OEA Announces Second Quarter Results
23 February 2000
OEA Announces Second Quarter Results
Inflator and Initiator Shipments Grow Over Prior Quarter;
Capacity Utilization Continues to Increase
DENVER, Feb. 22 -- OEA, Inc. today announced
results for its second quarter and six-month period ended January 31, 2000.
For the second quarter the Company reported a net loss of $4.4 million, or
$.21 per share, on sales of $59.6 million as compared with a net loss of
$1.0 million, or $.05 per share, on sales of $59.4 million in the same quarter
a year ago. For the six-month period OEA reported a net loss of $7.1 million,
or $.35 per share, on sales of $119.5 million versus a net loss of
$3.7 million, or $.18 per share, on sales of $116.2 million in the same period
last year.
Charles B. Kafadar, president and CEO, said, "The net loss included
$2.5 million, or $.08 per share due to higher than anticipated costs on
several strategically important, multi-year development programs at OEA
Aerospace. In accordance with generally accepted accounting principles, we
recognized a one-time charge in the current quarter for the expected future
losses on these key development programs. We believe that upon successful
completion of these development programs, we will be well positioned to secure
major follow-on production orders."
Regarding the automotive segment, Kafadar said shipments of both inflators
and initiators grew over the first quarter as the Company increased
utilization of its new high-volume manufacturing facility to 58.5%, up from
51% in the first quarter of fiscal 2000 and 36% in the fourth quarter of
fiscal 1999. He noted that, in spite of continued weakness in the Asian
market, second quarter inflator shipments grew to 2.35 million units from
2.25 million units in the first quarter and 1.7 million units in the same
period a year ago. Initiator shipments grew 6% over the first quarter, but
were lower than the second quarter of fiscal 1999 due to previously announced
inventory adjustments by a major customer.
OEA Automotive reported an increase in sales to $52.8 million with a gross
margin of $1.7 million in the second quarter versus sales of $51.1 million and
a gross margin $1.0 in the first quarter. Kafadar said the increase in gross
margin reflects improving production efficiencies and a stabilizing pricing
environment. He added that OEA continues to receive customer approvals for
cost-down design changes that are expected to improve results in the second
half of the year.
"We continue to make positive, steady progress in each of the key areas
that will return OEA to consistent profitability: continued improvements in
operating efficiencies, continued implementation of cost-down design changes,
and the introduction of new, higher-margin automotive safety products,"
Kafadar said. "We are looking forward to a significantly improved second half
and a profitable fiscal 2001."
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, operating efficiencies, the
success of cost reduction programs, productivity improvements, improved sales
of and demand for core products, introduction of new products and programs,
implementation of design changes, 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 (Unaudited)
(in thousands, except share data)
Three Months Ended Six Months Ended
January 30, January 29, January 30, January 29,
2000 1999 2000 1999
Net Sales $59,568 $59,434 $119,542 $116,227
Cost of Sales 59,420 56,563 116,998 111,847
Gross Profit 148 2,871 2,544 4,380
Selling, General and
Administrative Expenses 4,516 3,113 8,804 5,837
Research and Development
Expenses 1,452 735 2,904 1,741
Operating Profit (5,820) (977) (9,164) (3,198)
Other Income (Expense):
Interest Income 265 104 317 138
Interest Expense (2,245) (2,082) (4,126) (3,998)
Royalty Income &
Other, Net 853 1,531 1,648 1,643
(1,126) (447) (2,161) (2,217)
Earnings Before
Income Taxes (6,947) (1,424) (11,325) (5,415)
Federal and State
Income Taxes (2,576) (423) (4,200) (1,697)
Net Earnings (Loss) $(4,371) $(1,001) $(7,125) $(3,718)
Earnings (Loss) Per
Share - Basic (0.21) (0.05) (0.35) (0.18)
Weighted Average Number
of Shares Outstanding
- Basic 20,617,273 20,599,574 20,614,702 20,597,779