Uniroyal Global Engineered Products (UNIR) 8-K Reports Second Quarter 2015 Financial Results

EXHIBIT 99.1

Press Release

Uniroyal Global Engineered Products, Inc.

Reports Second Quarter 2015 Financial Results

Revenues surpass $25.7 million with EPS of $0.05 for the second quarter;

Revenues surpass $53.3 million with EPS of $0.09 for the six months

SARASOTA, FL - August 5, 2015- Uniroyal Global Engineered Products, Inc. (OTCQB: UNIR) (“Uniroyal Global Engineered Products, Inc.” or the “Company”) filed its Form 10-Q today reporting its results for the three months ended July 5, 2015.

“We are pleased with the second quarter and year to date results of operations. We continue to perform well against our stated objectives of customer diversification, deeper penetration into our current customers and continuous margin improvement through cost reduction and productivity gains,” said Howard R. Curd, Chairman and CEO. "Our order book continues to show strength through the end of the year primarily due to the launch of new automotive platforms in the US and Europe and increased unit sales at our European automotive customers. We are seeing highly favorable volume comparisons from last year that are somewhat masked by the recent decline in the Euro. Excluding a $2.3 million impact of currency headwinds, our revenues for the quarter would have been up more than 10% from the year ago period,” added Mr. Curd.

The following is a brief discussion of the results:

Revenue:

Total revenue for the three months ended July 5, 2015 increased $346,042, or 1.4%, to $25,746,054 from $25,400,012 for the three months ended June 29, 2014. The increase was primarily due to new automotive platform launches and offset to a large degree by $2.3 million of unfavorable impact of currency exchange rate changes.

Gross Profit:

Total gross profit for the second quarter 2015 was $5,855,955, or 22.7%, of sales compared with $4,901,701 or 19.3% of sales for the second quarter 2014. The gross profit percentage increased in 2015 primarily due to the rolling off of lower margin automotive platforms which were replaced with higher margin platforms and the positive results of cost efficiency programs implemented during 2014.

Operating Expenses:

Selling expenses for the second quarter 2015 increased $275,262, or 23.1%, to $1,469,369 from $1,194,107 during the second quarter 2014. The increase resulted primarily due to increases in commissions and administrative, marketing and support staff expenses added during the second half of 2014.

General and administrative expenses for the quarter decreased by $392,391, or 18.7%, to $1,702,545 from $2,094,936 compared to the same period 2014. The expense decrease is principally due to $412,000 of statutory severance payments for the same period 2014 as a result of labor reduction programs at our U.K. facility. This decrease was partially offset by slightly higher administrative expenses this quarter.

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Operating Income:

Operating income for the quarter was $2,265,077, or 8.8%, of sales compared with $1,222,329, or 4.8%, during the year ago period. The operating income increased primarily due to the gross margin improvements as stated above and a reduction in general and administrative expenses. The amount of increase was offset by approximately $400,000 of unfavorable impact of currency exchange rate changes and increased selling expenses. 

Interest expense:

Interest expense during the quarter increased by $1,096, or 0.3%, to $405,349 from $404,253 in the second quarter 2014. The increase attributable to average higher debt balances in the second quarter 2015 was partially offset by a lower weighted average effective rate for 2015 compared to 2014 and a favorable impact of the foreign exchange rates.

Other Income:

Other income in the quarter decreased $79,871 to $5,343 from $85,214 in the year ago period. Other income is principally the gain or loss on the settlement and fair values of financial instruments related to currency translations from Euro to the British Pound in the UK subsidiary. Contributing to the decrease was $27,394 of unrelated miscellaneous income recognized for second quarter 2014.

Net Income:

Net income increased $772,492, or 87.5%, to $1,655,709 from $883,217 before the preferred dividend of $696,769, which was issued by the company as a result of the acquisition of Uniroyal Engineered Products, LLC and Engineered Products Acquisition Limited.

Net income available to common shareholders for the second quarter increased to $0.067 per share, or 8.1%, from $0.062 per share in the second quarter 2014. Net income per share on a fully diluted basis increased to $0.050 from $0.047 in the second quarter 2014.

About Uniroyal Global Engineered Products, Inc.:

Uniroyal Global Engineered Products, Inc. (OTCQB: 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 2014 was derived 63% from the automotive industry and approximately 37% from the recreational, industrial, indoor and outdoor furnishings, hospitality and health care markets.

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,” “expect,” “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, 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.

