R&B, Inc. Reports Second Quarter 2000 EPS of $0.18, Lower Borrowing Levels
28 July 2000
R&B, Inc. Reports Second Quarter 2000 EPS of $0.18, Lower Borrowing Levels
COLMAR, Pa. - R&B, Inc., today reported diluted earnings per share of $0.18
for its second fiscal quarter ended June 24, 2000, a significant improvement
over results posted in its first fiscal quarter ended March 25, 2000. On a year
over year basis, net income for the second quarter of 2000 was $1.5 million
compared to $2.8 million, or $0.33 per diluted share, for the second quarter of
1999. Net income for the first half of 2000 was $2.7 million, or $0.32 per
diluted share, compared to $4.1 million, or $0.49 per diluted share in the first
half of 1999. Net income in the first quarter of 2000 included a non-recurring
gain on the sale of the Company's lift support business of approximately
$1.1 million after tax.
Net sales in the second quarter of 2000 declined 28 percent to
$49.2 million from $68.0 million in the same period last year. On a year to
date basis, net sales for the six months ended June 24, 2000 declined
17 percent to $102.5 million from $124.0 million in 1999's first half. The
decline in sales in both periods is the result of inventory adjustments by our
customers, and the Company's strategic decision to eliminate unprofitable
products in its core business and to launch fewer but more profitable new
initiatives. In addition, approximately one-fifth of the second quarter
decline in sales is attributable to the sale of the Company's lift support
business earlier in the year.
The Company continued to strengthen its balance sheet during the second
quarter of 2000 through better working capital management. As a result, total
outstanding debt was reduced by $7.2 million during the quarter. For the
year, total outstanding borrowings have been reduced $22.8 million from
$97.2 million at December 25, 1999 to $74.4 million at June 24, 2000.
Mr. Richard Berman, Chairman, President and CEO said: "Our second quarter
performance was encouraging. The cost cutting steps we initiated earlier in
the year enabled us to generate a meaningful profit in the quarter despite
very difficult automotive aftermarket conditions. This was largely the result
of the restructuring steps we announced early in the year. We are now
realizing the full benefit of those initiatives. Our debt level dropped
significantly in the second quarter and was down almost $23 million from
beginning of the year levels. We are excited to report that we were able to
reduce inventory levels almost $12 million in the first six months of the
year, yet sustain a very high fill rate to our customers through effective
sales and operations planning."
Mr. Berman further stated, "We believe that the steps taken earlier in the
year have strengthened the business and positioned us for future earnings
growth. R&B remains committed to the automotive aftermarket and growing its
core business of hard-to-find parts, fasteners and brake products."
R&B, Inc. is a leading supplier of "hard-to-find" parts, fasteners and
service line products for the automotive aftermarket. R&B's parts are
marketed under more than sixty proprietary brand names, through its Motormite
and Dorman divisions, as well as under the private labels of automobile
manufacturers, parts manufacturers, and national warehouse distributors.
R&B, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(in thousands, except per-share amounts)
13 weeks ended (unaudited) 6/24/00 Pct. 6/26/99 Pct.
Net sales $49,239 100.0 $68,018 100.0
Cost of goods sold 30,603 62.2 42,743 62.8
Gross profit 18,636 37.8 25,275 37.2
Selling, general and
administrative expenses 14,819 30.1 19,193 28.3
Income from operations 3,817 7.8 6,082 8.9
Interest expense, net 1,425 2.9 1,806 2.6
Income before taxes 2,392 4.9 4,276 6.3
Provision for taxes 854 1.8 1,496 2.2
Net income 1,538 3.1 2,780 4.1
Earnings per share
Basic $0.18 - $0.33 -
Diluted $0.18 - $0.33 -
Average shares outstanding
Basic 8,421 - 8,368 -
Diluted 8,506 - 8,437 -
26 weeks ended (unaudited) 6/24/00(1) Pct. 6/26/99 Pct.
Net sales $102,485 100.0 $123,964 100.0
Cost of goods sold 65,240 63.7 77,004 62.1
Gross profit 37,245 36.3 46,960 37.9
Selling, general and
administrative expenses 29,743 29.0 37,094 29.9
Income from operations 7,502 7.3 9,866 8.0
Interest expense, net 3,336 3.2 3,512 2.9
Income before taxes 4,166 4.1 6,354 5.1
Provision for taxes 1,457 1.5 2,223 1.8
Net income 2,709 2.6 4,131 3.3
Earnings per share
Basic $0.32 - $0.49 -
Diluted $0.32 - $0.49 -
Average shares outstanding
Basic 8,417 - 8,358 -
Diluted 8,508 - 8,406 -
(1) Includes non-recurring gain on sale of product line of $1.1 million
($0.13 per share).
R&B, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands)
6/24/00 12/25/99
Assets (unaudited)
Cash and cash equivalents $2,527 $1,467
Accounts receivable 43,775 49,979
Inventories 58,370 70,272
Prepaid expenses and other 10,747 7,117
Total current assets 115,419 128,835
Property & equipment 22,550 22,919
Intangible and other assets 35,504 36,250
Total assets $173,473 $188,004
Liability & Shareholders' Equity
Current portion of long-term debt $3,338 $11,910
Accounts payable 16,044 12,867
Accrued expenses and other 9,679 7,446
Total current liabilities 29,061 32,223
Long-term debt 71,024 85,283
Deferred income taxes 2,435 2,264
Shareholders' equity 70,953 68,234
Total Liabilities and Equity $173,473 $188,004
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