Baldwin Reports 2002 Results, Planned Sale of Assets of Baldwin Kansa
Press release from the issuing company
SHELTON, Conn.--Sept. 24, 2002--Baldwin Technology Company, Inc. (ASE:BLD) announced today a net loss for the fiscal year ended June 30, 2002 of $15,984,000 or $1.07 per diluted share, compared to $18,172,000 or $1.23 per diluted share for the prior fiscal year.
Net sales were $145,625,000 compared to $183,615,000 for the prior year. The results for this year included a non-cash impairment charge of $5,434,000 for the write-down of goodwill associated with the inserter business in Kansas which is to be divested, a non-cash tax charge of $6,684,000 which primarily resulted from the establishment of a valuation reserve related to US deferred tax assets, and $621,000 for charges associated with the previously announced restructuring plan. The prior year results also included restructuring charges and costs associated with management organization changes, as well as goodwill and asset write-offs related to the divestiture of the company's Roll Handling and Print On-Demand businesses.
Orders for the year and quarter ended June 30, 2002 were $135,800,000 and $32,200,000, respectively, compared to $140,900,000 and $31,100,000 for the year and quarter ended June 30, 2001. Backlog at June 30, 2002 was $48,900,000, which was 9.5% higher than the March 31, 2002 backlog of $44,600,000 and 2.7% lower than the backlog of $50,300,000 at June 30, 2001. For comparison purposes, prior year order and backlog amounts have been adjusted to reflect the disposition of the Roll Handling operations in September of 2001.
John T. Heald, Jr., President and CEO, commented: "Our goals for Fiscal 2002 were to achieve broad reductions in manufacturing costs, define a global product development plan, and attain a revenue level of approximately $150,000,000. We made progress in achieving cost reductions and installing global product development priorities, but came up short against our revenue target during the fourth quarter. Despite a lowering of our cost base, we were unable to achieve profitability at lower volumes. We continue to see very difficult markets ahead industry-wide, but are somewhat more encouraged by our order activity. On the one hand, advertising, a leading indicator of the health of the printing markets, has for the first time in thirty years, declined for two consecutive years. On the other hand, we are encouraged to report that we continue to see strength in our order rates with a resultant increase in our backlog, which currently stands at approximately $57,000,000."
Vijay C. Tharani, Vice President and CFO, noted, "In anticipation of a continuing weakness in the printing markets for the next several quarters, we are amplifying our existing cost cutting efforts. We will be taking a charge in the first quarter of Fiscal 2003 of approximately $3,000,000 for a new restructuring plan, to cover facility consolidations and additional reductions in employment levels worldwide. As noted below, we are also divesting the final piece of the material handling business, other portions of which we've sold over the last several years. The Company expects to receive $4,200,000 in cash for the business, most of which it intends to use to pay down its existing credit facility. Finally, with regards to our refinancing efforts, we are working diligently and cooperatively with our current lenders towards renegotiation of our existing credit facilities, which as previously announced, expire on October 1."
The Company also announced that it has signed a Letter of Intent to sell the assets of its Baldwin Kansa Corporation ("Kansa") to the former owners and Vektek, Inc., a local manufacturing company. The transaction is expected to close in October.
In commenting on the sale, Jerry Waddell, Chairman of Kansa and one of the Buyers, said, "I look forward to expanding the opportunities for our products and the business I've been in for the last thirty years. We intend to operate out of the existing facility in Emporia, Kansas, and hope to maintain a working relationship with Baldwin in the future." Ron Swint, President of Kansa and one of the Buyers, added, "We are very excited about this opportunity and are looking forward to working more closely with all of the employees and customers of Kansa who were instrumental in our past successes."
Mr. Heald concluded: "This divestiture is part of our strategy to focus Baldwin on its core business. We are pleased that we were able to arrange the sale of this business to existing management."
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