RANCHO CUCAMONGA, Calif., Aug. 19 /PRNewswire/ -- Pacer Technology
(Nasdaq: PTCH), owner of such branded consumer products as Super Glue, ZAP(R),
PRO SEAL(R), Cook Bates(R), Diamond Deb(R)/Kurlash(R) and Gem(R), today
announced continued gains in net sales, operating income and net income for
its fiscal 1998 year-end.
Continued growth both domestically and internationally for Pacer's
products, including the contribution from the California Chemical acquisition
last summer, drove operating results for the year. Also proceeding as
planned, the Cook Bates acquisition favorably impacted Pacer's revenue
performance, according to President and Chief Executive Officer Jim Munn.
Cook Bates, which was acquired in March 1998, manufactures and markets
manicure implements such as nail clippers, emery boards, tweezers and related
manicure products.
Financial Results
For the three months ended June 30, 1998, net sales were $9,968,812, a 53%
increase over the $6,498,765 reported for the fourth quarter of 1997. This
was the largest quarter, in terms of revenues, in the Company's history.
Operating income decreased to $564,571 for the fourth quarter from $671,096 in
the same period a year ago as Pacer and Cook Bates ran parallel operations
from March 1998 through June 1998. Net income was $386,313, or $.02 per
share, versus $382,101, or $.02 per share, for the corresponding quarter last
year.
For the year ended June 30, 1998, net sales improved 24% to $31,938,514,
up from $25,677,840 during the last fiscal year. Operating income was
$2,972,265, a 16% increase over $2,562,033 in 1997. Net income rose 27% to
$1,541,049, or $0.09 per share, up from $1,217,402, or $0.07 per share, in the
prior fiscal year.
Domestic Operations
The Company reported domestic sales of $26,503,842 for the fiscal year
versus $20,988,624 in 1997. The increase was driven largely by revenues from
California Chemical and Cook Bates. Domestic sales represented approximately
83% of total company sales.
International Operations
International sales increased to $5,434,672 representing 17% of total
sales for fiscal year 1998, compared to $4,689,216, or 18% of total sales in
1997. The Company continues to benefit from increases in sales in European
markets as well as from its expanding presence in emerging Eastern Bloc
countries.
Operating Expenses
Pacer's gross margin was 34% for the 1998 fourth quarter versus 36% in the
same quarter the year before. Operating margin was 6% of net sales during the
fourth quarter of fiscal year 1998 compared to 10% in the corresponding
quarter in the prior year. Selling, general and administrative expenses were
28% of sales for the three-month period versus 25% reported during the same
quarter a year ago. This performance was directly attributable to running
parallel operations with Cook Bates from March 1998 through June 1998.
For the year ended June 30, 1998, gross margin was 36%, the same as in
1997. Operating margins were 9% for the year, compared to 10% in 1997.
Selling, general and administrative expenses were 26% of revenues in 1998;
during 1997, selling, general and administrative expenses were also 26% of
sales.
Financial Position
At June 30, 1998, Pacer reported total assets of $27,798,925,
stockholders' equity of $10,631,965, long-term debt of $9,535,889 and working
capital of $14,504,365. Almost all of this long-term debt was incurred in
fiscal year 1998 in order to fund both the California Chemical and Cook Bates
acquisitions.
Integration of Cook Bates Acquisition on Track, Enhances Future Revenue
and Earnings Stream
In March 1998, Pacer Technology acquired Cook Bates, a manufacturer of
manicure implements. Cook Bates, a 102-year-old company, has a wide, well
established product line. The acquisition has given Pacer more products to
distribute through its existing retail channels; moreover, Cook Bates provides
Pacer with additional shelf space in key retail locations. The Cook Bates
acquisition is anticipated to grow the company in terms of sales by adding
significant new revenue during fiscal year 1999, and contribute positively to
earnings going forward.
According to Company management, as Cook Bates operations are absorbed
into Pacer facilities, cost reductions will reflect themselves in the
Company's financial results, with the full effect taking place by the end of
this calendar year. In addition to synergies in administrative, marketing and
support systems, the Company expects additional economies of scale in the
areas of manufacturing and distribution.
