CONTINENTAL MATERIALS CORPORATION REPORTS AUDITED 2019 RESULTS
March 23 2020 - 5:22PM
Continental Materials Corporation (NYSE American; CUO) today
reported a net loss of $13,899,000, or $8.12 per share, for the
2019 fiscal year on sales of $113,276,000. For the 2018 fiscal
year, the Company reported a net loss of $5,856,000, or $3.45 per
share, on sales of $100,887,000.
Consolidated sales in 2019 increased $12,389,000, or 12.3%,
compared to 2018. The increase was directly attributable to the
higher sales in the HVAC and Door segments reflecting the impact of
acquisitions in the second quarter of 2019. The HVAC segment
reported sales increases of $8,671,000 (11.8%) primarily due to the
acquisitions of Global Flow Products and InOvate Dryer
Technologies. The Door segment reported a sales increase of
$4,211,000 (20.9%) primarily due to the acquisitions of Fastrac
Building Supply and Serenity Sliding Door Systems.
The operating loss for 2019 was $22,845,000 compared to
operating loss of $8,764,000 in 2018. The current year included an
aggregated charge of $22,492,000 to impair mining assets related to
the final asset retirement obligations recorded in the Construction
Materials segment, a net $14,781,000 gain on a legal settlement and
a $6,800,000 loss on a legal settlement. 2018 included charges of
$6,840,000 and $627,000 to write off deferred development costs and
an overpayment of prepaid royalties, also in the Construction
Materials segment. Excluding these non-recurring items, the 2019
operating loss would be $8,334,000 compared to an operating loss of
$1,297,000 in 2018. The decline from the prior year is mainly
attributable to increased selling and administrative costs,
including acquisition related costs, combined with the impact of
lower sales volume in the Construction Materials segment.
The Company’s effective income tax rate reflects federal and
state statutory income tax rates adjusted for non-deductible
expenses, tax credits and other tax items. The effective income tax
rate for 2019 was 23.7% compared to 27.2% for 2018.
Subsequent to December 28, 2019, on February 18, 2020, Bee
Street Holdings LLC (Bee Street), commenced an unsolicited tender
offer for all outstanding shares of Common Stock of the Company
(Common Stock) not already owned by Bee Street. Bee Street is an
entity controlled by James G. Gidwitz, the Company’s chairman and
Chief Executive Officer, and other members of Mr. Gidwitz’ s
family. As of February 17, 2020, Bee Street beneficially owned
1,027,171, or approximately 61.3%, of the outstanding shares of
Common Stock. Bee Street is offering to purchase all outstanding
shares of Common Stock that Bee Street does not already own for
$9.50 per share, net to the seller in cash, without interest,
subject to applicable withholding taxes. Additional information
about the tender offer is available in Bee Street’s and the
Company’s SEC filings, including the Company’s Schedule 14D-9 filed
on March 3, 2020. The offer is subject to certain conditions set
forth in Bee Street’s tender offer documents. Bee Street has stated
that if it purchases shares of Common Stock in the tender offer
such that it will own at least 90% of the issued and outstanding
Common Stock, Bee Street (or its affiliate), intends to merge with
the Company (the “Merger”). As a result of the Merger, each then
issued and outstanding share of Common Stock (other than Common
Stock held by Bee Street and held by stockholders who validly
perfect their dissenters’ rights under the Delaware General
Corporation Law) would be cancelled and converted into and
represent the right to receive $9.50 per share.
CAUTIONARY STATEMENT-- Statements in this document that are not
historical facts are forward-looking statements. It is important to
note that the company’s actual results could differ materially from
those projected in such forward-looking statements. Additional
information concerning factors that could cause actual results to
differ materially from those suggested in the forward-looking
statements is contained in the company’s Annual Report on Form 10-K
for the year ended December 28, 2019 filed with the Securities and
Exchange Commission, as the same may be amended from time to time.
Forward-looking statements are not guarantees of performance. They
involve risks, uncertainties and assumptions. The future results
and shareholder values of the company may differ materially from
those expressed in these forward-looking statements. Many of the
factors that will determine these results and values are beyond the
company’s ability to control or predict. Shareholders are cautioned
not to put undue reliance on forward-looking statements. In
addition, the company does not have any intention or obligation to
update forward-looking statements after the date hereof, even if
new information, future events, or other circumstances have made
them incorrect or misleading. For those statements, the company
claims the protection of the safe harbor for forward-looking
statements contained in the Private Securities Litigation Reform
Act of 1995.
CONTINENTAL MATERIALS CORPORATIONSUMMARY OF SALES
AND EARNINGS(Unaudited)
|
Three Months Ended |
|
Year Ended |
|
December 28, 2019 |
December 29, 2018 |
|
December 28, 2019 |
December 29, 2018 |
|
|
|
|
|
|
Sales |
$ |
33,504,000 |
|
$ |
27,955,000 |
|
|
$ |
113,276,000 |
|
$ |
100,887,000 |
|
|
|
|
|
|
|
Operating loss |
|
(1,896,000 |
) |
|
(987,000 |
) |
|
|
(22,845,000 |
) |
|
(8,764,000 |
) |
|
|
|
|
|
|
Interest expense |
|
(97,000 |
) |
|
(124,000 |
) |
|
|
(371,000 |
) |
|
(539,000 |
) |
|
|
|
|
|
|
Other income, net |
|
51,000 |
|
|
71,000 |
|
|
|
442,000 |
|
|
101,000 |
|
|
|
|
|
|
|
Loss from continuing operations
before income taxes |
|
(1,942,000 |
) |
|
(1,040,000 |
) |
|
|
(22,774,000 |
) |
|
(9,202,000 |
) |
(Provision) benefit for income
taxes |
|
(334,000 |
) |
|
460,000 |
|
|
|
5,396,000 |
|
|
2,500,000 |
|
Loss from continuing
operations |
|
(2,276,000 |
) |
|
(580,000 |
) |
|
|
(17,378,000 |
) |
|
(6,702,000 |
) |
Income from discontinued
operations net of tax |
|
175,000 |
|
|
40,000 |
|
|
|
3,479,000 |
|
|
846,000 |
|
Net loss |
$ |
(2,101,000 |
) |
$ |
(540,000 |
) |
|
$ |
(13,899,000 |
) |
$ |
(5,856,000 |
) |
|
|
|
|
|
|
Basic and diluted income (loss)
per share: |
|
|
|
|
|
Loss from continuing
operations |
$ |
(1.33 |
) |
$ |
(0.34 |
) |
|
$ |
(10.15 |
) |
$ |
(3.95 |
) |
Income from discontinued
operations |
|
0.10 |
|
|
0.02 |
|
|
|
2.03 |
|
|
0.50 |
|
Basic and diluted loss per
share |
$ |
(1.23 |
) |
$ |
(0.32 |
) |
|
$ |
(8.12 |
) |
$ |
(3.45 |
) |
|
|
|
|
|
|
Average shares outstanding |
|
1,710,000 |
|
|
1,698,000 |
|
|
|
1,711,000 |
|
|
1,697,000 |
|
Contact:
Paul Ainsworth (312)
541-7222
Continental Materials (AMEX:CUO)
Historical Stock Chart
From Mar 2024 to Apr 2024
Continental Materials (AMEX:CUO)
Historical Stock Chart
From Apr 2023 to Apr 2024