Brush Wellman Reports Strong Sales and Lower Earnings for the Third Quarter 1999.CLEVELAND--(BUSINESS WIRE)--Oct. 27, 1999-- Brush Wellman Wellman(n) may refer to:
See: New York Stock Exchange :BW) today reported an 18% increase in third quarter sales to $113.8 million, and a net loss of $0.6 million. Earnings were a loss of $0.03 per share. This compares to sales of $96.2 million and net income of $0.6 million in the third quarter of 1998, excluding a special charge, after tax, of $0.5 million. 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. earnings for the third quarter of 1998 were $0.03 per share excluding the special charge. Third quarter operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before were negatively affected by a longer than expected annual maintenance shutdown shut·down n. A cessation of operations or activity, as at a factory. shutdown Noun the closing of a factory, shop, or other business Verb shut down of the Alloy alloy (ăl`oi, əloi`) [O. Fr.,=combine], substance with metallic properties that consists of a metal fused with one or more metals or nonmetals. operations in the month of July July: see month. , a slower start up after the shutdown and costs associated with additional resources to resolve equipment reliability issues in the recently completed strip expansion. These production issues increased costs and limited output in the quarter affecting the Company's ability to meet market demand. Overall third quarter earnings were positively affected by a reduction in the year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. tax rate due to the lower earnings, tax credits and a reduction in pension expense. For the first nine months of 1999, the Company achieved record sales of $335.6 million, a 7% increase over sales of $313.4 million during the first nine months of last year. Net income during the first nine months was $5.2 million, or $0.32 per share diluted, versus $9.3 million and earnings per share of $0.55 cents in 1998 (excluding a pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta charge taken in the second and third quarters of 1998 totaling $22.5 million). Segment Analysis: Metal Systems Group ------------------- The Metal Systems Group consists of Alloy Products, Technical Materials, Inc. (TMI TMI Too Much Information TMI Three Mile Island TMI TRMM Microwave Imager TMI Transactions on Medical Imaging TMI Texas Military Institute TMI Teen Missions International TMI Tauber Manufacturing Institute ) and Beryllium beryllium (bərĭl`ēəm) [from beryl ], metallic chemical element; symbol Be; at. no. 4; at. wt. 9.01218; m.p. about 1,278°C;; b.p. 2,970°C; (estimated); sp. gr. 1.85 at 20°C;; valence +2. Products. Metal Systems Group sales Group sales Block sale (of large amounts) of securities to institutional investors. group sales The distribution of a new security issue to institutional clients. grew 10% to $75.1 million from $68.1 million in the third quarter of 1998. Year-to-date sales of $228.6 million were flat as compared to 1998. Operating profit/(loss) for the quarter was ($0.7) million as compared to $3.9 million in 1998. For the first nine months, 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. decreased to $12.7 million from $25.8 in 1998. Alloy Products' sales increased, both domestically and overseas, in the third quarter of the year due to continued strong demand for strip products in the telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. , automotive electronics and computer markets. The strength in strip products was partially offset by weakness in bulk product sales, due to softness in the oil and gas and aerospace markets. Sales were down slightly for the first nine months as compared to 1998. Throughout the first nine months, Alloy Products' earnings were negatively affected by strip product capacity constraints CONSTRAINTS - A language for solving constraints using value inference. ["CONSTRAINTS: A Language for Expressing Almost-Hierarchical Descriptions", G.J. Sussman et al, Artif Intell 14(1):1-39 (Aug 1980)]. , higher startup (STARTing UP) "At startup" means when the computer is first turned on or when a program is first loaded. See Startup folder. costs in the new strip mill and development costs related to the new spinodal materials at the Brush Engineered