MotorVac Reports Results for First Quarter 2000
28 April 2000
MotorVac Reports Results for First Quarter 2000
SANTA ANA, Calif.--April 27, 2000--MotorVac Technologies Inc. (Nasdaq:MVAC) today announced results for the first quarter ended March 31, 2000, including a 17% increase in earnings per share compared to the first quarter of 1999.For the first quarter of 2000, MotorVac reported net income of $312,728, or $.07 per share on a diluted basis, on sales of $3,711,938, compared with net income of $283,870, or $.06 per share on a diluted basis, on sales of $4,053,760 for the first quarter of 1999.
The increase in net income during the first quarter of 2000, on a reduced level of revenue, was due primarily to a higher gross margin of 44%, compared to 36% for the first quarter of 1999. Gross margin was higher due primarily to lower warranty and product obsolescence costs.
The decline in revenue for the first quarter of 2000, as compared with the first quarter of 1999, was due primarily to lower domestic sales, including Canada. MotorVac considers the lower level of sales during the quarter to be an issue of order timing and not indicative of weakening longer-term market trends.
As of March 31, 2000, MotorVac had cash of $2.2 million compared with $1.9 million at year-end 1999. In addition, the company has an unused bank line, no long-term debt, and a current ratio of 5.6 to 1.
"We continue to remain optimistic about the outlook for full-year 2000," said Lee W. Melody, president and chief executive officer of MotorVac. "We believe the underlying market demand for our products remains strong, and that we are well-positioned to respond to market opportunity with our expanded line of products. This includes our TRANSTECH(TM) transmission fluid exchanger, which accounted for a considerable portion of our growth in 1999, and our LeakChek(TM) leak detection system and CoolantClean(TM) cooling system flush machine that we introduced in the second half of last year."
Melody concluded, "Over the remainder of the year, we plan to introduce additional products, increase sales of our proprietary detergents, and target new markets and distribution channels as we continue to execute our plan for growth and increased shareholder value."
About MotorVac
MotorVac Technologies Inc. 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 or Form 10-KSB for the year ended Dec. 31, 1999.
MotorVac Technologies Inc.
Statements of Income
(Unaudited)
Three Months Ended
March 31, March 31,
2000 1999
NET SALES $ 3,711,938 $ 4,053,760
COST OF SALES 2,079,616 2,609,430
GROSS PROFIT 1,632,322 1,444,330
OPERATING EXPENSES 1,341,032 1,170,768
INCOME FROM OPERATIONS 291,290 273,562
INTEREST INCOME, NET 28,438 11,358
Income before Taxes 319,728 284,920
Taxes 7,000 1,050
NET INCOME $ 312,728 $ 283,870
BASIC EARNINGS PER SHARE $ 0.07 $ 0.06
Basic shares 4,528,958 4,464,918
DILUTED EARNINGS PER SHARE $ 0.07 $ 0.06
Diluted Shares 4,695,082 4,473,869
MotorVac Technologies Inc.
Balance Sheets
March 31, Dec. 31,
2000 1999
(Unaudited) Audited
Assets
CURRENT ASSETS:
Cash $ 2,191,646 $ 1,943,586
Receivables 1,789,594 1,668,395
Inventories 2,198,475 2,474,919
Other Current 340,658 204,514
Total Current Assets 6,520,373 6,291,414
FIXED ASSETS 260,069 294,734
INTANGIBLES 335,096 416,702
MARKETING RIGHTS 180,000 191,250
OTHER ASSETS 58,123 21,133
TOTAL ASSETS $ 7,353,661 $ 7,215,233
Liabilities and Stockholders' Equity
CURRENT LIABILITIES:
Payables and Accruals $ 1,171,952 $ 1,289,931
Note Payable -- 50,000
Total Current Liabilities 1,171,952 1,339,931
EQUITY 6,181,709 5,875,302
TOTAL $ 7,353,661 $ 7,215,233