MODTECH REPORTS RESULTS
MODTECH REPORTS RESULTS PERRIS, Calif., March 23 /PRNewswire/ -- Modtech Inc.
(NASDAQ: MODT) reported today a pre-tax loss in 1991 of approximately $3,300,000 and said that the loss is primarily attributable to the low utilization of its manufacturing facilities in the poor economic climate of California. Revenue for the year ended Dec. 31, 1991, was $35,600,000 compared to $47,600,000 in the same period a year ago. For the year, the company reported a net loss of approximately $2,800,000 or $.77 per share.
According to Evan M. Gruber, chief executive officer, "Revenue in the fourth quarter was off approximately 60 percent. We continue to be hampered by the budget shortfalls which plague the State of California. On an almost daily basis, California school districts announce deficits and teacher layoffs. Gov. Wilson recently stated his intention to reduce the State of California payroll by 15 percent. The space/defense industry and the construction sectors continue to be weak. Unemployment in the inland areas of California such as Riverside/San Bernardino have recently reached 9.8 percent. These negative factors, which appear to cause reductions in state tax revenues, as well as others, have caused our industry to contract. Additionally as firms in our industry compete for shares of this market, margins decline. School districts do not appear to have funds to place orders even though the student population continues to grow rapidly. The fourth quarter also reflects year-end adjustments of approximately $1,500,000 for inventory shrinkage and a reserve for uncollectible trade accounts receivable. "In September of 1991, we announced plans to lay off 15 percent of our work force, in November we increased the layoffs to 30 percent, and today we are increasing the total layoffs to approximately 40 percent, when compared to the work force at June 30, 1991. In addition to this cost-cutting measure, we have cut the salary of executive officers by 25 percent, other managers by 10 percent. James Goldenetz, officer/director, has agreed to a leave of absence for the remainder of 1992 so as to further reduce costs. "As a further example of the fiscal problems at the State of California, the state procurement for emergency classrooms for 1992 was only 50 percent of the size of the prior year. However, we at Modtech Inc. are pleased to report that we are the apparent low bidder on the project. The contract, if fully utilized would approximate $7,000,000. "The other positive news to report is that on March 9, 1992, the California State Legislature agreed to place on the June 2, 1992 ballot, $1.9 billion of bonds for new school construction. We at Modtech Inc. are of course hopeful that this bond issue meets with voter approval. "While we believe we are in for more tough quarters, the underlying demographics of a continuing increase in student growth, as validated by the need for a bond issue, suggest that our industry has a potential for growth." Modtech Inc. designs, manufactures and installs modular relocatable classrooms, marketing its products to California school districts, as well as to the State of California and leasing companies which, in turn, lease the classrooms to school districts. MODTECH INC. Selected Unaudited Financial Data Dec. 31, ($, thousands, excepts EPS) 1991 1990 Fourth Quarter: Net sales $3,451 $9,094 (Loss)/income before taxes (3,338) 997 Net (loss)/income (2,855) 594 (Loss)/earnings per share (.77) .15 Average shares outstanding 3,701 3,967 Year: Net sales $35,592 $47,629 (Loss)/income before taxes (3,328) 5,066 Net (loss)/income (2,849) 3,015 (Loss)/earnings per share (.77) .89 Average shares outstanding 3,701 3,370 -0- 3/23/92 /NOTE: A pro-forma adjustment has been made to provide for income tax expense in 1990. Prior to the effective date of the July 1990 public offering, the company was an S corporation and paid no federal and minimum state income taxes./ /CONTACT: Evan M. Gruber, CEO of Modtech Inc., 714-943-4014/ (MODT) CO: Modtech Inc. ST: California IN: CST SU: ERN
KJ -- LA018 -- 0719 03/23/92 16:04 EST
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|Date:||Mar 23, 1992|
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