R&B Reports 1998 Third-Quarter Financial Results
30 October 1998
R&B Reports 1998 Third-Quarter Financial Results; Results In Line With Previously Announced Expectations
COLMAR, Pa., Oct. 30 -- R&B, Inc., today
announced financial results for its third quarter ended September 26, 1998.
Net sales for the third quarter of 1998 increased 9.0 percent to a record
$44.5 million from $40.8 million for the comparable period a year ago. Net
income rose to $2.5 million, a 7.4 percent increase from last year's third
quarter net income of $2.3 million. Earnings per share on a diluted basis of
$0.30 were up 3.4 percent over the $0.29 posted for the third quarter last
year.
"Although earnings for the quarter did not meet our initial expectations,
we were extremely pleased that our sales, operating income and net income rose
to record levels for the second consecutive quarter," commented Richard
Berman, President of R&B. "As we announced on September 23rd, our results for
the quarter were negatively affected by three events: integrating the Champ
acquisition, moving inventory between facilities, and the installation of the
new computer system."
Mr. Berman continued, "Complications transitioning to the new system
caused third-quarter fill rates to fall from their traditionally high levels,
affecting both sales and expense levels as we worked to correct the problems.
I am pleased to report that our relationships with our customers remain strong
and that as of today, fill rates are showing improvement."
"One of the most disappointing aspects for us is that this occurred at a
time when so many parts of the company are shining. Scan-Tech continues to
meet our expectations. MPI took advantage of the GM strike and saw solid
sales increases for the quarter. Our acquisition of Allparts, which closed
October 28th, holds tremendous opportunity for the Company. In addition to
the sales and net income records, we improved our gross margin."
For the nine months ended September 26, 1998, net sales rose 9.1 percent
to $125.6 million from $115.1 million posted for the comparable period of
1997. Net income grew 9.4 percent to $6.1 million, or $0.72 per diluted
share, from $5.5 million, or $0.69 per share, posted for the prior-year nine-
month period.
"While the computer problems will carry into the fourth quarter, we are
confident that we can correct the remaining issues within a short period of
time and be well underway to re-establishing our superior level of service
with all customers by the end of this year," concluded Mr. Berman. "Combined
with our many growth initiatives, we remain very optimistic for continued
improvement for the fourth quarter to close another record year."
R&B, Inc. is a leading supplier of "hard-to-find" parts and fasteners for
the automotive aftermarket. R&B's parts are marketed under more than fifty
proprietary brand names, through its Motormite and Dorman divisions, as well
as under the private labels of automobile manufacturers, parts manufacturers,
and national warehouse distributors.
Forward looking statements in this release are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.
Such forward looking statements are subject to certain risks and uncertainties
that could cause actual results to differ materially from those projected.
Readers are cautioned not to place undue reliance on these forward looking
statements which speak only as of the date hereof. Factors that cause actual
results to differ materially include, but are not limited to, those factors
discussed in the Company's Annual Report on Form 10-K under "Business -
Investment Considerations."
R&B, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)(1)
(in thousands, except per-share amounts)
13 weeks ended 9/26/98 Pct. 9/27/97 Pct.
Net sales $44,509 100.0 $40,817 100.0
Cost of goods sold 26,479 60.4 24,669 60.8
Gross profit 18,030 39.6 16,148 39.6
Selling, general and
administrative expenses 13,057 29.3 11,525 28.2
Income from operations 4,973 11.2 4,623 11.3
Interest expense, net 1,040 2.3 974 2.4
Income before taxes 3,933 8.8 3,649 8.9
Provision for taxes 1,430 3.2 1,319 3.2
Net income 2,503 5.6 2,330 5.7
Earnings per share
Basic $.30 -- $.29 --
Diluted $.30 -- $.29 --
Average shares outstanding
Basic 8,337 -- 8,031 --
Diluted 8,438 -- 8,031 --
39 weeks ended 9/26/98 Pct. 9/27/97 Pct.
Net sales $125,568 100.0 $115,075 100.0
Cost of goods sold 75,912 60.5 69,708 60.6
Gross profit 49,656 39.5 45,367 39.4
Selling, general and
administrative expenses 37,047 29.5 33,527 29.1
Income from operations 12,609 10.0 11,840 10.3
Interest expense, net 3,063 2.4 3,129 2.7
Income before taxes 9,546 7.6 8,711 7.6
Provision for taxes 3,479 2.8 3,167 2.8
Net income 6,067 4.8 5,544 4.8
Earnings per share
Basic $.73 -- $.69 --
Diluted $.72 -- $.69 --
Average shares outstanding
Basic 8,323 -- 8,028 --
Diluted 8,424 -- 8,028 --
R&B, INC. AND SUBSIDIARIES
Consolidated Balance Sheets(l)
(in thousands)
(Unaudited)
Assets 9/26/98 12/27/97
Cash and cash equivalents $15,666 $1,601
Accounts receivable 40,466 37,536
Inventories 49,202 38,264
Deferred income taxes 1,186 1,186
Prepaid expenses and other 2,178 1,461
Property & equipment 18,019 16,382
Intangible assets 31,104 29,747
Other assets 4,713 2,530
Total assets $162,831 $128,707
Liabilities and Shareholders, Equity
Current portion of long-term debt $1,911 $6,611
Accounts payable 12,812 8,982
Accrued expenses and other 9,582 5,846
Long-term debt 66,597 44,336
Deferred income taxes 1,770 1,770
Shareholders, equity 70,159 61,162
Total liabilities and equity $162,831 $128,707
(1) Totals may not add due to rounding.
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