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Hathaway Reports Profits for Second Quarter
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DENVER, Jan 30, 2002 (BUSINESS WIRE) -- Hathaway Corporation (Nasdaq: HATH)
today announced it achieved net income of $75,000, or $.02 per diluted share,
for the second quarter ended December 31, 2001, compared to $771,000, or $.16
per diluted share, for the second quarter last year.
Revenues for the second quarter decreased 19% to $10,659,000 this year from $13,166,000 last year. For the first six months of fiscal year 2002, the Company recognized a net loss of $163,000, or $.04 per diluted share, compared to net profit of $780,000, or $.16 per diluted share, for the first six months of last year. Revenues for the first six months decreased 19% to $19,764,000 this year from $24,499,000 last year. Revenues from the Motion Control segment for the second quarter decreased 25% to $4,222,000 from $5,635,000 for the second quarter last year. Revenues for the six months ended December 31, 2001, decreased 30% to $7,868,000 from $11,304,000 for six months last year. Pretax profit for Motion Control for the second quarter was $432,000 compared to $1,008,000 last year and, for the six months, pretax profit was $438,000 compared to $2,160,000 last year. At December 31, 2001, backlog for Motion Control orders was $8,758,000, 25% lower than the order backlog at the end of the second quarter last year. The decrease is primarily due to the cancellation of a $4,750,000 order that was received in March 2001, to supply motors and optical encoders to the fiberoptic telecommunications industry over an 18-month period. The Power and Process segment, comprised of the power and process instrumentation and systems automation businesses, reported revenues for the second quarter of fiscal 2002 of $6,437,000, compared to revenues of $7,531,000 for the second quarter last year, a 15% decrease, reflecting a decline in revenues from systems automation products. The segment reported a $523,000 pretax loss for the second quarter ended December 31, 2001, compared to a pretax loss of $246,000 for the second quarter last year. For the first six months of fiscal 2002, Power and Process reported revenues of $11,896,000, compared to $13,195,000 last year, a 10% decrease, and a pretax loss of $1,022,000, compared to a pretax loss of $1,505,000 last year. The current year's Power and Process results include a $674,000 pretax gain from the sale of our 20% interest in Hathaway Si Fang Protection and Control Company (Si Fang), compared with $350,000 equity income from Si Fang included in the first six months last year. Last year's Power and Process results include a pretax restructuring charge of $441,000. Without the income from the China joint venture or the restructuring charge, the Power and Process segment reported a pretax loss of $1,696,000, compared with a pretax loss of $1,414,000 last year. Sales order backlog for Power and Process orders was $8,188,000 at December 31, 2001, which is down 29% from the same time last year and represents a decline in systems automation backlog. "Our Motion Control segment has been adversely affected by the continued economic slowdown," commented Dick Smith, president and CEO. "However, we have recently been successful in winning new orders for our products from the military, medical, automotive and industrial automation markets and we continue to explore other opportunities to expand into new industry sectors and posture the motion control business for a quick recovery as the economy strengthens. We are disappointed with the cancellation of the telecommunications order but believe that when deliveries of fiberoptic test instrumentation that use our products begin to accelerate, we should be able to obtain new orders with higher margins. While we are still designed into the customer's products, deliveries have been halted by the customer because of excess inventories and the economic downturn. We believed it was important to have the order cancelled and obtain reimbursement for the inventory exposure we had and then have the customer release new orders at the time they are ready to start accepting deliveries." Mr. Smith further stated: "Hathaway continues to be a leading supplier of products and systems that provide solutions to the new challenges being faced by the electric power companies and generator owners, however, we are disappointed with the decline in revenues and profits in our Power and Process segment. The decline is primarily due to our decision to shift the focus of our systems business to power generation and transmission projects and away from industrial automation applications. The new power business is not accelerating as quickly as we are completing the backlog of industrial projects. While we will continue to selectively pursue industrial projects, the future growth in revenues for our systems business is highly dependent on the continued growth in the power applications side of this business. We continue to build momentum and future opportunities with successful installations of our evaluation systems into transmission substations of major power companies." Headquartered in Denver, Colorado, Hathaway designs, manufactures and sells advanced systems and instrumentation to the worldwide power and process industries, as well as motion control products to a broad spectrum of customers throughout the world. With subsidiaries in the United States and United Kingdom and joint venture investments in China, Hathaway is a leading supplier of systems automation and integration solutions to the world power industry and a leader in motion control products. The statements in this press release and in the Company's January 30, 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 Six Months
Ended December 31, Ended December 31,
HIGHLIGHTS OF OPERATING RESULTS 2001 2000 2001 2000
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Revenues $ 10,659 $ 13,166 $ 19,764 $ 24,499
====== ====== ====== ======
Income (loss) before income
taxes $ 29 $ 894 $ (209) $ 989
Benefit (provision) for income
taxes 46 (123) 46 (209)
------ ------ ------ ------
Net profit (loss) $ 75 $ 771 $ (163) $ 780
====== ====== ====== ======
PER-SHARE AMOUNTS:
Basic net income (loss) per
share $ 0.02 $ 0.17 $ (0.04) $ 0.17
====== ====== ====== ======
Diluted net income (loss) per
share $ 0.02 $ 0.16 $ (0.04) $ 0.16
====== ====== ====== ======
Basic weighted average common
shares 4,632 4,477 4,623 4,473
====== ====== ====== ======
Diluted weighted average common
shares 4,736 4,772 4,623 4,869
====== ====== ====== ======
December 31, June 30,
CONDENSED BALANCE SHEETS 2001 2001
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ASSETS
Cash $ 3,412 $ 1,911
Restricted Cash 409 346
Trade receivables, inventories, and other
current assets 13,995 13,354
Property and equipment, net 1,867 1,781
Other 477 2,811
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TOTAL ASSETS $ 20,160 $ 20,203
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LIABILITIES AND STOCKHOLDERS' INVESTMENT
LIABILITIES:
Accounts payable and other current liabilities $ 6,190 $ 5,822
Line-of-credit classified as current -- 553
------ ------
TOTAL LIABILITIES 6,190 6,375
STOCKHOLDERS' INVESTMENT 13,970 13,828
------ ------
TOTAL LIABILITIES AND STOCKHOLDERS' INVESTMENT $ 20,160 $ 20,203
====== ======
For the Six Months Ended
December 31,
CONDENSED STATEMENTS OF CASH FLOWS 2001 2000
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Cash flows from operating activities:
Net income (loss) $ (163) $ 780
Depreciation and amortization 360 386
Changes in working capital balances and other (941) (1,374)
------ ------
Net cash from operating activities (744) (208)
Net cash from investing activities 2,559 (218)
Net cash from financing activities (349) (928)
Effect of foreign exchange rate changes on cash 35 (32)
------ ------
Net (decrease) in unrestricted cash and cash
equivalents 1,501 (1,386)
Unrestricted cash and cash equivalents at
beginning of year 1,911 2,928
------ ------
UNRESTRICTED CASH AND CASH EQUIVALENTS AT
DECEMBER 31 $ 3,412 $ 1,542
====== ======
CONTACT: Hathaway Corporation
Richard Smith, 303/799-8200
Fax: 303/799-8880
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