SMC Reports Results for the First Quarter 1999
22 April 1999
SMC Reports Results for the First Quarter 1999
BEND, Ore., April 22 -- SMC Corporation today
reported its results for the first quarter of 1999. For the three month period
ended April 3, 1999 net sales increased to $56.8 million from $47.8 million
reported for the first quarter of 1998. However, net income decreased for the
same three month period from $916,000 in 1998 to $108,000 in the first quarter
of 1999. Earnings per share decreased from $0.142 on 6.4 million shares
outstanding to $0.018 on 5.9 million shares outstanding for the three months
ended March 31, 1998 and April 3, 1999, respectively.
Sales increased due to stronger demand for the Zanzibar and Continental
models of the Safari division, as well as large increases in sales of the
Monterey, Contessa and Patriot models at the Beaver division. The Harney
division's new Renegade model also had a substantial increase in demand over
the same period one year ago. While these developments dramatically increased
revenue, gross margins were reduced by a decrease in the sales mix of the
Marquis product, which was undergoing a model revision during the earlier
portion of the quarter. The Marquis model change was completed timely and the
product has been well received. Late first quarter Marquis sales increased at
a pace comparable to prior year levels, and present demand is now higher than
that of one year ago.
General and administrative costs increased by $746,000 over the same
period in 1998 primarily due to the reorganization of certain separate plant
functions now consolidated and performed on a corporate level and higher legal
fees. Selling costs increased in 1999 by $460,000 as the result of higher
commission costs and promotion expenses associated with higher sales volumes.
The Company has recently undertaken considerable measures to strengthen its
executive, customer service, and warranty functions. Mathew Perlot has now
assumed the operational responsibilities of President in addition to his
duties of CEO and Chairman of the board of directors. The Company has
reorganized its customer service and warranty department to provide higher
levels of customer attention and satisfaction. The Company believes these
actions will produce positive results during the remainder of the year.
Interest expense increased by $170,000 due primarily to the purchase of a
service center located in Tampa, Florida and to the building of product for
second quarter demand prior to the model changeover in June.
The Company expects to complete its stock repurchase program during the
second quarter. Presently the Company has repurchased or committed to
repurchase 765,000 shares of the 800,000 authorized during calendar 1998.
SMC Corporation is one of the largest high line motor coach manufacturers
in the United States. Headquartered in Bend, Oregon, the Company has six
locations in Oregon.
Information about SMC Corporation and its products can be found on the
World Wide Web at http://www.smc-corporation.com.
Forward Looking Statements: The statements in this report regarding
increased competition and start-up of a new production facility are
forward-looking statements. A number of factors could cause actual results to
differ materially from these statements, including delays in full operation of
the production facility, a general slowdown in the economy or the RV market
specifically, or new products from competitors. Please also refer to the
Company's SEC reports, including, but not limited to its Form 10K Annual
Report for the year ended December 31, 1998
SMC CORPORATION
CONSOLIDATED BALANCE SHEET
In Thousands
12/31/98 4/03/99
Assets
Current 45,453 46,138
Property & Equipment 20,551 19,141
Other 2,016 1,960
Total Assets 68,020 67,239
Liabilities
Current 36,473 35,907
Deferred Tax 928 928
Long-term Debt 7,410 7,088
Total Liabilities 44,811 43,923
Shareholders' Equity 23,209 23,316
Total Liability & Equity 68,020 67,239
SMC CORPORATION
CONSOLIDATED STATEMENT OF INCOME
$000's (except share and per share data)
Three Months Ended
3/28/98 4/03/99
Net Sales 47,805 56,822
Cost of Sales 41,799 50,613
Gross Profit 6,006 6,209
Sales, General, Adm 4,598 5,806
Income from Operations 1,408 403
Interest Expense 140 310
Other Expense (Inc) (176) (86)
Income Before Taxes 1,444 179
Provision for Taxes 528 71
Net Income 916 108
Net Income/share - basic 0.142 0.018
Net Income/share - diluted 0.141 0.018
Weighted shares - basic 6,439,777 5,890,208
Weighted shares - diluted 6,507,375 5,890,208