Uniroyal Global Engineered Products, Inc. Reports Net Income of $837,803, or $0.06 Per Share for the Third Quarter 2015 Versus $527,481 or $0.04 Per Share for the Third Quarter 2014 before Dividends of $698,499
For the first nine months of 2015, net income was $3,904,169, or
$0.27 per share versus $2,006,458, or $0.14 per share for the first nine
months of 2014 before dividends of $2,088,373. Net income available for
common shareholders was $139,304, or $0.01 per share for the third
quarter 2015 versus $527,481, or $0.04 per share for the third quarter
2014. For the first nine months of 2015 net income available for common
shareholders was $1,815,796, or $0.13 per share versus $2,006,458, or
$0.14 for the first nine months of 2014.
-
Revenue for the third quarter 2015 was $23.2 million versus $23.9
million in 2014. Revenue for the first nine months of 2015 was $76.5
million versus $73.7 million in 2014. -
Operating income expands 71% to $5.5 million for the first nine
months of 2015 versus $3.2 million in 2014. -
Continued expansion of unit volume and operating margins despite
unfavorable foreign exchange translations.
SARASOTA, Fla.–(BUSINESS WIRE)–Uniroyal Global Engineered Products, Inc. (OTCQB: UNIR) (“Uniroyal
Global Engineered Products, Inc.” or the “Company”) filed its Form 10-Q
last night reporting its results for the three months and nine months
ended October 4, 2015.
“We remain pleased with our quarterly and year to date results of
operations. We continue to perform well against our stated objectives of
customer diversification, deeper penetration into our current customers
and continuous margin improvement through cost reduction and
productivity gains,” said Howard Curd, Chairman and CEO.
“We continue to see favorable volume and margin comparisons from last
year that are somewhat masked by the recent decline in the Euro and
British Pound Sterling. Excluding $1.5 million in the third quarter and
$5.8 million year to date of negative impact of currency translations,
our revenues would have been up 3.5% and 11.4% from the third quarter
and year to date results, respectively, versus the 2014 comparable
period,” added Mr. Curd. “Despite the negative effects of the currency
on revenue we continued to expand our operating profit in excess of 50%
for the quarter and 70% year to date versus last year.”
The following is a brief discussion of the results:
Revenue:
Total revenue for the three months ended October 4, 2015 decreased
$702,956, or 2.9%, to $23,225,199 from $23,928,155 for the three months
ended September 28, 2014. This decrease was principally caused by a $1.5
million unfavorable impact of currency exchange rate changes. Excluding
this impact, revenues for the three months ended October 4, 2015 would
have increased by approximately $830,000, or 3.5%, over the three months
ended September 28, 2014.
Total revenue for the nine months ended October 4, 2015 increased
$2,787,787, or 3.8%, to $76,486,188 from $73,698,401 for the nine months
ended September 28, 2014. The increase would have been approximately
$8.6 million, or 11.4%, but it was offset by $5.8 million of unfavorable
impact of currency exchange rates for 2015 compared to 2014.
Sales volumes and pricing for the three months and nine months 2015 were
ahead of the corresponding prior year period primarily due to new
automotive platform launches. For the nine-month period, there was an
additional reporting week included in 2015.
Gross Profit:
Total gross profit for the three months ended October 4, 2015 increased
$519,116, or 10.7%, to $5,383,728 from $4,864,612 for the three months
ended September 28, 2014. The gross profit percentage was 23.2% of sales
for the three months ended October 4, 2015 compared to 20.3% for the
three months ended September 28, 2014. The gross profit increase was
offset by approximately $400,000 of unfavorable impact of currency
exchange rate changes.
Total gross profit for the nine months ended October 4, 2015 increased
$2,391,334, or 16.8%, to $16,594,746 from $14,203,412 for the nine
months ended September 28, 2014. The gross profit percentage was 21.7%
of sales for the nine months ended October 4, 2015 compared to 19.3% for
the nine months ended September 28, 2014. The gross profit increase was
offset by approximately $1.7 million of unfavorable impact of currency
exchange rate changes.
