Hein-Werner Reports Second Quarter Results
31 July 1997
Hein-Werner Reports Second Quarter Results
WAUKESHA, Wis., July 31 -- Hein-Werner Corporation
(Amex: HNW) today reported results for the second quarter and six months ended
June 28, 997.
Net sales from continuing operations for the second quarter of 1997 were
$10.0 million, approximately the same as for the second quarter of 1996. The
Company reported net earnings from continuing operations of $339,000 compared
with net earnings of $462,000 in 1996. Net income after adjustment for
discontinued operations was $6.0 million in the second quarter of 1997.
For the six months ended June 30, 1997, net sales from continuing
operations were $19.6 million compared with $20.6 million for the first six
months of 1996. Net earnings from continuing operations for the first six
months of 1997 were $690,000 compared with $1.2 million for the prior year
period. Net income after adjustment for discontinued operations was $6.3
million in the first six months of 1997.
Joseph L. Dindorf, President and Chief Executive Officer, said, "During
the second quarter of 1997, we proceeded to complete the second of two major
divestitures, which will allow Hein-Werner to accomplish a strategic
repositioning of its business. In May, we completed the sale of Great Bend
Industries, our fluid power business, to Kaydon Corporation at a premium value
of approximately $22.5 million in cash. In June, we announced that we had
signed a letter of intent to sell Winona Van Norman, our engine rebuilding
division, which has been struggling to emerge from weak U.S. market conditions
over the past several years. The Winona Van Norman sale is expected to close
in August 1997, and the cash from this sale, along with the cash generated by
the Great Bend sale, will strengthen significantly Hein-Werner's balance
sheet. When these transactions are completed, we expect to have over $3.00
per share in cash, net of related income tax, to invest in the business."
Dindorf continued, "The Company's core collision repair business is having
another good year, following a record year in 1996. North American sales and
earnings for the second quarter were up. Our international sales for the
second quarter and for the first half of 1997 were down slightly from 1996,
due to the weak business conditions which prevail in most of Western Europe,
particularly France. We expect to absorb some costs for the rest of the year
associated with the first quarter consolidation of certain European sales
facilities. Sales in Eastern Europe and the Far East are strong, and we
expect this trend to continue for the balance of the year."
Dindorf concluded, "For a number of months, we have been conducting long-
range planning designed to reposition Hein-Werner's activities for the future.
We are looking at a range of potential strategic and smaller product line
acquisitions to enhance our market-leading collision repair business. Our
intent is to use the cash from our recent divestitures to expand into markets
which are counter-cyclical to the automotive industry. This will provide the
Company with the ability to maintain long-term stability and growth over the
course of future business cycles and fluctuating economic conditions. Our
goal is to position Hein-Werner for solid growth potential on a global scale,
and the Company's current financial strength gives us the flexibility and
confidence to pursue this objective."
Hein-Werner Corporation is the leading worldwide manufacturer and marketer
of collision repair equipment. The company has manufacturing operations and
sales offices in the United States and Europe with distribution channels
throughout the rest of the world.
HEIN-WERNER CORPORATION
Consolidated Statements of Operations
(unaudited)
(In thousands, except per share amounts)
Three Months Ended Six Months Ended
June 28, June 29, June 28, June 29,
1997 1996 1997 1996
Net sales $10,040 $10,005 $19,639 $20,585
Cost of sales 5,405 5,299 10,570 10,858
Gross profit 4,635 4,706 9,069 9,727
Selling, general and
administrative expenses 4,114 4,021 8,044 8,208
Operating profit 521 685 1,025 1,519
Interest expense, net 31 141 114 291
Other (income) expense, net 78 (21) 88 (58)
Income from continuing operations,
before income tax 412 565 823 1,286
Income tax expense 73 103 133 120
Net income from continuing
operations 339 462 690 1,166
Discontinued businesses:
Income (loss) from operations of
discontinued businesses, net of
related income tax (154) 20 (235) 96
Gain on disposal of discontinued
businesses, net of related
income tax 5,844 -- 5,844 --
Net income $6,029 $482 $6,299 $1,262
Earnings per share from continuing
operations - primary (A) $0.12 $0.16 $0.24 $0.42
Earnings per share from discontinued
operations - primary (A) 1.99 0.01 1.98 0.03
Earnings per share - primary
(A) $2.11 $0.17 $2.22 $0.45
Average shares outstanding 2,860 2,800 2,838 2,788
(A) Earnings per share data has been adjusted to give effect to the 5%
stock dividend paid January 24, 1997.
SOURCE Hein-Werner Corporation