TransTechnology Reports Net Income for Fiscal 2000 First Quarter.LIBERTY CORNER, N.J.--(BUSINESS WIRE)--July 14, 1999-- TransTechnology Corporation (NYSE NYSE See: New York Stock Exchange :TT) today reported that, for the fiscal 2000 first quarter ended June 27, 1999, net income decreased 33% to $2,158,000 from $3,202,000 for the same period of the last fiscal year. On a fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. per-share basis, net income for the first quarter of fiscal year 2000 was $.35 compared with $.50 for the first quarter of fiscal 1999, a 30% decrease. Total sales for the first quarter of fiscal 2000 increased 8% to $55,368,000 from $51,483,000 for the prior year period. The Company's Specialty Fastener Products segment reported a 39% decrease in operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. over last year's first quarter on 2% lower sales. The company's domestic assembly fastener and cold headed products divisions each posted sales increases of 8% during the first quarter; however, lower sales and 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. were reported by the remaining domestic and international Specialty Fastener divisions. International retaining ring and hose clamp A hose clamp or hose clip is a device used to attach and seal a hose onto a fitting such as a barb or nib. A hose clamp is not the same as a pipe clamp which is a clamp made partly out of a pipe, not a clamp for clamping pipe. sales were down 20% from the prior year's first quarter, primarily the result of slower automotive OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and sales in the UK, Europe, and Brazil, and inventory liquidation The collection of assets belonging to a debtor to be applied to the discharge of his or her outstanding debts. A type of proceeding pursuant to federal Bankruptcy by major European distributors. Domestically, sales of fastener products were higher, with increased sales of assembly fasteners fasteners In construction, connectors between structural members. Bolted connections are used when it is necessary to fasten two elements tightly together, especially to resist shear and bending, as in column and beam connections. and cold headed products and sales from the aerospace rivet rivet, headed metal pin or bolt whose shaft is passed through holes in two or more pieces of metal, wood, plastic, or other material in order to unite them by forming the plain end into a second head. business acquired in June, 1998 being partly offset by sales decreases in retaining rings and hose clamps. The company's Aerospace Products segment reported a 35% increase in operating income for the quarter with a 53% increase in sales, primarily the result of the acquisition of the NORCO Norco, city (1990 pop. 23,302), Riverside co., SE Calif., a suburb of Los Angeles; inc. 1964. Diversified agriculture is being displaced by rapid urban development. Lubricating oils are manufactured. State prisons for men and women are nearby. hold open rod and actuator A mechanism that causes a device to be turned on or off, adjusted or moved. The motor and mechanism that moves the head assembly on a disk drive or an arm of a robot is called an actuator. See access arm. business in the second quarter of the prior fiscal year. Michael J. Berthelot, TransTechnology's Chairman and Chief Executive Officer, commented, "The economic weakness in Europe and Brazil has severely impacted our international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. , even though we have taken many steps to prepare for the downturns in these unstable markets. We have lowered headcounts in international operations 24% since the end of the third quarter of last fiscal year, have reduced capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. , and have liquidated DAMAGES, LIQUIDATED, contracts. When the parties to a contract stipulate for the payment of a certain sum, as a satisfaction fixed and agreed upon by them, for the not doing of certain things particularly mentioned in the agreement, the sum so fixed upon is called liquidated damages. (q.v. inventories at these international operations by more than $5 million over that same time period. Our ability to react to the continuing softness in the UK has been hampered to a certain extent by UK rules relative to plant consolidations and our pending acquisition of Ellison Holdings. However, now that the Ellison transaction has received clearance, we expect to immediately commence the consolidation of our two facilities, further reducing fixed costs fixed costs, n.pl the costs that do not change to meet fluctuations in enrollment or in use of services (e.g., salaries, rent, business license fees, and depreciation). and eliminating excess capacity. While some published articles have noted improvement in the economies of the UK and Germany, we have not seen any such indications in our served markets, and expect to see continued weakness in these units for the balance of the fiscal year." "In spite of the weakness in our European fastener business, we see many positive signs in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . Our Aerospace Products Group has a very strong backlog and is looking at solid increases in sales and operating income for the balance of the fiscal year. Our Breeze Industrial hose clamp unit has seen a very strong book to bill ratio over the past two quarters, with deliveries scheduled to begin in the second and third quarters of fiscal 2000, and is expected to show positive quarterly