Trianon Industries Corp Reports First Quarter Results
8 June 1999
Trianon Industries Corp Reports First Quarter Results
CENTER LINE, Mich., June 7 -- Effective May 12, 1999, MS
Acquisition Corp changed it name to Trianon Industries Corp. Trianon
Industries Corp, consisting of wholly owned subsidiaries Aetna Industries,
Inc. and Sofedit SA, announced financial results for the first quarter ended
March 31, 1999. This discussion presents the consolidated results of Trianon
Industries Corp, consisting of Sofedit SA and Aetna Industries Inc, and then
follows with a separate analysis of Aetna Industries, Inc's financial
performance. Consolidated results of Trianon for the first three months of
1998 are proforma.
Trianon Industries Corp's total net sales for the first quarter of 1999
were $218.1 million, or 14.8%, higher than first quarter 1998 sales of $189.9
million.
Gross profit was $26.2 million, or 12.0% of net sales, for the first
quarter of 1999 compared to $24.1 million, or 12.7% of net sales, for the same
period in 1998.
SG&A expenses for the first quarter of 1999 were $14.7 million, or 6.8% of
net sales, compared to $14.5 million, or 7.6% of net sales, for the same
period in 1998.
Interest expense for the first quarter of 1999 was $7.3 million, or 3.3%
of net sales, compared to $6.1 million or 3.2% of net sales for the same
period in 1998. The increase in interest expense is due principally to a
sharp increase in tooling inventory relating to two major projects in North
America. In Europe, interest expense was $2.4 million, or 1.6% of sales,
versus $2.2 million for the same period in 1998. Excluding the effect of
exchange rate fluctuations, interest expense in Europe rose by 4.7%. The
increase is mainly due to a $7.3 million increase in medium- and short-term
debt.
Income tax in the first quarter of 1999 was $2.3 million with an effective
tax rate of 52.5% as compared to a provision of $1.0 million with an effective
tax rate of 28.5% for the same period in 1998.
EBITDA was $20.4 million for the three months ended March 31, 1999
compared to $19.1 million for the same period in 1998.
Trianon Industries Corp's principal capital requirements for the three
months ended March 31, 1999 included $6.8 million of capital expenditures in
Europe compared to $5.9 million for the same period in 1998, and equipment to
support Aetna's development lab for 3-dimensional remote welding, and the
purchase and installation of robots to support increased volume requirements
for the GM rear suspension assembly.
Aetna Industries, Inc. recorded net sales for the first quarter of 1999 of
$66.8 million, or 25.9%, higher than first quarter 1998 sales of $53.1
million. Production sales of $58.8 million in the first quarter of 1999 were
up $6.3 million from $52.5 million in the first quarter of 1998 primarily due
to the CAMI Vitara and the DaimlerChrylser Jeep Grand Cherokee.
Gross profit was $8.1 million, or 12.1% of net sales, for the first
quarter of 1999 compared to $8.1 million, or 15.3% of net sales, for the same
period in 1998. As a percent of net sales, the decrease in gross profit was
primarily the result of the impact higher tooling sales in the first quarter
of 1999 with little or no associated margin, and the loss of higher margin
products such as DaimlerChrylser's minivan.
SG&A expenses for the first quarter of 1999 were $5.0 million, or 7.4% of
net sales, compared to $4.5 million, or 8.5% of net sales, for the same period
in 1998. The decrease as a percent to net sales is due principally to launch
costs that are no longer are being incurred on the CAMI Vitara and
DaimlerChrysler's Jeep Grand Cherokee.
Interest expense for the first quarter of 1999 was $3.8 million, or 5.7%
of net sales, compared to $2.9 million or 5.4% of net sales for the same
period in 1998. Higher levels of short-term debt used to finance the launch
of the Saturn platform and other working capital requirements affected
interest expense.
The income tax credit in the first quarter of 1999 was $0.1 million as
compared to expense of $0.2 million for the same period in 1998.
EBITDA was $5.6 million for the first quarter of 1999 and 1998.
Aetna's principal capital requirements for the three months ended March
31, 1999 were equipment to support Aetna's development lab for 3-dimensional
remote welding, and the purchase and installation of robots to support
increased volume requirements for the GM rear suspension assembly.