Control Devices, Inc. Announces Q3 Results
15 October 1998
Control Devices, Inc. Announces Third Quarter Results
STANDISH, Maine--Oct. 15, 1998--Control Devices, Inc. today reported net income for the quarter ended September 30, 1998 increased 49% to $1.8 million or $0.21 per share (diluted), compared to $1.2 million or $0.14 per share (diluted) for 1997.
Sales increased 18% to $19.0 million from 1997 results of $16.0 million.
Net income was $6.0 million or $0.68 per share (diluted) for the nine months ended September 30, 1998, an increase of 34% from $4.4 million or $0.52 per share (diluted) in the prior year period. Sales for the nine months ended September 30, 1998 were $58.1 million, an increase of 11% from $52.1 million in the first nine months of 1997.
Commenting on the Company's performance, Bruce D. Atkinson, President and Chief Executive Officer of Control Devices stated, "Control Devices continued to record significant gains in revenues and net income in the third quarter despite the negative impacts of both the GM strike and somewhat reduced shipments of ceramic products due to the softening wireless telecommunications market. Strong sales in European markets and the successful introduction of a new non-automotive circuit breaker were the drivers behind the 18% revenue gain. We were especially pleased with the 49% gain in net income considering that the GM strike impact was primarily a third quarter event. Although all indications point to a continued weak wireless telecommunications market for the remainder of 1998, we believe the fundamentals remain solid in this industry and it should recover in 1999. These factors combined with the ongoing investment in new electronic sensor technology are expected to provide Control Devices with continued new business opportunities as we move towards the millennium."
Control Devices is a leading supplier of automatically resetting circuit breakers and sensors, to the automotive market and of glass enclosed circuit breakers to the appliance market. In addition the Company also supplies electronic ceramics to the wireless cellular and PCS telecommunications market. In Europe the Company distributes automotive and electronic components through its subsidiary, RDI. The Company supplies its products to major OEM manufacturers such as GM, Ford, Mercedes, Chrysler, Volkswagen, Danfoss and Peugeot. Control Devices, whose corporate headquarters are in Standish, Maine, also has operations in Caribou, Maine; Southfield, Michigan; Villepinte, France; and the Dominican Republic.
CAUTIONARY STATEMENT: This document contains forward-looking statements which involve risks and uncertainties. The Company's actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such a difference include, but are not limited to, successful introductions of new products and technology, cyclically of automotive and appliance industries, differing opinions as to the application of, or changes to, the percentage of the Company's profits generated by foreign operations, U.S. and foreign tax laws and regulations, risk of customer labor interruptions, successful assimilation of acquisitions, reliance on OEM's, and competing technologies.
CONTROL DEVICES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands Except per Share Amounts, Unaudited )
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
Net sales $ 18,990 $ 16,042 $ 58,116 $ 52,140
Cost of sales 12,228 10,456 37,372 33,036
Gross profit 6,762 5,586 20,744 19,104
Selling, general and
administrative expenses 3,006 2,438 8,684 8,245
Research and development 1,422 1,073 4,053 3,363
Operating income 2,334 2,075 8,007 7,496
Interest expense (income), net (89) 92 (193) 239
Income before income taxes 2,423 1,983 8,200 7,257
Income tax provision 615 769 2,234 2,818
Net income $ 1,808 $ 1,214 $ 5,966 $ 4,439
Earnings per share:
Basic $ 0.22 $ 0.15 $ 0.72 $ 0.54
Diluted $ 0.21 $ 0.14 $ 0.68 $ 0.52
Weighted average number of common
shares and equivalents
outstanding:
Basic 8,296 8,272 8,292 8,272
Diluted 8,794 8,539 8,780 8,488
CONTROL DEVICES, INC.
CONSOLIDATED BALANCE SHEETS
(Amounts in Thousands)
September 30, December 31,
ASSETS 1998 1997
(Unaudited)
Current Assets:
Cash and cash equivalents $ 12,379 $ 9,996
Accounts receivable 14,058 11,311
Inventories 9,133 6,414
Other current assets 2,027 1,595
Total current assets 37,597 29,316
Property, plant and equipment, net 13,469 14,262
Goodwill, net 8,820 7,471
$ 59,886 $ 51,049
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt $ 546 $ 612
Short-term debt 594 320
Accounts payable 6,452 5,706
Accrued employee benefits 5,114 4,250
Accrued expenses 4,471 3,403
Total current liabilities 17,177 14,291
Long-term debt 171 640
Other liabilities 2,431 2,029
Shareholders' Equity:
Common shares 20,135 20,014
Foreign currency translation adjustment (290) (554)
Retained earnings 20,262 14,629
Total shareholders' equity 40,107 34,089
$ 59,886 $ 51,049