OEA Reports Third Quarter Operating Results
5 June 1998
OEA Reports Third Quarter Operating Results
DENVER, June 4 -- OEA, Inc. today reported its
financial results for the third quarter ended May 1, 1998. Third quarter net
sales were $63.6 million, a 16.9% increase over net sales of $54.4 million
recorded in the same period last year. Operating profit before one-time
charges was $4.0 million compared with $12.7 million for the same period last
year. Net earnings and earnings per share before one-time charges were
$1.8 million and $.09, respectively, compared with $ 8.1 million and $.39 for
the prior year.
The Company has taken one-time charges of $17.2 million after tax or
$.84 per share. This resulted in a net loss for the third quarter of
$15.4 million or $.75 per share.
The one-time charges, net of taxes, consist of $7.3 million in inventory
adjustments associated with the start-up of the Company's new inflator
production lines, $3.2 million associated with the consolidation of its
domestic initiator production operations in its Utah facility, a $2.5 million
charge for early production units from its new inflator facility. $1.6 million
in connection with the settlement of a legal claim and $2.6 million in other
charges.
"This has been the most difficult quarter in the Company's history," said
Charles B. Kafadar, OEA's President and Chief Executive Officer. "When we
made the decision to become a major player in air bag inflators, we adopted a
strategy which was designed to quadruple the size of our Company, and which
required significant up-front investment. There were many risks with such an
ambitious strategy, including manufacturing start-up and an adequate initial
utilization of new plant and equipment. We believe our major start-up
problems are behind us, and the strong and increasing demand for our inflators
will provide the necessary utilization of equipment. Further, our cost
reduction programs are on target. The fundamental decision to enter the
inflator market was sound, as is the market. We believe we are the industry
leaders in technology and manufacturing cost for both inflators and
initiators, and are positioned for success."
OEA is a major manufacturer of air bag inflators and initiators, and a
leader in the design and manufacture of personnel escape systems for military
aircraft and high-reliability devices for missile and space applications.
Certain of the information set forth above, including statements regarding
Company strategy, its soundness, the inflator and initiator market, inflator
and initiator demand, sales volume increases, and the benefits of cost
reduction programs and improved manufacturing processes, as well as other
statements or implications regarding future events, are "Forward-Looking
Statements" for purposes of the federal securities laws. Actual results or
events may differ materially from these forward looking statements depending
on a variety of factors. Reference is made to the cautionary statements under
the caption "Forward-Looking Statements" in OEA's Annual Report on Form 10-K
for the year ended July 31, 1997 and the Company's report on Form 8-K filed on
June 4, 1998 for a description of various factors that might cause OEA's
actual results to differ materially from those contemplated by such forward-
looking statements.
OEA, INC.
FINANCIAL SUMMARY
$(THOUSANDS, EXCEPT SHARE DATA)
3 MONTHS ENDED 5/1 9 MONTHS ENDED 5/1
BEFORE ONE-TIME CHARGES 1998 1997 1998 1997
NET SALES 63,592 54,397 180,341 151,223
OPERATING PROFIT 4,009 12,658 22,442 36,839
OTHER INCOME (EXPENSE) (1,076) 178(a) (3,389) 331(a)
EARNINGS BEFORE TAXES 2,933 12,836 19,053 37,170
INCOME TAXES 1,129 4,778 7,050 14,202
NET EARNINGS 1,804 8,058 12,003 22,968
NET EARNINGS PER SHARE 0.09 0.39 0.58 1.12
3 MONTHS ENDED 5/1 9 MONTHS ENDED 5/1
AFTER ONE-TIME CHARGES 1998 1997 1998 1997
NET SALES 63,592 54,397 180,341 151,223
OPERATING PROFIT (18,240) 12,658 193 36,839
OTHER INCOME (EXPENSE) (5,783) 3,421 (8,095) 3,574
EARNINGS BEFORE TAXES (24,023) 16,079 (7,902) 40,413
INCOME TAXES (8,671) 5,985 (2,749) 15,409
NET EARNINGS (15,352) 10,094 (5,153) 25,004
NET EARNINGS PER SHARE (0.75) 0.49 (0.25) 1.22
AVERAGE NUMBER OF
SHARES OUTSTANDING 20,594 50,546 20,576 20,536
(a) Excludes $3,243 gain on sale of foreign joint venture