Hilite Industries, Inc. Reports Q1 Fiscal 1999 Results
27 October 1998
Hilite Industries, Inc. Reports Strong Sales and Fifty Percent Earnings Increase for the First Quarter of Fiscal 1999.
CARROLLTON, Texas--Oct. 27, 1998--Hilite Industries, Inc. (the “Company” or “Hilite”) reported strong sales and a fifty percent earnings increase for the first quarter of fiscal 1999.Sales for the quarter ended September 30, 1998 were $21,316,000, an increase of $286,000 over sales of $21,030,000 for the first quarter of fiscal 1998. Earnings in the first quarter of fiscal 1999 improved by $401,000 or 50% to $1,193,000 ($0.24 per share) from $792,000 ($0.16 per share) in the first quarter of fiscal 1998. In addition, the Company's Board of Directors approved (by unanimous written consent) a cash dividend of $0.025 per share for the first quarter. The Board of Directors set a record date of November 6, 1998 for the cash dividend distribution, which is expected to be distributed on or about November 20, 1998. Subsequent quarterly dividends will depend upon future operating results. Shareholders' equity per share was $5.56 at September 30, 1998, an increase over the $5.34 per share at June 30, 1998.
Dan Brady, CEO of Hilite Industries, commented on the quarter's results: “After completing a record year for sales and earnings in fiscal 1998, these first quarter operating results, which includes a 50% increase in earnings from the prior year, represent an excellent beginning for fiscal 1999. We are pleased and encouraged that for the first time in the Company's history, trailing twelve-month earnings reached $1.00 per share. As was projected, new business in the brake valve and power transmission components divisions more than offset the planned reduction in sales in the specialty components and assembly division because of unprofitable products being eliminated as part of the restructuring program for the division. Earnings improved because the new business carries higher margins than the business being eliminated.
"Brake valve sales increased to $7,588,000 from $5,974,000, representing a 27.0% increase, resulting primarily from the increased valve sales to General Motors as well as increases in sales of relief valves, a new product for the Company. Power transmission components sales increased $1,569,000 or 27.2% to $7,329,000 for the first quarter of 1999 as compared to $5,760,000 for the same period last year. This increase resulted from sales of transfer case components, which the Company began producing in late 1998. These transfer cases are used in popular 4-wheel drive SUVs. Specialty components and assemblies division sales decreased from $9,296,000 for the first quarter of fiscal 1998 to $6,399,000 for the same period in fiscal 1999. This decrease resulted from the elimination of numerous unprofitable parts in conjunction with the restructuring of the division and from lower sales to Motorola as the Company benefited from a significant one-time sales opportunity in fiscal 1998."
“As we begin the second quarter, automotive build rates continue to be strong. At these levels, we are encouraged to anticipate that annual sales for the brake valve and power transmission components divisions will more likely be toward the upper end of our earlier projections for sales increases of 12 to 15% for the brake valve and power transmission components divisions. Sales for the specialty components division for fiscal 1999 are expected to approximate our earlier projection of $26 million. The excellent internal growth that is occurring in two divisions because of innovative product engineering is being obscured in fiscal 1999 by the impact of the restructuring of the specialty components and assemblies division. Given that the sales growth is expected to be in more profitable product lines, improvement in earnings should be achieved in fiscal 1999. Looking farther ahead, we are encouraged by the opportunities for all three divisions and believe that an 8% to 12% annual internal sales growth goal for the year 2000 and beyond is reasonable. Of course, this assumes a healthy economy and automotive industry.”
Except for historical information, certain statements contained herein are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” or variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve unknown risks and uncertainties, which may cause the Company’s actual results in future periods to differ materially from forecasted results. Those risks include, among others, risks associated with changes in automotive and non-automotive build rates as well as risks associated with the manufacturing process and start-up of new products and risks related to technological changes in components which affect the life of the product. Further, there can be no assurance that the contingency related to a possible involvement of the Company in a previously announced Ford Owner Notification Program will be resolved in a manner consistent with the Company’s expectations or without affecting the Company’s attempt to regain its Q1 quality status at Visteon. These and other risks are described in the Company’s Form 10-K filed with the Securities and Exchange Commission (SEC) on September 28, 1998 and Forms 10-Q filed quarterly with the SEC, copies of which are available from the SEC or may be obtained upon request from the Company. The Company does not undertake any obligation to update or revise any forward-looking statements
Hilite Industries, Inc. designs, manufactures and sells a diversified line of highly engineered components and assemblies for the automotive industry including brake proportioning valves, electromagnetic clutches, machined components such as mounting brackets and pulleys, and specialty components and assemblies such as stampings, specialty springs and automated assemblies. The Company’s customers include all three domestic automotive companies: Ford Motor Company, General Motors Corporation and Chrysler Corporation as well as other original equipment manufacturers such as Navistar International Transportation Corporation and non-automotive companies such as Motorola, Inc. The Company also sells products to first-tier suppliers of the automotive industry including Borg-Warner Corporation, Bosch Braking Systems Corporation, Denso of Los Angeles, Inc. and ITT Automotive of North America, Inc.
For further information call Investor Relations at 972/466-0475 or access Hilite Industries, Inc.’s website at www.hilite-ind.com.
HILITE INDUSTRIES, INC.
Financial Highlights
(In Thousands, Except Share and Per Share Data)
Three Months Ended
Sept. 30,
1998 1997
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Income Statement Data:
Brake Valves $7,588 $5,974
Power Transmission Components 7,329 5,760
Specialty Comp. and Assemblies 6,399 9,296
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Net Sales 21,316 21,030
Gross Profit 4,544 4,064
Operating Income (Loss) 2,248 1,660
Net Income (Loss) 1,195 792
Earnings (Loss) Per Share $0.24 $0.16
Weighted average number of
shares outstanding 4,900 4,900
Sept. 30, 1998 June 30, 1998
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Balance sheet data:
Working capital $15,915 $10,569
Property, plant, equipment, net 27,859 27,616
Total assets 60,055 57,356
Long-term obligations /a 17,416 12,957
Total liabilities 32,834 31,209
Shareholders' equity 27,221 26,147
/a Includes noncurrent portion of long-term debt