Morton Industrials Reports Loss, Divests Composites
MORTON, Ill. - Morton Industrial Group, Inc. (NASDAQ:MGRP), a leading contract manufacturing supplier to large industrial original equipment manufacturers (OEMs), today announced its financial results for the 1999 fourth quarter and year ended December 31, 1999.
Revenues for the Company's 1999 fourth quarter increased by 50.3 percent to $59.8 million from $39.8 million in the year ago quarter. For the year ended December 31, 1999, sales increased by 45.0 percent to $219.3 million from $151.2 million in the same period a year ago.
The operating loss for the fourth quarter of 1999 was $985 thousand compared to operating income of $149 thousand in the year ago quarter. Operating income for 1999 was $822 thousand, compared to operating income of $7.0 million in 1998. The operating results were negatively impacted by the yearlong decline in demand for agricultural equipment and the net loss was also impacted by the $2.5 million loss associated with the sale of Carroll George, Inc.
The net loss available to common shareholders for the 1999 fourth quarter was $5.1 million compared to a net loss of $1.3 million in the comparable period. The net loss per diluted share for the 1999 fourth quarter was $1.14, compared to $0.33 in the 1998 fourth quarter.
The net loss available to common shareholders for 1999 was $10.9 million compared to net income of $1.7 million in the comparable period. The net loss per diluted share in 1999 was $2.55 compared to $0.36 net income in 1998.
During the quarter the Company continued a strategic and organizational review of each operating entity. As a result of this review the Company divested the assets of Carroll George, Inc., a composite structures and plastics business unit based in Northwood, Iowa. The net proceeds of the sale, approximately $7 million, were used to reduce bank debt.
William D. Morton, Chairman, President and Chief Executive Officer of Morton Industrial Group Inc., stated: "Despite the continued industry-wide softness for farm equipment, 1999 was a year of significant investment and expansion for Morton. In 1999 we remained committed to our mission of owning and operating highly respected contract manufacturing suppliers who have significant relationships with industrial OEMs.
"Most importantly, we expanded our product capabilities through the strategic acquisition of three facilities from Worthington Industries that combined to form Morton Custom Plastics. These acquisitions not only give us a significant presence in the Southeastern United States but they also diversify our customer base and target markets. As a result of our expansion efforts we have become one of the top twenty-five contract manufacturing suppliers in the country for metal fabrications and plastic components and subassemblies.
"During 1999, in response to market conditions, we implemented a number of initiatives to reduce costs and improve operating efficiencies. With farm equipment inventory levels now near all-time lows and commodity prices stabilizing, production schedules are expected to begin to move up again, albeit from historically low levels. As the market recovers and as we begin to realize the synergies and cost reduction efforts initiated in 1999, we believe we are well positioned to leverage our significant relationships with our OEM customers, which should allow us to return to profitability."
Morton Industrial Group, Inc. is a supplier of highly engineered metal and plastic components and subassemblies for large industrial original equipment manufacturers (OEMs). The Company operates from 11 facilities in 5 states in the Midwest and Southeast with over 2,200 employees. The Company provides large industrial original equipment manufacturers with a wide range of services including design, prototype development, precision tool making and production of metal fabrications and plastic component parts.
"Safe Harbor" Statement Under The Private Securities Legislation Reform Act of 1995: This press release contains "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements containing words "anticipates," "believes," "intends," "estimates," "expects," "projects," and similar words. The forward looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results to be materially different from any future results expressed or implied by such forward looking statements. Such factors include, among others, the following: the loss of certain significant customers; the cyclicality of our construction and agricultural sales; risks associated with our acquisition strategy; general economic and business conditions, both nationally and in the markets in which we operate or will operate; competition; and other factors referenced in the Company's reports and registration statements filed with the Securities and Exchange Commission. Given these uncertainties, prospective investors are cautioned not to place undue reliance on such forward looking statements. The forward looking statements contained herein speak only of the Company's expectation as of the date of this press release. We disclaim any obligations to update any such factors or publicly announce the result of any revisions to any of the forward looking statements contained herein to reflect future events or developments.