BHA Group Holdings, Inc. Announces Third-Quarter 2001 Operating Results.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)--July 24, 2001 For the quarter ended June June: see month. 30, 2001 ("fiscal 2001"), 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.'s (Nasdaq:BHAG BHAG Big Hairy Audacious Goal BHAG Bad Honnef Aktiengesellschaft (Bad Honnef, Germany) ) consolidated net income was $1.7 million, or $.26 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, compared to $1.3 million, or $.20 per diluted share, during the same period in the prior year. For the nine-month period, BHA's consolidated net income was $5.8 million, or $.88 per diluted share, compared to $4.6 million, or $.68 per diluted share, for the same period in 2000. 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 Nine Months Ended
June 30, June 30,
2001 2000 2001 2000
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Revenues:
Domestic Air Pollution
Control (APC) Segment
U.S. Fabric Filter 21.5 24.7 64.9 69.0
U.S. Electrostatic
Precipitator (ESP) 7.9 5.9 31.9 23.3
U.S. Exports to Latin
America and Asia 5.4 4.2 15.2 14.7
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Total Domestic APC
Segment 34.8 34.8 112.0 107.0
Europe APC Segment 5.2 4.0 16.7 14.9
BHA Technologies Segment 1.9 1.9 7.4 3.7
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Total Revenues 41.9 40.7 136.1 125.6
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Pre-Tax Earnings:
Domestic APC Segment 2.4 2.4 8.4 8.3
Europe APC Segment 0.2 (0.2) 0.8 (0.6)
BHA Technologies Segment (0.1) (0.1) (0.5) (0.6)
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Total Pre-Tax Earnings 2.5 2.1 8.7 7.1
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Consolidated revenues for the quarter increased $1.2 million, or 3%, over the prior year as sales rose in the Europe Segment and were essentially unchanged in the Domestic 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. Revenues for the Domestic Air Pollution Control (APC) Segment were $34.8 million for the third quarter in each year as a decline in the fabric filter business was offset by an increase in electrostatic precipitator Noun 1. electrostatic precipitator - removes dust particles from gases by electrostatic precipitation Cottrell precipitator, precipitator electrical device - a device that produces or is powered by electricity (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. ) replacement parts and service sales within the U.S. market. The decline in fabric filter replacement parts and service sales to customers in the U.S. was the result of the continued weakness in the manufacturing sector of the domestic economy. Revenues for the Europe Segment increased 30% from the prior year when expressed in U.S. dollars. Europe's sales improved due to the execution of several ESP rebuild projects and higher fabric filter replacement parts sales across this market. 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 to non-APC customers through the BHA Technologies Segment were unchanged at $1.9 million. Consolidated revenues for the nine- month period increased $10.5 million, or 8%, over the prior year. Pre-Tax Earnings Pre-tax earnings for the third quarter increased 20% as compared to the same period in the prior year. For the nine months ended June 30, 2001, pre-tax earnings increased $1.6 million, or 23%, over the prior year. Year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. consolidated gross margins as a percentage of sales were 29.4% for each fiscal year. Selling, general and administrative expense as a percentage of sales was 22.0% and 22.6% for the nine months ended 2001 and 2000. 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. for the nine months increased 17% from $8.5 million (6.8% of sales) in fiscal 2000 to $10.0 million (7.4% of sales) in fiscal 2001. The pre-tax results for the first nine months of the current year include a net improvement of $.4 million (pre-tax) relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc foreign currency transactions. Strong business results in Europe and an increase in ESP rebuild project work in the U.S. were the primary drivers behind the improved operating results. Consolidated interest expense decreased as lower borrowing levels and rates impacted earnings in the third quarter. BHA's effective income tax rate was 33.6% for the first nine months of the current year, as compared to 35.3% for the same period in the prior year. The fiscal 2000 tax rate was higher due to losses during that period relating to certain foreign subsidiaries for which BHA did not recognize any tax benefits. Cash Flows For the first nine months of fiscal 2001 and 2000, the Company generated $10.6 million and $11.4 million, respectively, in cash from operations. These funds were 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. $5.9 million in treasury stock, pay cash dividends of $0.6 million, fund capital expenditures of $3.0 million and repay $1.7 million of debt. Cash flows for the three months ended June 30, 2001, were particularly strong as $11.3 million of cash provided by operations was used to repay $9.5 million of debt during the quarter. 