Trico Products Corp., buoyed by a sharp jump in earnings from its plants in the United States and Mexico, said today that its profits nearly tripled during the first three months of this year.
The Buffalo-based windshield wiper manufacturer said the improvement in its North American operations offset continued losses from its British business and a break-even performance from its Australian unit.
As a result, the company said its profits rose 197 percent to $2.09 million, or $1.11 per share, from $701,000, or 38 cents per share, a year ago.
It was the first time the company's operations had been profitable since the second quarter of last year, although Trico was able to report a net profit during the fourth quarter because of one-time gains from the sale of stock.
Trico's revenues rose by 18 percent to $95.2 million from $80.5 million because of higher sales volumes and price increases that were instituted at the start of this year on some of its less profitable parts.
The company also has increased its market share so that it now provides more than two-thirds of the wiper arms and blades to car makers in North America. While car sales rose by 15 percent during the first quarter, Trico's sales volume increased by 26 percent as the company doubled its market share at one of its major accounts.
Trico also cut its costs, reducing its selling, general and administrative expenses by 14 percent to $7.1 million during the quarter from $8.2 million a year ago.
"We continue to become leaner and more efficient while providing greater value to our customers," said Richard L. Wolf, Trico's chairman, president and chief executive officer.
The biggest improvement came from the company's North American operations, including its Buffalo plant. Trico's North American operations had their best quarter since at least 1971, Dunstan said.
"We're much more pleased with the Buffalo operation, and that's the first time we can say that since 1986," said Christopher T. Dunstan, the company's vice chairman.
The quality and profitability of the Buffalo plant have improved, while its delivery schedules have become more reliable, he said.
Part of the reason for that improvement is the company's decision last fall to move its metal-stamping and heading operations from Buffalo to Brownsville, Texas, he said. Union officials had tried to stop the move through arbitration, but a hearing on the issue has been put off while the company and union leaders try to negotiate a settlement.
The company's Mexican operations also have improved, with less overtime, better productivity and fewer parts lost as scrap, Wolf said. Trico also is adding new painting equipment to its plant in Matamoros, Mex., which the company thinks will make those operations more efficient.
But Trico's other operations struggled during the first quarter. It's British operation had an operating loss of $600,000, compared with an operating profit of $400,000 a year ago. "The economy has been down for a couple of years and the decline in volume has more than offset the improvement in productivity from our new plant," Dunstan said.
Because the new British plant is running below capacity, the company is seriously considering the possibility of shifting some extra production work from North America over to its Wales factory, Dunstan said.
The first type of work that might be shifted to the British plant would come from outside companies that now produce parts for Trico. Dunstan said the company could make those parts itself in Britain.
The company also may shift some work to the British plant if that facility could make a particular part or system that was being produced at peak capacity in North America. That way, Trico would not have to buy additional machinery to meet the higher demands, Dunstan said.
Trico's Australian operation broke even during the quarter, partly because of lower sales to North America and a season plant shutdown.