Raytech (NYSE:RAY)
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Raytech Corporation (NYSE:RAY) today announced net
income of $1.6 million for the thirteen-week period ended April 3,
2005, amounting to $.04 per basic and diluted share compared to a net
income of $1.4 million or $.03 per basic and diluted share for the
same period in the prior year. The Company recorded sales for the
thirteen-week period ended April 3, 2005 of $63.4 million compared to
$56.6 million in the same period in the prior year, an increase of
11.9 percent.
On May 19, 2005, in connection with a notification of late filing
for the first quarter, the Company reported an estimated net loss of
$675 thousand, subject to the completion of purchase accounting for
the acquisition of a minority interest in Allomatic Products Company
("APC"). The notification also indicated that the estimated net loss
was partially due to the recognition of a $1.3 million product
liability claim in the International segment.
Completion of purchase accounting for the APC acquisition resulted
in, among other things, the reduction of certain deferred tax assets
and consequently, a $995 thousand reduction in amounts payable to the
Raytech Asbestos Personal Injury Settlement Trust ("PI Trust"),
recorded as non-operating income. In addition, upon further review of
the product liability claim described above, it was determined that,
while a loss is reasonably possible, no liability should be recognized
at this time.
The increase in net income over the prior year was primarily due
to the recognition of non-operating income related to the decrease in
amounts payable to the PI Trust, partially offset by restructuring
expense and a decline in operating profit, primarily in the Domestic
OEM segment which, despite achieving 8.9 percent sales growth,
realized a 32 percent decrease in gross profit compared to the same
period in 2004. Reduced gross profit in the Domestic OEM segment was
primarily the result of the increased price of steel, a key raw
material used in that segment. First quarter 2005 operating results
were also negatively impacted in all segments by costs incurred to
transfer certain production from the Company's facilities to be closed
during 2005 to facilities to remain open as part of the Company's
facility restructuring program.
The increase in sales was driven by increased demand for the
Company's heavy-duty wet friction products, its commercial dry
friction products and its aftermarket products.
On March 21, 2005, the Company, through its majority owned
subsidiary, APC, purchased shares of APC owned by Raymark Corporation
in exchange for a ten-year unsecured promissory note of $7.2 million
which increased the Company's indirect ownership of APC from
approximately 57 percent of its outstanding common stock to
approximately 96 percent of its outstanding common stock.
Raytech Corporation is a worldwide manufacturer of wet and dry
clutch, power transmission and brake systems as well as specialty
engineered polymer matrix composite products and related services for
vehicular applications, including automotive OEM, heavy duty
on-and-off highway vehicles and aftermarket vehicular power
transmission systems. Through two technology and research centers and
five manufacturing operations worldwide, Raytech develops and delivers
energy absorption, power transmission and custom-engineered components
focusing on niche applications where its expertise and technological
excellence provide a competitive edge.
Raytech Corporation, headquartered in Shelton, Connecticut,
operates manufacturing facilities in the United States, Germany and
China as well as technology and research centers in Indiana and
Germany. The Company's operations are strategically situated in close
proximity to major customers and within easy reach of geographical
areas with demonstrated growth potential.
Raytech common stock is listed on the New York Stock Exchange and
trades under the symbol "RAY." Company information may be accessed on
our Internet website http://www.raytech.com.
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RAYTECH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(000's omitted, except share data)
Comparative results are as follows:
For the 13 Weeks Ended
April 3, 2005 March 28, 2004
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(Unaudited)
Net Sales $ 63,352 $ 56,598
Net income $ 1,620 $ 1,351
Basic and diluted earnings per share:
Earnings per share $ .04 $ .03
Weighted average shares 41,737,306 41,737,306
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