JPEIE,tomorrow JPEI after filing.
JPEI .005 x 14 million shares=$70k cap with over 120 million in revenues.Scam stocks,or chapter 7s sell a lot higher.JPEI 0 dilution for the last 3 years.Unlike the other scams.
Even as a plain shell should be worth a lot more IMO.
The Company works directly with its customers, including the three major U.S. automobile manufacturers, to design and develop products to satisfy market demands.
13:30 04/24/2002 JPEIE** JPEI JPE Inc
The number of shares of the Registrant's Common Stock outstanding at March 31, 2002 was 14,043,600.
MARKET RISK
The Company's sales volumes have remained steady during the last quarter of 2001 and throughout the first quarter of 2002. Although most underlying fundamentals remain strong, the impact of the OEM vehicle manufacturers to rebalance inventories, the continuance of rebates and reduced customer financing rates and the trend of retail sales and other uncertainties may adversely impact the Company's 2002 financial performance.
MARKETING, DISTRIBUTION AND CUSTOMERS
Original Equipment
The Company's OEM business supplies products to domestic OEMs either directly or through Tier 1 suppliers. For the year ended December 31, 2001, 54.7% of the Company's net sales (for only the operating subsidiaries the Company owned as of December 31, 2001) were to OEM or Tier 1 customers. Net sales (for only the operating subsidiaries the Company owned as of December 31, 2001) to significant customers for the year ending December 31, 2001 were as follows:
General Motors 31.1%
DaimlerChrysler Corporation 19.9%
The Company works directly with its customers, including the three major U.S. automobile manufacturers, to design and develop products to satisfy market demands. Most of the parts the Company produces have lead times of one to four years from product award to production. The Company has been awarded new business for each of the 2002-2004 1/2 model years. Because the Company's OEM business supplies its customers on a "just-in-time" basis and ships its products when orders are received in the aftermarket
COMPETITION
Original Equipment
The OEM supplier industry is highly competitive and comprised of many companies of various sizes. Demand for parts and components sold to OEMs is driven by the demand for sales of new vehicles. The Company believes that the number of such competitors will decrease in response to the OEMs' pressure for supplier consolidation. The Company's largest competitors for exterior trim include Magna International Inc.-Decoma Division, Guardian Industries Corp. and Cooper Standard. Many of the Company's competitors are divisions or subsidiaries of companies which are substantially larger and more diversified than the Company. In addition, many of the Company's competitors have greater financial and other resources than the Company.
INTELLECTUAL PROPERTY
The Company has a number of patents and patent applications pending in both the United States and certain foreign jurisdictions for processes related to its plastic injection molded products. Notwithstanding its patent portfolio, the
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Company believes that the design, quality and pricing of its products and its relations with its customers are substantially more important to its business than patent protection.
There can be no assurance that patents will be issued from any pending applications or that any claims allowed from existing or pending patents will be sufficiently broad to protect the Company's technology. The Company believes that it is not dependent to any material extent upon any one patent or group of patents.
EMPLOYEES
The Company had a total of approximately 800 employees on December 31, 2001, eight of which were located in Canada. Approximately 300 employees were represented by labor unions, at the Company's PTI Beavercreek operations.
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ITEM 2. PROPERTIES
The following list indicates by location the principal manufacturing, distribution and administrative facilities of the Company following the sale of the subsidiaries previously described. All owned U.S. facilities are subject to liens under the Company's existing financing arrangement with Comerica Bank:
Building Size
(Approximate Owned or
Primary Use of the Facility Location Square Feet) Leased Segment
--------------------------- -------- ------------ ------ -------
Corporate headquarters Auburn Hills, MI 9,700 Leased Corporate
Corporate headquarters (subleased) Ann Arbor, MI 5,200 Leased Corporate
Manufacturing and administrative East Tawas, MI 100,000 Owned Trim Products
Manufacturing and administrative Beavercreek, OH 105,000 Owned Trim Products
Manufacturing Harrisburg, PA 100,000 Owned Replacement Parts
Distribution and administrative Harrisburg, PA 150,000 Leased Replacement Parts
Distribution and administrative Edmonton, Canada 5,000 Leased Replacement Parts
The Company's buildings, machinery and equipment are in adequate operating condition, and are suitable and adequate for current production requirements. The Company's prior Corporate Headquarters in Ann Arbor, Michigan was subleased to an unrelated third party during April 2000.
