Brown & Sharpe Announces 4th Quarter 1999 Earnings
16 February 2000
Brown & Sharpe Announces 4th Quarter 1999 Earnings
NORTH KINGSTOWN, R.I.--Feb. 15, 2000--Brown & Sharpe Manufacturing Company today announced a net loss for the quarter ended December 31, 1999 of $16.8 million ($1.24 per share) on sales of $86.5 million compared to a net income of $6.6 million ($.49 per diluted share) on sales of $94.2 million for the same period in 1998. The fourth quarter results include a restructuring charge, net of taxes, of $11 million ($.81 per share) relating to the third in a series of restructuring initiatives implemented during 1999.Frank T. Curtin, Chairman, President and Chief Executive Officer said, "The fourth quarter charge was incurred to complete the restructuring of the European operations of the Precision Measuring Instruments Division ("PMI") begun in the first quarter of 1999. This reorganization has resulted in the consolidation of PMI manufacturing at Brown & Sharpe Tesa S.A. in Renens, Switzerland, eliminating four other factories and their associated costs and providing for greater production and administrative efficiencies."
The Company incurred a net loss of $42.9 million ($3.19 per share) on sales of $323.3 million for the year ended December 31, 1999 compared with net income of $11.9 million ($.88 per diluted share) on sales of $339 million in 1998. The 1999 loss included restructuring charges amounting to $36.8 million ($2.73 per share) for the restructuring of PMI and for the restructuring of the Custom Metrology Division in the United Kingdom and implementing a focused factory strategy in its Measuring Systems Division. The 1999 operating loss, excluding restructuring charges, resulted primarily from reduced sales and profitability of the PMI business, lower than expected sales of smaller Measuring Systems products, and higher costs associated with investments in new product development programs.
The Company has not completed the refinancing of its senior debt and is not in compliance with a provision of the waiver agreement requiring the Company to complete the refinancing by January 31, 2000. The Company has received financing proposals, and the Board of Directors of the Company has formed a Committee comprised of outside directors to work with management to evaluate these proposals and move quickly to remedy the current situation. Management is in discussion with its lenders to extend the waiver period to complete the refinancing.
This report contains forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve a number of assumptions, risks, and uncertainties that could cause actual results of the Company to differ materially from those matters expressed in or implied by such forward-looking statements because they involve known and unknown risks, uncertainties, and other factors, which are in some cases beyond the control of the Company and may cause the actual results, performance, or achievements of the Company to differ materially from anticipated future results, performance, or achievements expressed or implied by such forward-looking statements. Additional information regarding this risk factor and uncertainties is detailed from time to time in the Company's SEC filings.
BROWN & SHARPE MANUFACTURING COMPANY
STATEMENT OF INCOME (LOSS)
(Dollars in Thousands Except Per Share Data)
For the Quarter Ended Dec. 31, For the Year Ended Dec. 31,
1999 1998 1999 1998
Net sales $86,522 $94,249 $323,300 $339,030
Cost of sales 65,814 59,748 234,875 223,999
Research and
development 1,993 1,953 9,195 10,523
Selling,
general
and
administrative
expense 22,389 23,599 86,736 84,895
Restructuring
charges 7,832 (896) 25,858 (896)
Operating (loss)
profit (11,506) 9,845 (33,364) 20,509
Interest
expense 2,587 1,754 7,534 6,164
Other income,
net 313 344 374 949
(Loss) income
before Income
taxes (13,780) 8,435 (40,524) 15,294
Income tax
provision 2,982 1,792 2,350 3,365
Net (loss)
income $(16,762) $6,643 $(42,874) $11,929
Net (loss) income
per common
share:
Basic $(1.24) $.50 $(3.19) $.89
Diluted $(1.24) $.49 $(3.19) $.88
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1999 AND 1998
(DOLLARS IN THOUSANDS)
ASSETS 1999 1998
---- ----
Cash and cash equivalents $36,643 $12,290
Accounts receivable net 88,300 103,780
Inventories 68,310 88,391
Other assets 5,553 6,857
Total current assets 198,806 211,318
Property, plant, and equipment net 47,319 53,493
Other Assets 56,052 52,967
$ 302,177 $ 317,778
LIABILITIES AND SHAREOWNERS' EQUITY
Accounts payable and accrued expenses $94,420 $90,198
Current portion of short
and long-term debt 98,965 9,272
Total current liabilities 193,385 99,470
Long-term debt 11,175 65,433
Other long-term liabilities 26,083 23,220
Shareowners' equity 71,534 129,655
$ 302,177 $ 317,778