BHA Group Holdings, Inc. Announces Operating Results for Fiscal 2002.Business Editors KANSAS CITY Kansas City, two adjacent cities of the same name, one (1990 pop. 149,767), seat of Wyandotte co., NE Kansas (inc. 1859), the other (1990 pop. 435,146), Clay, Jackson, and Platte counties, NW Mo. (inc. 1850). , Mo.--(BUSINESS WIRE)--Nov. 6, 2002 BHA BHA butylated hydroxyanisole, an antioxidant used in foods, cosmetics, and pharmaceuticals that contain fats or oils. BHA n. A white, waxy phenolic antioxidant used to preserve fats and oils, especially in foods. Group Holdings Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :BHAG BHAG Big Hairy Audacious Goal BHAG Bad Honnef Aktiengesellschaft (Bad Honnef, Germany) ) reports that consolidated income for its fiscal year ended September September: see month. 30, 2002, before the cumulative effect of an accounting change, was $7.8 million or $1.23 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share. Including the impact of the one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. non-cash charge 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. for the effect of the change in accounting for goodwill, net income for fiscal 2002 was $6.6 million or $1.04 per diluted share. Net income for fiscal 2001 was $7.2 million or $1.11 per diluted share. Consolidated net income for the three months ended September 30, 2002 was $1.4 million or $.22 per diluted share. This compares to $1.5 million or $.23 per diluted share for the same period in the prior year. Commenting on the results, James James, person in the Bible James, in the Gospel of St. Luke, kinsman of St. Jude. The original does not specify the relationship. James, rivers, United States James. E. Lund Lund (lŭnd), city (1990 pop. 62,910), Malmöhus co., S Sweden. It is a commercial and industrial center and a rail junction. Manufactures include paper, packaging, printed materials, and clothing. Mentioned (c. , President and Chief Executive Officer, said: "BHA is pleased to report solid earnings and cash flows for fiscal 2002. The Company was able to strengthen its market position and balance sheet while operating in a challenging business environment. Improved operating results in BHA Technologies, an increase in ESP (1) (Enhanced Service Provider) An organization that adds value to basic telephone service by offering such features as call-forwarding, call-detailing and protocol conversion. rebuild work for electric utility customers and lower interest expense were the key business drivers that offset weakness in worldwide sales of fabric filter replacement parts and services. A record level of new orders for ESP project work were received during fiscal 2002 which provides the Company with an excellent overall backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. position moving into next year." The following table summarizes BHA's revenues and pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta income by segment (dollars in millions):
Quarter Ended Year Ended
Sept. 30, Sept. 30,
2002 2001 2002 2001
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Revenues:
Domestic Air Pollution Control (APC)
Segment
U.S. Fabric Filter 16.4 20.7 73.9 85.6
U.S. Electrostatic Precipitator (ESP) 5.8 4.1 39.4 36.0
U.S. Exports to Latin America and Asia 4.6 5.6 17.8 20.8
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Total Domestic APC Segment 26.8 30.4 131.1 142.4
Europe APC Segment 5.9 5.0 22.2 21.7
BHA Technologies Segment 2.4 3.4 12.3 10.8
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Total Revenues 35.1 38.8 165.6 174.9
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Pre-Tax Earnings:
Domestic APC Segment 1.7 2.0 10.3 10.4
Europe APC Segment 0.1 (0.1) 0.5 0.7
BHA Technologies Segment 0.3 0.3 1.0 (0.2)
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Total Pre-Tax Earnings 2.1 2.2 11.8 10.9
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Revenues Consolidated revenues for the full fiscal year decreased $9.3 million or 5% compared to the prior year due to the effect of challenging manufacturing conditions around the world and its impact on the Company's fabric filter business. The decline in sales relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc BHA's fabric filter product line was offset in part by increases in the areas of ESP rebuild work and third party sales of ePTFE membrane membrane, structure composed mostly of lipid and protein that forms the external boundary of cells and of major structures within cells. Membrane organization is based on a sheet two molecules thick—a double layer of lipids aligned with their long hydrocarbon products for use in applications outside of air pollution control. Consolidated revenues for the quarter decreased $3.7 million or 10% compared to the prior year due to lower sales in the Domestic Air Pollution Control (APC (1) (American Power Conversion Corporation, West Kingston, RI, www.apcc.com) The leading manufacturer of UPS systems and surge suppressors, founded in 1981 by Rodger Dowdell, Neil Rasmussen and Emanual Landsman, three electronic power engineers who had worked at MIT. ) and BHA Technologies segments. The decline was offset in part by higher Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). APC sales. The decline in the Domestic
