Simula, Inc. Reports Second-Quarter Results
6 August 1999
Simula, Inc. Reports Second-Quarter Results
PHOENIX--Aug. 5, 1999--Simula, Inc. today announced financial results for the second quarter ended June 30, 1999.Revenues from continuing operations for the three months ended June 30, 1999 were a record $34.0 million compared to revenues from continuing operations of $25.7 million for the comparable period in 1998, an increase of 32%.
Net income from continuing operations was $715,729, or $0.06 per basic and diluted common share, compared to net income from continuing operations of $502,976, or $0.05 per basic and diluted common share, in the second quarter of 1998, an increase of 42%. In the first quarter of 1999, the Company reported net income of $484,269, or $0.05 per basic and diluted common share, on revenues of $31.9 million.
Donald W. Townsend, president and CEO of Simula, said the improvements in quarterly and year-to-date revenues and profitability reflect improved manufacturing and assembly processes and continued strong acceptance of the Company's products.
"For the second consecutive quarter the Company was profitable in both of its operating segments," said Townsend. "Our Government and Defense business remains strong. In the Commercial Transportation Products segment, sales of our automotive safety products exceeded our expectations.
"Results at Airline Interiors continue to improve, and when combined with Artcraft Atlanta, our repair and upholstery operation, our airliner seating business was profitable again this quarter. We have made considerable progress in achieving manufacturing efficiencies, and we expect to see further improvements in each of these markets throughout the balance of the year."
Simula, Inc. is a leader in developing and commercializing protective systems and energy absorption technologies that safeguard human lives. Products include advanced occupant seating and restraint systems for commercial airline, military and automotive applications. Additional information may be found at www.simula.com.
This news release contains forward-looking statements that involve risks and uncertainties that may cause the Company's actual experience to differ materially from that anticipated. These forward-looking statements include projections of revenue and net income; issues that may affect revenue and net income; plans for the future; and assumptions relating to the foregoing. Projected operating results and capital needs will be affected by a wide variety of factors which could adversely impact revenues, profitability, and cash flows. The Company's liquidity and available working capital will be dependent upon improved cash flow from operating units, the availability of sales proceeds from discontinued operations, and availability of funds under its bank credit agreement. Factors and risks that may affect results include, but are not limited to, manufacturing capacity and yield; costs of labor, raw materials, supplies, and equipment; reliability of vendor base; contract mix and shifting production and delivery schedules; amount of resources committed to independent research and development from time to time; success in building strategic alliances with large prime contractors and first tier suppliers to OEMs; the level of orders which are received and can be shipped and invoiced in a quarter; customer order patterns and seasonality; the cyclical nature of the industries and markets addressed by the Company's products; the level and makeup of military expenditures; technological changes; increased costs attributable to changes in government regulations and certifications for transport vehicles; competition and competitive pressures on pricing; and economic conditions in the United States and worldwide markets served by the Company. Additionally, factors and risks affecting operating results include those described in the Company's registration statements and periodic reports filed with the Securities and Exchange Commission.
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended Six Months Ended
June 30, June 30,
1999 1998 1999 1998
Revenue $34,026,137 $25,739,419 $65,954,399 $48,281,597
Cost of revenue 25,161,644 19,067,593 48,575,753 35,683,586
Gross margin 8,864,493 6,671,826 17,378,646 12,598,011
Administrative
expenses 5,944,406 4,690,539 11,994,250 9,087,781
Operating income 2,920,087 1,981,287 5,384,396 3,510,230
Interest expense (1,741,531) (1,194,824) (3,408,603) (2,403,650)
Interest income 13,173 52,513 24,205 115,075
Income before taxes
and discontinued
operations 1,191,729 838,976 1,999,998 1,221,655
Income tax
expense (476,000) (336,000) (800,000) (490,000)
Income from
continuing
operations 715,729 502,976 1,199,998 731,655
Discontinued
operations:
(Loss) earnings
from discontinued
operations,
net of tax -- (1,932,410) -- (2,156,388)
Estimated loss on
disposal,
net of tax -- (4,680,000) -- (4,680,000)
Net income $ 715,729 $(6,109,434) $ 1,199,998 $(6,104,733)
Income (loss) per
common share - Basic:
Loss from continuing
operations $ 0.06 $ 0.05 $ 0.11 $ 0.07
Discontinued
operations:
(Loss) earnings
from discontinued
operations,
net of tax $ -- $ (0.20) $ -- $ (0.22)
Estimated loss on
disposal, net
of tax $ -- $ (0.47) $ -- $ (0.48)
Net income
(loss) $ 0.06 $ (0.62) $ 0.11 $ (0.63)
Income (loss) per
common share
- Diluted:
Loss from continuing
operations $ 0.06 $ 0.05 $ 0.10 $ 0.07
Discontinued
operations:
(Loss) earnings from
discontinued
operations, net
of tax $ -- $ (0.19) $ -- $ (0.21)
Estimated loss on
disposal, net
of tax $ -- $ (0.46) $ -- $ (0.46)
Net income
(loss) $ 0.06 $ (0.60) $ 0.10 $ (0.60)
Weighted average
shares - basic 10,049,111 9,873,668 9,983,154 9,851,392
Weighted average
shares
- diluted 11,474,356 10,276,638 11,441,230 10,218,953