Zemex Corporation Reports Strong Financial Results For Fiscal 1999.Business Editors TORONTO--(BUSINESS WIRE)--March 29, 2000 Zemex Corporation (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :ZMX)(NYSE NYSE See: New York Stock Exchange :ZMX) today reported strong net income and record 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 for the 1999 fiscal year. On a fully consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: basis, which includes continuing and discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. , the Corporation reported net income of $5.8 million, or $0.69 per share, for the year ended December December: see month. 31, 1999 compared to $5.4 million, or $0.65 per share for 1998. However, during the 1999 fourth quarter, the Corporation absorbed Absorbed 1. In a general business sense, when a cost is treated as an expense instead of being passed on to the customer in the form of higher prices. 2. In underwriting, when an issue has been completely sold to the public. 3. two significant one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. expenses. First, because the Corporation sold its remaining 1.8 million shares of Inmet Mining The 'Inmet Mining Corporation is a Canadian mining corporation that currently holds an 18% stake in Ok Tedi Mining Limited. Corporation in February February: see month. 2000, its investment was written down at year end by $0.5 million to be consistent with the amount realized “Amount Realized” is one of two variables in the formula used to compute gains and losses when determining gross income for tax purposes. The Amount Realized – Adjusted Basis tells the amount of Realized Gain (if positive) or Realized Loss (if negative). on the sale of this investment. Second, despite the fact that, in aggregate, the surplus contained in the Corporation's pension plans increased by $2.1 million in 1999, the Corporation absorbed a $0.6 million pension expense in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with U.S. generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting . These two items resulted in a decrease in earnings per share of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $0.09, resulting in the $0.69 above. On March 6, 2000 the Corporation announced that it had entered into a stock purchase agreement pursuant to which it has agreed to sell its metal powders division, which is comprised of two wholly-owned subsidiaries, Pyron Pyron is a video game character from the Darkstalkers fighting game series and an alien from the planet Hellstorm. After evolving over many years, he became a cosmic being. Over the time of 200 million years, he sought to collect beautiful planets by consuming them. Corporation and Pyron Metal Powders, Inc. These subsidiaries have been reflected as discontinued operations and prior years' income statements have been restated to reflect this transaction. It should be noted that, in this method of presentation, neither the Corporation's interest expense nor its corporate overhead is allocated to the metal powders division and, as a result, the entire interest and corporate burdens are borne by 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 , which distorts the results. Accordingly, net income from discontinued operations for fiscal 1999 was $3.9 million, or $0.47 per share compared to $2.7 million, or $0.33 per share, for fiscal 1998. 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. from discontinued operations in 1999 was $6.1 million on 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 of $39.0 million. Excluding discontinued operations, the Corporation's operating income for the 1999 year was $7.0 million on net sales of $77.5 million, an increase of 13.1% and 13.5%, respectively, over 1998. 1999 Performance On the 1999 results, Richard Ri·chard , Joseph Henri Maurice Known as "Rocket." 1921-2000. Canadian hockey player. A right wing for the Montreal Canadiens (1942-1960), he led his team to eight Stanley Cup championships and was the first player to score 50 goals in a L. Lister, President and Chief Executive Officer of Zemex, commented, "All in all, the operating performance of each of the Corporation's business units was very strong during 1999. Our industrial minerals group completed the retrofitting of its muscovite muscovite: see mica. muscovite or common mica or potash mica or isinglass Abundant silicate mineral that contains potassium and aluminum and has a layered atomic structure. It is the most common member of the mica group. mica operations, and production, which was brought on stream late in the year, is expected to achieve almost full capacity during the second quarter of 2000. Also in 1999, our aluminum recycling recycling, the process of recovering and reusing waste products—from household use, manufacturing, agriculture, and business—and thereby reducing their burden on