ROFO Reports Record First Quarter Sales and Net Income; Gains Significant Market Share

Apr 19, 2001, 01:00 ET from Rockford Corporation

    TEMPE, Ariz., April 19 /PRNewswire/ -- Rockford Corporation (Nasdaq:   ROFO)
 today announced results for the first quarter ended March 31, 2001.
 
     Financial Highlights of the quarter include:
     --  Sales increased 8% to a record level of $37.4 million versus
         $34.6 million in last year's first quarter.
     --  Fully Diluted EPS of $0.23 for the first quarter were in-line with the
         consensus estimate.
     --  Rockford's U.S. market share in January and February, based on dollar
         sales and as reported by the Intelect market survey, rose to 25.9% for
         amplifiers versus 17.4% for the same period last year and to 18.7% for
         sub-woofers from 15.4% last year.
 
     Net sales for the first quarter grew to $37.4 million, an increase of 8%
 over the year-ago level, in spite of a continuing difficult U.S. retail
 environment for car audio products.  This environment provided Rockford with
 an opportunity to capture significant market share.  According to the Intelect
 survey through February the total car audio market weakened slightly during
 the early part of the year, but Rockford's market share expanded dramatically.
 According to the Intelect survey, Rockford's share of the amplifier market
 increased to 25.9% versus 17.4% last year.  Its share of the sub-woofer market
 increased to 18.7% from 15.4%, and its share of the total speaker market
 increased to 8.2% from 6.7%.
     Gary Suttle, Rockford's president and chief executive officer said, "We
 are exceptionally pleased with our market share gains over the past quarter.
 The difficult retail environment is creating clear and compelling
 opportunities for Rockford to leverage its leadership position.  We're off to
 a strong start this year and are achieving short-term financial goals while
 executing our long-term growth strategy."
     Rockford's gross margin for the quarter was 35.5% versus 39.0% last year.
 This was due to end-of life discounts on source units, a mix shift toward
 lower margined products, and a higher level of incentive programs for dealers.
 SG&A expense as a percent of sales improved by 200 basis points to 26.6% due
 to the ongoing development of economies of scale.
     Rockford's EBITDA was $4.2 million, or 11.2% of revenues, during the
 quarter.  Fully diluted EPS for the first quarter were $0.23, in line with the
 consensus estimate.
     Inventories at the end of first quarter were down 0.6% to $20.3 million.
 This level reflects a continuing need for load-in inventory associated with
 resetting dealer stocks with Rockford's new products as well as overseas
 sourced product in transit.  Rockford is comfortable with both the level and
 composition of its inventory.
     Rockford also announced today that it continues to be comfortable with an
 earnings forecast of approximately $1.02 per share for the fiscal year ended
 December 31, 2001.  Further, Rockford believes that revenue growth should
 accelerate from the current pace of approximately 8% during the second half of
 the year.
     Mr. Suttle continued, "We continue to demonstrate our ability to
 capitalize on our strong competitive position to grow both sales and net
 income.  The initial response from dealers and consumers to our new product
 lines, with many totally redesigned products for this year, is encouraging.
 We remain excited about the opportunities for growth which lie ahead."
 
     About Rockford Corporation
     Rockford Corporation is a designer, manufacturer and distributor of
 high-performance audio systems for the mobile, professional, and home theatre
 audio markets.  Rockford's mobile audio products are marketed under the
 Rockford Fosgate and Lightning Audio brand names.  Rockford's professional
 audio and home theatre products are marketed under the Hafler and Fosgate
 Audionics brand names.
 
