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 CLEVELAND, Oct. 18 /PRNewswire/ -- The Standard Products Co. (NYSE: SPD) today reported higher sales and earnings for the first quarter of fiscal 1994.
 Sales for the three months ended September 30, 1993, increased to $201,691,000 from $164,417,000 in last year's period. Included in the current year's results are the benefit of sales of $35,250,000 from Standard Products Industriel (SPI) in France and "5" Rubber Corporation in the United States, which were acquired in January 1993. The results also include the negative impact of lower exchange rates that reduced total sales by $6,850,000 from last year.
 Net income was $4,852,000 or 29 cents per share. That compares with income last year of $4,436,000, or 29 cents per share, before restatement for the cumulative effect of the adoption of postretirement benefits other than pensions, Statement of Financial Accounting Standard (SFAS) No. 106. Restated for the effect of the adoption of SFAS 106, last year's net loss was $3,865,000, or 26 cents per share.
 Sales of the company's North American automotive operations increased 8.7 percent to $103,479,000. Profitability improved based on higher sales volume for General Motors in Canada as well as the absence of new model start-up costs incurred in Canada a year ago. Approximately one-third of this year's sales increase came from "5" Rubber Corporation, while the lower rate of exchange of the Canadian dollar reduced sales. Without the sales of "5" Rubber and the impact of the lower exchange rate, sales would have been up 8.2 percent over last year. While the North American car and light truck build was up 6 percent for the period, the build of passenger cars increased less than 2 percent, with the balance attributable to light trucks.
 In France, sales of SPI were less than last year but ahead of the European car build, and it was profitable for the quarter. Sales of Standard Products Limited in the United Kingdom decreased, largely the result of a 20 percent decline in exchange rates. Costs incurred in connection with a model changeover and a new product launch resulted in a loss that was larger than anticipated. These costs will extend into the second quarter.
 Sales of Oliver Rubber, supplying retread tire rubber to the truck tire industry, were $29,646,000, even with last year, but profitability was down due to lower sales of higher margin products. At Holm Industries, the leading manufacturer of magnetic gaskets for refrigerators and freezers, sales and profits were substantially ahead of the prior year's period.
 NISCO, the company's joint venture with Nishikawa Rubber Company of Japan, incurred a loss that was larger than anticipated, of which Standard Products' share was $1,077,000. During the quarter, NISCO launched two new programs which are now in volume production. Also affecting NISCO's first quarter results was an extended customer shutdown in July and August.
 Standard Products also reported that SPI's general and administrative expenses accounted for most of the company's increased general and administrative spending during the quarter. In addition, the company's effective tax rate increased to 40 percent from 32.5 percent because of non-deductible expenses and operating losses as well as the legislated increase in the statutory tax rate.
 James S. Reid, Jr., chairman and chief executive officer, said, "Our North American automotive operations performed well during the quarter. Even though NISCO and SPL had a difficult quarter due in part to new launches, other North American plants successfully began the launch of major new automotive models, among them the Ford Mustang. SPI also performed well in view of the steep decline in car sales in the European market. Looking ahead, we face the continued challenge of the new product launches scheduled for fiscal 1994 and an extended customer shutdown planned in Canada beginning in the second quarter. We are also benefiting from a slow improvement in the car and light truck build."
 Standard Products manufactures sealing and trimming systems for the automotive original equipment industry at its plants in North America, France and the United Kingdom, and its NISCO joint venture manufactures automotive sealing systems in the United States. The Company's Holm Industries subsidiary produces seals for home and commercial refrigerators and freezers and for residential doors and windows, and its Oliver Rubber subsidiary manufactures tread rubber and equipment for the retread industry.
 Consolidated Earnings Summary (Unaudited) (000 omitted)
 Three Months
 Periods Ended Sept. 30, and Sept. 27 1993 1992
 Net sales $201,691 $164,417
 Costs and expenses:
 Cost of goods sold 175,526 146,610
 Selling, general and
 administrative expenses 14,476 10,604
 Net interest expense 2,752 1,266
 Other income (expense), net (837) 642
 Income before taxes and nonrecurring items 8,100 6,579
 Provision for taxes on income 3,248 2,143
 Income before nonrecurring items 4,852 4,436
 Cumulative effect of accounting change,
 net of tax 0 (8,301)
 Net income (loss) $4,582 $(3,865)
 Earnings (loss) per common share:
 Income before nonrecurring items $ .29 $ .29
 Cumulative effect of accounting change,
 net of tax 0 (.55)
 Total $ .29 $ (.26)
 Average shares outstanding 16,580 15,063
 -0- 10/18/93
 /CONTACT: Aubrey E. Arndt of The Standard Products Co., 216-281-8300; or William L. Dupuy of Edward Howard & Co., 216-781-2400, for The Standard Products Co./

CO: The Standard Producs Co. ST: Ohio IN: AUT SU: ERN

BM -- CL009 -- 3231 10/18/93 09:23 EDT
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Publication:PR Newswire
Date:Oct 18, 1993

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