R&B, Inc., Reports Record Financial Results
26 February 1999
R&B, Inc., Reports Record Financial Results for the 1998 Fourth Quarter and Full Year
COLMAR, Pa., Feb. 26 -- R&B, Inc. reported
record financial results for both the 1998 fourth quarter and full year. The
1998 fourth quarter is the eleventh consecutive quarter of improved sales and
earnings on a year-over-year basis. Over the past three years, the company
has achieved an average growth rate of 16.1 percent in sales and 19.5 percent
in net income.
Business in 1998 ended on a favorable note as sales for the thirteen week
period ended December 26, 1998, were the highest for any three-month period in
the company's history. Net sales increased 38.9 percent to $52.7 million.
Net income in the fourth quarter improved by 27.3 percent to $1.5 million from
last year's $1.2 million. Diluted earnings per share rose 20 percent to $0.18
from the prior year's $0.15.
Richard N. Berman, R&B's Chairman, President, and Chief Executive Officer,
said: "The level of sales activity in the fourth quarter was outstanding,
which bodes well for the start of the new year. In addition, the company
consummated two acquisitions during the quarter -- Champ Service Line, and
Allparts. Gross profitability improved over last year, but operating
profitability slipped slightly because of the start-up of our new computer
system and the integration of the acquisitions. The problems that penalized
some of the company's efficiencies are now mostly resolved."
For the twentieth consecutive year, annual sales increased over the prior
year. Net sales improved 16.5 percent in 1998 to $178.3 million from last
year's $153.0 million. Net income in 1998 was a record, increasing 12.5
percent to $7.6 million versus last year's $6.7 million. Diluted earnings of
$0.90 per share were 8.4 percent higher than last year's $0.83 per share.
Mr. Berman further stated, "R&B has just completed its twentieth year in
business and its business outlook has never before been so promising. With
the integration of the three acquisitions and the start-up of our new computer
system behind us, efficiencies should begin to take hold as we progress
through the year. The three acquisitions we made in 1998, including Scan-
Tech, a worldwide distributor of Volvo and Saab parts we bought in the first
quarter, meet the company's strategic objectives. As we look at 1999, there
is a special sense of optimism throughout our company. Business is off to an
excellent start in 1999 and we expect profitability to improve as the year
develops."
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 (1)
(in thousands, except per-share amounts)
13 weeks ended (unaudited) 12/26/98 Pct. 12/27/97 Pct.
Net sales $52,733 100.0 $37,971 100.0
Cost of goods sold 31,985 60.7 23,324 61.4
Gross profit 20,748 39.3 14,647 38.6
Selling, general and
administrative expenses 16,938 32.1 11,703 30.8
Income from operations 3,810 7.2 2,944 7.8
Interest expense, net 1,566 3.0 1,076 2.8
Income before taxes 2,244 4.2 1,868 4.9
Provision for taxes 755 1.4 698 1.8
Net income 1,489 2.8 1,170 3.1
Earnings per share
Basic $.18 - $.15 -
Diluted $.18 - $.15 -
Average shares outstanding
Basic 8,343 - 8,067 -
Diluted 8,373 - 8,067 -
52 weeks ended 12/26/98 Pct. 12/27/97 Pct.
Net sales $178,301 100.0 $153,046 100.0
Cost of goods sold 107,897 60.5 93,032 60.8
Gross profit 70,404 39.5 60,014 39.2
Selling, general and
administrative expenses 53,985 30.3 45,230 29.6
Income from operations 16,419 9.2 14,784 9.6
Interest expense, net 4,629 2.6 4,205 2.7
Income before taxes 11,790 6.6 10,579 6.9
Provision for taxes 4,234 2.4 3,865 2.5
Net income 7,556 4.2 6,714 4.4
Earnings per share
Basic $.91 - $.83 -
Diluted $.90 - $.83 -
Average shares outstanding
Basic 8,330 - 8,043 -
Diluted 8,421 - 8,043 -
R&B, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (1)
(in thousands)
12/26/98 12/27/97
Cash and short-term investments $915 $1,601
Accounts receivable, less allowance
for doubtful accounts and customer
credits of $9,165 and $7,214 55,585 37,536
Inventories 68,401 38,264
Deferred income taxes 1,674 1,186
Prepaids and other current assets 861 1,461
Total current assets $127,436 $ 80,048
Property, plant & equipment, net 20,761 16,382
Intangible assets 33,640 29,747
Other assets 2,111 2,530
Total $183,948 $128,707
Liability & Shareholders' Equity
Current portion of long-term debt $3,089 $6,611
Accounts payable 18,309 8,982
Accrued compensation 2,652 2,923
Other accrued liabilities 5,766 2,923
Total current liabilities 29,816 21,439
Long-term debt 80,004 44,336
Deferred income taxes 2,514 1,770
Comments and Contingencies
Shareholders' Equity
Common stock, par value $.01
Authorized 25,000,000 shares,
issued 8,344,082 & 8,066,543 83 81
Additional paid-in capital 33,133 30,221
Cumulative translation adjustments (18) -
Retained earnings 38,416 30,860
Total shareholder's equity $ 71,614 $ 61,162
Total $183,948 $128,707
(1) Totals may not add due to rounding.