The gross profit percentage increased for the three months and nine
months 2015 primarily due to the rolling off of lower margin automotive
platforms which were replaced with higher margin platforms and the
positive results of cost efficiency programs implemented during 2014.
Operating Expenses:
Selling expenses for the three months ended October 4, 2015 increased
$140,711, or 12.5%, to $1,268,656 from $1,127,945 for the three months
ended September 28, 2014. Selling expenses for the nine months ended
October 4, 2015 increased $571,488, or 16.4%, to $4,065,951 from
$3,494,463 for the nine months ended September 28, 2014. The increase
resulted primarily due to increases in commissions and additional
support staff expenses added during the second half of 2014.
General and administrative expenses for the three months ended October
4, 2015 decreased by $256,900, or 10.5%, to $2,192,559 from $2,449,459
for the three months ended September 28, 2014. General and
administrative expenses for the nine months ended October 4, 2015
decreased by $542,558, or 8.5%, to $5,850,880 from $6,393,438 for the
nine months ended September 28, 2014. The decrease for the three month
period was principally due to 2014 pre-acquisition expenses incurred in
the three months ended September 28, 2014. In addition to the
pre-acquisition expenses, the decrease for the nine month period 2015
was impacted by statutory severance payments in 2014 of $460,000 as a
result of labor reduction programs at our U.K. facility. These decreases
were partially offset by higher labor and administrative costs in 2015
in preparing the Company to become a multinational SEC reporting company.
Research and development expenses for the three months ended October 4,
2015 increased by $87,561, or 24.8%, to $440,257 from $352,696 for the
three months ended September 28, 2014. Research and development expenses
for the nine months ended October 4, 2015 increased by $80,420, or 7.3%,
to $1,185,051 from $1,104,631 for the nine months ended September 28,
2014. The increase was due to increased expenditures for new product
development.
Operating Income:
Operating income for the three months ended October 4, 2015 increased by
$547,744, or 58.6%, to $1,482,256 from $934,512 for the three months
ended September 28, 2014. The operating income percentage was 6.4% of
sales for the three months ended October 4, 2015 compared to 3.9% for
the three months ended September 28, 2014. Operating income for the nine
months ended October 4, 2015 increased by $2,281,984, or 71.1%, to
$5,492,864 from $3,210,880 for the nine months ended September 28, 2014.
The operating income percentage was 7.2% of sales for the nine months
ended October 4, 2015 compared to 4.4% for the nine months ended
September 28, 2014.
The operating income increased primarily due to the gross margin
improvements as stated above and a reduction in general and
administrative expenses. The amount of increases was offset by increased
selling expenses and approximately $300,000 and $1,250,000 of
unfavorable impact of currency exchange rates for the three months and
nine months ended October 4, 2015, respectively.
Interest expense:
Interest expense for the three months ended October 4, 2015 increased by
$10,115, or 2.6%, to $406,242 from $396,127 for the three months ended
September 28, 2014. Interest expense for the nine months ended October
4, 2015 decreased by $55,429, or 4.4%, to $1,199,008 from $1,254,437 for
the nine months ended September 28, 2014. The increase for the three
months 2015 was attributable to average higher debt balances in 2015.
Both periods were effected by a lower weighted average effective rate
for 2015 compared to 2014 and a favorable impact of the foreign exchange
rates.
Other Income:
Other income for the three months ended October 4, 2015 decreased
$191,837 to an expense of $103,051 from income of $88,786 for the three
months ended September 28, 2014. Other income for the nine months ended
October 4, 2015 decreased $128,780, or 64.9% to $69,653 from $198,433
for the nine months ended September 28, 2014. The decrease was
principally due to losses and lower net gains on the settlement and
changes in fair values of financial instruments related to currency
translations from Euro to the British Pound in the subsidiary.
