EXHIBIT 99.1
[GRAPHIC OMITTED]
NEWS RELEASE
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CONTACT: Hugh Aiken
Kevin McDermed
913 367 2121
NYSE: FDY
ATCHISON CASTING CORPORATION ANNOUNCES
4TH QUARTER AND FISCAL 2001 RESULTS
AND PLANNED SALE OF TWO OPERATIONS
Atchison, Kansas - October 3, 2001 - Atchison Casting Corporation
(NYSE:FDY) today announced results for the quarter and fiscal year ended June
30, 2001.
Fourth quarter net sales decreased 8.7% to $106.2 million from $116.4
million in the comparable period last year. The net loss for the quarter,
excluding non-recurring items, was $4.1 million, or $0.53 per share. The net
loss in the fourth quarter of the prior year, excluding non-recurring items, was
$3.4 million, or $0.45 per share. During the fourth quarter of fiscal 2001,
Atchison recorded asset impairment charges of $18.1 million relating to the
Company's planned closure of Empire Steel and planned sale of Jahn Foundry and
Los Angeles Die Casting. Based on the Company's current income tax position, no
income tax benefits were recorded in connection with these asset impairment
charges. Included in the prior year results were asset impairment charges of
$16.4 million ($11.3 million, net of tax), relating to the Company's Claremont,
PrimeCast, Pennsylvania Steel and Empire Steel subsidiaries. Including these
items, the net loss for the fourth quarter of fiscal 2001 was $28.0 million, or
$3.64 per share, compared to a net loss of $14.7 million, or $1.92 per share,
for the fourth quarter of fiscal 2000.
Fiscal 2001 net sales were $428.2 million compared to $461.1 million in
fiscal 2000. Excluding the items mentioned above and non-recurring business
interruption property insurance gains relating to an insurance claim following
from the industrial accident on February 25, 1999 at the Company's subsidiary,
Jahn Foundry Corp., the Company recorded a net loss of $19.6 million, or $2.55
per share. The net loss for fiscal 2000, excluding the items mentioned above and
a $7.8 million deferred income tax benefit relating to the Company's tax
treatment of certain flood insurance proceeds received in 1995 and 1996, was
$8.2 million, or $1.07 per share. Including these items, the net loss for fiscal
2001 was $37.0 million, or $4.81 per share, compared to a net loss of $11.7
million, or $1.53 per share, for fiscal 2000.
As previously announced, the Company decided to close Empire Steel. As a
result, the Company recorded an impairment charge of $1.6 million in the fourth
quarter of fiscal 2001. "We are consolidating Empire's operations into other
Atchison facilities, and expect to have Empire closed by November 30, 2001,"
said Tom Armstrong, Chief Operating Officer - North America.
The Company is negotiating the sale of Los Angeles Die Casting and Jahn
Foundry. These transactions, if consummated, are expected to close in November
2001. As a result, the Company recorded, in the fourth quarter of fiscal 2001,
impairment chares of $2.6 million and $13.9 million at Los Angeles Die Casting
and Jahn Foundry, respectively.
"Despite the difficulties of the past two fiscal years, Atchison Casting
has maintained or increased its market share and maintained a high level of
customer service, with the result that backlog has recently recovered and
several plants are operating profitably," said Hugh Aiken, CEO. "If we can
generate the working capital necessary to deliver the current backlog in an
efficient manner, ACC can return to profitability. We are doing our best to make
this happen," he added.
Regarding the markets for Atchison's products, Aiken stated, "Demand is
currently strongest for castings used in electric power generation equipment of
all types, including oil, gas coal, nuclear and hydroelectric plants. The market
for oil field and coal mining equipment has been strengthening as well. Mass
transit equipment demand is good. Rail markets are weak, along with mining and
farming equipment. Unfortunately, sales of rolling mill equipment to the steel
industry, which is ACC's single largest market, are in a severe recession."
ACC produces iron, steel and non-ferrous castings for a wide variety of
equipment, capital goods and consumer markets.
