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Hathaway Reports Fiscal 2002 Results
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DENVER, Aug 19, 2002 (BUSINESS WIRE) -- Hathaway Corporation (Nasdaq:HATH)
today announced that it achieved net income, before an estimated charge for
litigation settlement and related legal fees, of $695,000 or $.15 per share for
the fiscal year ended June 30, 2002, compared to $1,996,000, or $.41 per diluted
share for the year ended June 30, 2001.
After the net estimated litigation charge of $961,000, the Company reported a net loss for fiscal 2002 of $266,000 or $.06 per share. Subsequent to June 30, 2002, the Company agreed to settle an environmental contamination lawsuit pursuant to which Hathaway, with other parties, was named as a defendant. Accordingly, during the fourth quarter, an estimated charge for the settlement and related legal fees of $961,000, net of tax, was recorded. The lawsuit relates to property that was occupied by the Company's Power business over 37 years ago. While the Company believes the suit against the Company was without merit, it agreed to the settlement to eliminate the future costs of defending itself and the uncertain risks associated with litigation. Revenues for the fiscal year 2002 decreased 13% to $42,059,000 this year from $48,386,000 last year. Hathaway achieved net income before the estimated charge for litigation settlement and related legal fees for the fourth fiscal quarter ended June 30, 2002, of $551,000, or $.12 per share compared to $956,000, or $.20 per diluted share for the fourth quarter last year. The Company reported a net loss for the fourth quarter, after the net estimated charge of $961,000 for the litigation settlement and related legal fees, of $410,000 or $.09 per share. Revenues for the fourth quarter ended June 30, 2002, decreased 13% to $10,907,000 this year from $12,574,000 for the same period last year. The Power and Process segment, comprised of the power and process instrumentation and systems automation businesses, reported revenues for fiscal 2002 of $26,336,000 compared to revenues of $27,198,000 for last year, a 3% decrease. The segment reported a pretax loss of $1,883,000 for the year ended June 30, 2002, compared to $1,539,000 for the year ended June 30, 2001. For the fourth quarter of fiscal 2002, Power and Process reported revenues of $7,103,000 compared to $8,522,000 last year, a 17% decrease, and a pretax loss of $993,000 compared to pretax income of $1,030,000 last year. The current year's Power and Process results include the estimated pretax charge for litigation settlement and related legal fees. On July 30, 2002, the Company completed the sale of the Power and Process segment for $6,550,000 in cash subject to certain closing adjustments and will recognize a pretax gain on the sale of approximately $1.8 million subject to certain closing adjustments. Revenues for the Motion Control segment for the year ended June 30, 2002, decreased 26% to $15,723,000 from $21,188,000 last year. Revenues for the fourth quarter of fiscal 2002 decreased 6% to $3,804,000 from $4,052,000 for the fourth quarter last year. Pretax profit for Motion Control for fiscal 2002 was $842,000 compared to $3,584,000 last year, and for the fourth quarter, pretax profit was $230,000 compared to $378,000 for the quarter ended June 30, 2001. At June 30, 2002, backlog for Motion Control orders was $5,836,000, 55% lower than the order backlog at the end of fiscal 2001. The decrease is primarily due to the cancellation this year of $7,426,000 of orders to supply motors and optical encoders to the fiberoptic telecommunications industry. Other than the effect from the order cancellations, backlog for the year has increased 4%. Dick Smith, Chief Executive Officer, commented: "Subsequent to year end, we were successful in completing both the sale of our Power and Process segment and the acquisition of Motor Product Corporation in Owosso, Michigan, to further our expansion into the motion control industry. We also agreed to settle a pending lawsuit related to our Power and Process business. We are excited to focus our future efforts on expanding the Company's motion control business to maximize profits in both the short and long term." "Although this business has recently been adversely affected by the economic downturn," continued Mr. Smith, "we believe it should continue to be a profitable and growing business in the future. We have been successful in winning orders for our motion control products from new market segments and we continue to explore opportunities to expand into new industry sectors and posture the motion control business for a quick recovery as the economy strengthens." Dick Warzala, President of Hathaway, states: "Strategically, Motor Products and the existing Hathaway businesses are very well aligned, due to the commitment to lean manufacturing processes and an extensive design and applications engineering knowledge base. Motor Products has a strong management team who has already been aggressively pursuing lean manufacturing efficiencies, improved purchasing programs and multiple new product development opportunities. With the acquisition of Motor Products, Hathaway further expands its ability to deliver unique motor solutions to multiple and diverse OEM markets." Headquartered in Denver, Colorado, Hathaway designs, manufactures and sells motion control products into applications that serve many industry sectors. With subsidiaries in the United States and United Kingdom, Hathaway is a leading supplier of precision and specialty motion control components and systems to a broad spectrum of customers throughout