Universal Automotive Industries (NASDAQ:UVSL)
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Universal Automotive Reports 2004 Third Quarter Financial Results
- Sales Rise 89.4% as Company Cites Progress Integrating Milestone Acquisition
Completed Earlier This Year -
ALSIP, Ill., Nov. 19 /PRNewswire-FirstCall/ -- Universal Automotive
Industries, Inc. (NASDAQ:UVSL) today reported that sales for the 2004 third
quarter ended September 30, 2004 advanced 89.4% to $26.7 million from $14.1
million in the third quarter last year, primarily reflecting contributions from
the acquisition of certain assets of TRW Automotive, Inc., completed in January
2004.
As expected, the company registered a net loss for the third quarter of $3.2
million, equal to $0.28 per share, compared with a net loss of $812,217, or
$0.10 per share, for the corresponding prior year period. Per share
calculations were based on 11.2 million and 8.4 million shares of common stock
outstanding for the third quarter of 2004 and 2003, respectively.
For the 2004 year-to-date period, sales increased 62% to $75.9 million from
$46.9 million in the same period last year. Universal reported net income for
the first nine months of 2004 of $1.2 million, equal to $0.08 per diluted
share, which includes a non-operating, non-cash gain of $9.9 million on the
valuation of assets purchased. This compares with a net loss of $1.8 million,
or $0.21 per share, for the first nine months of 2003. Per share calculations
were based on 14.7 million and 8.3 million shares of common stock outstanding
for the first nine months of 2004 and 2003, respectively.
"We are making great strides integrating the two companies, and at the same
time, tending to new business and to our customers' needs," said Arvin Scott,
Universal's president and chief executive officer. "While change of the
magnitude that is required to transform two organizations of equal size does
not happen overnight, we are encouraged by the progress thus far and pleased
with the positive trending among key financial metrics."
Scott said sales of brake parts for the first and second quarters of 2004
increased 45% and 89%, respectively, over the comparable periods of 2003. Brake
parts sales for the third quarter of 2004 increased 6% over the preceding 2004
second quarter.
Selling, general and administrative expenses (SG&A) were reduced 2.0% compared
with the preceding second quarter, despite higher sales. SG&A expenses for
2004 amounted to 19.1% for the second quarter and 17.1% for the third quarter,
resulting in a net reduction of $336,000 on a 6% sales increase.
Loss from operations for the third quarter of 2004 was 13% lower than the
preceding second quarter. However, Scott said margins were adversely impacted
in the third quarter by expenses associated with the integration process, along
with higher raw material and freight costs, and higher costs associated with
the weak dollar in relationship to the Canadian currency.
"We are aggressively taking counter measures to improve our gross profit
margins," Scott said. "In July, we raised certain prices to offset a portion
of the higher costs. The price increases were well accepted by customers,
since most automotive companies effected similar changes. We also have
instituted a number of additional measures to enhance operating efficiencies
and further reduce costs, including implementing a number of steps to improve
supply chain management.
"We are confident of the company's long-term future and will remain focused on
our ultimate objective of enhancing shareholder value," Scott added.
During the quarter, the company announced it was selected by a national
automotive aftermarket buying organization, RPM Group, as its preferred
supplier for brake friction parts. Scott said the new pact is expected to add
approximately $3 million in annualized sales. Subsequent to the close of the
quarter, Universal's Autospecialty division completed and introduced its 2005
product catalog, featuring more than one million records and representing the
most comprehensive product offering in the company's history.
Conference Call Information
At 10 a.m. (ET) today, the company will host a conference call to review the
results of operations for the third quarter ended September 30, 2004.
Discussion during the conference call may include forward-looking statements
regarding such topics as, but not limited to, the company's revenues, margins,
operating expenses and any comments the company may make about its future in
response to questions from call participants. The conference call may be
accessed through a live audio Internet broadcast at
http://www.fulldisclosure.com/. For those unable to listen to the live
broadcast, a playback will be available at both Web sites for one year
beginning at approximately noon (ET) the same day.
About Universal Automotive Industries, Inc.
Universal Automotive Industries distributes and manufactures brake rotors and
other brake parts, under its trademarks UBP - Universal Brake Parts, Evolution
and Ultimate in the United States and Canada and its proprietary Autospecialty,
ValuMaxx and PowerStop brands. The company also provides TRW-branded brake
rotors and drums and suspension products.
This news release contains certain 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, which are intended to
be covered by safe harbors created hereby. Such forward-looking statements,
including, but not limited to, returning the company to profitability,
realizing cost savings, as well as synergies, operating efficiencies and growth
opportunities as a result of the acquisition of certain assets from TRW
Automotive, involve known and unknown risks, uncertainties (including those
risk factors referenced in the company's filings with the Securities and
Exchange Commission), and other factors that may cause the actual results,
performance or achievements of the company to be materially different from any
future results, performance, or achievements of the company expressed or
implied by such forward-looking statements.
UNIVERSAL AUTOMOTIVE INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended Nine Months Ended
September 30, September 30,
2004 2003 2004 2003
Net sales $26,674,735 $14,083,051 $75,911,058 $46,938,618
Cost of sales 24,478,257 12,176,229 68,867,231 40,648,203
Gross profit 2,196,478 1,906,822 7,043,827 6,290,415
Selling, general,
and
administrative
expenses 4,558,196 2,457,024 13,777,574 7,323,398
Income (loss)
from operations (2,361,718) (550,202) (6,733,747) (1,032,983)
Other expense/
(income):
Interest expense 825,812 284,816 1,936,884 772,904
Gain on valuation
of assets
purchased 0 0 (9,886,328) 0
Other 2,208 (22,801) (10,395) (34,283)
828,020 262,015 (7,959,839) 738,621
Income (loss)
before provision
for income taxes (3,189,738) (812,217) 1,226,092 (1,771,604)
Income tax
provision 0 0 0 0
Net income (loss) $(3,189,738) $(812,217) $1,226,092 $(1,771,604)
Comprehensive
income (loss):
Net income (loss) $(3,189,738) $(812,217) $1,226,092 $(1,771,604)
Other
comprehensive
income (loss),
Foreign
currency
translation
adjustments (13,517) (49,549) (37,640) 308,840
Comprehensive
income (loss) $(3,203,255) $(861,766) $1,188,452 $(1,462,764)
Earnings (Loss)
per share:
Basic $(0.28) $(0.10) $0.11 $(0.21)
Diluted $(0.28) $(0.10) $0.08 $(0.21)
Weighted average
number of common
shares
outstanding:
Basic 11,197,572 8,437,589 11,197,572 8,296,608
Common stock
equivalents
resulting from
Conversion of
preferred stock 0 0 3,475,297 0
Diluted 11,197,572 8,437,589 14,672,869 8,296,608
Web site:
DATASOURCE: Universal Automotive Industries, Inc.
CONTACT: Robert W. Zimmer of Universal Automotive Industries, Inc.,
+1-708-293-4050 ext. 227; or Roger S. Pondel or Robert Jaffe, both of
PondelWilkinson Inc., +1-310-279-5980, for Universal Automotive Industries,
Inc.