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Uniroyal Global Engineered Products, Inc. Reports Net Sales of $100,377,278 and Net Income of $4,499,664 or $0.24 per Diluted Share for the Fiscal Year Ended January 1, 2017

Mar 20, 2017

OTC Disclosure & News Service


Uniroyal Global Engineered Products, Inc. (OTCQB:UNIR) (or the “Company”) today reported its financial results for the fiscal year ended January 1, 2017.

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Net Sales

Net Sales for the fiscal year increased to $100,377,278, a gain of $615,305 or 0.6% versus the prior year. Included in these figures is a negative currency translation of $2.9 million due to the continued weakness in the British Pound. Also, fiscal 2015 was a 53-week period which, on a comparable basis, benefited Net Sales approximately $500,000 as compared to this year which was a 52-week period. Without the effect of currency rate exchange and the additional week of sales in 2015, Net Sales would have increased 4.1%.

The Global Automotive Sector, representing 64.9% of total Net Sales, increased $3.9 million or 6.0% versus the prior year as a result of the Company being awarded several new programs both in Europe and domestically. The new platforms and programs should also benefit the automotive sector in fiscal 2017. Before the negative currency translation, the increase in the Global Automotive Sector would have been $6.6 million or 10.1%.

The Industrial Sector declined $3.3 million or 9.4% in fiscal 2016 as major off-highway equipment manufacturers were impacted by a very challenging economic environment. Before the negative currency translation, the decrease in the Industrial Sector would have been $3.1 million or 8.6%.

Operating Income

Gross Profit margins improved to 22.8% versus 22.0% last year. The margin improvement is due in part to the capital projects in Europe put in place last year specifically targeted to operating efficiencies and continued progress on our lean manufacturing and continuous improvement initiatives.

Operating Income was up sharply in 2016, increasing 11.1% versus the prior year to $8,046,665 or 8.0% of Net Sales, an increase of $807,124 from the $7,239,541 or 7.3% reported last year. Operating expenses were in line with the prior year. Spending on Research and Development projects remained robust in 2016 at $1,727,616 or 1.7% of Net Sales.

“Despite some major economic headwinds in 2016, we recorded significant operational improvement. Our focus for 2017 will continue to be on the development of new products and technical improvement in automotive and industrial applications as well as capital spending initiatives to further enhance a strengthening in margins,” said Howard R. Curd, Chairman and Chief Executive Officer.

Net Income Available to Common Shareholders

Net Income before taxes increased $620,116 or 11.2% to $6,180,905 versus the $5,560,789 reported last year primarily due to the expansion of Operating Margins.

Net Income Available to Common Shareholders declined 9.1% to $4,499,664 versus the $4,952,156 reported last year. Offsetting the improved operational performance was a significant decline in the tax benefit versus the previous year primarily related to the reduction in the Company’s U.S. deferred tax valuation allowance.

For further details, see the Consolidated Statements of Operations in the Company’s Form 10-K filed on March 20, 2017. The Company will have comments on the year in an earning conference call on March 21, 2017 at 9:00 am (EST). Persons wishing to access the conference call may do so by dialing 800-732-8711 (U.S.) and 913-312-0711 (International), and using the ID #2350165. Howard F. Curd, President, will discuss our earnings on the call and will be available for questions. The call will also be available by logging on to www.uniroyalglobal.com and accessing the webcast link (https://public.viavid.com/player/index.php?id=123426) in the investor relations section. A replay of the conference call will be available beginning March 21, 2017 through June 21, 2017 by calling (844) 512-2921 (US) or (412) 317-6671 (International) and Pin #2350165.

About Uniroyal Global Engineered Products, Inc.:

Uniroyal Global Engineered Products, Inc. (UNIR) is a leading manufacturer of vinyl coated fabrics that are durable, stain resistant, cost-effective alternatives to leather, cloth and other synthetic fabric coverings. Uniroyal Global Engineered Products, Inc.’s revenue in 2016 was derived 65% from the automotive industry and approximately 35% from the recreational, industrial, indoor and outdoor furnishings, hospitality and health care markets. Our primary brand names include Naugahyde®, BeautyGard®, Flameblocker™, Spirit Millennium®, Ambla®, Amblon®, Velbex®, Cirroflex®, Plastolene® and Vynide®.

