Binks Sames Announces Higher First Quarter Income
13 April 1999
Binks Sames Announces Higher First Quarter Income; Moves Forward with Sale Process
FRANKLIN PARK, Ill., April 13 -- Binks Sames Corporation
(Amex: BIN), soon to be renamed Sames Corp., today reported net income from
continuing operations of $604 thousand, or $.20 per share, for the first
quarter of fiscal 1999 ended February 28, 1999, compared to net income from
continuing operations of $79 thousand, or $.03 per share, in the first quarter
of fiscal 1998. Sales in the first quarter were $17.8 million compared to
$32 million in the prior-year period. The decline in sales was primarily
attributable to decreased sales of higher volume, lower margin, large
automotive installations by the Company's French subsidiary relative to the
first quarter of fiscal 1998. Gross margin increased from 24.2 percent to
45.5 percent, a reflection of the improved sales mix in the quarter dominated
by higher margin standard products and spare parts.
Arnold H. Dratt, President and Chief Executive Officer, said, "Our earlier
forecast that full-year income from continuing operations will be at least
25 percent higher than reported for 1998 remains unchanged. Automotive
business globally has strengthened considerably in the second quarter, and our
automotive order book at this time is very close to meeting our annual goal.
We are also very encouraged by the currently concluding validation testing of
our new robotic and fixed rotary paint atomizer (PPH 607), we expect will
substantially reduce costs for automotive manufacturers because of its higher
transfer efficiency.
"With the addition to our management team of Philippe Vuillerme, who was
recently named managing director in Grenoble, France, we expect that our
programs targeted at significant cost reductions and reduced manufacturing
cycle times will be fully realized in less time than originally planned."
Dratt said. "Both programs will substantially benefit our customers and our
bottom line." Vuillerme, 46, an engineer by training, was most recently a
senior officer of Avery Dennison in Europe. In that position, he was
responsible for purchasing and supply chain management, as well as key
accounts, and he has had similar responsibilities with prior companies,
including Procter & Gamble.
Dratt noted that the Company is responding to the lawsuit filed by ITW
related to ITW's purchase of the Company's "standard products" business last
October. In addition, the Company and ITW are attempting to resolve various
issues through mediation. The Company has suspended its discussions with its
strategic alliance partners pending resolution of the ITW matters.
Dratt commented on the Company's initiative announced March 29, 1999, to
continue to explore strategic alternatives with its financial advisor, William
Blair & Company. He indicated that Blair is exploring strategic alternatives
and that the Company's Board of Directors will recommend a transaction if it
is in the best interest of stockholders.
Binks Sames is engaged in the design, manufacture and sale of high-quality
spray finishing and coating application equipment. The Sames business is
noted for its global leadership position in electrostatic finishing equipment
for the automotive finishing market and for the general industrial finishing
market.
(Statements regarding the Company's future operating performance and
strategic alternatives and alliances constitute "forward-looking statements"
within the meaning of Section 21E of the Securities Exchange Act of 1934, and
are subject to the safe harbor created thereby. Although the Company believes
that the expectations reflected in such forward-looking statements are
reasonable, it can give no assurance that such expectations reflected in such
forward-looking statements will prove to be correct. Important factors that
could cause actual results to differ materially from the Company's
expectations include, without limitation, general economic and market
conditions, competitive factors, implementation of manufacturing programs,
results of testing and validation programs, the ability to enter into
strategic alliances, the outcome of the ITW litigation and mediation and the
ability of the Company to identify potential purchasers and to negotiate
definitive purchase agreements. No assurance can be given that the
forward-looking statements will prove to be correct.)
Binks Sames Corporation and Consolidated Subsidiaries
Consolidated Statements of Operations
Three months ended February 28, 1999 and February 28, 1998
(Unaudited)
For the three
months ended
Feb.28 Feb. 28
1999 1998
($000 omitted)
Net sales $17,776 31,954
Cost of goods sold 9,682 24,231
Gross profit 8,094 7,723
Selling, general and administrative expenses 6,688 6,518
Research and development costs 994 940
Operating income 412 265
Other expense (income):
Interest expense 351 150
Other expense (income), net (530) 159
(179) 309
Income (loss) from continuing operations
before income taxes 591 (44)
Income tax benefit 13 123
Income from continuing operations,
net of tax 604 79
Loss from discontinued operations, net of tax (1,190) (3,738)
Net loss $(586) (3,659)
Income (loss) per share - basic
Continuing operations .20 .03
Discontinued operations (.40) (1.26)
Net loss (.20) (1.23)
Income (loss) per share - diluted
Continuing operations .20 .03
Discontinued operations (.40) (1.24)
Net loss (.20) (1.21)
Weighted average shares:
Basic 2,964 2,964
Effect of stock options 8 40
Diluted 2,972 3,004