Simula Inc. Comments on Outlook for Fourth-Quarter 1999 and Fiscal 2000
7 January 2000
Simula Inc. Comments on Outlook for Fourth-Quarter 1999 and Fiscal 2000
PHOENIX--Jan. 7, 2000--Simula Inc. today said that, pursuant to a recently announced sale of assets and recapitalization that together are expected to increase working capital by approximately $6 million, the company expects to be solidly profitable in fiscal 2000.On Jan. 4, 2000, Simula announced an agreement to sell substantially all the assets of Airline Interiors Inc. (a wholly owned subsidiary engaged in the manufacture of 16g commercial airliner seats) for approximately $22 million in cash and assumed liabilities; the procurement of a new $22 million credit facility; and the private placement of $20 million in secured senior notes.
The sale of Airline Interiors, noted Donald W. Townsend, president and CEO of Simula, will result in a substantial charge to fourth-quarter 1999 earnings, the extent of which will not be known until the sale has closed and post-closing adjustments and year-end results have been determined. The transaction, which is subject to federal anti-trust review, is expected to close in late January 2000.
"With the disposition of Airline Interiors," said Townsend, "the company looks forward to focusing on its core businesses, notably automotive safety systems and government and defense contracting.
"These businesses were profitable in the fourth quarter of 1999, and -- absent the fourth-quarter operating results of Airline Interiors and the charge to fourth-quarter earnings -- the company as a whole would have been profitable in the quarter just ended, as well as for the entire year."
In the first three quarters of 1999, the company reported diluted earnings per share of $0.04, $0.06 and $0.09, respectively.
Townsend noted that Simula has not exited the airline seating business entirely, for although with the sale of Airline Interiors the company will cease manufacturing 16g seats, it retains Artcraft Industries Corp. ("Artcraft Atlanta"), a wholly owned subsidiary that is a leader in the "soft goods" refurbishment of commercial aircraft seats.
"Artcraft Atlanta is a solidly profitable subsidiary whose performance -- like that of all our operations -- will, of course, continually be evaluated to ensure alignment with the company's overall strategic objectives," said Townsend.
Simula is a leader in developing and commercializing protective systems and energy absorption technologies that safeguard human lives. Products include advanced occupant seating and restraint systems for military and automotive applications. Additional information may be found at www.simula.com.
Statements made in this news release, including forward-looking statements concerning the anticipated completion of the sale of the assets of Airline Interiors Inc., an anticipated charge against fourth-quarter 1999 earnings and anticipated operating results in the fourth-quarter of 1999, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties that may cause results to differ materially from those set forth in such statements. Other factors that may cause actual results to differ from anticipated results include those described in the company's registration statements and periodic reports filed with the U.S. Securities and Exchange Commission.