Bronze bronze, in metallurgy bronze, in metallurgy, alloy of copper, tin, zinc, phosphorus, and sometimes small amounts of other elements. Bronzes are harder than brasses. facility in Lorain, Ohio Lorain is a city in Lorain County, Ohio, United States. The municipality is located in northeastern Ohio on Lake Erie, at the mouth of the Black River, west of Cleveland. As of the 2000 Census, the city had a total population of 68,652 making it Ohio's 10th largest city. . The demand for strip products continued to outpace out·pace tr.v. out·paced, out·pac·ing, out·pac·es To surpass or outdo (another), as in speed, growth, or performance. outpace Verb [-pacing, the ramp up Ramp Up To increase a company's operations in anticipation of increased demand. Notes: A company might 'ramp up' operations if they just signed a contract creating substantially more demand for their product. See also: Demand, Economies of Scale of the new strip mill, especially during the third quarter. Additional external and internal resources were committed to the new strip mill to accelerate the ramp up. TMI sales and profits for the third quarter and first nine months of 1999 increased significantly over the same period last year due to strong demand from automotive electronics and telecommunication telecommunication Communication between parties at a distance from one another. Modern telecommunication systems—capable of transmitting telephone, fax, data, radio, or television signals—can transmit large volumes of information over long distances. product applications. TMI is also beginning to experience increased demand for its precious metal plated products. Beryllium Products' sales decreased in the third quarter and first nine months of 1999 compared to the same periods last year. The reduction in sales is due to delays in U.S. and European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. defense procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. including, defense programs in optics, satellite and defense electronic applications. Profits were flat in the third quarter but down year to date as compared to 1998. Microelectronics microelectronics, branch of electronic technology devoted to the design and development of extremely small electronic devices that consume very little electric power. Group ---------------------- The Microelectronics Group includes Williams Advanced Materials Advanced Materials is a leading peer-reviewed materials science journal published every two weeks. Advanced Materials includes Communications, Reviews, and Feature Articles from the cutting edge of materials science, including topics in chemistry, physics, Inc. (WAM WAM - Intermediate language for compiled Prolog, used by the Warren Abstract Machine. "An Abstract Prolog Instruction Set", D.H.D. Warren, TR 309, SRI 1983. ) and Electronic Products. Microelectronics Group sales grew 38% to $36.3 million compared with $26.2 million in the third quarter of 1998. Year-to-date sales grew 26% to $100.9 million from $80.1 million in 1998. Operating profit was $2.9 million for the third quarter and $7.8 million year to date versus $1.5 million and $1.3 million respectively for 1998. WAM continues to display double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. sales and earnings growth in 1999. This growth has been fueled by strong demand for vapor deposition Vapor deposition Production of a film of material often on a heated surface and in a vacuum. Vapor deposition technology is used in a large variety of applications. targets from the optical media and decorative and performance film markets. Exceptional growth also continues for low-cost frame lids for telecommunications applications. These low-cost lid sales have nearly doubled versus 1998. In addition, the successful introduction of specialty alloys This is a list of alloys for which an article exists in Wikipedia (or is proposed but not yet written). They are grouped by base metal, in order of increasing atomic number. Within these headings they are in no particular order. , including high-purity nickel alloys Noun 1. nickel alloy - an alloy whose main constituent is nickel nickel-base alloy alloy, metal - a mixture containing two or more metallic elements or metallic and nonmetallic elements usually fused together or dissolving into