0000899078-01-500374.txt : 20011031
0000899078-01-500374.hdr.sgml : 20011031
ACCESSION NUMBER: 0000899078-01-500374
CONFORMED SUBMISSION TYPE: 425
PUBLIC DOCUMENT COUNT: 1
FILED AS OF DATE: 20011029
SUBJECT COMPANY:
COMPANY DATA:
COMPANY CONFORMED NAME: INDUSTRIAL DATA SYSTEMS CORP
CENTRAL INDEX KEY: 0000933738
STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPUTERS [3571]
IRS NUMBER: 760157248
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 425
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-14217
FILM NUMBER: 1769234
BUSINESS ADDRESS:
STREET 1: 600 CENTURY PLZ
STREET 2: BLDG 140
CITY: HOUSTON
STATE: TX
ZIP: 77073-6016
BUSINESS PHONE: 2818213200
MAIL ADDRESS:
STREET 1: 600 CENTURY PLAZA DR
STREET 2: BLDG 140
CITY: HOUSTON
STATE: TX
ZIP: 77073-6016
FILED BY:
COMPANY DATA:
COMPANY CONFORMED NAME: INDUSTRIAL DATA SYSTEMS CORP
CENTRAL INDEX KEY: 0000933738
STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPUTERS [3571]
IRS NUMBER: 760157248
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 425
BUSINESS ADDRESS:
STREET 1: 600 CENTURY PLZ
STREET 2: BLDG 140
CITY: HOUSTON
STATE: TX
ZIP: 77073-6016
BUSINESS PHONE: 2818213200
MAIL ADDRESS:
STREET 1: 600 CENTURY PLAZA DR
STREET 2: BLDG 140
CITY: HOUSTON
STATE: TX
ZIP: 77073-6016
425
1
form425_10252001.txt
FORM 425 - 10/25/01
Filer: Industrial Data Systems Corporation
Company Subject to Offering: Petrocon Engineering, Inc.
Commission File Number: 333-68288
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 425
Pursuant to Rule 425 of
The Securities Act of 1933
Industrial Data Systems Corporation
-----------------------------------
(Exact name of registrant as specified in its charter)
Nevada 001-14217 88-0322261
--------------------------------------------------------------------------------
(State or other jurisdiction of (Commission File (IRS Employer
incorporation) Number) Identification No.)
600 Century Plaza Drive Building 140 Houston, Texas 77073-6013
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (281) 821-7200
--------------
(Former name or former address, if changed from last report)
Included below are press releases of Industrial Data Systems Corporations that
relate to a proposed business combination with Petrocon Engineering, Inc.
1. Press Release - April 3, 2001
-----------------------------
IDS AGREES TO MERGE WITH PETROCON ENGINEERING, INC.
(Houston, April 3, 2001) -- Industrial Data Systems Corporation (AMEX: IDS) and
Petrocon Engineering, Inc. ("Petrocon") today announced that they have signed a
Letter of Intent relating to their proposed merger. Petrocon is a
privately-held, full service, international engineering and control systems firm
with approximately 800 employees and 2000 revenues of $68 million. IDS is a
service provider and specialty manufacturer, which through its largest
subsidiary, provides engineering and control system services for pipeline and
production facilities. Based in Houston, Texas, IDS has approximately 175
employees and 2000 revenues of $17 million.
The transaction will be effected as a stock for stock merger and is subject to
the approval of the Board of Directors and stockholders of both companies and to
customary closing conditions. IDS will issue 9.8 million shares of its Common
Stock in return for 100% of Petrocon stock. The stock to be issued to Petrocon
shareholders will represent approximately 43.0% of the 22.8 million shares that
will be outstanding after closing. The combined companies are projected to have
2001 pro forma revenues of approximately $96 million, total assets of $37
million and stockholders' equity of $14 million. It is planned that Mike Burrow,
CEO of Petrocon, will serve in the same capacity for IDS and that William A.
Coskey, founder, current CEO and President of IDS, will serve as President of
the combined companies.
There are many strategic reasons for the proposed combination. IDS believes that
the merger with Petrocon will provide it with: 1) a more extensive record of
performing projects in the downstream segment of the oil and gas industry which
includes refining, petrochemical and process related facilities; 2) an enhanced
capability in the area of control systems and advanced control technology; and
3) a well recognized field inspection services, plant maintenance and
construction management operation. There is very little overlap in the two
companies' client base or services provided. In addition, the combination
provides for increased geographical coverage in the primary U.S. energy
marketplaces of South Louisiana, Texas and Oklahoma, with continued access to
all U.S. and international projects.
