U.S. Automotive Manufacturing, Inc.
1 April 1998
U.S. Automotive Manufacturing, Inc.
NEW YORK, April 1 -- U.S. Automotive Manufacturing, Inc.
reported that for the year ended December 31, 1997, it
sustained a loss of $(13,034,799) or $(1.22) per share on net sales of
$6,999,636 compared to a loss of $(6,118,170) or $(.90) per share and net
sales of $3,912,237 for the year ended December 31, 1996.
Results for the 1997 fiscal year included four months of the operating
results of Quality Automotive Company, which was acquired by the Company on
August 29, 1997. Results also included approximately $9,63O,000
non-operating/non-recurring charges (including a write-down to estimated
market value of assets located at its Sanford, FL facility of approximately
$3,340,000) recorded in the third fiscal quarter ended September 30, 1997.
According to Martin Chevalier, the Company's President, "the financial
results were in keeping with management's previously stated expectations that
losses would continue during the fourth quarter primarily due to the
continuing costs of integrating Quality Automotive Company with the Company
and the traditional seasonal slowdown in business occurring in the fourth
fiscal quarter." Nonetheless, Mr. Chevalier stated he was, "pleased with the
progress the Company has made during last quarter of 1997." Although he
expected the Company to report a loss for the first fiscal quarter of 1998,
Mr. Chevalier noted that he, "looked forward to improved results for the full
1998 fiscal year particularly as the Company enters the historically stronger
second and third fiscal quarters." Management is fully committed to continue
to take the actions necessary to help return the Company to profitability.
Mr. Chevalier further stated that, "as a result of the merger with Quality
Automotive Company, the Company has acquired the capacity to manufacture
friction materials for its own use in the manufacture and re-manufacture of
brake products as well as for third-party sales to other manufacturers. The
combined machinery, equipment, dies, molds and tooling of the Tappahannock, VA
and the Sanford, FL facilities, together with the ability to manufacture its
own friction material, has enabled the Company to produce all part numbers it
offers for sale. By offering and producing a full product line (integrally
molded and riveted brake pads and both bonded and riveted brake shoes), all
produced internally, the Company believes it can be more responsive to
customer needs while gaining better control of its inventory. Management
believes this has substantially enhanced the marketing of the Company's
products and has had a positive effect on Company sales. In this regard, the
Company has recently entered into non-binding business relationships with new
customers which could result in the Company receiving as much as $7,500,000 in
revenues over a 12 month period.
Mr. Chevalier cautioned, however, that "any significant new amount of
business will require more working capital than is presently available to the
Company. Accordingly, the Company is currently negotiating an extension of its
credit facility and supplement its existing capital expenditure lines as well
as exploring new ways of raising capital which may include the sale of its
equity securities."
U.S. Automotive Manufacturing, Inc., through its wholly owned
subsidiaries, Quality Automotive Company and U.S. Automotive Friction, Inc.,
manufactures, assembles and distributes new and rebuilt automotive friction
products (brake pads, linings and remanufactured brake shoes) to other
automotive manufacturers and to the automotive aftermarket.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act
of 1995: The statements which are not historical facts contained herein are
forward-looking statements that relate to plans for future activities. Such
forward-looking information involves a number of important known and unknown
risks, uncertainties and other factors which may cause the actual results,
performance or achievements of the Company to be materially different from any
future results, performance or achievements of the Company expressed or
implied by such forward-looking statements. Such risks, uncertainties and
factors, include, but are not limited to, those relating to the integration of
recently acquired companies, industry competition, possible need for future
financing and possible obsolescence of equipment and other risks detailed in
the Company's filings with the Securities and Exchange Commission. Readers
are cautioned not to place undue reliance on these forward-looking statements,
which only speak as of the date the statement was made.
SOURCE U.S. Automotive Manufacturing, Inc.