Baldwin Piano Reports 14% Increase in Third Quarter Sales.Business Editors MASON, Ohio--(BUSINESS WIRE)--Nov. 1, 2000 Contract Electronics Achieves Third Consecutive Profitable Quarter; Music Division Reports First Profitable Quarter Since 1998 Baldwin Baldwin, cities, United States Baldwin. 1 Uninc. city (1990 pop. 22,719), Nassau co., SE N.Y., on the south shore of Long Island, on Baldwin Bay; settled 1640s. A fishing center and summer resort, it has varied manufactures. Piano & Organ Company (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 :BPAO BPAO Benefits Planning Assistance and Outreach ) today reported results for the third quarter and nine months ended September September: see month. 30, 2000. 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 third quarter grew 14 percent to $33.3 million, up from $29.1 million a year ago, primarily reflecting strong demand for Baldwin's Music products. The net loss for the quarter was $562,000, or 16 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , a significant improvement over the loss of $1,622,000, or 47 cents per share, a year ago. The current quarter's loss from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the includes a gain of 20 cents per share from the sale of an unused facility and land in Fayetteville, Arkansas
adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. gain of $1.04 per share from the sale of the company's facility in Juarez, 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. . In the third quarter of 1999, Baldwin recorded income from its discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: retail financing operations of $154,000, or four cents per share. For the first nine months, Baldwin's net sales rose 12 percent to $99.1 million, up from $88.2 million for the 1999 period. The net loss decreased to $3,077,000, or 89 cents per share, including the 20 cents per share gain on the sale of the excess facility in Fayetteville, Arkansas. This is an improvement from last year's loss of $4,825,000, or $1.40 per share, which included the gain of $1.04 per share from the sale of the Juarez, Mexico facility, offset in part by a restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and other non-recurring charges of 27 cents per share related to the consolidation of grand piano assembly operations. Earnings from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. for the first nine months of 2000 were 25 cents per share, which included a gain of 21 cents per share from the sale of Baldwin's retail financing subsidiaries. Last year's earnings from discontinued operations were 43 cents per share. Karen Karen Any member of a variety of tribal peoples of southern Myanmar (Burma). Constituting the second largest minority in Myanmar, the Karen are not a unitary group in any ethnic sense, as they differ among themselves linguistically, religiously, and economically. L. Hendricks, chairman, president and chief executive officer of Baldwin, said, "We are encouraged by the strong sales growth in Music and with our continued profit progress in Contract Electronics experienced in the third quarter. Currently, all indicators point toward further improvements for both divisions in future quarters. "In addition to top line growth, we experienced a substantial overall decline in selling, general and administrative expenses. Year to date SG&A expense improved significantly from 21 percent of sales a year ago to 17 percent of sales this year. The drop reflects both higher sales and the impact of efficiencies and cost controls put in place over the last year." The Music Division reported net sales of $23.4 million in the third quarter, up 30 percent from a year ago, reflecting an increased demand for Baldwin's products. Music reported a pre-tax and interest operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. of $150,000, fueled by strong total unit sales unit sales Sales measured in terms of physical units rather than dollars. Unit sales data are often used by financial analysts when evaluating the health of a company. including increased sales of our higher margin products, Artist and Concert Grand Pianos and Digital Pianos A digital piano is a modern electronic musical instrument designed to serve primarily as an alternative to a traditional piano, both in the way it feels to play and in the sound produced. Some digital pianos are also designed to look like an acoustic piano. . Third quarter 2000 total unit sales rose by 16 percent. In the third quarter last year, Music reported a loss of $4,519,000 excluding the gain on the sale of the Juarez, Mexico facility. Ms. Hendricks added, "Music's return to profitability represents a major milestone in our turnaround Turnaround A situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. . This is Music's first profitable quarter since the fourth quarter of 1998. We expect this progress to be sustainable. Last year's fourth quarter sales were impacted by reduced grand piano production due to the ramp-up at our Trumann, Arkansas Trumann is a city in Poinsett County, Arkansas, United States. The population was 6,889 at the 2000 census. It is included in the Jonesboro, Arkansas Metropolitan Statistical Area. Geography Trumann is located at (35. , facility. This year, we have the production capability and inventory to have a robust fourth quarter. "Our largest uncertainty in the fourth quarter is the overall U.S. economy. If the economy slows more than expected, or the stock market experiences a major correction, Music sales, like other high-end durable goods durable goods Goods, such as appliances and automobiles, that have a useful life over a number of periods. Firms that produce durable goods are often subject to wide fluctuations in sales and profits. Also called consumer durables. sales, could be affected." The Contract Electronics Division reported third quarter sales of $9.9 million, down 11 percent from a year ago. However, Contract Electronics reported pre-tax and interest profits of $402,000, excluding the gain on the sale of real estate, compared with a loss of $908,000 in the third quarter of 1999. "Contract Electronics increased its gross profit margin 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. by 0.5 percent from the second quarter of this year and continues to focus on profitable business," Ms. Hendricks added. Baldwin Piano & Organ Company has marketed keyboard musical products for over 138 years. Baldwin, maker of America's best selling pianos, also manufactures electronic and electro-mechanical components for Original Equipment Manufacturers. "Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " statement under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995: This release contains forward looking statements that are subject to risk and uncertainties, including, but not limited to, the impact of competitive products and pricing, product demand and market acceptance, reliance on key strategic alliances, fluctuations in operating results and other risks detailed from time to time in the company's filing with the Securities and Exchange Commission.
BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES
CONSOLIDATED SUMMARY OF OPERATIONS
(In Thousands, except earnings per share)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
-------- -------- -------- --------
Net sales $ 33,340 $ 29,106 $ 99,147 $ 88,164
Cost of goods sold 29,168 31,033 87,450 83,726
-------- -------- -------- --------
Gross profit 4,172 (1,927) 11,697 4,438
Other operating
income, net 1,380 6,063 1,571 6,336
Selling, general
and administrative (5,506) (6,157) (16,773) (18,507)
Interest expense (954) (837) (2,772) (2,276)
-------- -------- -------- --------
Earnings (loss)
before income
taxes (908) (2,858) (6,277) (10,009)
Income taxes (346) (1,082) (2,325) (3,694)
-------- -------- -------- --------
Net earnings
(loss) from
continuing
operations (562) (1,776) (3,952) (6,315)
Discontinued
operations:
Income from
operations of
Retail Financing
to be disposed
of (net of
income taxes of
$537 in 2000
and $890 in 1999) -- 154 875 1,490
-------- -------- -------- --------
Net earnings (loss) $ (562) $ (1,622) $ (3,077) $ (4,825)
======== ======== ======== ========
Earning (loss) per
share
Basic
Earnings (loss)
from continuing
operations $ (0.16) $ (0.51) $ (1.14) $ (1.83)
Earnings from
discontinued
operations -- 0.04 0.25 0.43
-------- -------- -------- --------
Net earnings
(loss) $ (0.16) $ (0.47) $ (0.89) $ (1.40)
======== ======== ======== ========
Diluted
Earnings (loss)
from continuing
operations $ (0.16) $ (0.51) $ (1.14) $ (1.83)
Earnings from
discontinued
operations -- 0.04 0.25 0.43
-------- -------- -------- --------
Net earnings
(loss) $ (0.16) $ (0.47) $ (0.89) $ (1.40)
======== ======== ======== ========
Average number of
shares outstanding 3,463 3,453 3,463 3,453
======== ======== ======== ========
Diluted number of
shares outstanding 3,463 3,453 3,463 3,453
======== ======== ======== ========
CONSOLIDATED SUMMARY BALANCE SHEETS
(In Thousands)
September 30, September 30, December 31,
2000 1999 1999
(unaudited) (unaudited)
Assets
Receivables, net $ 17,796 $ 12,271 $ 11,703
Installment receivables
retained 4,120 5,741 5,344
Inventories 51,579 44,250 38,786
Other current assets 11,532 4,060 14,517
Net assets of
discontinued operations -- 20,222 21,748
-------- -------- --------
Total current assets 85,027 86,544 92,098
Property, plant and
equipment, net 19,787 21,430 20,985
Other assets 11,031 17,140 14,909
-------- -------- --------
Total assets $115,845 $125,114 $127,992
======== ======== ========
Liabilities and
Shareholders' Equity
Current portion of
long-term debt $ 5,436 $ 13,833 $ 12,765
Other liabilities 26,529 18,622 26,789
-------- -------- --------
Total current
liabilities 31,965 32,455 39,554
Long-term debt, less
current portion 31,232 33,715 32,582
Other liabilities 2,077 2,376 2,168
Shareholders' equity 50,571 56,568 53,688
-------- -------- --------
Total liabilities and
shareholders' equity $115,845 $125,114 $127,992
======== ======== ========
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