The letter of intent also provides that, in exchange for forgiveness of certain
indebtedness, IDS' majority shareholder, Alliance 2000, Ltd., ("Alliance") will
grant IDS the option to redeem 4,000,000 shares of IDS Common Stock. The option
is not expected to be exercisable until mid-2003. William A. Coskey and Hulda L.
Coskey are directors and officers of IDS and also serve as general partners of
Alliance.
A significant Petrocon creditor is also a party to the Letter of Intent and has
agreed to convert approximately $9 million of Petrocon debt into 2.5 million
shares of newly issued IDS Series A Convertible Preferred Stock (convertible
into approximately 1,050,000 shares of Common Stock), in addition to receiving
cash, and a promissory note.
In a statement issued regarding the merger with Petrocon, William A. Coskey,
Chairman and CEO of IDS, commented, "IDS is very excited about the opportunity
presented by the proposed combination of our two companies. Together, we believe
the company will have the size and breadth to fully service our combined client
base. We expect to be a major force in the energy engineering marketplace with
the potential for additional growth and increased earnings."
Also commenting on the merger, Mike Burrow, Chairman, President and CEO of
Petrocon stated, "From our many meetings with IDS, it is evident that we share
the same "core values" and similar visions for our companies. We see the
strategic advantages for shareholders, customers, and employees of combining our
operations."
About Petrocon Engineering, Inc.
In business since 1973, Petrocon provides a broad range of services to the
refining, chemical, petrochemical, exploration, production, co-generation,
manufacturing, process control and advanced automation sectors. Petrocon
subsidiaries include: Petrocon Construction Resources, Inc., which focuses on
field inspection services, process plant operations and construction management;
Petrocon Systems, Inc., which is a full service control systems integration and
advanced automation technology company; Triangle Engineers and Constructors,
Inc., which provides engineering, design and construction services to refining,
chemical and petrochemical industries; and RPM Engineering, Inc./Barnard and
Burk Industries, a full service multi-discipline engineering company located in
Baton Rouge, Louisiana with more than a 50 year history of providing quality
engineering services. Petrocon has offices in Houston and Beaumont, Texas and
Baton Rouge and Lake Charles, Louisiana. Petrocon's CEO, Mike Burrow, has
completed 18 acquisitions of engineering services companies during his career.
Further information about the company is available at http://www.petrocon.com.
About Industrial Data Systems Corporation
Industrial Data Systems Corporation is a service provider and specialty
manufacturer. IDS provides consulting services to the pipeline and process
industries for development, management and turnkey execution of engineering
projects. Manufactured products include conditioned power systems and HVAC
equipment. Further information about the company is available at
http://www.idscorporation.com.
Safe Harbor for Forward-Looking Statements
Except for the historical information contained herein, this news release
contains forward-looking statements, including, without limitation, statements
containing the words, "believes," "anticipates," "expects" and words of similar
import, other statements about Industrial Data Systems Corporation and Petrocon
Engineering, Inc.'s managements' future expectations, beliefs, goals, plans and
prospects, and statements regarding the likelihood and timing of the closing of
the merger, the expected benefits and synergies of the merger, the ability of
the combined company to successfully provide products and services after the
merger, and the future growth of the markets served by the companies. Such
forward-looking statements have known and unknown risks, uncertainties and other
factors that may cause the actual results, performance or achievements of
Industrial Data Systems Corporation, Petrocon Engineering, Inc, the combined
company or industry results to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements. Such factors include, among others: risks associated with
difficulties in successfully integrating Industrial Data Systems Corporation and
Petrocon Engineering, Inc.'s businesses and technologies; costs related to the
merger; failure to obtain required director, stockholder or regulatory approvals
of the merger; failure of the combined company to retain and hire key
executives, technical personnel and other employees; difficulty of successfully
managing a large organization; potential inability to maintain business
relationships with clients and suppliers, rapid technological changes;
competition in the consulting engineering industry; consolidation and cost
pressures in the industry, and other risk factors. Reference is hereby made to
cautionary statements set forth in the Company's Form 10-KSB for the year ended
December 31, 2000, Form 10- QSB for the quarters ended March 31, June 30, and
September 30, 2000, current Forms 8-K, and other SEC filings. The
forward-looking statements contained in this news release are made as of the
date hereof and Industrial Data Systems Corporation and Petrocon Engineering,
Inc. do not assume any obligation to update the reasons why actual results could
differ materially from those projected in the forward-looking statements.