Net Income:
Net income for the three months ended October 4, 2015 increased
$310,322, or 58.8%, to $837,803 from $527,481 for the three months ended
September 28, 2014 before the preferred dividend of $698,499. Net income
for the nine months ended October 4, 2015 increased $1,897,711, or
94.6%, to $3,904,169 from $2,006,458 before the preferred dividend of
$2,088,373.
Net income available to common shareholders for the three months ended
October 4, 2014 decreased to $0.01 per share from $0.04 per share for
the three months ended September 28, 2014. Net income per share on a
fully diluted basis for three months 2015 decreased to $0.01 from $0.03
in 2014. Net income available to common shareholders for the nine months
ended October 4, 2014 decreased to $0.13 per share from $0.14 per share
for the nine months ended September 28, 2014. Net income per share on a
fully diluted basis for nine months 2015 decreased to $0.10 from $0.11
in 2014. The decrease in net income is primarily the result of the
preferred dividend in 2015.
About Uniroyal Global Engineered Products, Inc.:
Uniroyal Global Engineered Products, Inc. (OTCQB: UNIR) is a leading
manufacturer of vinyl coated fabrics that are durable, stain resistant,
cost-effective alternatives to leather, cloth and other synthetic fabric
coverings. Uniroyal Global Engineered Products, Inc.’s revenue in 2014
was derived 63% from the automotive industry and approximately 37% from
the recreational, industrial, indoor and outdoor furnishings,
hospitality and health care markets.
Forward-Looking Statements:
Except for statements of historical fact, certain information
contained in this press release constitutes forward-looking statements,
including, without limitation, statements containing the words
“believe,” “expect,” “anticipate,” “intend,” “expect,” “should,”
“planned,” “estimated” and “potential” and words of similar import, as
well as all references to the future. These forward-looking statements
are based on Uniroyal Global Engineered Products, Inc.’s current
expectations. The Company cautions investors that any forward-looking
statements made by the Company are not guarantees of future performance
and that a variety of factors could cause the Company´s actual results
and experience to differ materially from the anticipated results or
other expectations expressed in the Company´s forward-looking
statements. The risks and uncertainties which may affect the operations,
performance, development and results of the Company´s business include,
but are not limited to, the following: uncertainties relating to
economic conditions, uncertainties relating to customer plans and
commitments, the pricing and availability of equipment, materials and
inventories, technological developments, performance issues with
suppliers, economic growth, delays in testing of new products, the
Company’s ability to successfully integrate acquired operations, the
Company’s dependence on key personnel, the Company’s ability to protect
its intellectual property rights, the effectiveness of cost-reduction
plans, rapid technology changes and the highly competitive environment
in which the Company operates. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the
date the statement was made.
| Uniroyal Global Engineered Products, Inc. | ||||||||||||||||||
| Consolidated Statements of Operations | ||||||||||||||||||
| (Unaudited) | ||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||