APC segment was primarily due to lower sales of U.S. and export fabric
filter replacement parts and services that correspond to the overall
weakness in the global manufacturing sector. The decline in BHA
Technologies sales for the fourth quarter relates to the timing of
shipments under several large supply contracts.Pre-Tax Earnings Fiscal 2002 earnings before taxes and the non-cash charge related to a change in accounting for goodwill were $11.8 million. This represents an 8% increase over the $10.9 million in pre-tax earnings for fiscal 2001. Higher ESP rebuild sales combined with improved operating results in the BHA Technologies segment and lower overall interest expense were the key drivers behind the increase in pre-tax earnings for the fiscal year. The 5% decline in pre-tax earnings for the fourth quarter of the current year as compared to the prior year is primarily attributable to the 10% decrease in sales volume discussed above. The percentage decline in pre-tax earnings is less than the corresponding percentage decline in sales due to lower interest expense in the current year. Cash Flows For fiscal 2002 and 2001, the Company generated $17.1 million and $16.5 million, respectively, in cash from operations. In fiscal 2002, cash flows from operations were used to fund capital expenditures of $4.6 million, acquire certain fabric filter production assets from a company in Mexico Mexico, city, Mexico Mexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. for $0.6 million and $1.0 million was used to repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. treasury shares. The Company also repaid borrowings of $6.7 million and increased its cash balances by $4.3 million. Outlook The Company continues to see success in the implementation of its business plan. The solid financial condition of BHA has been further strengthened during the current fiscal year providing the Company with substantial capital to invest in growth areas and improve its overall position in the key markets it serves. The Company will continue to focus on managing costs while investing in those areas that will provide the greatest advantage in the long term. The Company will maximize opportunities to service the ESP side of the APC business and pursue opportunities to expand its business in the sale of ePTFE membranes membranes Obstetrics A popular term for the amniotic sac, see there to customers for use in applications outside of air pollution control. Management is pleased with year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. reported earnings and cash flows, but the Company continues to remain cautious about the near-term near-term adj. Of, for, or involving a short period of time in the near future. results of its U.S. and export fabric filter businesses. Of specific concern is continued weakness in the worldwide manufacturing and industrial sector. Based on historical trending, the Company continues to believe that improvement in its market for the sale of fabric filter replacement parts and services will likely trail an improvement in overall manufacturing conditions by as much as six months. The Company has not seen any improvement in business conditions and expects that competition will remain intense and pricing will continue to come under pressure. The Company is committed to maintaining and expanding its position as the premier supplier of APC replacement parts and service during this challenging economic period. Although cautious about the near-term prospects for the fabric filter replacement parts and service business, the Company expects that its earnings for the first quarter of fiscal 2003 will be sequentially stronger than the fourth quarter of fiscal 2002. This expectation is premised on the substantial increase in backlog relating to ESP rebuild work for electric utility customers that will start to ship during the first quarter of fiscal 2003. The following is specific guidance being provided: -- For the first quarter of fiscal 2003, the Company anticipates that consolidated net sales will increase by at least 10% over the same quarter in the prior year. Gross margins as a percentage of sales are expected to be lower due to the product mix. -- Earnings for the first quarter of fiscal 2003 are expected to be in the range of $.28 to $.33 per diluted share. Earnings per diluted share for the first quarter of fiscal 2002 were $.26 per diluted share exclusive of the $1.2 million ($.19 per diluted share) one-time non-cash charge relating to the change in accounting for goodwill. Including the impact of the one-time charge, earnings for the first quarter of the prior fiscal year were $.07 per diluted share. Visibility with respect to future results beyond 90 days remains a challenge. For more information, you should refer to the sections entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: "Outlook" and "Factors Affecting Earnings and Share Price" included in the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. filed with the Securities and Exchange Commission on November November: see month. 