NEWS RELEASE
FOR IMMEDIATE RELEASE
TUFCO TECHNOLOGIES, INC. REPORTS
RESULTS FOR SECOND FISCAL QUARTER 2003
GREEN BAY, WI (May 13, 2003)--Tufco Technologies, Inc. (NASDAQ: TFCO), a leader
in providing diversified contract manufacturing and specialty printing services
and business imaging paper products today announced results for its second
fiscal quarter which ended March 31, 2003. Previously reported results have been
adjusted to reflect the Paint Sundries segment as discontinued operations. The
Paint Sundries segment was disposed of on March 31, by way of sale, with an
effective date of February 28, 2003.
In commenting on the quarter, Lou LeCalsey, the Company's President and CEO
stated, "We continue our positive trend on income from continuing operations,
earning $.03 for the quarter and $.07 for the six months. Later in our fiscal
third quarter we will begin production on our new wide-web flexographic press
and begin production of disposable wet-wipe products on our new non-wovens
production line. Through the second quarter of this year we invested almost $1.8
million on capital expenditures and advanced about the same amount for the
press, which we intend to lease. Thus, we will get that advance returned,
further strengthening our already strong balance sheet. These two assets provide
us the potential to continue to grow revenues and earnings on a consistent
basis. Additionally, the sale of the Paint Sundries segment provides the
flexibility for strategic alternatives and, importantly, enables management to
focus without distraction on our remaining core businesses-Contract
Manufacturing, Business Imaging paper products, and specialty printing."
For the second quarter of fiscal 2003, net sales from continuing operations were
$12.8 million, up 5% from second quarter 2002 sales from continuing operations
of $12.2 million. For the six months, net sales from continuing operations
increased 6.2% to $25.3 million from six-month sales from continuing operations
for 2002 of $23.9 million.
Net income from continuing operations was $.136 million or $.03 per share for
the second quarter of 2003 compared to $.025 million, or $.01 per share for
2002. For the six months, ended March 31, 2003 net income from continuing
operations was $.319 million, or $.07 per share compared to a loss from
continuing operations of $.217 million, or $.05 per share for the first six
months of fiscal 2003.
Net loss was $.254 million, or $0.6 per share for the March 31, 2003 quarter
compared to a loss of $.349 million, or $0.08 per share for the comparable
quarter last year. For the six months, net loss was $.087 million or $.02 per
share for 2003 and $5.408 million loss ($1.17 per share) for six months 2002.
During the quarter, the Company sold the assets and business of its Paint
Sundries segment for $12.3 million and incurred a net loss of $.244 million (net
of fees, expenses and taxes) on the transaction. Almost $8 million of the
proceeds were used to fully pay all outstanding bank debt under the Company's
senior credit facility leaving the Company only $1.0 million of debt for an
outstanding industrial revenue bond. The balance of the proceeds may be used for
a number of strategic alternatives including the recently announced share
repurchase program.
2
Last year's reported six month results include a loss of $4.652 million
resulting from the cumulative effect of an accounting charge relating to the
implementation of SFAS 142.
Tufco, headquartered in Green Bay, Wisconsin, has manufacturing operations in
Wisconsin and North Carolina.
INFORMATION ABOUT THE RESULTS REPORTED HEREIN, OR COPIES OF THE COMPANY'S
QUARTERLY REPORTS, MAY BE OBTAINED BY CALLING THE CONTACT PERSON LISTED BELOW.
Management's discussion of the Company's 2003 quarterly periods in comparison to
2002, contains forward-looking statements regarding current expectations, risks
and uncertainties for future periods. The actual results could differ materially
from those discussed here. As well as those factors discussed in this report,
other factors that could cause or contribute to such differences include, among
other items, cancellation of production agreements by significant customers,
material increases in the cost of base paper stock, competition in the Company's
product areas, or an inability of management to successfully reduce operating
expenses in relation to net sales without damaging the long-term direction of
the Company. Therefore, the condensed financial data for the periods presented
may not be indicative of the Company's future financial condition or results of
operations.
Contact: Michael B. Wheeler, VP and CFO
Tufco Technologies, Inc.
P. O. Box 23500
Green Bay, WI 54305-3500
(920) 336-0054
(920) 336-9041 (Fax)
3
TUFCO TECHNOLOGIES, INC.