     Forward-Looking Statement Disclosure
     This press release contains forward-looking statements including, without
 limitation, statements about the future of our industry, anticipated revenues
 and earnings, business strategy, and continued acceptance and growth of our
 products.  These statements discuss our future expectations and projections.
     When considering our forward-looking statements, you should keep in mind
 that these statements are subject to significant risks that could cause our
 actual results to vary.  In particular, we are currently in a period of
 economic uncertainty that may lead consumers to reduce their anticipated
 spending (particularly on large discretionary products such as ours), may make
 retailers reduce their inventories of products, and may lead our competitors,
 facing reduced demand, to reduce their prices and otherwise increase the level
 of competition.  Any of these events could reduce our sales and earnings from
 currently anticipated levels.
     For a more detailed discussion of the risks we face, please refer to the
 risk factors and cautionary statements identified in our filings with the
 Securities and Exchange Commission, including specifically the risk factors
 identified in exhibit 99.1 to our Annual Report on Form 10-K for the Fiscal
 Year ended December 31, 2000, filed with the SEC on March 13, 2001.  The risk
 factors noted above, the risk factors discussed in our SEC filings, and other
 factors that we do not currently anticipate, may cause our actual results to
 differ significantly from those contained in our forward-looking statements.
 
 
      Rockford Corporation
      Consolidated Statements of Operations Data
      First Quarter Results
      For the Three Months Ended March 31, 2001 and March 31, 2000
      ($000s omitted except per share amounts)
 
                                                               Actual
                                                         Three Months Ended
                                                              Mar. 31,
                                                           2001        2000
 
     Net sales                                           $37,363     $34,588
     Cost of goods sold                                   24,083      21,113
 
     Gross profit                                         13,280      13,475
 
     Selling, general, and administrative                  9,924       9,892
 
     Operating income                                      3,356       3,583
 
     Other expense (income)                                  158         (20)
     Interest expense                                         46         481
     Income before income taxes                            3,152       3,122
 
     Income tax expense                                    1,160       1,195
 
     Net income                                           $1,992      $1,927
 
     EBITDA                                               $4,176      $4,590
 
     Net income per share:
 
       Basic                                               $0.25       $0.40
       Diluted                                             $0.23       $0.31
 
     Shares used to calculate net income per share:
 
       Basic                                               8,007       4,798
       Diluted                                             8,834       6,283
 
     Proforma net income per share:
     2000 Proforma reflects adjustments to after-tax
     interest expense and shares outstanding as if
     IPO occurred at beginning of 1999
 
     Net income                                           $1,992      $2,195
 
     Net income per share:
 
     Basic                                                 $0.25       $0.27
     Diluted                                               $0.23       $0.25
 
     Shares used to calculate net income per share:
 
     Basic                                                 8,007       8,007
     Diluted                                               8,834       8,834
 
 
      Rockford Corporation
      Consolidated Balance Sheets
      At March 31, 2001 and December 31, 2000
      ($000s)
 
                                                      March 31,   December 31,
                                                        2001          2000
     ASSETS
 
     Current assets:
       Cash                                            $1,938         $2,750
       Accounts receivable, net                        33,286         28,488
       Inventories, net                                20,279         20,406
       Prepaid expenses and other current assets        7,671          5,687
 
        Total current assets                           63,174         57,331
 
     Property and equipment, net                        6,603          5,996
     Goodwill, net                                      2,233          2,275
     Other long term assets                             2,710          1,316
 
        Total assets                                  $74,720        $66,918
 
 
     LIABILITIES AND STOCKHOLDERS' EQUITY
 
     Current Liabilities:
       Accounts payable                               $10,893         $7,118
       Notes payable and current portion of
        long term debt                                    802            935
       Accrued warranty                                 4,789          4,621
       Other accrued liabilities                        9,540          7,478
 
        Total current liabilities                      26,024         20,152
 
     Long term liabilities                                355            434
 
        Total liabilities                              26,379         20,586
 
     Stockholders' equity:
       Common stock                                        81             80
       Additional paid-in-capital                      29,632         29,504
       Retained Earnings                               18,685         16,695
       Treasury Stock                                      (6)
       Accumulated other comprehensive income             (51)            53
 
        Total stockholders' equity                     48,341         46,332
 
        Total liabilities and stockholders' equity    $74,720        $66,918
 
 

SOURCE Rockford Corporation
    TEMPE, Ariz., April 19 /PRNewswire/ -- Rockford Corporation (Nasdaq:   ROFO)
 today announced results for the first quarter ended March 31, 2001.
 
