FIRST QUARTER 2006 EARNINGS RELEASE
Published on
NEW 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.dormanproducts.com
(215) 997-1800 x 5132
E-mail: MBarton@dormanproducts.com
R&B, Inc. Reports Sales and Earnings for the First Quarter Ended April 1, 2006;
Announces proposed name change to Dorman Products, Inc.
Colmar, Pennsylvania (May 4, 2006) -- R&B, Inc., (NASDAQ:RBIN) today
announced financial results for the first quarter ended April 1, 2006.
Sales increased 13% to $68.9 million from $61.2 million in the same
period last year. Net income in the first quarter of 2006 was $3.42 million
compared to net income of $3.45 million in the same period last year. Diluted
earnings per share for both the first quarter of 2006 and the first quarter of
2005 was $0.19.
Revenue growth was primarily the result of increased sales from
products introduced in the past two years. Gross profit margins declined as a
result of a continued mix shift to lower margin automotive hard parts, higher
customer returns and allowances and a $0.5 million increase in the Company's
provision for excess and obsolete inventory in 2006.
Effective January 1, 2006, the Company adopted SFAS No. 123R,
"Accounting for Stock-Based Compensation," and related interpretations and began
expensing the grant date fair value of employee stock options. Prior to January
1, 2006, the Company applied Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees," and related interpretations in
accounting for its stock option plans. Accordingly, no compensation expense was
recognized in net income for employee stock options in the prior year. The
Company adopted SFAS No. 123R using the modified prospective transition method
and therefore has not restated prior periods. The estimated impact of adopting
SFAS No. 123R in 2006, is expected to reduce diluted earnings per share for the
year by approximately $0.02.
Mr. Richard Berman, Chairman, President and Chief Executive Officer
said, "Sales growth in the first quarter was the result of our continued success
on the new product front. Earnings, however, were below expectation. In addition
to a gross margin shortfall, we have not yet fully leveraged our recent
investments in systems, sales and new product development. We remain confident
that these investments will contribute to our long term goal of double digit
growth in sales and earnings."
The Company also announced that, subject to shareholder approval, it
intends to change its name and trading symbol to Dorman Products, Inc. and DORM,
respectively. In November 2005, the Company launched its DORMAN(R) NEW SINCE
1918(TM) marketing campaign and repositioned its brands under a single corporate
umbrella - DORMAN. The Company's products are now sold under one of the seven
DORMAN sub-brands. The change from R&B, Inc. to Dorman Products, Inc. will
present a sharper image of the Company and strengthen its corporate identity by
connecting it directly to the Company's strongest brand. If approved by the
shareholders, the changes will be effective shortly after the next Annual
Shareholders Meeting scheduled for May 24, 2006.
R&B Inc., is a leading supplier of OE Dealer "Exclusive" automotive
replacement parts, automotive hardware, brake products, and household hardware
to the Automotive Aftermarket and Mass Merchandise markets. Dorman automotive
parts and hardware are marketed under the OE Solutions(TM), HELP!(R),
AutoGrade(TM), First Stop(TM), Conduct-Tite(R), Pik-A-Nut(R) and Scan-Tech(R)
brand names.
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 "Item1A - Risk
Factors."
R&B, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(in thousands, except per-share amounts)
13 Weeks 13 Weeks
First Quarter (unaudited) 4/01/06 Pct. 3/26/05 Pct.
Net sales $ 68,865 100.0 $ 61,231 100.0
Cost of goods sold 44,176 64.1 38,538 62.9
Gross profit 24,689 35.9 22,693 37.1
Selling, general and
administrative expenses 18,659 27.1 16,623 27.2
Income from operations 6,030 8.8 6,070 9.9
Interest expense, net 590 0.9 607 1.0
Income before income taxes 5,440 7.9 5,463 8.9
Provision for income taxes 2,020 2.9 2,009 3.3
Net income $ 3,420 5.0 $ 3,454 5.6
Earnings per share
Basic $ 0.19 - $ 0.19 -
Diluted $ 0.19 - $ 0.19 -
Average shares outstanding
Basic 17,744 - 17,885 -
Diluted 18,158 - 18,449 -
R&B, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
4/01/06 12/31/05
Assets: (unaudited)
Cash and cash equivalents $ 2,507 $ 2,944
Accounts receivable 62,547 64,778
Inventories 78,559 75,535
Deferred income taxes 9,738 9,560
Prepaid expenses 1,447 1,545
Total current assets 154,798 154,362
Property & equipment 27,358 27,473
Goodwill 29,676 29,617
Other assets 806 704
Total assets $212,638 $212,156
Liability & Shareholders' Equity:
Current portion of long-term debt $ 8,571 $ 8,571
Accounts payable 14,136 14,739
Accrued expenses and other 12,690 15,240
Total current liabilities 35,397 38,550
Long-term debt and other 27,759 27,869
Deferred income taxes 7,266 7,195
Shareholders' equity 142,216 138,542
Total Liabilities and Equity $212,638 $212,156
Selected Cash Flow Information:
(in thousands) Quarter Ended(unaudited)
4/01/06 3/26/05
Depreciation and
amortization $ 1,622 $1,326
Capital Expenditures $ 1,502 $2,160