ITEM 3. LEGAL PROCEEDINGS
Neither the Company nor any of its subsidiaries is a party to, nor are any of its properties the subject of, any pending legal proceedings, other than certain ordinary routine litigation incidental to their businesses, which in the opinion of management is not material.
From time to time, the Company is subject to claims or litigation incidental to its business. The Company is not currently involved in any legal proceedings that indirectly or in the aggregate, are expected to have a material adverse effect on its business, financial condition or results of operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
Through August 5, 1998, the Company's Common Stock traded on the Nasdaq National Market tier of The Nasdaq Stock Market(SM) under the symbol "JPEI." From that date forward the Company's Common Stock continues to trade on the OTC Bulletin Board. The following table indicates the high and low sale prices for the Company's Common Stock as reported on the OTC Bulletin Board for the last two years. Such over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.
MARKET PRICE
===========================================
QUARTER 2000 2001
------- ---- ----
HIGH LOW HIGH LOW
---- --- ---- ---
First $0.78 $0.06 $0.09 $0.03
Second 0.53 0.13 0.07 0.02
Third 0.84 0.13 0.03 0.03
Fourth 0.17 0.03 0.03 0.01
On March 31, 2002, there were approximately 195 holders of record of the Company's Common Stock.
The Company has never declared or paid any dividends on shares of Common Stock or First Series Preferred Shares and, as required by its credit facility, has no intention of declaring or paying any dividends on shares of Common Stock or First Series Preferred Shares in the foreseeable future. The Company intends to retain its earnings, if any, for the development of its business.
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ITEM 6.
SELECTED FINANCIAL DATA (in thousands, except per share data)
The selected financial data presented below, as of and for the periods ended December 31, 1997, 1998, May 27, 1999 and December 31, 1999, 2000 and 2001, are derived from the Company's audited financial statements, and should be read in conjunction with the Company's audited financial statements and notes thereto included elsewhere in this Report on Form 10-K (the "Company's Financial Statements"). The selected financial data set forth below should also be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in Item 7 of this Report on Form 10-K.
PREDECESSOR COMPANY SUCCESSOR COMPANY
-------------------------------------- ---------------------------------------
JANUARY 1,
1999, MAY 28,
YEARS ENDED THROUGH 1999 YEARS ENDED
DECEMBER 31, MAY 27, THROUGH DECEMBER 31,
----------------------- 1999 DECEMBER 31, -----------------------
1997 1998 RESTATED 1999 2000 2001
--------- --------- --------- --------- --------- ---------
Income statement data:
Net Sales $ 247,539 $ 171,780 $ 24,044 $ 88,081 $ 138,709 $ 122,170
Cost of goods sold 211,120 151,802 17,716 73,448 121,278 108,380
--------- --------- --------- --------- --------- ---------
Gross profit 36,419 19,978 6,328 14,633 17,431 13,790
Selling, general and administrative expenses 26,983 25,583 5,538 12,137 20,236 17,281
Other expense (income) 618 1,886 682 (235) 1,009 1,765
Charge for subsidiaries under court ordered
protection -- 28,490 -- -- -- --
Discontinuance of stamping operations 2,164 -- -- -- -- --
Loss on sale of subsidiary -- 5,190 -- -- -- --
Affiliate companies' (income) loss -- 1,713(1) (8,680)(1) -- -- --
Interest expense, net 10,464 13,085 2,859 2,766 4,646 2,880
--------- --------- --------- --------- --------- ---------
Income (loss) from continuing operations
before income taxes and
extraordinary item (3,810) (55,969) 5,929 (35) (8,460) (8,136)
Income tax expense (benefit) (194) (1,035) 104 75 1,125 (61)
--------- --------- --------- --------- --------- ---------
