MotorVac Technologies Expects Weak Second Quarter
22 June 1998
MotorVac Technologies Expects Weak Second Quarter
SANTA ANA, Calif.--June 19, 1998--MotorVac Technologies Inc. Friday announced that it anticipates its second quarter 1998 operating results will be lower than expected.The company's largest distributor (which accounted for over 70 percent of revenues in 1997) has taken action to reduce its inventory levels, which include MotorVac products. Accordingly, a decline in sales from first quarter levels is anticipated and the company is not expecting to be profitable in its quarter ending June 30, 1998. For the first quarter ending March 31, 1998, MotorVac reported revenues of $3,083,605 and net income of $63,930.
"We are naturally disappointed that our largest customer has reduced their purchases from levels in previous quarters," said Lee W. Melody, president and chief executive officer of MotorVac Technologies. "We continue to have a strong relationship with this customer and we anticipate that their order level in a few months will resume to previous levels.
"To strengthen our business over the next few years, we are continuing to take a number of aggressive actions. These include expanded focus on other market segments such as the diesel engine and quick service markets, and added emphasis on alternative channels of distribution.
"The recent announcement of two new diesel system distribution agreements represents a significant expansion in the diesel engine service market. Automotive Solutions, a division of MotorVac, was formed to market to the quick-service market. This is a new market segment for the company and is an important long-term worldwide growth opportunity."
MotorVac(R) Technologies, designs, develops, assembles and markets unique technological solutions for the service and repair of automotive fluid systems. Product lines include specialty chemicals and shop equipment for servicing fuel systems and transmission systems. MotorVac(R)'s products are distributed to service shops, fleets and government agencies in more than 70 countries worldwide. For additional information, visit MotorVac(R)'s Web site at www.motorvac.com.
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The company intends that such statements shall be protected by the safe harbor provided for in such sections.
These forward-looking statements include the company's statements regarding its anticipated reduction in sales to its customer and anticipated net loss for the second quarter of 1998 and statements regarding anticipated orders from such customer in the future.
Such statements are subject to the risks and uncertainties that could cause actual results to vary materially from those projected in the forward-looking statements. The company may experience significant fluctuations in future operating results due to a number of economic, competitive, governmental and technological factors, including, among other things, changes in laws, the size and timing of customer orders, new or increased competition, unexpected increases in expenses, delays in acceptance of new products, product returns, seasonality in product purchases by distributors and end users, and pricing trends in the automotive after-market industry in general and in specific markets in which the company is active.
Any of these factors, or others, could cause operating results to vary significantly from prior periods and those projected in the forward-looking statements. Additional information with respect to these and other factors which could materially affect the company and its operations is included in the company's filings with the Securities and Exchange Commission, including its Annual Report or Form 10-KSB for the year ended Dec. 31, 1997 and any subsequent filings.