Milwaukee-based Jason Industries Inc. narrowed its losses in the fourth quarter and attributed revenue declines to lower demand from motorcycle and rail car end markets.
The company reported a fourth quarter net loss of $60.4 million or $2.69 per share, an improvement over the $70.4 million, or $3.20 per share, loss during the same period in 2015. Revenue in the quarter was down 8.6 percent to $158.8 million.
Brian Kobylinski, Jason chief executive officer, said the company’s seating and components businesses were down significantly because of lower motorcycle and rail car demand, although the declines were within expectations.
Jason is made of seating, finishing, components and automotive acoustics manufacturers. Milsco, the company’s seating business, is also based in Milwaukee with manufacturing and satellite offices in Redgranite, Wiscosnin; Michigan; Georgia; Mexico and the United Kingdom.
The seating segment reported $32.1 million in sales for the quarter, down from $36.7 million the previous year.
Kobylinski also said the seating business is the one segment where the company has a lot of work remaining. While operational performance remains strong at Milsco, he said there are sporadic supply chain and quality issues to address, particularly in turf care.
Jason has been undergoing significant restructuring over the last year. The company is targeting $30 million in savings over three years. That includes $10 million from restructuring its selling, general and administrative functions, a figure that has already been exceeded. Another $20 million is expected from operations improvements and footprint rationalization.
Kobylinski said there are opportunities to reclaim 20 percent of the footprint in nearly every facility and he expects there to be two or three major projects a year moving forward.
“There is significant opportunity for lean transformation at Jason,” he said.
For the full year, the company reported a net loss of $66.9 million, or $3.13 per share. The result was an improvement over 2015’s net loss of $74.5 million or $3.53 per share. Revenue for the year was down 0.4 percent to $705.5 million.
The company forecasted its revenue would be $650 million to $670 million in 2017, although it also project adjusted EBITDA would increase slightly from $64.2 million to a range of $64 million to $67 million. Operational improvements and cost reductions were expected to drive that increase, even as volumes continued to decline