Bowmar Instrument Corporation; Bowmar to Sell Division and Close Corporate Office - Names New CEO
In addition, with but one location to manage, the need for the Corporate office and the associated costs become redundant and will be eliminated. This move alone is expected to save Bowmar approximately $800,000 per year, the full effect of which will not be realized until fiscal 1999.
The decision to sell the Technologies division will result in a $1,300,000 pre-tax charge to earnings which, under accounting guidelines, must be recognized in fiscal 1997. Therefore, the previously released earnings have been restated to reflect the charge to earnings and to classify the Technologies division's results as discontinued operations. The closure of the Corporate office will result in a one-time charge of approximately $340,000, which will be recognized in the first quarter of 1998.
The strategic repositioning of Bowmar to a pure microelectronics company calls for leadership with expertise in that market. As such, Hamid Shokrgozar, White Microelectronics division's current President, will assume the role of President and CEO of Bowmar on January 2, 1998. Tom Lanin will remain with the Company as a member of the Board of Directors.
Tom Lanin, President and CEO stated, "The actions taken at the Technologies division over the past two years have strengthened the division and have increased its attractiveness as an acquisition candidate. In fact, we have received several unsolicited inquiries from parties interested in acquiring the Technologies division. By focusing on White Microelectronics and reducing our overhead, we can leverage the profitability of White Microelectronics."
Lanin continued, "Hamid, with his technical and marketing background is uniquely suited to running this company. He has combined this experience with enthusiastic and energetic leadership in profitably growing White Microelectronics. I look forward to working with Hamid in my continuing role as a Bowmar Board member."
Bowmar, which is headquartered in Phoenix, Arizona, manufactures and sells microelectronic products with specific applications in the aerospace, electronic, and computer industries.
Bowmar Instrument Corporation and Subsidiaries Consolidated Statements of Income (Unaudited) (in thousands of dollars, except share data) Fourth Quarter of Fiscal Year Fiscal Year 1997 1996 1997 1996 Sales $5,824 $5,150 $ 22,189 $ 18,840 Cost of sales 3,451 3,071 13,169 11,002 Gross margin 2,373 2,079 9,020 7,838
Selling, general and
administrative 1,595 1,360 5,870 5,315 Product development 116 128 480 423 Interest expense 111 128 416 483
(income), net (Note A) 420 (90) 135 (478) Total expenses 2,242 1,526 6,901 5,743
Income from continuing
income taxes 131 553 2,119 2,095
for income taxes (94) 190 679 800
Income from continuing
operations 225 363 1,440 1,295
Loss from operations 1 128 (51) (9)
Provision (credit) for
income taxes 0 (41) 16 4
Loss on disposition,
net of deferred
income tax credit
of $417 (883) --- (883) ---
Net (loss) gain from
discontinued operations (882) 87 (918) (5) Net Income (loss) $(657) $450 $522 $1,290
Net income per common
Continuing operations $0.02 $0.04 $0.16 $0.14
(Loss) gain on
discontinued operations(0.14) 0.01 (0.14) 0
Net Income Per
Primary (Note C) $(0.12) $0.05 $0.02 $0.14
Note: (A) Includes a $425,000 provision for the loss on the sale of the building in Acton, Massachusetts.
(B) Reflects accounting for the electromechanical segment as discontinued operations, including a provision of $600,000 for operating losses during the phase-out period, as a result of the decision in December 1997 to sell this division.
(C) Fully diluted net income per share is considered to be the same as primary net income per share since the effect of the potentially dilutive preferred stock is currently antidilutive.
SOURCE Bowmar Instrument Corporation
/CONTACT: Joseph G. Warren, Jr. of Bowmar Instrument Corporation, 602-957-0271/
CO: Bowmar Instrument Corporation ST: Arizona IN: CPR SU: PER RCN
MR-CM -- LATH036 -- 0662 12/18/97 11:51 EST http://www.prnewswire.com
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|Date:||Dec 18, 1997|
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