MotorVac Reports Record Sales and Net Income for Full-Year 1999
9 March 2000
MotorVac Reports Record Sales and Net Income for Full-Year 1999; Fourth Quarter Net Income Per Share Up 75% Over Prior Year
SANTA ANA, Calif.--March 8, 2000--MotorVac Technologies Inc. Wednesday announced a 75% gain in net income per share for the fourth quarter ended Dec. 31, 1999, when compared with the same quarter in 1998. In addition, record levels were achieved for sales and net income for the full year 1999.For the fourth quarter of 1999, MotorVac reported net income of $323,792, or $0.07 per share on a diluted basis, on sales of $2,960,548, compared with net income of $174,012, or $0.04 per share on a diluted basis, on sales of $2,584,723 for the fourth quarter 1998.
For full-year 1999, MotorVac reported record sales of $15,126,288, a 51% increase over sales of $10,017,020 in 1998. Net income for 1999 totaled a record $1,399,631, or $0.31 per share, compared with a net loss of $385,467, or $0.09 per share last year.
The increase in net income during the fourth quarter of 1999 was due primarily to higher sales and lower operating expenses as a percentage of sales, down from 44% in fourth quarter 1998 to 40% in fourth quarter 1999. Gross margin for the fourth quarter of 1999 was 50.1%, consistent with gross margin of 50.3% in the same quarter last year.
The increase in sales during full-year 1999 was due to significantly higher sales of MotorVac's TRANSTECH(TM) machines as well as expansion of the Company's line of innovative fluid management and diagnostic testing systems for the automotive service industry. Gross margin for 1999 was 41 percent, compared with 45 percent in 1998, largely because higher margin detergent sales declined as a percentage of total sales, and because of higher inventory obsolescence costs. Net income for 1999 benefited from the higher level of sales, as well as from lower operating expenses as a percentage of sales. For 1999, operating expenses were 32 percent of sales, versus 49 percent in 1998.
As of the end of 1999, MotorVac had cash of $1.9 million compared with $1.6 million at year-end 1998. In addition, the Company has an unused bank line, and no long-term debt.
"We are pleased with our record performance for 1999," said Lee W. Melody, president and chief executive officer, "and with our fifth consecutive quarter of profitability. We benefited during the year from our strategy to expand our product line, and from our efforts to control spending. Our TRANSTECH(TM) transmission fluid exchanger, introduced in 1998, was a significant contributor to our improved performance," stated Melody, "and our LEAKCHEK(TM) leak detection system and CoolantClean(TM) cooling system flush machine, introduced in the second half of 1999, also contributed to our increased revenues and earnings.
"In 2000 and beyond," added Melody, "we plan to continue to expand our product lines and to introduce additional solutions that improve vehicle performance, increase fuel economy and reduce emissions. We also plan to increase sales of our proprietary detergents, target new markets and distribution channels, and to build value for shareholders by continuing to create and build brand recognition in the marketplace. We remain optimistic about our future."
About MotorVac Inc.
MotorVac Technologies designs, develops, assembles and markets unique technological solutions for the service and repair of automotive fluid systems. Product lines include specialty chemicals and shop equipment for servicing fuel, coolant and transmission systems. MotorVac's products are distributed to service shops, fleets and government agencies in more than 70 countries worldwide. For additional information, visit MotorVac's Web site at www.motorvac.com.
MotorVac is a registered trademark of MotorVac Technologies Inc.
This news release contains 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. The company intends that such forward-looking statements shall be protected by the safe harbor provided for in such sections. In particular, statements regarding future results are subject to the risks and uncertainties that could cause actual results to vary materially from those projected in the forward-looking statements. The company may experience significant fluctuations in future operating results due to a number of economic, competitive, governmental and technological factors, including, among other things, changes in laws, the size and timing of customer orders, new or increased competition, unexpected increases in expenses, delays in acceptance of new products, product returns, seasonality in product purchases by distributors and end users, and pricing trends in the automotive after-market industry in general and, in specific, markets in which the company is active. Any of these factors, or others, could cause operating results to vary significantly from prior periods and those projected in the forward-looking statements. The making of these forward-looking statements shall not in any way obligate the company to update or correct the foregoing estimates or projections. Additional information with respect to these and other factors which could materially affect the company and its operations is included in the company's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-KSB for the year ended Dec. 31, 1998 and any subsequent filings.
MotorVac Technologies, Inc. -- Statements of Operations
Year Ended Year Ended 4th Quarter 4th Quarter
December 31, December 31, December 31, December 31,
1999 1998 1999 1998
NET SALES $ 15,126,288 $10,017,020 $ 2,960,548 $2,584,723
COST OF
SALES 8,910,587 59% 5,548,288 55% 1,478,374 50% 1,284,666 50%
GROSS PROFIT 6,215,701 41% 4,468,732 45% 1,482,174 50% 1,300,057 50%
OPERATING
EXPENSES 4,862,574 32% 4,905,145 49% 1,187,585 40% 1,142,933 44%
INCOME (LOSS)
FROM
OPERATIONS 1,353,127 9% (436,413)-4% 294,589 10% 157,124 6%
INTEREST
INCOME -NET 84,504 56,504 31,378 16,796
INCOME (LOSS)
BEFORE
TAXES 1,437,631 10% (379,909)-4% 325,967 11% 173,920 7%
TAXES 38,000 5,558 2,175 (92)
NET Income
(LOSS) 1,399,631 9% (385,467)-4% 323,792 11% 174,012 7%
Basic EPS $ 0.31 $ (0.09) $ 0.07 $ 0.04
-
Wtd. Avg Shares
Outstanding 4,497,248 4,503,285 4,527,536 4,503,285
EPS diluted $ 0.31 $ (0.09) $ 0.07 $ 0.04
Diluted
Shares 4,568,865 4,503,285 4,647,327 4,503,285
MotorVac Technologies, Inc. -- Balance Sheets
December 31, December 31,
1999 1998
Assets
Cash 1,943,586 1,632,605
Accounts Receivable-net 1,668,395 866,357
Inventories-net 2,474,919 1,667,333
Other Current Assets 204,514 275,245
Total Current Assets $ 6,291,414 $4,441,540
Property and Equipment-net 294,734 242,666
Intangible assets-net 607,952 639,288
Other Assets 21,133 17,227
Total Assets $ 7,215,233 $5,340,721
Liabilities and Stockholders' Equity
Current Liabilities 1,339,931 954,567
Stockholders' Equity 5,875,302 4,386,154
Total Liabilities and Equity $ 7,215,233 $5,340,721
Working Capital 4,951,483 3,486,973
Current Ratio 4.7 4.7