaried personnel and (ii) an extraordinary charge of $0.3 million ($0.04
per share) recorded in the third quarter relating to debt refinancing.
Robert E. Stutz, President and Chief Executive Officer, noted the
improvement in earnings and cash flow for both the fourth quarter and the
year. "We were particularly pleased with the 9% sales growth in the fourth
quarter, with the gain attributable to strong domestic sales of optical film
(up 63%) and strengthening international markets (up 39%). The disappointing
2% decline for revenue for the full year resulted largely from soft market
conditions and pricing pressure domestically, although the strong fourth
quarter showed some evidence of recovery." Mr. Stutz added that international
sales advanced 23% during the year, with particularly robust gains in Latin
American markets. He also commented that domestic sales of optical film
products advanced 26% for the full year and noted that the Company was awarded
new supply contracts from nine states during 1997 with an aggregate sales
value of over $2.5 million.
Gross margin in 1997 was 34% compared with 32% in 1996, reflecting a
favorable sales mix and cost reductions. Inventory levels were reduced
$0.5 million and trade receivables were reduced $2.3 million compared to
December 31, 1996. Mr. Stutz commented that the $12.7 million debt reduction
accomplished during the year had lowered debt from 56% to 41% of total
capitalization.
Selling, general and administrative expenses in 1997 were $14.2 million
compared to $15.3 million in 1996. Aggressive cost reduction programs
initiated during the fourth quarter of 1996 were pivotal in achieving the 7%
expense reduction.
Under the previously announced stock buyback program, the Company
purchased 70,100 shares of common shares during the fourth quarter of 1997.
Shares purchased cumulatively through December 31, 1997 under the program
totaled 508,400 shares at an average price of $6.61.
This press release contains "forward looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995, including
(without limitation) statements as to expectations, beliefs and future
financial performance and assumptions underlying the foregoing relating to the
trends indicated by fourth quarter sales and the Company's future sales of
optical film. The actual results or outcomes could differ materially from
those discussed in the particular forward looking statement based on a number
of factors, including (i) deviations from historical seasonal purchasing
patterns; (ii) changes in competitive and economic conditions; and (iii)
government funding levels.
Stimsonite is a leading worldwide manufacturer and marketer of highway
safety products designed to offer enhanced visual guidance to drivers and
pedestrians.
Stimsonite Corporation
Consolidated Statements of Operations
(In thousands, except per share information)
Quarter Ended 12 months ended
12/31/97 12/31/96 12/31/97 12/31/96
Net sales $17,653 $16,213 $81,363 $82,712
Cost of goods sold 12,887 13,593 53,958 55,835
Gross profit 4,766 2,620 27,405 26,877
Operating expenses:
Selling and administrative 3,787 3,804 14,184 15,260
Research and development 682 701 2,086 2,800
Amortization of intangible
assets 657 716 2,730 2,846
Restructuring charge -- 4,000 -- 4,000
Total operating expenses 5,126 9,221 19,000 24,906
Operating income (360) (6,601) 8,405 1,971
Other (income) expense:
Interest expense 439 606 2,302 2,680
Income (loss) before
provision for income taxes
and extraordinary items (799) (7,207) 6,103 (709)
Provision for income taxes (485) (2,829) 2,474 (193)
Income (loss) before
extraordinary item (314) (4,378) 3,629 (516)
Extraordinary item, net
Net Income/(Loss) ($314) ($4,378) $3,629 ($848)
Earnings per common and common equivalent share:
Income (loss) before
extraordinary item ($0.04) ($0.50)* $0.42 ($0.06)*
Extraordinary item, net
of tax benefit -- -- -- ($0.04)*
Net income (loss):
Basic ($0.04) ($0.50)* $0.42 ($0.10)*
Diluted ($0.04) ($0.50)* $0.42 ($0.10)*
Weighted average number
of shares and share
equivalents outstanding:
Basic 8,526,837 8,758,653 8,581,701 8,826,203
Diluted 8,526,837 8,758,653 8,629,162 8,826,203
* Prior year's Earnings Per Share have been restated for the
implementation of FAS 128; Earnings Per Share.
Consolidated Balance Sheets
(In thousands)
12/31/97 12/31/96
ASSETS
Current Assets
Cash and cash equivalents $337 $227
Trade accounts receivable, net 14,864 17,130
Inventories 11,418 11,938
Other current assets 2,902 4,827
Total current assets 29,521 34,122
Property, plant and
equipment, net 11,829 18,907
Intangible assets, net 11,259 14,373
Deferred financing costs, net 251 287
Long term deferred tax assets 2,239 3,990
Other 102 191
Total Assets $55,201 $71,870
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $4,573 $11,334
Current borrowings 2,500 2,500
Other accrued expenses 5,444 4,435
Total current liabilities 12,517 18,269
Accrued postretirement benefits 631 631
Long-term debt 15,575 28,300
Total Liabilities 28,723 47,200
Stockholders' equity
Common stock 90 90
Treasury stock (3,387) (1,801)
Additional paid-in capital 23,849 23,818
Retained earnings 5,941 2,314
Foreign currency translation (15) 249
Total stockholders' equity 26,478 24,670
Total Liabilities and Stockholders'
Equity $55,201 $71,870
* Prior year's Earnings Per Share have been restated for the
implementation of FAS 128; Earnings Per Share.
SOURCE Stimsonite Corporation