Safety Components Announces Return to Profitability for Q1
10 August 1999
Safety Components International, Inc. Announces Return to Profitability for First Fiscal Quarter
FORT LEE, N.J., Aug. 9 -- Safety Components International,
Inc. , one of the world's leading manufacturers of automotive
airbag fabric and cushions, today reported results for the first quarter ended
June 26, 1999. Sales for the quarter increased to $63,845,000 from
$51,449,000 in the previous year's comparable quarter. The Company reported
net income of $620,000, or $0.12 per diluted share, for the quarter, compared
to net income of $1,543,000, or $0.30 per diluted share, for the same period
in the prior year. The Company's results for its first quarter compare
favorably to its previously reported net losses for the third and fourth
quarters of fiscal year 1999.
The Company also reported net income before goodwill amortization of
$1,028,000, or $0.20 per diluted share, for the quarter, compared to
$1,949,000, or $0.37 per diluted share, in the comparable 1999 quarter.
"I am very encouraged by the return to profitability in the wake of the
disappointing results in the third and fourth quarters of fiscal year 1999.
We have made significant strides in controlling our costs as we emerge from
the significant new platform introductions. The lean manufacturing
implementation started in the first quarter is having a positive impact on the
operating results, which is expected to continue into future periods," stated
Robert A. Zummo, Chairman and Chief Executive Officer of Safety Components
International, Inc.
"We anticipate that results of operations for our second quarter,
typically our weakest fiscal quarter due to the customary shutdown of our
automotive plants, will also be negatively affected by continued poor
performance of our noncore metal components businesses. As a result, we
expect to incur a loss for the second quarter of fiscal 2000, but also expect
that our third and fourth fiscal quarters will show marked improvement over
our first quarter as the benefits of our high volume awards and cost reduction
programs are realized. We are considering strategic alternatives regarding
our noncore operations so that we can concentrate on building our more
profitable automotive operations," stated Mr. Zummo.
"I am also pleased to introduce Brian P. Menezes as the successor to
Jeffrey J. Kaplan. Mr. Menezes has served in various financial and
operational positions in automotive parts and textiles manufacturing companies
over the past 25 years. Most notable among these companies is Cooper
Industries - Canada, where he served as Vice President of Operations and
Finance. Mr. Kaplan, who has served as Executive Vice President and Chief
Financial Officer since February 1997, resigned for personal reasons effective
August 31," continued Mr. Zummo.
This release contains forward-looking statements. There are certain
important factors that could cause results to materially differ from those
anticipated from the statements above. Those factors include, but are not
limited to: dependence of revenues upon several major module suppliers;
worldwide economic conditions; the results of cost-savings programs being
implemented; adequacy of capital; qualification of awarded programs; domestic
and international automotive industry trends; pricing pressures; the ability
to successfully identify strategic alternatives for the Company's noncore
operations or otherwise return such operations to profitability; and the
ability to satisfy the Company's customers on timeliness and quality.
Additional information on these and other factors that could potentially
affect the Company's financial results may be found in the Company's filings
with the Securities and Exchange Commission.
Safety Components International, Inc. is a leading, low-cost supplier of
automotive airbag fabric and cushions with operations in North America and
Europe. The Company is also a leading manufacturer of value-added synthetic
fabrics used in a variety of niche industrial and commercial applications. In
addition, Safety Components supplies metal airbag components to its airbag
customers utilizing its machining and stamping capabilities gained from years
of experience as a military ordnance manufacturer and continues as a systems
integrator and manufacturer for ordnance programs.
SAFETY COMPONENTS INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Thirteen Thirteen
Weeks Ended Weeks Ended
June 26, 1999 June 27, 1998
Net sales $63,845 $51,449
Cost of sales, excluding depreciation 52,841 40,318
Depreciation 2,127 1,866
Gross profit 8,877 9,265
Selling and marketing expenses 782 647
General and administrative expenses 2,875 2,571
Research and development expenses 223 --
Amortization of goodwill 575 560
Income from operations 4,422 5,487
Other expense 8 44
Interest expense 3,423 2,807
Income before income taxes 991 2,636
Provision for income taxes 371 1,093
Net income $620 $1,543
Net income per share, basic $0.12 $0.30
Net income per share, assuming dilution $0.12 $0.30
Weighted average number of
shares outstanding, basic 5,136 5,068
Weighted average number of
shares outstanding, assuming dilution 5,166 5,224