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Exhibit 99.1
CONSOLIDATED BALANCE SHEETS
(Unaudited)
July 2, Dec. 31,
(Dollars in thousands) 2004 2003
- -------------------------------------------------------------------
Assets
Current assets
Cash and cash equivalents $ 10,325 $ 5,062
Accounts receivable 67,950 55,102
Inventories 100,030 87,396
Prepaid expenses 5,674 5,454
Deferred income taxes 51 291
-------- --------
Total current assets 184,030 153,305
Other assets 16,006 18,902
Long-term deferred income taxes 1,393 704
Property, plant and equipment 537,679 535,421
Less allowances for depreciation,
depletion and impairment 355,873 344,575
-------- --------
181,806 190,846
Goodwill 7,992 7,859
-------- --------
$391,227 $371,616
======== ========
Liabilities and Shareholders' Equity
Current liabilities
Short-term debt $ 25,516 $ 13,387
Accounts payable 16,994 16,038
Other liabilities and accrued items 38,200 37,366
Income taxes 928 1,373
-------- --------
Total current liabilities 81,638 68,164
Other long-term liabilities 12,219 14,739
Retirement and post-employment benefits 50,439 49,358
Long-term debt 78,581 85,756
Minority interest in subsidiary -- 26
Shareholders' equity 168,350 153,573
-------- --------
$391,227 $371,616
======== ========
See notes to consolidated financial statements.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Second Quarter Ended First Half Ended
(Dollars in thousands except share July 2, June 27, July 2, June 27,
and per share amounts 2004 2003 2004 2003
- ------------------------------------------------------------------------------------- ------------------------------
Net sales $ 128,639 $ 101,805 $ 254,501 $ 201,323
Cost of sales 99,198 82,941 195,483 165,346
------------ ------------ ------------ ------------
Gross margin 29,441 18,864 59,018 35,977
Selling, general and administrative expenses 19,161 16,611 38,208 33,909
Research and development expenses 1,098 928 2,366 2,036
Other-net 127 230 3,319 976
------------ ------------ ------------ ------------
Operating profit (loss) 9,055 1,095 15,125 (944)
Interest expense 2,389 834 4,607 1,606
------------ ------------ ------------ ------------
Income (loss) before income taxes 6,666 261 10,518 (2,550)
Minority interest -- (22) -- (22)
Income taxes 95 246 194 451
------------ ------------ ------------ ------------
Net income (loss) $ 6,571 $ 37 $ 10,324 $ (2,979)
============ ============ ============ ============
Per share of common stock: basic $ 0.39 $ 0.00 $ 0.62 $ (0.18)
Weighted average number
of common shares outstanding 16,704,568 16,563,098 16,661,099 16,562,283
Per share of common stock: diluted $ 0.38 $ 0.00 $ 0.60 $ (0.18)
Weighted average number
of common shares outstanding 17,127,698 16,639,382 17,107,295 16,562,283
See notes to consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
FIRST HALF ENDED
JULY 2, JUNE 27,
(Dollars in thousands) 2004 2003
- -------------------------------------------------------------------------------------------------------
NET INCOME (LOSS) $ 10,324 $ (2,979)
ADJUSTMENTS TO RECONCILE NET INCOME (LOSS) TO NET CASH USED IN OPERATING
ACTIVITIES:
Depreciation, depletion and amortization 12,025 10,021
Amortization of deferred financing costs in interest expense 722 163
Derivative financial instrument ineffectiveness (1) 58
Decrease (increase) in accounts receivable (13,344) (10,461)
Decrease (increase) in inventory (12,923) 5,754
Decrease (increase) in prepaid and other current assets 293 1,666
Increase (decrease) in accounts payable and accrued expenses 4,287 1,870
Increase (decrease) in interest and taxes payable (1,033) 105
Increase (decrease) in deferred income taxes (709) 147
Increase (decrease) in other long-term liabilities (374) 173
Other - net 1,771 653
-------- --------
NET CASH PROVIDED FROM OPERATING ACTIVITIES 1,038 7,170