Important Information Will Be Filed With the SEC
Industrial Data Systems Corporation plans to file with the SEC a Registration
Statement on Form S-4 in connection with the transaction, and expects to file
with the SEC and mail their stockholders a Proxy Statement/Prospectus in
connection with the transaction. The Registration Statement and Proxy
Statement/Prospectus will contain important information about Industrial Data
Systems Corporation and Petrocon Engineering, Inc, the transaction and related
matters. Investors and security holders are urged to read the Registration
Statement and Proxy Statement/Prospectus carefully when they are available.
Investors and security holders will be able to obtain free copies of the
Registration Statement and the Proxy Statement/Prospectus and other documents
filed with the SEC by Industrial Data Systems Corporation through the web site
maintained by the SEC at http://www.sec.gov. Furthermore, investors and security
holders will be able to obtain free copies of the Registration Statement and the
Proxy Statement/Prospectus from IDS by contacting IDS Investor Relations at 281
821-3200, extension 215.
Industrial Data Systems Corporation and Petrocon Engineering, Inc., and their
respective directors, officers and certain members of their management and
employees may be soliciting proxies from Industrial Data Systems Corporation or
Petrocon Engineering, Inc.'s stockholders in connection with the transaction. A
description of any interests that Industrial Data Systems Corporation and
Petrocon Engineering, Inc.'s directors and executive officers have in the
transaction and their security holdings will be available in the Registration
Statement and the Proxy Statement/Prospectus.
2. Press Release - May 16, 2001
----------------------------
IDS ANNOUNCES RECORD QUARTERLY REVENUE AND PROFIT
HOUSTON, May 16, 2001/PRNewswire/ -- Industrial Data Systems Corporation (Amex:
IDS) today announced record results for its first quarter ended March 31, 2001.
A Form 10-QSB has been filed with the Securities and Exchange Commission
reflecting these results.
The Company reports that for the first quarter of 2001, sales rose 75.5% to a
record $6.0 million from $3.4 million in the comparable period of the previous
year. Net after tax income for the first quarter increased 110.3% to a record
$338 thousand, or 2.6 cents per share on a basic and diluted basis, compared
with after tax income of $161 thousand, or 1.2 cents per share in the same
period 2000.
"We are proud to report the best quarterly operating results in the Company's
history," stated William A. Coskey, Chairman and CEO. "To achieve both solid
profitability and significant growth is a great accomplishment for IDS. The
demand for our services continues to be strong, being driven by the need to
update and expand aging facilities in the energy industry."
Mr. Coskey added, "At present, we are well into the due diligence phase of our
recently announced intent to merge with Petrocon Engineering, Inc. All of the
strategic reasons for initiating this transaction, expressed in our April 3rd
news release, are still in place and I remain optimistic about the opportunities
that will be created by our proposed combination."
The following are selected summaries of the unaudited results of operations as
reported for the periods shown:
Comparative Analysis
--------------------
Three months ended Three months ended
March 31, 2001 March 31, 2000
------------------ ------------------
Net Sales $ 5,953,906 $ 3,392,211
Net Income Before Tax $ 536,719 $ 232,045
Net Income After Tax $ 338,219 $ 160,791
Net Income Per Common Share
(Basic and Diluted) .026 .012
About Industrial Data Systems Corporation
Industrial Data Systems Corporation is a service provider and specialty
manufacturer. IDS provides consulting services to the pipeline and process
industries for development, management and turnkey execution of engineering
projects. Manufactured products include conditioned power systems and HVAC
equipment. Further information about the company is available at
http://www.idscorporation.com.
Safe Harbor for Forward-Looking Statements
This news release contains "forward-looking statements" within the meaning of
the safe harbor provisions of the federal securities laws. They should be read
in conjunction with the "Forward-Looking Statements Cautionary Factors" in IDS'
Form 10-KSB, Part 1 that discusses important factors that could cause IDS'
results to differ materially from those anticipated in such statements.
