UNITED WESTBURNE POISED FOR 1992 RECOVERY AFTER DECLARING FIRST LOSS IN HISTORY
UNITED WESTBURNE POISED FOR 1992 RECOVERY AFTER DECLARING
FIRST LOSS IN HISTORY
MONTREAL, Feb. 26 /PRNewswire/ -- Michel Vennat, vice chairman and chief executive officer of United Westburne Inc. (Montreal, Toronto Stock Exchanges: UWB), announced that the company is reporting a net loss on continuing operations for 1991 - the first in its history. Before discontinued operations, the loss totalled $8,970,000 on sales of $2,134,676,000, compared to a profit of $22,806,000 on sales of $2,359,964,000 in 1990. After provision for discontinued operations, the net loss increases to $27,350,000 for the year against a net profit of $18,197,000 realized in 1990.
The company incurred a loss per share before discontinued operations for the year of $0.25, compared with earnings per share of $0.61 in 1990. After discontinued operations, these figures represent a loss of $0.73 and earnings of $0.49 respectively.
"The weak North American economy created serious challenges for the company throughout the year and the long anticipated recovery never materialized," stated Vennat. "That the company conducted its business in a difficult economic environment is evidenced by the fact that activity in the Canadian industrial and commercial construction sector -- where more than 50 percent of Westburne's business is conducted -- fell by more than 37 percent."
As a response, the company undertook a cost reduction program which resulted in $11.3 million before taxes in restructuring and downsizing costs. Some 31 branches were merged or closed and the total number of employees was decreased by more than 10 percent. Overhead was cut by some $20 million compared to 1990 and the year-end balance sheet was improved through reduction in inventories and accounts receivable. Total borrowings were reduced by approximately $60 million during the year.
On January 15 of this year, the company announced its decision to sell its Southeastern U.S. operations. "The Memphis Division," as the operations are known," had been underperforming for years and was a drain on operating profits,'' stated Vennat. Two of the 14 divisional branches have now been sold and an after-tax provision of $11.4 million for discontinued operations was recorded in 1991.
Yesterday afternoon, the board of directors of United Westburne declared a dividend of $0.04 per common share for the first quarter ending March 31, 1992, being a reduction of $0.025 on the quarterly dividend paid since fiscal 1988. This reduction will assist the company in preserving its capital base while economic conditions remain difficult.
United Westburne Inc. is North America's largest integrated wholesale distributor of electrical, plumbing and heating, refrigeration and air conditioning, electronics and telecommunication supplies. Headquartered in Montreal, the company has 368 branches across Canada and 73 branches in 10 states in the United States.
/CONTACT: Louis-Gilles Gagnon of United Westburne Inc., 514-342-5181/
(UWB.) CO: United Westburne Inc. ST: Quebec IN: SU: ERN TQ -- NY034 -- 2781 02/26/92 12:02 EST