THE HAMMOND CO. ANNOUNCES RESULTS
THE HAMMOND CO. ANNOUNCES RESULTS NEWPORT BEACH, Calif., Jan. 24 /PRNewswire/ -- The Hammond Co. today
announced it has commenced a self tender offer to purchase up to 380,000 shares or approximately 30 percent of its outstanding common stock at a price of $4 per share.
The self tender offer will expire on Tuesday, Feb. 25, 1992, unless extended by the company. Shareholders may, at their own discreion, tender their common stock at a price of $4 per share (no commissions charged) or continue to hold their common stock. The company's offer to purchase tendered shares is subject to certain conditions, including there being validly tendered sufficient shares which will result in there being less than 300 record holders of shares. If these conditions are satisfied, the company expects to delist its shares from the NASDAQ National Market System, terminate registration of shares under the Securities Exchange Act of 1934 and cease to file public reports with the SEC. The tender offer is also conditioned upon, among other things, the successful completion of a privately placed new issue of convertible preferred stock to fund the tender offer and related expenses. The company's board of directors has unanimously approved its tender offer, however, neither the company nor its directors are making any recommendation to any shareholder as to whether to tender or refrain from tendering shares. Neither the chairman nor any of the directors are tendering shares. The offer to purchase, which describes the tender offer in greater detail, has been mailed to the company's shareholders. The company also announced its operating results for the third quarter ended Dec. 31, 1991. For the nine months ended Dec. 31, 1991, the company had a net loss of $977,452 or $.77 per share, compared to a net loss of $778,879 or $.61 per share for the nine months ended Dec. 31, 1990. The company increased its mortgage servicing portfolio to $622 million at Dec. 31, 1991, which is a 33 percent increase over $467 million at April 1, 1991, the beginning of the company's current fiscal year. The results for the nine months ended Dec. 31, 1991, are consistent with the business plan presented in the company's March 31, 1991, Annual Report and SEC Form 10K. That plan stated a strategy that, because of the company's adequate cash and capital position, the sales of mortgage servicing rights would be minimized. This strategy would result in generally accepted accounting principles (GAAP) losses but would increase the company's overall value when considering the increase in the mortgage servicing portfolio. The company's operations for the nine-month period ended Dec. 31, 1991, are summarized as follows: Net income. The company's net loss for the nine-month period ended Dec. 31, 1991, was $977,452 or $.77 per share which, compares to $778,879, or $.61 per share for the comparable nine-month period ended Dec. 31, 1990. The primary reason for the difference was due to the sale of $183 million of mortgage servicing rights for revenues of $1,401,275 which occurred during the previous nine-month period ended Dec. 31, 1990. This compares to $23 million of sold servicing rights for revenues of $194,018 during the current nine-month period ended Dec. 31, 1991. Revenues from loan origination income, net gain on sale of loans and interest income (net of interest expense) all slightly improved for the nine-month period ended Dec. 31, 1991, over the comparable period in 1990. In addition the company realized a gain in the quarter ended Sept. 30, 1991, of $353,418 from the sale of Hammond Mortgage Securities Corp., a wholly owned subsidiary which was formed in fiscal 1985 and operated solely as a mortgage bond issuance company. Mortgage Servicing. The company's mortgage servicing portfolio at Dec. 31, 1991, increased 33 percent to $622 million, compared to $467 million at April 1, 1991, the beginning of the current fiscal year. However revenues from servicing income during the nine-months ended Dec. 31, 1991, fell 14 percent from the comparable nine-month period ended Dec. 31, 1990, primarily due to the expensing of previously capitalized but unamortized future servicing fee income related to serviced loans which paid off at a rate faster than previously estimated. This is a result of the falling interest rate environment which encouraged families to refinance their mortgages. Loan Originations. The company's loan originations for the nine- months ended Dec. 31, 1991, were $283 million, a 16 percent increase from the previous period. Other Operating Expenses. Other operating expenses, or unallocated expenses, for the nine months ended Dec. 31, 1991, were $3.8 million, an 8 percent reduction from the comparable nine-month period ended Dec. 31, 1990, which was the result of the company's on-going efforts to reduce costs and increase productivity. THE HAMMOND CO. Highlights of Operations (Unaudited) Three months ended Dec. 31, 1991 1990 Change Revenues $2,948,119 $3,404,340 -13 pct Loss before extraordinary item ($438,313) ($347,331) -26 pct Net loss ($438,313) ($347,331) -26 pct Per share: Loss before extraordinary item ($0.34) ($0.27) -26 pct Net loss ($0.34) ($0.27) -26 pct Loans originated $85,727,000 $78,830,000 9 pct Nine months ended Dec. 31, 1991 1990 Change Revenues $10,348,448 $11,766,947 -12 pct Loss before extraordinary item ($1,038,792) ($778,879) -33 pct Net loss ($977,452) ($778,879) -25 pct Per share: Loss before extraordinary item ($0.82) ($0.61) -33 pct Net loss ($0.77) ($0.61) -25 pct Loans originated $283,400,000 $244,955,000 16 pct Dec. 31, 1991 March 31, 1991 Change Total assets $50,494,948 $67,567,027 -25 pct Shareholders' equity $4,986,459 $5,963,911 -16 pct Book value per share $3.92 $4.69 -16 pct Loans serviced $622,243,000 $467,220,000 33 pct -0- 1/24/92 /CONTACT: Thomas T. Hammond or Jonathan T. Bastis of The Hammond Co., 714-752-6671/ CO: The Hammond Company ST: California IN: FIN SU: ERN EH-JL -- LA013 -- 3127 01/24/92 08:43 EST
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|Date:||Jan 24, 1992|
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