RANCHO CUCAMONGA, Calif., May 7 /PRNewswire/ -- Pacer Technology
(Nasdaq: PTCH), owner of branded consumer products such as Super Glue, Zap(R),
PRO SEAL(R), Cook Bates(R), Diamond Deb(R)/Kurlash(R), and Gem(R), today
announced continued growth in net sales, operating income and net income for
its nine-month period fiscal year ended March 31, 1999.
Acting President, Tom Nightingale stated, "We are pleased with our
year-to-date results despite a more challenging retail environment and coming
through our first full year of operating our most recent and largest
acquisition. Third quarter financial results were impacted by costs
associated with the Cook Bates acquisition and support of seasonal sales.
I think it is important to recognize the growth of the Company in the last
twelve months. Pacer has nearly doubled its revenue and profit potential.
We expect to achieve our year end growth objectives."
Financial Results
For the three months ended March 31, 1999, net sales were $9,993,995, a
20% gain over the $8,321,050 reported for the comparable 1998 third quarter.
The Company reported a seasonal operating loss of $313,048 for the third
quarter compared to operating income of $904,765 in the same period a year
ago. For the current quarter, Pacer reported a net loss of $391,513, or
($.02) per share, versus net income of $428,217, or $.02 per share, for the
comparable prior year quarter.
For the nine months ended March 31, 1999, net sales improved 62% to
$35,491,821 from $21,969,702 during the first nine months of 1998. Operating
income was $2,504,582, representing a 4% increase from $2,407,695 in the
comparable period a year ago. Net income reduced 15% to $986,284, or $.06 per
share, from $1,154,737, or $.07 per share, in the 1998 first nine-month
period.
Domestic Operations
The Company reported domestic sales of $31,428,775 for the first
nine-months versus $17,891,510 in the prior year. Domestic sales represent
approximately 89% of total company sales. The increase was driven largely by
revenues from Cook Bates and the Company's Super Glue and PRO SEAL(R) product
lines.
The Company also noted that it increased its presence in a number of
existing key distribution outlets including The Home Depot, Kmart and Rite-Aid
by expanding its shelf-space and placement in multiple sections of stores.
Pacer products can now be found in about 55,000 outlets across the country.
International Operations
International sales were $4,063,046, representing approximately 11% of
total sales for the first nine months, compared to $4,078,191, or 19% of total
sales, for the same year ago period. The Company's international sales
represent a lower percentage of total revenue this period primarily due to the
inclusion of results from Cook Bates, whose products are mostly distributed
domestically. According to Nightingale, Pacer also felt the impact of
weakened economies in various regions around the world, but reported that
business results from Australia and Western Europe were fairly strong.
Nightingale affirmed that Pacer's long term goal is to build international
sales to account for up to 50% of total revenue stating this is realistic as
recent acquisitions have had little or no international sales.
Other Operating Expenses
Pacer's gross margin was 31% for the third quarter of fiscal 1999 versus
36% in the comparable quarter the year before. This decline in Pacer's gross
margin was the result of larger than expected sales discounts and
miscellaneous retail charge backs associated primarily with the retail account
base. Cost of goods sold was impacted by higher than anticipated expenses
associated with the Cook Bates business integration. The Company's operating
margin was (3%) of net sales during the current quarter compared to 11% in the
corresponding quarter the prior year. Selling, general and administrative
expenses represented 34% of sales for the three-month period and 27% for the
nine-month period compared to 25% of sales for the same quarter and 25% of the
nine-month period a year ago. This rise in spending for the period pertained
to the increase in allowance for doubtful accounts receivable primarily due to
the retail customer environment, participation at higher levels of cooperative
advertising and promotional programs and growth in the number of sales
personnel in support of the Cook Bates product lines, quarter to quarter. The
Company anticipates a profitable fiscal fourth quarter, stated Nightingale.
Financial Position
At March 31, 1999, Pacer reported total assets of $31,637,113,
stockholders' equity of $12,012,361, long-term debt of $11,458,165 and working
capital of $17,862,395.
Pacer Technology and Subsidiaries
Consolidated Income Statement
Three Months Ended Nine Months Ended
March 31, March 31,
1999 1998 1999 1998
Net Sales $9,993,995 $8,321,050 $35,491,821 $21,969,702
Cost of Sales 6,868,652 5,348,746 23,311,973 13,990,095
Gross Profit
on Sales 3,125,343 2,972,304 12,179,848 7,979,607
Selling, General and
Administrative
Expenses 3,438,391 2,067,539 9,675,266 5,571,912
Operating Income (313,048) 904,765 2,504,582 2,407,695
Interest Expense
and Other 224,080 143,050 629,431 347,761
Income Before Taxes (537,128) 761,715 1,875,151 2,059,934
Income Taxes (145,615) 333,498 888,867 905,197
Net Income $(391,513) $428,217 $986,284 $1,154,737
Weighted Average
Shares 16,115,642 15,849,975 15,965,086 15,849,975
Basic Earnings Per
Share ($0.02) $0.03 $0.06 $0.07
Adjusted Weighted
Average Shares 17,170,132 17,274,627 17,369,409 17,352,005
Diluted Earnings
Per Share ($0.02) $0.02 $0.06 $0.07
Pacer Technology and Subsidiaries
Consolidated Balance Sheet
Quarter Fiscal Year
Ended Ended
March 31, June 30,
ASSETS 1999 1998
Current Assets:
Cash $677,288 $277,370
Trade Receivables 10,037,236 8,591,327
Notes and Other Receivables 231,374 334,941
Inventories 13,134,469 10,974,578
Prepaid Expenses 801,846 810,451
Deferred Income Tax -- Current 1,146,769 1,146,769
Total Current Assets 26,028,982 22,135,436
Equipment and Leasehold Improvements, Net 1,978,517 1,819,783
Deferred Income Tax Asset 124,065 124,065
Cost In Excess Of Net Assets Acquired 3,477,853 3,689,516
Other Assets 27,696 30,125
Total Assets $31,637,113 $27,798,925
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable 3,894,985 4,135,472
Other Accrued Expenses 3,354,935 3,162,266
Current Portion of Long-Term Debt 916,667 333,333
Total Current Liabilities 8,166,587 7,631,071
Long-Term Liabilities:
Long-Term Debt, Excluding
Current Installments 11,458,165 9,535,889
Total Liabilities 19,624,752 17,166,960
Stockholders' Equity:
Notes Receivable From Directors (201,477) (265,257)
Common Stock 8,604,259 8,270,633
Retained Earnings 3,599,738 2,613,453
Other Comprehensive Income 9,841 13,136
Total Stockholders' Equity $12,012,361 $10,631,965
Total Liabilities and Equity $31,637,113 $27,798,925
Working Capital $17,862,395 $14,504,365
Current Ratio 3.19 2.90
SOURCE Pacer Technology
 back to top
CONTACT:
Tom Nightingale, Interim Chief Executive
Officer of Pacer Technology, 909-987-0550, or General
Information, Karen Taylor, or Analyst Information, Moira Conlon,
both of The Financial Relations Board, 310-442-0599
|
