UNR INDUSTRIES, INC. REPORTS SECOND QUARTER FINANCIAL RESULTS
CHICAGO, July 22 /PRNewswire/ -- UNR Industries, Inc. (NASDAQ: UNRI; CSE) today reported that sales in the second quarter of 1993 were $88.4 million, up 5 percent from $84.1 million in the second quarter of 1992. Net income for the current quarter was $3.8 million or $.08 per share, compared to $16.2 million or $.36 per share reported last year. The 1992 results include an after-tax amount of $8.1 million or $.18 per share as a result of a litigation settlement with one of the Company's previous insurance carriers. The 1992 results also include a non-recurring tax benefit of $3.2 million or $.07 per share in the second quarter and $5.3 million or $.12 per share in the six month period ended June 30, 1992. As a result of tax regulations issued in December of 1992, the Company recorded a tax benefit of $90 million or $1.99 per share in the fourth quarter of 1992. The year-to-date 1993 income tax provision of $4.0 million represents a non-cash charge for the Company's effective tax rate. Sales for the six months ended June 30, 1993, were $172.0 million, up 5 percent from $163.3 million reported for the same period in the prior year. Net income for the same period was $6.4 million or $.14 per share, compared to $22.1 million or $.49 per share in 1992. The 1992 amounts include the insurance recovery previously mentioned. Thomas A. Gildehaus, President and Chief Executive Officer, stated, "Operating income for the quarter was $6.8 million, down 16 percent from the same quarter last year. This decrease occurred largely because of rapidly escalating steel costs which resulted in a $900,000 LIFO charge in the quarter. Earnings were also somewhat depressed because of a timing lag in our ability to fully recover the steel cost increases in our selling prices over the quarter. UNR Industries, Inc. is a diversified company producing welded steel tubing, shopping carts, stainless steel sinks, towers and shelters for communication and other uses, and material handling products and systems. UNR INDUSTRIES, INC. CONDENSED STATEMENTS OF INCOME (unaudited) (In thousands except per share data) Three Months Ended June 30 Six Months Ended June 30 1993 1992 1993 1992 Net Sales $ 88,435 $ 84,146 $171,974 $163,260 Gross profit 19,541 18,765 34,908 35,203 Operating Income 6,788 8,076 11,098 13,925 Insurance recovery --- 13,000 --- 13,000 Interest income (exp.), net (501) 233 (727) 799 Income from continuing operations before taxes 6,287 21,309 10,371 27,724 Income tax provision 2,500 8,290 4,000 10,830 Income tax benefit derived from Trust expenditures --- (3,200) --- (5,300) Income from continuing operations 3,787 16,219 6,371 22,194 Discontinued operations gain (loss), net of tax benefit --- 23 --- (52) Net Income $ 3,787 $ 16,242 $ 6,371 $ 22,142 Net Income per share: Continuing operations $ .08 $ .36 $ .14 $ .49 Discontinued operations --- --- --- --- Net Income per share $ .08 $ .36 $ .14 $ .49 UNR INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (in thousands) JUNE 30 DECEMBER 31 1993 1992 ASSETS Cash $ 29,599 $ 112,220 Accounts receivable 43,154 38,407 Notes receivable-insurance companies 4,860 8,316 Inventories(a) 67,902 61,292 Current deferred income taxes 63,000 63,000 Prepaid expenses 2,546 2,725 Total Current Assets $ 211,061 $ 285,960 Plant and equipment, net 69,213 71,288 Non-current deferred income taxes 24,800 24,000 Net assets of discontinued operations - 13,341 Other assets, primarily goodwill 7,793 248 Total Assets $ 312,867 $ 394,837 LIABILITIES AND STOCKHOLDERS' EQUITY Dividends payable $ - $ 100,255 Other current liabilities 42,007 34,994 Long-term liabilities 24,075 26,607 Stockholders' equity 246,785 232,981 Total Liabilities and Stockholders' Equity $312,867 $ 394,837 (a) Net of reserve for LIFO valuation of inventories of $8.8 million and $7.1 million at June 30, 1993 and December 31, 1992, respectively. UNR INDUSTRIES, INC. NOTES TO FINANCIAL STATEMENTS (1) On December 21, 1992, the Internal Revenue Service issued final regulations under Section 468B "Special Rules for Designated Settlement Funds". Prior to the issuance of these tax regulations, the Company had significant unrecorded net operating loss carry-forwards resulting from extraordinary reorganization charges included in the 1989 Statement of Income. Through 1992, these