3. Press Release - June 11, 2001
----------------------------
IDS ANNOUNCES ANNUAL STOCKHOLDERS MEETING
To Be Held June 28th at the Company's Headquarters
HOUSTON, June 11, 2001/PRNewswire/ -- Industrial Data Systems Corporation (AMEX:
IDS) today announced that its annual meeting of stockholders will be held
Thursday, June 28, 2001 at 10:00 a.m. Central Time at the corporate offices in
Houston, Texas, as noted in the Proxy Statement and Notice which have been filed
with the Securities and Exchange Commission. The board of directors has fixed
the close of business on May 31, 2001 as the record date and only the
stockholders of record on that date are entitled to notice of and to vote at the
annual meeting. Stockholders of record on that date have the opportunity to vote
by proxy or at the meeting on two proposals, the election of the Company's
directors and the appointment of the Company's independent auditors.
The Company may set an additional date for a Special Meeting of the Stockholders
to be held during the third quarter 2001. If called, the special meeting will be
held for the purpose of approving matters relating to a proposed merger with
Petrocon Engineering, Inc., with whom the Company signed a non-binding letter of
intent on April 3, 2001.
About Industrial Data Systems Corporation
Industrial Data Systems Corporation is a service provider and specialty
manufacturer. IDS provides consulting services to the pipeline and process
industries for development, management and turnkey execution of engineering
projects. Manufactured products include conditioned power systems and HVAC
equipment. Further information about the company is available at
http://www.idscorporation.com.
Safe Harbor for Forward-Looking Statements
This news release contains "forward-looking statements" within the meaning of
the safe harbor provisions of the federal securities laws. They should be read
in conjunction with the "Forward-Looking Statements Cautionary Factors" in IDS'
Form 10-KSB, Part 1 that discusses important factors that could cause IDS'
results to differ materially from those anticipated in such statements.
4. Press Release - July 2, 2001
----------------------------
RESULTS FROM ANNUAL MEETING OF IDS STOCKHOLDERS
Update provided on proposed Petrocon merger
HOUSTON, July 2, 2001/PRNewswire/ -- Industrial Data Systems Corporation (AMEX:
IDS) held its annual meeting of stockholders on Thursday, June 28, 2001. The
five directors noted in the Proxy Statement were re-elected to terms expiring at
the next annual meeting to be held in 2002 and the appointment of the Company's
audit firm was ratified. Over ninety-nine percent of the outstanding voting
stock was represented in person or by proxy at the meeting.
In his address to stockholders, William A. Coskey, President and CEO of IDS,
provided highlights of recent accomplishments by each of the Company's
subsidiaries, including: a record backlog at Thermal Corporation with six months
of continuous profitability; a successful move of Constant Power Manufacturing
into its new facilities and continued good financial results at IDS Engineering.
In the question and answer segment of the meeting, several questions were raised
regarding progress on the proposed merger with Petrocon Engineering, Inc.
("PEI"). Mr. Coskey commented that:
o the due diligence phase undertaken by all parties is substantially
complete;
o the parties are currently in the process of finalizing a definitive
agreement but because of the number of parties involved and complexity
of the transaction, progress has been slow. If completed, the
transaction should close late in the 3rd quarter of 2001;
o a majority vote of the non-affiliated, minority stockholders of IDS
along with PEI shareholder approval would be required to authorize the
merger;
o as previously announced, it is expected that Michael L. Burrow would
hold the position of CEO and William A. Coskey would assume the role
of COO and President.
Mr. Coskey further explained that immediately following the signing of a
definitive agreement the Company would distribute a press release regarding
details of the transaction. Due to the number of non-accredited PEI
shareholders, the Company will be required to file a Form S-4 Registration
document with the SEC which will provide greater detail of the transaction and
related parties. There will be a period of time for SEC review and comment on
the Form S-4, and upon final approval, the matter would then come before the
shareholders of each company for their approval.