the world. The statements in this press release and in the Company's August 19, 2002, conference call that relate to future plans, events or performance are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, any statements that may predict, forecast, indicate, or imply future results, performance, or achievements. Forward-looking statements involve known and unknown risks and uncertainties that may cause actual results of the Company to differ materially from the forward-looking statements. The risks and uncertainties include international, national and local general business and economic conditions in the Company's motion control, process and power markets, introduction of new technologies, products and competitors, the ability to protect the Company's intellectual property, the ability of the Company to sustain, manage or forecast its growth and product acceptance, the continued success of the Company's customers to allow the Company to realize revenues from its order backlog and to support the Company's expected delivery schedules, the continued viability of the Company's customers and their ability to adapt to changing technology and product demand, the ability of the Company to meet the technical specifications of its customers, the continued availability of parts and components, increased competition and changes in competitor responses to the Company's products and services, changes in government regulations, availability of financing, the ability of the Company's lenders and financial institutions to provide additional funds if needed and the ability to attract and retain qualified personnel who can design new applications and products for the motion control and power industries. Deregulation and changes in demographic patterns and weather conditions have changed the product needs and requirements of the power industry and new products are being introduced on a regular basis. They are often products for improving the efficiency and reliability of the power systems and include products that automate and improve the availability of information regarding the performance of the power system. The Company's ability to compete in this market depends upon its capacity to anticipate the need for new products, and to continue to design and market those products to meet customers' needs in a competitive world. Actual results, events and performance may differ materially. Readers are cautioned not to place undue reliance on these forward-looking statements as a prediction of actual results. The Company has no obligation or intent to release publicly any revisions to any forward-looking statements, whether as a result of new information, future events, or otherwise.
FINANCIAL SUMMARY (IN THOUSANDS, EXCEPT PER-SHARE DATA)
For the Three Months For the Year
Ended June 30, Ended June 30,
HIGHLIGHTS OF OPERATING RESULTS 2002 2001 2002 2001
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Revenues $10,907 $12,574 $42,059 $48,386
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(Loss) income before income
taxes $ (641) $ 1,265 $ (586) $ 2,572
Benefit (provision) for income
taxes 231 (309) 320 (576)
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Net (loss) profit $ (410) $ 956 $ (266) $ 1,996
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PER SHARE AMOUNTS:
Basic net income per share $ (0.09) $ 0.21 $ (0.06) $ 0.44
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Diluted net income per share $ (0.09) $ 0.20 $ (0.06) $ 0.41
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Basic weighted average common
shares 4,669 4,542 4,644 4,493
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Diluted weighted average common
shares 4,669 4,780 4,644 4,834
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CONDENSED BALANCE SHEETS June 30, 2002 June 30, 2001
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ASSETS
Cash $ 4,278 $ 1,911
Restricted Cash 501 346
Trade receivables, inventories,
and other current assets 15,287 13,354
Property and equipment, net 1,934 1,781
Other 629 2,811
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TOTAL ASSETS $22,629 $20,203
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LIABILITIES AND STOCKHOLDERS'
INVESTMENT
LIABILITIES:
Accounts payable and other current
liabilities $ 8,125 $ 5,822
Line-of-credit classified as
current -- 553
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TOTAL LIABILITIES 8,125 6,375
STOCKHOLDERS' INVESTMENT 14,504 13,828
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TOTAL LIABILITIES AND STOCKHOLDERS'
INVESTMENT $22,629 $20,203
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For the Nine Months Ended
June 30,
CONDENSED STATEMENTS OF CASH FLOWS 2002 2001
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Cash flows from operating activities:
Net income (loss) $ (266) $ 1,996
Depreciation and amortization 754 831
Changes in working capital balances
and other (426) (2,173)
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Net cash from operating activities 62 654
Net cash from investing activities 2,117 (715)
Net cash from financing activities 79 (896)
Effect of foreign exchange rate changes
on cash 109 (60)
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Net (decrease) in unrestricted cash
and cash equivalents 2,367 (1,017)
Unrestricted cash and cash equivalents
at beginning of year 1,911 2,928
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UNRESTRICTED CASH AND CASH EQUIVALENTS
AT JUNE 30 $ 4,278 $ 1,911
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CONTACT: Hathaway Corporation
Richard Smith or Sue Chiarmonte, 303/799-8200
303/799-8880 (fax)
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