the environment. business completed the construction of its calcium calcium (kăl`sēəm) [Lat.,=lime], metallic chemical element; symbol Ca; at. no. 20; at. wt. 40.08; m.p. about 839°C;; b.p. 1,484°C;; sp. gr. 1.55 at 20°C;; valence +2. aluminate a·lu·mi·nate n. A chemical compound containing aluminum as part of a negative ion. Noun 1. aluminate - a compound of alumina and a metallic oxide facility and is now producing high quality product in large commercial quantities at the new facility. These two programs, along with others that have been implemented over the past three or four years at these divisions, have met with great success and are anticipated to lend themselves to future growth." Maximizing Shareholder Value Mr. Lister continued, "We continue to work with Banc of America America [for Amerigo Vespucci], the lands of the Western Hemisphere—North America, Central (or Middle) America, and South America. The world map published in 1507 by Martin Waldseemüller is the first known cartographic use of the name. Securities reviewing ways to maximize shareholder value. The first step we have taken in this regard is the sale of the metal powders division. We have made great strides in building this business over the last couple of years. However, it did not fit in with our core mandate A judicial command, order, or precept, written or oral, from a court; a direction that a court has the authority to give and an individual is bound to obey. A mandate might be issued upon the decision of an appeal, which directs that a particular action be taken, or upon a to be dominant or a very strong number two in any business segment; therefore, we feel it is better off in the hands of another owner. As to what our next step will be, we are still in the process of evaluating a number of available options." Zemex Corporation is a leading producer of industrial minerals, specialty materials and, through its Alumitech division, reprocesses aluminum drosses with patented zero discharge technology. Zemex currently has facilities across 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 Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of . Its products are used in a variety of industrial and commercial applications that are sold throughout the North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). .This press release may contain "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. " within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These forward statements include statements regarding the intent, belief or current expectation of the Corporation and members of its senior management team, including, without limitation, expectations regarding prospective performance and opportunities. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by the Corporation.
Tables Follow:
ZEMEX CORPORATION
CONSOLIDATED BALANCE SHEETS
DECEMBER 31
(US$)
---------------------------------------------------------------
1999 1998
---------------------------------------------------------------
ASSETS (audited)
Current assets
Cash and cash equivalents $ 1,592,000 $ 1,062,000
Accounts receivable 19,829,000 17,642,000
Inventories 19,482,000 18,036,000
Prepaid expenses and other current
assets 2,457,000 946,000
Future income tax benefits 677,000 657,000
---------------------------------------------------------------
44,037,000 38,343,000
---------------------------------------------------------------
Property, plant and equipment 96,779,000 90,058,000
Other assets 18,228,000 20,374,000
Future income tax benefits
(non-current) 484,000 91,000
---------------------------------------------------------------
$159,528,000 $148,866,000
---------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Bank indebtedness $ 5,500,000 $ 10,000,000
Accounts payable 5,959,000 6,324,000
Accrued liabilities 3,398,000 4,433,000
Accrued income taxes 950,000 644,000
Current portion of long term debt 617,000 2,132,000
---------------------------------------------------------------
16,424,000 23,533,000
---------------------------------------------------------------
Long term debt 50,502,000 39,354,000
Other non-current liabilities 585,000 1,006,000
---------------------------------------------------------------
67,511,000 63,893,000
---------------------------------------------------------------
NON-CONTROLLING INTEREST 2,970,000 3,075,000
---------------------------------------------------------------
SHAREHOLDERS' EQUITY
Common stock 58,560,000 8,708,000
Paid-in capital - 48,876,000
Retained earnings 33,920,000 28,233,000
Note receivable from shareholder (1,749,000) (1,749,000)
Cumulative translation adjustment (1,684,000) (2,170,000)
---------------------------------------------------------------
89,047,000 81,898,000
---------------------------------------------------------------
$159,528,000 $148,866,000
---------------------------------------------------------------