each other when molten; "brass , has also contributed to WAM's sales growth. Sales and earnings for Electronic Products (formerly Ceramics ceramics (sərăm`ĭks), materials made of nonmetallic minerals that have been permanently hardened by firing at a high temperature, or objects made of such materials. ) were up for the third quarter and nine months of 1999 compared to the same period last year due to strong demand for wireless telecommunications applications and yield and productivity improvements. Chairman's Comments ------------------- Commenting on the results, Gordon Gordon, river in W Tasmania, Australia, 125 mi (200 km) long. Flowing from mountains to the W coast, its main tributaries are the Franklin and Denison from the N, and Serpentine and Olga to the S. Harnett, Chairman, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , stated, "I am pleased to report record sales for the first nine months of 1999. We have continued to experience strong demand for our products from automotive electronics, telecommunications, computers, and optical and performance film product applications. "We remain committed to bringing the new strip mill up and increasing our output as soon as possible to meet our customer demand for strip products. The additional external and internal resources we have focused on the new strip mill have begun to increase equipment reliability and have added capacity. We have made progress in our ability to ship strip product directly from our Elmore, Ohio Elmore is a village in Ottawa County, Ohio, United States. As of the 2000 census, the village had a total population of 1,426. Geography Elmore is located at (41.470067, -83.292115)GR1. facility, which also increases our overall capacity. "Looking forward, we expect the strong sales demand to continue through the fourth quarter and into the year 2000. We will continue to commit the appropriate resources to achieve the increased capacity and cost efficiencies needed to be competitive and to meet future demand. It is anticipated that earnings for the fourth quarter of 1999 will be similar to the third quarter of this year. We look forward to continued progress with the new strip mill and an improved earnings outlook for 2000." Forward Looking Statements -------------------------- Any 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. in this announcement are based on current expectations. The Company's performance may differ from that contemplated by the forward-looking statements as a result of a variety of factors including the global and domestic economy, manufacturing yields and operating performances at the Company's various facilities, changes in product mix, the timely and successful completion of pending capital expansions, tax rates and exchange rates. Brush Wellman, with headquarters in Cleveland, Ohio "Cleveland" redirects here. For the Cleveland metropolitan area, see . For other uses, see Cleveland (disambiguation). Cleveland is a city in the U.S. state of Ohio and the county seat of Cuyahoga County, the most populous county in the state. , is a manufacturer of engineered materials. The Company and its subsidiaries supply worldwide markets with Beryllium Products, Alloy Products, Electronic Products, Precious Metal Products and Engineered Material Systems. -0-
Consolidated Statements of Income
(Unaudited)
Third Quarter Ended Nine Months Ended
(Dollars in thousands ------------------- --------------------
except share and Oct. 1, Oct. 2, Oct. 1, Oct. 2
per share amounts) 1999 1998 1999 1998
----------------------------------------------------------------------
Net sales $ 113,794 $ 96,240 $ 335,628 $ 313,414
Cost of sales 94,981 76,824 267,557 248,454
------------ ------------ ------------ ------------
Gross Margin 18,813 19,416 68,071 64,960
Selling,
administrative
and general
expenses 17,298 15,422 52,919 48,203
Research and
development
expenses 2,191 2,185 6,207 6,357
Other-net 259 1,318 287 19,979
------------ ------------ ------------ ------------
Operating Profit (935) 491 8,658 (9,579)
Interest expense 913 352 2,697 760
------------ ------------ ------------ ------------
Income before
income taxes (1,848) 139 5,961 (10,339)
Income taxes (1,296) 41 793 (3,515)
------------ ------------ ------------ ------------
