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Questron Technology, Inc. Reports First Quarter Results.

BOCA RATON, Fla.--(BUSINESS WIRE)--May 11, 1999--

Questron Technology, Inc. (NASDAQ: QUST, QUSTW) announced its results for the first quarter of 1999. For the quarter ended March 31, 1999, the Company reported sales of $19,304,486, compared with $10,400,966 for the first quarter of 1998.

Operating income for the quarter was $2,443,250, compared with $1,565,449 for the first quarter of 1998. Net income for the quarter was $702,866, or $.14 per diluted common share ($.14 per common share), compared with $757,604, or $0.16 per diluted common share ($0.25 per common share) reported in the first quarter of 1998. There were 5,080,338 and 4,716,440 average number of diluted common shares outstanding, and 5,008,172 and 2,115,793 average number of common shares outstanding, for the 1999 and 1998 periods, respectively. The Company included its previously outstanding preferred stock in the computation of its net income per diluted common share for the first quarter of 1998.

The Company noted that the 85.6% sales increase for the first quarter of 1999, as compared with the first quarter of 1998, was primarily attributable to the acquisitions of Fas-Tronics, Fortune and AFCOM, which took place in the second half of 1998. The increase in sales for the first quarter of 1999 also reflects 19.5% internal growth (based on the industry equivalent of "same store sales"), as compared with the first quarter of 1998 (excluding the sales of Fas-Tronics, Fortune and AFCOM) and 2% internal growth, as compared with the fourth quarter of 1998 (excluding the sales of AFCOM).

Dominic A. Polimeni, Chairman, President and Chief Executive Officer of Questron, said, "The lower than expected internal growth rate over the fourth quarter is due to some moderate softness in certain customer segments, including aerospace and industrial equipment OEMs ." Mr. Polimeni continued, "The higher level of SG&A expense in the first quarter of 1999 is the result of our investment in infrastructure, including the expansion of facilities and staff in San Diego, San Jose and Grand Rapids, to support the expected increase in our inventory logistics management business with both new and existing customers." Mr. Polimeni added, "Our results for the first quarter of 1999 are also burdened with the goodwill amortization and interest expense associated with our three most recently completed acquisitions, without the benefit of the cost savings resulting from the organizational, system, and physical integration of these businesses which is planned for later this year and early next year."

Douglas D. Zadow, President of Questron Distribution Logistics, Inc. ("QDL"), the Company's principal operating subsidiary, said, "We recently formed Questron Aerospace Logistics as a division of QDL, combining the aerospace distribution businesses of Fortune and Fas-Tronics organizationally so that we can more effectively provide inventory logistics management programs to our aerospace customer base." Mr. Zadow added, "We expect to convert both aerospace businesses, as well as AFCOM, to our computer system later this year and to merge Fortune and Fas-Tronics into one facility in early 2000, which will enable us to achieve the operating efficiencies we have been able to attain by integrating our other businesses."

Questron Technology Inc., headquartered in Boca Raton, Florida, is a leading provider of inventory logistics management programs for fasteners and related products (commonly referred to as "C" inventory items). The Company is also a master distributor of fasteners and a distributor of lithium batteries. Questron's securities are traded on NASDAQ under the symbols QUST (common) and QUSTW (warrants).

(Table to follow)

Certain information contained in this release includes "Forward-Looking Statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and is subject to certain risks and uncertainties, including those "Risk Factors" set forth in the company's current Annual Report on Form 10-K for the year ended December 31, 1998. Readers are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date hereof. The Company undertakes no obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect unanticipated events or developments.

This release is available on the KCSA Worldwide website at www.kcsa.com.

 QUESTRON TECHNOLOGY, INC.
 CONSOLIDATED STATEMENT OF INCOME
 for the Three Months Ended March 31, 1999 and 1998

 Three Months Ended
 March 31,
 ----------------------------
 1999 1998
 ---- ----

Sales $19,304,486 $10,400,966
 ----------- -----------

Costs and expenses:
 Cost of products sold 11,815,652 6,181,350
 Selling, general and
 administrative expenses 4,676,636 2,490,567
 Depreciation and amortization 368,948 163,600
 ----------- -----------
 16,861,236 8,835,517
 ----------- -----------

Operating income 2,443,250 1,565,449

Interest expense 1,251,952 281,375
 ----------- -----------

Income before income taxes 1,191,298 1,284,074

Provision for income taxes 488,432 526,470
 ----------- -----------

Net income $ 702,866 $ 757,604
 =========== ===========

Net income used in per common
 share calculation (reflecting
 deduction for preferred stock
 dividends in 1998) $ 702,866 $ 526,772
 =========== ===========

Net income per common share $ 0.14 $ 0.25
 =========== ===========

Net income per diluted
 common share $ 0.14 $ 0.16
 =========== ===========

Average number of
 common shares outstanding 5,008,172 2,115,793
 =========== ===========

Average number of diluted
 common shares outstanding 5,080,338 4,716,440
 =========== ===========

 This interim report is subject to independent audit at year-end.
COPYRIGHT 1999 Business Wire
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1999, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Publication:Business Wire
Geographic Code:1USA
Date:May 11, 1999
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