EX-99.1 3 e14635ex99-1.txt PRESS RELEASE Exhibit 99.1 Bairnco Announces Improved First Quarter 2003 Results LAKE MARY, Fla., April 17 /PRNewswire-FirstCall/ -- Bairnco Corporation (NYSE: BZ) today reported improved operating results for the first quarter 2003 as compared to the same period last year. Sales were up 9.2% to $39,972,000, net income increased 30.5% to $889,000 and diluted earnings per share increased 33.3% to $.12. Performance Sales in the first quarter 2003 were $39,972,000, an increase of 9.2% from $36,617,000 in 2002. Arlon's sales were up 5.5% from last year showing improvements in its electronics, foreign graphics and industrial markets. Sales to the telecommunications market, however, were down as compared to the first and fourth quarters of 2002 reflecting the continuing softening of this market. Kasco's sales increased 21.1% as compared to the first quarter last year. Kasco's first quarter 2003 sales reflected the increased activity generated from several significant new retail grocery chain contracts in North America as well as increased sales in Europe, Africa and Asia. Kasco's foreign sales were also positively impacted by the currency translation effect of the weakened US dollar versus the British Pound and the Euro. Gross profit increased 9.3% to $11,580,000 from $10,591,000 due to the increased sales. The gross profit margin as a percent of sales increased slightly to 29.0% from 28.9%. The first quarter 2003 gross profit was negatively impacted by $213,000 of relocation and closing expenses related to the consolidation of Arlon's industrial engineered coated product's businesses. Selling and administrative expenses increased 8.2% to $10,093,000 from $9,331,000 due to the increased sales, and to the costs of new engineering and development hires for the industrial engineered coated product's facility in San Antonio, Texas. As a percent of sales, selling and administrative expenses decreased to 25.3% from 25.5%. Interest expense decreased to $199,000 in 2003 as compared to $273,000 in 2003 due to debt reductions made during 2002 from strong cash generation as well as lower average interest rates. The effective tax rate for both the quarters ended April 5, 2003 and March 30, 2002 was 31.0%. Net income increased 30.5% to $889,000 as compared to $681,000 in the first quarter of 2002. Diluted earnings per common share increased 33.3% to $.12 from $.09 as a result of increased earnings. Litigation On March 14, 2003 the United States District Court for the Southern District of New York (the "Court") issued a decision granting all Bairnco and other defendants' motions for summary judgment and dismissing all remaining claims in the Transactions Lawsuit. On April 14, 2003, plaintiffs filed a notice of appeal to the U.S. Court of Appeals for the Second Circuit. The notice of appeal references both the final judgment entered based on the Court's summary judgment ruling and also all of the Court's earlier rulings in the case. "Safe Harbor" Statement under the Private Securities 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 US or international economic or political conditions, such as inflation or fluctuations in interest or foreign exchange rates; the costs and other effects of legal and administrative cases and proceedings, settlements and investigations; disruptions in operations due to labor disputes; 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 market for raw or packaging materials which could impact the Corporation's manufacturing costs; changes in the product mix; the loss of a significant customer or supplier; production delays or inefficiencies; the impact on production output and costs from the availability of energy sources and related pricing; the ability to achieve anticipated revenue growth, synergies and other cost savings in connection with acquisitions; the costs and other effects of complying with environmental regulatory requirements; 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 (Engineered Materials and Components segment) 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. Bairnco Corporation Comparative Results of Operations (Unaudited) Quarter Ended Condensed Income Statements Apr 5, 2003 Mar 30, 2002 Net sales $39,972,000 $36,617,000 Cost of sales 28,392,000 26,026,000 Gross profit 11,580,000 10,591,000 Selling and administrative expenses 10,093,000 9,331,000 Operating profit 1,487,000 1,260,000 Interest expense, net 199,000 273,000 Income before income taxes 1,288,000 987,000 Provision for income taxes 399,000 306,000 Net income $889,000 $681,000 Basic Earnings per Share of Common Stock $0.12 $0.09 Diluted Earnings per Share of Common Stock $0.12 $0.09 Diluted Average Common Shares 7,336,000 7,334,000 Condensed Balance Sheets Apr 5, 2003 Dec 31, 2002 ASSETS Cash $746,000 $705,000 Accounts receivable, net 24,439,000 22,732,000 Inventories 26,251,000 24,882,000 Other current assets 9,261,000 8,689,000 Total current assets 60,697,000 57,008,000 Plant and equipment, net 37,371,000 37,468,000 Cost in excess of net assets of purchased businesses 13,391,000 13,276,000 Other assets 7,463,000 7,832,000 Total $118,922,000 $115,584,000 LIABILITIES AND STOCKHOLDERS' INVESTMENT Short-term debt $1,585,000 $1,200,000 Current maturities of long-term debt 8,250,000 7,000,000 Accounts payable 11,774,000 9,855,000 Accrued expenses 12,930,000 15,103,000 Total current liabilities 34,539,000 33,158,000 Long-term debt 20,972,000 19,547,000 Other liabilities 11,325,000 11,363,000 Stockholders' investment 52,086,000 51,516,000 Total $118,922,000 $115,584,000