6, 2002. Backlog BHA's order backlog was $57.8 million at September 30, 2002. This compares with order backlogs of $46.4 million at September 30, 2001, and $39.9 million at June 30, 2002. Other Actions The Company reports that its Board of Directors has increased the number of shares of BHA common stock authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: for repurchase to 4.0 million shares from 3.5 million shares. The Company has accumulated ac·cu·mu·late v. ac·cu·mu·lat·ed, ac·cu·mu·lat·ing, ac·cu·mu·lates v.tr. To gather or pile up; amass. See Synonyms at gather. v.intr. To mount up; increase. 2.5 million shares under its repurchase program. BHA Group Holdings, Inc. is a world leader in innovative 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 technology. Its two principal operating subsidiaries An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. are BHA Group, Inc., the world's largest supplier of replacement parts and services for industrial air pollution control systems, and BHA Technologies, Inc., which manufactures and markets expanded polytetrafluoroethylene expanded polytetrafluoroethylene (ePTFE) (ekspan´did pol´ētet´r  -fl (ePTFE) membrane products for use in a variety
of industrial and consumer products.This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that reflect the Company's current views with respect to future events and financial performance. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or those anticipated. The words "should," "believe," "anticipate," "expect" and other expressions that indicate future events and trends identify forward-looking statements. Actual future results and trends may differ materially from historical results or those anticipated depending on a variety of factors, including, but not limited to, the performance of newly established domestic and international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. , demand and price for the Company's products and services and other factors. You should also consult the sections entitled "Factors Affecting Earnings and Stock Price" and "Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial " included in the Company's report on Form 10-K filed with the Securities & Exchange Commission on November 6, 2002.
BHA GROUP HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENT OF INCOME & BALANCE SHEETS
(In millions except per share amounts)
Quarter Ended Year Ended
September 30 September 30
2002 2001 2002 2001
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Net sales $35.1 $38.8 $165.6 $174.9
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Gross margin 12.1 12.7 52.3 52.7
Operating expense 9.9 10.2 40.0 40.2
Interest expense, net .1 .3 .6 1.6
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Earnings before income taxes 2.1 2.2 11.7 10.9
Income tax expense .7 .7 3.9 3.7
Cumulative effect of accounting
change -- -- (1.2) --
----- ----- ------ ------
Net income $1.4 $1.5 $ 6.6 $ 7.2
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Diluted shares outstanding 6.4 6.4 6.4 6.5
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Diluted earnings per share $0.22 $0.23 $ 1.04 $ 1.11
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Diluted earnings per share excluding
effect of accounting change (a) $0.22 $0.23 $ 1.23 $ 1.11
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Depreciation and amortization $ 1.6 $ 1.3 $ 5.5 $ 5.8
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(a) During fiscal 2002, the Company adopted Statement of Accounting
Standards No. 142, "Accounting for Goodwill and Other Intangible
Assets." As a result, the Company no longer recognizes
amortization expense on intangible assets with indefinite lives.
Fiscal 2001 earnings per diluted share for the quarter and year
would have been $0.25 and $1.18 if such amortization had not been
expensed during those periods.
The earnings per share figures in this press release are computed on a
"diluted" basis as defined under Statement of Financial Accounting
Standards No. 128, "Earnings per Share."
September 30 September 30,
2002 2001
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Cash and equivalents $ 13.8 $ 9.5
Inventories 24.2 22.8
Accounts receivable 28.6 29.8
Other current assets 5.5 5.3
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Total current assets 72.1 67.4
PP&E and other assets 41.4 43.8
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Total assets $113.5 $111.2
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Current debt and lease payments $ 2.6 $ 2.5
Accounts payable and accruals 23.0 19.6
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Total current liabilities 25.6 22.1
Long-term debt and capital leases 17.8 24.4
Other liabilities 2.7 3.6
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Total liabilities 46.1 50.1
Stockholders' equity 67.4 61.1
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Total liabilities and stockholders' equity $113.5 $111.2
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