Page 3
5TH STORY of Level 1 printed in FULL format.
Copyright 1998 PR Newswire Association, Inc.
PR Newswire
March 16, 1998, Monday
SECTION: Financial News
DISTRIBUTION: TO BUSINESS EDITOR
LENGTH: 615 words
HEADLINE: Burke Industries Announces Acquisition of Mercer Products And Fiscal
1997 Results
DATELINE: SAN JOSE, Calif., March 16
BODY:
Burke Industries, Inc., a portfolio company of J.F. Lehman & Company, has
announced that it has agreed to purchase Mercer Products Company, Inc. from
Sovereign Specialty Chemicals, Inc. Mercer Products Company is a leading
manufacturer of vinyl flooring accessories with revenue of $24.9 million in
1997. Mercer is located in Eustis, Florida with distribution centers in South
Kearny, New Jersey and Rancho Cucamonga, CA. Burke intends to fund the
acquisition in part through the incurrance of additional indebtedness.
Consummation of the transaction is subject to certain conditions, including
approval under the Hart-Scott-Rodino Act.
"We are excited to welcome Mercer's employees and customers into the Burke
family," said Rocky Genovese, president and CEO of Burke Industries. "Mercer's
reputation for quality and strength in the vinyl flooring accessories market
certainly complements our rubber flooring accessories business. Together, we
will create an alliance beneficial to all Burke and Mercer customers."
Burke also announced its audited financial results for 1997, EBITDA,
excluding certain charges related to the August 1997 recapitalization, was
$16.8 million on sales of $90.2 million, representing increases of 36% and
25% over the 1996 results, which were $12.4 million and $72.5 million,
respectively. "We're pleased with the growth in profitability and improvement
in margins," said Genovese. Despite these results, financial performance for
1997 was affected by delayed orders for stealth products, primarily in
connection with the B-2 bomber program.
Burke Industries is a leading manufacturer of silicone and organic
rubber-based products, including floor covering accessories, aircraft seals,
precision hose, and single-ply membranes.
BURKE INDUSTRIES, INC.
AUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
Fiscal Fiscal
Year 1997 Year 1996
Page 4
PR Newswire, March 16, 1998
Net Sales $90,228 $72,466
Cost of Sales 62,917 49,689
Gross profit 27,311 22,777
30.3% 31.4%
Selling, general and
administrative expenses 13,559 11,610
Stock option purchase 14,105
Income (loss) from operations (353) 11,167
Interest expense, net 5,408 2,668
Income (loss) before
income tax provision
and discontinued operation (5,761) 8,499
Income tax provision (1,818) 3,466
Income (loss) from
continuing operations
before discontinued operation (83,943) $5,033
Depreciation and amortization $1,499 $1,419
EBITDA $16,851 $12,378
EBITDA margin 18.7% 17.1%
Note: EBITDA excludes charges related to the August, 1997 recapitalization
of $14,105 for stock option charge in 1997 and $1,600 and (208) in 1997 and 1996
for transaction expenses and management fee changes.
SOURCE Burke Industries, Inc.
CONTACT: Rocky Genovese or David Worthington, both for Burke Industries,
408-297-3500
LANGUAGE: ENGLISH
LN-SUBJ: MERGERS &
ACQUISITIONS (90%); CHEMICALS (88%); MANUFACTURING (88%); FINANCIAL
RESULTS (67%);
LOAD-DATE: March 17, 1998