ROYAL APPLIANCE MFG. CO. REPORTS RESULTS
ROYAL APPLIANCE MFG. CO. REPORTS RESULTS CLEVELAND, Oct. 27 /PRNewswire/ -- Royal Appliance Mfg. Co.
(NYSE: RAM), maker of the Dirt Devil(R) vacuum cleaners, reported today that its earnings increased to 19 cents per share in the third quarter ended Sept. 30, 1992, over the 4 cents per share earned in the second quarter ended June 30, 1992 but below the 29 cents per share in the comparable fiscal quarter of 1991. Net sales for the third quarter ended Sept. 30, 1992 were $98,901,000, up 46 percent from the $67,710,000 in the comparable 1991 period.
Michael Merriman, vice president - finance, attributed the improvement in earnings over the second quarter primarily to higher gross margin. "The company's gross margin improved from 34 percent of net sales in the second quarter of 1992 to approximately 36 percent of net sales in the third quarter of 1992, reflecting higher utilization of plant capacity and changes in the company's product sales mix. However, the gross margin percentage declined from approximately 40 percent in the comparable quarter in 1991, principally reflecting increases in the company's plant capacity and overhead costs and higher product returns than experienced in 1991. Product returns have remained comparable with the returns in the first and second quarters of 1992, each of which were also higher than comparable quarters in 1991." Merriman added, "The company's advertising and promotion expenses increased to $19,145,000, approximately 19 percent of net sales in the third quarter, as compared to approximately 22.5 percent of net sales or $17,481,000 in the second quarter 1992, and approximately 12 percent of net sales or $8,083,000 in the third quarter of 1991. The company is continuing its strategy of aggressive advertising and promotion to support sales growth and to increase brand awareness." Net sales for the nine months ended Sept. 30, 1992 were $253,640,000, up 57 percent from $161,111,000 for the corresponding period last year. Net income for the nine months was down 27 percent to $10,258,000 compared with net income of $14,017,000 for the first nine months of 1991. Earnings for the nine month period have been impacted by a lower gross margin percentage and significantly higher advertising and promotion expenditures. Comparative Financial Results 1992 1991 3 months to September 30 Net sales $98,901,000 $67,710,000 Net income (pro forma in 1991) (A) $ 4,806,000 $ 7,278,000 Per share (pro forma in 1991) (A) $.19 $.29 Weighted average number of common shares outstanding 24,782,000 (A) 9 months to September 30 Net sales $253,640,000 $161,111,000 Net income (pro forma in 1991) (A) $ 10,258,000 $ 14,017,000 Per share (pro forma in 1991) (A) $.41 $.56 Weighted average number of common shares outstanding 25,214,000 (A) (A) -- The above per share amounts reflect the 2-for-1 stock split that became effective on July 17, 1992. For the period Jan. 1, 1987 through Aug. 8, 1991, the company elected to be treated as an S corporation for income tax purposes and, as a consequence, paid no federal or state income taxes. The pro forma amounts for the three and nine month periods ended Sept. 30, 1991 reflect a pro forma tax provision as if the company had been a C corporation for income tax purposes, and assumes 25,200,000 shares were outstanding, for both 1991 periods. The company had its initial public offering in August 1991. The company develops, assembles and markets a full line of vacuum cleaners for home and commercial use under the Dirt Devil(R) and Royal(R) brandnames. In 1984, the company introduced its first bright red Dirt Devil(R) Hand Vac(TM) through mass retail. That original Dirt Devil(R) has since become the market leader in corded hand-held vacuum cleaners and has grown into a full line of various Dirt Devil products. The company's executive offices are located at 650 Alpha Drive, Cleveland, 44143. -0- 10/27/92 /CONTACT: Michael J. Merriman, vice president-finance; or Richard G. Vasek, controller, both of Royal Appliance Mfg. Co., 216-449-6150/ (RAM) CO: Royal Appliance Mfg. Co. ST: Ohio IN: MAC SU: ERN
KK -- CL005 -- 5183 10/27/92 08:33 EST
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|Date:||Oct 27, 1992|
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