Raytech Corporation Announces Third Quarter Results
17 November 1999
Raytech Corporation Announces Third Quarter Results
SHELTON, Conn.--Nov. 17, 1999--Raytech Corporation today announced net income for the thirteen-week period ended October 3, 1999 amounting to $3.4 million, or $.98 per basic share as compared with $3.1 million or $.90 per basic share for the corresponding period in 1998.Albert A. Canosa, President and Chief Executive Officer of Raytech Corporation, stated, "We continue to expand our sales growth as evidenced in the 4 percent increase over the prior year. Our depth of knowledge in the friction industry is recognized by our customer base as we work together in developing new materials and techniques to improve efficiency and durability."
"It is this technical knowledge, coupled with our continued focus on profitability that provides for our continued success."
Net Sales Up 1.6% for Quarter, Up 4.0% Year-to-Date Raytech
Corporation showed strong performance in the third quarter posting sales of $62.5 million for the thirteen-week period ended October 3, 1999 as compared to $61.5 million for the same period in the prior year. Net sales for the thirty-nine week period of $195.6 million showed an increase of $7.6 million, 4.0 percent, over the prior year amount of $188.0 million.
The wet friction segment reported increased sales of $3.4 million or 2.9 percent as compared to the same period in the prior year. The rise in sales is primarily the result of increased unit production among the automotive original equipment manufacturers and the sales of new products to this customer base, which is reflected in the reported sales increase of $9.6 million in the automotive original equipment market sector over the prior year. Domestic car and light truck sales are expected to reach 17 million units in 1999 according to industry analysts, which would be the record year for sales in this industry. The heavy duty markets continue their decline as a result of the economic downturn in Asia and Latin America. In addition, the demand for heavy duty equipment was affected by a decline in orders from the oil and mining industries. Sales in this market decreased $1.0 million as compared to last year. However domestic sales of heavy duty equipment is expected to remain stable. Demand for agricultural equipment remains weak as the farm sector continues to feel the effects of depressed agricultural commodity prices and reduced domestic farm income. Sales in this market decreased $5.2 million or 45 percent over last year.
Sales in the Aftermarket segment increased by $5.8 million over the same period in the prior year, equating to a 13 percent growth rate. Improved sales reflected deeper penetration into the current customer base and sales of new products and the penetration of new markets. The sales of dry friction products in the North American aftermarket, a new market for 1999, continued during this quarter.
Operating Profit Up 1.8% for Quarter, 2.9 Percent Year-to-Date
Worldwide operating profits in the third quarter of $5.6 million reflected an increase of 1.8 percent over the same period in the prior year. Earnings in the third quarter of 1998 were $5.5 million. Operating profits for the nine months ended October 3, 1999 of $21.6 reflected an increase of $.6 million or 2.9 percent over the prior year's amount of $21 million for the same nine-month period.
The wet friction segment reported operating profits of $4.0 million for the quarter ended October 3, 1999 as compared to $3.4 million for the same period in 1998, an increase of 17.6 percent. The recorded operating profit for the 39-week period ended October 3, 1999 of $13.9 million reflects an increase of $.4 million over the same period in the prior year, an increase of 3.0 percent. This increase was driven by increased sales of $3.4 million during this period and the improved gross profit in the third quarter.
The aftermarket segment reported operating profits of $2.8 million for the quarter ended October 3, 1999, an increase of $.3 million over the same period in the prior year. The 12.5 percent increase in operating profits reflects improved sales of $1.2 million. The recorded operating profit for the 39-week period ended October 3, 1999 of $8.6 million reflects an increase of $1 million over the same period in the prior year. The increased operating profit of 13.2 percent over the prior year was due to the increased sales of $5.8 million during this 39-week period as compared to the same period in the prior year.
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
October 3, September 27,
1999 1998
Net sales $ 62,473 $ 61,486
Pretax income $ 5,260 $ 5,152
Net income(a) $ 3,378 $ 3,081
Basic earnings per share:
Earnings per share $ .98 $ .90
Weighted average shares 3,436,812 3,421,298
Diluted earnings per share:
Earnings per share $ .94 $ .87
Weighted average shares 3,576,342 3,560,044
For the 39 Weeks Ended
October 3, September 27,
1999 1998
Net sales $ 195,649 $ 188,026
Pretax income $ 20,690 $ 20,130
Net income(a) $ 13,205 $ 13,224
Basic earnings per share:
Earnings per share $ 3.85 $ 3.90
Weighted average shares 3,426,534 3,395,064
Diluted earnings per share:
Earnings per share $ 3.76 $ 3.71
Weighted average shares 3,510,265 3,560,347
(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.