     Financial Highlights of the quarter include:
     --  Sales increased 8% to a record level of $37.4 million versus
         $34.6 million in last year's first quarter.
     --  Fully Diluted EPS of $0.23 for the first quarter were in-line with the
         consensus estimate.
     --  Rockford's U.S. market share in January and February, based on dollar
         sales and as reported by the Intelect market survey, rose to 25.9% for
         amplifiers versus 17.4% for the same period last year and to 18.7% for
         sub-woofers from 15.4% last year.
 
     Net sales for the first quarter grew to $37.4 million, an increase of 8%
 over the year-ago level, in spite of a continuing difficult U.S. retail
 environment for car audio products.  This environment provided Rockford with
 an opportunity to capture significant market share.  According to the Intelect
 survey through February the total car audio market weakened slightly during
 the early part of the year, but Rockford's market share expanded dramatically.
 According to the Intelect survey, Rockford's share of the amplifier market
 increased to 25.9% versus 17.4% last year.  Its share of the sub-woofer market
 increased to 18.7% from 15.4%, and its share of the total speaker market
 increased to 8.2% from 6.7%.
     Gary Suttle, Rockford's president and chief executive officer said, "We
 are exceptionally pleased with our market share gains over the past quarter.
 The difficult retail environment is creating clear and compelling
 opportunities for Rockford to leverage its leadership position.  We're off to
 a strong start this year and are achieving short-term financial goals while
 executing our long-term growth strategy."
     Rockford's gross margin for the quarter was 35.5% versus 39.0% last year.
 This was due to end-of life discounts on source units, a mix shift toward
 lower margined products, and a higher level of incentive programs for dealers.
 SG&A expense as a percent of sales improved by 200 basis points to 26.6% due
 to the ongoing development of economies of scale.
     Rockford's EBITDA was $4.2 million, or 11.2% of revenues, during the
 quarter.  Fully diluted EPS for the first quarter were $0.23, in line with the
 consensus estimate.
     Inventories at the end of first quarter were down 0.6% to $20.3 million.
 This level reflects a continuing need for load-in inventory associated with
 resetting dealer stocks with Rockford's new products as well as overseas
 sourced product in transit.  Rockford is comfortable with both the level and
 composition of its inventory.
     Rockford also announced today that it continues to be comfortable with an
 earnings forecast of approximately $1.02 per share for the fiscal year ended
 December 31, 2001.  Further, Rockford believes that revenue growth should
 accelerate from the current pace of approximately 8% during the second half of
 the year.
     Mr. Suttle continued, "We continue to demonstrate our ability to
 capitalize on our strong competitive position to grow both sales and net
 income.  The initial response from dealers and consumers to our new product
 lines, with many totally redesigned products for this year, is encouraging.
 We remain excited about the opportunities for growth which lie ahead."
 
     About Rockford Corporation
     Rockford Corporation is a designer, manufacturer and distributor of
 high-performance audio systems for the mobile, professional, and home theatre
 audio markets.  Rockford's mobile audio products are marketed under the
 Rockford Fosgate and Lightning Audio brand names.  Rockford's professional
 audio and home theatre products are marketed under the Hafler and Fosgate
 Audionics brand names.
 
