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Zaring National Corporation Reports Record Consolidated Second Quarter Revenues

CINCINNATI, July 21 /PRNewswire/ -- Zaring National Corporation (Nasdaq: ZHOM), reports record consolidated revenues of $53,873,000 for the quarter ended June 30, 1997, compared to $43,415,000 for the same period June 30, 1996. Net income for the quarter was $1,032,000, or $.22 per share, compared to $1,523,000, or $.32 per share, for the similar period in 1996. For the six months ended June 30, 1997, net income was $1,512,000, $.32 per share, compared to $1,901,000, or $.40 per share for the same period in 1996. The stated net income includes a loss from Zaring National's HomeMax subsidiary of $156,000, $.03 per share, for the three months ended June 30, 1997, and a loss of $278,000, or $.06 per share, for the six month period.

Zaring National Chairman and CEO Allen G. Zaring III reports, "Zaring National Corporation has adopted innovative strategies that are decidedly different from our competitors in the housing industries for the purpose of improving our rates of return. We are reinventing our role in the housing industry and view manufactured housing producers as our allies rather than rivals. With HomeMax, Zaring National's manufactured housing retail distributor, we intend to deploy modern merchandising, retailing, and delivery techniques to the retail distribution of manufactured homes and to establish a national brand through strategic alliances with leading manufactured housing suppliers. In Zaring Homes, Zaring National's site built single family homebuilder, we are applying the Total Quality Management principles of rapid consumer response, cycle time reduction, and even flow technologies to both create a distinct marketing advantage and to increase the rate of return on the assets employed in that business line." Mr. Zaring further points out that, "The initial start-up expenses associated with the HomeMax initiatives will be substantial. However, they should be viewed as an investment in Zaring National's future."

HomeMax, Inc. recorded 40 sales valued at $1,316,000 and closed 37 manufactured homes with total revenues of $1,330,000 during the second quarter. For the six months ended June 30, 1997, HomeMax, Inc. sold 61 units valued at $1,856,000 and closed 75 units for total revenues of $2,456,000. During the same six months, 56 contracts valued at $3,402,000 were acquired through the asset purchases of two operating sales centers. Contract backlog as of June 30, 1997, was 42 units valued at $2,802,000.

J. Stephen Jellicorse, President of HomeMax says, "HomeMax is establishing a national brand through strategic alliances with leading manufactured housing suppliers. Five "super village" retail sales centers are under development to open during the last half of 1997, and several others are in process for 1998." HomeMax plans to open 50 "super village" retail sales centers throughout the United States, deploying modern merchandising and retailing concepts more in line with the country's best high volume retailers.

Zaring Homes, Inc. achieved record second quarter closings and revenues for the company's quarter ended June 30, 1997. The company closed 212 homes with revenues of $52,463,000, up 11% and 21%, respectively, from the 191 homes and revenues of $43,415,000 for the second quarter of 1996. The closings represented the best performance for any second quarter in the company's history. The company also reported sales of 243 homes valued at $57,085,000 compared to 184 homes valued at $42,620,000 in the second quarter of last year, increases of 32% and 34%, respectively. Contract backlog stood at 314 homes valued at $75,641,000, down 20% and 16%, respectively, from the 394 homes valued at $89,687,000 a year ago, in part reflecting the overall reduction in cycle times created by the "Quality Time Masters(TM)" program. For the six months ended June 30, 1997, the company's unit sales of 441 single family homes were down 10%, and unit closings of 390 were up 25%.

George E. Casey, Jr., President and CEO of Zaring Homes, Inc. says, "Our Quality Time Masters(TM)" (QTM) program is moving us toward reduced working capital for all construction in progress, which will improve the company's rate of return." Zaring's QTM program consists of conducting detailed consumer surveys, targeting strategies for land acquisition and product development to meet demand, establishing design galleries to allow buyers a wide range of option choices, reducing speculative inventories, achieving even-flow production, and compressing the cycle time to deliver homes to customers.

Zaring National Corporation, based in Cincinnati, Ohio, operates two wholly-owned subsidiaries. HomeMax, Inc. the company's retail distributor of manufactured homes, based in Raleigh, North Carolina, has retail distribution centers in North Carolina. Zaring Homes, Inc. is a leading regional site builder of luxury and move-up single family homes in the metropolitan areas of Cincinnati, Ohio; Nashville and Knoxville, Tennessee; Raleigh and Charlotte, North Carolina; Indianapolis, Indiana; and Louisville, Kentucky.