Questions regarding PEI, the privately-held merger candidate, were also
addressed, including:
o Share ownership is held by approximately 85 shareholders, none of
which is a majority holder. According to the Letter of Intent, merger
consideration includes the issuance of 9.8 million shares of IDS
common stock to PEI shareholders and it is expected that a large
percentage of these shares will be subject to a Lock-Up Agreement.
o PEI primarily operates in the downstream segment (refining,
petrochemical facilities) of the oil and gas business and may just be
starting to see the turnaround already recognized in the upstream
segment (pipeline, production facilities) in which IDS primarily
operates.
o Although IDS is the smaller of the companies in revenues, IDS is
considered the financial acquirer in the transaction, and would become
the Parent of PEI and its subsidiaries.
Additional information on PEI can be found at their corporate website,
www.petrocon.com.
About Industrial Data Systems Corporation
Industrial Data Systems Corporation is a service provider and specialty
manufacturer. IDS provides consulting services to the pipeline and process
industries for development, management and turnkey execution of engineering
projects. Manufactured products include conditioned power systems and HVAC
equipment. Further information about the company and its subsidiaries is
available at http://www.idscorporation.com.
About Petrocon Engineering, Inc.
In business since 1973, Petrocon provides a broad range of services to the
refining, chemical, petrochemical, exploration, production, co-generation,
manufacturing, process control and advanced automation sectors. Petrocon
subsidiaries include: Petrocon Construction Resources, Inc., which focuses on
field inspection services, process plant operations and construction management;
Petrocon Systems, Inc., which is a full service control systems integration and
advanced automation technology company; Triangle Engineers and Constructors,
Inc., which provides engineering, design and construction services to refining,
chemical and petrochemical industries; and RPM Engineering, Inc./Barnard and
Burk Industries, a full service multi-discipline engineering company located in
Baton Rouge, Louisiana with more than a 50 year history of providing quality
engineering services. Petrocon has offices in Houston and Beaumont, Texas and
Baton Rouge and Lake Charles, Louisiana. Petrocon's CEO, Mike Burrow, has
completed 18 acquisitions of engineering services companies during his career.
Further information about the company is available at http://www.petrocon.com.
Safe Harbor for Forward-Looking Statements
This news release contains "forward-looking statements" within the meaning of
the safe harbor provisions of the federal securities laws. They should be read
in conjunction with the "Forward-Looking Statements Cautionary Factors" in IDS'
Form 10-KSB, Part 1 and subsequent SEC filings that discuss important factors
that could cause IDS' results to differ materially from those anticipated in
such statements.
5. August 1, 2001 Press Release
----------------------------
IDS SIGNS MERGER AGREEMENT WITH PETROCON ENGINEERING, INC.
(Houston, August 1, 2001) -- Industrial Data Systems Corporation (AMEX: IDS)
today announced that it has signed a definitive merger agreement with Petrocon
Engineering, Inc. ("PEI"), a privately-held, full service, international
engineering and control systems firm with 2000 revenues of approximately $68
million. The two companies previously announced, on April 3, 2001, the signing
of a Letter of Intent relating to their proposed merger. It is expected that
this transaction will close during the fourth quarter of 2001, subject to
regulatory approvals, shareholder approvals and satisfaction of other closing
requirements as stipulated in the merger agreement.
William A. Coskey, Chairman and CEO of IDS, commented, "The mission will now be
to realize the many strategic benefits made possible by combining our two
companies. I look forward to working with associates from both IDS and PEI to
create a unified company in which we can all take pride. On a pro forma basis
with Petrocon, our 2002 revenues may approach the $100 million level. As a
public company, we should now have a focused, growth story to share with
customers, stockholders and the investment community."
Also commenting on the merger, Mike Burrow, Chairman, President and CEO of
Petrocon stated, "PEI and IDS have already started working together on
prospective projects with clients who need our combined capabilities. I am
enthused about the prospects for growing together with IDS to attract more
customers who see the strategic advantages of dealing with a firm which covers a
larger segment of the energy business."
The transaction will be effected as a stock for stock exchange, with PEI
surviving as an indirect wholly owned subsidiary of IDS. Under the terms of the
merger agreement, IDS will issue 9.8 million shares of its common stock in
return for 100% of PEI shares. In addition, a significant PEI creditor has
agreed to convert approximately $9 million of PEI debt into 2.5 million shares
of newly issued IDS Series A Convertible Preferred Stock (convertible
into approximately 1,050,000 shares of IDS Common Stock), in addition to
receiving cash and a promissory note. The Boards of Directors of both companies
have unanimously approved the transaction, which is expected to be presented for
IDS and PEI shareholder approval early in the fourth quarter of this year.
