BGF Industries, Inc. Announces First Quarter 2002 Earnings.Business Editors GREENSBORO Greensboro, city (1990 pop. 183,521), seat of Guilford co., N central N.C.; inc. 1829. The city is a financial, insurance, and distribution center for the region. , N.C.--(BUSINESS WIRE)--May 10, 2002 BGF BGF Black Guerrilla Family (Afro-American prison gang symbol/tattoo) BGF Boursier du Gouvernement Français (French) BGF Black Guerilla Family (gang) BGF Best Guy Friend Industries, Inc. (BGF) announced today that net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the quarter ended March 31, 2002 were $36.3 million compared to $46.5 million for the quarter ended March 31, 2001, a decrease of $10.2 million, or 21.9%. This decrease was due primarily to a decrease in sales of electronics fabrics and sales of composite composite, alternate common name for Asteraceae or Compositae, the aster family. composite - aggregate fabrics. The decrease in sales of electronics fabrics was primarily a result of significant inventory adjustments in the electronics industry that began during the first quarter of 2001. In addition, the decrease in capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. in the information technology and telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. industries led fabricators of printed circuit boards to reduce production which negatively impacted our sales to these customers. Our second largest market, fabrics used in composite materials composite material or composite, any material made from at least two discrete substances, such as concrete. Many materials are produced as composites, such as the fiberglass-reinforced plastics used for automobile bodies and boat hulls, but the , held up well prior to September September: see month. 11, 2001. However, we have experienced a decline in orders from customers in the aerospace industry due to uncertainty over airline traffic recovery. It is unknown if this decrease will be fully or partially offset by the market for refurbishing existing aircraft or increased purchases by the military. In response to these market conditions, we reduced production schedules and focused on operating cost reductions and working capital management. In the third and fourth quarters of 2001, we furloughed production employees thereby reducing our production workforce by approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 25% since January January: see month. 1, 2001. In addition to the furlough fur·lough n. 1. a. A leave of absence or vacation, especially one granted to a member of the armed forces. b. A usually temporary layoff from work. c. of production employees, we reduced a number of salaried positions in order to cut costs in future periods. The reduction of production schedules resulted in a $10.8 million decrease in inventory from the end of the third quarter of 2001 to the end of the first quarter of 2002. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become for the quarter ended March 31, 2002 decreased $6.3 million, or 80.8%, to $1.5 million from $7.8 million for the quarter ended March 31, 2001. For the twelve-month period ended March 31, 2002, net sales and EBITDA were $136.6 million and $11.4 million respectively. EBITDA is defined as net income before interest expense, income taxes, depreciation, amortization expense and non-recurring, non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. . Gross profit margins Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. decreased to 1.4% in the three months ended March 31, 2002 from 17.7% in the three months ended March 31, 2001 due primarily to shifts in product mix as well as lower sales and production volumes which resulted in less absorption absorption [Lat.,=sucking from], taking of molecules of one substance directly into another substance. It is contrasted with adsorption, in which the molecules adhere only to the surface of the second substance. of fixed costs fixed costs, n.pl the costs that do not change to meet fluctuations in enrollment or in use of services (e.g., salaries, rent, business license fees, and depreciation). . Selling, general and administrative expenses decreased $1.4 million, or 51.9%, to $1.3 million in the three months ended March 31, 2002, from $2.7 million in the three months ended March 31, 2001. This was primarily due to decreased accruals Accruals Accounts on a balance sheet that represent liabilities and non-cash-based assets used in accrual-based accounting. These accounts include, among many others, accounts payable, accounts receivable, goodwill, future tax liability and future interest expense. for profit sharing profit sharing, arrangement by which employees receive, in addition to their wages, a share of the net profits of a business. The purpose is to give them an incentive to increase their output through enhanced morale, less wasteful use of materials, better care of and management fees and bonuses and a decrease in sales commission expense. As a result of the aforementioned a·fore·men·tioned adj. Mentioned previously. n. The one or ones mentioned previously. aforementioned Adjective mentioned before Adj. 1. factors, operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. decreased $6.4 million to $(0.8) million, or (2.3)% of net sales, in the three months ended March 31, 2002, from $5.6 million, or 12.0% of net sales, in the three months ended March 31, 2001. Interest expense remained at $3.3 million in the three months ended March 31, 2002 compared to the three months ended March 31, 2001. As a result of the aforementioned factors, net income (loss) decreased $4.0 million to a net loss of $(2.5) million in the three months ended March 31, 2002 from $1.5 million in the three months ended March 31, 2001. BGF, headquartered in Greensboro, NC, manufactures specialty A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. woven A woven is a cloth formed by weaving. It only stretches in the Bias directions (between the warp and weft directions), unless the threads are elastic. Woven cloth usually frays at the edges, unless measures are taken to counter this, such as the use of pinking shears or hemming. and non-woven fabrics made from glass, carbon and aramid Aramid fibers are a class of heat-resistant and strong synthetic fibers. They are used in aerospace and military applications, for ballistic rated body armor fabric, and as an asbestos substitute. The name is a shortened form of "aromatic polyamide". yarns for use in a variety of electronic, filtration filtration: see sewerage; water supply. Filtration The separation of solid particles from a fluidsolids suspension of which they are a part by passage of most of the fluid through a septum or membrane that retains most of the solids , composite, insulation insulation (ĭn'səlā`shən, ĭn'sy  –), use of materials or devices to inhibit or prevent the conduction of heat or of electricity. ,
construction, and commercial products.The financial information included herein is unaudited. In addition, the financial information does not include disclosures required under generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting . The financial information reflects all adjustments that are, in the opinion of management, necessary to present a fair statement of the results for the interim periods.
