EXHIBIT 99.1
NEWS RELEASE
October 8, 2004
Torrance, California
Summa Industries Announces Preliminary 4th Quarter and Year-end Results
Summa Industries (NNM:SUMX) reports preliminary unaudited earnings of $698,000, or $.17 per common share, on sales of $30,773,000 for the three months ended August 31, 2004, versus earnings of $948,000, or $.18 per common share, on sales of $26,688,000 for the three months ended August 31, 2003.
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| Three months ended August 31 |
| Years ended August 31 |
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| 2004 |
| 2003 |
| 2004 |
| 2003 |
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Sales |
| $ | 30,773,000 |
| $ | 26,688,000 |
| $ | 116,404,000 |
| $ | 111,140,000 |
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Income before cumulative effect of a change in accounting principle |
| $ | 698,000 |
| $ | 948,000 |
| $ | 3,371,000 |
| $ | 3,558,000 |
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Diluted EPS before cumulative effect of a change in accounting principle |
| $ | .17 |
| $ | .18 |
| $ | .68 |
| $ | .63 |
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The fiscal 2004 income tax provision as reflected in the preliminary earnings is under continuing review.
A conference call to discuss the results will be held at 9:00 a.m., Pacific Time, Friday, October 8, 2004. The call-in number is (800) 310-1961 and the passcode is 954077. The conference call will also be simulcast and archived by www.vcall.com.
Summa Industries manufactures proprietary plastic components for industrial and commercial markets.
For further information, contact James R. Swartwout, (310) 792-7024; Fax (310) 792-7079; jim@summaindustries.com or visit www.summaindustries.com.
Statements in this news release which relate to future plans, financial results or projections, events or performance are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and fall under the safe harbor. These forward-looking statements include, but are not limited to, statements regarding the adequacy of the Company’s provision for taxes currently under audit, anticipated audited financial results for the Company, completion of the audit for fiscal 2004 and the results and timing thereof. Actual results could differ materially from those anticipated in the forward-looking statements as a result of a number of factors, including, but not limited to additional unforeseen adjustments to the Company’s provisions for taxes, preliminary earnings and/or balance sheet based on the audit, continued delay in completion of the audit, and other risks and uncertainties described in detail under “Risk Factors” in Summa’s Annual Report on Form 10-K for the fiscal year ended August 31, 2003.
Summa Industries
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
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| August 31, 2003 |
| August 31, 2004 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
| $ | 380,000 |
| $ | 1,248,000 |
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Accounts receivable |
| 15,729,000 |
| 18,227,000 |
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Inventories |
| 11,645,000 |
| 14,749,000 |
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Prepaid expenses and other |
| 2,710,000 |
| 3,802,000 |
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Total current assets |
| 30,464,000 |
| 38,026,000 |
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Property, plant and equipment, net |
| 26,112,000 |
| 31,053,000 |
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Other assets |
| 2,518,000 |
| 1,090,000 |
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Goodwill and other intangibles, net |
| 9,422,000 |
| 9,254,000 |
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Total assets |
| $ | 68,516,000 |
| $ | 79,423,000 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable |
| $ | 5,302,000 |
| $ | 9,088,000 |
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Accrued liabilities |
| 5,015,000 |
| 6,735,000 |
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Current maturities of long-term debt |
| 3,896,000 |
| 2,195,000 |
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Total current liabilities |
| 14,213,000 |
| 18,018,000 |
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Long-term debt, net of current maturities |
| 16,219,000 |
| 28,663,000 |
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Other long-term liabilities |
| 2,601,000 |
| 2,508,000 |
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Total long-term liabilities |
| 18,820,000 |
| 31,171,000 |
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Mandatorily redeemable convertible preferred stock |
| 6,103,000 |
| — |
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Minority interest in subsidiary |
| — |
| 205,000 |
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Total stockholders’ equity |
| 29,380,000 |
| 30,029,000 |
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Total liabilities and stockholders’ equity |
| $ | 68,516,000 |
| $ | 79,423,000 |
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Summa Industries
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
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| Three months ended August 31 |
| Years ended August 31 |
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| 2003 |
| 2004 |
| 2003 |
| 2004 |
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Net sales |
| $ | 26,688,000 |
| $ | 30,773,000 |
| $ | 111,140,000 |
| $ | 116,404,000 |
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Cost of sales |
| 20,270,000 |
| 23,615,000 |
| 83,336,000 |
| 88,522,000 |
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Gross profit |
| 6,418,000 |
| 7,158,000 |
| 27,804,000 |
| 27,882,000 |
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Selling, general, administrative and other expenses |
| 4,681,000 |
| 5,560,000 |
| 21,005,000 |
| 21,027,000 |
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Operating income |
| 1,737,000 |
| 1,598,000 |
| 6,799,000 |
| 6,855,000 |
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Interest expense |
| 314,000 |
| 375,000 |
| 1,481,000 |
| 1,585,000 |
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Income before income taxes and cumulative effect of a change in accounting principle |
| 1,423,000 |
| 1,223,000 |
| 5,318,000 |
| 5,270,000 |
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Provision for income taxes |
| 475,000 |
| 525,000 |
| 1,760,000 |
| 1,899,000 |
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Income before cumulative effect of a change in accounting principle |
| 948,000 |
| 698,000 |
| 3,558,000 |
| 3,371,000- |
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Cumulative effect of a change in accounting principle |
| — |
| — |
| (22,343,000 | ) | — |
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Net income (loss) |
| $ | 948,000 |
| $ | 698,000 |
| $ | (18,785,000 | ) | $ | 3,371,000 |
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Preferred stock accretion |
| $ | 184,000 |
| $ | — |
| $ | 737,000 |
| $ | 450,000 |
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Net income available to common stockholders: |
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before cumulative effect of a change in accounting principle |
| $ | 764,000 |
| $ | 698,000 |
| $ | 2,821,000 |
| $ | 2,921,000 |
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after cumulative effect of a change in accounting principle |
| $ | 764,000 |
| $ | 698,000 |
| $ | (19,522,000 | ) | $ | 2,921,000 |
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Earnings per common share before cumulative effect of a change in accounting principle |
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Basic |
| $ | .18 |
| $ | .18 |
| $ | .65 |
| $ | .69 |
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Diluted |
| $ | .18 |
| $ | .17 |
| $ | .63 |
| $ | .68 |
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Earnings (loss) per common share after cumulative effect of a change in accounting principle |
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Basic |
| $ | .18 |
| $ | .18 |
| $ | (4.48 | ) | $ | .69 |
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Diluted |
| $ | .18 |
| $ | .17 |
| $ | (4.48 | ) | $ | .68 |
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Weighted average common shares outstanding |
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Basic |
| 4,426,000 |
| 3,971,000 |
| 4,359,000 |
| 4,215,000 |
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Diluted |
| 4,308,000 |
| 4,074,000 |
| 4,449,000 |
| 4,297,000 |
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