Universal Automotive Industries, Inc. Reports Income
13 November 1998
Universal Automotive Industries, Inc. Reports Income From Operations Improves 25 Percent
CHICAGO, Nov. 12 -- Universal Automotive Industries, Inc.
(Nasdaq: UVSL, UVSLW) (CHX: UVS, UVSWS) today reported that in the third
quarter income from operations improved 25% to $559 thousand from
$447 thousand in the same quarter of 1997. For the nine months ended
September 30, 1998, income from operations was $2.2 million or an improvement
of 30% over the same 1997 period. Operating income improved in both periods
due to a changing mix of customers requiring less variable distribution
expenses and a reduction in bad debt expense due to a higher than normal bad
debt provision in 1997.
Total sales and gross profit for the quarter were $16.1 million and
$3.4 million, respectively which were generally flat compared to the third
quarter of 1997. The Company largely replaced a significant reduction in
sales to APS, Inc., formerly the Company's largest customer. APS, Inc. has
been operating as a debtor-in-possession since its bankruptcy filing in
February, 1998. Third quarter sales to APS, Inc. were down approximately 35%
or $1.1 million compared to the second quarter of 1998. Sales and gross
profit for the nine months ending September 30, 1998 were $50.1 million and
$10.7 million, respectively, increases of $1.9 million and $0.2 million
compared to the same quarter of 1997. The nine month to date increases are
attributable to the strong 1998 second quarter which was generally unaffected
by the APS, Inc. bankruptcy.
Net results for the third quarter were a loss of $76 thousand ($0.01 per
share) compared to a net loss in the same quarter of 1997 of $16 thousand
($0.00 per share), primarily as a result of higher interest expense due to
higher average borrowing during the 1998 third quarter. For the nine months
ended September 30, 1998, net earnings were $315 thousand ($0.05 per share)
compared to a loss of $181 thousand ($0.03 per share) for the same 1997
period. Net earnings for the 1998 nine month period included a favorable
credit of $151 thousand (pretax) due to the reduction of the provision for
lawsuit settlement to reflect the actual results of the litigation between the
Company and the Trustee for the bankrupt Estate of the First National Parts
Exchange, Inc. The net loss for the nine month period ended September 30,
1997 included the initial provision for lawsuit settlement of $650 thousand
(pretax).
"We are pleased with our profitability as compared to the prior year.
However, the level of profitability did not meet management expectations as we
faced the challenges of the APS bankruptcy," commented Arvin Scott, President
and CEO. "We recently added RPM Group and Parts Plus, Inc. to our growing
customer list. Both are significant national auto parts buying groups that
are important pieces of our growth plans."
This news release contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, which are intended to
be covered by safe harbors created hereby. Such forward-looking statements
involve known and unknown risks, uncertainties (including those risk factors
referenced in the Company's filings with the Securities and Exchange
Commission), and other factors that may cause the actual results, performance
or achievements of the Company to be materially different from any future
results, performance, or achievements of the Company expressed or implied by
such forward-looking statements.
The Company, headquartered in Chicago, specializes in the distribution and
manufacture of brake rotors and other brake parts, under its private labels
"UBP - Universal Brake Parts," and "Ultimate" in the United States and Canada.
Universal Automotive Industries, Inc.
Summary of Financial Results
(000's) except per share data
Quarter Ended Sept. 30 Nine Months Ended Sept. 30
1998 1997 1998 1997
Net Sales:
Brake parts $13,661 $13,825 $41,494 $40,792
Non-brake $2,476 $2,359 $8,641 $7,397
Total $16,137 $16,184 $50,135 $48,189
Gross profit $3,415 $3,476 $10,666 $10,417
Gross profit percent 21.2% 21.5% 21.3% 21.6%
Selling, general, and
administrative expenses 2,856 3,029 8,487 8,739
Income from Operations $559 $447 $2,179 $1,678
Provision for lawsuit
settlement (151) 650
Interest expense and
other, net 557 474 1,698 1,256
Pretax Income (loss) $2 ($27) $632 ($228)
Income Tax Provision
(benefit) 78 (11) 317 (47)
Net Income (loss) ($76) ($16) $315 ($181)
Net Income (Loss)
Per Share ($0.01) ($0.00) $0.05 ($0.03)
Weighted Average
Shares 6,769,425 6,769,425 6,769,425 6,745,835