OEA Announces First Quarter Results
23 November 1999
OEA Announces First Quarter Results
Inflator Shipments Grow by 36%
With Increased Utilization of New Inflator Production Facility
DENVER, Nov. 23 -- OEA, Inc. today announced
increased sales and improved gross margins for its first quarter ended
October 31, 1999.
Charles B. Kafadar, president and CEO, said strong growth in inflator
volumes resulted in a sales increase of 5.6% over the same quarter last year,
despite a slow-down in inflator shipments to Asian customers and a 3% weighted
average price reduction in the automotive segment. Gross margins improved to
4.0% in the quarter from 2.7% in the same period last year.
As expected, the Company reported a net loss of $2.75 million, or
$.13 per share, on sales of $60.0 million for the quarter versus a net loss of
$2.72 million, or $.13 per share, on sales of $56.8 million in the same
quarter a year ago. Kafadar attributed the net loss to weakness in the Asian
market, automotive price reductions and operational costs associated with
supporting increased customer demand.
"Inflator unit shipments grew 36% in the quarter, reflecting steadily
increasing utilization of our new high-volume production facility, which
operated at 51% of capacity in the first quarter versus 36% in the fourth
quarter of fiscal 1999," said Kafadar. "Overall initiator unit volume grew
1.6% in the quarter."
"Over the past year we encountered a number of operational challenges
related to our rapid expansion and implementation of high-volume manufacturing
processes," Kafadar said. "With our continuing implementation of lean
manufacturing techniques, we expect improved productivity and profitability in
the future."
Kafadar added that OEA is making steady progress with its cost reduction
programs and that the Company continued to reduce automotive inventory and
working capital requirements in the first quarter, while holding long-term
debt at $91 million, a 27-month low.
OEA is the technology leader and a major manufacturer in the air bag
inflator and initiator industry. The Company is also a leader in the design
and manufacture of personnel escape systems for military aircraft and
high-reliability devices for missile and aerospace applications.
Certain of the information set forth above, including statements regarding
future profitability, capacity utilization, the success of cost reduction
programs, productivity improvements, improved sales of and demand for core
products, technology development and leadership, as well as other statements
or implications regarding future events, are "forward-looking statements" for
purposes of federal securities laws. Actual results or events may differ
materially from these forward-looking statements depending on a variety of
factors. Reference is made to the cautionary statements under the caption
"Forward-Looking Statements" in OEA's Annual Report on Form 10-K for the year
ended July 31, 1999, and the Company's report on Form 8-K filed on June 4,
1998, for a description of various factors that might cause OEA's actual
results to differ materially from those contemplated by such forward-looking
statements.
OEA, INC.
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(in thousands, except share data)
Three Months Ended
October 31, October 30,
1999 1998
(Unaudited) (Unaudited)
Net Sales $59,974 $56,793
Cost of Sales 57,577 55,284
Gross Profit 2,397 1,509
Selling, General and Administrative Expenses 4,288 2,725
Research and Development Expenses 1,452 1,005
Operating Profit (Loss) (3,343) (2,221)
Other Income (Expense):
Interest Income 52 34
Interest Expense (1,882) (1,916)
Royalty Income & Other, Net 795 113
(1,035) (1,769)
Earnings (Loss) Before Income Taxes (4,378) (3,990)
Federal and State Income Taxes (1,624) (1,274)
Net Earnings (Loss) $(2,754) $(2,716)
Earnings (Loss) Per Share - Basic $(0.13) $(0.13)
Weighted Average Number of Shares
Outstanding - Basic 20,612,037 20,595,964