R&B Reports 1999 Third-Quarter and Nine Month Results
1 November 1999
R&B Reports 1999 Third-Quarter and Nine Month Results
COLMAR, Pa., Oct. 29 -- R&B, Inc., today
announced financial results for the third quarter and nine months ended
September 25, 1999.
Net sales for the third quarter of 1999 increased 33.7 percent to
$59.5 million from $44.5 million recorded in the same period last year. As
previously announced, the sales growth was less than expected due to a general
softening in the automotive aftermarket, inventory reduction programs
implemented by several major customers and the added costs and timing of new
program roll-outs during the 3rd quarter. As anticipated, net income declined
49.7 percent to $1.3 million from $2.5 million in the year earlier period.
Diluted earnings per share were $0.15 compared to $0.30 in the third quarter
of 1998.
Mr. Richard Berman, Chairman, President and Chief Executive Officer said,
"As indicated in our press release on September 1, while we believe part of
the lower-than-budgeted sales increases will prove to be temporary, we have
already moved to reduce costs, bringing them in line with current business
levels. We are also reviewing opportunities for further actions which would
benefit future results as we are determined to quickly resume our previous
trend of achieving at least 15 percent year-over-year earnings growth."
For the nine months ended September 25, 1999, sales were a record
$183.5 million, up 46.1 percent from $125.6 million for the comparable period
of 1998. Reflecting the lower-than-budgeted sales in the third quarter and
business mix changes, gross profit, which was up 36.6 percent to $67.8 million
from $49.7 million a year ago, did not keep pace with the sales growth.
Because operating costs were budgeted at higher than realized sales levels,
operating profit only increased by $0.9 million, or 7.1 percent. Interest
costs, reflecting the borrowings for the acquisition of Allparts last fall and
the working capital requirements for the increased level of sales overall,
increased 70.7 percent, resulting in declines of 13.3 percent in pretax
earnings and 11.1 percent in net income to $5.4 million from $6.1 million.
Diluted earnings per share of $0.64 were also 11.1 percent below the record
$0.72 achieved in the first nine months of 1998.
"Unfortunately, the sudden and unforeseen change in industry conditions
caused a major shortfall in third quarter earnings, and more than offset the
records we set during the first half," said Mr. Berman. "Our costs are being
brought in line with the anticipated business levels and we are optimistic
that we can get back on track with our earnings momentum."
R&B, Inc. is a leading supplier of "hard-to-find" parts and fasteners for
the automotive aftermarket. R&B's parts are marketed under more than fifty
proprietary brand names, through its Motormite and Dorman divisions, as well
as under the private labels of automobile manufacturers, parts manufacturers,
and national warehouse distributors.
Forward looking statements in this release are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.
Such forward looking statements are subject to certain risks and uncertainties
that could cause actual results to differ materially from those projected.
Readers are cautioned not to place undue reliance on these forward looking
statements which speak only as of the date hereof. Factors that cause actual
results to differ materially include, but are not limited to, those factors
discussed in the Company's Annual Report on Form 10-K under "Business -
Investment Considerations."
R&B, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)(A)
(in thousands, except per-share amounts)
13 weeks ended 9/25/99 Pct. 9/26/98 Pct.
Net sales $59,495 100.0 $44,509 100.0
Cost of goods sold 38,620 63.7 26,479 59.5
Gross profit 20,875 36.3 18,030 40.5
Selling, general and
administrative expenses 17,235 30.1 13,057 29.3
Income from operations 3,640 6.1 4,973 11.2
Interest expense, net 1,717 2.9 1,040 2.3
Income before taxes 1,923 3.2 3,933 8.8
Provision for taxes 663 1.1 1,430 3.2
Net income 1,260 2.1 2,503 5.6
Earnings per share
Basic $.15 -- $.30 --
Diluted $.15 -- $.30 --
Average shares outstanding
Basic 8,392 -- 8,337 --
Diluted 8,461 -- 8,438 --
39 weeks ended 9/25/99 Pct. 9/26/98 Pct.
Net sales $183,459 100.0 $125,568 100.0
Cost of goods sold 115,624 62.6 75,912 60.5
Gross profit 67,835 37.4 49,656 39.5
Selling, general and
administrative expenses 54,329 30.0 37,047 29.5
Income from operations 13,506 7.4 12,609 10.0
Interest expense, net 5,229 2.9 3,063 2.4
Income before taxes 8,277 4.5 9,546 7.6
Provision for taxes 2,886 1.6 3,479 2.8
Net income 5,391 2.9 6,067 4.8
Earnings per share
Basic $.64 -- $.73 --
Diluted $.64 -- $.72 --
Average shares outstanding
Basic 8,369 -- 8,323 --
Diluted 8,418 -- 8,424 --
R&B, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (A)
(in thousands)
(Unaudited)
Assets 9/25/99 12/26/98
Cash and cash equivalents $1,936 $915
Accounts receivable 57,412 55,585
Inventories 84,958 68,401
Prepaid expenses and other 3,403 2,535
Property & Equipment 22,558 20,761
Intangible and other assets 36,054 35,751
Total Assets $206,321 $183,948
Liabilities and Shareholders' Equity
Current portion of long-term debt $1,861 $3,089
Accounts payable 23,998 18,309
Accrued expenses and other 8,304 8,418
Long-term debt 92,301 80,004
Deferred income taxes 2,514 2,514
Shareholders' equity 77,343 71,614
Total Liabilities and Equity $206,321 $183,948
(A) Totals may not add due to rounding.