This press release contains forward-looking statements that involve risks
and uncertainties. Such statements include the Company's expectations as to
future performance. Among the factors that could cause actual results to differ
materially from the forward looking statements are the following: costs of
closing foundries, success in selling Jahn Foundry and Los Angeles Die Casting,
the impact that terrorist activities on and after September 11, 2001 may have on
the markets served by the Company, business conditions and the state of the
general economy, particularly the capital goods industry, the strength of the
U.S. dollar, British pound sterling and the Euro, interest rates, the Company's
ability to renegotiate or refinance its lending arrangements, utility rates, the
availability of labor, the successful conclusion of union contract negotiations,
the results of any litigation arising out of the accident at Jahn Foundry,
results of any litigation or regulatory proceedings arising from the accounting
irregularities at the Pennsylvania Foundry Group, the competitive environment in
the casting industry and changes in laws and regulations that govern the
Company's business, particularly environmental regulations.
ATCHISON CASTING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands)
Three Months Ended Year Ended
June 30, June 30,
2001 2000 2001 2000
(unaudited) (unaudited)
----------------- ------------ ------------ -------------
NET SALES $ 106,209 $ 116,355 $ 428,150 $ 461,137
COST OF GOODS SOLD 98,438 107,474 400,289 419,299
----------- ----------- ----------- -----------
GROSS PROFIT 7,771 8,881 27,861 41,838
OPERATING EXPENSES:
Selling, general and administrative 10,244 11,705 44,172 44,526
Impairment charges 18,139 16,414 18,139 16,414
Amortization of intangibles (58) (48) (255) (408)
Other (income) expense, net -- 75 (10,920) (606)
----------- ----------- ----------- -----------
Total operating expenses 28,325 28,146 51,136 59,926
----------- ----------- ----------- -----------
OPERATING INCOME (20,554) (19,265) (23,275) (18,088)
INTEREST EXPENSE 2,797 2,496 11,329 9,452
MINORITY INTEREST IN NET INCOME (187) (42) (57) 66
OF SUBSIDIARIES
----------- ----------- ----------- -----------
LOSS BEFORE INCOME TAXES AND (23,164) (21,719) (34,547) (27,606)
CUMULATIVE EFFECT OF A CHANGE IN
ACCOUNTING PRINCIPLE
INCOME TAX (BENEFIT) 4,807 (7,031) 1,892 (15,927)
INCOME (LOSS) BEFORE CUMULATIVE EFFECT
OF A CHANGE IN ACCOUNTING PRINCIPLE (27,971) (14,688) (36,439) (11,679)
----------- ----------- ----------- -----------
CUMULATIVE EFFECT ON PRIOR YEARS (TO JUNE 30,
2000) OF A CHANGE IN ACCOUNTING FOR DERIVATIVE
FINANCIAL INSTRUMENTS, NET OF $364 TAX BENEFIT (546)
----------- ----------- ----------- -----------
NET INCOME LOSS ($ 27,971) ($ 14,688) ($ 36,985) ($ 11,679)
=========== =========== =========== ===========
INCOME (LOSS) PER SHARE - BASIC:
INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF A
CHANGE IN ACCOUNTING PRINCIPLE ($ 3.64) ($ 1.92) ($ 4.74) ($ 1.53)
CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING
FOR DERIVATIVE FINANCIAL INSTRUMENTS (0.07)
----------- ----------- ----------- -----------
NET INCOME (LOSS) ($ 3.64) ($ 1.92) ($ 4.81) ($ 1.53)
=========== =========== =========== ===========
INCOME (LOSS) PER SHARE - DILUTED:
INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF A
CHANGE IN ACCOUNTING PRINCIPLE ($ 3.64) ($ 1.92) ($ 4.74) ($ 1.53)
CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING
FOR DERIVATIVE FINANCIAL INSTRUMENTS (0.07)
----------- ----------- ----------- -----------
NET INCOME (LOSS) ($ 3.64) ($ 1.92) ($ 4.81) ($ 1.53)
=========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER OF
SHARES USED IN CALCULATION:
BASIC 7,689,347 7,661,674 7,685,339 7,648,616
=========== =========== =========== ===========
DILUTED 7,689,347 7,661,674 7,685,339 7,648,616
=========== =========== =========== ===========