| October 4, | September 28, | October 4, | September 28, | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||||
| NET SALES | $ | 23,225,199 | $ | 23,928,155 | $76,486,188 | $ | 73,698,401 | |||||||||||
| COST OF GOODS SOLD | 17,841,471 | 19,063,543 | 59,891,442 | 59,494,989 | ||||||||||||||
| Gross Profit | 5,383,728 | 4,864,612 | 16,594,746 | 14,203,412 | ||||||||||||||
| OPERATING EXPENSES: | ||||||||||||||||||
| Selling | 1,268,656 | 1,127,945 | 4,065,951 | 3,494,463 | ||||||||||||||
| General and administrative | 2,192,559 | 2,449,459 | 5,850,880 | 6,393,438 | ||||||||||||||
| Research and development | 440,257 | 352,696 | 1,185,051 | 1,104,631 | ||||||||||||||
| OPERATING EXPENSES | 3,901,472 | 3,930,100 | 11,101,882 | 10,992,532 | ||||||||||||||
| Operating Income | 1,482,256 | 934,512 | 5,492,864 | 3,210,880 | ||||||||||||||
| OTHER INCOME (EXPENSE): | ||||||||||||||||||
| Interest and other debt related expense | (406,242 | ) | (396,127 | ) | (1,199,008 | ) | (1,254,437 | ) | ||||||||||
| Other income (expense) | (103,051 | ) | 88,786 | 69,653 | 198,433 | |||||||||||||
| Net Other Expense | (509,293 | ) | (307,341 | ) | (1,129,355 | ) | (1,056,004 | ) | ||||||||||
| INCOME BEFORE TAX PROVISION | 972,963 | 627,171 | 4,363,509 | 2,154,876 | ||||||||||||||
| TAX PROVISION | 135,160 | 99,690 | 459,340 | 148,418 | ||||||||||||||
| NET INCOME | 837,803 | 527,481 | 3,904,169 | 2,006,458 | ||||||||||||||
| Preferred stock dividend | (698,499 | ) | – | (2,088,373 | ) | – | ||||||||||||
| NET INCOME AVAILABLE TO COMMON | ||||||||||||||||||
| SHAREHOLDERS | $ | 139,304 | $ | 527,481 | $1,815,796 | $ | 2,006,458 | |||||||||||
| EARNINGS PER COMMON SHARE: | ||||||||||||||||||
| Basic | $ | 0.01 | $ | 0.04 | $0.13 | $ | 0.14 | |||||||||||
| Diluted | $ | 0.01 | $ | 0.03 | $0.10 | $ | 0.11 | |||||||||||
| WEIGHTED AVERAGE SHARES OUTSTANDING: | ||||||||||||||||||
| Basic | 14,264,699 | 14,128,309 | 14,323,414 | 14,148,717 | ||||||||||||||
| Diluted | 19,021,532 | 18,885,142 | 19,080,247 | 18,905,550 | ||||||||||||||
| Uniroyal Global Engineered Products, Inc. | ||||||||||||||||
| Consolidated Statements of Comprehensive Income | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| October 4, | September 28, | October 4, | September 28, | |||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| NET INCOME | $ | 837,803 | $ | 527,481 | $ | 3,904,169 | $ | 2,006,458 | ||||||||
| OTHER COMPREHENSIVE INCOME (LOSS): | ||||||||||||||||
| Minimum benefit liability adjustment | (45,226 | ) | (147,474 | ) | (135,685 | ) | (442,422 | ) | ||||||||
| Foreign currency translation adjustment | (237,772 | ) | (277,447 | ) | (198,839 | ) | (96,840 | ) | ||||||||
| Unrealized gain (loss) on effective hedge: | ||||||||||||||||
| Reclassification of amounts to earnings | – | 9,335 | – | 42,478 | ||||||||||||
| Unrealized loss for the year | – | – | – | (1,561 | ) | |||||||||||
| OTHER COMPREHENSIVE LOSS | (282,998 | ) | (415,586 | ) | (334,524 | ) | (498,345 | ) | ||||||||
| COMPREHENSIVE INCOME | 554,805 | 111,895 | 3,569,645 | 1,508,113 | ||||||||||||
| Preferred stock dividend | (698,499 | ) | – | (2,088,373 | ) | – | ||||||||||
| COMPREHENSIVE INCOME (LOSS) TO COMMON | ||||||||||||||||
| SHAREHOLDERS | $ | (143,694 | ) | $ | 111,895 | $ | 1,481,272 | $ | 1,508,113 | |||||||
| Uniroyal Global Engineered Products, Inc. | ||||||||
| Consolidated Balance Sheets | ||||||||
| October 4, | ||||||||
| 2015 | December 28, | |||||||
| ASSETS | (Unaudited) | 2014 | ||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | 2,058,534 | $ | 604,234 | ||||
