SARASOTA, Fla., Aug. 06, 2018 (GLOBE NEWSWIRE) -- Uniroyal Global Engineered Products, Inc. (OTCQB:UNIR) (or the “Company”) today reported its financial results for the second quarter and six months ended July 1, 2018.

Financial Highlights-Second Quarter

• Net Sales in line with the prior year on increases in the Automotive Sector
• Gross Profit margins improve quarter-to-quarter on operational improvements, cost reduction and increased selling prices
• Operating expenses decline to 12.6% of Net Sales versus 14.2% in prior year quarter
• Net Income Available to Common Shareholders of $148,389 or $0.01 per share, in line with prior year

Overview 

The financial results for the second quarter ended July 1, 2018 showed marked improvement from recent quarters in many key measurements.  Gross Margins improved to 18.3% which was an improvement from the 17.5% and 14.8% recorded in the two previous quarters.  Raw material cost increases continue to be a headwind, but operational efficiencies offset the negative impact.  Operating expenses as a percentage of Net Sales declined to 12.6% versus the 14.1% of the previous quarter and 14.2% of last year as the Company continues cost cuts, particularly in the General and Administrative area. 

As we mentioned last quarter, we are diversifying our product mix in the Automotive sector to qualify for platforms of major automotive OEM’s, targeting growing segments such as SUV’s and trucks.  Further, we are diversifying our sales strategies to include different channels such as heavy truck, recreational vehicles and marine applications.  We anticipate that we will return to sales growth and continued margin improvements in the second half of this year.

Net Sales

Net Sales for the second quarter were $26,023,233 versus $26,077,549 in the second quarter of 2017, resulting in a decline of 0.2% (a decline of 4.0% excluding the favorable currency effect). Geographically, US operations (45.3% of total Net Sales for the second quarter) recorded an increase of 2.8% and the UK operations (54.7% of total Net Sales for the second quarter) declined 2.6% versus the prior year second quarter.

The Automotive Sector (68.6% of total Net Sales) increased 1.4% versus the prior year as the US operations recorded sharp improvement (9.8%) over the prior year more than offsetting a 1.4% decline in the UK operations. Though it’s difficult to forecast quarterly sales in the Automotive Sector because of timing of platforms, OEM scheduling and demands, we are pleased with the performance of our US operations and believe the second quarter results will launch us into a stronger second half.  The UK customer base in particular is positioned strongly in the European marketplace.

The Industrial Sector (31.4% of total Net Sales for the second quarter) declined 3.5% versus the prior year as UK sales from the non-automotive transportation market saw a decline compared to 2017 due to a quarterly timing issue. Sales of this sector were up 3.3% for the six months 2018 versus the six months of the prior year. 

Operating Income

Operating Income for the second quarter was $1,474,897, which was a decline of 10.3% from the $1,644,302 recorded in the same quarter of the prior year. As a percentage of Net Sales, Operating Income was 5.7% versus 6.3% in the second quarter of the previous year.  Though the metrics of this quarter were below that of the prior year, we are pleased with the improvement being made at our operations from the most recent quarters where we encountered sharp increases in raw material prices and operational start-up issues due to a major equipment installation in the UK.  While raw material price increases are being accepted by customers, this is a continuous process. Further, we believe that the UK start-up issues are now behind us.  These variables lead to a Gross Profit Margin of 18.3% which was an improvement from the 17.5% recorded in the first quarter of this year.  A reduction in Operating Expenses has been a strategic focus of the Company as well.  For the second quarter, Operating Expenses declined $403,000 versus the second quarter of last year to 12.6% of Net Sales versus 14.2% in the year ago quarter.  We believe that the result of the targeted actions in place will lead to a continuous improvement in Operating Income in the second half of this year.

Net Income (Loss) Available to Common Shareholders

After Preferred stock dividends, Net Income Available to Common Shareholders was $148,389 or $0.01 per diluted common share as compared to $214,466 or $0.01 per diluted common share in the second quarter of the prior year.  Weighted average shares outstanding were moderately below that of the previous year at 18,690,030.

For further details, see the Consolidated Statements of Operations in the Company’s Form 10-Q filed on August 6, 2018.  The Company will have comments on the quarter in an earnings conference call on August 7, 2018 at 9:00 am (EDT). 

