Bonded Motors Announces Q1 Results
28 April 1998
Bonded Motors Announces First Quarter Results
Revenues Increase 67% to Record Levels; Genuine Parts/NAPA Places Initial
Stocking Orders; Revenue Growth Over 40% from Traditional Customers; Increased
Margins Beginning to Show Production Improvements
LOS ANGELES, April 27 -- Aaron Landon, Chairman of the Board
and Chief Executive Officer of Bonded Motors, Inc. , announced
at today's annual shareholder meeting the operating results for the quarter
ended March 31, 1998. Revenues increased over 67% for the quarter to a record
$8.5 million versus $5.1 million for the first quarter of 1997. Net income
for the quarter totaled $205,694, or $.07 per share versus $428,520 or $.14
per share for the first quarter of 1997.
Commenting on the results, Mr. Landon noted, "We continue to make strong
progress in gaining market share, as evidenced by the over 40% increase in
revenues from our traditional customer base. In addition, Genuine Parts/NAPA
placed its initial stocking orders on March 2, 1998, and those new
shipments topped over one million dollars for the month, bringing out total
revenue increase to over 67%.
"Gross margins improved to 17.9% for the quarter, an increase from 17.2%
gross margins reported for the December 1997 quarter. Further, our cost of
production went down by approximately $40 per engine in this most recent
quarter, which bodes well for future gross margin improvement. And we expect
continued production improvements in the coming quarters.
"Our tax rate for the March quarter was approximately 38%. We stopped
earning Los Angeles Revitalization Zone (LARZ) tax credits from the State of
California beginning January 1st of this year, which affected our tax rate for
the first quarter of 1998."
To participate in the conference call being held Tuesday, April 28 at
6:00am PST please call Ben J. Rohan at 213-583-8631, extension 234.
Safe Harbor statement under the Private Securities Litigation Reform Act
of 1995: The statements in this release regarding the business conditions of
the automotive aftermarket for remanufactured engines and the expansion of the
company's products and markets are forward looking statements that include
risks and uncertainties, including but not limited to product demand and
development, technological advancements, impact of competitive products and
pricing, growth in targeted markets, manufacturing capacity, risks of foreign
operations, ability to integrate and leverage acquisitions, and other
information detailed from time to time in the Company's Securities and
Exchange Commission filings.
Bonded Motors is a remanufacturer of car and light truck engines with
headquarters in Los Angeles, manufacturing plants in California and Georgia,
and Distribution Centers in California, Washington, Colorado, Ohio, Georgia,
and New York. The Company's principal customers are automotive parts chain
stores, such as Pep Boys - Manny, Moe and Jack, (NYSE: PBY ) CSK Automotive
(Checkers, Schucks, and Kragens), Paccar Automotive (Grand's and
Al's Auto Parts) and Genuine Parts/NAPA .
BONDED MOTORS, INC.
Balance Sheet
March 31, 1998
(Unaudited)
Assets
Current assets:
Cash $200,431
Trade accounts receivable (less allowance for
doubtful accounts of $128,019) 6,558,080
Inventories:
Parts 1,570,074
Work in process 698,200
Finished goods 5,548,822
7,817,096
Deferred tax assets 393,144
Prepaid expenses and other current assets 264,719
Prepaid income taxes 2,689
Total current assets 15,236,159
Property and equipment, at cost;
Machinery and equipment 2,672,129
Furniture and fixtures 445,985
3,118,114
Less accumulated depreciation 1,367,361
Net property and equipment 1,750,753
Goodwill, less accumulated amortization of $13,242 198,636
Deferred tax assets 1,352,683
$18,538,231
Liabilities and Shareholders' Equity
Current liabilities:
Current installments of notes payable to bank
(note B) $385,128
Accounts payable 2,574,737
Accrued expenses 575,335
Accrued warranty obligations 471,000
Total current liabilities 4,006,200
Notes payable to bank, excluding current installments
(note B) 375,113
Long-term debt (note B) 5,450,808
Shareholders' equity (note D)
Preferred stock, no par value. Authorized 1,000,000
shares; none issued and outstanding.
Common stock, no par value. Authorized 10,000,000
shares; issued and outstanding 3,040,040 shares 4,889,569
Retained earnings 3,916,541
Notes receivable from exercise of stock options (100,000)
Total shareholders' equity 8,706,110
$18,538,231
See accompanying notes to financial statements
BONDED MOTORS, INC.
Statement of Earnings
(Unaudited)
For the Three Months Ended
March 31
1998 1997
Net sales $ 8,508,042 5,075,773
Cost of sales 6,984,237 3,689,416
Gross profit 1,523,805 1,386,357
Selling, general and administrative
expenses 1,082,596 864,587
Earnings from operations 441,209 521,770
Other (expense) income:
Interest expense (110,424) (12,293)
Interest income 2,085 4,077
Other (1,896)
Earnings before income taxes 330,974 513,554
Income tax (expense) (125,280) (85,034)
Net earnings $ 205,694 428,520
Basis earnings per share $0.07 0.14
Diluted earnings per share 0.06 0.14
Weighted average common shares
outstanding 3,039,000 3,003,000
Weighted average common and common
equivalent shares outstanding 3,188,000 3,111,000
SOURCE Bonded Motors, Inc.