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SCOTTISH HERITABLE, INC. REPORTS SECOND QUARTER RESULTS, CITES SIGNIFICANCE OF VIRGINIA LIME SALE AND LAWSUIT SETTLEMENT

 SCOTTISH HERITABLE, INC. REPORTS SECOND QUARTER RESULTS, CITES
 SIGNIFICANCE OF VIRGINIA LIME SALE AND LAWSUIT SETTLEMENT
 FAIRFAX, Va., Aug. 20 /PRNewswire/ -- Two major events dominated the first six months of the year for Scottish Heritable (NASDAQ: SHER) the sale of substantially all assets and business of the Virginia Lime Company for $19,700,000 effective July 15, and the settlement of a lawsuit against wholly owned subsidiary Cadenhead-Rangaire, Inc.
 As of June 30, 1992, the company's balance sheet shows stockholders' equity of $0.53 per share. When adjusted for the financial impact of the Virginia sale, the pro forma balance sheet shows stockholders' equity of $3.25 per share. The pro forma balance sheet also reflects the recent pay down of $17.2 million of outstanding debt.
 Meanwhile, Scottish Heritable settled the Birdville (Texas) Independent School District's lawsuit against Cadenhead-Rangaire at a cost of $300,000. The lawsuit was for $5.3 million, not including punitive damages, treble damages and attorneys' fees.
 "These transactions will have a significant, positive impact on the company as we move forward," said Peter C. Timms, Scottish Heritable's president and chief executive officer. "Bear in mind, however, that there are short-term costs reflected in our first-half results."
 In addition to the $300,000 loss from discontinued operations reflecting the settlement with the Birdville Independent School District, Timms also noted the Virginia plant produced losses until the point of sale, due in part to the inevitable uncertainty leading up to the ownership change. Also, the plant experienced a month-long plant shutdown, which was prompted by the need to remove a potentially dangerous structure from the plant site. The loss incurred by the shutdown was compounded by the company's need to purchase lime from other suppliers to satisfy customers' needs.
 The Virginia plant's losses and the continuing depressed market demand in Pennsylvania and New Jersey, the areas served by the Corson facility, resulted in net losses for the first six months of 1992 of $1,249,000, compared with net earnings of $192,000 for the first six months of 1991.
 "Our aggregates and dolomitic lime plant, Corson, continues to experience depressed market conditions, which we are countering with cost saving and productivity improving initiatives," said Timms. "We expect Corson's markets to pick up as new federally funded projects are released.
 "The sale of the Virginia Lime plant will transform the company's balance sheet and improve underlying profitability," said Timms. "The settlement of the Birdville lawsuit has removed a lingering uncertainty from the company. As these events pass into history, we'll be able to focus more clearly on the ongoing businesses to the further benefit of our shareholders."
 The following Condensed Consolidated Financial Statements include results of Virginia Lime Company and does not reflect the sale transaction which took place as of July 15, 1992.
 SCOTTISH HERITABLE, INC.
 Condensed Consolidated Statements of Operations -- Unaudited
 (In thousands of dollars, except per share data)
 Three Months Ended Six Months Ended
 June 30, June 30,
 1992 1991 1992 1991
 Revenues $10,111 10,631 18,753 19,113
 Cost of revenues 8,475 8,238 15,681 15,170
 Gross profit 1,636 2,393 3,072 3,943
 Selling, general and
 admin. expenses 1,345 1,612 2,863 3,028
 Operating profit 291 781 209 915
 Interest expense 620 508 1,232 1,062
 Other, net (69) (93) (74) (133)
 Net Earnings (loss)
 from continuing operations
 before income taxes (260) 366 (949) (14)
 Federal and State income
 taxes -- (206) -- (206)
 Net earnings (loss)
 from continuing operations (260) 572 (949) 192
 Loss from discontinued
 operations (300) -- (300) --
 Net earnings (loss) $ (560) 572 (1,249) 192
 Earnings (loss) per share
 of common stock:
 Continuing operations $ (0.07) 0.15 (0.25) 0.05
 Discontinued operations $ (0.08) -- (0.08) --
 Net earnings (loss) $ (0.15) 0.15 (0.33) 0.05
 Condensed Consolidated Balance Sheets
 (In thousands of dollars)
 June 30, 1992 December 31, 1992
 (unaudited)
 Assets
 Current assets $14,141 13,469
 Net property, plant
 & equipment 22,205 22,404
 Cost in excess of net
 assets acquired, net
 of amortization 1,276 1,604
 Other assets 561 557
 Total assets $38,183 38,034
 Liabilities and Stockholders'
 Equity
 Current liabilities $ 6,261 5,782
 Long-term debt & lease
 obligations 29,213 28,559
 Long-term lease
 obligation 273 107
 Deferred credits 398 401
 Stockholders' equity 2,038 3,185
 Total liabilities
 and stockholders'
 equity $38,183 38,034


Pro Forma Condensed Consolidated Financial Statements - Unaudited
 To provide you with an historic perspective of the continuing operations, the company has provided below a pro forma restatement of 1991 and 1992 results excluding Virginia Lime Company, produced as if the sale transaction and debt pay down had occured at the beginning of the respective periods. The pro forma balance sheet assumes that the sale transaction and debt pay down occurred as of June 30, 1992.
 Pro Forma Condensed Consolidated Statement of Operations
 (In thousands of dollars, except per share data)
 Six Months Ended
 June 30, Fiscal Year
 1992 1991 1991
 Revenues $14,736 15,013 30,684
 Cost of revenues 11,625 11,525 24,175
 Gross profit 3,111 3,488 6,509
 Selling, general &
 admin. expenses 2,355 2,512 5,197
 Operating profit 756 976 1,312
 Interest expense 501 362 704
 Other, net (60) (78) (309)
 Net earnings (loss)
 from continuing
 operations before income
 taxes 315 692 917
 Federal and State income
 taxes 73 194 258
 Net earnings (loss) from
 continuing operations 242 498 659
 Earnings (loss) per share of
 common stock:
 Continuing operations $ 0.06 0.13 0.17
 Pro Forma Condensed Consolidated Balance Sheet
 (In thousands of dollars)
 June 30, 1992
 Assets
 Current assets $13,325
 Net property, plant & equipment 16,528
 Cost in excess of net assets acquired, net
 of amortization 1,276
 Other assets 561
 Total assets $31,690
 Liabilities and Stockholders' Equity
 Current liabilities $ 6,712
 Long-term debt 12,013
 Long-term lease obligation 99
 Deferred credits 398
 Stockholders' equity 12,468
 Total liabilities & stockholders' equity $31,690
 -0- 8/20/92
 /CONTACT: Peter C. Timms of Scottish Heritable, Inc., 703-207-9702/
 (SHER)
 CO: Scottish Heritable, Inc.
 ST: Virginia
 IN: MNG
 SU: ERN


DC -- NY054 -- 1799 08/20/92 15:07 EDT
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