BGF INDUSTRIES, INC.
(a wholly owned subsidiary of Glass Holdings Corp.)
CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except share data)
March 31, Dec. 31,
2002 2001
---- ----
ASSETS
Current assets:
Cash and cash equivalents $10 $22
Trade accounts receivable, less
allowance for returns and doubtful
accounts of $465 and $663 respectively 16,978 12,710
Inventories 36,427 39,037
Other current assets 5,850 4,693
------ -------
Total current assets 59,265 56,462
Net property, plant and equipment 60,032 62,155
Other noncurrent assets, net 16,935 16,982
------ -------
Total assets $ 136,232 $ 135,599
========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
Current liabilities:
Book overdraft $ 4,540 $ 2,528
Accounts payable 8,205 4,171
Accrued liabilities 5,268 7,642
------ -------
Total current liabilities 18,013 14,341
Long-term debt, net of discount of
$1,417 and $1,617 respectively 124,633 125,583
Postretirement benefit and pension
obligations 5,778 5,415
------ -------
Total liabilities 148,424 145,339
------- --------
Commitments and contingencies
Stockholder's equity (deficit):
Common stock, $1.00 par value.
Authorized 3,000 shares; issued and
outstanding 1,000 shares 1 1
Capital in excess of par value 34,999 34,999
Retained earnings 69,442 71,981
Accumulated other comprehensive loss (255) (342)
Loan to parent (116,379) (116,379)
--------- ---------
Total stockholder's equity
(deficit) (12,192) (9,740)
--------- --------
Total liabilities and
stockholder's equity (deficit) $ 136,232 $ 135,599
========== ============
BGF INDUSTRIES, INC.
(a wholly owned subsidiary of Glass Holdings Corp.)
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands)
For the Three Months
Ended March 31,
-----------------------
2002 2001
-----------------------
Net sales $ 36,343 $ 46,558
Cost of goods sold 35,822 38,301
---------- ---------
Gross profit 521 8,257
Selling, general and administrative expenses 1,343 2,700
---------- ---------
Operating income (loss) (822) 5,557
Interest expense 3,333 3,296
Other income, net - (121)
---------- ----------
Income (loss) before income taxes (4,155) 2,382
Income tax expense (benefit) (1,616) 916
---------- ---------
Net income (loss) $(2,539) $ 1,466
---------- ---------
Other comprehensive income (loss) net of tax:
Cumulative effect of change in accounting
principle - 183
Change in fair value of cash flow hedge 87 235
---------- ---------
Total comprehensive income (loss) $(2,452) $1,414
========== =========
Other Data:
EBITDA $ 1,450 $ 7,835
========== ==========
BGF INDUSTRIES, INC.
(a wholly owned subsidiary of Glass Holdings Corp.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
For the Year
Ended March 31,
-----------------------
2002 2001
---------- --------
Net cash provided by (used in)
operating activities $ 218 $ (1,744)
------- -------
Cash flows from investing activities:
Purchases of property, plant
and equipment (1,242) (2,771)
------- -------
Net cash used in investing activities (1,242) (2,771)
------- -------
Cash flows from financing activities:
Book overdraft 2,012 (1,480)
Proceeds from revolving credit facility 17,000 10,000
Payments on revolving credit facility (18,000) (4,000)
------- -------
Net cash provided by financing activities 1,012 4,520
------- -------
Net (decrease) increase in cash and
cash equivalents (12) 5
Cash and cash equivalents at beginning
of period 22 8
------- -------
Cash and cash equivalents at end
of period $ 10 $ 13
======= =======
Supplemental disclosure of
non-cash investing and
financing activities:
Property and equipment financed in
accounts payable $ 319 $ 1,861
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