Income (loss) from continuing operations
before extraordinary item (3,616) (54,934) 5,825 (110) (9,585) (8,075)
Discontinued operations:
Income (loss) from operations of IAF 1,473 1,364 214 -- -- --
Loss on sale of stock of IAF -- -- (2,321) -- -- --
Extraordinary Item:
Forgiveness of debt and liabilities -- -- 18,272 -- -- --
--------- --------- --------- --------- --------- ---------
Net income (loss) (2,143) (53,570) 21,990 (110) (9,585) (8,075)
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Item 6. SELECTED FINANCIAL DATA (in thousands, except per share data)
PREDECESSOR COMPANY SUCCESSOR COMPANY
-------------------------------------- ----------------------------------------
JANUARY 1,
1999, MAY 28,
YEARS ENDED THROUGH 1999 YEARS ENDED
DECEMBER 31, MAY 27, THROUGH DECEMBER 31,
----------------------- 1999 DECEMBER 31, -----------------------
1997 1998 RESTATED 1999 2000 2001
--------- --------- --------- ----------- --------- ---------
Other comprehensive income (expense):
Foreign currency translation (271) (65) -- -- -- --
adjustment
Unrealized gain on available for sale
securities -- -- -- -- -- 76
--------- --------- --------- -------- -------- ---------
Comprehensive income (loss) $ (2,414) $ (53,635) $ 21,990 $ (110) $ (9,585) $ (7,999)
========= ========= ========= ======== ======== =========
Basic earnings (loss) per share from
continuing operations before
extraordinary item:
Common Shares $ (.79) $ (11.94) $ 1.27 $ -- $ (0.08) $ (0.07)
First Series Preferred Shares -- -- -- (0.05) (4.23) (3.58)
Earnings (loss) per share from
continuing operations before
extraordinary item assuming
dilution:
Common Shares $ (.79) $ (11.94) $ 1.25 $ -- $ (0.08) $ (0.07)
First Series Preferred Shares -- -- -- (0.05) (4.23) (3.58)
Basic earnings (loss) per share:
Common Shares $ (.47) $ (11.64) $ 4.78 $ -- $ (0.08) $ (0.07)
First Series Preferred Shares -- -- -- (0.05) (4.23) (3.58)
Earnings (loss) per share assuming dilution
Common Shares $ (.47) $ (11.64) $ 4.73 $ -- $ (0.08) $ (0.07)
First Series Preferred Shares -- -- -- (0.05) (4.23) (3.58)
Balance sheet data at end of period:
Working capital (deficit) $ (59,181)(2) $ (62,815)(2) $ (50,712)(2) $(12,805)(2) $ 24,500 $ 20,619
Total assets 193,215 76,974 79,498 78,905 67,595 58,372
Long-term debt (excluding current
maturities) 9,272(2) 50(2) 46(2) 246(2) 43,952 42,507
Total liabilities 159,721 97,115 77,084 59,753 57,848 56,804
Total shareholders' equity (deficit) 33,494 (20,141) 2,416 19,152 9,747 1,568
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the consolidated financial statements and notes thereto to assist in understanding the Company's results of operations, its financial position, cash flows, capital structure and other relevant financial information.
RECENT INFORMATION
See discussion under "General and Recent Information" under "Item 1 - Business" of this Form 10-K.
RESULTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 2001 COMPARED TO YEAR ENDED DECEMBER 31, 2000
Net sales for business segments comprising the Company's operating locations for the years ended December 31, 2001 and 2000 were as follows (in thousands):
2000 2001 $ Change % Change
---- ---- -------- --------
Trim Products $ 87,912 $ 66,791 $(21,121) (24.0)%
Replacements Parts 50,797 55,379 4,582 9.0
-------- -------- -------- ----
Total $138,709 $122,170 $(16,539) (11.9)%
The decrease in Trim Products sales of $21,121, or 24.0%, is related to the completion of product programs for which the Company has not been awarded replacement business, a decrease in customer orders on specific product programs and the impact of customer negotiated price concessions. The increase in Replacement Parts sales of $4,582, or 9.0%, is attributable to an increase in heavy duty truck repair orders consistent with general market conditions in the overall heavy duty aftermarket industry.
