James F. Fagan
or
Kathaleen Carroll-Coelho
at
(508) 872-3711
ARROW AUTOMOTIVE INDUSTRIES ANNOUNCES
THIRD QUARTER RESULTS, FISCAL 1997
FRAMINGHAM, Mass., May 14, 1997 -- Arrow Automotive Industries, Inc.
(ASE: AI) announced a net loss for its third quarter of fiscal year
1997, ended March 29, 1997, of $6,120,000, or $2.13 per share on sales of
$22,481,000. The third quarter results include an increase in inventory
valuation reserves of $4 million and non-recurring period costs of
$952,000 relating to the restructuring of manufacturing facilities. This
compares to a net loss of $359,000, or 13 cents per share on sales of
$26,226,000 for the third quarter of fiscal 1996.
For the nine months ended March 29, 1997, the Company had a net loss of
$7,724,000 (including restructuring charges and related one-time period
costs of $2,942,000 and an increase in inventory valuation reserves of
$4,000,000) or $2.69 per share, on sales of $68,192,000. This compares
to a net loss during the nine months ended March 30, 1996 of $821,000 or
29 cents per share on sales of $79,101,000.
Arrow's President, Jim Osment, stated that the "net loss was related to
the Company's restructuring efforts, including the consolidation of
product line production, and the closing of the Company's Santa Maria, CA
manufacturing facility and increased inventory reserves". These
additional inventory reserves were provided based on a
ARROW AUTOMOTIVE INDUSTRIES ANNOUNCES
THIRD QUARTER RESULTS, FISCAL 1997
PAGE 2
review of the Company's inventory balances after considering the product
line and plant consolidations occurring this year and lower current year
unit sales.
Mr. Osment stated that "the restructuring efforts, while painful in the
current year, will realign the Company's operating structure to enable
it to lower its break-even point and be more competitive. The automotive
aftermarket today is burdened by manufacturing overcapacity and
saturation within the distribution sector by both wholesalers and
retailers. To be successful, we must be the most cost effective, highest
quality remanufacturer in the marketplace."
Arrow, with headquarters in Framingham, Mass., is one of the nation's
largest remanufacturers of precision replacement parts for domestic and
import passenger cars, light and heavy trucks, farm vehicles and off-road
industrial and construction equipment. Arrow operates remanufacturing
and distribution facilities in Spartanburg, S.C., and Morrilton, Ark.
Arrow's shares are traded on the American Stock Exchange (Symbol AI).
# # #
Note: Condensed Statements of Operations attached.
ARROW AUTOMOTIVE INDUSTRIES, INC.
CONDENSED STATEMENT OF OPERATIONS
(IN THOUSANDS EXCEPT PER SHARE DATA)
(Unaudited)
THREE MONTHS ENDED
March 29, March 30,
1997 1996
NET SALES $ 22,481 $ 26,226
Loss Before Taxes (5,951) (535)
Provision (Benefit) for
Income Taxes 169 (176)
NET LOSS $ (6,120) $ (359)
LOSS PER SHARE
LOSS PER SHARE $ (2.13) $ (0.13)
Average Number of
Shares Outstanding 2,873,083 2,873,083
ARROW AUTOMOTIVE INDUSTRIES, INC.
CONDENSED STATEMENT OF OPERATIONS
(IN THOUSANDS EXCEPT PER SHARE DATA)
(Unaudited)
NINE MONTHS ENDED
March 29, March 30,
1997 1996
(39 Weeks) (40 Weeks)
NET SALES $ 68,192 $ 79,101
Loss Before Taxes (8,309) (1,281)
Benefit for Income Taxes (585) (460)
NET LOSS $ (7,724) $ (821)
LOSS PER SHARE
LOSS PER SHARE $ (2.69) $ (0.29)
Average Number of
Shares Outstanding 2,873,083 2,873,083