Lund International Holdings, Inc. Announced Net Sales and Results
10 March 1998
Lund International Holdings, Inc. Announced Net Sales and Results of Operations for the Three and Six Month Periods Ended December 31, 1997
MINNEAPOLIS, March 10 -- Lund International Holdings, Inc.
announced net sales and results of operations for the three and
six month periods ended December 31, 1997. On September 16, 1997, the
Company's Board of Directors voted to change the Company's fiscal year end to
December 31, commencing with a six-month transition period ended
December 31, 1997.
Net sales for the quarter ended December 31, 1997 were $9,495,397,
compared to $10,345,653 for the same period in 1996. Net income was $155,198,
or $.04 per share, compared to $462,537, or $.11 per share, for the period
ended December 31, 1996.
The decrease in net income for the three month period ended December 31,
1997 was primarily the result of the decrease in sales for the same period.
The decrease in net sales resulted primarily from lower unit sales of the
running board product category and Lund's Interceptor(TM) hood shield product
line.
Sales of Lund's running board product category were negatively impacted by
industry trends toward changes in both styling and attachment. In response to
these trends, Lund began shipping its newly designed X-Step(TM) running board
in the first quarter of 1998.
In addition, competitive pricing pressure over the past year has reduced
sales on the Interceptor hood shield line. Lund has recently introduced two
low-end shields which were designed to compete in the price-sensitive market;
however, the new product lines are in the early stages of release and did not
have a significant impact on 1997 sales.
For the six month period ended December 31, 1997, net sales were
$19,523,308, compared to $20,752,074 for the comparable period in 1996. The
Company incurred a net loss of $363,585, or $.08 per share, compared to net
income of $924,559, or $.21 per share, for the same period in 1996. In
addition to the lower running board and hood shield unit sales, the Company
incurred after-tax non-recurring transaction fees of $823,858, or $.19 per
share, in the six month period related to the sale of stock by Allan W. Lund,
former Chairman of the Board, to LIH Holdings, LLC and other related
agreements.
William J. McMahon, President and CEO of Lund, said, "While we are
disappointed with the net sales for the recent period, we are pleased that our
new product releases have been implemented and initial response has been very
positive."
On December 30, 1997, the Company acquired approximately 98% of the stock
of Deflecta-Shield Corporation and acquired the balance on February 27, 1998.
The total cost of the acquisition was approximately $90 million. The
acquisition of Deflecta-Shield Corporation had no impact on the Company's
results of operations for the six month period ended December 31, 1997 because
the transaction closed on December 30, 1997. In its earnings release for the
first quarter of 1998, the Company's financial results will reflect the
consolidation of Deflecta-Shield's financial statements with the Company's.
Mr. McMahon said, "The acquisition of Deflecta-Shield has been formally
completed and the integration process is well underway. Key senior managers
from Deflecta-Shield have been retained and will assume expanded roles in the
combined company. In addition, I am pleased to announce that Ken Holbrook
joined the Company on March 1 as the Vice President of Sales. Mr. Holbrook
came to Lund with an extensive sales management background and was most
recently Vice President of Sales and Marketing for Bestop Corporation, an
automotive OE and aftermarket supplier. The sales leadership that Ken brings
to the Company will be an integral part of reshaping and driving our sales
efforts."
Statements in this press release relating to future financial results, new
product development, ongoing company operations, trends and market analysis,
and the effects of the acquisition of Deflecta-Shield, among others, are
forward-looking statements under the Private Securities Litigation Reform Act
of 1995. These statements involve certain risks and uncertainties which could
cause results to differ materially from those anticipated. Among the factors
that could cause anticipated results of operations or results of the
acquisition to differ materially are the following: inability to obtain
expected efficiencies, or to obtain them in a timely manner; inability to
effectively manage a larger enterprise, to integrate the two companies or to
control costs associated with such integration; and the representations,
warranties and covenants made in the merger agreement proving to be materially
untrue. In addition, both Lund's and Deflecta-Shield's business and
operations (and anticipated results) include the following risk factors:
consumer preference changes, risk of expansion into new distribution channels,
delays in designing, developing, testing or shipping of products, increased
competition, general economic developments and trends, developments and trends
in the light truck and automotive accessory market and increased costs. This
is not an exhaustive list and the Company may supplement this list in future
filings or releases or in connection with the making of forward-looking
statements.
LUND INTERNATIONAL HOLDINGS, INC.
CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
(Unaudited)
Three Months Ended Six Months Ended
December 31, December 31,
1997 1996 1997 1996
Net sales $9,495,397 $10,345,653 $19,523,308 $20,752,074
Cost of goods sold 6,322,276 6,661,836 12,946,258 13,722,440
Gross profit 3,173,121 3,683,817 6,577,050 7,029,634
Operating expenses
General and
administrative 973,140 1,177,785 2,145,820 2,117,183
Selling and marketing1,553,218 1,556,130 3,103,005 3,064,813
Research and development374,446 319,033 722,234 631,037
Non-recurring transaction -- -- 1,174,299 --
Total operating
expenses 2,900,804 3,052,948 7,145,358 5,813,033
Income (loss) from
operations 272,317 630,869 (568,308) 1,216,601
Other income, net 10,186 75,295 83,795 194,939
Income (loss) before
income taxes 282,503 706,164 (484,513) 1,411,540
Income tax expense
(benefit) 127,305 243,627 (120,928) 486,981
Net income (loss) $155,198 $462,537 $(363,585) $924,559
Basic and diluted
earnings per share $0.04 $0.11 $(0.08) $0.21
SOURCE Lund International Holdings, Inc.