charges were deducted for income tax purposes only to the extent expenditures were actually made by the UNR Asbestos-Disease Claims Trust. Approximately $8.4 million and $13.9 million of expenditures were made by the Trust in the second quarter of 1992 and in the first six months of 1992, respectively, and the related tax benefits were recorded by the Company. This 1992 tax benefit of $3.2 million and $5.3 million is presented in the accompanying Statement of Income as "Income tax benefit derived from Trust expenditures" for the three and six month periods, respectively. The Section 468B regulations deal with the tax treatment of the Company's 1989 transfer of 29.4 million shares of UNR stock to the UNR Asbestos-Disease Claims Trust. Based on these regulations, the Company and Trust have elected to treat the Trust as a Qualified Settlement Fund on January 1, 1993, which entitles the Company to a tax deduction equivalent to the value of the stock held by the Trust on that date. This deduction will substantially reduce the Company's 1993 income tax liability and will also generate tax loss carry-backs and carry- forwards. The Company expects to receive Federal and state income tax refunds of approximately $54 million in 1994 as a result of the carry- backs. Future expenditures by the Trust will no longer be deductible by the Company. Based on these developments, the Company recorded a tax benefit (net of a valuation allowance of approximately $20 million) of $90 million, or $1.99 per share in the fourth quarter of 1992. (2) On February 1, 1993, the Company paid a regular cash dividend of $.20 and an extraordinary cash dividend of $2.00 per share to stockholders of record as of the close of business on January 15, 1993. On January 15, 1992, the Company paid a regular cash dividend of $.20 and an extraordinary cash dividend of $1.00 per share to stockholders of record as of the close of business on December 31, 1991. (3) On March 4, 1993, the Company decided to divest itself of its Midwest CATV Division (a distributor of products to the cable television industry) and its Midwest Steel Division (a distributor of rail and trackwork). The Company has sold assets of the Midwest Steel Division to L.B. Foster Company and assets of the Midwest CATV Division to Anixter Bros., Inc. (4) On April 27, 1993, the Company announced it had purchased all the issued and outstanding stock of Real Time Solutions, Inc. ("RTS"). RTS, provides automated inventory management products to the warehouse and distribution industry. Their primary product is a light directed display based inventory picking, sorting, packing and shipping system called "EASYpick".
The purchase price included $4.2 million of cash and 616,102 shares of common stock valued at approximately $4.2 million. The purchase price exceeded the fair value of RTS's net assets by approximately $7.7 million which is reported as goodwill in the accompanying balance sheet.
(5) On June 22, 1993, the Company's Board of Directors established a Special Committee of independent directors of the Company to implement appropriate action in response to its principal shareholder's (the UNR Asbestos-Disease Claims Trust) request that the Company consider retaining a financial adviser to solicit third party proposals for an acquisition of UNR through a merger or other business combination in which UNR shareholders would receive cash for their shares. (6) The 1992 second quarter statement of income includes a $13.0 million pre-tax insurance recovery ($8.1 million after-tax), or $.18 per share, as a result of a litigation settlement reached in June, 1992, with one of the Company's previous insurance carriers. These amounts represent the present value of payments due over a three year period, net of certain costs. (7) The interim determination of inventories under the LIFO method is based on the management's estimates of the expected year-end inventory levels and costs and as such, interim financial results are subject to final year-end inventory amounts. -0- 7/22/93 /CONTACT: Henry Grey, V.P. - Finance & Treasurer, UNR Industries, Inc., 312-341-1234/ (UNRI)
CO: UNR Industries, Inc. ST: Illinois IN: SU: ERN
JG -- DE028 -- 4770 07/22/93 16:42 EDT
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|Date:||Jul 22, 1993|
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