National-Standard Company Reports First Quarter Results
28 January 2000
National-Standard Company Reports First Quarter Results
NILES, Mich., Jan. 27 -- National-Standard Company
(Amex: NSD) announced a net loss for the first quarter of fiscal year 2000 of
$4.3 million or 75 cents per share versus a net income of $.5 million or 9
cents per share for the same period last year. The $4.8 million decrease in
income from the same period last year reflects non-recurring charges taken in
the first quarter this year, along with softer than expected sales.
During the first quarter, the Company recorded a $1.3 million charge for
severance and pension charges related to a realignment of organizational
responsibilities. In conjunction, several new executive appointments were
made as well as other management realignments within the business units. "We
believe that the moves made as part of the realignment were the right things
to do in order to give the business units more control and focus within their
operations and to provide the necessary leadership for the successful
performance of the Company," said R. B. Kalich, President and Chief Executive
Officer.
Additionally, the Company recorded a $1.5 million charge to reserve for
the likely uncollectibility of notes receivable from the March 1999 sale of
its former facility in Kidderminster, United Kingdom. In early January 2000,
the Company learned that those operations had been placed in receivership but
are continuing to operate while a buyer is sought. According to Kalich, "We
will be monitoring this situation closely to insure that our carbon steel wire
technology and rights to use certain National-Standard trade names and marks
that were licensed as part of the original sale are protected."
Sales for the first quarter of fiscal year 2000 were $38.2 million,
compared to $52.6 million for the same period last year. Last year's sales
include $6.1 million from the Kidderminster, United Kingdom operation and $1.3
million of sales from the non-air bag wire cloth product lines which were sold
in February of 1999. Excluding the $6.1 million of sales from Kidderminster
and the $1.3 million of non-air bag wire cloth, sales declined $7.0 million or
15.4% from last year.
Sales of wire products declined 9.5% in the first quarter from last year
due primarily to lower selling prices, the inability to recover weld wire
sales lost last year due to the closure of the Canadian facility, and
inventory adjustments taken by several customers over the holidays.
Sales of Engineered products declined 28.6% from last year, excluding the
divested product lines. The reason for the decline is primarily due to lower
unit prices for new air bag inflator filter constructions and extended
shutdowns taken by several customers over the holidays.
According to Kalich, "Several major initiatives have been put in place to
not only recover the lost sales in weld wire from last year but to pick up new
business in all business units. We feel that as a result of these actions, we
should start seeing positive results by the second half of the fiscal year."
Founded in 1907, National-Standard is a Niles, Michigan based firm with
annual sales of approximately $180 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 initiatives put in place to
recover lost weld wire sales and to increase sales in all business units, with
the expectation that improved results will be seen in the second half of the
fiscal year.
The ability of the Company to achieve these improvements is subject to
risks and uncertainties, including, but not limited to, the impact of
competitive products and pricing, changes in product demand by customers,
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:
January 2 January 3
2000 1999
Net Sales $38,186 $52,574
Operating Profit (3,506) 1,504
Net Income (4,324) 512
Basic and Diluted Earnings per Share (.75) .09
Basic and Diluted Weighted Average Shares
Outstanding 5,730,176 5,485,099