Forward-Looking Statements:

Except for statements of historical fact, certain information contained in this press release constitutes forward-looking statements, including, without limitation, statements containing the words “believe,” “expect,” “anticipate,” “intend,” “should,” “planned,” “estimated” and “potential” and words of similar import, as well as all references to the future. These forward-looking statements are based on Uniroyal Global Engineered Products, Inc.’s current expectations. The Company cautions investors that any forward-looking statements made by the Company are not guarantees of future performance and that a variety of factors could cause the Company´s actual results and experience to differ materially from the anticipated results or other expectations expressed in the Company´s forward-looking statements. The risks and uncertainties which may affect the operations, performance, development and results of the Company´s business include, but are not limited to, the following: uncertainties relating to economic conditions, uncertainties relating to customer plans and commitments, the pricing and availability of equipment, materials and inventories, currency fluctuations, technological developments, performance issues with suppliers, economic growth, delays in testing of new products, the Company’s ability to successfully integrate acquired operations, the Company’s dependence on key personnel, the Company’s ability to protect its intellectual property rights, the effectiveness of cost-reduction plans, rapid technology changes and the highly competitive environment in which the Company operates. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made.

Uniroyal Global Engineered Products, Inc.
Consolidated Statements of Operations
Years Ended
January 1, 2017   January 3, 2016
NET SALES $ 100,377,278 $ 99,761,973
COST OF GOODS SOLD   77,515,316     77,813,354  
Gross Profit 22,861,962 21,948,619
Selling 5,078,706 5,201,199
General and administrative 8,008,975 7,779,012
Research and development   1,727,616     1,728,867  
OPERATING EXPENSES   14,815,297     14,709,078  
Operating Income   8,046,665     7,239,541  
Interest and other debt related expense (1,616,120 ) (1,613,391 )
Other expense   (249,640 )   (65,361 )
Net Other Expense   (1,865,760 )   (1,678,752 )
INCOME BEFORE TAX BENEFIT 6,180,905 5,560,789
TAX BENEFIT   (1,198,557 )   (2,193,054 )
NET INCOME 7,379,462 7,753,843
Preferred stock dividend   (2,879,798 )   (2,801,687 )
$ 4,499,664   $ 4,952,156  
Basic   0.24     0.35  
Diluted   0.24     0.26  
Basic   18,828,378     14,334,485  
Diluted   18,869,709     19,040,032  
Uniroyal Global Engineered Products, Inc.
Consolidated Balance Sheets
ASSETS   January 1, 2017   January 3, 2016
Cash and cash equivalents $ 1,321,586 $ 1,910,112
Accounts receivable, net 14,555,463 14,209,056
Inventories, net 17,046,171 17,527,728
Other current assets 2,485,213 2,891,007
Related party receivable   25,456     23,298  
Total Current Assets   35,433,889     36,561,201  
PROPERTY AND EQUIPMENT, NET   13,611,494     14,003,276  
Intangible assets 3,133,564 3,534,936
Goodwill 1,079,175 1,079,175
Other long-term assets   5,410,375     3,095,414  
Total Other Assets   9,623,114     7,709,525  
TOTAL ASSETS $ 58,668,497   $ 58,274,002  
Checks issued in excess of bank balance $ 679,494 $ 322,307
Lines of credit 16,799,592 16,577,279
Current maturities of long-term debt 851,988 639,018
Current maturities of capital lease obligations 368,718 489,978
Accounts payable 7,331,213 7,592,510
Accrued expenses 3,645,526 3,941,296
Related party obligation 371,161 276,880
Current portion of postretirement benefit liability - health and life   158,527     136,725  
Total Current Liabilities   30,206,219     29,975,993  
Long-term debt, less current portion 1,994,910 2,134,243
Capital lease obligations, less current portion 856,171 1,469,317
Related party lease financing obligations 2,162,151 2,164,682
Long-term debt to related parties 2,826,907 4,449,243
Postretirement benefit liability - health and life, less current portion 2,883,684 2,836,638
Other long-term liabilities   838,308     975,781  
Total Long-Term Liabilities   11,562,131     14,029,904  
Total Liabilities   41,768,350     44,005,897  
Preferred units, Series A UEP Holdings, LLC, 200,000 units issued
and outstanding ($100 issue price)
617,571 617,571
Preferred units, Series B UEP Holdings, LLC, 150,000 units issued
and outstanding ($100 issue price)
463,179 463,179
Preferred stock, Engineered Products Acquisition Limited, 50 shares
issued and outstanding ($1.51 stated value)
75 75
Common stock, 95,000,000 shares authorized ($.001 par value)
18,727,782 and 18,890,909 shares issued and outstanding as of
January 1, 2017 and January 3, 2016, respectively
18,728 18,892
Additional paid-in capital 34,653,894 34,823,886
Accumulated deficit (17,174,814 ) (21,674,478 )
Accumulated other comprehensive income   (1,678,486 )   18,980  
Total Stockholders' Equity   16,900,147     14,268,105  

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