Bonded Motors Expects Loss
28 January 1999
Bonded Motors Expects Loss
LOS ANGELES--Jan. 27, 1999--
Sales Below Expectations; Returns Increase Expenses;
Higher Reserves Set; Charge Taken For Cancelled Offering Expenses;
Expense Reduction Program Underway
Aaron Landon, chairman of the board and chief executive officer of Bonded Motors Inc. , Wednesday announced that the company expects to report a loss for the quarter and year ended Dec. 31, 1998.
Actual results are due to be reported on Feb. 11, after 1 p.m. PST.
"Unit shipments for the fourth quarter were below expectations, falling approximately 17 percent from the third quarter of 1998. High customer returns for the period, totaling over $3 million, also contributed to the net revenue shortfall," Landon said.
"In addition, we needed to adjust our reserves for future returns accordingly. These factors have created a loss for our company. Finally, costs related to a cancelled secondary offering were expensed during the quarter. We anticipate a continuation of high returns and attendant expenses in the near term.
"Management has already implemented companywide cost reductions in the current quarter, and anticipate that we can improve further. Effective Jan. 1, 1999, Bonded Motors will have new service representation for one of our major accounts.
"We anticipate that our revenue growth rate for all of 1999 will continue to be at our historical 30 percent level, though not necessarily in the first quarter. The management team is working diligently to improve operations, and we expect to announce further positive changes in the very near future," Landon concluded.
Management will conduct a conference call Thursday, Jan. 28, at 9:30 a.m. Pacific (12:30 p.m. Eastern) to further discuss the issues addressed in this release. To participate in the call, dial 800/388-8975 a few minutes before 9:30 a.m. Pacific time.
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 current and expected sales, cost expectations 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.