Walbro Corporation Reports Third Quarter Results
22 October 1998
Walbro Corporation Reports Third Quarter Results, Notes Significant Gains in Earnings From Operations
CASS CITY, Mich., Oct. 21 -- Frank E. Bauchiero, President
and Chief Executive Officer, Walbro Corporation , reported sales
of $165,648,000 for the third quarter ended September 30, 1998, compared with
sales of $146,523,000 for the third quarter of 1997, an increase of 13
percent.
Net income was $538,000 for the third quarter of 1998 compared with a loss
of $1,186,000 for the same period in 1997. Net income per share was $0.06 for
the third quarter of 1998, compared with a loss of $0.14 for the same period
in 1997. Average shares outstanding for the third quarter were 8,688,282 in
1998 and 8,664,420 in 1997.
"Third quarter sales rose 13 percent while earnings from operations
increased nearly 200 percent compared with the third quarter of 1997,"
Bauchiero said in announcing the results. "Sales increased 11 percent in the
first nine months of 1998 while earnings from operations increased 61 percent.
Our efforts to improve operating efficiency are continuing to have a positive
effect."
"Worldwide sales of Walbro's automotive products were up 11 percent in the
third quarter," Bauchiero noted. "North American automotive sales were up
five percent, despite the General Motors strike that affected a portion of the
quarter. Sales of automotive products in Europe were also up during the
quarter. However, sales in Brazil were down due to unstable economic
conditions and poor vehicle sales in that market."
"Overall sales of small engine products increased 17 percent in the third
quarter, with significant gains in our facilities in China, Japan and Mexico,"
the Walbro chief executive noted.
"Sales of replacement products for automotive applications were also up
significantly in the quarter, helping the Aftermarket Division post a 31
percent sales gain for the quarter compared with the same period in 1997,"
Bauchiero said.
"Income from operations rose dramatically in the third quarter," Bauchiero
noted. "Gross margin from North American automotive operations increased 63
percent due to higher volume and improved efficiency at our Ossian, Indiana,
and Meriden, Connecticut, fuel tank system facilities. In addition, the
disposition of the former Walbro facility in Ligonier, Indiana, helped improve
profitability in comparison with 1997."
"Profits from Walbro's small engine operations were up overall, with
plants in Mexico, Japan and China posting improved earnings. Aftermarket
operations posted a 43 percent gain in gross margin for the quarter. Gross
margin at our European automotive operations dropped slightly in the third
quarter due to start-up costs related to new fuel tank programs," he added.
"While income from operations increased dramatically for the quarter, net
income was affected by increased interest expense and reduced profits from
joint ventures, especially start-up costs at VITEC, our partnership in
Detroit's Empowerment Zone," Bauchiero said. "Even so, third quarter net
income represents a significant improvement over the year-ago period."
"The recent quarter represents the third consecutive profitable quarter
for Walbro. We expect that trend to continue in the fourth quarter and into
the next year, as we increase our focus on continuous improvement," Bauchiero
said.
Walbro Corporation is a designer and manufacturer of precision fuel
systems and products for automotive and small engine markets. Walbro
Corporation has subsidiaries and joint ventures throughout the world,
including North and South America, Europe and Asia. Walbro common stock is
traded on the Nasdaq National Market under the symbol WALB.
This press release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. Actual results may
differ materially from anticipated results due to certain risks and
uncertainties, including but not limited to general economic conditions in the
markets in which Walbro operates, fluctuations in the production of vehicles
for which Walbro is a supplier, labor disputes involving Walbro or its
significant customers, risks associated with conducting business in foreign
countries and other risks detailed from time to time in the Company's
Securities and Exchange Commission filings.
WALBRO CORPORATION
(In thousands, except share data)
Three Months Ended Nine Months Ended
September 30 September 30
1998 1997 1998 1997
Net Sales $165,648 $146,523 $503,076 $454,384
Income Before
Extraordinary Item 538 (1,186) 2,678 2,360
Extraordinary Item, Net - - (1,473) -
Net Income $538 $(1,186) $1,205 $2,360
Income Per Share
Before Extraordinary Item $.06 $(.14) $.31 $.27
Extraordinary Item
Per Share - - (.17) -
Net Income Per Share $.06 $(.14) $.14 $.27
Average Shares
Outstanding 8,688,282 8,664,420 8,685,512 8,657,507
EBITDA* $18,662 $13,173 $59,140 $46,091
* Earnings before interest and taxes, plus depreciation and amortization.