Earnings are out:
Tuesday October 27, 8:08 pm Eastern Time
Company Press Release
SOURCE: Elamex S.A. de C.V.
Elamex Reports 3Q98 Results
EL PASO, Texas, Oct. 27 /PRNewswire/ -- Elamex S.A. de C.V. (Nasdaq: ELAMF - news),
a leading contract manufacturer, today reported third
quarter and nine month results for September 27, 1998. Sales for the
third quarter were $30.8 million, a 6.4 percent decrease from sales of
$32.9 million for the third quarter of 1997. Net income was $680,649
or $0.09 per share compared with $1.7 million or $0.23 per share for
the same period in 1997.
Operating Income for the quarter was $ 1.3 million (4.3% of Sales)
compared with $ 2.0 million in 3Q97 (6.1% of Sales) and $ 1.0 million
(3.4% of Sales) during the second quarter of 1998.
Sales for the first nine months of 1998 were $89.7 million which
compared with $100.5 million in 1997. Net income for the period was
$2.3 million or $0.31 per share versus $5.5 million or $0.75 per
share for the first nine months of last year.
Hector M. Raynal, Elamex's Chief Executive Officer said: ''During the
quarter, we initiated the gradual ramp up of three new projects. These
ramp ups are progressing according to plan. Although we have added
five new projects over the past six months, their impact does not yet
fully compensate sales lost by the two previously announced departing
projects and a reduction in the quarter in the level of activity of
two existing projects.''
Gross Profit for the quarter was impacted by start-up expenses,
including those related to the gradual utilization of a 50% increase
in our SMT capacity, where we invested $3.0 million dollars in
equipment needed to meet forecasted customer demand.
Other Income for the quarter at $ 0.84 million compares favorably with
$0.35 in 3Q97, reflecting mainly the gain on the sale to GE
International Mexico of a minority interest in our Plastics and Metal
Stamping operation.
Elamex's functional currency is the U.S. dollar and the Company keeps
its books in accordance with U.S. GAAP. During the quarter, we
experienced a devaluation of the Mexican Peso. This devaluation does
not have an impact in our U.S. GAAP based Balance Sheet. However, for
tax purposes in Mexico, the Company recognized an exchange rate gain
arising from its net monetary asset position in dollars. This taxable
gain caused our tax provision to jump to $ 1.5 million, a 68.5% tax
rate versus a 26.5% tax rate provision in the similar quarter of last
year and 28.3% during 2Q98.
''We continue to see high levels of interest from our prospect
accounts, and having completed the GE Joint Venture transaction, we
are now again pursuing our growth option via acquisitions'', Mr.
Raynal concluded.
Elamex is a Mexican contract manufacturing service provider. The
Company delivers high quality finished assemblies to U.S. and Canadian
Original Equipment Manufacturers (OEM's) in the consumer,
telecommunications, computer, industrial, medical and automotive
industries. Elamex participates in an accelerated growth industry,
where its unique competitive advantage results from its demonstrated
capability to leverage low cost, highly productive labor, strategic
North American locations, recognized world class quality, and proven
ability to combine high technology with labor intensive manufacturing
processes.
This press release includes forward looking statements that involve
risks and uncertainties, including, but not limited to, risks
associated with the Company's future growth and profitability, the
ability of the Company to increase sales to existing customers and to
make sales to new customers, the effects of competitive and general
economic conditions and the ability of Elamex's own customers to meet
their expectations and projections.
ELAMEX, S.A. DE C.V. AND SUBSIDIARIES
Consolidated Statements of Earnings
(In Thousand U. S. Dollars, except per share amounts)
(Unaudited)
3 Weeks ended 39 Weeks ended
September 27, September 28, September 27, September 28,
1998 1997 1998 1997
Net sales $30,757 $32,872 $89,731 $100,514
Cost of sales 27,146 28,656 78,989 86,597
Gross Profit 3,611 4,216 10,742 13,917
Operating expenses:
General and
administrative 1,528 2,047 5,476 6,076
Selling 480 164 1,223 509
Research and
development 284 -- 1,274 --
Total operating
expenses 2,292 2,211 7,973 6,586
Operating income 1,319 2,004 2,769 7,331
Other income (expense):
Interest income 258 187 742 310
Interest expense (43) (50) (132) (151)
Other, net 626 214 1,046 435
Total other income
(expense) 842 352 1,656 595
Income before income
taxes 2,160 2,356 4,424 7,926
Income tax provision 1,479 625 2,136 2,378
Net income $681 $1,731 $2,288 $5,548
Net income per common
share $0.09 $0.23 $0.31 $0.75
Weighted average shares
outstanding 7,350,000 7,400,000 7,361,219 7,400,000
ELAMEX, S.A. DE C.V. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In Thousand U. S. Dollars)
September 27, December 31,
1998 1997
(Unaudited)
Assets
Current assets $53,537 45,399
Property, plant and equipment,
net 32,670 28,503
Other assets, net 494 743
86,701 74,645
Liabilities and Stockholders' Equity
Current liabilities $21,009 13,622
Long-term debt and
liabilities 4,025 3,991
Total liabilities 25,035 17,613
Minority interest 2,569 --
Stockholders' equity 59,097 57,032
$86,701 74,645
SOURCE: Elamex S.A. de C.V. |
