Universal Automotive Reports Results for 2003 Year, Fourth Quarter
March 30 2004 - 4:00PM
PR Newswire (US)
Universal Automotive Reports Results for 2003 Year, Fourth Quarter
Company Reports Good Progress Integrating Acquisition Completed in
January, Doubling Universal's Size ALSIP, Ill., March 30
/PRNewswire-FirstCall/ -- Universal Automotive Industries,Inc.
today reported financial results for its fourth quarter and year
ended December 31, 2003. The company also said it is making
excellent progress integrating the assets it acquired from TRW
Automotive, Inc. in January 2004, which effectively doubled
Universal's size. Net sales for the 2003 fourth quarter amounted to
$12.4 million, compared with $14.6 million for the corresponding
period last year. Including year-end adjustments, the company
sustained a net loss of $2.5 million, equal to $.29 per share, for
the 2003 fourth quarter, versus net loss of $190,000, or $.02 per
fully diluted share, a year ago. For the full year, net sales were
$59.3 million, compared with $69.9 million in 2002. As anticipated,
the company recorded a net loss for 2003 of $4.2 million, equal to
$0.51 per share, versus net income of $491,000, or $0.04 per fully
diluted share in 2002. Universal attributed the loss primarily to a
sharp, rapid decline in sales that resulted from a nonrecurring
major supply chain interruption in the second quarter. The company
said one of its major brake rotor suppliers in China experienced a
fire at its manufacturing plant early in the year, severely
impacting Universal's fill rates during subsequent quarters, which
historically have been the company's busiest selling periods.
Universal said it has since expanded its supplier base in China
through a relationship with Wanxiang, the company's single largest
shareholder and one of the largest privately-owned companies in
China. Arvin Scott, Universal's president and chief executive
officer, said supply for a significant product category was
effectively curtailed, hampering the company's top line, while
operating expenses remained relatively intact. He said earnings
also were impacted by approximately $1.1 million of non-cash
year-end adjustments related to issuance and re-pricing of warrants
and other reserves. "It was a perfect storm in 2003 that will not
likely happen again," Mr. Scott said. "We have since
re-establishedan outstanding base of new suppliers, and sales in
the affected product categories are returning. Moreover, 2004 is
starting off on the right track, having completed the purchase of
certain assets from TRW Automotive, Inc. in January and making
excellent progress thus far with the first phase of the integration
process. The acquisition doubles the size of Universal and enables
the company to be a complete brake and undercar supplier, with well
known branded and private label products. Moreover, it is providing
outstanding new growth opportunities, along with measurable
operating efficiencies and economies of scale." Mr. Scott said
approximately $5 million in identified costs are being taken out of
the combined operations, including closing Universal's Rancho
Dominguez, CA facility and merging the operations with the
Autospecialty facility in Carson, CA that it acquired from TRW, as
well as closing an acquired warehouse in Itasca, Illinois and
merging those operations into an existing Universal facility in
Alsip, Illinois. He said cost savings also are being be realized
from related workforce reductions, including consolidation of the
Autospecialty brake rotor manufacturing plant into the existing
Universal brake rotor manufacturing facility,as well as from
administrative and certain other functions, and related operating
efficiencies. "Customers of the acquired TRW operations, as well as
Universal's customers, are reacting enthusiastically to the wider
array of product offerings that is now available to them from one
company," Mr. Scott said. "From a corporate perspective, while
there is much to do in our aggressive plan to essentially complete
the integration process by mid year, we are excited about the
future and confident about ourlong term growth opportunities and
providing a solid return to our shareholders." About Universal
Automotive Industries, Inc. Universal, headquartered in the Chicago
area, specializes in the distribution and manufacture of 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, exceeding $100 million
in annualized sales for 2004 and realization of efficiencies from
the consolidation of facilities and functions, 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.
Summary of Financial Results ($000's) except per share data Quarter
Ended Year Ended December 31, December 31, 2003 2002 20032002 Net
Sales Brake Parts $9,042 $12,998 $45,303 $62,568 Non-Brake Parts
3,322 1,643 14,000 7,288 Total $12,364 $14,641 $59,303 $69,856
Gross Margin: 1,248 1,904 7,538 12,326 10.1% 13.0% 12.7% 17.6%
Selling, General and Administrative Expenses 2,092 1,844 9,415
10,317 Other Operating (Income) Expense 248 (63) 248 98 (Income)
Loss from Hungarian operations 71 - 71 Income (loss) from
operations $(1,092) $52 $(2,125) $1,840 Other expense (income)
Interest Expense 284 291 1,057 1,398 Non-cash expense related to
the issuance of warrants 648 648 Loss (Gain) on disposition of
assets 39 (49) 6 (49) Other income (loss) (406) - (405) Income
(loss) before provision (benefit) for income taxes $(2,469) $(190)
$(4,241) $491 Income tax provision (benefit) - - - - Net Income
(Loss) $(2,469) $(190) $(4,241) $491 Earnings (loss) per share
Basic net income (loss) per common share $(0.29) $(0.02) $(0.51)
$0.06 Diluted net income (loss) per common share $(0.29) $(0.02)
$(0.51) $0.04 Weighted-average common shares outstanding 8,394,763
8,198,174 Effect of dilutive securities Conversion of preferred
stock - 3,014,380 8,394,763 11,212,554 DATASOURCE: Universal
Automotive Industries, Inc. CONTACT: Robert W. Zimmer of Universal
Automotive Industries, Inc., +1-708-293-4050, ext. 227, or Roger
Pondel of PondelWilkinson Inc., +1-323-866-6006 Web site:
http://www.universalbrake.com/
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