NOTE: Certain statements in this Press Release are "forward-looking statements" within the meaning the Private Securities Litigation Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially. Such risks, uncertainties and other factors include, but are not limited to, changes in general economic conditions, fluctuations in interest rates, increases in raw materials and labor costs, levels of competition and other factors described in detail in the Zaring National Corporation's Form 10-Q for the quarter ended June 30, 1996.
 ZARING NATIONAL CORPORATION
 CONSOLIDATED STATEMENT OF INCOME
 For the Three Months and Six Months Ended June 30, 1997
 (In Thousands, Except for per Share Amounts - Unaudited)
 Three Months Six Months
 Ended June 30, Ended June 30,
 1997 1996(A) 1997 1996(A)
 Total Revenues $53,873 $43,415 $97,986 $70,670


Site Built Single Family Homes
 Revenues $52,463 $43,415 $95,564 $70,670
 Cost of Sales 43,957 35,066 79,537 56,864
 Interest 1,607 1,576 3,055 3,058


Selling, General and
 Administrative Expenses 5,487 4,916 10,639 8,916
 Operating Income 1,412 1,857 2,333 1,832
 Other Income (Expense) 7 99 13 144
 Pretax Site Built Income 1,419 1,956 2,346 1,976


Retail Distribution Manufactured Single Family Homes
 Revenues 1,410 -- 2,422 --
 Cost of Sales 1,102 -- 1,857 --
 Interest 67 -- 87 --


Selling, General and
 Administrative Expenses 461 -- 964 --
 Operating Income (Loss) (220) -- (486) --
 Other Income (Expense) (36) -- 28 --
 Pretax Retail Distribution Loss (256) -- (458) --


Corporate (Income) and Expenses

Interest Income from
 Subsidiaries, Net (1,087) (903) (1,801) (1,719)
 General and Administrative 523 346 1,160 564
 Income Before Taxes 1,727 2,513 2,529 3,131
 Income Taxes 695 990 1,017 1,230
 Net Income $1,032 $1,523 $1,512 $1,901
 Earnings Per Share $0.22 $0.32 $0.32 $0.40


Weighted Average Shares
 Outstanding 4,781,063 4,777,360 4,781,063 4,777,360


(A) Certain reclassifications have been made to prior year financial
 statements to conform to the 1997 presentation.
 ZARING NATIONAL CORPORATION
 CONSOLIDATED BALANCE SHEET
 As of June 30, 1997 and 1996
 (In Thousands - Unaudited)
 (Unaudited) (Unaudited)
 Consolidated Balance Sheet Data: June 30, 1997 June 30, 1996
 Cash and cash equivalents $ 2,142 $ 2,877


Inventories and properties
 held for development or sale 85,987 78,722
 Other assets 14,024 7,305
 Total assets $102,153 $88,904
 Notes payable $37,994 $28,340
 Other liabilities 13,969 14,820
 Total liabilities 51,963 43,160
 Shareholders' equity 50,190 45,744


Total liabilities and
 shareholders' equity $102,153 $88,904
 ZARING NATIONAL CORPORATION
 OTHER INFORMATION SUMMARY
 For the Three Months and Six Months Ended June 30, 1997 and 1996
 (In Thousands - Unaudited)
 Operating Data: Three Months Six Months
 Ended June 30, Ended June 30,
 1997 1996 % Inc. 1997 1996 % Inc.


Site Built Single Family Homes
 New orders(A) $57,085 $42,620 34% $105,572 $112,629 (6)%
 Closings $51,584 $42,937 20% $94,124 $69,975 35%
 Backlog(B) $75,641 $89,687 (16)% $75,641 $89,687 (16)%


Average revenue
 per closing $243 $225 8% $241 $225 7%


Average value of
 new order sales $235 $232 1% $239 $231 3%


Retail Distribution Manufactured Single Family Homes
 New orders(A) $1,316 -- -- $1,856 -- --
 Closings $1,330 -- -- $2,456 -- --
 Backlog(B)(C) $2,802 -- -- $2,802 -- --


Average revenue --
 per closing $36 -- -- $33 -- --


Average value of
 new order sales $33 -- -- $30 -- --


(A) New orders represent total new orders received during the period, net
 of cancellations.


(B) Backlog includes sales orders which have not yet closed.

(C) 56 contracts with sales value of $3,402 were acquired through
 acquisition.
 ZARING NATIONAL CORPORATION
 OTHER INFORMATION SUMMARY
 For the Three Months and Six Months Ended June 30, 1997 and 1996
 (Unaudited)
 Operating Data (In Units): Three Months Six Months
 Ended June 30, Ended June 30,
 1997 1996 % Inc. 1997 1996 % Inc.


Site Built Single Family Homes
 New orders(A) 243 184 32% 441 488 (10)%
 Closings 212 191 11% 390 311 25%
 Backlog(B) 314 394 (20)% 314 394 (20)%


Retail Distribution Manufactured Single Family Homes
 New orders(A) 40 -- -- 61 -- --
 Closings 37 -- -- 75 -- --
 Backlog(B)(C) 42 -- -- 42 -- --


(A) New orders represent total new orders received during the period, net
 of cancellations.


(B) Backlog includes sales orders which have not yet closed.

(C) 56 contracts with sales value of $3,402 were acquired through
 acquisition.


SOURCE Zaring National Corporation
 -0- 07/21/97


/CONTACT: Ronald G. Gratz, Chief Financial Officer, of Zaring National Corporation, 513-489-8849/

/Zaring Homes' press releases available through Company News On-Call by fax, 800-758-5804, ext. 983350, or at http://www.prnewswire.com/

(ZHOM)

CO: Zaring National Corporation ST: Ohio IN: CST SU: ERN

JS-BG -- CLM020 -- 8469 07/21/97 11:56 EDT http://www.prnewswire.com
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