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UNIROYAL GLOBAL ENGINEERED PRODUCTS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Three Months Ended						Six Months Ended
	July 5, 2015			June 29, 2014			July 5, 2015			June 29, 2014
NET SALES	$	25,746,054		$	25,400,012		$	53,260,989		$	49,770,246
COST OF GOODS SOLD		19,890,099			20,498,311			42,049,971			40,431,446
Gross Profit		5,855,955			4,901,701			11,211,018			9,338,800
OPERATING EXPENSES:
Selling		1,469,369			1,194,107			2,797,295			2,366,518
General and administrative		1,702,545			2,094,936			3,658,321			3,943,979
Research and development		418,964			390,329			744,794			751,935
OPERATING EXPENSES		3,590,878			3,679,372			7,200,410			7,062,432
Operating Income		2,265,077			1,222,329			4,010,608			2,276,368
OTHER INCOME (EXPENSE):
Interest and other debt related expense		(405,349	)		(404,253	)		(792,766	)		(858,310	)
Other income		5,343			85,214			172,704			109,647
Net Other Expense		(400,006	)		(319,039	)		(620,062	)		(748,663	)
INCOME BEFORE TAX PROVISION		1,865,071			903,290			3,390,546			1,527,705
TAX PROVISION		209,362			20,073			324,180			48,728
NET INCOME		1,655,709			883,217			3,066,366			1,478,977
Preferred stock dividend		(696,769	)		—			(1,389,874	)		—
NET INCOME AVAILABLE TO
COMMON SHAREHOLDERS		958,940			883,217			1,676,492			1,478,977
OTHER COMPREHENSIVE INCOME (LOSS):
Minimum benefit liability adjustment		(45,230	)		(147,474	)		(90,459	)		(294,948	)
Foreign currency translation adjustment		398,149			141,338			38,933			180,607
Unrealized gain (loss) on effective hedge:
Reclassification of amounts to earnings		—			16,644			—			33,143
Unrealized loss for the year		—			(166	)		—			(1,561	)
COMPREHENSIVE INCOME TO
COMMON SHAREHOLDERS	$	1,311,859		$	893,559		$	1,624,966		$	1,396,218
EARNINGS PER COMMON SHARE:
Basic	$	0.07		$	0.06		$	0.12		$	0.10
Diluted	$	0.05		$	0.05		$	0.09		$	0.08
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic		14,351,797			14,137,731			14,351,684			14,158,920
Diluted		19,108,630			18,894,565			19,108,517			18,915,754

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UNIROYAL GLOBAL ENGINEERED PRODUCTS, INC.

 CONSOLIDATED BALANCE SHEETS

		July 5, 2015		December 28, 2014
		(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	1,991,056	$	604,234
Accounts receivable, net		15,863,522		14,607,787
Inventories, net		19,167,048		17,421,082
Other current assets		1,986,640		2,130,282
Related party receivable		21,262		74,931
Total Current Assets		39,029,528		34,838,316
PROPERTY AND EQUIPMENT		13,728,711		12,001,128
OTHER ASSETS
Intangible assets		3,664,459		3,668,956
Goodwill		1,079,175		1,079,175
Other long-term assets		1,484,781		1,295,965
Total Other Assets		6,228,415		6,044,096
TOTAL ASSETS	$	58,986,654	$	52,883,540
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Checks issued in excess of bank balance	$	499,205	$	438,145
Line of credit		17,519,022		16,396,306
Current maturities of long-term debt		592,442		522,095
Current maturities of capital lease obligations		465,803		96,071
Accounts payable		10,158,494		9,409,062
Accrued expenses		4,127,900		3,408,143
Related party payable		—		20,260
Current portion of postretirement benefit liability - health and life		115,039		115,039
Total Current Liabilities		33,477,905		30,405,121
LONG-TERM LIABILITIES
Long-term debt, less current portion		1,385,294		1,355,297
Capital lease obligations, less current portion		1,683,639		238,836
Related party lease financing obligations		2,163,541		2,162,393
Long-term debt to related parties		4,743,696		4,740,728
Postretirement benefit liability - health and life, less current portion		2,651,721		2,662,570
Other long-term liabilities		776,592		840,378
Total Long-Term Liabilities		13,404,483		12,000,202
Total Liabilities		46,882,388		42,405,323

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		July 5, 2015			December 28, 2014
		(Unaudited)
STOCKHOLDERS' EQUITY
Convertible Preferred Stock: 5,000,000 shares authorized ($100 value):
Series A, 9,715 shares issued and outstanding		798,500			798,500
Series B, 2,702  shares issued and outstanding		270,160			270,160
Series C, 16,124 shares issued and outstanding		1,600,467			1,600,467
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) 14,351,798 and 14,351,398 shares issued and outstanding as of July 5, 2015 and December 28, 2014, respectively		14,352			14,352
Additional paid-in capital		32,550,668			32,549,585
Accumulated deficit		(24,950,142	)		(26,626,634	)
Accumulated other comprehensive income		739,436			790,962
Total Stockholders'  Equity		12,104,266			10,478,217
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	58,986,654		$	52,883,540

Contacts

Corporate Contact:

Uniroyal Global Engineered Products, Inc.

Elizabeth Henson, 941-870-3950

LHenson@UniroyalGlobal.com

or

Public Relations:

TTC Group, Inc.

Vic Allgeier, 646-290-6400

vic@ttcominc.com

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