Wynn's Reports 13% Growth in Quarterly Earnings Per Share
17 July 1998
Wynn's Reports 13% Growth in Quarterly Earnings Per Share
ORANGE, Calif., July 16 -- Wynn's International, Inc.
reported today income from continuing operations of $7,149,000 in
the second quarter ended June 30, 1998, an increase of 10% over 1997 second
quarter income from continuing operations of $6,499,000. Diluted earnings per
share from continuing operations for the quarter ended June 30, 1998 were
$.36, a 13% increase over the comparable $.32 per share amount in the second
quarter of 1997. (All references to shares and per share amounts reflect the
3 for 2 stock split to stockholders of record on December 22, 1997.) Net
sales for the quarter ended June 30, 1998 were $85,589,000, 6% above last
year's comparable quarterly sales of $81,040,000. The growth rate in sales
and earnings was lower than the rates achieved in recent quarters due mainly
to the three-week labor strike at two of the Company's major plants in
Tennessee and the ongoing General Motors strike.
Net income for the most recent quarter, including discontinued operations,
was also $7,149,000 compared to last year's second quarter net income of
$6,818,000, which included $319,000 income from discontinued operations.
Diluted earnings per share, including discontinued operations, for the most
recent quarter were also $.36 compared to last year's second quarter per share
results of $.34, which included $.02 per share from discontinued operations.
For the first six months of 1998, income from continuing operations
increased 14% to $14,643,000 or $.74 per share compared to $12,801,000 or $.62
per share a year ago. Net income for the six months, including the results of
discontinued operations, was also $14,643,000, an increase of 12% compared to
$13,120,000 in 1997. Diluted earnings per share for the six months of 1998
were $.74, a 17% increase over last year's $.63 per share. Net sales for the
first six months of 1998 were $171,398,000 compared to $158,927,000 for the
first six months of 1997. For the most recent six months, the pretax return
on sales increased to 13.5% compared to 12.8% in the first six months of 1997.
Wynn's-Precision, Inc. (Precision), a key supplier of sealing products for
automobiles and other equipment, reported a 6% increase in operating profit on
a slight increase in revenues in the most recent quarter compared to the
second quarter of 1997. During the quarter, two of Precision's eight major
plants were impacted by a three-week labor strike. The strike was settled May
10, 1998 and a three-year contract was signed with the same economic package
as originally offered by the Company immediately before the strike. The labor
strike at General Motors, Precision's largest customer, that began June 5,
1998 had a small impact on the most recent quarter, but could impact the third
quarter results of Precision. Precision has developed contingency plans to
adjust its production capacity if the General Motors strike continues.
Wynn Oil Company, a worldwide manufacturer and marketer of specialty
chemicals, equipment and related service programs, reported a 3% increase in
operating profit on an 11% increase in revenue in the second quarter of 1998
compared to the second quarter of 1997. Strong results were posted by the
U.S. professional, Latin American export and European operations, offset by
weaker results in the Asian Pacific area. Results at the U.S. product
warranty operation were relatively flat compared to the prior year due to
reduced lending activity by companies specializing in sub-prime financing of
used automobiles. During the quarter, the U.S. dollar remained strong
compared to the currencies in those countries in which Wynn Oil operates.
Excluding the impact of foreign exchange rate fluctuations, Wynn Oil's
revenues and operating profits would have grown 15% and 9%, respectively.
The Company's financial condition remains very good at June 30, 1998 with
cash and cash equivalents of $41.3 million; the current ratio at 2.57 to 1;
and no interest-bearing debt. Stockholders' equity at June 30, 1998 was
$136.9 million or $7.12 per common share.
James Carroll, Chairman of the Board and Chief Executive Officer said,
"Despite the labor issues arising during the quarter, we were able to react
quickly and post improved consolidated results. We are closely monitoring the
General Motors developments and taking action to reduce the effect on
Precision's third quarter results. If the General Motors strike continues for
an extended period, our results could be significantly affected. However, we
remain optimistic that 1998 will be another year of record consolidated
results."
Wynn's International, Inc., founded in 1939, is a worldwide supplier of
high quality O-rings and sealing products; specialty chemical products,
equipment and related service programs; and builders hardware supplies. The
Company has 2,084 employees and is headquartered at 500 North State College
Boulevard, Suite 700, Orange, California, 92868, telephone: (714) 938-3700.
Certain statements contained in this release are forward looking and may
involve risk and uncertainties. Such statements include, but are not limited
to, the extent and duration of the General Motors strike and its effect on the
Company, the Company's ability to take actions to reduce the effect of the
General Motors strike on Precision's future results, the impact of the U.S.
dollar exchange rates, along with general product demand, market and other
risks disclosed in the Company's filings with the Securities and Exchange
Commission.
FINANCIAL HIGHLIGHTS
Income Statement Data:
Second Quarter Ended
June 30
1998 1997
Net sales $85,589,000 $81,040,000
Income from continuing
operations before taxes 11,125,000 10,301,000
Provision for taxes 3,976,000 3,802,000
Income from continuing
operations 7,149,000 6,499,000
Income from disposal of
discontinued operations 0 319,000
Net income $7,149,000 $6,818,000
Earnings per share
of common stock:
Basic:
Continuing operations $.37 $.33
Discontinued operations 0 .02
Total $.37 $.35
Diluted:
Continuing operations $.36 $.32
Discontinued operations 0 .02
Total $.36 $.34
Average shares outstanding:*
Basic 19,296,634 19,565,852
Diluted 19,866,138 20,202,524
Six Months Ended
June 30
1998 1997
Net sales $171,398,000 $158,927,000
Income from continuing
operations before taxes 23,059,000 20,384,000
Provision for taxes 8,416,000 7,583,000
Income from continuing
operations 14,643,000 12,801,000
Income from disposal of
discontinued operations 0 319,000
Net income $14,643,000 $13,120,000
Earnings per share
of common stock:
Basic:
Continuing operations $.76 $.64
Discontinued operations 0 .01
Total $.76 $.65
Diluted:
Continuing operations $.74 $.62
Discontinued operations 0 .01
Total $.74 $.63
Average shares outstanding:*
Basic 19,292,909 20,063,180
Diluted 19,910,878 20,727,726
Balance Sheet Data:
As of
June 30, 1998 Dec. 31, 1997
Cash and cash equivalents $41,335,000 $43,266,000
Working capital 94,394,000 86,497,000
Total assets 214,777,000 207,091,000
Stockholders' equity 136,890,000 127,523,000
Book value per common share $7.12 $6.63
* The number of shares outstanding for the periods ended June 30, 1997
have been adjusted retroactively to reflect the 3 for 2 stock split
effected in December 1997.