Bonded Motors Expects Earnings Shortfall; Weak 4th Quarter Sales
15 December 1998
Bonded Motors Expects Earnings Shortfall; Weak 4th Quarter Sales; Higher Than Expected Returns
LOS ANGELES--Dec. 14, 1998--Aaron Landon, Chairman of the Board and Chief Executive Officer of Bonded Motors Inc. announced today that the company will fall short of analysts' 4th quarter earnings estimates. Bonded Motors' sales were hurt in the 4th quarter by a weak showing from primary customers. Mr. Landon stated, "Bonded's sales projections are based on estimates we get from our retail customers. When they fall short, so do we." The Company also announced it expects higher new return and warranty expenses as a percentage of net sales.
"Together these items will cause earnings to fall below estimates. Exactly how far is, as yet, unknown," Mr. Landon said.
Mr. Landon was optimistic about the Company's future prospects. "Nothing about our sales and earnings over the last quarter alters the long-term views of the business," Mr. Landon said. "I remain comfortable with Bonded's business plan and believe that we are doing the right things to position ourselves for long-term continued growth."
The Company verified that it is moving forward with a planned property acquisition. "We've been hampered from soliciting new business because of our capacity restraints. With the reduced sales figures from our current customer base, Bonded Motors is free to step-up our campaign to attract additional retail customers," Landon concluded.
The Company will host a conference call Tuesday, December 15, to discuss these issues. To participate in the discussion, dial 800/388-8975 a few minutes before 1:00 p.m. Eastern (10:00 a.m. Pacific).
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 (Checker, Schucks, Kragen) , Paccar Automotive (Grand's and Al's Auto Parts) , and Genuine Parts / NAPA .
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 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.