Genesis Announces Fourth Quarter and 1999 Results.Business Editors & Analysts DAYTON Dayton, city (1990 pop. 182,044), seat of Montgomery co., SW Ohio, on the Great Miami River where it is joined by the Stillwater River; inc. 1805. It is the trade center for a fertile farm area, but is best known for its involvement with industry, invention, and , Ohio--(BUSINESS WIRE)--March 10, 2000 Genesis Worldwide Inc. (NYSE NYSE See: New York Stock Exchange :GWO GWO Good Working Order GWO Google Website Optimizer GWO Ginninderra Wind Orchestra (Canberra, Australia) GWO General Watch Officer GWO Gravel Watch Ontario GWO Gateway Wrestling Organization ) today reported a 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 of $428,000, or $0.11 per basic and 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, for the year ended December December: see month. 31, 1999 compared to income of $2,280,000, or $0.60 per share, for the prior year. For the fourth quarter of 1999, the Company incurred a loss from continuing operations of $1,251,000, or $0.29 per share, compared to income of $457,000, or $0.12 per share, realized in the final quarter of 1998. The 1999 results include a $600,000 impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charge ($384,000 after tax) recorded in the fourth quarter against the value of a property held for sale and exclude the Company's machine tool and Busch Busch , Adolf Georg Wilhelm 1891-1952. German-born Swiss violinist and conductor best known for his work as leader of the Busch Quartet, an internationally acclaimed chamber group formed in 1919. paper coating and laminating lam·i·nate v. lam·i·nat·ed, lam·i·nat·ing, lam·i·nates v.tr. 1. To beat or compress into a thin plate or sheet. 2. To divide into thin layers. 3. segments, which are classified as discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . In 1999, 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 from continuing operations increased over 140% to $111.4 million compared to $46.0 million in 1998. For the fourth quarter of 1999, net sales were $37.3 million or over 3.5 times net sales reported in the fourth quarter of 1998. The sales increase was attributed to the Company's two acquisitions, GFG GFG George Foreman Grill GFG Gift from God GFG Gone for Good GFG Governor's Foot Guard GFG Governance for Growth (AusAID program) GFG Good Freakin' Game (polite form) (now GenCoat), acquired on December 31, 1998 and Herr-Voss (now GenSystems), acquired on June 30, 1999. The higher level of 1999 sales resulted in the Company realizing $24.8 million of gross margin compared to $10.9 million in 1998, while gross margin as a percent of sales remained relatively constant at about 23%. 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. in 1999, exclusive of amortization of intangibles (primarily goodwill) and impairment, more than doubled to $7.7 million compared to the previous year's $3.6 million. Results in 1999 were negatively impacted by increased interest expense, as the Company carried higher levels of borrowings used to acquire the two new businesses. Interest expense in 1999 was $5.5 million compared to only $368,000 in 1998. During the fourth quarter of 1999, the Company realized $2.4 million of operating income, before amortization of intangibles and impairment, compared to $661,000 in the fourth quarter last year. However, the level of operating income in 1999 was not sufficient to compensate for the higher amount of interest expense incurred during the period, resulting in the loss from continuing operations. The Company's continuing operations recorded $50.1 million of orders in the fourth quarter of 1999 compared to only $20.1 million in the third quarter. A low level of orders received by the Company in the second and third quarters of 1999 negatively impacted results in the second half of the year. This low order rate will also negatively impact the Company's financial results into the first quarter of 2000, although the Company anticipates it will benefit from the higher fourth quarter order rate in the months ahead. Early in 2000, the Company repaid almost $18.0 million of its bank indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. using proceeds generated by the sale of 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: machine tool business and the distribution of assets from its terminated pension plans. This 17% decrease in indebtedness is expected to lower the Company's interest costs in 2000 by over $1.6 million on an annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. basis. The Company's effective tax rate in 1999 is higher than the statutory rate due to the non-tax deductibility of the amortization of intangibles. This situation is expected to continue into the foreseeable fore·see tr.v. fore·saw , fore·seen , fore·see·ing, fore·sees To see or know beforehand: foresaw the rapid increase in unemployment. future. Richard E. Clemens, 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. of Genesis, stated "The Company's business has gone through a significant transformation in 1999, beginning with the December 31, 1998 acquisition of GFG through the June 30, 1999 acquisition of Herr-Voss and ending with the February 2000 disposal of the machine tool business. Now the Company is fully focused on its market leadership position in coil processing equipment. Our revenue level was adversely impacted in the second half of 1999 by the low amount of orders received during the middle part of the year. We believe that the order rate achieved in the fourth quarter is more indicative of the rate which our businesses should achieve. Although the year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. order rate is currently below that of the fourth quarter, we are excited about the size and number of opportunities we have either in the proposal stage or under contract negotiation. Our strong proposal 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. and the larger size of contracts on which we are now proposing should provide a solid business base for 2000. If we succeed in obtaining the contracts we project in 2000, the Company's revenues and 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 will be significantly improved in 2000". Clemens continued, "The cash we have generated from the sale of the machine tool business and the pension plan termination Plan termination for ERISA defined benefit pension plans, is either the voluntary act of a pension plan sponsor who no longer believes that the costs of providing the pension outweighs its benefits, or the involuntary termination by the PBGC when the federal pension agency believes will also positively impact our financial results through lower interest expense in 2000. We believe that we have reengineered our business and are taking steps to reduce debt,which should position us to increase shareholder value in 2000." Genesis Worldwide Inc. engineers and manufactures high quality metal coil processing, roll coating and electrostatic Stationary electrical charges in which no current flows. For example, laser printers and copier machines place a positive charge of the image on a drum, and negatively charged toner is attracted onto the drum. The toner is then transferred to positively charged paper and fused to the paper by heat. oiling equipment in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and the United Kingdom. The Company also provides mill roll reconditioning, texturing and grinding grinding, process by which surface material is removed from an object, usually metal, by the abrasive action of a rotating wheel or a moving belt that contains abrasive grains. services in addition to its rebuild, repair and spare parts Spare parts, also referred to as Service Parts is a term used to indicate extra parts available and in proximity to the mechanical item, such as a automobile, boat, engine, for which they might be used. Spare parts are also called “spares. business. In addition to historical information, this press release contains various 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. , involving risks and uncertainties, which could cause actual results to differ materially from these statements. These risks include, but are not limited to, changes in economic conditions, interest rates, price and product offering competition from domestic and foreign entities, customer purchasing patterns, labor costs, product liability issues and other legal claims and governmental regulatory issues. Words identifying forward-looking statements include "plan", "believe", "except", "anticipate", "project", "intend", "estimate" and other expressions which are predictions or indications of future events or trends which do not relate to historical matters.
