Hastings Announces 1999 Second-Quarter and First-Half Results
9 August 1999
Hastings Announces 1999 Second-Quarter and First-Half Results
HASTINGS, Mich., Aug. 9 -- Hastings Manufacturing Company
(Amex: HMF), a manufacturer and marketer of automotive-related products, today
announced its financial results for the 1999 second quarter and six-month
period ended June 30, 1999.
For the second quarter, net sales were $9.7 million, compared with net
sales of $10.6 million for the same quarter last year. As in the first
quarter of 1999, lower sales volume in both the domestic aftermarket and
export market contributed to the decline in sales. Sales of private-branded
and original equipment products were similar year to year. Second-quarter net
income was $255,572, or $0.33 per diluted share, versus $525,016, or $0.68 per
diluted share, in 1998.
For the first six months of 1999, Hastings earned $301,215 on $18.7
million in sales, compared with net income of $943,291 and net sales of $20.6
million for the corresponding period in 1998. Diluted earnings per share for
the first half was $0.39 versus $1.22 for the same period last year.
"While Hastings was affected in 1999's first half by weaker aftermarket
sales domestically, we are seeing indications of stronger aftermarket part
demand in the second half of 1999. We also are beginning to see some recovery
in the export market," said Hastings Co-CEO Mark Johnson.
Gross profit as a percentage of sales was 29.4 percent for the second
quarter and 28.0 percent for 1999's first half, compared with 31.7 percent and
31.8 percent in 1998, respectively. In 1999's first quarter, anticipated
production conversion costs led to the Company's higher cost of sales. In the
second quarter, the Company incurred added expenses to address orders delayed
by the production conversion in addition to its second-quarter orders.
Without these non-recurring costs, the Company's gross margins approximated
the levels experienced in 1998's second quarter and first half.
Hastings' operating expenses as a percentage of sales increased slightly
to 23.5 percent for 1999's second quarter and 23.8 percent for the first half,
versus 22.3 percent and 23.0 percent in 1998, respectively. While operating
expenses decreased in dollar amounts for 1999's second quarter and first half,
the higher operating expense ratios were due to fixed costs being covered by
lower sales volume.
"With better sales volume and without the non-recurring costs related to
the production conversion we expensed in 1999's first half, we expect improved
earnings for the second half," Mark Johnson concluded.
Hastings Manufacturing is a leading manufacturer and marketer of piston
rings and specialty tools under the Hastings Brand, and additives for engines,
transmissions, cooling systems and fuel systems under the Casite Brand.
Safe Harbor Statement under the Private Securities Litigation Reform Act
of 1995: The statements contained in this news release include certain
predictions and projections that may be considered forward-looking statements
under securities laws. These statements involve a number of important risks
and uncertainties that could cause actual results to differ materially,
including but not limited to economic, competitive, governmental and
technological factors affecting the Company's operations, markets, products,
services and prices.
HASTINGS MANUFACTURING COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
For The Three Months Ended For The Six Months Ended
June 30, June 30,
1999 1998 1999 1998
Net Sales $9,738,166 $10,628,170 $18,697,297 $20,574,188
Cost of Sales 6,870,929 7,263,221 13,468,483 14,035,201
Gross Profit 2,867,237 3,364,949 5,228,814 6,538,987
Operating Expenses:
Advertising 84,306 92,488 154,607 190,054
Selling 781,863 833,782 1,518,573 1,593,818
General and
Administrative 1,425,072 1,444,108 2,785,112 2,948,232
Total Operating
Expenses 2,291,241 2,370,378 4,458,292 4,732,104
Operating Income 575,996 994,571 770,522 1,806,883
Other Expenses (Income):
Interest Expense 153,705 113,440 300,792 222,570
Interest Income - (11,660) - (19,777)
Other, net (4,281) (1,225) (41,485) (201)
Total Other
Expenses 149,424 100,555 259,307 202,592
Income Before Income
Tax Expense 426,572 894,016 511,215 1,604,291
Income Tax
Expense 171,000 369,000 210,000 661,000
Net Income $255,572 $525,016 $301,215 $943,291
Net Income Per Share of Common Stock:
Basic $0.33 $0.68 $0.39 $1.22
Diluted $0.33 $0.68 $0.39 $1.22
Average Shares Outstanding:
Basic 775,046 771,496 775,046 771,496
Diluted 775,046 773,062 775,046 772,718