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Raytech Corporation Announces Second Quarter Results

10 August 1999

Raytech Corporation Announces Second Quarter Results

    SHELTON, Conn.--Aug. 9, 1999--Raytech Corporation today announced net income for the thirteen-week period ended July 4, 1999 of $5.33 million or $1.56 per basic share as compared with $5.98 million or $1.75 per basic share for the corresponding period in 1998. For the twenty-six-week period, net income amounted to $9.83 million or $2.87 per basic share compared with net income of $10.14 million or $3.00 per basic share for the same period in 1998. The results reflect higher pretax income for both the thirteen- and twenty-six-week periods of $7.8 million for the thirteen-week period and $15.4 million for the twenty-six-week period as compared to $7.7 million and $15.0 million in 1998, respectively. The improved pretax income was offset by higher taxes and a larger minority interest in earnings of a subsidiary, the combination of which served to reduce basic earnings per share and diluted earnings per share by $.23.

    Net Sales Up 3.5% for Quarter, Up 5.3% Year-to-Date
    Worldwide net sales rose 3.5 percent for the thirteen-week period ended July 4, 1999 to $65.8 million as compared to $63.6 for the same period in the prior year. Net sales for the 26-week period ended July 4, 1999 of $133.2 million reflects an increase of 5.3 percent over reported sales of $126.5 million in the corresponding period for 1998. Increased sales were driven by new products and new markets in the Aftermarket segment and the Wet Friction segments, specifically the automotive original equipment market. The new products accounted for in excess of 60 percent of the increase in sales.
    "In one of the most intensely competitive markets for auto suppliers in recent history, our operations continued the growth momentum from 1998, posting a 5.3% sales increase over last year. The introduction of new products and our intense focus on producing quality products have been the driving forces in our sales growth," said Raytech President and Chief Executive Officer Albert A. Canosa.
    The increase in Aftermarket sales resulted from increased sales in the basic product offerings and new sales of dry friction products in North America. Sales in the segment increased $4.6 million or 16 percent over the same period in 1998.
    Wet friction sales increased $3.2 million or 4 percent over the same period in 1998. Sales of new products to New Venture Gear in support of the Jeep Grand Cherokee represented a significant portion of the increased sales year-over-year.
    Overall, sales to the automotive original equipment market increased $8.9 million. The sales growth was reduced by declines in sales of agricultural products and other heavy duty products do primarily to the impact of low commodity prices for farm products, causing a reduction in farm income.
    The Dry Friction segment reported sales $1.1 million lower than the same period in the prior year. The sluggish European economy accounts for substantially all of the sales decrease.
    The Company has been under the protection of the U.S. Bankruptcy Court relating to asbestos personal injury and environmental liabilities since March 1989. The ultimate liability of the Company with respect to asbestos-related, environmental or other claims cannot presently be determined.
    Raytech Corporation is headquartered in Shelton, Connecticut, with operations serving world markets for energy absorption and power transmission products, as well as custom-engineered components.

                          RAYTECH CORPORATION
            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                  (000's omitted, except share data)

     Comparative results for the full year are as follows:

                                   For the 13 Weeks Ended
                                July 4, 1999          June 28, 1998

Net sales                          $  65,833              $ 63,645

Pretax income                      $   7,831              $  7,660 
                                                             

Net income(a)                      $   5,339              $  5,986

Basic earnings per share:
  Earnings per share               $    1.56              $   1.75
  Weighted average shares          3,421,395             3,413,700

Diluted earnings per share:
  Earnings per share               $    1.53              $   1.67
  Weighted average shares          3,483,342             3,589,837


                                   For the 26 Weeks Ended
                                July 4, 1999          June 28, 1999

Net sales                          $ 133,176             $ 126,540

Pretax income                      $  15,430             $  14,978

Net income(a)                      $   9,827             $  10,143

Basic earnings per share:
  Earnings per share               $    2.87             $    3.00
  Weighted average shares          3,421,395             3,381,947

Diluted earnings per share:
  Earnings per share               $    2.82             $    2.85
  Weighted average shares          3,477,646             3,558,284

(a)  The Company has been under the protection of the U.S. Bankruptcy
     Court relating to asbestos personal injury and environmental
     liabilities since March 1989. The ultimate liability of the
     Company with respect to asbestos-related, environmental or other
     claims cannot presently be determined.