Pacer Technology Reports Strong First Quarter Fiscal 1999 Results
RANCHO CUCAMONGA, Calif.--(BUSINESS WIRE)--Nov. 4, 1998--Pacer
Technology (Nasdaq:PTCH), owner of such branded consumer products as
Super Glue, ZAP, PRO SEAL, Cook Bates, Diamond Deb/Kurlash and Gem,
Wednesday announced continued gains in net sales, operating income and
net income for its first quarter ended Sept. 30, 1998.
Commented President and Chief Executive Officer Jim Munn: "We are
pleased with these strong results, most of which is attributable to
our acquisition of Cook Bates. We acquired Cook Bates last March in
order to expand the number of products we distribute through our
existing retail channels to gain additional shelf space in key retail
locations."
Financial Results
For the three months ended Sept. 30, 1998, net sales were
$13,657,709, an 85.2 percent increase over the $7,375,150 reported for
the first quarter of 1997. Operating income improved to $1,875,271 for
the first quarter from $935,072 in the same period a year ago. Net
income increased 112.2 percent to $956,911, or 5 cents per share,
versus $450,872, or 3 cents per share, for the corresponding quarter
last year.
Domestic Operations
The company reported domestic sales of $12,502,759 for the first
quarter ended Sept. 30, 1998, compared with $5,743,736 in 1997. The
increase was driven largely by revenues from Cook Bates, including
strong seasonal sales related to pre-holiday purchases.
Domestic sales accounted for 91.5 percent of total company sales
for the first quarter.
International Operations
International sales decreased to $1,154,950, representing 8.5
percent of total sales for the current quarter compared with
$1,631,414, or 22.1 percent of total sales in the corresponding
year-ago quarter. The company reported lower revenues from overseas
due to challenging economic conditions in Asia, South America and
Europe.
The company believes this resulted from a number of key retailers
trimming back inventory levels. Munn further explained that
international sales represented a lower percentage of total revenue
primarily due to the inclusion of results from Cook Bates, whose
products are mostly distributed domestically.
Other Operating Expenses
Pacer's gross margin was 36.0 percent for the first quarter of
fiscal 1999 versus 37.1 percent in the comparable quarter the year
before. This gross margin reduction was the result of competitive
pricing pressures. Operating margin was 13.7 percent of net sales
during the current quarter compared with 12.7 percent in the
corresponding quarter in the prior year.
Selling, general and administrative expenses were 22.3 percent of
sales for the three-month period vs. 24.4 percent reported during
the same quarter a year ago. Munn stated, "The operating margin
improvements resulted from economies of scale."
Financial Position
At Sept. 30, 1998, Pacer reported total assets of $33,409,106,
stockholders' equity of $11,605,873, long-term debt of $10,919,556 and
working capital of $16,689,051.
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, PRO SEAL, Cook Bates, Diamond Deb/Kurlash and Gem, and other
well-known branded products.
For more information about Pacer Technology via facsimile call
800/PRO-INFO and dial client code "PTCH."
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 as, among others,
significant fluctuations in operating results, uncertain market
acceptance of the company's products and intense competition.
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PACER TECHNOLOGY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
Sept. 30, June 30,
1998 1998
ASSETS
Current Assets:
Cash $ 559,060 $ 277,370
Trade Receivables 13,627,037 8,591,327
Notes and Other Receivables 303,658 334,941
Inventories 10,848,060 10,974,578
Prepaid Expenses 1,088,144 810,451
Deferred Income Tax - Current 1,146,769 1,146,769
Total Current Assets $ 27,572,728 $ 22,135,436
Equipment and Leasehold
Improvements, Net 2,064,308 1,819,783
Deferred Income Tax Asset 124,065 124,065
Cost In Excess of Net
Assets Acquired 3,618,962 3,689,516
Other Assets 29,043 30,125
Total Assets $ 33,409,106 $ 27,798,925
LIABILITY AND STOCKHOLDERS EQUITY
Current Liabilities:
Accounts Payable 6,144,945 4,135,472
Other Accrued Expenses 4,405,399 3,162,266
Current Portion of Long-Term Debt 333,333 333,333
Total Current Liabilities 10,883,677 7,631,071
Long-Term Liabilities:
Long-Term Debt, Excluding
Current Installments 10,919,556 9,535,889
Total Liabilities 21,803,233 17,166,960
Stockholders Equity:
Notes Receivable From Directors (265,227) (265,257)
Common Stock 8,270,633 8,270,633
Retained Earnings 3,570,364 2,613,453
Exchange Rates Difference 30,103 13,136
Total Stockholders Equity 11,605,873 10,631,965
Total Liabilities and Equity $ 33,409,106 $ 27,798,925
Working Capital 16,689,051 14,504,365
Current Ratio 2.53 2.90
PACER TECHNOLOGY AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENT
Three Months Ended
Sept. 30,
1998 1997
Net Sales $13,657,709 $ 7,375,150
Cost of Sales 8,738,720 4,641,009
Gross Profit on Sales 4,918,989 2,734,141
Selling, General and
Administrative Expenses 3,043,718 1,799,069
Operating Income 1,875,271 935,072
Interest Expense
(Income) and Other 210,778 121,052
Income Before Taxes 1,664,493 814,020
Income Taxes 707,582 363,148
Net Income $ 956,911 $ 450,872
Weighted Average Shares 15,864,975 15,849,975
Basic Earnings Per Share $ 0.06 $ 0.03
Adjusted Weighted
Average Shares 17,624,745 17,611,839
Diluted Earnings Per Share $ 0.05 $ 0.03
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CONTACT:
Pacer Technology, Rancho Cucamonga
Roberto J. Cavazos Jr., 909/987-0550
or
The Financial Relations Board, Los Angeles
310/442-0599
Karen Taylor (General Information)
Moira Conlon (Investor/Analyst Contact)
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