DeCrane Aircraft Reports Second Quarter Results.EL SEGUNDO El Segundo (ĕl sēgŭn`dō), industrial city (1990 pop. 15,223), Los Angeles co., S Calif., on Santa Monica Bay; inc. 1917. Its products include navigation and computer systems, aircraft parts, office machines, telephone apparatus, and , Calif.--(BUSINESS WIRE)--August 13, 1998--DeCrane Aircraft Holdings, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :DAHX), a leading manufacturer of avionics avionics (ā'vēŏn`ĭks), electronic instruments used in air or space flight; also the design and production of such instruments. Early planes had few instruments, but as aviation and aircraft became more complex, so did instrumentation. components and an avionics systems integrator An individual or organization that builds systems from a variety of diverse components. With increasing complexity of technology, more customers want complete solutions to information problems, requiring hardware, software and networking expertise in a multivendor environment. for the commercial and high-end corporate aircraft industry, today announced continued financial performance gains due to internal growth and a successful acquisition strategy. Net income, adjusted for one-time charges, advanced 47.8% on a 6.1% increase in quarterly revenues. Earnings per share on an adjusted basis improved to $.30 per share during the second quarter from $.28 per share on a pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma basis for the same quarter last year. Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , R. Jack DeCrane, said, "Our performance this quarter reflects a solid contribution from both our components and systems integration businesses, together with the inclusion of results from Audio International. Also noteworthy is the improvement we realized in our operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: , despite the decline in sales to two of our major customers, Boeing and Matsushita, during the quarter." According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. DeCrane, the Company made further advances in expanding the scope of its product and service franchise with the acquisitions of Avtech Corporation and Dettmers Industries Inc., both of which occurred at the end of the quarter. As previously announced on July 17, 1998, the Company signed a definitive merger agreement with an affiliate of DLJ Merchant Banking Partners DLJ Merchant Banking Partners (DLJMB) is a LBO-focused private equity firm of Credit Suisse. DLJMB has offices in New York, London and Los Angeles. External links
Financial Results For the second quarter of 1998, revenues rose 6.1% to $29.8 million from $28.1 million for the second quarter of 1997. Gross profit improved 34.7% to $9.7 million from $7.2 million in the second quarter a year-ago, while the Company's gross margin increased to 32.6% of revenues compared to 25.6% of revenues. Operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. advanced 27.2% to $4.0 million, up from $3.2 million for the second quarter of 1997 and the Company's operating profit margin Operating profit margin The ratio of operating profit to net sales. also improved to 13.5% of revenues from 11.3% of revenues from the prior period. Net income, adjusted to exclude the effect of one-time charges, increased 47.8% to $2.3 million, or $0.30 per share, in the second quarter of 1998, up from pro forma net income of $1.6 million, or $0.28 per share, in the corresponding prior year quarter. Including the one-time charges, the Company reported net income of $1.7 million, or $0.22 per share, for the second quarter of 1998. For the six months ended June 30, 1998, revenues increased 8.7% to $59.0 million, up from $54.3 million in the comparable period a year ago. Gross profit increased 41.5% to $18.7 million for the first half of 1998 from $13.2 million during the first half of last year, while gross profit margins Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. improved to 31.7% of revenues from 24.4% of revenues. Operating profit increased 38.8% to $7.8 million, up from $5.6 million for the first half of 1997, as the Company's operating profit margin improved to 13.2% of revenues from 10.3% of revenues. Net income, adjusted to exclude the effect of one-time charges, increased 34.3% to $4.0 million, or $0.58 per share, for the first half of 1998 from pro forma net income of $3.0 million, or $0.53 per share, for the first half of 1997. Including the one-time charges, the Company reported net income of $3.4 million, or $0.50 per share, for the first half of 1998. Key Performance Factors DeCrane stated, "Our ability to execute on our growth strategy was greatly enhanced by the success of our secondary stock offering last April. The $34.8 million in capital we raised strengthened our capital structure and gave us the financial flexibility we needed to make two acquisitions. We are delighted to have acquired Avtech and Dettmers, both market leading players in their product niches, which will serve to further solidify so·lid·i·fy v. so·lid·i·fied, so·lid·i·fy·ing, so·lid·i·fies v.tr. 1. To make solid, compact, or hard. 2. To make strong or united. v.intr. our competitive standing in the marketplace." Systems Integration During the quarter, DeCrane's systems integration group enlarged its core group of customers and increased its revenue base. Contracts with B.F. Goodrich (for American Airlines American Airlines Major U.S. airline. American was created through a merger of several smaller U.S. airlines and incorporated in 1934. It continued to buy the routes of other airlines, becoming an international carrier in the 1970s; its routes include South America, the ), Securaplane (for Southwest Airlines This article is about the American airline. For the former Japanese airline, see Japan Transocean Air. For the British airline, see Air Southwest. Southwest Airlines Co. ) and Walter Kidde Walter Kidde (March 7 1877 – February 