Universal Automotive Industries, Inc. Reports Record Second Quarter Sales
3 August 1999
Universal Automotive Industries, Inc. Reports Record Second Quarter Sales And Profitability Improvement
CHICAGO, Aug. 2 -- Universal Automotive Industries, Inc.
today announced record second
quarter sales of $20.7 million, income from operations of $1.22 million and
net income of $392 thousand or $0.06 per share. This compares to 1998 second
quarter sales of $19.5 million, income from operations of $1.05 million and
net income of $350 thousand or $0.05 per share. Core business brake parts
sales and gross profit in the second quarter of 1999 increased 9% and 11%,
respectively compared to the same 1998 quarter. These increases are due to
Universal's continued focus on friction and premium "Ultimate" products. Non
brake business sales and gross profit are lower than the same 1998 quarter as
the Hungarian foundry has not yet replaced the loss of sales as a result of
the economic crisis in Russia.
Year to date sales for 1999 totaled $35.9 million compared to $34.0
million in 1998. Income from operations and net loss were $951 thousand and
$193 thousand ($0.03 per share), respectively year to date in 1999. 1998 year
to date income from operations and net income was $1.6 million and 392
thousand ($0.06 per share), respectively. The year to date totals reflect the
aggressive pricing early in the year to secure new customers, especially two
new buying groups. Additional new volume from these customers in the second
quarter have somewhat offset the impact of the lower margins earlier in the
year. The Company believes that there will be additional margin improvement
in the second half of the year due to additional new volume from these groups
and continued improvement in product mix as sales of higher margin friction
and "Ultimate" products continue to grow. The Company's gross profit percent
has increased in each month of 1999.
Arvin Scott, President and CEO commented, "The record sales and improved
margin in the core brake parts business for the second quarter of 1999 can be
attributed to the aggressive sales efforts over the last three quarters. I'm
especially pleased with the growth in the higher margin friction and Ultimate
rotor product lines. I believe we are at the early stages of realizing the
benefits of one important tenet of the Company's core business strategy, that
of growing with existing customers." Mr. Scott continued, "A key aspect of
our business plan is to market higher margin friction, hydraulics, and
Ultimate brake parts to established customers in the drum and rotor market
segment where the Company believes that it enjoys a 12% market share. The
industry trend towards consolidating suppliers favors the Company's business
plan."
This news release contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, which are intended to
be covered by safe harbors created hereby. Such forward-looking statements
involve known and unknown risks, uncertainties (including those risk factors
referenced in the Company's Filings with the Securities and Exchange
Commission), and other factors that may cause the actual results, performance
or achievements of the Company to be materially different from any future
results, performance, or achievements of the Company expressed or implied by
such forward-looking statements.
The Company, headquartered in Chicago, specializes in the distribution and
manufacture of brake rotors and other brake parts, under its trademarks
"UBP -- Universal Brake Parts," and "Ultimate" in the United States and
Canada.
UNIVERSAL AUTOMOTIVE INDUSTRIES, INC.
Summary of Financial Results
(000's) except per share data
Quarter Ended June 30 Six Months Ended June 30
1999 1998 1999 1998
Net Sales:
Brake parts $17,575 $16,182 $29,329 $27,833
Non-brake $3,138 $3,292 $6,583 $6,165
Total $20,713 $19,474 $35,912 $33,998
Gross Profit:
Brake parts $4,092 $3,691 $6,314 $6,340
Non-brake $325 $529 $560 $912
Total $4,417 $4,220 $6,874 $7,252
Gross profit percent
Brake parts 23.3% 22.8% 21.5% 22.8%
Non-brake 10.4% 16.1% 8.5% 14.8%
Total 21.3% 21.7% 19.1% 21.3%
Selling, general, and
administrative
expenses $3,196 $3,172 $5,923 $5,631
Income from operations $1,221 $1,048 $951 $1,621
Provision for lawsuit
settlement (151) (151)
Interest expense
and other, net 498 666 1,008 1,141
Pretax income (loss) $723 $533 ($57) $631
Income tax provision 331 183 136 239
Net income (loss) $392 $350 ($193) $392
Basic net income
(loss) per share $0.06 $0.05 ($0.03) $0.06
Weighted average
shares 6,784,810 6,769,425 6,778,229 6,769,425