Gross profit for business segments comprising the Company's operating locations for the years ended December 31, 2001 and 2000 was as follows (in thousands):
% of Applicable % of Applicable
--------------- ---------------
2000 Net Sales 2001 Net Sales
---- --------- ---- ---------
Trim Products $ 5,146 5.9% $ 723 1.1%
Replacements Parts 12,285 24.2 13,067 23.6
------- ---- ------- ----
Total $17,431 12.6% $13,790 11.3%
The gross profit percentage for the Trim Products segment was 1.1% and 5.9% for the years ended December 31, 2001 and 2000, respectively. The decrease in gross profit as a percentage of sales is the result of lower overhead burden absorption due to lower sales and the impact of customer negotiated price concessions.
The gross profit percentage for the Replacement Parts segment was 23.6% and 24.2% for the years ended December 31, 2001 and 2000, respectively. The decrease in gross profit as a percentage of sales is the result of selling price reductions required to meet competitive market pricing and sales of lower margin products.
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Selling, general and administrative expenses (SGA) for business segments comprising the Company's operating locations were as follows (in thousands):
% of Applicable % of Applicable
--------------- ---------------
2000 Net Sales 2001 Net Sales
---- --------- ---- ---------
Trim Products $ 5,269 6.0% $ 1,889 2.8%
Replacements Parts 9,627 19.0 10,068 18.2
Corporate 5,340 3.8 5,324 4.4
------- ---- ------- ----
Total $20,236 14.6% $17,281 14.1%
SGA for the Trim Products segment was $1,889 or 2.8% of segment sales for 2001 and $5,269 or 6.0% of segment sales for 2000. The decrease in SGA is attributable to the elimination of the sales commission to MB Associates of $1,724 as a result of the purchase of its net assets during 2000, and the subsequent inclusion of the salaries and administrative expenses of the former MB Associates sales representatives as corporate SGA. The remaining decrease in SGA is attributable to the headcount reductions and reduced spending at the Beavercreek, Ohio operation.
SGA for the Replacements Parts segment was $10,068 or 18.2% of segment sales for 2001 and $9,627 or 19.0% of segment sales for 2000. The decrease in SGA as a percentage of Replacement Parts segment sales is the result of increased sales for Replacement Parts in 2001.
Corporate administrative costs were $5,324 or 4.4% of Company sales for 2001 and $5,340 or 3.8% of Company sales for 2000. As a result of the purchase of the net assets of MB Associates on July 1, 2000, corporate administrative costs for 2000 include six months of salaries and administrative expenses of the former MB Associates sales representatives, while corporate administrative costs for 2001 include a full year of these salaries and administrative expenses. This increase in corporate administrative costs in 2001 is, however, offset by headcount reductions and reduced spending at the Company's Corporate Office. The increase in corporate administrative costs as a percentage of Company sales is the result of decreased Company sales in 2001.
Other expenses for 2001 were $1,765. During December 2001, due to unfavorable operating results at the Beavercreek, Ohio operation, the Company assessed the net book value of Beavercreek's long-lived assets for impairment. Based on the assessment, the Company recorded a charge of $1,735, which eliminated all of the goodwill associated with the Beavercreek operation. Also included in Other expense for 2001 was the write-off of obsolete equipment at the Beavercreek operation of $438. In November 2001, Beavercreek's health care provider converted from a mutual insurance company to a stock insurance company. The Company received common stock valued at $495 based on the market price on the date of issuance, which is included as Other income.
Other expense for 2000 of $1,009 relates primarily to the write-off of obsolete equipment at the Beavercreek operation.
Interest expense for 2001 was $2,880 compared to $4,646 for 2000. The reduction in interest expense reflects lower borrowing costs of the new bank credit facility executed during February 2001, as well as a reduction in total bank borrowing due to the subordinated debt funding, which carries a lower interest rate than bank borrowing.
Income tax expense (benefit) for 2001 and 2000 was $(61) and $1,125, respectively. The income tax benefit for 2001 of $61 is due to the reversal of state income taxes in 2000 of approximately $184.
Income tax expense for 2000 is attributable to the Company's inability to deduct amortization of goodwill associated with the Investment Transaction as well as an increase in the Company's valuation reserve of $1 million to eliminate deferred taxes recorded at May 27, 1999, in connection with the Investment Transaction.