9, 1943) (IPA pronunciation: [kɪdə]) was the court appointed trustee of the bankrupt New York, Susquehanna and Western Railway from July 24, 1937 until his death in 1943. (for Northwest Airlines), as well as Rockwell Collins Rockwell Collins, Inc. (NYSE: COL) is a large United States-based international company headquartered in Cedar Rapids, Iowa, primarily providing aviation and information technology systems, solutions, and services to governmental agencies and aircraft manufacturers. for an engineering program related to an in-flight entertainment In-flight entertainment (IFE) refers to the entertainment available to aircraft passengers during a flight. After World War II commercial aviation flights became a daily event in which entertainment was requested by passengers to help the time pass. system for British Airways British Airways in full British Airways PLC International passenger airline based in London. In 1936 British Airways Ltd. was founded through the merger of three smaller airlines. , are well underway. DeCrane stated, "We are pleased with the gains of our systems integration business in the fast growing smoke detection and fire suppression market." According to DeCrane, the Company secured new program awards in this area with TWA TWA Time-weighted average, see there , Alaska Airlines Alaska Airlines, (NYSE: ALK) is an airline based in Seattle, Washington, United States. It operates hubs at Seattle-Tacoma International Airport, Ted Stevens Anchorage International Airport, Los Angeles International Airport, and Portland International Airport. and Federal Express, in addition to the existing contracts with other customers, all of which are anticipated to favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impact second half results. Components -- Contacts, Connectors, Harness Assemblies and Displays "Our components business made important improvements in its margins, even though sales volume was adversely affected by the original equipment production disruptions announced earlier in the year," commented DeCrane. The components group experienced a moderate decrease in sales for the quarter over the same period last year due to the temporary slowdown of direct and indirect sales to Boeing and Matsushita. According to DeCrane, the decline was as anticipated and, based on the momentum in current bookings, he expects sales to these parties to return to more normal levels during the second half of 1998. The Company's aggressive marketing program to further penetrate Airbus (through Aerospatiale) continues on course with qualification for sixty contact part numbers still expected in the third quarter. Capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. At June 30, 1998, the Company had $195.6 million in total assets, $94.4 million in long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. and $77.7 million in stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. . The long term debt to total capitalization Total capitalization The total long-term debt and all types of equity of a company that constitutes its capital structure. total capitalization See capitalization. ratio was 54.9%. Bookings, Backlog For the quarter, bookings increased to $33.1 million versus $28.3 million in the second quarter of 1997. As of June 30, 1998, the Company had a backlog of $84.5 million compared to $44.7 million during the same period a year before. This significant increase in backlog for 1998 is primarily due to the inclusion of $31.4 million in sales orders The sales order, sometimes abbreviated as SO, is an order received by a business from a customer. A sales order may be for products and/or services. Given the wide variety of businesses, this means that the orders can be fulfilled in several ways. attributable to Avtech, but increases occurred at other companies as well. Outlook According to DeCrane, it is reasonable to expect continued growth in demand for new commercial aircraft, new corporate aircraft and new safety mandates. All of these trends favor the Company's ongoing growth. Except for historical information contained herein, this document contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These statements involve known and unknown risks and uncertainties that may cause the Company's actual results or outcomes to be materially different from those anticipated and discussed herein. Further, the Company operates in an industry sector where securities values may be volatile and may be influenced by regulatory and other factors beyond the Company's control. Important factors that the Company believes might cause such differences are discussed in the cautionary statements accompanying the forward-looking statements in the Company's Prospectus, dated April 16, 1997, filed with the Securities and Exchange Commission and subsequent filings. In assessing forward-looking statements contained herein, readers are urged to read carefully all cautionary statements contained in those filings with the Securities and Exchange Commission. DeCrane Aircraft Holdings, Inc. is a leading manufacturer of avionics components and a provider of avionics systems integration services in certain niche markets A niche market also known as a target market is a focused, targetable portion (subset) of a market sector. By definition, then, a business that focuses on a niche market is addressing a need for a product or service that is not being addressed by mainstream providers. of the commercial aircraft industry. The Company's products and services typically are utilized to provide an interface between an aircraft and its avionic a·vi·on·ics n. 1. (used with a sing. verb) The science and technology of electronics and the development of electronic devices as applied to aeronautics and astronautics: systems. For more information about DeCrane Aircraft Holdings, Inc. via facsimile simply call 1-800-PRO-INFO and dial client code "DAHX".
DECRANE AIRCRAFT HOLDINGS, INC.