ZEMEX CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(US$)
--------------------------------------------------------------
3 Months Ended December Year Ended December 31,
31,
1999 1998 1999 1998
---------------------------------------------------------------
(unaudited) (audited)
NET SALES
Industrial
minerals $12,257,000 11,452,000 $50,373,000 $44,835,000
Aluminum
recycling 6,820,000 5,950,000 27,157,000 23,503,000
---------------------------------------------------------------
19,077,000 17,402,000 77,530,000 $68,338,000
---------------------------------------------------------------
COSTS AND EXPENSES
Cost of goods
sold 11,969,000 11,785,000 50,776,000 46,842,000
Selling, general
and
administrative 3,989,000 2,763,000 12,337,000 9,941,000
Depreciation,
depletion and
amortization 1,863,000 1,430,000 7,402,000 5,353,000
---------------------------------------------------------------
17,821,000 15,978,000 70,515,000 62,136,000
---------------------------------------------------------------
OPERATING
INCOME 1,256,000 1,424,000 7,015,000 6,202,000
---------------------------------------------------------------
Interest income 54,000 96,000 151,000 202,000
Interest
expense (1,250,000) (980,000) (4,325,000) (2,384,000)
Other, net (484,000) 10,000 (522,000) (840,000)
---------------------------------------------------------------
(1,680,000) (874,000) (4,696,000) (3,022,000)
---------------------------------------------------------------
INCOME BEFORE INCOME TAXES
AND
NON-CONTROLLING
INTEREST (424,000) 550,000 2,319,000 3,180,000
(Recovery of)
provision for
income taxes (42,000) (58,000) 577,000 569,000
Non-controlling interest in
loss of
subsidiary (65,000) (40,000) (105,000) (41,000)
---------------------------------------------------------------
INCOME FROM
CONTINUING
OPERATIONS (317,000) 648,000 1,847,000 2,652,000
INCOME FROM
DISCONTINUED
OPERATIONS 1,415,000 857,000 3,934,000 2,713,000
---------------------------------------------------------------
NET INCOME $ 1,098,000 $ 1,505,000 $ 5,781,000 $ 5,365,000
---------------------------------------------------------------
NET INCOME
PER SHARE
Basic
Continuing
operations $ (0.04) $ 0.08 $ 0.22 $ 0.32
Discontinued
operations $ 0.17 $ 0.10 $ 0.47 $ 0.33
---------------------------------------------------------------
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES
OUTSTANDING 8,489,332 8,316,801 8,425,561 8,286,178
---------------------------------------------------------------
ZEMEX CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31
(US$)
---------------------------------------------------------------
1999 1998
---------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES (audited)
Net income $ 5,781,000 $ 5,365,000
Adjustments to reconcile net income
to net cash flows from
operating activities
Depreciation, depletion
and amortization 8,860,000 6,561,000
Amortization of deferred
financing costs 249,000 168,000
Increase in future income
tax benefits (413,000) (909,000)
Non-controlling interest in loss of
subsidiary (105,000) (41,000)
Loss on sale of property, plant and
equipment 358,000 19,000
Increase in other assets (277,000) (795,000)
Decrease in other non-current
liabilities (421,000) (191,000)
Changes in non-cash working
capital items (5,517,000) (5,536,000)
---------------------------------------------------------------
Net cash provided by operating
activities 8,515,000 4,641,000
---------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant
and equipment (13,803,000) (20,728,000)
Assets acquired in connection
with acquisitions, net of cash acquired - (7,468,000)
Acquisitions of securities (837,000) (14,566,000)
Proceeds of sales of securities 554,000 9,696,000
Proceeds from sale of assets 36,000 3,126,000
---------------------------------------------------------------
Net cash used in investing
activities (14,050,000) (29,940,000)
---------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
(Payments) proceeds net, on bank
indebtedness (4,500,000) 7,000,000
Proceeds from long term debt 50,733,000 21,572,000
Repayment of long term debt (41,100,000) (4,921,000)
Cash paid in lieu of fractional
shares - (4,000)
Issuance of common stock 1,049,000 1,101,000
Purchase of common stock and options (167,000) (516,000)
---------------------------------------------------------------
Net cash provided by financing
activities 6,015,000 24,232,000
---------------------------------------------------------------
EFFECT OF EXCHANGE RATE CHANGES ON
CASH 50,000 (60,000)
---------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH 530,000 (1,127,000)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR 1,062,000 2,189,000
---------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT
END OF YEAR $ 1,592,000 $ 1,062,000
---------------------------------------------------------------
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