Bonded Motors Announces Third Quarter Results
23 October 1998
Bonded Motors Announces Third Quarter Results
LOS ANGELES--Oct. 22, 1998--
Revenues Increase 64%
Adjacent Property Acquisition Planned
Sustainable Growth Forecast
Additional Management Added
Aaron Landon, chairman of the board and chief executive officer of Bonded Motors Inc. (Nasdaq NMS:BMTR) Thursday announced operating results for the third quarter ended Sept. 30, 1998.
Revenues increased 64% to $10.8 million for the quarter versus $6.6 million for the comparable 1997 quarter. Earnings from operations totaled $847,519 for the quarter versus $63,166 for the comparable 1997 quarter. Net income totaled $478,203 or 16 cents per share, versus 7 cents per share for the comparable 1997 quarter.
Commenting on the results, Landon noted, "We continue to be pleased with our growth. Revenues have increased 70% year-to-date, and continue to be strong during the first three weeks of this new quarter.
"Revenues and margins for the September quarter were affected by a 10% higher than normal engine core return ratio from our customers, or approximately $425,000 in revenues and approximately $125,000 in gross profits. Most of this occurred in the month of September. In addition, scrapping from customer returned engine cores exceeded normal limits. The company is taking measures to improve core management and improve its core attrition rate.
"To meet anticipated growing demand for our products in 1999 and beyond, we are currently negotiating for the acquisition of the property adjacent our Los Angeles facility. We are hopeful to have the capacity to produce at a $70 million annual run rate by late next year, and are confident that our existing facilities will satisfy next year's anticipated 30% internal growth.
"To help us manage our sustained growth, I am pleased to announce the addition of Mr. Bill Robinson to our executive management team. Bill has extensive knowledge of, and strong management experience in our industry. He will be joining us as executive vice president within the next two weeks."
Safe Harbor statement under the Private Securities Litigation Reform Act of 1995: The statements in this release regarding the business conditions of the automotive aftermarket for remanufactured engines and the expansion of the company's products, facilities and markets are forward looking statements that include risks and uncertainties, included but not limited to product demand and development, technological advancements, impact of competitive products and pricing, growth in targeted markets, manufacturing capacity, risks of foreign operations, ability to integrate and leverage acquisitions, and other information detailed from time to time in the company's Securities and Exchange Commission filings.
Bonded Motors is a remanufacturer of car and light truck engines with headquarters in Los Angeles, manufacturing facilities in California and Georgia, and distribution centers in California, Washington, Colorado, Ohio, New York, and Georgia. The company's principal customers are automotive parts chain stores such as Pep Boys -- Manny, Moe and Jack , CSK Automotive (Checkers, Schucks, Kragens) , Paccar Automotive (Grand's and Al's Auto Parts) (Nasdaq NMS:PCAR), and Genuine Parts/NAPA .
Bonded Motors Inc.
Balance Sheet
Sept. 30, 1998
(Unaudited)
Assets
Current assets:
Cash $146,142
Trade accounts receivable (less allowance for
doubtful accounts of $143,764) 5,158,162
Inventories:
Parts 2,226,746
Work in process 922,959
Finished goods 6,746,254
9,895,959
Deferred tax assets 573,061
Prepaid expenses and other current assets 348,099
Total current assets 16,121,423
Property and equipment, at cost:
Machinery and equipment 3,114,160
Furniture and fixtures 552,445
3,666,605
Less accumulated depreciation 1,510,101
Net property and equipment 2,156,504
Goodwill, less accumulated amortization
of $23,836 188,043
Deferred tax assets 1,482,822
Other assets 157,380
$20,106,172
Liabilities and Shareholders' Equity
Current liabilities:
Current installments of notes payable to
bank $ 385,128
Accounts payable 2,843,296
Accrued expenses 579,373
Accrued warranty obligations 657,000
Income taxes payable 237,527
Total current liabilities 4,702,324
Obligation under capital leases 31,153
Notes payable to bank, excluding current
installments 336,659
Long-term debt 5,213,131
Shareholders' equity
Preferred stock, no par value. Authorized
1 million shares; none issued and outstanding --
Common stock, no par value. Authorized
10 million shares; issued and outstanding
3,065,540 shares 5,030,319
Additional paid-in capital 99,000
Retained earnings 4,793,586
Notes receivable from exercise of stock
options (100,000)
Total shareholders' equity 9,822,905
$20,106,172
Bonded Motors Inc.
Statement of Earnings
(Unaudited)
For the Three Months For the Nine Months
Ended Ended
Sept. 30, Sept. 30,
1998 1997 1998 1997
Net sales $10,807,015 6,576,528 $30,617,667 17,924,622
Cost of sales 8,622,708 5,504,917 24,440,356 14,272,545
Gross profit 2,184,307 1,071,611 6,177,311 3,652,077
Selling, general and
administrative
expenses 1,336,788 1,008,445 4,203,289 2,762,817
Earnings from
operations 847,519 63,166 1,974,022 889,260
Other (expense)
income:
Interest expense (108,903) (49,806) (364,582) (96,341)
Interest income 2,088 4,084 6,259 12,244
Other -- (3,100) (1,896) (3,100)
Earnings before
income taxes 740,704 14,344 1,613,803 802,063
Income tax
(expense) (262,501) 198,029 (531,064) 121,690
Net earnings $ 478,203 212,373 $1,082,739 923,753
Basic earnings per
share $ 0.16 0.07 $ 0.35 0.31
Diluted earnings per
share $ 0.15 0.07 $ 0.34 0.30
Weighted average common
shares outstanding 3,062,000 3,033,000 3,052,000 3,016,000
Weighted average common and
common equivalent shares
outstanding 3,133,000 3,100,000 3,168,000 3,115,000