National-Standard Company Reports Third Quarter Results
4 August 2000
National-Standard Company Reports Third Quarter Results
NILES, Mich. - National-Standard Company announced net income for the third
quarter of fiscal year 2000 of $0.6 million or 10 cents per diluted share versus
a net income of $2.4 million or 40 cents per diluted share for the same period
last year. Included in last year's third quarter net income is a $.7 million
post retirement benefit gain related to changes in the Company's retiree health
benefits that were made in 1998. The remaining decrease in income from last
year's third quarter is largely attributable to lower than planned sales volume
in some of the Company's higher margin products.
For the first nine months of fiscal year 2000, the Company had a net loss
of $2.8 million or 48 cents per diluted share versus a net income of $4.9
million or 86 cents per diluted share in the same period last year. This
year's results include first quarter charges of $1.3 million to realign
organizational responsibilities and $1.5 million to reserve for the
uncollectibility of a note receivable from the Company's former facility in
Kidderminster, United Kingdom.
Sales for the third quarter of fiscal year 2000 were $40.0 million,
compared to $41.6 million for the same period last year, while sales for the
nine-month period ended July 2, 2000 were $121.0 million, compared to $144.3
million in the same period of fiscal year 1999. Weld wire sales are down 7%
and 4% in the current three- and nine-month period from the same periods last
year as the Company continues to experience the impact on sales resulting from
last year's closure of the Company's Canadian facility. Sales of air bag
inflator filtration products are also down 5% and 15% in the current three-
and nine-month period from last year due primarily to lower unit prices for
new air bag inflator filter constructions. Included in last year's sales for
the nine-month period are $10.5 million from the Company's former
Kidderminster facility and $1.7 million from the divested non-air bag wire
cloth product line sold in 1999.
As previously reported, the Company is currently the subject of a tender
offer contemplated by the Agreement and Plan of Merger among the Company, NS
Acquisition Corp. and Heico Holding, Inc., the parent of NS Acquisition Corp.
In the tender offer, NS Acquisition Corp. is offering to purchase for $1.00
per share in cash all of the outstanding shares of common stock of National-
Standard. The tender offer is being made pursuant to tender offer materials
that have been distributed to the Company's shareholders and have been filed
with the Securities and Exchange Commission. The tender offer is expected to
remain open until 12:00 midnight, New York City time, on August 4, 2000,
unless extended. The tender offer is subject to the condition that a majority
of National-Standard's outstanding shares be validly tendered and not
withdrawn prior to the expiration date of the offer, and is also
subject to receipt of required governmental and regulatory approvals and other
conditions.
The merger agreement provides that, following consummation of the tender
offer, NS Acquisition Corp. will be merged into National-Standard and each
remaining common share of National-Standard will be converted into the right
to receive $1.00 in cash.
Following the announcement of the merger agreement, the Company entered
into an agreement in July for an additional $2.5 million short-term credit
facility from Foothill Capital Corporation that is intended to meet the
Company's short-term financing needs.
Founded in 1907, National-Standard is a Niles, Michigan based firm with
annual sales of approximately $160 million. In nine 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.
Financial Highlights
National-Standard Company and Subsidiaries
(Dollars in thousands except per share amounts)
For three months ended: July 2 July 4
2000 1999
Net Sales $40,038 $41,632
Operating Income 1,522 3,016
Net Income 569 2,360
Basic Earnings Per Share .10 .41
Diluted Earnings Per Share .10 .40
Basic Average Shares Outstanding 5,788,569 5,728,801
Diluted Average Shares Outstanding 5,788,569 5,883,415
For nine months ended: July 2 July 4
2000 1999
Net Sales $120,978 $144,255
Operating Income (454) 7,570
Net Income (2,750) 4,924
Basic Earnings Per Share (.48) .87
Diluted Earnings Per Share (.48) .86
Basic Average Shares Outstanding 5,762,646 5,646,258
Diluted Average Shares Outstanding 5,762,646 5,734,045