Genesis Worldwide Inc.
Condensed Balance Sheets
(in thousands)
December 31, December 31,
1999 1998
ASSETS: ------ ------
Current Assets:
Cash $ 559 $ 1,708
Accounts Receivable 21,765 12,932
Unbilled Contract Receivables 12,702 8,557
Inventories 10,016 3,546
Prepaids 1,783 646
Deferred Income Taxes 7,759 1,874
Net Current Assets from
Discontinued Operations 8,077 7,533
--------- ---------
Total Current Assets 62,661 36,796
Property, Plant & Equipment 27,770 6,657
Prepaid Pension Costs 19,849 19,051
Deferred Income Taxes 1,229 1,631
Intangible Assets 68,473 10,099
Other Assets 5,018 3,113
Net Non-Current Assets from
Discontinued Operations 5,403
--------- ---------
$ 185,000 $ 82,750
--------- ---------
--------- ---------
LIABILITIES & SHAREHOLDERS' EQUITY:
Current Liabilities:
Short-term Borrowings $ - $ 500
Accounts Payable 20,557 7,109
Accrued Liabilities 14,659 8,842
Progress Payments 6,962 5,517
Current Portion of
Long-Term Debt 5,540
--------- ---------
Total Current Liabilities 47,718 21,968
Postretirement Benefits 3,054 1,450
Long-Term Debt 94,034 16,497
Other Long-Term Liabilities 1,122 181
--------- ---------
Total Liabilities 145,928 40,096
Shareholders' Equity 39,072 42,654
--------- ---------
$ 185,000 $ 82,750
--------- ---------
--------- ---------
Genesis Worldwide Inc.
Condensed Statements of Operations
(in thousands, except per share amounts)
Quarter Ended Year Ended
Dec. 31, Dec. 31,
--------------- ------------
1999 1998 1999 1998
------ ------ ------ ------
Net Sales $ 37,307 $ 10,600 $ 111,394 $ 46,038
Cost of Sales 29,586 8,010 86,610 35,128
--------- --------- --------- ---------
Gross Margin 7,721 2,590 24,784 10,910
Selling, General
& Administrative 5,339 1,929 17,083 7,271
Amortization of
Intangibles 975 1,858
Impairment 600 600
--------- --------- --------- ---------
Operating Income 807 661 5,243 3,639
Interest (Expense) (2,484) (116) (5,450) (368)
Other (Expense) Income 265 205 582 215
-------- -------- --------- ---------
Income (Loss) Before
Income Taxes (1,412) 750 375 3,486
Income Taxes (Provision)
Benefit 161 (293) (803) (1,206)
-------- -------- --------- ---------
Net Income (Loss) from
Continuing Operations (1,251) 457 (428) 2,280
Discontinued Operations-
net of tax:
Income (Loss) from
Operations (1,600) 25 (2,139) (197)
(Loss) on Disposal (4,383) (4,383)
-------- -------- --------- ---------
Net Income (Loss) $(7,234) $ 482 $ (6,950) $ 2,083
-------- -------- --------- ---------
-------- -------- --------- ---------
Net Income (Loss)
per Share -
Basic and Diluted:
From Continuing $ (0.29) $ 0.12 $ (0.11) $ 0.60
From Discontinued (1.40) 0.01 (1.62) (0.05)
-------- -------- ---------- ---------
Total $ (1.69) $ 0.13 $ (1.73) $ 0.55
Weighted Average Common
Shares Outstanding:
Basic 4,284 3,769 4,032 3,768
Diluted 4,284 3,769 4,032 3,768
Supplemental Data (from
continuing operations):
End of Period Backlog $ 62,245 $ 42,982 $ 62,390 $ 42,982
Depreciation and
Amortization $ 1,947 $ 177 $ 4,319 $ 731
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