Lund International Holdings, Inc. Sales and Results of Operations
19 March 1999
Lund International Holdings, Inc. Announced Sales and Results of Operations for the Fourth Quarter and Year Ended December 31, 1998
ANOKA, Minn., March 19 -- Lund International Holdings, Inc.
, announced results of operations for the quarter and year ended
December 31, 1998. The financial results for the quarter and year ended
December 31, 1998 include the results of operations of Deflecta-Shield
Corporation ("Deflecta-Shield"), acquired by Lund on December 30, 1997 and the
results of operations for nine days of Ventshade Holdings, Inc. and its
subsidiary ("Ventshade"), acquired by Lund on December 23, 1998.
Net sales for the fourth quarter increased to $26,170,000, from $9,495,000
for the same period in 1997. Net sales for the year ended December 31, 1998
were $112,594,000 compared to $42,076,000 for the same period of 1997. For
both 1998 periods, the increase in net sales was attributed to the
consolidation of Deflecta-Shield's results in 1998.
The gross profit margin for the three month period ended December 31, 1998
was 21.0%, compared to 33.4% for the same period of 1997. The gross profit
margin for the year ended December 31, 1998 was 27.3%, compared to 34.0% for
the twelve month period ended December 31, 1997. The decline in gross margin
is due primarily to reserves established for product rationalization and
slow-moving inventories resulting from the Lund/Deflecta-Shield merger, a
shift in sales mix to lower margin products, and initial start-up
manufacturing costs and inefficiencies from combining operations.
Lund recorded a net loss of $2,743,000, or $.40 per share, for the three
month period ended December 31, 1998 compared to a net income of $155,000, or
$.04 per share, for the same period in 1997. For the year ended December 31,
1998, Lund incurred a net loss of $4,070,000, or $.64 per share, compared to
net income of $908,000, or $.21 per share, for the same period last year.
Dennis W. Vollmershausen, appointed as President and Chief Executive
Officer in October 1998, stated that "the Company's financial results for the
fourth quarter and full year continued to be disappointing. The Light Truck
Accessories business is continuing to under-perform and accounts for the
Company's poor results. Over the fourth quarter, several major initiatives
were launched to restore Light Truck Accessories performance. The management
team has responded positively to the challenge and is confident that the
turnaround now underway will lead to improvements. At the same time, the
Company's Heavy Truck and Suspension businesses enjoyed positive and
profitable results.
"We continue to be firmly committed to establishing our Company as the
leader in truck accessories. Our December 1998 acquisition of Ventshade for
$66 million in cash and the January 1999 acquisition of Smittybilt, Inc. for
$18 million in cash are both important steps towards our goal."
Statements made in this press release relating to future financial
results, the effects of the acquisitions, company operations, trends and
market analyses, among others, are forward-looking statements made under the
Private Securities Litigation Reform Act of 1995. These statements involve
risks and uncertainties which could cause results of operations to differ
materially from those anticipated. Among the factors that could cause results
of operations to differ materially are the following: inability to obtain
expected efficiencies, or to obtain them in a timely manner; inability to
effectively manage a larger enterprise, to integrate the companies, or to
control costs associated with such integration. In addition, the operations
and financial performance of the Company, Ventshade, and Smittybilt are
subject to the following risk factors: consumer preference changes; risks of
expansion into new distribution channels; delays in designing, developing,
testing, or shipping of products; increased competition; general economic
developments and trends; developments and trends in the light truck and
automotive accessory market; sales of heavy trucks, which are cyclical; the
timely development and introduction of competitive new products by the
Company, Ventshade and Smittybilt and acceptance of those new products; and
increased costs. This is not an exhaustive list and the Company may supplement
this list in future filings or releases or in connection with the making of
forward-looking statements.
LUND INTERNATIONAL HOLDINGS, INC.
CONDENSED CONSOLIDATED INCOME STATEMENTS
(Unaudited)
(In thousands, except per share date)
Three Months ended Twelve months ended
December 31 December 31
1998 1997 1998 1997
Net Sales $26,170 $9,495 $112,594 $42,076
Cost of Goods Sold 20,675 6,322 81,825 27,755
Gross Profit 5,495 3,173 30,769 14,321
Operating Expenses:
Sales & Marketing 3,461 1,553 13,736 6,370
Product Development 783 374 2,970 1,381
General & Administration 3,384 939 11,801 5,450
Amortization of Intangibles 666 35 2,424 139
Total Operating Expenses 8,294 2,901 30,931 13,340
(Loss) income from
operations (2,799) 272 (162) 981
Other, net (1,507) 10 (5,523) 253
(Loss) income before
income taxes (4,306) 282 (5,685) 1,234
Income tax (benefit) expense (1,563) 127 (1,615) 326
Net (loss) income $(2,743) $155 $(4,070) $908
Basic net (loss) income
per share $(0.40) $0.04 $(O.64) $0.21
Diluted net (loss) income
per share $(0.40) $0.04 $(0.64) $0.21
Weighted average common
shares 6,848 4,398 6,326 4,388
Weighted average common and
common equivalent shares 6,848 4,421 6,326 4,401
LUND INTERNATIONAL HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)
December 31
1998 1997
ASSETS
Current assets $63,204 $52,466
Non-current assets
Property and equipment, net 29,568 20,621
Intangibles, net 119,834 68,778
Other assets 8,751 2,162
Total Assets $221,357 $144,027
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $28,467 $25,008
Long-term liabilities 107,003 56,506
Stockholders' equity 85,887 62,513
Total Liabilities and Stockholders'
Equity $221,357 $144,027