Except for historical information contained herein, the matters set forth
in this news release are forward looking statements that are subject to
certain risks and uncertainties that could cause actual results to differ
materially from those set forth herein in the forward looking statements,
including such factors, among others, as significant fluctuations in operating
results, uncertain market acceptance of the company's products and intense
competition.
Pacer Technology is a manufacturer and worldwide marketer of advanced
technology adhesives, sealants and related products for a variety of consumer
and industrial applications, as well as manicure implements for consumer
markets. It is the provider of SUPER GLUE, ZAP(R), PRO SEAL(R), Cook
Bates(R), Diamond Deb(R)/Kurlash(R) and Gem(R), and other well known branded
products.
PACER TECHNOLOGY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
June 30, June 30,
1998 1997
ASSETS
Current Assets:
Cash $277,370 $294,298
Trade Receivables 8,591,327 4,719,970
Notes and Other
Receivables 334,941 447,075
Inventories 10,974,578 4,347,497
Prepaid Expenses 810,451 390,331
Deferred Income Tax -
Current 1,146,769 621,804
Total Current Assets $22,135,436 $10,820,976
Equipment and Leasehold
Improvements, Net 1,819,783 1,444,631
Deferred Income Tax Asset 124,065 60,222
Cost In Excess of Net
Assets Acquired 3,689,516 1,690,878
Other Assets 30,125 9,344
Total Assets $27,798,925 $14,026,051
LIABILITY AND STOCKHOLDERS' EQUITY
Current Liabilities:
Bank Loan 0 792,000
Accounts Payable 4,135,472 2,367,245
Other Accrued Expenses 3,162,266 1,620,391
Current Installment of
Long-Term Debt 333,333 262,866
Total Current Liabilities 7,631,071 5,042,502
Long-Term Liabilities:
Long-Term Debt, Excluding
Current Installments 9,535,889 221,202
Total Liabilities 17,166,960 5,263,704
Stockholders' Equity:
Notes Receivable From
Directors (265,257) (571,030)
Common Stock 8,270,633 8,260,973
Retained Earnings 2,613,453 1,072,404
Foreign Currency
Translation Adjustment 13,136 --
Total Stockholders'
Equity 10,631,965 8,762,347
Total Liabilities and
Equity $27,798,925 $14,026,051
Working Capital 14,504,365 5,778,474
Current Ratio 2.90 2.15
PACER TECHNOLOGY AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENT
Three Months Ended Twelve Months Ended
June 30, June 30,
1998 1997 1998 1997
Net Sales $9,968,812 $6,498,765 $31,938,514 $25,677,840
Cost of Sales 6,602,629 4,178,156 20,592,723 16,520,294
Gross Profit on
Sales 3,366,183 2,320,609 11,345,791 9,157,546
Selling, General and
Administrative
Expenses 2,801,612 1,649,513 8,373,526 6,595,513
Operating Income 564,571 671,096 2,972,265 2,562,033
Interest Expense and
Other (38,428) (21,263) 309,333 75,752
Income Before Taxes 602,999 692,359 2,662,932 2,486,281
Income Taxes 216,686 310,258 1,121,883 1,268,879
Net Income $386,313 $382,101 $1,541,049 $1,217,402
Weighted Average
Shares 15,859,975 15,825,975 15,852,475 15,549,392
Basic Earnings
Per Share $0.02 $0.02 $0.10 $0.08
Adjusted Weighted
Average Shares 18,068,296 16,750,293 17,554,113 16,484,119
Diluted Earnings
Per Share $0.02 $0.02 $0.09 $0.07
SOURCE Pacer Technology
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CONTACT:
Roberto J. Cavazos, Jr., Chief Financial
Officer of Pacer Technology, 909-987-0550; or Karen Taylor,
General Information, or Moira Conlon, Investor-Analyst Contact,
310-442-0599, both of The Financial Relations Board
NOTE TO EDITORS: For more information about Pacer Technology via
facsimile simply call 1-800-PRO-INFO and dial client code "PTCH."
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