LAKE MARY, Fla., Oct. 20 /PRNewswire-FirstCall/ -- Bairnco
Corporation (NYSE:BZ) today reported reduced operating results for
the third quarter 2005 as compared to the same period last year.
Sales were down 2.5% to $39,668,000, income from continuing
operations decreased from $860,000 to $215,000 and diluted earnings
per share from continuing operations decreased from $.11 to $.03.
Performance Sales in the third quarter 2005 decreased 2.5% to
$39,668,000 from $40,675,000 in 2004. Arlon's Electronic Materials
sales increased 8.0% due primarily to increased activity in the
wireless telecommunications markets. Arlon's Coated Materials sales
were lower by 10.5% as foreign sales and certain automotive and
industrial markets have remained weak. Kasco's sales increased 0.7%
from the third quarter 2004 due to continued growth in North
American service and repair revenue as well as improved U.S. export
markets. Kasco's European sales were down 6.9%, primarily the
result of weakness in the French market. Gross profit decreased
8.5% to $10,557,000 from $11,533,000 on lower sales and production
volumes and higher relocation and closing costs in the third
quarter of 2005 versus 2004. The gross profit margin as a percent
of sales decreased to 26.6% from 28.4%. Plant level gross profit at
the recently opened Arlon Coated Materials San Antonio facility was
a loss of approximately $300,000 versus an expected profit of
$300,000 due to poor production scheduling, increased scrap,
inefficient labor and increased raw material costs. Management was
changed. Signs of improvement were evident by the end of September.
Kasco successfully completed the transition of the majority of its
production and equipment to Mexico and was in full operation by the
end of the third quarter. The costs of relocation in the third
quarter were approximately $450,000 versus the forecast of
$400,000. The China manufacturing facility continued to progress
but had only a minor impact on gross profit due to the delay in
permitting and licensing. The third quarter 2004 gross profit was
reduced by $263,000 from relocation and closing expenses related to
the consolidation of Arlon's Coated Material's businesses. Selling
and administrative expenses increased slightly to $10,189,000 in
2005 as compared to $10,156,000 in 2004. As a percent of sales,
selling and administrative expenses increased from 25.0% in 2004 to
25.7% in 2005. 2005 includes $83,000 of increased expenses related
to the development of the new China plant. Net interest expense was
$38,000 in 2005 as compared to $149,000 in 2004 due to the reduced
outstanding borrowings. The effective tax rate for the third
quarter 2005 was 35.0% compared to 30.0% in 2004. Income from
continuing operations was $215,000 as compared to $860,000 in the
third quarter of 2004. Diluted earnings per common share from
continuing operations decreased to $.03 from $.11 in 2004. The
Corporation repurchased 86,568 shares for $943,740 on the open
market during the third quarter 2005. Net income for the third
quarter 2004 was $25,555,000 reflecting the impact of the
$24,695,000 contingent asset settlement of the NOL Lawsuit. Diluted
earnings per share of common stock from the settlement was $3.25
for the quarter ended October 2, 2004 Sales for the first nine
months of 2005 were down $1,074,000 to $123,878,000 from
$124,952,000 in 2004 due primarily to the weak third quarter. Gross
profit decreased 1.2% to $35,839,000 from $36,274,000 due to lower
third quarter sales. Selling and administrative expenses increased
2.3% to $31,549,000 from $30,829,000. Income from continuing
operations decreased 16.0% to $2,726,000 from $3,245,000 and
diluted earnings per share from continuing operations decreased
16.3% to $.36 from $.43 in 2004. Net income for the first nine
months of 2004 was $27,940,000 reflecting the impact of the
$24,695,000 settlement of the NOL Lawsuit. "Safe Harbor" Statement
under the Private Securities Litigation Reform Act of 1995
Statements in this press release referring to the expected future
plans and performance of the Corporation are forward-looking
statements. Actual future results may differ materially from such
statements. Factors that could affect future performance include,
but are not limited to, changes in U.S. or international economic
or political conditions, such as inflation or fluctuations in
interest or foreign exchange rates; the impact on production output
and costs from the availability of energy sources and related
