National-Standard Company Reports 1998 Results
19 November 1998
National-Standard Company Reports 1998 Results
NILES, Mich., Nov. 18 -- National-Standard Company
announced fourth quarter sales for fiscal 1998 were $54.9 million,
compared to $60.1 million reported for fiscal 1997. Net loss for the quarter
was $7.2 million or $1.35 per share, including the $7.7 million fourth quarter
charge taken to realign operations and reduce staff, compared to a net income
of $0.7 million or $0.13 per share in 1997.
During the fourth quarter of 1998, the Company recorded a charge of $6.2
million to consolidate its North America wire manufacturing by closing the
Guelph, Ontario facility and relocating certain equipment to the Stillwater,
Oklahoma and Niles, Michigan facilities. The Guelph facility employed 93
people during 1998. The charge includes 1999 cash outlays of $3.4 million,
primarily for employee related, environmental and lease termination costs.
The Company will also incur $1 million of costs to relocate certain equipment
from Guelph to Stillwater and Niles during 1999. These costs are not included
in the 1998 charge in accordance with current generally accepted accounting
principles. The Company further provided an additional $1.5 million charge to
reduce support staff in North America by 40 employees and exit certain non air
bag related wire cloth product lines.
"Without the $7.7 million charge in the fourth quarter, we would have
reported $.5 million of profit in the quarter and $1.0 million for the year,"
said Michael B. Savitske, President and Chief Executive Officer. "Given the
significant negative impact from the GM strike on all of our product lines,
the quarter's result was better than our expectations. The actions we've
taken to close the Guelph facility, sell the U.K. wire operation and reduce
administrative costs should significantly improve the company's results going
forward."
For fiscal year ended September 30, 1998, the Company reported on a
consolidated basis a net loss of $6.7 million or $1.27 per share, compared to
a net loss of $9.0 million, or $1.71 per share in 1997. Sales for the year
were $225.5 million, a nine percent decrease from sales of $247.8 million
reported in fiscal 1997.
The loss in Fiscal 1997 includes a $9.9 million, or $1.87 per share,
charge taken in the second quarter for restructuring the Company's wire
operations in the United Kingdom. During 1998, the Company's wire operations
in the United Kingdom incurred a loss of $1.7 million, as declining selling
prices more than offset any improvement from the 1997 restructuring. The
Company has previously announced its intention to sell the U.K. wire
operations.
The decrease in sales in 1998 was due in part to lower sales in the United
Kingdom subsidiary, a direct result of the restructuring in the U.K. during
Fiscal 1997 and lower prices in 1998. In North America, sales declined in the
air bag inflator filtration products and rubber reinforcement products
segments. The decline in air bag products follows the decision to limit the
sale of certain lower margin wire cloth products. The decline in products is
due primarily to lower selling prices. These declines, however, were
partially offset by a five percent increase in weld wire sales over the
previous year.
Founded in 1907, National-Standard is a Niles, Michigan based firm with
annual sales of approximately $225 million. In ten operating facilities
throughout the world, the Company manufactures and distributes a broad range
of wire and wire-related products, including tire bead wire and welding wire,
in addition to wire cloth, fabricated filters and inflator housings for the
automotive air bag industry.
This press release contains forward looking statements, within the meaning
of the Private Securities Litigation Reform Act of 1995, relating to future
improvements in the Company's results based upon actions taken with respect to
its Guelph and U.K. wire facilities and the reduction of administrative costs.
The ability of the Company to achieve such future improvements, however, is
subject to risks and uncertainties, including, but not limited to, the impact
of competitive products and pricing, changes in product demand by customers,
industry overcapacity, availability and cost of raw materials and changes in
economic conditions. Should any one or more of these risks or uncertainties
materialize, actual performance results may vary materially. The Company does
not intend to update these forward looking statements.
Financial Highlights
National-Standard Company and Subsidiaries
($000 except per share amounts)
For three months ended September 30: 1998 1997
Net Sales $54,900 $60,061
Operating Income/(Loss) (6,555)A. 1,721
Net Income/(Loss) (7,231)A. 696
Income/(Loss) Per Share (1.35) .13
Average Shares Outstanding 5,351,737 5,224,613
For year ended September 30: 1998 1997
Net Sales $225,495 $247,763
Operating (Loss) (3,579)A. (4,697)B.
Net (Loss) (6,699)A. (8,990)B.
(Loss) Per Share (1.27) (1.71)
Average Shares Outstanding 5,262,561 5,265,770
A. Includes a one-time charge of $7,700 for the Guelph closure and the
reorganization in the U.S.
B. Includes a one-time charge of $9,850 related to the restructuring of
operations in the United Kingdom.