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. BHA's backlog was $45.2 million at June 30, 2001. This compares with order backlogs of $48.6 million at March 31, 2001, and $47.9 million at June 30, 2000. Outlook In order to assist investors and analysts as they formed their current year expectations for the Company, guidance in previous filings with the Securities and Exchange Commission noted that earnings per diluted share for fiscal 2001 were expected to be in the range of $1.05 to $1.15. Although business conditions in many of the key industries that BHA serves are challenging, the Company believes that earnings per diluted share for fiscal 2001 will be within this range. The manufacturing sector of the U.S. economy remains weak which has led to a year-over-year decline in new orders for domestic fabric filter replacement parts and services. The Company expects that this portion of the business will remain difficult until the U.S. economy improves. The decline in this area of BHA's business has been offset by higher sales of ESP replacement parts and service to electric utility customers in the U.S. The Company expects to see continued success in working with its electric utility customers to improve the performance of their coal-fired plants and achieve compliance with regulatory requirements Regulatory requirements are part of the process of drug discovery and drug development. Regulatory requirements describe what is necessary for a new drug to be approved for marketing in any particular country. . However, in the event that sales order The sales order, sometimes abbreviated as SO, is an order received by a business from a customer. A sales order may be for products and/or services. Given the wide variety of businesses, this means that the orders can be fulfilled in several ways. volume in the ESP area were to decline before the manufacturing sector of the U.S. economy shows meaningful improvement, the Company's future operating results would be negatively impacted. BHA, a leader in its markets, remains well positioned to weather the current downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. in the U.S. economy. The Company is focused on expanding its market share and competitive advantages in its core businesses while improving its already strong financial position. For more information, you should refer to the section 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" in the Company's Quarterly Report on Form 10-Q Form 10-Q See 10-Q. which was filed with the Securities and Exchange Commission on July 24, 2001. Other Actions BHA announced that the Board of Directors has declared a cash dividend of $.03 per share payable on August 7, 2001, to shareholders of record at the close of business on July 31, 2001. The Company also reports that it 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. 2.4 million shares of the 3.0 million 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: by its Board of Directors for repurchase. 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 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. which was filed with the Securities & Exchange Commission on November 8, 2000.
BHA GROUP HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENT OF INCOME
& BALANCE SHEETS
(In millions except per share amounts)
Quarter Ended Nine Months Ended
June 30, June 30,
2001 2000 2001 2000
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Net sales $ 41.9 $ 40.7 $136.1 $125.6
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Gross margin 12.6 11.7 40.0 36.9
Operating expense 9.7 9.1 30.0 28.3
Interest expense, net .4 .5 1.3 1.5
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Earnings before income
taxes 2.5 2.1 8.7 7.1
Income tax expense .8 .8 2.9 2.5
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Net income $ 1.7 $ 1.3 $ 5.8 $ 4.6
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Diluted shares outstanding 6.4 6.6 6.5 6.7
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Diluted earnings per
share $ 0.26 $ 0.20 $ 0.88 $ 0.68
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Depreciation and
amortization $ 1.5 $ 1.4 $ 4.6 $ 4.2
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EBITDA $ 4.4 $ 4.0 $ 14.6 $ 12.8
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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."
June 30, September 30,
2001 2000
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Cash and equivalents $ 3.8 $ 3.9
Inventories 22.3 26.3
Accounts receivable 31.3 31.6
Other current assets 6.3 5.0
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Total current assets 63.7 66.8
PP&E and other assets 43.9 45.4
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Total assets $ 107.6 $ 112.2
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Current debt and lease payments $ 2.9 $ 2.7
Accounts payable and accruals 18.2 20.8
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Total current liabilities 21.1 23.5
Long-term debt and capital leases 22.9 24.8
Other liabilities 3.5 4.1
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Total liabilities 47.5 52.4
Equity 60.1 59.8
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Total liabilities and equity $ 107.6 $ 112.2
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