| Accounts receivable, net | 15,674,772 | 14,607,787 | ||||||
| Inventories, net | 18,563,488 | 17,421,082 | ||||||
| Other current assets | 1,938,997 | 2,130,282 | ||||||
| Related party receivable | 22,510 | 74,931 | ||||||
| Total Current Assets | 38,258,301 | 34,838,316 | ||||||
| PROPERTY AND EQUIPMENT | 13,964,761 | 12,001,128 | ||||||
| OTHER ASSETS | ||||||||
| Intangible assets | 3,590,405 | 3,668,956 | ||||||
| Goodwill | 1,079,175 | 1,079,175 | ||||||
| Other long-term assets | 1,377,218 | 1,295,965 | ||||||
| Total Other Assets | 6,046,798 | 6,044,096 | ||||||
| TOTAL ASSETS | $ | 58,269,860 | $ | 52,883,540 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Checks issued in excess of bank balance | $ | 515,070 | $ | 438,145 | ||||
| Line of credit | 17,738,392 | 16,396,306 | ||||||
| Current maturities of long-term debt | 553,402 | 522,095 | ||||||
| Current maturities of capital lease obligations | 574,804 | 96,071 | ||||||
| Accounts payable | 8,743,466 | 9,409,062 | ||||||
| Accrued expenses | 4,267,835 | 3,408,143 | ||||||
| Related party payable | – | 20,260 | ||||||
| Current portion of postretirement benefit liability – health and life | 115,039 | 115,039 | ||||||
| Total Current Liabilities | 32,508,008 | 30,405,121 | ||||||
| LONG-TERM LIABILITIES | ||||||||
| Long-term debt, less current portion | 1,626,934 | 1,355,297 | ||||||
| Capital lease obligations, less current portion | 2,044,952 | 238,836 | ||||||
| Related party lease financing obligations | 2,164,360 | 2,162,393 | ||||||
| Long-term debt to related parties | 4,706,473 | 4,740,728 | ||||||
|
Postretirement benefit liability – health and life, less current portion |
2,649,427 | 2,662,570 | ||||||
| Other long-term liabilities | 900,702 | 840,378 | ||||||
| Total Long-Term Liabilities | 14,092,848 | 12,000,202 | ||||||
| Total Liabilities | 46,600,856 | 42,405,323 | ||||||
| STOCKHOLDERS’ EQUITY | ||||||||
|
Convertible Preferred Stock: 5,000,000 shares authorized ($100 value): |
||||||||
| Series A, 9,715 shares issued and outstanding | 798,500 | 798,500 | ||||||
| Series B, 2,702 shares issued and outstanding | 270,160 | 270,160 | ||||||
| Series C, 16,124 shares issued and outstanding | 1,600,467 | 1,600,467 | ||||||
| Preferred units, Series A UEP Holdings, LLC, 200,000 units | ||||||||
| issued and outstanding ($100 issue price) | 617,571 | 617,571 | ||||||
| Preferred units, Series B UEP Holdings, LLC, 150,000 units | ||||||||
| issued and outstanding ($100 issue price) | 463,179 | 463,179 | ||||||
| Preferred stock, Engineered Products Acquisition Limited, 50 | ||||||||
| shares issued and outstanding ($1.51 stated value) | 75 | 75 | ||||||
| Common stock, 95,000,000 shares authorized ($.001 par value) | ||||||||
| 14,193,252 and 14,351,398 shares issued and outstanding as | ||||||||
| of October 4, 2015 and December 28, 2014, respectively | 14,194 | 14,352 | ||||||
| Additional paid in capital | 32,259,258 | 32,549,585 | ||||||
| Accumulated deficit | (24,810,838 | ) | (26,626,634 | ) | ||||
| Accumulated other comprehensive income | 456,438 | 790,962 | ||||||
| Total Stockholders’ Equity | 11,669,004 | 10,478,217 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 58,269,860 | $ | 52,883,540 | ||||
Contacts
Uniroyal Global Engineered Products, Inc.
Corporate Contact:
Elizabeth Henson, 941-870-3950
LHenson@UniroyalGlobal.com
or
TTC
Group, Inc.
Public Relations: Vic Allgeier, 646-290-6400
vic@ttcominc.com
