Glas-Aire Announces Earnings for the Quarter Ended April 30, 1999
15 June 1999
Glas-Aire Industries Group Ltd. Announces Record Revenues and Earnings for the Quarter Ended April 30, 1999
VANCOUVER, British Columbia--June 15, 1999--Glas-Aire Industries Group Ltd. ("Glas-Aire" or the "Company") (PSE: GLA), a leading designer, developer, manufacturer and marketer of original equipment automotive wind deflector accessories to automobile manufacturers worldwide, announced a record 69.1% increase revenues and a record 388% increase in per share earnings for the quarter ended April 30, 1999.Sales and earnings have broken records in each of the last two fiscal years and the Company expects to attain a new record in the second quarter ended June 30, 1999.
Alex Ding, President of Glas-Aire stated: "Our total quality management sales and production capability and strong OEM customer base continues to provide the elements for growth. During the quarter the Company's new office in Tokyo became operational and the facilities expansion program in Vancouver progressed on budget and on schedule. This program is expected to be completed during the second quarter and provide for our higher forecasted production capacity requirements. With the recent purchase of the control position of the Company by Speed.com, e-commerce is becoming an important driver for future growth. Management is very excited about the proactive style of our new leadership from Regency Affiliates, the parent company to Speed.com, and their commitment to the growth of Glas-Aire."
The Company sales increased by 69% from $1,085,596 for the three months ended April 30, 1998, to $1,835,787 for the three months ended April 30, 1999. This improvement in sales was the result of sales to new customers, sales of new parts, and volume increase in sales orders from existing customers.
Gross profit margin, expressed as a percentage of sales, was 32% for the three months ended April 30, 1999 and April 30, 1998 respectively.
Depreciation expense increased by 9% from $42,951 for the three months ended April 30, 1998, to $46,807 for the three months ended April 30, 1999. This increase was the result of bringing new equipment into service.
Expenses for research and development increased by 11% from $102,598 for the three months ended April 30, 1998 to $113,930 for the three months ended April 30, 1999. This increase resulted from R&D activities relating to a number of new projects that led to (i) an increase in usage of outside contractors to accommodate an increase in product development activities, and (ii) an increase in travel expenses to customers to provide extra services related to new design.
Selling and distribution expenses increased by 69%, from $79,306 for the three months ended April 30, 1998, to $133,977 for the three months ended April 30, 1999. This increase was primarily due to (i) the increase of $30,644 in commission expenses associated with the increase in sales, (ii) an increase of $3,677 in advertising and promotion expenses, (iii) a decrease of $2,016 in travel expenses related to the Company's marketing efforts which have been deferred to May 1999, and (iv) $22,366 resulting from the initial set up of an office in Tokyo with one full-time Japanese employee to enhance the Company's direct marketing efforts in Japan.
General and administrative expenses increased by 40% from $109,351 for the three months ended April 30, 1998, to $153,104 for the three months ended April 30, 1999. This was the result of (i) an increase of $5,061 due to additional maintenance support fees paid to the EDI program as required by our major customers, (ii) a loss on foreign exchange of $25,912, (iii) an increase of $14,015 in consulting and legal fees and the preparation of special reports to investors, and (iv) a decrease in cash discount and other administration costs of $1,235.
The provision for profit sharing increased from $3,530 for the three months ended April 30, 1998, to $16,542 for the three months ended April 30, 1999, as a result of the increase in profit.
Interest income (net of interest expense) increased by 27% from $24,261 for the three months ended April 30, 1998, to $30,926 for the three months ended April 30, 1999. This was the net result of interest earned on cash deposits not required for current working capital.
Before income taxes, the Company's income increased from $31,729 for the three months ended April 30, 1998, to $159,228 for the three months ended April 30, 1999. This increase in income resulted primarily from the increase in sales.
The Company accrued income taxes increased from $9,625 for the three months ended April 30, 1998, to $56,972 for the three months ended April 30, 1999, as a result of the increase in taxable income.
Net income increased 362% from $22,104 for the three months ended April 30, 1998 to $102,256 for the three months ended April 30, 1999 primarily as a result of higher sales. Earnings per share increased from $0.0145 for the three months ended April 30, 1998 to $0.0708, a record increase of 388%.
For more information on Glas-Aire Industries Group Ltd., look up the company's web site at www.glasaire.com or call 303-380-2177.
Certain statements and information included in this release constitute "forward-looking statements" within the meaning of the Federal Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied in such forward-looking statements. Additional discussion of factors that could cause actual results to differ materially from management's projections, forecasts, estimates and expectations is contained in the Company's SEC filings.
Glas Aire Industries Group Ltd.
Consolidated Condensed Statement of Operations
(Unaudited)
Three Months Ended
April 30, April 30,
1999 1998
Sales $1,835,787 $1,085,596
Cost of sales 1,243,125 740,392
Gross Profit 592,662 345,204
Expenses
Depreciation 46,807 42,951
Research and
development 113,930 102,598
Selling and
distribution 133,977 79,306
General and
administrative 153,104 109,351
Provision for
profit sharing 16,542 3,530
Interest (30,926) (24,261)
------- -------
433,434 313,475
Income before income
taxes 159,228 31,729
Income taxes - current 56,972 9,625
------- ------
Net Income for the
period $102,256 $ 22,104
-------- ------
Net income per share
of common stock $0.0708 $ .0145
------- -----------
Weighted average
common shares
outstanding
(after deducting
158,872 shares of
treasury stock
held by the Company) 1,444,417 1,519,405
--------- ---------
Glas Aire Industries Group Ltd.
Consolidated Condensed Balance Sheet
April 30, January 31,
1999 1999
(Unaudited) (Audited)
Assets
Current
Cash and
equivalents $2,642,897 $2,110,535
Accounts
receivable 990,096 953,289
Note receivable
from related
party - 506,806
Inventories 652,968 673,688
Prepaid expenses 27,153 33,460
------ ------
4,313,114 4,277,778
Fixed assets 1,651,761 1,607,557
--------- ------------
$5,964,875 $5,885,335
Liabilities and Shareholders'
Equity
Current
Accounts payable
and accrued
liabilities $598,053 $733,512
Income taxes
payable 147,585 94,712
Current portion -
capital lease 43,470 49,055
------ ----------
789,108 877,279
Obligation under
capital lease 66,414 68,722
Deferred Income Taxes 358,504 358,504
------- -------
1,214,026 1,304,505
Shareholders' Equity
Share capital 16,033 15,935
Contributed
surplus 3,475,597 3,475,695
Treasury stock (339,573) (339,573)
Retained earnings 1,648,987 1,546,730
Cumulative
translation
adjustment (50,195) (117,957)
------- -------------
4,750,849 4,580,830
Total Liabilities and
Shareholders' Equity $5,964,875 $5,885,335