R&B, Inc. announced that for the second quarter ended June 28, 2003, sales increased 5% to $58.1 million U.S. from $55.5 million U.S. in the same period last year.
R&B markets aftermarket products under a variety of brand names, but the Motormite and Dorman names are among the best recognized.
Diluted earnings per share in the second quarter of 2003 were $0.39 compared to $0.46 in the same period last year, which included an after-tax gain of $0.15 per share on the sale of the Company’s specialty fastener business. Net income in the second quarter of 2003 was $3.5 million compared to net income of $4.1 million in the same period last year, which included the above-mentioned after-tax gain of $1.3 million.
Excluding the gain for comparison purposes, fully diluted earnings per share increased 26% in the second quarter. For the six months ended June 28, 2003, sales increased 2% to $108.3 million from $106.5 million in the same period last year.
Diluted earnings per share for the first six months of 2003 were $0.64 compared to $0.70 in the same period last year, which included the after-tax gain of $0.15 per share. Net income for the first six months of 2003 was $5.8 million compared to net income of $6.3 million in the same period last year, which included the above- mentioned after-tax gain of $1.3 million.
Excluding the gain for comparison purposes, fully diluted earnings per share increased 16% for the first six months of 2003. Sales volume in 2003 increased as a result of shipments to a new customer for the company’s Allparts brake business, but this growth was partially offset by lower levels of new product introductions and line updates earlier in the year.
The favourable effects of foreign currency exchange resulted in a 2% year over year increase in sales, however this benefit was offset by the elimination of $2.1 million in revenues from the specialty fastener business sold in May 2002. Net debt (total debt less cash and short-term investments) increased $0.2 million in the quarter to $36.4 million.
The slightly higher net borrowing level was due to an increase in accounts receivable as a result of higher sales in the second quarter. Inventory levels during the quarter were flat, but have increased $5.0 million since year end due to inventory builds for customer programs scheduled to ship in the third quarter and higher safety stock levels given recent world events.
Inventories are expected to decline in the second half of the year as safety stocks are reduced and customer programs ship.
Richard Berman, chairman, president and chief executive officer, said, “We are pleased to be able to report solid results despite the challenging economic climate. Second quarter sales benefited from seasonally higher order levels and an increased level of line updates and new product introductions. We believe that these new product introductions as well as the releases we have slated for the rest of this year will continue to drive future sales growth. We remain committed to our strategy of accelerating opportunities for our customers and our businesses through continued investment in new product development, initiatives designed to create and grow aftermarket demand for new and existing products, and supply chain excellence to ensure that the right parts are available at the right time.”
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