Secom General Reports Fiscal Q3 Profit of 13 Cents Per Share
12 August 1999
Secom General Reports Fiscal Third Quarter Profit of 13 Cents Per Share
NOVI, Mich., Aug. 12 -- Secom General Corporation
today reported net income of $136,800, or $0.13 per share, on
sales of $6,693,200 for its fiscal third quarter ended June 30, 1999, compared
to a net loss of $948,900, or $0.89 per share, on sales of $7,879,100 in the
same quarter last year. For the nine months ended June 30, 1999, the company
recorded net income of $20,200, or $0.02 per share, on sales of $21,423,800,
compared to a net loss of $5,781,400, or $5.41 per share, on sales of
$24,778,200 in the same period of the prior year. Per share amounts and
shares outstanding have been restated to reflect a one-for-five reverse stock
split effective Apr. 14, 1999. Prior year results have been restated to
reflect discontinued operations.
"The improvement in operating results is principally due to our Uniflow
unit benefitting from continuing shop-floor cost containment steps, as well as
price increases implemented in the first fiscal quarter," said Paul D.
Clemente, Secom's vice president. "The tooling group's results also
benefitted from management's ability to control shop-floor labor and related
support costs," added Clemente.
Clemente said the company expects the profitable trend from continuing
operations to continue and include the fiscal fourth quarter ending Sept. 30,
1999.
"The company's financial position has improved substantially in the last
three months due to a $1 million 'good faith deposit' received from an
automotive OEM customer, along with the positive results from operations,"
said Scott J. Konieczny, Secom's chief financial officer. Konieczny added,
"The 'good faith deposit' is a partial recovery of the company's multi-million
dollar investment in a transmission shaft program, and we anticipate
completing negotiations with the customer over the next several months." He
also said the company believes a successful completion to these negotiations
would substantially improve Secom's financial position and could include the
recognition of a significant one-time gain.
Separately, the company reiterated that preliminary discussions with
potential buyers of all or pieces of the company suggest a higher overall
value for the company than its current stock price would indicate. Further,
it stated that such an assessment is supported by a comparison of the
company's book value of $7.87 per share as of June 30, 1999, compared with a
closing stock price of $4.12 on Aug. 10, 1999. However, the company noted, no
assurances can be made that a definitive purchase price would be at or above
the then current stock price.
Secom is a leading supplier of various metal parts and tooling for
primarily the automotive and trucking industries. Secom operates in
two business segments: (1) metal parts forming, and (2) tooling for the
cold/hot forming industry. Sales and manufacturing are completed through
four subsidiaries located in the metropolitan Detroit area.
This management's press release includes a number of forward-looking
statements, which reflects the company's current views with respect to future
events and financial performance. These forward-looking statements are
subject to certain risks and uncertainties that could cause results to differ
materially from historical results or those anticipated. In this release the
word "expects", "anticipates", "believes" and similar expressions identify
forward-looking statements, which speak only as to the date hereof.
SECOM GENERAL CORPORATION
(Unaudited)
Third Quarter Ended Nine Months Ended
June 30, June 30, June 30, June 30,
1999 1998(b) 1999 1998(b)
Net Sales $6,693,200 $7,879,100 $21,423,800 $24,778,200
Cost of
sales --
Production 5,229,000 7,066,300 17,460,700 22,164,600
Cost of
Sales --
Restructuring
Charges -0- -0- -0- 900,000
Gross Profit 1,464,200 812,800 3,963,100 1,713,600
Selling,
General and
Administrative
Expenses 1,094,900 1,335,200 3,366,600 4,089,900
Other
Restructuring
Charges -0- 400,000 -0- 2,162,000
Other 198,100 162,900 552,800 712,500
Income (Loss)
from Continuing
Operations before
Income Taxes 171,200 (1,085,300) 43,700 (5,250,800)
Income Tax
(Expense)
Benefit (34,400) 136,400 (23,500) 541,100
Income (Loss)
from Continuing
Operations 136,800 (948,900) 20,200 (4,709,700)
Loss from
Discontinued
Subsidiary -0- -0- -0- 1,071,700
Net Income
(Loss) $136,800 ($948,900) $20,200 ($5,781,400)
Earnings (Loss)
Per Common
Share (a):
Income (Loss)
from Continuing
Operations $0.13 ($0.89) $0.02 ($4.41)
Loss from Operations
of Discontinued
Subsidiary -0- -0- -0- ($1.00)
Basic and Diluted
Income (Loss) Per
Common Share $0.13 ($0.89) $0.02 ($5.41)
Basic and Diluted
Weighted
Average Shares
Outstanding(a) 1,064,900 1,067,100 1,066,200 1,069,200
(a) Per share amounts and share outstanding amounts restated to reflect a
one-for-five reverse stock split effective Apr. 14, 1999.
(b) Amounts restated to reflect discontinued operations.