Persons wishing to access the conference call may do so by dialing 800-289-0438 (U.S.) and 323-794-2433 (International), and using the ID #3000820.  Howard F. Curd, President, will discuss our earnings on the call and will be available for questions. The call will also be available by logging on to www.uniroyalglobal.com and accessing the webcast link (http://public.viavid.com/player/index.php?id=130823) in the investor relations section.

A replay of the conference call will be available beginning August 7, 2018 through November 7, 2018 by calling 844-512-2921 (U.S.) or 412-317-6671 (International) and using Pin #3000820. The webcast will be archived on www.uniroyalglobal.com in the investor relations section until August 7, 2019.

About Uniroyal Global Engineered Products, Inc.:

Uniroyal Global Engineered Products, Inc. (UNIR) is a leading manufacturer of vinyl-coated fabrics that are durable, stain resistant, cost-effective alternatives to leather, cloth and other synthetic fabric coverings. Uniroyal Global Engineered Products, Inc.’s revenue in 2017 was derived 67.5% from the automotive industry and approximately 32.5% from the recreational, industrial, indoor and outdoor furnishings, hospitality and healthcare markets. Our primary brand names include Naugahyde^®, BeautyGard^®, Flame Blocker™, Spirit Millennium^®, Ambla^®, Amblon^®, Velbex^®, Cirroflex^®, Plastolene^® and Vynide^®.

Forward-Looking Statements:

Except for statements of historical fact, certain information contained in this press release constitutes forward-looking statements, including, without limitation, statements containing the words “believe,” “expect,” “anticipate,” “intend,” “should,” “planned,” “estimated” and “potential” and words of similar import, as well as all references to the future. These forward-looking statements are based on Uniroyal Global Engineered Products, Inc.’s current expectations. The Company cautions investors that any forward-looking statements made by the Company are not guarantees of future performance and that a variety of factors could cause the Company´s actual results and experience to differ materially from the anticipated results or other expectations expressed in the Company´s forward-looking statements. The risks and uncertainties which may affect the operations, performance, development and results of the Company´s business include, but are not limited to, the following: uncertainties relating to economic conditions, uncertainties relating to customer plans and commitments, the pricing and availability of equipment, materials and inventories, currency fluctuations, technological developments, performance issues with suppliers, economic growth, delays in testing of new products, the Company’s ability to successfully integrate acquired operations, the Company’s dependence on key personnel, the Company’s ability to protect its intellectual property rights, the effectiveness of cost-reduction plans, rapid technology changes and the highly competitive environment in which the Company operates. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made.

Uniroyal Global Engineered Products, Inc. Public Relations:

TTC Group, Inc.

