NORD RESOURCES CORP. THIRD QUARTER 1991
NORD RESOURCES CORP. THIRD QUARTER 1991 DAYTON, Ohio, Nov. 15 /PRNewswire/ -- Nord Resources Corp.
(NYSE: NRD) today announced results of operations for the third quarter ended Sept. 30, 1991. A net loss of $3,635,000, or 24 cents per share, was incurred in the third quarter of 1991 compared to a net loss of $1,314,000 or 9 cents per share in the third quarter of 1990. Revenues for the third quarter of 1991 increased to $27,845,000 compared to third quarter 1990 revenues of $27,124,000.
For the nine months ended Sept. 30, 1991, the company incurred a net loss of $9,203,000 or 61 cents per share, on revenues of $83,937,000 compared to net earnings of $123,000 or 1 cent per share on revenues of $74,196,000 for the same period of 1990. Operating losses were slightly higher for the kaolin segment in the third quarter of 1991 compared to 1990 while the rutile segment had a decline in operating earnings in the third quarter and nine month periods ended Sept. 30, 1991, due to lower prices and increased production costs, primarily resulting from mining low grade ore, and higher fuel, oil and supplemental mining costs. Average sales prices for rutile decreased by 7.9 percent in the first nine months of 1991 compared to the first nine months of 1990, while both tons sold and produced increased in the first nine months of 1991 compared to 1990. The worldwide recession, which began impacting the company in 1990, continues to have an adverse impact on rutile prices and the demand for rutile. Also negatively affecting 1991 compared to 1990 is 1) an increase of $991,000 in interest expense due to higher borrowings and less capitalized interest; 2) an increase of $1,474,000 in income taxes, primarily at SRL; 3) an increase of $1,341,000 in legal costs as a result of ongoing litigation, including sales agent arbitration and shareholder litigation and 4) the company's $950,000 reduction in commission expense in the first quarter of 1990 which resulted from the elimination of a previously reported accrual. Revenues from the kaolin operation increased to $19,150,000 in the first three quarters of 1991 compared to revenues of $11,910,000 in 1990. This was primarily due to an increase in sales of Norplex(R) and, to a lesser degree, conventional clay products. Sales of Norplex(R) are not yet at sufficient levels to have a significant impact on operating results. Operating results continue to be impacted by costs associated with the company's plant expansion, depreciation and leased equipment costs, and new product development and introduction. The losses incurred by the company in 1991, primarily as a result of the worldwide recession, continue to adversely affect the company's short-term liquidity and have caused the company to reduce planned capital expenditures and to seek additional external financing for its operations. The negative impact the recession is having on operations and cash flow is expected to continue until the business environment responds to a general economic recovery, particularly the paper and paint manufacturing segments. Although the company is current in the payment of all of its bank debt and equipment lease obligations, it was necessary to obtain amendments and waivers to its loan agreements from its banks and waivers or amendments from equipment lessors so that the company is not in violation of any of the covenants contained in any of the loan and lease agreements. Unless the company is successful in restructuring its financial position, there can be no assurance that the company will be in compliance with its bank and lease covenants in the future without obtaining further amendments or waivers from certain lenders and lessors, or will be able to maintain its current business operations without the sale of certain assets. As previously announced on Sept. 25, 1991, and updated on Oct. 30, 1991, the company has entered into a preliminary agreement with an international mining company to issue to it U.S. $20 million principal amount of 10 year 8 percent convertible debentures. The funds from these debentures would be used for general working capital. Drafts of definitive agreements are now in hand and are being reviewed in preparation for closing. In addition, the company, through a financial advisory agreement with SBCI Swiss Bank Corp., is reviewing a broad range of possible transactions including, but not limited to, the formation of strategic alliances, joint ventures or partnerships with equity and/or debt participants in connection with the company's varied operations, or their possible sale. The summary of the consolidated statement of earnings follows: FOR THE QUARTER ENDED SEPT. 30, 1991 1990 Revenues $27,845,000 $27,124,000 Net Earnings (Loss) ($3,635,000) ($1,314,000) Earnings (Loss) per Share ($.24) ($.09) FOR THE NINE MONTHS ENDED SEPT. 30, 1991 1990 Revenues $83,937,000 $74,196,000 Net Earnings (Loss) ($9,203,000) $123,000 Earnings (Loss) per Share ($.61) $.01 Nord Resources Corp. is a major producer of rutile (a premium titanium dioxide mineral), kaolin and perlite, and holds a significant interest in Nord Pacific Limited (NASDAQ: NORPF), a company engaged in the exploration for and development of precious, strategic and base metals. -0- 11/15/91 /CONTACT: Terence H. Lang, senior vice president - finance; or Susan Shahan, director of shareholder relations, both of Nord Resources Corp., 513-433-6307/ (NRD) CO: Nord Resources Corp. ST: Ohio IN: MNG ST: ERN KK -- CL002 -- 1389 11/15/91 09:07 EST
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|Date:||Nov 15, 1991|
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