Consolidated Income Statements (Unaudited)
(in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
1998 1997(1) 1998 1997(1)
Revenues $29,854 $28,130 $58,982 $54,248
Cost of sales 20,134 20,916 40,275 41,023
Gross profit 9,720 7,214 18,707 13,225
Operating expenses 5,684 4,041 10,942 7,632
Operating profit 4,036 3,173 7,765 5,593
Other expenses, net
Interest expense 383 692 1,169 2,284
Other expenses, net 587 156 570 69
Income before income taxes 3,066 2,325 6,026 3,240
Provision for income taxes 1,394 871 2,666 1,157
Income before extraordinary
item 1,672 1,454 3,360 2,083
Extraordinary loss from
debt refinancing -- 2,078 -- 2,078
Net income (loss) 1,672 (624) 3,360 5
Adjustment to redemption
value of mandatorily
redeemable common
stock warrants -- (2,203) -- (2,203)
Cumulative convertible
preferred stock dividends -- (62) -- (442)
Net income (loss)
applicable to common
stockholders $ 1,672 $(2,889) $ 3,360 $(2,640)
Income (loss) per
common share (2)
Basic
Income (loss) before
extraordinary item $ .23 $ (.18) $ .53 $ (.25)
Extraordinary loss
from debt refinancing -- (.47) -- (.91)
Net income (loss) $ .23 $ (.65) $ .53 $ (1.16)
Diluted
Income (loss) before
extraordinary item $ .22 $ (.18) $ .50 $ (.25)
Extraordinary loss
from debt refinancing -- $ (.47) -- $ (.91)
Net income (loss) $ .22 $ (.65) $ .50 $ (1.16)
Pro forma, as adjusted (3)
Income applicable to
common stockholders $ 1,672 $ 1,568 $ 3,360 $ 2,983
Income per common share
Basic $ .23 $ .30 $ .53 $ .56
Diluted $ .22 $ .28 $ .50 $ .53
DECRANE AIRCRAFT HOLDINGS, INC.
Notes to Consolidated Income Statements
Notes:
(1) Certain reclassifications have been made to prior quarters'
presentation to conform to the 1998 presentation.
Share and per share data for 1997 have been restated to conform
with the provisions of Statement of Financial Accounting Standards
No. 128, "Earnings Per Share."
(2) For 1997, pro forma for the sale by the Company of 2,700,000
shares of common stock in its initial public offering and the
application of the net proceeds therefrom as described in the
Company's Form 10-K as if it had occurred on January 1, 1997. The
effect of a $2,078,000 extraordinary loss incurred from the
Company's debt refinancing with the net proceeds from the initial
public offering is shown separately.
(3) For 1997, computed based upon pro forma income applicable to
common stockholders (Note 2) and pro forma as if the following had
occurred as of January 1, 1997 as described in the Company's Form
10-K: (i) the effect of a 3.53 for one reverse stock split and the
recapitalization of the Company; and (ii) the sale by the Company
of 2,700,000 shares of common stock in its initial public offering
and the application of the net proceeds therefrom.
DECRANE AIRCRAFT HOLDINGS, INC.
Consolidated Balance Sheet Data
(In thousands)
June 30, December 31,
1998 1997
(Unaudited)
Assets
Current assets
Cash and cash equivalents $ 2,337 $ 206
Accounts receivable, net 25,857 18,152
Inventories 35,109 25,976
Income taxes refundable 4,368 --
Prepaid expenses and other
current assets 2,875 782
Total current assets 70,546 45,116
Property and equipment, net 23,815 14,054
Other assets, principally
intangibles, net 101,248 39,967
Total assets $195,609 $ 99,137
Liabilities and Stockholders'
Equity
Current liabilities
Short-term borrowings $ 90 $ 568
Current portion of long-term
obligations 857 858
Accounts payable 8,157 8,032
Accrued expenses 11,597 6,911
Income taxes payable 3,175 3,975
Total current liabilities 23,876 20,344
Long-term liabilities
Long-term obligations,
net of current portion 93,027 37,412
Other long-term liabilities 523 96
Deferred income taxes 521 1,758
Total long-term liabilities 94,071 39,266
Stockholders' equity
Common stock 75 53
Additional paid-in capital 85,928 51,057
Accumulated deficit (8,084) (11,444)
Accumulated other
comprehensive income (deficit) (257) (139)
Total stockholders' equity 77,662 39,527
Total liabilities and
stockholders' equity $195,609 $ 99,137
CONTACT: DeCrane Aircraft Holdings, Inc. John Hinson, 310/725-9123 (Investor Relations Investor relations The process by which the corporation communicates with its investors. ) or The Financial Relations Board Karen Taylor Karen Taylor is an English comedienne from Barrow-in-Furness, Cumbria. She is a former finalist in the prestigious Daily Telegraph Open Mic Award[1] and has fronted her own sketch show on BBC Three, entitled Touch Me, I'm Karen Taylor. , 310/442-0599 (General Information) Moira Conlon, 310/442-0599 (Investor/Analyst) Michaelle Burstin, 310/442-0599 (Media) |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion