Uniroyal Global Engineered Products, Inc. for the Third Quarter Ended September 30, 2018 Reports Net Sales Increases of 8.1%, Operating Income
Increases of 30.2% and Earnings (Loss) Per Share at Breakeven versus a Loss of $0.03 for the Third Quarter Ended October 1, 2017
SARASOTA, Fla.—November 5, 2018—Uniroyal Global Engineered Products, Inc. (OTCQB: UNIR or the “Company”) today reported its financial results for
the third quarter and nine months ended September 30, 2018.
Financial Highlights-Third Quarter
- Net Sales increase 8.1% on growth in all three major business segments
- Operating expenses decline to 12.6% of Net Sales versus 14.7% in prior year quarter
- Operating Income up 30.2% versus prior year quarter
- Earnings (Loss) Per Common Share at breakeven versus loss of $0.03 in Prior year quarter
The third quarter ended September 30, 2018 represents a continuation of improvement in financial performance as a result of the successful implementation of strategic objectives put in place last year. Of particular note are the increase in Net Sales and a reduction in Operating expenses versus the same quarter of the prior year. Net Sales increased 8.1% to $24.3 million and Operating expenses declined 7.3% or $241,756 to 12.6% of Net Sales versus 14.7% of the prior year quarter. The result was a sharp increase in Operating Income of 30.2% versus the previous year.
All three of our major business segments participated in the gains in Net Sales versus the prior year. The Industrial and Contract segments improved principally due to an improved US economy which bolstered sales to equipment manufacturers and the re-upholstery marketplace. The growth in the Automotive segment is due to “wins” in new platforms which the Company has been positioning for some time.
The reduction in Operating expenses is a result of strategic initiatives targeted to doing administrative and selling functions in a more efficient manner. The successes we have achieved in these areas have been very rewarding but the process will continue well into next year and beyond.
On the negative front, raw material costs continue to increase and a negative product mix have weighed on our Gross Profit margins which declined for the current quarter and the nine months 2018 versus the corresponding periods last year. Price increases in some of our segments are very hard to achieve and take time to implement, therefore we will have to absorb some of these costs and offset them with cost reductions and productivity improvements. Many of these cost reduction programs and the prices increases have already been implemented and are beginning to have a positive effect on our operating results.
Net Sales for the third quarter increased 8.1% to $24,322,532 versus $22,498,456 recorded in the prior year. All three major business segments recorded gains versus the comparable prior year period. The Automotive segment (64.6% of Net Sales) recorded increases of 6.4% versus the prior year with both the US and UK operations showing improvement. The Industrial segment (including Contract; 35.4% of Net Sales) increased 11.3% versus the previous year. Our US business is the dominant contributor to this segment and enjoyed the benefits of a robust economy. Sales to the off-road industrial and recreational equipment manufacturers as well as sales to the hospitality and healthcare markets were the principal reasons for the gains in this segment.
Operating Income for the third quarter was $1,138,760 which was an increase of $263,818 or 30.2% from the $874,942 recorded in the third quarter of last year. Operating Income margins improved to 4.7% of Net Sales versus the 3.9% of last year. This improvement was due to the increase in Net Sales of 8.1% as well as to a decline in Operating expenses versus the prior year.
The sharp improvement in Operating Income was accomplished despite major increases in raw material prices having a negative impact on Gross Profit margins which declined versus the prior year (17.3% versus 18.6%). Significant improvement in Gross Profit margins will be a challenge for the Company for the fourth quarter as selling price increases and productivity programs already in place will take some time to be fully realized to offset the raw material increases. An initiative for the Company has been to reduce Operating expenses. Reduction in expenses versus the previous year has been realized for the last several quarters and for the third quarter expenses declined $241,756 or 7.3%. This is a continuous objective for the Company.
Net Income (Loss) Available to Common Shareholders
After Preferred Stock dividends, Net Loss Available to Common Shareholders was $10,118 or a breakeven per common share for the third quarter 2018 as compared to a net loss of $477,553 or $0.03 per common share for the third quarter 2017. Weighted average shares outstanding were 18,690,030 at September 30, 2018 versus 18,698,030 at October 1, 2017.
For further details, see the Consolidated Statements of Operations in the Company’s Form 10-Q filed on November 5, 2018. The Company will have comments on the quarter in an earnings conference call on November 6, 2018 at 9:00 am (EST).
Persons wishing to access the conference call may do so by dialing 888-394-8218 (U.S.) and 323-701-0225 (International), and using the ID #9980193. Howard F. Curd, President, will discuss our earnings on the call and will be available for questions. The call will also be available by logging on to www.uniroyalglobal.com and accessing the webcast link (http://public.viavid.com/player/index.php?id=132125) in the investor relations section.
A replay of the conference call will be available beginning November 6, 2018 through February 6, 2019 by calling 844-512-2921 (U.S.) or 412-317-6671 (International) and using Pin #9980193. The webcast will be archived on www.uniroyalglobal.com in the investor relations section until November 6, 2019.
About Uniroyal Global Engineered Products, Inc.:
Uniroyal Global Engineered Products, Inc. (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 2017 was derived 67.5% from the automotive industry and approximately 32.5% from the recreational, industrial, indoor and outdoor furnishings, hospitality and healthcare markets. Our primary brand names include Naugahyde®, BeautyGard®, Flame Blocker™, Spirit Millennium®, Ambla®, Amblon®, Velbex®, Cirroflex®, Plastolene® and Vynide®.
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,” “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, currency fluctuations, 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. Public Relations:
TTC Group, Inc.
Vic Allgeier, 646-290-6400, email@example.com