National-Standard Company Reports Second Quarter Results
21 April 1999
National-Standard Company Reports Second Quarter Results
NILES, Mich., April 20 -- National-Standard Company
announced net income for the second quarter of fiscal year 1999 of
$2.1 million or 35 cents per diluted share versus a net income of $.1 million
or 2 cents per diluted share for the same period last year. The $2.0 million
increase in income over last year is due to the net positive impact of the
1998 restructuring in U.S. operations, the closure of the Guelph, Ontario
operation, and the sale of the Kidderminster, United Kingdom plant.
As reported on March 15, 1999, 100% of the wire operation at Kidderminster
in the United Kingdom was sold on March 12, 1999. The second quarter results
include both the quarter's operating loss up to the sale date of $.4 million
from the United Kingdom and a $.6 million gain on the transaction, a net
positive impact in the quarter of $.2 million compared to Kidderminster's last
year's second quarter net loss of $.2 million.
"We're very encouraged by our second quarter results," said M. B.
Savitske, President and Chief Executive Officer. "All restructuring
activities were completed in the first half of the fiscal year, and we have
now begun to experience the positive results we expected. Going forward, our
focus will remain on continuously improving our operating results through
manufacturing cost reductions and leveraging the benefits of our
restructuring."
During the second quarter, four restructuring activities were completed.
The Kidderminster wire operation was sold; the Guelph, Ontario plant was
closed and useful production capacity relocated to the Stillwater, Oklahoma
and Niles, Michigan plants; the weaving operation at the Corbin, Kentucky
plant was sold and relocated; and the administrative expense reductions were
fully implemented. The Company incurred $.7 million of expense in the quarter
in relocating equipment from Guelph. Excluding England's $.2 million net gain
and the non-recurring $.7 million of equipment relocation costs, the net
earnings for the quarter from the remaining businesses was $2.6 million
compared to a $.3 million result without Kidderminster in the year earlier
period.
For the first six months of 1999, net income was $2.6 million or 45 cents
per diluted share versus $.3 million, or 6 cents per diluted share in the same
period last year. The net income reported in the first half of the fiscal
year includes a net loss of $.6 million from the Kidderminster operation which
consists of a $1.2 million loss from operations offset by the $.6 million gain
from the sale of the unit. During the comparable period last year, the
Kidderminster operation was breakeven. In addition, the Company incurred $1.0
million of expense in the first six months of the fiscal year for the
relocation of the Guelph plant's wire manufacturing capacity. Without the
Kidderminster net loss of $.6 million and the $1.0 of the nonrecurring cost
for moving equipment, the Company would have recorded $4.2 million of net
income in the current six-month period, compared to $.3 million in the
comparable period last year.
Sales for the second quarter of fiscal year 1999 were $50.0 million,
compared to $58.0 million for the same period last year, while sales for the
six-month period ended April 4, 1999 were $102.6 million compared to $114.9
million in the first half of fiscal 1998. Sales in the current three- and
six-month periods include lower sales from Kidderminster of $2.9 million and
$4.0 million, respectively. Sales from other operations were also adversely
affected by the slowdown in the Asian economy, the depressed agricultural
equipment market, and lower sales of certain low margin wire cloth for
automotive air bag filtration applications. As anticipated, to date there has
been no reduction in sales of the Company's wire products as a result of the
discontinuation of production in Canada and consolidation of all wire
manufacturing activities in the United States.
Founded in 1907, National-Standard is a Niles, Michigan based firm with
annual sales of approximately $200 million. In eight 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 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, reduction of administrative costs, and
its continuous improvement programs. 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:
April 4 March 29
1999 1998
Net Sales $50,049 $57,959
Operating Income 3,050 954
Net Income 2,052 127
Basic Earnings Per Share .36 .02
Diluted Earnings Per Share .35 .02
Basic Average Shares Outstanding 5,727,537 5,233,542
Diluted Average Shares Outstanding 5,791,447 5,233,542
For six months ended:
April 4 March 29
1999 1998
Net Sales $ 102,623 $ 114,900
Operating Income 4,554 1,879
Net Income 2,564 333
Basic Earnings Per Share .46 .06
Diluted Earnings Per Share .45 .06
Basic Average Shares Outstanding 5,604,986 5,231,066
Diluted Average Shares Outstanding 5,646,267 5,231,066