National-Standard Company Reports First Quarter Results
29 January 1999
National-Standard Company Reports First Quarter Results
NILES, Mich. Jan. 28 -- National-Standard Company
announced net income for the first quarter of fiscal year 1999 of $.5 million
or 9 cents per share versus $.2 million or 4 cents per share for the same
period last year. The $.3 million increase in income over last year reflects
the net positive impact of the 1998 restructuring in U.S. operations,
partially offset by worse results for wire operations in Guelph, Canada and
Kidderminster, England
During 1998, the Company recorded a charge in the fourth quarter of
$7.7 million to consolidate its North American wire manufacturing by closing
its Guelph, Ontario facility and relocating certain equipment to its
Stillwater, Oklahoma and Niles, Michigan facilities, consolidation of wire
cloth manufacturing and reduction in salaried employment levels. At that
time, the Company announced that it would incur approximately $1.0 million of
cost to relocate equipment in 1999. For the first three months of 1999, the
Company incurred expenses of approximately $.3 million related to equipment
moves and expects to incur the remaining $.7 million in the second quarter.
"The restructuring announced in 1998 is progressing on plan," said M. B.
Savitske, President and Chief Executive Officer. The Canadian facility ceased
production in December and equipment to be relocated is being moved. The
reductions in administrative support personnel were essentially completed in
the first quarter. A definitive offer to purchase the Kidderminster wire
operations has been received and accepted. Closing on the sale is scheduled
for February 15, 1999. The sale of non-air bag related wire cloth product
lines previously manufactured in Corbin, Kentucky was finalized in December
1998 and January 1999, with the proceeds used to reduce debt.
For the quarter, the Guelph operation incurred losses from operations
prior to its closure of approximately $.5 million, compared to losses of $.3
million in 1998, while the wire manufacturing facility in Kidderminster
incurred losses of approximately $.8 million, compared to income of $.2
million in 1998. Sales in the quarter were $1.2 million lower than in the
same period last year. Excluding the losses from the two international
operations and the $.3 million expense for equipment moves, the net income for
the Company's remaining operations would be $2.1 million for the quarter,
compared to $.4 million for the same period last year.
Sales for the first quarter of fiscal year 1999 were $52.6 million,
compared to $56.9 million for the same period last year. International and
domestic sales in the quarter were adversely affected by the slowdown in the
Asian economy and the depressed domestic agricultural equipment market.
During the first quarter of fiscal 1999, the Company contributed 255,000
shares of National-Standard common stock to the National-Standard Pension
Master Trust. The action brings the total shares outstanding to 5,718,759.
The Pension Master Trust holds 1,963,175 shares of National-Standard common
stock, 34% of the total shares outstanding.
Founded in 1907, National-Standard is a Niles, Michigan based firm with
annual sales of approximately $225 million. In nine operating facilities in
the United States and England, 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 may contain 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
(Dollars in thousands except per share amounts)
For three months ended:
January 3 December 28
1999 1997
Net Sales $52,574 $56,941
Operating Profit 1,504 925
Net Income 512 206
Basic and Diluted Earnings
per Share .09 .04
Average Shares Outstanding 5,485,099 5,228,644