pricing; changes in the market for raw or packaging materials which
could impact the Corporation's manufacturing costs; changes in the
pricing of the products of the Corporation or its competitors; the
market demand and acceptance of the Corporation's existing and new
products; the impact of competitive products; changes in the
product mix; the loss of a significant customer or supplier;
production delays or inefficiencies; the ability to achieve
anticipated revenue growth, synergies and other cost savings in
connection with acquisitions and plant consolidations; the costs
and other effects of legal and administrative cases and
proceedings, settlements and investigations; the costs and other
effects of complying with environmental regulatory requirements;
disruptions in operations due to labor disputes; and losses due to
natural disasters where the Corporation is self-insured. While the
Corporation periodically reassesses material trends and
uncertainties affecting the Corporation's results of operations and
financial condition in connection with its preparation of its press
releases, the Corporation does not intend to review or revise any
particular forward-looking statement referenced herein in light of
future events. Bairnco Corporation is a diversified multinational
company that operates two distinct businesses -- Arlon (Electronic
Materials and Coated Materials segments) and Kasco (Replacement
Products and Services segment). Arlon's principal products include
high technology materials for the printed circuit board industry,
cast and calendered vinyl film systems, custom-engineered laminates
and special silicone rubber compounds and components. Kasco's
principal products include replacement band saw blades for cutting
meat, fish, wood and metal, and on site maintenance primarily in
the meat and deli departments. Kasco also distributes equipment to
the food industry in France. Comparative Results of Operations
(Unaudited) Quarter Ended Nine Months Ended Condensed Income
Statements October 1, October 2, October 1, October 2, 2005 2004
2005 2004 Net sales $39,668,000 $40,675,000 $123,878,000
$124,952,000 Cost of sales 29,111,000 29,142,000 88,039,000
88,678,000 Gross profit 10,557,000 11,533,000 35,839,000 36,274,000
Selling and administrative expenses 10,189,000 10,156,000
31,549,000 30,829,000 Operating profit 368,000 1,377,000 4,290,000
5,445,000 Interest expense, net 38,000 149,000 97,000 548,000
Income before income taxes 330,000 1,228,000 4,193,000 4,897,000
Provision for income taxes 115,000 368,000 1,467,000 1,652,000
Income from continuing operations 215,000 860,000 2,726,000
3,245,000 Income from spun off subsidiary -- 24,695,000 --
24,695,000 Net Income $215,000 $25,555,000 $2,726,000 $27,940,000
Basic Earnings per Share of Common Stock from Continuing Operations
$ 0.03 $ 0.12 $ 0.37 $ 0.44 Basic Earnings per Share of Common
Stock from Spun Off Subsidiary -- 3.35 -- 3.36 Basic Earnings per
Share of Common Stock $ 0.03 $ 3.47 $ 0.37 $ 3.80 Diluted Earnings
per Share of Common Stock from Continuing Operations $ 0.03 $ 0.11
$ 0.36 $ 0.43 Diluted Earnings per Share of Common Stock from Spun
Off Subsidiary -- 3.25 -- 3.28 Diluted Earnings per Share of Common
Stock $ 0.03 $ 3.37 $ 0.36 $ 3.71 Basic Average Common Shares
7,346,000 7,368,000 7,379,000 7,355,000 Diluted Average Common
Shares 7,612,000 7,587,000 7,649,000 7,527,000 Condensed Balance
Sheets October 1, 2005 Dec 31, 2004 ASSETS Cash $4,275,000
$3,451,000 Accounts receivable, net 25,357,000 24,912,000
Inventories 27,313,000 24,964,000 Other current assets 8,030,000
7,702,000 Total current assets 64,975,000 61,029,000 Plant and
equipment, net 35,154,000 34,429,000 Cost in excess of net assets
of purchased businesses, net 14,454,000 14,542,000 Other assets
7,721,000 8,781,000 Total Assets $122,304,000 $118,781,000
LIABILITIES AND STOCKHOLDERS' INVESTMENT Short-term debt $3,598,000
$1,030,000 Current maturities of long-term debt 152,000 663,000
Accounts payable 10,887,000 10,601,000 Accrued expenses 9,757,000
10,515,000 Total current liabilities 24,394,000 22,809,000
Long-term debt 2,217,000 231,000 Other liabilities 11,426,000
10,974,000 Stockholders' investment 84,267,000 84,767,000 Total
Liabilities and Stockholders' Investment $122,304,000 $118,781,000
DATASOURCE: Bairnco Corporation CONTACT: Kenneth L. Bayne, Bairnco
Corporation, +1-407-875-2222, ext. 227 Web site:
http://www.bairnco.com/
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