PRESS RELEASE 2-13-04
Published on
NEWS RELEASE
R&B, INC.
Corporate Headquarters:
R&B, Inc.
3400 East Walnut Street
Colmar, Pennsylvania 18915
Fax: (215) 997-8577
For Further Information Contact: Visit our Home Page:
Mathias J. Barton, CFO www.rbinc.com
(215) 997-1800 x 5132
E-mail: MBarton@rbinc.com
R&B, Inc. Reports Sales and Earnings for the Fourth Quarter and Year Ended
December 27, 2003; Comments on Future Outlook
Colmar, Pennsylvania (February 13, 2004) -- R&B, Inc., (NASDAQ:RBIN)
today announced financial results for the fourth quarter and year ended December
27, 2003. For the fourth quarter ended December 27, 2003, sales increased 1% to
$55.6 million from $55.1 million in the same period last year. Net income in the
fourth quarter of 2003 was $3.8 million compared to net income of $3.5 million
in the same period last year. Diluted earnings per share in the fourth quarter
increased 8% to $0.42 from $0.39 in the same period last year.
For the year ended December 27, 2003, sales increased 3% to $222.1
million from $215.5 million in the same period last year. Diluted earnings per
share for the year ended December 27, 2003 were $1.47 compared to $1.38 in the
same period last year, which included an after-tax gain of $0.15 per share on
the sale of the Company's specialty fastener business. Net income for the year
ended December 27, 2003 was $13.3 million compared to net income of $12.4
million in the same period last year, which included the above-mentioned
after-tax gain of $1.3 million. Excluding the gain for comparison purposes,
fully diluted earnings per share increased 20% for the year ended December 27,
2003.
Sales volume in 2003 increased as a result of several successful new
product introductions and shipments to new customers for the Company's Allparts
brake and Pik-A-Nut home hardware businesses. The favorable effects of foreign
currency exchange resulted in a 2% year over year increase in sales. These sales
increases were partially offset by a decline in sales volume in the Company's
Swedish subsidiary due to the weak U.S. dollar. Fourth quarter 2002 sales
benefitted from over $4 million in one-time sales related to customer inventory
builds, and 2002 sales included $2.1 million in revenues from the specialty
fastener business prior to its sale in May 2002. Sales growth for fiscal 2003
after adjusting for foreign currency exchange, the specialty fastener sale and
the one-time sales described above was 4%.
The Company continued to generate strong cash flow, which enabled it to
further reduce borrowing levels in 2003. Net debt (total debt less cash and
short-term investments) declined $15.6 million to $18.7 million at year end from
$34.3 million at the beginning of the year.
Mr. Richard Berman, Chairman, President and Chief Executive Officer
said, "Our strategic plan continues to drive improvements in our business. Our
investments in new product development and awareness programs, together with a
continued focus on supply chain efficiencies, have enabled us to deliver these
results. We are excited about the success of our 2003 new product introductions,
particularly our intake manifold and oil cooler lines, both part of our Dorman
OE Solutions brand. We have also had excellent acceptance of our Dorman brake
parts new master cylinder product line. In Spring 2004 we will publish all new
Dorman automotive hardware, Dorman hard-parts and Help! catalogs that will
highlight thousands of new products for the service dealer and do-it-yourself
markets. These, and other exciting catalogs, will be distributed to service
dealers and auto parts stores, as part of the Company's awareness program. R&B
remains committed to its strategy of accelerating opportunities for its
customers through continued investment in new product development, initiatives
designed to create and grow aftermarket demand for new and existing products,
and supply chain efficiencies to ensure that the right parts are available, at
the right place, at the right time."
Future Outlook:
The Company's strategic plan provides for a continued intense focus on
new product develop ment and further expansion of its existing core businesses.
Management anticipates that these efforts will result in compounded annual sales
growth of between 3% and 8% over the next two year period. The Company may
experience significant fluctuations in its results of operations from quarter to
quarter due to the timing of new product introductions and orders placed by its
customers.
R&B, Inc. is a leading supplier of OE Dealer "Exclusive" automotive
replacement parts, automotive hardware and brake products to the automotive
aftermarket and household hardware to the general merchandise markets. R&B's
products are marketed under more than thirty proprietary brand names, through
its Motormite, Dorman, Allparts, Scan-Tech, MPI and Pik-A-Nut businesses.
