Hilite Industries, Inc. Reports Record Sales and Earnings
28 July 1998
Hilite Industries, Inc. Reports Record Sales and Earnings for Fiscal 1998
CARROLLTON, Texas, July 28 -- Hilite Industries, Inc.
(the "Company" or "Hilite") reported record sales and earnings
for the 1998 fiscal year. Earnings per share for the 1998 fiscal year were a
record $0.92 per share as compared to the previous record of $0.74 per share
in fiscal 1996. In fiscal 1997 a loss of $0.34 per share was incurred. Net
income for fiscal 1998 was $4,512,000 on sales of $87,167,000 as compared to a
fiscal 1997 net loss of $1,657,000 on sales of $73,492,000. The fiscal 1997
loss, which was entirely attributable to the specialty components and
assemblies division, included a fourth quarter after tax charge of $1,757,000,
or $0.36 per share, related to the restructuring of that division.
Shareholders' equity at June 30, 1998 was $5.34 per share a 19% improvement
over the prior year.
For the fourth quarter of fiscal 1998 net income was $1,318,000, or $0.27
per share on sales of $23,401,000. In the fourth quarter of fiscal 1997,
there was a loss of $1,420,000 or $0.29 per share on sales of $20,310,000.
Daniel W. Brady, CEO of Hilite Industries, Inc. commented on the year's
results: "Fiscal 1998 was an exceptional year of positive accomplishments for
Hilite. Sales and earnings were at all time record levels. All three
divisions of the Company contributed to the overall increase in net sales in
fiscal 1998 of 18.6% compared to the prior year. Brake valve division sales
increased 24.0%; power transmission components division sales increased 9.2%
and the specialty components and assemblies division sales increased 21.5%.
Profit margins also improved significantly. Gross profit for the year was 20%
and operating income was 9.6% of sales. The Company achieved an 18.7% return
on average shareholders' equity. We believe that these financial results
place Hilite among the best automotive parts suppliers on the basis of growth
and profitability. We are especially pleased that once again we have achieved
our corporate goals of growing faster than industry automotive sales and
secondly, achieving growth and profitability that ranks with the best
automotive parts suppliers."
"The success of this year is primarily attributable to new business for
the brake valve and power transmission components divisions and to the
restructuring of the specialty components and assemblies division.
New business opportunities are the result of the Company's consistent
investment in engineering and research and development. We believe that this
substantial focus on engineered products is what distinguishes Hilite from
many automotive component suppliers and is the primary contributor to our
future sales growth. In fiscal 1998, we continued our trend of expanding our
engineered products by adding new brake valve products, clutch related
products and automated assemblies. We believe Hilite has been successful in
getting new business because we find opportunities to provide technically
improved products while saving our customers money. Recently, the Company
received formal recognition from Chrysler for providing them with cost
reductions of approximately $4,000,000 through design engineering changes."
"The restructuring of the specialty components and assemblies division,
which included the elimination of approximately $8,000,000 of unprofitable and
commodity products, was substantially complete by fiscal year end. The
division benefited during the year by increased pricing on the products being
eliminated and by a one-time opportunity of non-automotive product sales. The
task of the division for fiscal 1999 is to grow the division's sales and
profitability with focus on value added products. We also will continue to
work toward regaining the division's Q1 rating from the Visteon division of
Ford and resolving the previously disclosed owner notification issue with the
same division without a material impact. Our expected sales for the division
for fiscal 1999 are approximately $26,000,000."
"Both the brake valve and power transmission components divisions will
show strong sales momentum in fiscal 1999 with sales improvement in each
division expected of between 12% to 15%. The sales improvement in these
divisions should substantially offset the reduction in sales of the specialty
components and assemblies division and, because the expected sales growth is
in more profitable product lines, improvement in earnings should result in
fiscal 1999. This assumes that automotive build rates remain at current
levels and that the General Motors strike is not prolonged. Sales of all
products used on General Motors vehicles approximate 8% of Company sales.
However, the ultimate effect on the Company will depend upon how long the
strike lasts and what models are affected."
"Looking longer term, we are excited about the opportunities for Hilite's
growth which have never been more promising. We will continue to invest in
product research, engineering and market development to maintain an aggressive
growth plan for the year 2000 and beyond."
Except for historical information, certain statements contained herein are
forward-looking statements that are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Art of 1995. Words
such as "expects," "anticipates," "intends," "plans," "believes," "seeks,"
"estimates," or variations of such words and similar expressions are intended
to identify such forward-looking statements. These statements are not
guarantees of future performance and involve unknown risks and uncertainties,
which may cause the Company's actual results in future periods to differ
materially from forecasted results. Those risks include, among others, risks
associated with changes in automotive and non-automotive build rates as well
as risks associated with the manufacturing process and start-up of new
products and risks related to technological changes in components which affect
the life of the product. Further, there can be no assurance that the
contingency related to a possible involvement of the Company in a previously
announced Ford Owner Notification Program will be resolved in a manner
consistent with the Company's expectations or without affecting the Company's
attempt to regain its Q1 quality status at Visteon. These and other risks are
described in the Company's Form 10-K filed with the Securities and Exchange
Commission (SEC) on September 29, 1997 and Forms 1O-Q filed quarterly with the
SEC, copies of which are available from the SEC or may be obtained upon
request from the Company. The Company does not undertake any obligation to
update or revise any forward-looking statements.
Hilite Industries, Inc. designs, manufactures and sells a diversified line
of highly engineered components and assemblies for the automotive industry
including brake proportioning valves, electromagnetic clutches, machined
components such as mounting brackets and pulleys, and specialty components and
assemblies such as stampings, specialty springs and automated assemblies. The
Company's customers include all three domestic automotive companies: Ford
Motor Company, General Motors Corporation and Chrysler Corporation as well as
other original equipment manufacturers such as Navistar International
Transportation Corporation and non-automotive companies such as Motorola, Inc.
The Company also sells products to first-tier suppliers of the automotive
industry including Borg-Warner Corporation, Bosch Braking Systems Corporation,
Denso of Los Angeles, Inc. and ITT Automotive of North America, Inc.
For further information call Investor Relations at 972-466-0475 or access
Hilite Industries, Inc.'s website at http://www.hilite-ind.com.
HILITE INDUSTRIES, INC.
Financial Highlights
(In Thousands, Except Share and Per Share Data)
Three Months Ended Year Ended
June 30, June 30,
1998 1997 1998 1997
Income Statement Data:
Brake Valves $7,667 $5,626 $27,525 $22,195
Power Transmission
Components 7,202 5,925 23,761 21,762
Specialty Comp. and
Assemblies 8,535 8,759 35,881 29,535
Net Sales 23,404 20,310 87,167 73,492
Gross Profit 4,602 2,457 17,403 9,554
Operating Income (Loss) 2,355 (1,849) 8,377 (786)
Net Income (Loss) 1,318 (1,420) 4,512 (1,657)
Earnings (Loss) Per
Share $0.27 $(0.29) $0.92 $(0.34)
Weighted average number
of shares outstanding 4,900 4,900 4,900 4,900
As of As of
June 30, 1998 June 30, 1997
Balance sheet data:
Working Capital $10,569 $8,329
Property, plant,
equipment, net 27,616 26,323
Total assets 57,356 57,219
Long-term
obligations (A) 12,957 18,271
Total liabilities 31,208 35,216
Shareholders' equity 26,148 22,004
(A) Includes noncurent portion of long-term debt