OEA Announces Third Quarter Results
24 May 1999
OEA Announces Third Quarter Results
Growing Inflator and Initiator Sales
Contribute to Return to Profitability in Third Quarter
DENVER, May 24 -- OEA, Inc. today announced
results for its third quarter and nine-month period ended April 30, 1999. The
Company reported net income of $324,000, or $.02 per share, on sales of
$66.7 million for the quarter as compared with a net loss of
$14.9 million, or $.72 per share, on sales of $63.6 million in the same
quarter a year ago.
For the nine-month period OEA reported a net loss of $3.4 million, or
$.16 per share, on sales of $182.9 million versus a net loss of $18.0 million,
or $.87 per share, on sales of $180.3 million in the same period last year.
The nine-month period ended May 1, 1998, included a net loss attributable to
cumulative effect of a change in accounting principle of $10.0 million, or
$.49 per share.
Charles B. Kafadar, president and CEO, said air bag inflator unit
shipments increased 31% and initiator unit shipments to outside customers
increased 19% as compared to the nine-month period a year ago. He added that
the effect of this strong sales growth for inflators and initiators was
largely offset by a 23% industry-driven price reduction implemented at the
beginning of this fiscal year. The price reduction had the effect of reducing
operating income by $35.0 million for the nine months ended April 30, 1999.
"We are optimistic about continued growth in our core products as well as
new applications utilizing our advanced safety technology," Kafadar said. "We
are also achieving excellent results in our cost reduction efforts as
demonstrated by our return to profitability in the quarter. Our third quarter
operating profit improved more than $2.2 million over the second quarter and
$3.5 million over the first quarter."
Kafadar noted that OEA achieved significant progress toward its materials
cost reduction goals in the third quarter. In addition, the Company continued
to improve productivity in its driver, passenger and side inflator
manufacturing as well as its initiator operations. These improved
efficiencies have resulted in annualized cost savings of $50 million, savings
that have been important in offsetting the 23% price reduction.
"We will continue to work to drive costs down while maintaining very high
standards for quality and customer support," Kafadar said. "In addition, we
will continue to leverage our technology leadership position by leading the
way in developing new and innovative safety products."
OEA is the technology leader and a major manufacturer in the air bag
inflator and initiator industry. The Company is also a leader in the design
and manufacture of personnel escape systems for military aircraft and
high-reliability devices for missile and aerospace applications.
Certain of the information set forth above, including statements regarding
future profitability, the success of cost reduction programs, productivity
improvements, sales of and demand for core products and new automotive safety
products, technology leadership, as well as other statements or implications
regarding future events, are "forward-looking statements" for purposes of
federal securities laws. Actual results or events may differ materially from
these forward-looking statements depending on a variety of factors. Reference
is made to the cautionary statements under the caption "Forward-Looking
Statements" in OEA's Annual Report on Form 10-K for the year ended July 31,
1998, and the Company's report on Form 8-K filed on June 4, 1998, for a
description of various factors that might cause OEA's actual results to differ
materially from those contemplated by such forward-looking statements.
OEA, INC.
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(in thousands, except share data)
Three Months Ended Nine Months Ended
April 30, May 1, April 30, May 1,
1999 1998 1999 1998
Net Sales $66,700 $63,592 $182,927 $180,341
Cost of Sales 60,731 76,500 172,578 174,976
Gross Profit 5,969 (12,908) 10,349 5,365
General and
Administrative Expenses 3,860 4,236 9,698 8,239
Research and
Development Expenses 834 274 2,574 951
Operating Profit 1,275 (17,418) (1,923) (3,825)
Other Income (Expense):
Interest Income 11 73 149 273
Interest Expense (2,034) (1,749) (6,032) (4,125)
Royalty Income
& Other, Net 1,023 (4,107) 2,666 (4,243)
(1,000) (5,783) (3,217) (8,095)
Earnings Before
Income Taxes 275 (23,201) (5,140) (11,920)
Federal and State
Income Taxes (49) (8,276) (1,746) (4,005)
Net Earnings (Loss)
Before Cumulative
Effect of a Change in
Accounting Principle $324 $(14,925) $(3,394) $(7,915)
Cumulative Effect of a
Change in Accounting
Principle -- -- -- (10,040)
Net Earnings (Loss) $324 $(14,925) $(3,394) $(17,955)
Earnings (Loss) Per
Share Before Cumulative
Effect of a Change
in Accounting
Principle -- Basic $0.02 $(0.72) $(0.16) $(0.38)
Cumulative Effect of a
Change in Accounting
Principle - Basic $-- $-- $-- $(0.49)
Earnings (Loss) Per
Share -- Basic 0.02 (0.72) (0.16) (0.87)
Weighted Average Number
of Shares Outstanding
-- Basic 20,603,020 20,593,570 20,599,532 20,575,583
OEA, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
ASSETS
April 30, 1999 July 31, 1998
Current Assets: (Unaudited)
Cash and Cash Equivalents $3,949 $1,920
Accounts Receivable, Net 41,477 43,998
Unbilled Costs and Accrued Earnings 4,652 3,190
Income Taxes Receivable 2,621 12,040
Inventories
Raw Material and Component Parts 23,726 25,954
Work-in-Process 16,348 17,222
Finished Goods 6,028 11,391
46,102 54,567
Prepaid Expenses and Other 850 1,863
Total Current Assets 99,651 117,578
Property, Plant and Equipment 284,644 272,411
Less: Accumulated Depreciation 85,199 67,761
Property, Plant and Equipment, Net 199,445 204,650
Long-Term Receivable 3,000 3,000
Investment in Foreign Joint Venture 2,323 2,323
Other Assets 1,211 1,208
Total Assets $305,630 $328,759
LIABILITIES AND STOCKHOLDERS EQUITY
Current Liabilities:
Accounts Payable 25,408 22,457
Interest Payable 2,239 2,368
Accrued Expenses 6,387 6,636
Total Current Liabilities 34,034 31,461
Long-term Bank Borrowings 105,000 124,000
Deferred Income Taxes 10,820 10,821
Other 956 971
Total Liabilities 150,810 167,253
Stockholders' Equity:
Common Stock - $.10 par value,
Authorized 50,000,000 shares:
Issued -- 22,019,700 Shares 2,202 2,202
Additional Paid-In Capital 13,329 13,201
Retained Earnings 145,347 150,440
Less: Cost of Treasury Shares,
1,410,259 and 1,424,943 (2,120) (2,142)
Equity Adjustment from Translation (3,938) (2,195)
Total Stockholders' Equity 154,820 161,506
Total Liabilities and
Stockholders' Equity $305,630 $328,759