Hastings Announces 1999 First-Quarter Results
29 April 1999
Hastings Announces 1999 First-Quarter Results
HASTINGS, Michigan, April 29 -- Hastings Manufacturing
Company (Amex: HMF), a manufacturer and marketer of automotive-related
products, today announced the results of its 1999 first quarter, which ended
March 31, 1999.
Net sales for the 1999 first quarter were $9.0 million, compared with net
sales of $9.9 million for last year's first quarter. Sales declines were
experienced in both the domestic aftermarket and the export market. Increased
sales of private-branded and original equipment products partially offset
these declines.
The Company posted first-quarter net income of $45,643, or $0.06 per
diluted share, this year versus $418,275, or $0.54 per diluted share, in 1998.
"As noted in our 1998 year-end earnings release, net sales in this year's
first quarter were below last year's first-quarter levels. Weaker aftermarket
sales -- a trend seen industrywide as the result of robust new car sales -- as
well as slower export sales contributed to the reduced sales in the first
quarter," said Hastings Co-CEO Mark Johnson. "Earnings additionally were
affected by non-recurring costs associated with the conversion and start-up of
various production processes."
Gross profit as a percentage of sales was 26.4 percent for the first
quarter, compared with 31.9 percent for the year-ago period. Costs related to
the non-recurring production situation added approximately $400,000 to 1999's
first-quarter cost of sales. Without these non-recurring costs, the gross
margin would have neared last year's first-quarter gross margin of 31.9
percent.
While lower in absolute dollars, Hastings' operating expenses as a
percentage of sales increased slightly to 24.2 percent for 1999's first
quarter, versus 23.7 percent in the prior-year first quarter.
"As we enter our seasonally strong second and third quarters, we have seen
improved orders from our export customers, targeted improved order fill rates
going forward, and resolved certain production issues," said Hastings Co-CEO
Andrew Johnson. "As a result, we do expect profitability improvements over
our first quarter."
Hastings Manufacturing is a leading manufacturer and marketer of piston
rings and specialty tools under the Hastings Brand, and additives for engines,
transmissions, cooling systems and fuel systems under the Casite Brand.
Safe Harbor Statement under the Private Securities Litigation Reform Act
of 1995: The statements contained in this news release include certain
predictions and projections that may be considered forward-looking statements
under securities laws. These statements involve a number of important risks
and uncertainties that could cause actual results to differ materially,
including but not limited to economic, competitive, governmental and
technological factors affecting the Company's operations, markets, products,
services and prices.
For The Three Months Ended
March 31,
1999 1998
Net Sales $ 8,959,131 $ 9,946,018
Cost of Sales 6,597,554 6,771,980
Gross Profit 2,361,577 3,174,038
Operating Expenses:
Advertising 70,301 97,566
Selling 736,710 760,036
General and Administrative 1,360,040 1,504,124
Total Operating Expenses 2,167,051 2,361,726
Operating Income 194,526 812,312
Other Expenses (Income):
Interest Expense 147,087 109,130
Interest Income 0 (8,117)
Other, net (37,204) 1,024
Total Other Expenses 109,883 102,037
Income Before Income Tax Expense 84,643 710,275
Income Tax Expense 39,000 292,000
Net Income $45,643 $418,275
Net Income Per Share of Common Stock:
Basic $ 0.06 $ 0.54
Diluted $ 0.06 $ 0.54
Average Shares Outstanding:
Basic 775,046 771,496
Diluted 775,046 772,527