Net Income $ (552)$ 98 $ 5,168 $ (6,824)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Per Share of Common
Stock: Basic $ (0.03)$ 0.01 $ 0.32 $ (0.42)
Weighted average
number of
common shares
outstanding 16,200,229 16,197,162 16,197,158 16,295,836
Per Share of Common
Stock: Diluted $ (0.03)$ 0.01 $ 0.32 $ (0.42)
Weighted average
number of
common shares
outstanding 16,200,229 16,272,126 16,261,878 16,295,836
Cash dividends per
common share $ 0.12 $ 0.12 $ 0.36 $ 0.36
Consolidated Balance Sheets
Oct. 1, Dec. 31,
(Dollars in thousands) 1999 1998
----------------------------------------------------------------------
Assets
Current Assets
Cash and cash equivalents $ 5,060 $ 1,938
Accounts receivable 80,017 62,181
Inventories 110,373 103,108
Prepaid expenses 6,212 7,210
Deferred income taxes 23,632 20,087
-------- --------
Total Current Assets 225,294 194,524
Other Assets 43,296 44,697
Property, Plant and Equipment 416,335 421,467
Less allowances for depreciation,
depletion and impairment 260,892 256,998
-------- --------
155,443 164,469
-------- --------
$424,033 $403,690
-------- --------
-------- --------
Liabilities and Shareholders' Equity
Current Liabilities
Short-term debt $ 33,216 $ 45,587
Accounts payable 31,293 15,156
Other liabilities and accrued
items 29,455 26,482
Dividends payable 1,959 1,966
Income taxes 6,203 4,341
-------- --------
Total Current Liabilities 102,126 93,532
Other Long-Term Liabilities 9,466 10,507
Retirement and Post-Employment Benefits 39,954 39,448
Long-Term Debt 42,305 32,105
Deferred Income Taxes 9,025 6,287
Shareholders' Equity 221,157 221,811
-------- --------
$424,033 $403,690
-------- --------
-------- --------
Consolidated Statements of Cash Flows
Third Quarter Ended
Oct. 1, Oct. 2,
(Dollars in thousands) 1999 1998
----------------------------------------------------------------------
Net Income $ 5,168 ($ 6,824)
Adjustments to Reconcile
Net Income to Net Cash
Provided From Operating
Activities:
Depreciation, depletion
and amortization 16,645 17,334
Amortization of mine development 4,408 2,792
Impairment of fixed assets
and related intangibles -- 14,273
Decrease (Increase) in
accounts receivable (17,448) (594)
Decrease (Increase) in inventory (7,454) (7,842)
Decrease (Increase) in prepaid
and other current assets (2,665) (1,735)
Increase (Decrease) in accounts
payable and accrued expenses 19,459 (1,727)
Increase (Decrease) in interest
and taxes payable 2,251 (1,538)
Increase (Decrease) in deferred
income tax 2,738 (3,155)
Increase (Decrease) in other
long-term liabilities (541) (718)
Other - net 1,027 458
-------- --------
Net Cash Provided From
Operating Activities 23,588 10,724
Cash Flows from Investing Activities:
Payments for purchase of property,
plant and equipment (11,556) (29,267)
Payments for mine development (261) (294)
Proceeds from (Payments for)
other investments 141 (12,003)
-------- --------
Net Cash Provided From
(Used in) Investing
Activities (11,676) (41,564)
Cash Flows from Financing Activities:
Proceeds from issuance of
short-term debt 158 38,254
Repayment of short-term debt (13,429) (528)
Proceeds from issuance of
long-term debt 17,200 --
Repayment of long-term debt (7,000) (800)
Issuance of Common Stock under
stock option plans 171 3,433
Purchase of Common Stock for treasury -- (5,390)
Payments of dividends (5,854) (7,837)
-------- --------
Net Cash Provided From
(Used in) Financing
Activities (8,754) 27,132
Effects of Exchange Rate Changes (36) (48)
-------- --------
Net Change in Cash and
Cash Equivalents 3,122 (3,756)
Cash and Cash Equivalents
at Beginning of Period 1,938 7,170
-------- --------
Cash and Cash Equivalents
at End of Period 5,060 3,414
-------- --------
-------- --------
Brush Wellman Inc.
Digest of Earnings
October 1, 1999
1999 1998
-------------- -------------
Third Quarter
Net Sales $113,794,000 $96,240,000
Net Income ($552,000) $98,000
Share Earnings - Basic ($0.03) $0.01
Average Shares - Basic 16,200,229 16,197,162
Share Earnings - Diluted ($0.03) $0.01
Average Shares - Diluted 16,200,229 16,272,126
Year - to - Date
Net Sales $335,628,000 $313,414,000
Net Income $5,168,000 ($6,824,000)
Share Earnings - Basic $0.32 ($0.42)
Average Shares - Basic 16,197,158 16,295,836
Share Earnings - Diluted $0.32 ($0.42)
Average Shares - Diluted 16,261,878 16,295,836
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