Standard Products Reports FY 1998 Fourth Quarter Results
28 July 1998
Standard Products Reports FY 1998 Fourth Quarter Results
DEARBORN, Mich., July 28 -- The Standard Products Co.
today announced results for its fourth quarter and fiscal year
ended June 30, 1998. Net income for the quarter was $18.3 million, or $1.08
diluted earnings per share of common stock. This compares with record net
income of $19.3 million, or $1.14 diluted earnings per share, in the fourth
quarter last year. Sales for the fourth quarter were $294.6 million compared
with $294.3 million in the fourth quarter of fiscal 1997. As previously
announced, fourth quarter sales and earnings were negatively impacted by the
United Auto Workers' strike against General Motors. The strike reduced
earnings by an estimated $0.10 diluted earnings per share.
For fiscal year 1998, Standard Products reported sales of $1,101.3
million, compared with record sales of $1,108.3 million in fiscal 1997. Net
income for the year was $43.4 million, or $2.56 diluted earnings per share,
compared with $27.5 million, or $1.63 diluted earnings per share last year.
Full year results for last year included a third-quarter charge against
earnings of $17.7 million, pre-tax, or $0.63 diluted earnings per share,
related to the closing of two U.S. automotive parts plants. In addition, the
Company expensed costs related to the closings that did not qualify for
immediate accrual of approximately $0.03 per share in the third quarter and
$0.03 per share in the fourth quarter of fiscal 1997. Excluding these
charges, income for fiscal 1997 was $39.1 million, or $2.32 diluted earnings
per share.
Fourth quarter sales for the North American Automotive segment declined
$4.8 million, or 3.1 percent, from the same period last year. Sales were
negatively impacted by the United Auto Workers' strike against General Motors
as well as a strengthening of the U.S. dollar compared to the Canadian dollar.
These were partially offset by stronger volumes on vehicles such as the
Chrysler minivan and Neon.
Sales in Brazil for the quarter were $18.8 million, or 5.3 percent higher
than the fourth quarter of fiscal 1997. Sales in the European Automotive
segment increased 1.9 percent, or roughly $1.2 million, from the same period
in fiscal 1997, due primarily to increased volume on the Opel Astra and other
lower volume platforms. These volume increases more than offset currency
changes, which reduced U.S. dollar sales by $1.3 million.
Sales at Holm Industries for the quarter increased 12.5 percent over prior
year levels, primarily due to higher volumes from existing customers. Sales
in the Tread Rubber segment increased 4.1 percent to $39.3 million. The
increase resulted from higher sales of precure rubber products and greater
intercompany sales to the automotive group.
"This is our third consecutive year of improved gross margins," said Vice
Chairman and CEO Ron Roudebush. "In addition, excluding the charge for plant
closings, the Company achieved a year-over-year increase in net income of
10.3 percent. This is proof of how deeply entrenched our Low Cost Producer
strategy is in the Company.
"A continued focus on cost reductions and sales growth through expansion
of our core businesses and complementary acquisitions are key objectives for
the Company in fiscal 1999," he added. "Our recently announced agreement to
purchase the assets of corrugated plastic tubing manufacturer OEM/Miller
Corporation is in line with this strategy."
Certain statements in this press release constitute "forward-looking
statements" as that term is defined under the Private Securities Litigation
Reform Act of 1995. The achievement of the projections and estimates set
forth is subject to certain risks and uncertainties including general economic
and industry conditions that affect all international businesses, as well as
matters that are specific to the Company and the markets it serves.
Standard Products manufactures sealing, trim and vibration control systems
for the automotive original equipment industry in North and South America and
Europe. Its Holm Industries subsidiary produces seals for residential and
commercial appliances, doors and windows. Its Oliver Rubber subsidiary
manufactures tread rubber and equipment for the retread industry.
THE STANDARD PRODUCTS COMPANY
Consolidated Earnings Summary (Unaudited) (000 omitted)
Three Months Twelve Months
Periods ended June 30 1998 1997 1998 1997
Net sales $294,649 $294,263 $1,101,309 $1,108,268
Costs and expenses:
Cost of goods sold 241,310 244,555 935,340 962,812
Selling, general and
administrative expenses 21,146 16,786 78,025 68,559
Non-recurring charge -- -- -- 17,661
Interest expense 3,062 3,162 12,389 12,914
Other (income) expense 1,375 845 7,033 (137)
Income before taxes
on income 27,756 28,915 68,522 46,459
Provision for taxes
on income 9,443 9,640 25,078 18,929
Net income $18,313 $19,275 $43,444 $27,530
Per share of common stock:
Basic $1.09 $1.15 $2.58 $1.64
Diluted $1.08 $1.14 $2.56 $1.63
Average shares outstanding:
Basic 16,867 16,809 16,849 16,804
Diluted 17,013 16,845 16,975 16,856