Cash flows from investing activities:
Payments for purchase of property, plant and equipment (2,959) (3,212)
Payments for mine development (120) (101)
Proceeds from other investments 14 --
Proceeds from sale of property, plant and equipment 15 8
-------- --------
NET CASH USED IN INVESTING ACTIVITIES (3,050) (3,305)
Cash flows from financing activities:
Proceeds from issuance/(repayment) of short-term debt 13,557 (4,959)
Proceeds from issuance of long-term debt 24 2,000
Repayment of long-term debt (8,629) (4,034)
Issuance of common stock under stock option plans 2,381 --
-------- --------
NET CASH PROVIDED FROM (USED IN) FINANCING ACTIVITIES 7,333 (6,993)
Effects of exchange rate changes (58) 78
-------- --------
NET CHANGE IN CASH AND CASH EQUIVALENTS 5,263 (3,050)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 5,062 4,357
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 10,325 $ 1,307
======== ========
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE A - ACCOUNTING POLICIES
In management's opinion, the accompanying consolidated financial statements
contain all adjustments necessary to present fairly the financial position as of
July 2, 2004 and December 31, 2003 and the results of operations for the three
and six month periods ended July 2, 2004 and June 27, 2003. All of the
adjustments were of a normal and recurring nature. Certain items in the prior
year have been reclassified to conform to the 2004 consolidated financial
statement presentation.
NOTE B - INVENTORIES
JULY 2, DEC. 31,
(Dollars in thousands) 2004 2003
- --------------------------------------------------------------------------
Principally average cost:
Raw materials and supplies $ 23,655 $ 24,990
Work in process 74,631 65,212
Finished goods 28,457 20,637
-------- --------
Gross inventories 126,743 110,839
Excess of average cost over LIFO
Inventory value 26,713 23,443
-------- --------
Net inventories $100,030 $ 87,396
======== ========
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE C - COMPREHENSIVE INCOME (LOSS)
The reconciliation between net income (loss) and comprehensive income (loss)
for the three and six month periods ended July 2, 2004 and June 27, 2003 is as
follows:
SECOND QUARTER ENDED FIRST HALF ENDED
JULY 2, JUNE 27, JULY 2, JUNE 27,
(Dollars in thousands) 2004 2003 2004 2003
- ----------------------------------------------------------------------- -------------------------
Net income (loss) $ 6,571 $ 37 $ 10,324 $ (2,979)
Cumulative translation adjustment (356) 3 (131) (70)
Change in the fair value of derivative
financial instruments 1,424 (3,065) 2,353 (1,900)
-------- -------- -------- --------
Comprehensive income (loss) $ 7,639 $ (3,025) $ 12,546 $ (4,949)
======== ======== ======== ========
NOTE D - SEGMENT REPORTING
Metal Micro- Total All
(Dollars in thousands) Systems Electronics Segments Other Total
- --------------------------------------------------------------------------------------------------------------
Second Quarter 2004
- -------------------
Revenues from external customers $ 77,129 $ 51,510 $ 128,639 $ -- $ 128,639
Intersegment revenues 856 391 1,247 6,185 7,432
Operating profit 1,795 4,804 6,599 2,456 9,055
Second Quarter 2003
- -------------------
Revenues from external customers $ 60,670 $ 37,650 $ 98,320 $ 3,485 $ 101,805
Intersegment revenues 817 246 1,063 4,081 5,144
Operating profit (loss) (2,775) 3,473 698 397 1,095
First Half 2004
- ---------------
Revenues from external customers $ 153,087 $ 101,414 $ 254,501 $ -- $ 254,501
Intersegment revenues 2,070 687 2,757 11,482 14,239
Operating profit (loss) 4,971 10,293 15,264 (139) 15,125
First Half 2003
- ---------------
Revenues from external customers $ 121,877 $ 75,961 $ 197,838 $ 3,485 $ 201,323
Intersegment revenues 1,718 518 2,236 7,654 9,890
Operating profit (loss) (6,199) 6,010 (189) (755) (944)