Balance Sheet
(Amounts in 000's)
<Table>
<Caption>
March 31, September 30,
2003 2002
-------- --------------
ASSETS
Cash & Cash Equivalents $ 3,173 $ 251
Restricted Cash 100 100
Accounts Receivable - net 5,574 11,121
Inventories 3,370 6,585
Other Current Assets 4,641 1,710
-------- --------------
Total Current Assets 16,858 19,767
Property, Plant and Equipment - net 15,048 16,305
Goodwill - net 7,212 10,345
Other Assets 540 750
-------- --------------
Total $ 39,658 $ 47,167
======== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Portion of Long-term Debt $ 250 $ 923
Accounts Payable 3,396 5,280
Accrued Liabilities 1,684 2,261
-------- --------------
Total Current Liabilities 5,330 8,464
Long-term Debt - Less current portion 750 5,234
Deferred Income Taxes 676 661
Common Stock and Paid-in Capital 25,135 25,135
Retained Earnings 8,317 8,404
Treasury Stock and Stockholder Notes Receivable (534) (691)
Accumulated Other Comprehensive Loss, net of tax (16) (40)
-------- --------------
Total Stockholders' Equity 32,902 32,808
-------- --------------
Total $ 39,658 $ 47,167
======== ==============
</Table>
TUFCO TECHNOLOGIES, INC.
Condensed Consolidated Statements of Operations
(Amounts in 000's except share and per share data)
<Table>
<Caption>
Three Months Ended Six Months Ended
March 31, March 31,
2003 2002 2003 2002
----------- ----------- ----------- -----------
Net Sales $ 12,794 $ 12,186 $ 25,324 $ 23,852
Cost of Sales 11,242 10,322 22,284 21,244
----------- ----------- ----------- -----------
Gross Profit 1,552 1,864 3,040 2,608
SG&A Expense 1,249 1,003 2,249 1,972
Employee Severance Costs -- 202 46 209
Facility Restructuring Costs -- 233 -- 233
Property & Inventory Write Downs 311 -- 311
Loss (Gain) on Asset Sales -Net -- (29) 31 (29)
----------- ----------- ----------- -----------
Operating Income (Loss) 303 144 714 (88)
Interest Expense (79) (115) (177) (260)
Other Income (Expense) -Net 3 3 7 23
----------- ----------- ----------- -----------
Income (Loss) from Continuing Operations
Before Income Tax 227 32 544 (325)
Income Tax Expense (Benefit) 91 6 225 (108)
----------- ----------- ----------- -----------
Income(Loss) From Continuing Operations 136 26 319 (217)
Loss From Discontinued Operations:
Net loss from Operations of Discontinued Segment (147) (375) (162) (539)
Net Loss from sales of Discontinued Operations (244) -- (244) --
----------- ----------- ----------- -----------
Loss Before Accounting Change (255) (349) (87) (756)
Cumulative Effect of Accounting Change -- -- -- (4,652)
----------- ----------- ----------- -----------
NET LOSS $ (255) $ (349) $ (87) $ (5,408)
----------- ----------- ----------- -----------
BASIC EARNINGS (LOSS) PER SHARE:
Income (Loss) from Continuing Operations $ 0.03 $ 0.01 $ 0.07 $ (0.05)
Net loss from Operations of Discontinued Segment (0.04) (0.08) (0.04) (0.11)
Net Loss from Discontinued Operations (0.05) -- (0.05) --
----------- ----------- ----------- -----------
Income (Loss) before Accounting Change (0.06) (0.07) (0.02) (0.16)
Cumulative Effect of Accounting Change -- -- -- (1.01)
----------- ----------- ----------- -----------
Net Loss $ (0.06) $ (0.07) $ (0.02) $ (1.17)
DILUTED EARNINGS (LOSS) PER SHARE:
Income (Loss) from Continuing Operations $ 0.03 $ 0.01 $ 0.07 $ (0.05)
Net loss from Operations of Discontinued Segment (0.04) (0.08) (0.04) (0.11)
Net Loss from Discontinued Operations (0.05) -- (0.05) --
----------- ----------- ----------- -----------
Income (Loss) before Accounting Change (0.06) (0.07) (0.02) (0.16)
Cumulative Effect of Accounting Change -- -- -- (1.01)
----------- ----------- ----------- -----------
Net Loss $ (0.06) $ (0.07) $ (0.02) $ (1.17)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic 4,627,844 4,627,844 4,627,844 4,627,844
Diluted 4,627,844 4,627,844 4,627,844 4,627,844
</Table>