Tufco Technologies Reports Q4 Results: To Enter 2003 with Clean Slate
Press release from the issuing company
GREEN BAY, Wis., Dec. 6 -- Tufco Technologies, Inc., a leader in providing diversified contract manufacturing and specialty printing services, business imaging paper products and paint sundry products today announced operating results for the fourth quarter and full fiscal year 2002. Sales for the quarter were $19.4 million, down from the $21.1 million in sales for the fourth quarter of 2001. For the year, sales were $75.7 million compared to $82.1 million for fiscal year 2001. Net loss for the fourth quarter was $0.8 million ($0.17 per share) and net loss for the year was $5.4 million ($1.17 per share). This compares to net income of $0.6 million ($0.14 per share) and $1.4 million ($0.31 per share) for the comparable periods a year ago. During the year, the Company continued to improve its balance sheet, reducing debt by $6.3 million to $6.2 million and reducing the debt equity ratio from 32.7% to 18.8%.
In commenting on the results, Lou LeCalsey, Tufco's President and CEO commented, "Fiscal year 2002 turned out virtually as we predicted a year ago in that we were deeply involved with restructuring and cost reduction activities eliminating low margin businesses and positioning the Company for the future. Although our financial results were somewhat depressed, the loss is primarily attributable to a number of one-time charges. Without these charges, the Company would have generated pre-tax income of $0.7 million for the year. Also, actions taken throughout the year bode well for our future. In addition to the debt reduction, we invested in new equipment which will enable us to participate in a significant way in the non-woven wipes and flexible packaging markets and the ever increasing demand for high quality flexographic printing. The closing of the Dallas Manufacturing facility puts that chapter behind us and allows us to enter the new year with a clean slate."
"Thus we expect fiscal 2003 -- assuming no major war or domestic terrorist actions cripples our economy -- to be a year in which not only do we expect year over year improvement each quarter, but also positive improvements each quarter over the previous quarter."
As earlier reported, the Company incurred a charge of $0.7 million in the fourth quarter of 2002 for completing the closing of its Dallas Manufacturing operations and merging those operations into its Newton, North Carolina facility. It is anticipated the Company will save in excess of $0.7 million annually as a result of this closing and consolidation. For the year, the Company also incurred additional charges of $0.8 million for severance and restructuring costs relating to the closing of the Dallas Manufacturing facility and $4.7 million for the cumulative effect of an accounting change resulting from the implementation of SFAS No. 142. There was no cash flow impact resulting from the accounting change.
Effective October 1, 2001, the Company adopted certain provisions of SFAS No. 142. Under SFAS No. 142, goodwill and certain other intangible assets are no longer systematically amortized but instead are reviewed for impairment and any excess in carrying value over the estimated fair value is charged to results of operations. For the three months and the year ended
September 30, 2001, amortization of goodwill was $128,085 and $512,340, respectively, net of tax, or $0.03 and $0.11 per share. Had goodwill not been amortized for the three months and the year ended September 30, 2001, the income per share would have been $0.17 and $0.42 per share instead of the $0.14 and $0.31, respectively, per share as reported. During the second quarter of Fiscal 2002 the Company completed the transitional goodwill impairment test under SFAS No. 142. As a result, an impairment charge of $6.4 million ($4.7 million after tax, or $1.01 per diluted share) was recorded.
Tufco, headquartered in Green Bay, Wisconsin, has manufacturing operations in Wisconsin, North Carolina and South Carolina.
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