     Forward-Looking Statement Disclosure
     This press release contains forward-looking statements including, without
 limitation, statements about the future of our industry, anticipated revenues
 and earnings, business strategy, and continued acceptance and growth of our
 products.  These statements discuss our future expectations and projections.
     When considering our forward-looking statements, you should keep in mind
 that these statements are subject to significant risks that could cause our
 actual results to vary.  In particular, we are currently in a period of
 economic uncertainty that may lead consumers to reduce their anticipated
 spending (particularly on large discretionary products such as ours), may make
 retailers reduce their inventories of products, and may lead our competitors,
 facing reduced demand, to reduce their prices and otherwise increase the level
 of competition.  Any of these events could reduce our sales and earnings from
 currently anticipated levels.
     For a more detailed discussion of the risks we face, please refer to the
 risk factors and cautionary statements identified in our filings with the
 Securities and Exchange Commission, including specifically the risk factors
 identified in exhibit 99.1 to our Annual Report on Form 10-K for the Fiscal
 Year ended December 31, 2000, filed with the SEC on March 13, 2001.  The risk
 factors noted above, the risk factors discussed in our SEC filings, and other
 factors that we do not currently anticipate, may cause our actual results to
 differ significantly from those contained in our forward-looking statements.
 
 
      Rockford Corporation
      Consolidated Statements of Operations Data
      First Quarter Results
      For the Three Months Ended March 31, 2001 and March 31, 2000
      ($000s omitted except per share amounts)
 
                                                               Actual
                                                         Three Months Ended
                                                              Mar. 31,
                                                           2001        2000
 
     Net sales                                           $37,363     $34,588
     Cost of goods sold                                   24,083      21,113
 
     Gross profit                                         13,280      13,475
 
     Selling, general, and administrative                  9,924       9,892
 
     Operating income                                      3,356       3,583
 
     Other expense (income)                                  158         (20)
     Interest expense                                         46         481
     Income before income taxes                            3,152       3,122
 
     Income tax expense                                    1,160       1,195
 
     Net income                                           $1,992      $1,927
 
     EBITDA                                               $4,176      $4,590
 
     Net income per share:
 
       Basic                                               $0.25       $0.40
       Diluted                                             $0.23       $0.31
 
     Shares used to calculate net income per share:
 
       Basic                                               8,007       4,798
       Diluted                                             8,834       6,283
 
     Proforma net income per share:
     2000 Proforma reflects adjustments to after-tax
     interest expense and shares outstanding as if
     IPO occurred at beginning of 1999
 
     Net income                                           $1,992      $2,195
 
     Net income per share:
 
     Basic                                                 $0.25       $0.27
     Diluted                                               $0.23       $0.25
 
     Shares used to calculate net income per share:
 
     Basic                                                 8,007       8,007
     Diluted                                               8,834       8,834
 
 
      Rockford Corporation
      Consolidated Balance Sheets
      At March 31, 2001 and December 31, 2000
      ($000s)
 
                                                      March 31,   December 31,
                                                        2001          2000
     ASSETS
 
     Current assets:
       Cash                                            $1,938         $2,750
       Accounts receivable, net                        33,286         28,488
       Inventories, net                                20,279         20,406
       Prepaid expenses and other current assets        7,671          5,687
 
        Total current assets                           63,174         57,331
 
     Property and equipment, net                        6,603          5,996
     Goodwill, net                                      2,233          2,275
     Other long term assets                             2,710          1,316
 
        Total assets                                  $74,720        $66,918
 
 
     LIABILITIES AND STOCKHOLDERS' EQUITY
 
     Current Liabilities:
       Accounts payable                               $10,893         $7,118
       Notes payable and current portion of
        long term debt                                    802            935
       Accrued warranty                                 4,789          4,621
       Other accrued liabilities                        9,540          7,478
 
        Total current liabilities                      26,024         20,152
 
     Long term liabilities                                355            434
 
        Total liabilities                              26,379         20,586
 
     Stockholders' equity:
       Common stock                                        81             80
       Additional paid-in-capital                      29,632         29,504
       Retained Earnings                               18,685         16,695
       Treasury Stock                                      (6)
       Accumulated other comprehensive income             (51)            53
 
        Total stockholders' equity                     48,341         46,332
 
        Total liabilities and stockholders' equity    $74,720        $66,918
 
 SOURCE  Rockford Corporation