Vic Allgeier, 646-290-6400 vic@ttcominc.com

Uniroyal Global Engineered Products, Inc.
Consolidated Balance Sheets
	(Unaudited)
ASSETS	July 1, 2018				December 31, 2017
CURRENT ASSETS
Cash and cash equivalents	$	903,082			$	1,267,319
Accounts receivable, net		16,011,212				15,167,468
Inventories, net		19,368,331				19,769,662
Other current assets		877,091				846,362
Related party receivable		2,073				37,116
Total Current Assets		37,161,789				37,087,927
PROPERTY AND EQUIPMENT, NET		18,043,816				17,289,058
OTHER ASSETS
Intangible assets		3,231,439				3,295,896
Goodwill		1,079,175				1,079,175
Other long-term assets		3,921,695				3,902,246
Total Other Assets		8,232,309				8,277,317
TOTAL ASSETS	$	63,437,914			$	62,654,302
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Checks issued in excess of bank balance	$	705,321			$	686,640
Lines of credit		19,650,799				19,340,468
Current maturities of long-term debt		1,187,384				1,155,490
Current maturities of capital lease obligations		416,588				408,425
Accounts payable		10,363,209				10,358,761
Accrued expenses and other liabilities		3,894,980				3,594,684
Related party obligation		768,036				286,955
Current portion of postretirement benefit liability - health and life		143,287				143,287
Total Current Liabilities		37,129,604				35,974,710
LONG-TERM LIABILITIES
Long-term debt, less current portion		2,684,591				2,467,433
Capital lease obligations, less current portion		301,787				531,218
Related party lease financing obligation		2,468,248				2,153,327
Long-term debt to related parties		2,459,393				2,765,655
Postretirement benefit liability - health and life, less current portion		2,522,261				2,547,076
Other long-term liabilities		785,129				822,492
Total Long-Term Liabilities		11,221,409				11,287,201
Total Liabilities		48,351,013				47,261,911
STOCKHOLDERS' EQUITY
Preferred units, Series A UEP Holdings, LLC, 200,000 units issued    and outstanding ($100 issue price)		617,571				617,571
Preferred units, Series B UEP Holdings, LLC, 150,000 units issued    and outstanding ($100 issue price)		463,179				463,179
Preferred stock, Uniroyal Global (Europe) Limited, 50 shares    issued and outstanding ($1.51 stated value)		75				75
Common stock, 95,000,000 shares authorized ($.001 par value)    18,690,030 shares issued and outstanding as of both July 1, 2018   and December 31, 2017		18,690				18,690
Additional paid-in capital		35,138,353				34,944,972
Accumulated deficit		(20,423,375	)			(20,276,944	)
Accumulated other comprehensive loss		(727,592	)			(375,152	)
Total Stockholders' Equity		15,086,901				15,392,391
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	63,437,914			$	62,654,302

Uniroyal Global Engineered Products, Inc.
Consolidated Statements of Operations
(Unaudited)
	Three Months Ended
	July 1, 2018				July 2, 2017
NET SALES	$	26,023,233			$	26,077,549
COST OF GOODS SOLD		21,259,055				20,740,966
Gross Profit		4,764,178				5,336,583
OPERATING EXPENSES:
Selling		1,200,051				1,325,397
General and administrative		1,658,665				1,929,780
Research and development		430,565				437,104
OPERATING EXPENSES		3,289,281				3,692,281
Operating Income		1,474,897				1,644,302
OTHER INCOME (EXPENSE):
Interest and other debt related expense		(473,663	)			(408,794	)
Other income (expense)		(19,220	)			(92,379	)
Net Other Expense		(492,883	)			(501,173	)
INCOME BEFORE TAX PROVISION		982,014				1,143,129
TAX PROVISION		57,521				191,343
NET INCOME		924,493				951,786
Preferred stock dividend		(776,104	)			(737,320	)
NET INCOME (LOSS) AVAILABLE TO  COMMON SHAREHOLDERS	$	148,389			$	214,466
EARNINGS (LOSS) PER COMMON SHARE:
Basic	$	0.01			$	0.01
Diluted	$	0.01			$	0.01
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic		18,690,030				18,704,024
Diluted		18,690,030				18,809,598

Uniroyal Global Engineered Products, Inc.
Consolidated Statements of Operations
(Unaudited)
	Six Months Ended
	July 1, 2018				July 2, 2017
NET SALES	$	52,452,920			$	51,835,978
COST OF GOODS SOLD		43,071,248				41,123,248
Gross Profit		9,381,672				10,712,730
OPERATING EXPENSES:
Selling		2,549,081				2,610,344
General and administrative		3,606,966				3,751,246
Research and development		852,528				970,958
OPERATING EXPENSES		7,008,575				7,332,548
Operating Income		2,373,097				3,380,182
OTHER INCOME (EXPENSE):
Interest and other debt related expense		(930,027	)			(798,650	)
Other income (expense)		14,062				6,875
Net Other Expense		(915,965	)			(791,775	)
INCOME BEFORE TAX PROVISION		1,457,132				2,588,407
TAX PROVISION		43,000				425,929
NET INCOME		1,414,132				2,162,478
Preferred stock dividend		(1,560,563	)			(1,477,236	)
NET INCOME (LOSS) AVAILABLE TO  COMMON SHAREHOLDERS	$	(146,431	)		$	685,242
EARNINGS (LOSS) PER COMMON SHARE:
Basic	$	(0.01	)		$	0.04
Diluted	$	(0.01	)		$	0.04
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic		18,690,030				18,713,625
Diluted		18,690,030				18,810,191

 

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