Industrial Data Systems Corporation plans to file with the SEC a Registration
Statement on Form S-4 in connection with the transaction, and IDS and Petrocon
plan to mail their stockholders a Proxy Statement/Prospectus in connection with
the transaction. The Registration Statement and Proxy Statement/Prospectus will
contain important information about Industrial Data Systems Corporation and
Petrocon Engineering, Inc., the transaction and related matters. Investors and
security holders are urged to read the Registration Statement and Proxy
Statement/Prospectus carefully when they are available.
Investors and security holders will be able to obtain free copies of the
Registration Statement and the Proxy Statement/Prospectus and other documents
filed with the SEC by Industrial Data Systems Corporation through the web site
maintained by the SEC at http://www.sec.gov. Furthermore, investors and security
holders will be able to obtain free copies of the Registration Statement and the
Proxy Statement/Prospectus from IDS by contacting IDS Investor Relations at
(281) 821-3200, extension 215.
Industrial Data Systems Corporation and Petrocon Engineering, Inc., and their
respective directors, officers and certain members of their management and
employees may be soliciting proxies from Industrial Data Systems Corporation or
Petrocon Engineering, Inc.'s stockholders in connection with the transaction. A
description of any interests that Industrial Data Systems Corporation and
Petrocon Engineering, Inc.'s directors and executive officers have in the
transaction and their security holdings will be available in the Registration
Statement and the Proxy Statement/Prospectus.
About Petrocon Engineering, Inc.
Petrocon provides a broad range of services to the refining, chemical,
petrochemical, exploration, production, co-generation, manufacturing, process
control and advanced automation sectors. Petrocon subsidiaries include: Petrocon
Construction Resources, Inc., which focuses on field inspection services,
process plant operations and construction management; Petrocon Systems, Inc.,
which is a full service control systems integration and advanced automation
technology company; Triangle Engineers and Constructors, Inc., which provides
engineering, design and construction services to refining, chemical and
petrochemical industries; and RPM Engineering, Inc./Barnard and Burk Industries,
a full service multi-discipline engineering company located in Baton Rouge,
Louisiana with more than a 50 year history of providing quality engineering
services. Petrocon, with approximately 800 employees and 2000 revenues of $68
million, has offices in Houston and Beaumont, Texas and Baton Rouge and Lake
Charles, Louisiana. Petrocon's CEO, Mike Burrow, has completed 18 acquisitions
of engineering services companies during his career. Further information about
the company is available at http://www.petrocon.com.
About Industrial Data Systems Corporation
Industrial Data Systems Corporation is a service provider and specialty
manufacturer, which through its largest subsidiary, provides engineering and
control system services for pipeline and production facilities. Based in
Houston, Texas, IDS has approximately 175 employees and 2000 revenues of $17
million. IDS provides consulting services to the pipeline and process industries
for development, management and turnkey execution of engineering projects.
Manufactured products include conditioned power systems and HVAC equipment.
Further information about the company is available at
http://www.idscorporation.com.
Safe Harbor for Forward-Looking Statements
Except for the historical information contained herein, this news release
contains forward-looking statements, including, without limitation, statements
containing the words, "believes," "anticipates," "expects" and words of similar
import, other statements about Industrial Data Systems Corporation and Petrocon
Engineering, Inc.'s managements' future expectations, beliefs, goals, plans and
prospects, and statements regarding the likelihood and
timing of the closing of the merger, the expected benefits and synergies of the
merger, the ability of the combined company to successfully provide products and
services after the merger, and the future growth of the markets served by the
companies. Such forward-looking statements have known and unknown risks,
uncertainties and other factors that may cause the actual results, performance
or achievements of Industrial Data Systems Corporation, Petrocon Engineering,
Inc, the combined company or industry results to be materially different from
any future results, performance or achievements expressed or implied by such
forward-looking statements. Such factors include, among others: risks associated
with difficulties in successfully integrating Industrial Data Systems
Corporation and Petrocon Engineering, Inc.'s businesses and technologies; costs
related to the merger; failure to obtain required director, stockholder or
regulatory approvals of the merger; failure of the combined company to retain
and hire key executives, technical personnel and other employees; difficulty of
successfully managing a large organization; potential inability to maintain
business relationships with clients and suppliers, rapid technological changes;
competition in the consulting engineering industry; consolidation and cost
pressures in the industry, and other risk factors. Reference is hereby made to
cautionary statements set forth in the Company's Form 10-KSB for the year ended
December 31, 2000, Form 10-QSB for the quarters ended March 31, 2001, June 30,
2000 and September 30, 2000, current Forms 8-K, and other SEC filings. The
forward-looking statements contained in this news release are made as of the
date hereof and Industrial Data Systems Corporation and Petrocon Engineering,
Inc. do not assume any obligation to update the reasons why actual results could
differ materially from those projected in the forward-looking statements.
