SMC Corporation Reports Fourth Quarter and Year End Results for 1999
10 February 2000
SMC Corporation Reports Fourth Quarter and Year End Results for 1999
BEND, Ore., Feb. 10 -- SMC Corporation today
reported its results for the fourth quarter of 1999. For the three month
period ended December 31, 1999 net sales were $58.2 million. This is a
decrease from sales of $67.1 million reported in the quarter ending
December 31, 1998. However, when compared to sales in the third quarter of
1999 of $46.7 million, the fourth quarter 1999 sales increased by
$11.5 million. Net income in the quarter ending December 31, 1999 was $152,000
compared to $1.1 million recorded in the quarter ending December 31, 1998. Net
income in the fourth quarter of 1999 increased by $22,000 over third quarter
1999 results. Earnings per share for the quarter ending December 31, 1999
decreased to $.03 per share on 5.8 million shares outstanding from $.18 per
share on 6.2 million shares outstanding for the quarter ending
December 31, 1998.
For the year ending December 31, 1999 net sales were $215.5 million down
slightly from 1998 revenues of $217.5 million. Net income for 1999 was
$241,000 down from $409,000 recorded in 1998. Earnings per share were $.04 in
1999 compared to $.06 per share recorded in 1998.
Gross profit for the quarter ending December 31, 1999 declined
$1.2 million from the level recorded in the quarter ending December 31, 1998.
While the Company made significant improvements in its operations, this
reduction was primarily the result of lower sales volumes in the fourth
quarter comparisons. In the full year comparisons of 1999 and 1998 gross
profit declined by $467,000 as a result of lower sales volumes and higher
warranty costs.
Selling, general and administrative costs for the three month period
ending December 31, 1999 increased to $4.7 million from $4.6 million recorded
in the three month period ending December 31, 1998. For the year ending
December 31, 1999, selling, general, and administrative costs increased by
$689,000 when compared to the year ending December 31, 1998. While the
administrative portion of these costs decreased $600,000, selling costs
increased by $1.3 million primarily due to increased promotional costs and
costs associated with the introduction of three new products.
Operating income decreased to $715,000 in the quarter ending
December 31, 1999 from $2.2 million recorded in the quarter ending
December 31, 1998. When compared to the quarter ending October 2, 1999,
operating income increased to $715,000 from a loss of $489,000. For the year
ending December 31, 1999 operating income declined by $1.1 million from levels
recorded for the year ending December 31, 1998.
Interest expense in both the quarterly and yearly comparisons increased as
the result of a higher utilization of the company's credit facilities. Other
expense (income) was impacted by the gain on the sale of certain company
assets earlier in the year.
Commenting on the results, Michael R. Jacque, President and Chief
Operating Officer stated, "Unequivocally, 1999 was a dismal year financially,
especially considering the strong RV market. However, recent fundamental
changes in culture, methodology and attitude have positioned the company to
significantly improve its performance this year."
Mr. Jacque continued, "We have initiated a company wide program to
simplify manufacturing and administrative processes that is enjoying dramatic
gains in productivity and quality. Further, a recent management restructuring
is now complete, and I feel very fortunate that our company has recruited
individuals recognized as the best in their respective fields to return SMC to
the path of growth and profitability."
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. 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 2, 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 Year to Date
12/31/98 12/31/99 12/31/98 12/31/99
Net Sales 67,079 58,214 217,485 215,540
Cost of Sales 59,667 51,966 195,405 193,927
Gross Profit 7,412 6,248 22,080 21,613
Sales, General, Adm 4,627 4,706 17,610 18,299
Litigation and
Settlement Costs 594 827 2,849 2,808
Income from Operations 2,191 715 1,621 506
Interest Expense 261 478 813 1,538
Other Expenses (Inc) 36 34 127 (1,383)
Income Before Taxes 1,894 203 681 351
Provision for Taxes 757 51 272 110
Net Income 1,137 152 409 241
Net Income/share
Basic 0.18 0.03 0.06 0.04
Net income/share
Diluted 0.18 0.03 0.06 0.04
Weighted shares
Basic 6,238.491 5,780,599 6,429,317 5,824,741
Weighted shares 6,238,491 5,780,599 6,429,317 5,824,741
SMC CORPORATION
CONSOLIDATED BALANCE SHEET
In Thousands
12/31/98 12/31/99
Assets
Current 45,453 59,704
Property & Equipment 20,551 13,978
Other 2,016 1,987
Total Assets 68,020 75,669
Liabilities
Current 36,492 44,106
Deferred Tax 928 --
Long-term Debt 7,391 8,685
Total Liabilities 44,811 52,791
Shareholders' Equity 23,209 22,878
Total Liability & Equity 68,020 75,669