EXHIBIT 99
BAIRNCO CORPORATION
300 PRIMERA BOULEVARD, SUITE 432
LAKE MARY, FLORIDA 32746
(407) 875-2222
PRESS RELEASE
BAIRNCO ANNOUNCES IMPROVED FIRST QUARTER 2004 RESULTS
Lake Mary, Florida, April 19, 2004 - Bairnco Corporation (NYSE-BZ) today reported improved operating results for the first quarter 2004 as compared to the same period last year. Sales were up 6.5% to $42,577,000, net income increased 41.2% to $1,255,000 and diluted earnings per share increased 41.7% to $.17.
Performance
Sales in the first quarter 2004 increased 6.5% to $42,577,000 from $39,972,000 in 2003. Arlon's Electronic Materials sales were up 12.8% due to improvements in its wireless telecommunications, electronics and certain industrial markets. Arlon’s Coated Materials sales increased 5.7% from growth in foreign sales. Kasco's sales increased slightly from the first quarter 2003 from the currency translation effect of the weakened US dollar versus the British Pound and the Euro. Kasco’s foreign sales were lower in local currency but were up in US dollars due to the change in exchange rates.
Gross profit increased 9.6% to $12,697,000 from $11,580,000 due to the increased sales and production volumes. The gross profit margin as a percent of sales increased to 29.8% from 29.0%. The first quarter 2004 and 2003 gross profit was reduced by $193,000 and $213,000, respectively, from relocation and closing expenses related to the consolidation of Arlon’s industrial engineered coated product’s businesses.
Selling and administrative expenses increased 4.7% to $10,564,000 from $10,093,000 due to the increased sales. As a percent of sales, selling and administrative expenses decreased to 24.8% from 25.3% in 2003.
Interest expense increased to $216,000 in 2004 as compared to $199,000 in 2003 due to higher average debt outstanding as well as higher average interest rates. Interest expense, net, of $202,000 reflected in the income statement includes $14,000 of interest income.
The effective tax rate for the first quarter 2004 was 35.0% versus 31.0% for the first quarter 2003. The increased tax rate assumes the Extraterritorial Income Exclusion (“EIE”), a statutory exclusion from taxable income, will expire in 2004. Legislation to replace the EIE is currently in Congressional committee.
Net income increased 41.2% to $1,255,000 as compared to $889,000 in the first quarter of 2003. Diluted earnings per common share increased 41.7% to $.17 from $.12 as a result of increased earnings.
Credit Agreement
The Corporation has in place a credit agreement that expires in February 2005. Consequently, all borrowings under the credit agreement are shown as current portion of long-term debt in the accompanying condensed balance sheet for the quarter ended April 3, 2004. It is our intent to structure a new financing agreement prior to the end of 2004.
Litigation
On April 9, 2004 the U.S. Court of Appeals for the Second Circuit affirmed the U.S. District Court's decisions dismissing, in its entirety, the Transactions Lawsuit against Bairnco and all the other defendants.
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“Safe Harbor” Statement under the Private Securities Reform Act of 1995
Statements in this press release referring to the expected future plans and performance of the Corporation are forward-looking statements. Actual future results may differ materially from such statements. Factors that could affect future performance include, but are not limited to, the costs and other effects of legal and administrative cases and proceedings, settlements and investigations; renegotiation of the Corporation’s Credit Agreement; changes in US or international economic or political conditions, such as inflation or fluctuations in interest or foreign exchange rates; disruptions in operations due to labor disputes; changes in the pricing of the products of the Corporation or its competitors; the market demand and acceptance of the Corporation’s existing and new products; the impact of competitive produ cts; changes in the market for raw or packaging materials which could impact the Corporation’s manufacturing costs; changes in the product mix; the loss of a significant customer or supplier; production delays or inefficiencies; the impact on production output and costs from the availability of energy sources and related pricing; the ability to achieve anticipated revenue growth, synergies and other cost savings in connection with acquisitions and plant consolidations; the costs and other effects of complying with environmental regulatory requirements; and losses due to natural disasters where the Corporation is self-insured. While the Corporation periodically reassesses material trends and uncertainties affecting the Corporation’s results of operations and financial condition in connection with its preparation of its press releases, the Corporation does not intend to review or revise any particular forward-looking statement referenced herein in light of future events.
Bairnco Corporation is a diversified multinational company that operates two distinct businesses - Arlon (Electronic Materials and Coated Materials segments) and Kasco (Replacement Products and Services segment). Arlon’s principal products include high technology materials for the printed circuit board industry, cast and calendered vinyl film systems, custom-engineered laminates and special silicone rubber compounds and components. Kasco’s principal products include replacement band saw blades for cutting meat, fish, wood and metal, and on site maintenance primarily in the meat and deli departments. Kasco also distributes equipment to the food industry in France.
CONTACT: Larry C. Maingot, Bairnco Corporation
Telephone: (407) 875-2222, ext. 230
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Comparative Results of Operations (Unaudited)
Quarter Ended | |||||
Condensed Income Statements | Apr 3, 2004 | Apr 5, 2003 | |||
Net sales | $42,577,000 | $39,972,000 | |||
Cost of sales | 29,880,000 | 28,392,000 | |||
Gross profit | 12,697,000 | 11,580,000 | |||
Selling and administrative expenses | 10,564,000 | 10,093,000 | |||
Operating profit | 2,133,000 | 1,487,000 | |||
Interest expense, net | 202,000 | 199,000 | |||
Income before income taxes | 1,931,000 | 1,288,000 | |||
Provision for income taxes | 676,000 | 399,000 | |||
Net income | $ 1,255,000 | $ 889,000 | |||
Basic Earnings per Share of Common Stock | $ 0.17 | $ 0.12 | |||
Diluted Earnings per Share of Common Stock | $ 0.17 | $ 0.12 | |||
Basic Average Common Shares | 7,342,000 | 7,334,000 | |||
Diluted Average Common Shares | 7,431,000 | 7,336,000 |
Condensed Balance Sheets | Apr 3, 2004 | Dec 31, 2003 |
ASSETS | ||
Cash | $ 1,224,000 | $ 796,000 |
Accounts receivable, net | 26,973,000 | 23,511,000 |
Inventories | 26,424,000 | 25,516,000 |
Other current assets | 7,649,000 | 7,873,000 |
Total current assets | 62,270,000 | 57,696,000 |
Plant and equipment, net | 35,377,000 | 36,476,000 |
Cost in excess of net assets of purchased businesses, net | 14,341,000 | 14,360,000 |
Other assets | 9,264,000 | 9,697,000 |
Total | $121,252,000 | $118,229,000 |
LIABILITIES AND STOCKHOLDERS’ INVESTMENT | ||
Short-term debt | $ 1,052,000 | $ 1,875,000 |
Current maturities of long-term debt | 29,926,000 | 2,173,000 |
Accounts payable | 12,557,000 | 10,159,000 |
Accrued expenses | 11,209,000 | 10,916,000 |
Total current liabilities | 54,744,000 | 25,123,000 |
Long-term debt | 374,000 | 27,785,000 |
Other liabilities | 11,015,000 | 11,023,000 |
Stockholders’ investment | 55,119,000 | 54,298,000 |
Total | $121,252,000 | $118,229,000 |
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