Universal Automotive Industries, Inc. Reports Record Sales Growth
18 November 1999
Universal Automotive Industries, Inc. Reports Record Sales Growth
CHICAGO, Nov. 18 -- Universal Automotive Industries, Inc.
reported 1999 third quarter sales grew 16.2% to $18.7 million
compared to $16.1 million in the same 1998 period due to strong growth of
brake parts sales. Income from operations for the quarter ended September 30,
1999 was $482 thousand and the net loss was $136 thousand or $0.02 per share.
This compares to 1998 third quarter income from operations of $558 thousand
and net loss of $76 thousand or $0.01 per share. Year to date sales for 1999
totaled $54.7 million, income from operations was $1.43 million and net loss
was $329 thousand ($0.05 per share). In comparison, prior year to date sales,
income from operations, and net income were $50.1 million, $2.18 million, and
$315 thousand ($0.05 per share), respectively.
The Company realized exceptionally strong growth in the Company's primary
business: brake parts for the automotive aftermarket. The sales gain
reflects the success of the Company's marketing strategy of providing one stop
shopping for maximum value brake parts across three product lines: drum and
rotor, friction, and hydraulics. Despite the strong gain in the brake
business, the Company's profitability has been adversely affected by
continuing losses at its Csepel Gray Iron Foundry located in Budapest,
Hungary. Third quarter 1999 earnings were also adversely affected by one time
costs incurred in relocating its main distribution and headquarters facility
to larger, leased quarters. Net income before charges related to the loss at
its Hungarian operation and the one time expenses related to the move of its
main distribution facility would have been $199 thousand or $0.03 per share
for the 1999 third quarter compared to $150 thousand or $0.02 per share for
the 1998 third quarter. For the 1999 nine months, net income and earnings per
share would have been $562 thousand and $0.08 per share, respectively compared
to $507 thousand and $0.07 per share, respectively for the same period in 1998
after deduction of losses attributable to the Hungarian operation and the
facility move.
Arvin Scott, President and CEO commented, "I'm pleased with the strong
growth in our primary brake parts business. In light of industry growth of 3%
to 5% annually, the double digit growth the Company enjoyed in the brake parts
segment is a significant accomplishment and reaffirms the Company's brake
parts strategy. However, our success in our primary business has been masked
by our totally unsatisfactory performance at our Csepel Hungarian foundry. I
want to assure our shareholders that management is totally focused on
exploring all possibilities to resolving the challenges associated with
Csepel. Csepel accounts for 7% of the Company's sales for the 1999 nine month
period, but is 230% of the Company's loss."
This news release contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, which are intended to
be covered by safe harbors created hereby. Such forward-looking statements
involve known and unknown risks, uncertainties (including those risk factors
referenced in the Company's filings with the Securities and Exchange
Commission), and other factors that may cause the actual results, performance
or achievements of the Company to be materially different from any future
results, performance, or achievements of the Company expressed or implied by
such forward-looking statements.
The Company, headquartered in Chicago, specializes in the distribution and
manufacture of brake rotors and other brake parts, under its trademarks
"UBP -- Universal Brake Parts," and "Ultimate" in the United States and
Canada.
For further information contact: Jerome J. Hiss, CFO
(708-293-4050, ext. 227).
UNIVERSAL AUTOMOTIVE INDUSTRIES, INC.
Summary of Financial Results
(000's) except per share data
Three Months Nine Months
Ended September 30 Ended September 30
1999 1998 1999 1998
Net Sales:
Brake parts $16,138 $13,661 $45,468 $41,494
Commodities $1,407 $1,308 $5,454 $4,010
Hungarian foundry $1,203 $1,168 $3,738 $4,630
Total $18,748 $16,137 $54,660 $50,134
Gross profit:
Brake parts $3,783 $3,158 $10,170 $9,498
One time building move ($100) ($150)
Commodities $242 $191 $643 $494
Hungarian foundry $59 $66 $45 $674
Total $3,984 $3,415 $10,708 $10,666
Gross profit percent:
Brake parts 23.4% 23.1% 22.4% 22.9%
Commodities 17.2% 14.6% 11.8% 12.3%
Hungarian foundry 4.9% 5.7% 1.2% 14.6%
Total 21.3% 21.2% 19.6% 21.3%
Selling, general, and
administrative expenses $3,457 $2,856 $9,350 $8,487
One time building move $45 $75
Total $3,502 $2,856 $9,425 $8,487
Income from operations
Brake parts $659 $604 $1,844 $1,795
One time building move ($145) ($225)
Commodities $216 $181 $570 $576
Hungarian foundry ($248) ($227) ($756) ($192)
Total $482 $558 $1,433 $2,179
Provision for lawsuit
settlement (151)
Interest expense and
other, net 573 557 1,582 1,698
Pretax income (loss) ($91) $1 ($149) $632
Income tax provision
(benefit) 45 78 180 317
Net income (loss) ($136) ($77) ($329) $315
Basic net income (loss)
per share ($0.02) ($0.01) ($0.05) $0.05
Weighted average
shares 6,793,777 6,769,425 6,783,411 6,769,425