Safety Components International, Inc. Posts Q1 Results
11 August 1998
Safety Components International, Inc. Announces Fiscal 1999 First Quarter Results and Additional Awards From a Major Module Supplier
FORT LEE, N.J., Aug. 10 -- Safety Components International,
Inc. , one of the world's leading manufacturers of automotive
airbag fabric and cushions, today reported results for the quarter ended
June 27, 1998. Sales for the quarter increased to $51,449,000 from
$27,629,000 for the previous year's comparable quarter. The Company reported
net income of $1,547,000, or $0.31 per basic share, for the quarter, compared
to net income of $1,435,000, or $0.29 per basic share, for the same period in
the prior year.
Of particular note, earnings before interest, taxes, depreciation and
amortization (EBITDA) increased $3,891,000 to $7,913,000, or $1.56 per basic
share, for the first quarter of fiscal 1999, compared to $4,022,000, or $0.80
per basic share, in the comparable 1998 quarter.
"These results are indicative of the strides we are making in our air
restraint businesses," stated Robert A. Zummo, president and chief executive
officer of Safety Components International, Inc.
It should be noted that for the quarter ended June 27, 1998, interest
expense as a percentage of revenue increased to 5 percent from 2 percent for
the first quarter of fiscal 1998. The increase in interest expense is
attributable to the issuance of $90 million in senior subordinated debt in
connection with the company's July 1997 acquisition of the Air Restraint and
Technical Fabrics Division of JPS Automotive, L.P., now Safety Components
Fabric Technologies, Inc.
"We are pleased to report these strong results in the first quarter
despite a small impact of the General Motors strike and price decreases to our
customers," added Mr. Zummo. "With the recent significant awards from our new
and existing customers, we are currently tailoring our business structure to
meet the increased volume demands, while controlling costs to improve margins.
However, the General Motors strike will have a greater impact on earnings in
our second fiscal quarter."
In addition, the Company announced that its North American automotive
group was awarded an additional 650,000 airbags ($4.3 million) from a major
module supplier. North American orders from this new customer now aggregate
in excess of 3.7 million airbag cushions and $43 million in annual revenues
once full production commences. Production for orders with this new customer
began in the fourth quarter of fiscal 1998, and full production on all awards
is expected to be reached by the end of the first quarter of fiscal 2000.
The Company also announced awards from this new customer in Europe.
Production for these awards is scheduled to begin in the fourth quarter of
fiscal 2000 and should approximate 900,000 airbags and $7 million of revenue
per year once full production commences in calendar 2001. "We are very
excited about broadening our relationship with this new customer to include
business for our European operations. Safety Components continues to believe
we are well positioned to expand the awards from this new customer even
further in both North America and Europe," added Mr. Zummo.
As previously announced, Safety Components has received significant
additional airbag cushion orders from an existing European customer to
increase annual volumes from this module supplier to 5 million airbag cushions
annually from approximately 3 million airbag cushions delivered in fiscal
1998. "As a result of our strategic movements in Europe, we feel we are well
positioned to successfully provide this important module supplier with the
additional volume during fiscal 1999 and beyond," Zummo continued.
This release contains forward looking statements. There are certain
important factors that could cause results to materially differ from those
anticipated from the statements above. These factors include, but are not
limited to: worldwide economic conditions; automotive industry trends;
approval of automobile manufacturers of airbag cushions currently in
production; pricing pressures; and the ability to satisfy our customers on
timeliness and quality. Additional information on these and other factors
that could potentially affect the company's financial results may be found in
the company's filings with the Securities and Exchange Commission.
Safety Components International, Inc. is a leading, low-cost supplier of
automotive airbag fabric and cushions with operations in North America, Europe
and Asia. The company is also a leading manufacturer of value-added synthetic
fabrics used in a variety of niche industrial and commercial applications. In
addition, Safety Components supplies metal airbag components to its airbag
customers utilizing its machining and stamping capabilities gained from years
of experience as a military ordnance manufacturer and continues as a systems
integrator and manufacturer for ordnance programs.
Safety Components International, Inc.
Consolidated Statements of Operations
(in thousands, except per share data)
Thirteen Three
Weeks Ended Months Ended
June 27, 1998 June 30, 1997
Net sales $ 51,449 $ 27,629
Cost of sales, excluding
depreciation 40,318 21,156
Depreciation 1,866 805
Gross profit 9,265 5,668
Selling and marketing expenses 647 288
General and administrative
expenses 2,571 2,163
Amortization of goodwill 560 185
Income from operations 5,487 3,032
Other expense, net 44 118
Interest expense 2,803 523
Income before income taxes 2,640 2,391
Provision for income taxes 1,093 956
Net income $ 1,547 $ 1,435
Net income per share, basic $ 0.31 $ 0.29
Weighted average number of shares
outstanding, basic 5,068 5,021
EBITDA $ 7,913 $ 4,022
EBITDA per share $ 1.56 $ 0.80