Forward looking statements in this release are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995. Such
forward looking statements are subject to certain risks and uncertainties that
could cause actual results to differ materially from those projected. Readers
are cautioned not to place undue reliance on these forward looking statements
which speak only as of the date hereof. Factors that cause actual results to
differ materially include, but are not limited to, those factors discussed in
the Company's Annual Report on Form 10-K under "Business - Risk Factors."
R&B, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(in thousands, except per-share amounts)
13 Weeks 13 Weeks
Fourth Quarter (unaudited) 12/27/03 Pct. 12/28/02 Pct.
Net sales $55,560 100.0 $55,100 100.0
Cost of goods sold 33,959 61.1 33,823 61.4
Gross profit 21,601 38.9 21,277 38.6
Selling, general and
administrative expenses 14,869 26.8 14,970 27.2
Income from operations 6,732 12.1 6,307 11.4
Interest expense, net 755 1.3 853 1.5
Income before income taxes 5,977 10.8 5,454 9.9
Provision for income taxes 2,140 3.9 1,967 3.6
Net income $ 3,837 6.9 $ 3,487 6.3
Earnings per share
Basic $ 0.44 - $ 0.41 -
Diluted $ 0.42 - $ 0.39 -
Average shares outstanding
Basic 8,757 - 8,497 -
Diluted 9,117 - 8,961 -
52 Weeks 52 Weeks
-------- --------
Fiscal Year 12/27/03 Pct. 12/28/02 Pct.
Net sales $222,083 100.0 $215,524 100.0
Cost of goods sold 139,875 63.0 136,321 63.3
Gross profit 82,208 37.0 79,203 36.7
Selling, general and
administrative expenses 58,156 26.2 58,213 27.0
Other income (1) - - (2,143) (1.0)
Income from operations 24,052 10.8 23,133 10.7
Interest expense, net 3,376 1.5 3,931 1.8
Income before income taxes 20,676 9.3 19,202 8.9
Provision for income taxes 7,372 3.3 6,845 3.2
Net income $13,304 6.0 $12,357 5.7
Earnings per share
Basic $ 1.54 - $ 1.46 -
Diluted $ 1.47 - $ 1.38 -
Average shares outstanding
Basic 8,647 - 8,487 -
Diluted 9,050 - 8,948 -
(1) In the second quarter of 2002, the Company sold its specialty fastener
business, resulting in a pre-tax gain of $2.1 million, which is reported as
other income. The gain after-tax was $1.3 million, or $0.15 per fully diluted
share.
R&B, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands)
12/27/03 12/28/02
Assets:
Cash and short term investments $ 25,082 $ 19,171
Accounts receivable 44,127 48,769
Inventories 51,170 47,217
Prepaid expenses and other 8,849 9,046
Total current assets 129,228 124,203
Property & equipment 17,590 16,591
Goodwill 29,125 28,607
Other assets 663 727
Total assets $176,606 $170,128
Liability & Shareholders' Equity:
Current portion of long-term debt$ 8,571 $ 9,291
Accounts payable 10,029 11,813
Accrued expenses and other 12,176 11,759
Total current liabilities 30,776 32,863
Long-term debt 35,213 44,218
Deferred income taxes 4,632 3,475
Shareholders' equity 105,985 89,572
Total Liabilities and Equity $176,606 $170,128
Selected Cash Flow Information:
(in thousands) 13 Weeks (Unaudited) 52 Weeks
-------------------- --------
12/27/03 12/28/02 12/27/03 12/28/02
Depreciation and
amortization $ 1,288 $1,198 $ 4,640 $ 5,560
Capital Expenditures $ 2,255 $1,032 $ 5,598 $ 3,543
Reconciliation of Non-GAAP Measures (Unaudited): In the second quarter of 2002,
R&B, Inc. sold its specialty fastener business, resulting in an after-tax gain
of $1.3 million. The gain from the sale has been excluded from comparisons to
net income and earnings per share to enhance comparability due to the size and
infre quent nature of this gain.
52 Weeks 52 Weeks Pct.
(In thousands) 12/27/03 12/28/02 Change
Fully diluted earnings
per share (as reported) $1.47 $1.38 7%
Less: gain on sale, net of tax - (0.15)
----- ----- ---
Net Income (as adjusted) $1.47 $1.23 20%
===== ===== ===