6. Press Release - August 14, 2001
-------------------------------
IDS ANNOUNCES FINANCIAL RESULTS SHOWING
55% REVENUE GROWTH AND IMPROVED PROFITABILITY
HOUSTON, August 14, 2001/PRNewswire/ -- Industrial Data Systems Corporation
(Amex: IDS) today announced its financial results for the three month and six
month periods ended June 30, 2001. Highlights include revenue growth of 54.6%
for the second quarter of 2001 when compared with the same quarter of the prior
year. A comparison of the first half of 2001 versus 2000 shows an even greater
revenue increase of 65.1%. Also recorded was a substantial improvement in
profitability with pretax net income exceeding 9% as a percentage of revenue for
each of the 2001 periods being reported. For the six months year to date, IDS'
net income is approximately 5 cents per share, compared to a break-even
performance in 2000. A Form 10-QSB has been submitted to the Securities and
Exchange Commission reflecting these results.
"We at IDS are proud to report another quarter of solid operating results,"
stated William A. Coskey, Chairman and CEO. "As previously announced, we have
signed a definitive merger agreement with Petrocon Engineering, Inc., a company
with 2000 revenues of approximately $68M. We expect to have an S-4 Registration
Statement relating to this transaction filed with the SEC within the next two
weeks with an anticipated closing sometime during the fourth quarter."
The Company reports that for the second quarter ended June 30, 2001, net sales
rose 54.6% to $5.1 million from $3.3 million in the comparable period of the
previous year. Operating income was $501 thousand, up from a loss of $221
thousand in the second quarter of 2000. Net income after tax for the second
quarter 2001 was $292 thousand, or 2.3 cents per share on a basic and diluted
basis, compared with a net loss of $154 thousand, or (1.2) cents per share, in
the same period 2000. Revenue from the Engineering segment of the Company
comprised 64.7% of the Company's revenues for the quarter.
For the first half of fiscal year 2001 ended June 30, 2001, net sales rose 65.1%
to $11.1 million from $6.7 million in the comparable period of the previous
year. Operating income was $1.0 million, up 7,734% from $13 thousand in the
first half of 2000. Net income after tax for the first half of 2001 increased
from $7 thousand to $624 thousand, a gain of 8,975%. Earnings per share on a
basic and diluted basis increased to 4.9 cents per share from 0.1 cents per
share in the same period 2000. The following are selected summaries of the
unaudited results of operations as reported for the periods shown:
Comparative Analysis
--------------------
Three months ended June 30, Six months ended June 30,
--------------------------- -------------------------
2001 2000 2001 2000
---- ---- ---- ----
Net Sales $ 5,149,490 $ 3,331,742 $ 11,103,396 $ 6,723,953
Net Income Before Tax $ 497,783 $ (225,092) $ 1,034,502 $ 6,953
Net Income After Tax $ 292,783 $ (153,838) $ 631,002 $ 6,953
Net Income Per Common Share
(Basic and Diluted) 0.023 (0.012) 0.049 0.001
About Industrial Data Systems Corporation
Industrial Data Systems Corporation is a service provider and specialty
manufacturer. IDS provides consulting services to the pipeline and process
industries for development, management and turnkey execution of engineering
projects. Manufactured products include conditioned power systems and HVAC
equipment. Further information about the company is available at
http://www.idscorporation.com.
Safe Harbor for Forward-Looking Statements
This news release contains "forward-looking statements" within the meaning of
the safe harbor provisions of the federal securities laws. They should be read
in conjunction with the "Forward-Looking Statements Cautionary Factors" in IDS'
Form 10-KSB, Part 1 that discusses important factors that could cause IDS'
results to differ materially from those anticipated in such statements.