SMC Corporation Reports Third Quarter Results for 1999
21 October 1999
SMC Corporation Reports Third Quarter Results for 1999
BEND, Ore., Oct. 21 -- SMC Corporation today
reported its results for the third quarter of 1999. For the three month period
ended October 2, 1999 net sales decreased to $46.7 million from
$50.3 million reported for the third quarter in 1998. Net income increased
however for the same three month period to $130,000 in the third quarter of
1999 from a loss of $2.5 million reported in the third quarter in 1998.
Earnings for the quarter increased to $.02 per share on 5.8 million diluted
shares outstanding from a loss of $(.38) per share on 6.5 million diluted
shares outstanding for the third quarter of 1998.
For the nine month periods ended October 2, 1999 and September 25, 1998,
sales were $157.3 million and $150.4 million respectively. Net income for the
periods was $89,000 for the nine months of 1999 compared to a loss of
$(727,000) for the nine months of 1998. Earnings for the respective nine month
periods were $.02 per share on 5.8 million diluted shares outstanding for
1999 versus a loss of $.(.11) per share on 6.5 million diluted shares in 1998.
Sales revenue decreased by 7% in the third quarter. This was primarily the
result of decreased sales of the Company's Renegade product. This product was
introduced in 1998 and third quarter sales during that time represented
initial stocking orders. Total sales thus far for the year, however, are
5% higher than the same periods in 1998 due to higher revenues of primarily
the Safari product lines.
Gross profits increased in the third quarter of 1999 to $5.0 million from
$2.8 million recorded a year earlier in the third quarter of 1998. This
improvement is primarily the result of improved production costs. For the nine
month period comparisons, gross profit percentage remained consistent with
prior year levels.
Selling, general, and administrative costs were higher in the third
quarter comparisons of 1999 versus 1998. While administrative and finance
costs were 16% lower than those costs of a year earlier, selling and marketing
costs were 28% higher reflecting increased promotional and personnel costs.
For the nine month period comparisons, selling, general and administrative
costs remained consistent as a percentage of sales. Litigation and settlement
costs decreased during the third quarter of 1999 compared to the third quarter
in 1998. These costs are also lower in the nine month comparisons of 1999 to
1998. Most legal disputes have been settled and the Company has invested
heavily in efforts to increase production quality and customer satisfaction.
The Company believes the result has been significantly fewer customer
satisfaction issues.
Interest expense is higher in both the three and nine month comparisons
due to higher debt loads used to finance current operations and the new
service center in Tampa, Florida. Other income is significantly higher in both
three month and nine month comparisons as the result of profit recognized on
the sale of Company owned aircraft of $1.1 million.
Michael Jacque, SMC President and Chief Operating Officer, states, "It is
our continuing belief that SMC Common Stock is undervalued. In May, I
purchased 20,000 shares of SMC common stock at an average price of $4.75 prior
to joining the company. Subsequently, I purchased 8,200 shares in June at an
average price of $5.17; 8,400 shares in September at an average price of
$4.29; and more recently, 4,300 shares at an average price of $3.91. Further,
other members of our senior management team have been and will be actively
buying stock as well. I currently intend to buy 100,000 shares of our stock
personally, to hold long-term, demonstrating the continued confidence that we
have in our business fundamentals. Further purchases of mine will be published
as soon as practical; no sales are planned."
Mr. Jacque continues, "As of October 2, 1999, the Company has repurchased
a total of 765,000 shares of common stock of the 800,000 shares authorized for
repurchase by our Company's board of directors. Note that although Mat Perlot,
C.E.O., and Chairman of the Board, shares our confidence in the fundamental
value of our stock, "planned sales" of approximately 50,000 shares per quarter
of his stock will continue to occur per his estate plans."
SMC Corporation is one of the largest high line motor coach manufacturers
in the United States.
Information about SMC Corporation and its products can be found on the
World Wide Web at http://www.smc-corporation.com.
Forward-Looking Statements: The statements in this report may be regarded
as forward-looking statements, particularly those statements referring to the
current value of the Company's stock by Mr. Jacque. A number of factors could
cause actual results to differ materially from these statements, including
delays in full operation of the production facility, a general slowdown in the
economy or the RV market specifically, or new products from competitors.
Please also refer to the Company's SEC reports, including, but not limited to
its Form 10Q Quarterly Report for the quarter ended October 3, 1999 and its
Form 10K Annual Report for the year ended December 31, 1998.
SMC CORPORATION
CONSOLIDATED STATEMENT OF INCOME
$000's (except share and per share data)
Three Months Ended Nine Months Ended
9/30/98 10/02/99 9/30/98 10/02/99
Net Sales 50,276 46,711 150,406 157,327
Cost of Sales 47,483 41,699 135,738 141,962
Gross Profit 2,793 5,012 14,668 15,365
Sales, General, Adm 4,513 4,796 12,984 13,593
Litigation and
Settlement Costs 1,599 705 2,254 1,981
Income from Operations (3,319) (489) (570) (209)
Interest Expense 196 416 552 1,060
Other Expense (Inc) 505 (1,122) 91 (1,417)
Income Before Taxes (4,020) 217 (1,213) 148
Provision for Taxes (1,538) 87 (486) 59
Net Income (2,482) 130 (727) 89
Net Income/share (0.38) 0.02 (0.11) 0.02
basic
Net Income/share
diluted (0.38) 0.02 (0.11) 0.02
Weighted share
basic 6,499,000 5,839,000 6,495,000 5,839,000
Weighted shares
diluted 6,499,000 5,841,000 6,519,000 5,841,000
SMC CORPORATION
CONSOLIDATED BALANCE SHEET
In Thousands
12/31/98 10/02/99
Assets
Current 45,453 58,395
Property & Equipment 20,551 13,949
Other 2,016 1,853
Total Assets 68,020 74,197
Liabilities
Current 36,492 41,801
Deferred Tax 928 928
Long-term Debt 7,391 8,742
Total Liabilities 44,811 51,471
Shareholders' Equity 23,209 22,726
Total Liability & Equity 68,020 74,197