comparisons through the balance of the fiscal year. We believe that our Palnut assembly fastener unit has turned the corner in its recovery and should continue to post favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. comparisons for the rest of the fiscal year, as should TCR TCR T cell receptor. , our cold headed and specialty machined products division. However, our Aerospace Rivet subsidiary, acquired last June, is showing the effects of the reduction in fastener orders by both airframe OEM's and distributors as Boeing works off and pushes back to distributors large amounts of its fastener inventory, and is expected to report unfavorable comparisons for the next few quarters." "The addition of the Tinnerman assembly fastener business, which we announced yesterday and which is subject to receiving anti-trust clearances," Mr. Berthelot continued, "will have a major impact upon our domestic assembly fastener operation as well as all of our other divisions which sell directly to US automotive OEM's. We see the possibility of increasing revenues by adding several new internally generated product lines to be sold through a consolidated sales force, as well as the opportunity to reduce fixed costs by combining certain administrative operations. The Tinnerman and Ellison acquisitions, when completed, are expected to add over $110 million of annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. revenues, bringing TransTechnology to over $350 million in annualized sales, a 53% increase from the $228 million reported in fiscal 1999. The opportunities presented us to increase shareholder value by building a stronger, more profitable business through these acquisitions is very exciting, and we expect to begin to see the benefits of these acquisitions later in fiscal 2000." Joseph F. Spanier, Vice President and Chief Financial Officer of TransTechnology, said "We continue to have very strong cash flow, the result of our focus on inventory and cost reduction in both weak and strong business units as well as their overall high levels of profitability and cash flow generation. Following the completion of the Tinnerman and Ellison transactions, both of which will be funded from a new $325 million credit facility, provided us by BankBoston and replacing our existing facility, we realize that our 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 will be substantially higher than our goal of 35%. However, we believe that we have solid levels of debt service coverage and will redouble re·dou·ble v. re·dou·bled, re·dou·bling, re·dou·bles v.tr. 1. To double. 2. To repeat. 3. Games To double the doubling bid of (an opponent) in bridge. v. our focus on bringing our debt down to a level closer to our goal. We expect to enter the high yield debt market later this year in order to refinance Refinance 1. When a business or person revises their payment schedule for repaying debt. 2. Replacing an older loan with a new loan offering better terms. Notes: When a business refinances they typically extend the maturity date. part of the credit facility relative to the acquisitions in process." TransTechnology Corporation is a multi-national manufacturer of specialty fasteners and rescue hoists and cargo hooks. The Company employs 1,710 people at its eleven manufacturing facilities in the U.S., England, Germany and Brazil. -0- This release 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. that are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected in such statements. Such risks and uncertainties include, but are not limited to, unanticipated slowdowns in the Company's major markets, the impact of competition, the effectiveness of operational changes expected to increase efficiency and productivity, and worldwide economic and political conditions and foreign currency fluctuations that may affect worldwide results of operations. -0-
Results for the first quarter were as follows:
(In thousands of dollars, except per share data)
TransTechnology Corporation
STATEMENTS OF CONSOLIDATED OPERATIONS
Three Months Ended
6/27/99 6/28/98
Net sales $55,368 $51,483
Cost of sales 39,251 34,583
Gross profit 16,117 16,900
General, administrative and selling
expenses 11,185 10,336
Interest expense 1,630 1,351
Interest income (63) (99)
Royalty and other income (232) (70)
Income before income taxes 3,597 5,382
Income taxes 1,439 2,180
Net income $ 2,158 $ 3,202
Basic Earnings per Share $ 0.35 $ 0.51
Diluted Earnings per Share $ 0.35 $ 0.50
Weighted average basic shares 6,124,000 6,285,000
Weighted average diluted shares 6,158,000 6,439,000
SEGMENT INFORMATION
Three Months Ended
6/27/99 6/28/98
Sales:
Specialty fasteners $ 41,184 $ 42,220
Aerospace 14,184 9,263
Total $ 55,368 $ 51,483
Operating profit:
Specialty Fasteners $ 4,227 $ 6,879
Aerospace 3,223 2,389
Total 7,450 9,268
Corporate expenses (2,223) (2,535)
Interest expense (1,630) (1,351)
Income before income taxes $ 3,597 $ 5,382
BALANCE SHEET INFORMATION
6/27/99 3/31/99
Current assets $ 96,801 $ 100,901
Property, plant and equipment - net 74,779 76,384
Costs in excess of net assets of
acquired businesses 76,545 76,731
Other assets 25,607 25,704
Total assets $ 273,732 $ 279,720
Current portion of long-term debt $ 46 $ 46
Other current liabilities 24,329 29,761
Total current liabilities $ 24,375 $ 29,807
Long term debt 100,429 102,463
Other liabilities 23,537 23,740
Shareholders' equity 125,391 123,710
Total liabilities and shareholders'
equity $ 273,732 $ 279,720
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