SOURCE: New Century Companies Inc.

November 15, 2005 08:30 ET

New Century Cos. Reports 37.5% Revenue Growth, 12-Cent EPS Swing in Third Quarter

Machine-Tool Firm Expects Profitability to Continue Amid Strong Demand From Energy, Transportation, Aerospace and Other Sectors

LOS ANGELES, CA -- (MARKET WIRE) -- November 15, 2005 -- New Century Companies, Inc. (OTC BB: NCNC), a leading manufacturer and re-manufacturer of machine tools, today announced financial results for the third quarter and nine months ended September 30, 2005. Rising demand for New Century's vertical turning centers (VTC) pushed sales to a 37.5% year-over-year gain, while earnings per share had a 12-cent positive swing over the same period. The Company said it expects profitability and the current strong sales pace to continue in the fourth quarter of 2005.

Net sales for the third quarter ended September 30, 2005, totaled $1.60 million, up 37.5% from $1.17 million in the third quarter of 2004. The company said the increase was primarily due to a sharp rise in orders for its remanufactured VTCs, a type of large vertical lathe. During August and September 2005, New Century reported $2.74 million in new VTC orders, with part of that amount booked in the third quarter and the remainder to be recognized in the fourth.

For the nine months ended September 30, 2005, net sales were $4.24 million, up 13.95 from $3.73 million in the first nine months of 2004.

Operating Income, EPS Show Sharp Positive Swing

Improving year-over-year gross margins (to 37.2% from negative 17.6%) and reduced operating expenses enabled New Century to achieve a positive swing of more than $849,000 in quarterly operating income. Operating income for the third quarter of 2005 was $347,625, compared to a loss of ($450,743) in the third quarter of 2004. Net income applicable to common shareholders in the third quarter of 2005 rose to $335,016 from a loss of ($531,780) in the third quarter of 2004.

Earnings per fully diluted share were $0.04 in the third quarter of 2005, up from a loss of ($0.08) in the third quarter of 2005. This positive swing of $0.12 was achieved despite a 32% year-over-year increase in the diluted weighted average number of common shares outstanding. Without this increase, EPS in the third quarter of 2005 would have been $0.05, for a positive swing of $0.13.

For the nine months ended September 30, 2005, gross margins improved to 31.9% from negative 4.8% in the first nine months of 2004. Operating income in the first nine months of 2005 was $449,193, up from an operating loss of ($1,160,851) in the same period of 2004. Net income applicable to common shareholders was $211,774 in the first nine months of 2005, compared to a loss of ($863,132) a year earlier. Earnings per fully diluted share had a positive swing of $0.15, to $0.03 in the first nine months of 2005 from a year-earlier loss of ($0.12).

CEO Notes Order Surge, Boom in Quote Requests

"This was a landmark quarter for New Century," said the Company's CEO David Duquette. "Not only did we return to solid profitability, but our year-over-year sales growth signaled a decisive end to the long nationwide slump in machine-tool demand. Also notable were the sharp improvement in gross margins, from negative in 2004 to strongly positive this year, and the positive impact of cost-cutting in operating expenses. As the latest figures show, New Century has come a long way over the past year, and we expect the good news of the third quarter to continue in the fourth. New orders and requests for quotes -- the latter a key indicator of future orders -- have both been up sharply in recent months."

The Company has reported a string of new orders and other positive financial events since the start of the third quarter. During August and September, New Century reported $2.74 million in new orders for VTCs. Since the start of the fourth quarter on October 1, 2005, it has reported an additional $950,000 in VTC orders. Revenue from the August-September orders was recognized beginning the third and ending in the fourth quarter. Revenue from the orders after October 1 will be booked in the fourth quarter of 2005 and the first quarter of 2006.

In addition to new orders, New Century announced in October that its cash flow now was sufficient for it to meet its foreseeable capital needs without outside financing. It also said it expects to pay off existing notes payable by mid-2006, and that it plans to apply for exchange listing, on either the Amex or NASDAQ exchanges, during 2006. It reported that requests for quotes were running at the highest level in its history.

Continued Sales Strength, Profitability Seen

For the fourth quarter of 2005, New Century expects to remain profitable and to experience strong demand for its products, particularly remanufactured VTCs. It noted that VTCs have a wide range of machining applications in many industries, including energy production (oil and gas production, power generation and coal mining), defense and aerospace, surface transportation and construction.

About New Century Companies

New Century Companies, Inc. (OTC BB: NCNC) is one of the leading U.S.-based makers of machine tools, primarily vertical boring mills and large lathes such as vertical turning centers. It also assembles sound-wall modules made from Quilite®, a lightweight, graffiti-resistant alternative to concrete. In its machine-tool business, the Company specializes in re-manufacturing, starting with existing major castings and fitting them with state-of-the-art, computer-controlled equipment. These products generally cost 40% to 60% less to make than new ones. New Century passes these savings on to its customers, which include such leading manufacturers as General Electric Co., General Dynamics Corp., Siemens AG and Gardner Denver. New Century machines are used to manufacture jet-engine components, airplane landing gear parts, power generation equipment, oil and gas production components and construction materials, to name just a few applications. Quilite is used not only in freeway noise walls but in other sound-absorbing structures, including barriers at sports stadiums and electric transformers. New Century manufactures its machine tools and Quilite modules in Santa Fe Springs, Calif. Visit New Century's Web site at http://www.newcenturyinc.com

Forward-looking statement: Except for historical information, this press release contains forward-looking statements, which reflect the Company's current expectation regarding future events. These forward-looking statements involve risks and uncertainties, which may cause actual results to differ materially from those statements. Those risks and uncertainties include, but are not limited to, changing market conditions and other risks detailed from time to time in the Company's ongoing quarterly filings, annual information form, and annual reports. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events in this press release might not occur.

Contact Information

  • Contact:
    David Duquette, CEO
    New Century Companies, Inc.
    562-906-8455