OEA Announces First Quarter Results
2 December 1998
OEA Announces First Quarter Results
Demand for Inflators and Initiators Continues To Increase
With Unit Shipments Up 31% and 43%, Respectively
DENVER, Dec. 2 -- OEA, Inc. today announced
results for its first quarter ended October 30, 1998. The Company reported a
net loss of $2.7 million, or $.13 per share, on sales of $56.8 million for the
quarter as compared with a net loss of $5.4 million, or $.26 per share, on
sales of $57.3 million in the same quarter a year ago. As previously
reported, last year's results have been restated to incorporate an accounting
change that is reflected on the income statement under "cumulative effect of a
change in accounting principle."
Charles B. Kafadar, president and CEO, said growing demand for OEA's
automotive products resulted in a significant increase in unit shipments
during the period. The Company shipped more than 1.6 million inflators, an
increase of 31%, and 6.0 million initiators, an increase of 43%.
"We are pleased with the increasing demand for our products and the
growing utilization of our new inflator production facility," Kafadar said.
"As anticipated, price reductions totaling $10 million significantly impacted
sales levels and gross margins. However, we experienced substantially
improved results as the quarter progressed and achieved profitability on a
consolidated basis for the month of October. With our restructuring and cost
control programs on track, we are optimistic about prospects for continued
growth and a return to profitability in the second half of the fiscal year."
Kafadar noted that during the first quarter OEA was awarded new air bag
inflator programs anticipated to generate $150 million in sales over the next
four years, with initial shipments expected to commence in the second quarter.
"These awards, which were made by both new and existing customers, reflect
OEA's reputation for producing high quality products at competitive prices,"
Kafadar said.
OEA is the technology leader and a major manufacturer in the air bag
inflator and initiator industry. The Company is also a leader in the design
and manufacture of personnel escape systems for military aircraft and high-
reliability devices for missile and aerospace applications.
Certain of the information set forth above, including statements regarding
future profitability, the success of restructuring and cost control programs,
sales from new inflator programs, technology leadership, as well as other
statements or implications regarding future events, are "forward-looking
statements" for purposes of federal securities laws. Actual results or events
may differ materially from these forward-looking statements depending on a
variety of factors. Reference is made to the cautionary statements under the
caption "Forward-Looking Statements" in OEA's Annual Report on Form 10-K for
the year ended July 31, 1998 and the Company's report on Form 8-K filed on
June 4, 1998 for a description of various factors that might cause OEA's
actual results to differ materially from those contemplated by such forward-
looking statements.
OEA, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Unaudited)
(in thousands except share data)
Three Months Ended October 30,
1998 1997
Net Sales $56,793 $57,335
Cost of Sales 55,284 47,171
Gross Profit 1,509 10,164
General and Administrative
Expenses 2,725 1,885
Research and Development
Expenses 1,005 301
Operating Profit (Loss) (2,221) 7,978
Other Income (Expense):
Interest Income 34 131
Interest Expense (1,916) (975)
Other, Net 113 154
(1,769) (690)
Earnings (Loss) Before
Income Taxes (3,990) 7,288
Federal and State
Income Tax Expense (1,274) 2,656
Net Earnings (Loss) Before
Cumulative Effect of a Change
in Accounting Principle $(2,716) $4,632
Cumulative Effect of a Change
in Accounting Principle -- (10,040)
Net Earnings (Loss) $(2,716) $(5,408)
Earnings (Loss) per Share
Before Cumulative
Effect of a Change in
Accounting Principle $(0.13) $0.23
Cumulative Effect of a Change
in Accounting Principle -- (0.49)
Earnings (Loss) per Share $(0.13) $(0.26)
Weighted Average Number
of Shares Outstanding 20,595,964 20,557,178
OEA, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
ASSETS
October 30, 1998 July 31, 1998
Current Assets: (Unaudited)
Cash and Cash Equivalents $15,489 $1,920
Accounts Receivable, Net 45,797 43,998
Unbilled Costs and
Accrued Earnings 3,834 3,190
Income Taxes Receivable 8,152 12,040
Inventories
Raw Material and
Component Parts 23,045 25,954
Work-in-Process 17,238 17,222
Finished Goods 8,470 11,391
48,753 54,567
Prepaid Expenses and Other 1,348 1,863
Total Current Assets 123,373 117,578
Property, Plant and Equipment 281,244 272,411
Less: Accumulated Depreciation 73,835 67,761
Property, Plant and
Equipment, Net 207,409 204,650
Long-Term Receivable 3,000 3,000
Investment in Foreign
Joint Venture 2,323 2,323
Other Assets 1,207 1,208
Total Assets $337,312 $328,759
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable $23,161 $22,457
Interest Payable 2,212 2,368
Accrued Expenses 5,729 6,636
Federal and State
Income Taxes -- --
Total Current Liabilities 31,102 31,461
Long-term Bank Borrowings 135,000 124,000
Deferred Income Taxes 10,821 10,821
Other 962 971
Total Liabilities 177,885 167,253
Stockholders' Equity:
Common Stock - $.10 par value,
Authorized 50,000,000 shares:
Issued - 22,019,700 shares 2,202 2,202
Additional Paid-In Capital 13,201 13,201
Retained Earnings 147,724 150,440
Less: Cost of Treasury Shares,
1,424,943 and 1,424,943 (2,142) (2,142)
Equity Adjustment from
Translation (1,558) (2,195)
Total Stockholders' Equity 159,427 161,506
Total Liabilities and
Stockholders' Equity $337,312 $328,759