Standard Products Reports Fiscal 1999 First Quarter Results
20 October 1998
Standard Products Reports Fiscal 1999 First Quarter Results
DEARBORN, Mich., Oct. 20 -- The Standard Products Co.
today announced results for its first quarter of fiscal 1999,
ended September 30, 1998. Net income for the quarter was $0.4 million, or
$0.03 diluted earnings per share of common stock, on sales of $231.8 million.
This compares with net income of $2.8 million, or $0.17 diluted earnings per
share, on sales of $246.2 million in the first quarter a year ago.
"This quarter's results reflect the impact of several factors, the most
significant of which were the downturn in the economy of Brazil and the strike
against General Motors," said Vice Chairman and CEO Ron Roudebush. The
Company expects to recover the profits lost due to the GM strike over the
remainder of fiscal 1999.
First quarter sales for the Company's Transportation Equipment segment
were $197.9 million, a 7.3 percent decrease from 1998 first quarter sales of
$213.3 million. North American automotive sales declined by 14.1 percent from
$122.2 million to $105.0 million. Decreased production related to the UAW
strike against General Motors, the balancing out of some existing programs,
and exchange rate changes on the Canadian dollar all contributed to the North
American sales decline. Sales in the Company's European automotive group
increased by 5.4 percent compared with the same period last year, going from
$47.2 million in fiscal 1998 to $49.8 million in fiscal 1999. First quarter
sales in Brazil declined by $6.3 million, or 32.0 percent, from the same
period in fiscal 1998, when sales were $19.7 million.
Sales of the Company's Holm Industries subsidiary were up significantly
from last year's first quarter. The increase of $5.6 million, or 23.0
percent, includes the sales of its most recent acquisition OEM/Miller.
OEM/Miller was acquired on August 14, 1998. The Company's Tread Rubber
segment experienced a sales increase of 3.4 percent compared with the first
quarter of last year. This improvement resulted from increased sales to
Michelin.
"The global environment for the automotive industry is a concern for the
Company over the rest of the fiscal year," said Mr. Roudebush. "In
particular, the sharp decline in vehicle production in Brazil which has
resulted from the current economic uncertainty in that country is having a
significant impact on the Company's performance. We do not anticipate that
conditions in Brazil will improve in the near future," he added. "As a
result, our performance in Brazil will not meet our original expectations for
fiscal 1999. Because of this, and because of reduced profitability in our
European operations, we do not expect the Company to exceed its record
earnings performance of fiscal 1998. In addition to our Low Cost Producer
initiatives, we are reviewing our cost structure and will take the necessary
actions to more closely align it with global market conditions."
Certain statements in this press release, especially those concerning the
Company's future earnings, 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 general risks and uncertainties, including economic and industry
conditions that affect all international businesses, as well as specific
risks, including but not limited to a prolonged recession in Brazil, and the
various factors contained in the reports filed by the Company with the
Securities and Exchange Commission.
Standard Products produces highly engineered polymer-based products and
systems on a global basis for the automotive, appliance and construction
industries. More information may be found on the Internet at
http://www.standardproducts.com.
THE STANDARD PRODUCTS COMPANY
Consolidated Earnings Summary (Unaudited) (000 omitted)
Three Months
Periods ended September 30, 1998 1997
Net sales $231,815 $246,173
Costs and expenses:
Cost of goods sold 209,428 218,936
Selling, general and
administrative expenses 18,173 17,323
Interest expense 2,973 2,956
Other (income) expense 563 2,386
Income before taxes on income $678 $4,572
Provision for taxes on income 244 1,761
Net income $434 $2,811
Per share of common share:
Basic $0.03 $0.17
Diluted $0.03 $0.17
Dividends $0.17 $0.17
Average shares outstanding:
Basic 16,698 16,826
Diluted 16,747 16,879