NS Group Reports Second Quarter 2002 Results.Business Editors NEWPORT Newport, town, England Newport, town (1991 pop. 19,758), Isle of Wight, S England. It is also a port and the commercial center of the island, with agricultural markets and light industries (plastics, soft drinks, and woodworking). In the 17th cent. , Ky.--(BUSINESS WIRE)--July 18, 2002 NS Group, Inc. (NYSE NYSE See: New York Stock Exchange :NSS (Novell Storage Services) A 64-bit file system introduced with NetWare 5 that can support terabyte-sized files. NSS files and standard NetWare files can be used in the same server. See NetWare 5. 1. (networking) NSS - Nodal Switching System. ) announced today its results for the quarter ended June June: see month. 30, 2002. 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 quarter were $54.9 million, a 41 percent increase from the first quarter of 2002. The company reported an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $1.6 million for the quarter compared to an operating loss of $12.6 million in the first quarter of 2002. Net loss for the quarter was $3.9 million, or a $0.19 loss 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 a net loss of $14.3 million, or a $0.69 loss per diluted share, in the first quarter of 2002. Net sales for the six-month period ended June 30, 2002 were $93.7 million, compared to $184.8 million for the six months ended June 30, 2001. Operating loss for the first six months of 2002 was $14.2 million, compared to an operating loss of $43.8 million, including restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of $56.2 million, for the comparable prior year period. The company reported a net loss of $18.2 million, or an $0.88 loss per diluted share, compared to a net loss of $45.6 million, or a $2.17 loss per diluted share, including restructuring charges of $2.68 per diluted share, in the prior year period. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become (earnings 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 before extraordinary items, net interest expense, taxes, depreciation and amortization and restructuring charges) was a positive $1.2 million in the second quarter of 2002 compared to a negative $9.7 million in the first quarter of 2002. EBITDA was a negative $8.4 million for the first six months of 2002 compared to a positive $22.0 million in the first six months of 2001. 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. , Rene RENE Recycling Network Europe RENE Rocket Engine Nozzle Ejector J. Robichaud stated, "Our second quarter financial results improved dramatically over the first quarter due to an increase in shipments of OCTG OCTG Oil Country Tubular Goods products and, very importantly, a much better operating performance. Our employees have worked diligently dil·i·gent adj. Marked by persevering, painstaking effort. See Synonyms at busy. [Middle English, from Old French, from Latin d in containing costs and I thank them for their fine effort. We will continue to place our focus on operational excellence. In addition, we will pursue revenue growth opportunities. Our Houston-based sales office, which brings us closer to many of our customers and provides for better coordination of our sales and marketing efforts, is scheduled to open in the fourth quarter of this year." Robichaud went on to say, "The marketplace clearly improved in the second quarter. The U.S. drilling rig count increased by 100 rigs during the quarter and currently stands at 848 active rigs. We expect rig count will continue to increase to approximately 950 rigs by year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. . As such, we believe our shipments and selling prices will likewise improve during the second half of the year. It is important to note that we expect to see higher coil costs over the next six months. However, much of the increase in coil purchase costs are expected to be offset by selected tubular tubular /tu·bu·lar/ (too´bu-lar) 1. shaped like a tube. 2. of or pertaining to a tubule. tubular 1. pertaining to renal tubules. 2. pertaining to fallopian tube. price increases. We estimate a loss in the area of $0.13 per diluted share in the third quarter of 2002 which will include a $0.6 million non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. ($0.03 per diluted share) related to the write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of deferred financing costs and debt discount associated with the July 2002 redemption of $35.0 million of our senior secured notes." The company will host a conference call and simultaneous web cast to discuss second quarter results at 10:00 A.M. ET on Friday, July 19, 2002. Details concerning the conference call and web cast are available on the company's web site, www.nsgrouponline.com. NS Group, Inc. is a leading producer of seamless and welded tubular products serving the energy industry. These products are used in the drilling, exploration and transmission of oil and natural gas. The company's tubular products are marketed primarily 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 certain foreign markets. NS Group is traded on the NYSE under the symbol NSS. To learn more about NS Group log on to www.nsgrouponline.com. This report contains forward-looking information with respect to the company's operations and beliefs. Actual results may differ from these 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. due to numerous factors, including those discussed in the company's filings with the Securities and Exchange Commission. NS Group does not undertake any obligations to update or revise its forward-looking statements.
NS Group, Inc.
Summarized Financial Data
(In thousands, except per share amounts,
tons shipped, selling price and rig count)
(Unaudited)
Three Months Ended Six Months Ended
---------------------------- -------------------
June 30, March 31, June 30, June 30, June 30,
2002 2002 2001 2002 2001
------- --------- -------- --------- --------
Net sales $54,851 $ 38,848 $102,727 $ 93,699 $184,841
Cost of
products sold 52,598 47,081 87,268 99,679 161,985
------- --------- -------- --------- --------
Gross profit
(loss) 2,253 (8,233) 15,459 (5,980) 22,856
Selling,
general and
administrative
expenses 3,872 4,322 5,476 8,194 11,101
Restructuring
charges -- -- -- -- 55,585
------- --------- -------- --------- --------
Operating
income
(loss)(a) (1,619) (12,555) 9,983 (14,174) (43,830)
Investment income 370 751 1,286 1,121 2,124
Interest expense (2,658) (2,596) (2,580) (5,254) (5,102)
Other income, net (12) 93 206 81 1,305
------- --------- -------- --------- --------
Income (loss)
before
extraordinary
items and
income taxes (3,919) (14,307) 8,895 (18,226) (45,503)
Provision (benefit)
for income taxes -- -- -- -- --
------- --------- -------- --------- --------
Income (loss)
before
extraordinary
items (3,919) (14,307) 8,895 (18,226) (45,503)
Extraordinary
items, net of
income taxes -- -- -- -- (59)
------- --------- -------- --------- --------
Net income
(loss)(a) $(3,919) $ (14,307) $ 8,895 $ (18,226) $(45,562)
------- --------- -------- --------- --------
------- --------- -------- --------- --------
Per common share
- diluted(a)
Income (loss)
before
extraordinary
items $ (0.19) $ (0.69) $ 0.41 $ (0.88) $ (2.17)
Extraordinary
items, net
of income taxes -- -- -- -- --
------- --------- -------- --------- --------
Net income
(loss)(a) $ (0.19) $ (0.69) $ 0.41 $ (0.88) $ (2.17)
------- --------- -------- --------- --------
------- --------- -------- --------- --------
Weighted average
shares outstanding
Basic 20,647 20,646 20,994 20,646 20,971
Diluted 20,647 20,646 21,689 20,646 20,971
EBITDA(b) $ 1,229 ($ 9,657) $ 13,057 ($ 8,428) $ 21,967
Product shipments
(tons):
Energy products
- welded 63,600 40,700 96,200 104,300 170,100
Energy products
- seamless 32,200 25,300 57,000 57,500 102,000
Industrial
products - SBQ(c) -- -- 9,900 -- 23,900
Revenue per ton:
Energy products
- welded $ 424 $ 427 $ 490 $ 425 $ 493
Energy products
- seamless 867 848 899 858 886
Industrial
products - SBQ(c) -- -- 390 -- 412
Average rig count 808 814 1,239 811 1,190
NOTES:
(a) Results for the six months ended June 30, 2001, include
restructuring charges of $56.2 million which reduced net
income by $56.2 million or $2.68 per share. Excluding
these charges, operating income would have been
$12.4 million, and net income and income per diluted share
would have been $10.7 million and $0.49, respectively.
(b) Represents earnings (loss) before net interest expense,
taxes, depreciation, amortization and restructuring
charges.
(c) NS Group exited the SBQ business in the second quarter of 2001.
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