Brunswick Third Quarter Earnings and Revenues Increase
BRUNSWICK, Maine - Brunswick Technologies Inc. (NASDAQ:BTIC), a leading manufacturer and innovative developer of composite reinforcements, today reported net income rose to $421,000 in the third quarter, a 62% increase from $260,000 for the same period last year, and fully diluted earnings per share grew by 60% to $.08, up from $.05 last year at the same time. Third quarter revenue increased to $10,636,000, a 3.2% increase over the previous year's third quarter of $10,309,000 while operating income rose 80% to $538,000 compared to last year.
Net revenues for the first nine months of 1999 totaled $34,222,000, up 13% from $30,325,000 during the same period last year. Year to date net income totaled $1,332,000, which represents $.25 compared to $.22 per fully diluted earnings per share, a 14% increase from the first nine months of last year. Operations in 1999 include a full nine months of Brunswick Technologies Europe Limited and four months of operations in 1998 when the business was acquired.
"This is a solid financial performance," said Martin Grimnes, Chairman and CEO about the growth in net income and increase in the company's earnings per share for the quarter and first nine months over last year. "Gross margin was 22.9%, up sharply from 20.9% reported in the previous year's third quarter. The difference this quarter is that we maintained strong production rates at all facilities," he added.
Bill Dubay, President and COO, commented on the quarter and expectations for the balance of the year. "We remained on target for our financial plan through the traditionally slow third quarter despite the impact of Hurricane Floyd. The threat of flooding forced several of our major customers to shut down for up to two weeks longer than normal for the season."
The ongoing consolidation in the North American distribution channels also squeezed inventory levels in the distribution system impacting the flow of orders BTI received during the quarter. "The recovery in the beginning of the fourth quarter has been somewhat slower than anticipated as the distributors have been slow to re-establish appropriate order points.
We've been working closely with the distributors and have begun to see an increase in the order flow and continue to believe that the company will end the year with earnings in line with our business plan.
The company explained that third quarter activity throughout the composite industry is traditionally slow. Many North American marine manufacturers schedule seasonal plant shutdowns to convert tooling over to new model year boats. European manufacturers also schedule summer holiday shutdowns, which reduces demand in the third quarter for BTI's international operations based in the UK.
Mr. Dubay went on to say that the recent launch of BTI's Black Steel(R) product line of carbon reinforcements is being well received in the marketplace. "We believe this is the most cost effective line of carbon products available in the composites industry." According to Mr. Dubay, there was considerable interest expressed by customers at Composites '99 , the largest composites industry trade show in North America, held last week in Chicago. "This new line of products serves as an example as to how BTI continues to lead the composites industry into emerging markets by leveraging its existing technology base," he concluded.
The company also noted that production of the composite railcar has been halted by the manufacturer and the future of the project is uncertain. While it is disappointing for the industry to have such a visible project put on hold, it has not had a material affect on BTI's operations.
Examples of products manufactured with BTI engineered reinforcements include: ballistic armor, boats, snowboards, truck panels, windblades, automotive parts, marine pilings, bridges, and offshore oil and gas production equipment. BTI has manufacturing facilities in Maine, Texas and the UK and a new website at www.brunswicktech.com.
Matters discussed in this news release, including any discussion of or impact, expressed or implied, on the Company's anticipated revenue growth, operating results and future earnings per share contain forward-looking statements (identified by the words "expect", "estimate", "project", "plans", "believe", and similar expressions) that involve known and unknown risks and uncertainties. For these statements the company claims the protection of the safe harbor of the Private Securities Litigation Reform Act of 1995. The company's results may differ significantly form the results indicated by such forward-looking statements. The Company's future results are dependent upon general economic conditions, the availability of supplies of fiberglass, the ability to continue to improve operating margins, the ability to expand new and existing markets, competition from competing product lines from both fiberglass and non-fiberglass suppliers, the ability of major distributors to successfully merge operations, the ability to manage growth in inventory, the stability of its customers' capital spending plans and the ability of the company to obtain necessary capital from time to time. These and other risks are detailed from time to time in the Company's SEC reports, including Form 10K for the year ended December 31, 1998.