Secom General Reports Fiscal Q2 Loss
14 May 1998
Secom General Reports Fiscal 2nd Quarter Loss; Includes Nonrecurring Restructuring Charges at Uniflow Unit - Profitability Expected in Fiscal 4th Quarter
NOVI, Mich., May 14 -- Secom General Corporation
as indicated earlier, today reported a net loss of
($3,919,600), or (73 cents) per share, on sales of $8,545,000 for its fiscal
second quarter ended March 31, 1998, compared to net income of $227,300, or
four cents per share, on sales of $9,190,700 in the same quarter last year.
For the six months ended March 31, 1998, the Company reported a net loss of
($4,832,400), or (90 cents) per share, on sales of $16,899,100, compared to
net income of $93,900, or two cents per share, on sales of $17,234,600 in the
same prior year period.
A significant portion of the March 31, 1998 second quarter loss is
attributable to nonrecurring restructuring charges recorded at the Company's
Uniflow unit. This resulted from management's decision to refocus that
business around its profitable press forging capabilities and related
secondary machining, according to Robert A. Clemente, Secom's president and
chief executive officer.
"Management has made significant progress in implementing the major steps
of the Uniflow restructuring. The sale of the FX 1250 cold former was
completed in March and the consolidation of equipment into two facilities from
three is on schedule for completion in June," said Mr. Clemente. He added
that the Company would sell one of the Uniflow buildings in connection with
the restructuring.
The Company also completed the sale of its brake fluid valve machining
business in March 1998, which accounted for over 90% of product sales from the
Company's Milford Manufacturing subsidiary, according to Scott J. Konieczny,
Secom's controller. The Milford business operated under the "Production
Machining" segment which is now shown as a discontinued operation, added
Mr. Konieczny.
"We expect an improvement in operating results in our third quarter and a
return to profitability in our fourth quarter," said Mr. Clemente, "resulting
from the significant cost reductions being implemented at Uniflow and the
elimination of Milford's continuing losses."
Separately, the Company announced that David J. Marczak has resigned all
of his positions with the Company to pursue other business interests.
Mr. Marczak was a director of the Company, its secretary and chief
financial officer. Scott Konieczny, controller, has assumed the duties of
principal accounting officer. Mr. Marczak will consult with the Company over
a six-month period to ensure an orderly transition of duties.
Secom operates in two business segments: metal parts forming and tooling
for the cold/hot forming industry. Sales and manufacturing are completed
through four subsidiaries located in the metropolitan Detroit area.
SECOM GENERAL CORPORATION
(UNAUDITED)
SECOND QUARTER ENDED
Mar 31 1998 Mar 31 1997(a)
NET SALES $8,545,000 $9,190,700
COSTS OF SALES 7,625,900 7,656,900
RESTRUCTURING CHARGE 900,000 -
GROSS PROFIT 19,100 1,533,800
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 1,616,900 1,717,300
RESTRUCTURING CHARGES 1,762,000 -
OTHER 261,700 230,600
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES (3,621,500) 131,900
INCOME TAX BENEFIT (EXPENSE) 322,700 (46,900)
INCOME (LOSS) FROM CONTINUING
OPERATIONS (3,298,800) 85,000
INCOME (LOSS) FROM DISCONTINUED
OPERATIONS (620,800) 142,300
NET INCOME (LOSS) ($3,919,600) $227,300
EARNINGS (LOSS) PER COMMON SHARE:
Income (loss) from continuing
operations ($0.62) $0.01
Income (loss) from operations
of discontinued operations (0.11) 0.03
BASIC AND DILUTED INCOME (LOSS) PER
COMMON SHARE ($0.73) $0.04
BASIC AND DILUTED WEIGHTED AVERAGE
SHARES OUTSTANDING 5,335,400 5,480,400
SIX MONTHS ENDED
Mar 31 1998 Mar 31 1997(a)
NET SALES $16,899,100 $17,234,600
COSTS OF SALES 14,918,500 14,544,400
RESTRUCTURING CHARGE 900,000 -
GROSS PROFIT 1,080,600 2,690,200
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 2,934,500 2,387,100
RESTRUCTURING CHARGES 1,762,000 -
OTHER 549,500 456,000
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES (4,165,400) (152,900)
INCOME TAX BENEFIT (EXPENSE) 404,700 48,300
INCOME (LOSS) FROM CONTINUING
OPERATIONS (3,760,700) (104,600)
INCOME (LOSS) FROM DISCONTINUED
OPERATIONS (1,071,700) 198,500
NET INCOME (LOSS) ($4,832,400) $93,900
EARNINGS (LOSS) PER COMMON SHARE:
Income (loss) from continuing
operations ($0.70) ($0.02)
Income (loss) from operations
of discontinued operations (0.20) 0.04
BASIC AND DILUTED INCOME (LOSS) PER
COMMON SHARE ($0.90) $0.02
BASIC AND DILUTED WEIGHTED AVERAGE
SHARES OUTSTANDING 5,346,100 5,488,500
(a) Amounts restated to reflect discontinued operations.
SOURCE Secom General Corporation