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YEAR ENDED DECEMBER 31, 2000 COMPARED TO YEAR ENDED DECEMBER 31, 1999
Managements' discussion and analysis of the results of operations for the year ended December 31, 2000 compared to the year ended December 31, 1999 has been structured to compare the results of operations related only to the operating locations that remain part of the Company at December 31, 2000. To facilitate this discussion, the information shown below makes the following adjustments to the Company's income (loss) from continuing operations before income taxes and extraordinary item: (1) the sale of JPE Canada Inc. in February 1999, and (2) the consolidation of entities that were previously accounted for under the equity method (Plastic Trim, Inc. and Starboard Industries, Inc., from September 16, 1998 through May 27, 1999).
RESULTS OF OPERATIONS FOR ASCET OPERATING LOCATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
(DOLLARS IN THOUSANDS)
SUCCESSOR CONSOLIDATION OF
PREDECESSOR COMPANY ENTITIES
COMPANY AS REPORTED ON PREVIOUSLY
AS REPORTED ON FACE OF CARRIED ON ASCET
FACE OF FINANCIAL FINANCIAL DIVESTED EQUITY OPERATING
STATEMENT STATEMENT OPERATIONS (1) METHOD (2) LOCATIONS
--------- --------- -------------- ---------- ---------
Net Sales $ 24,044 $ 88,081 $ -- $ 44,781 $ 156,906
Cost of goods sold 17,716 73,448 -- 38,001 129,165
--------- --------- --------- --------- ---------
Gross profit 6,328 14,633 -- 6,780 27,741
Selling, general and administrative
expenses 5,538 12,137 -- 3,163 20,838
Other expense (income) 682 (235) -- 804 1,251
Affiliate companies' (income) loss (8,680) -- 2,620 6,060 --
Interest expense, net 2,859 2,766 -- 546 6,171
--------- --------- --------- --------- ---------
Income (loss) from continuing
operations before income taxes
and extraordinary item $ 5,929 $ (35) $ (2,620) $ (3,793) $ (519)
========= ========= ========= ========= =========
Net sales for business segments comprising the Company's operating locations for the years ended December 31, 2000 and 1999 were as follows (in thousands):
1999 2000 $ Change % Change
---- ---- -------- --------
Trim Products $101,086 $ 87,912 $(13,174) (13.0)%
Replacements Parts 55,820 50,797 (5,023) (9.0)
-------- -------- -------- -----
Total $156,906 $138,709 $(18,197) (11.6)%
The decrease in Trim Products sales of $13,174 thousand or 13% is the result of a revenue decrease related to the completion of product programs for which the company has not been awarded replacement business. The sales decrease in the Replacement Parts segment of $5,023 thousand or 9% is attributable to selling price reductions required to meet competitive market pricing, and general market conditions in the overall heavy duty aftermarket industry.
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Gross profit for business segments comprising the Company's operating locations for the years ended December 31, 2000 and 1999 was as follows (in thousands):
1999 % Net Sales 2000 % Net Sales
---- ----------- ---- -----------
Trim Products $13,359 13.2% $ 5,146 5.9%
Replacements Parts 14,382 25.8 12,285 24.2
------- ---- ------- ----
Total $27,741 17.7% $17,431 12.6%
Trim Products 2000 gross profit decline over 1999 results was attributable to higher scrap rates, increased freight costs, third party quality inspection costs and lower labor efficiencies at the Company's Beavercreek, Ohio location. Management is continuing to address these issues by implementing manufacturing process improvements, lean manufacturing concepts, staff restructuring and intensive quality control measures. The 2000 gross profit decline over 1999 results for the Replacement Parts Segment is attributable to discounts offered to customers to maintain market share in a declining industry.
Selling, general and administrative expenses (SGA) for business segments comprising the Company's operating locations were as follows (in thousands):
1999 % Net Sales 2000 % Net Sales
---- ----------- ---- -----------
Trim Products $ 6,354 6.3% $ 5,269 6.0%
Replacements Parts 10,976 19.7 9,627 19.0
Corporate 3,508 2.2 5,340 3.8
------- ---- ------- ----
Total $20,838 13.3% $20,236 14.6% |
