SMC Corporation Reports Second Quarter Results for 1999
22 July 1999
SMC Corporation Reports Second Quarter Results for 1999
BEND, Ore., July 22 -- SMC Corporation today
reported its results for the second quarter of 1999. For the three month
period ended July 3, 1999 net sales increased to $53.8 million from
$52.3 million reported for the second quarter of 1998. However, net income
decreased for the same three month period from $838,000 in 1998 to a loss of
$149,000 in the second quarter of 1999. Earnings decreased from $.13 per share
on 6.6 million diluted shares outstanding to a loss of $(.03) per share on
5.8 million diluted shares outstanding in the second quarter of 1999.
For the six month periods ended July 3, 1999 and June 30, 1998, sales were
$111 million and $100 million respectively. Net income for the same periods
was a loss of $41,000 in 1999 versus a gain of $1,754,000 in 1998. Earnings
for the respective six month periods were a loss of $(.01) per share on
5.8 million diluted shares in 1999 versus a gain of $.27 per share on
6.5 million diluted shares in 1998.
Sales revenue rose nominally in the second quarter. Gross profit, however,
decreased from $5.9 million to $4.1 million. The Company believes the decrease
was primarily due to seasonal factors affecting the second quarter, changes in
the product mix from the second quarter of 1998 and certain operational issues
primarily affecting the Safari plant. A general manager was appointed at
Safari in the second quarter, filling a vacancy that had existed for several
months. Late in the quarter, the Company also introduced several cost cutting
measures at the Safari plant which included a significant workforce reduction.
Selling, general and administrative expenses while consistent with the
prior year quarter levels, were significantly reduced from the first quarter
of 1999. Legal costs while higher than prior year quarter levels were less
than half the costs incurred in the first quarter of 1999. On a year to date
basis, selling, general and administrative costs were higher primarily due to
increased selling expenses associated with $11 million of increased sales.
Interest expense is higher in both the quarterly and year to date
comparisons as the result of increased borrowing from the operating credit
lines and the financing of the new service center in Tampa, Florida.
Other income increased as the result of the sale of certain non production
related assets during the quarter.
As of June 30, 1999 the company has repurchased a total of 765,000 shares
of common stock of the 800,000 shares authorized for repurchase by the
Company's board of directors.
Late in the quarter, SMC announced the hiring of Michael R. Jacque as its
President and Chief Operating Officer. "We look forward to leveraging Mike's
hands on experience in operations and manufacturing from his years at Marathon
as well as the distribution, sales, and marketing knowledge he developed at
Guaranty (Guaranty Chevrolet Pontiac Oldsmobile RV)," said Mathew M. Perlot,
chairman and CEO of SMC.
SMC Corporation is one of the largest high line motor coach manufacturers
in the United States.
Information about SMC Corporation and its products can be found on the
World Wide Web at http://www.smc-corporation.com .
Forward Looking Statements: The statements in this report may be regarded
as forward looking statements. A number of factors could cause actual results
to differ materially from these statements, including delays in full operation
of the production facility, a general slowdown in the economy or the RV market
specifically, or new products from competitors. Please also refer to the
Company's SEC reports, including, but not limited to its Form 10Q Quarterly
Report for the quarter ended July 3, 1999 and its Form 10K Annual Report for
the year ended December 31, 1998.
SMC CORPORATION
CONSOLIDATED STATEMENT OF INCOME
$000's (except share and per share data)
Three Months Ended Six Months Ended
6/30/98 7/03/99 6/30/98 7/03/99
Net Sales 52,324 53,794 100,129 110,616
Cost of Sales 46,455 49,651 88,254 100,264
Gross Profit 5,869 4,143 11,875 10,352
Sales, General, Adm 3,975 3,861 8,226 8,796
Litigation and
Settlement Costs 308 405 655 1,276
Income from Operations 1,586 (123) 2,994 280
Interest Expense 216 334 356 644
Other Expense (Inc) 7 (209) (169) (295)
Income Before Taxes 1,363 (248) 2,807 (69)
Provision for Taxes 525 (99) 1,053 (28)
Net Income 838 (149) 1,754 (41)
Net Income/share
basic 0.13 (0.03) 0.27 (0.01)
Net Income/share
diluted 0.13 (0.03) 0.27 (0.01)
Weighted share
basic 6,545,000 5,845,000 6,493,000 5,868,000
Weighted shares
diluted 6,550,000 5,846,000 6,529,000 5,868,000
SMC CORPORATION
CONSOLIDATED BALANCE SHEET
In Thousands
12/31/98 7/03/99
Assets
Current 45,453 54,213
Property & Equipment 20,551 18,024
Other 2,016 1,906
Total Assets 68,020 74,143
Liabilities
Current 36,492 40,851
Deferred Tax 928 928
Long-term Debt 7,391 9,768
Total Liabilities 44,811 51,547
Shareholders' Equity 23,209 22,596
Total Liability & Equity 68,020 74,143