National-Standard Company Reports $5.4 Million Income for 1999
17 November 1999
National-Standard Company Reports $5.4 Million Income for 1999
NILES, Mich., Nov. 17 /PRNewsire/ -- National-Standard (Amex: NSD)
reported today that net income in the fiscal year ended September 30, 1999
improved to $5.4 million compared to a loss of $6.7 million in fiscal 1998.
The improvement is due primarily to the execution of the 1998 restructuring
plan in 1999. The 1998 result includes the $7.7 million provision to
consolidate the North American wire operations into the Stillwater, Oklahoma
and Niles, Michigan plants, exit non-air bag wire cloth products and reduce
North American support staff. Without the charge in 1998, net income would
have been $1.0 million.
The 1999 results include a $0.6 million gain associated with the second
fiscal quarter sale of the Kidderminster, United Kingdom wire operations, and
a $0.7 million gain associated with recognition of previously unrecognized
gains associated with changes made to retiree health care benefits, offset by
$0.8 million of carrying value adjustments on idle assets, including the
Clifton, New Jersey site, valued at the lower of cost or net realizable value.
Sales in 1999 declined 19% to $182.9 million from $225.5 million in 1998.
A significant portion of the decrease, $17.1 million, resulted from the
divestiture of Kidderminster during the 1999 second fiscal quarter.
Sales of wire products declined $13.9 million from 1998 due to the
combined effect of lower selling prices on all product lines and lower weld
wire volumes. The transition of wire manufacturing capacity from Guelph,
Canada to the U.S. plants did not proceed at the planned rate. As a
consequence, weld wire delivery lead times extended, customers cancelled
orders, and weld wire sales declined. With the Guelph transition now
completed, lead times have been reduced. The Company anticipates recovering
its market position in 2000.
Sales of engineered products to the air bag inflator market declined $8.0
million due to lower unit selling prices on new filter products and lower
sales of certain low margin wire cloth filtration materials. As prices for
these products declined, the Company decided not to participate in some
segments of this market. Sales of divested non-air bag wire cloth products
were lower by $3.6 million in 1999 compared to 1998.
During the fourth fiscal quarter, sales declined to $38.7 million compared
to $54.9 million in the comparable period last year. The sales decline as
noted above is due to lower sales of $6.5 million as a result of the sale of
Kidderminster, lower wire product sales of $5.4 million, lower sales of
engineered products to the air bag inflator market of $3.0 million, and lower
sales of divested non-air bag wire cloth products of $1.3 million. Net income
in the 1999 fourth quarter improved to $0.4 million compared to a loss of $7.2
million in the fourth quarter last year. Included in results for the fourth
quarter of fiscal 1999 is a charge of $1.0 million to adjust the carrying
value of idle assets, including the Clifton, New Jersey site, valued at the
lower of cost or net realizable value. Last year's fourth fiscal quarter
results included the restructuring charge of $7.7 million.
"1999 was a year of change for National-Standard," said Michael B.
Savitske, Vice Chairman. "We closed the Canadian plant, sold the
Kidderminster wire operation and returned the Company to profitability. We
anticipate further change in 2000 as we transition our air bag materials
business to higher value added fabricated filters and expand our position in
inflator housings. The wire business, especially bead wire, remains as
competitive as I've ever seen it. Reaching our low cost producer targets will
be critical for continued success in these markets. While the GridShield(TM)
technology continues to generate a high level of interest, we do not yet have
any parts in production. However, we are working on a number of promising
opportunities, and the prospects for it becoming a new core business look
better every day."
Founded in 1907, National-Standard is a Niles, Michigan based firm with
annual sales of approximately $200 million. In ten 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 former Kidderminster wire facility, North American restructuring, reaching
low cost producer status in bead wire, acceptance of the GridShield(TM)
product line, recovery of market position in weld wire, transitioning to
higher value filters, and expanding inflator housing sales. The ability of
the Company to achieve 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 September 30:
1999 1998
Net Sales $ 38,656 $ 54,900
Operating Income/(Loss) 893 (6,555) (A)
Net Income/(Loss) 439 (7,231) (A)
Basic Earnings/(Loss) Per Share 0.08 (1.35)
Diluted Earnings/(Loss) Per Share 0.07 (1.35)
Basic Average Shares Outstanding 5,728,441 5,351,737
Diluted Average Shares Outstanding 5,866,939 5,351,737
For year ended September 30:
1999 1998
Net Sales $ 182,911 $ 225,495
Operating Income/(Loss) 8,463 (3,579) (A)
Net Income/(Loss) 5,363 (6,699) (A)
Basic Earnings/(Loss) Per Share 0.95 (1.27)
Diluted Earnings/(Loss) Per Share 0.93 (1.27)
Basic Average Shares Outstanding 5,666,972 5,262,561
Diluted Average Shares Outstanding 5,764,698 5,262,561
(A) Includes a one-time charge of $7,700 for the Guelph closure and the
reorganization in the U.S.