Automotive Performance Group Announces First-Quarter Results
24 May 1999
Automotive Performance Group Announces First-Quarter Results
NEW YORK---May 21, 1999--Automotive Performance Group, Inc. (OTCBB: RACG) today reported a significant increase in revenues for the first quarter of 1999, ended March 31, and higher expenses associated with the restructuring and refocus of the corporation and the formation of a professional management and corporate staff.Sales from continuing operations for the first quarter of 1999 were $765,000, an increase of 167%, compared with the year-ago period. Operating expenses were $2.0 million, up from $992,000 a year ago, resulting in an operating loss for the period of $1.2 million versus $0.7 million in the first three months of 1998.
The Company reported a net loss from continuing operations of $1.4 million, equal to $(0.23) per share, in this year's quarter, compared with a loss from continuing operations of $2.7 million, or $(0.45) per share, a year ago. Including a loss from discontinued operations of $(0.92) per share, and a gain of $0.12 per share from an extraordinary item, Automotive Performance Group reported a loss of $(1.25) per share for the first quarter of 1998.
"The first quarter of 1999 was a transitory period for APG," said Chairman and Chief Executive Officer Dean M. Willard. "We initiated our growth strategies; we successfully negotiated letters of intent and/or agreements to acquire companies and products related to the automotive aftermarket for chemicals and specialty materials for the aerospace/aircraft adhesives, coatings, and sealants industry; we began to assemble a professional management and corporate staff team; and we completed the acquisition of Boyd's Wheels and Hot Rods by Boyd," he added.
"As a result, we incurred substantial operating expenses that may well be one time in nature. This contributed in large part to our poor financial performance," Mr. Willard noted. "Nonetheless, we are pleased with the good results in our Royal Purple Motor Oil (RPMO) subsidiary: sales increased by more than 60% in the first quarter of 1999 versus a year ago. And we expect RPMO's performance in the last six months of the year to substantially outpace results for the first half."
Mr. Willard noted the Company expects to complete the acquisition of Loctite's North American Automotive Aftermarket Division by the end of the second quarter. This division had 1998 sales of $107 million. "The successful completion of the Loctite automotive aftermarket business and of Advanced Chemistry & Technology, or AC Tech (a maker of sealant for the aerospace/aircraft industry), coupled with the Company's existing base operations of RPMO and Klein Engines, are expected to propel APG into 2000 as a fast-growing, high-margin chemical specialties enterprise," he added.
Except for historical matters contained herein, the matters discussed in this press release are forward-looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect assumptions and involve risks and uncertainties which may affect Automotive Performance Group, Inc.'s business and prospects and cause actual results to differ materially from these forward-looking statements.
Automotive Performance Group, Inc., is a full-service owner and operator of high-performance automotive businesses, including Royal Purple Motor Oil, which produces synthetic oil and chemical products favored by many racing teams and manufacturers, and Klein Engines and Competition Components, Inc., a leading manufacturer of high-performance engines.
Automotive Performance Group, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In Thousands, Except Per-share Data)
Three months ended
March 31,
1999 1998
Revenues $ 765 $ 286
Expenses
Direct expenses 503 163
Selling, general and administrative 528 341
Salaries, payroll taxes and benefits 479 180
Professional expenses 436 298
Depreciation and amortization 52 7
Loss on investment in affiliates 8 3
2,006 992
Operating loss (1,241) (706)
Other income (expense)
Interest expense (210) (319)
Interest income 26 46
Other income 2
(182) (273)
Loss on continuing
operations before
income taxes (1,423) (979)
Income taxes
Loss from continuing
operations before
discontinued
operations and
extraordinary item (1,423) (979)
Discontinued operations
Loss from operations
of discontinued
venue division (220)
Loss from operations
of discontinued race
team subsidiary (1,758)
Loss from discontinued
operations (1,978)
Loss before extraordinary
item (1,423) (2,957)
Extraordinary item
Gain from extinguishment
of debt 258
NET LOSS $(1,423) $(2,699)
Loss per common share
basic and diluted
Loss before
discontinued operations
and extraordinary items $ (0.23) $ (0.45)
Discontinued operations (0.92)
Extraordinary item 0.12
$ (0.23) $ (1.25)