SPZNC Speizman Industries (MM)

Speizman Industries Announces First Quarter 2004 Financial Results CHARLOTTE, N.C., Nov. 11 /PRNewswire-FirstCall/ -- Speizman Industries, Inc. today reported a net loss for its first quarter ended September 27, 2003 of $730,000 or $0.22 per basic and diluted share, compared to a net loss of $127,000, or $0.04 per basic and diluted share for the quarter ended September 28, 2002. Revenues decreased by 43% to $9.7 million for the first quarter fiscal 2004 from $16.8 million in the first quarter fiscal 2003. Revenues for the textile division decreased to $5.4 million for first quarter fiscal 2004 from $8.5 million in the first quarter fiscal 2003. The decrease in revenue was due primarily to a 39% decrease in the sales of sock finishing equipment. Revenues for the laundry division decreased to $4.3 million from $8.3 million for the same period last year. The decline in revenue reflects that no large projects were installed in the first quarter of fiscal 2004, resulting in a 55% reduction in sales of new machines. First quarter gross profit decreased to $1.3 million in fiscal 2004 from $2.6 million in first quarter fiscal 2003. As a percent of revenues, gross margins decreased to 13.6% from 15.5% for the respective quarters in 2004 and 2003. Gross margins decreased in the textile division from 18.1% in 2003 to 12.2% in 2004. The decrease was due to a reduction in sales of higher margin textile equipment along with an increase of $60,000 for inventory reserves. Gross margins for the quarters increased in the laundry division from 12.9% in 2003 to 15.5% in 2004. The increase was due to higher margin machine sales and improved margins for parts and service sales. The first quarter of fiscal 2004 did not include any large machinery sales projects. Larger projects have lower gross margins due to the increased competition for those projects. Selling expenses decreased 26.6% to $741,000 (7.7% of sales) in first quarter 2004 from $1.0 million (6.0% of sales) in the same period last year. The decrease in selling expenses for the quarter reflects lower commissions due to lower sales and lower travel expenses compared to prior year period. The increase as a percentage of sales reflects the fixed nature of certain selling expenses. General and administrative expenses decreased 20.5% to $1.1 million (11.3% of sales) in first quarter 2004 from $1.4 million (8.2% of sales) in the same period last year. The reduction reflects management's continued emphasis on cost control, primarily in payroll, professional services, travel and insurance. The increase as a percentage of sales reflects the reduction in revenues and the fixed nature of certain general and administrative expenses. Interest expense increased $36,000 in the first quarter of fiscal 2004 compared to first quarter of fiscal 2003 due to increased average borrowings on the Company's revolving credit line and an increase in the interest rate charged on the revolving line of credit. Robert S. Speizman, President and Chief Executive Officer, commented, "We are naturally disappointed with the reduction in revenues in both the textile and laundry divisions and we expect weak sales to continue into the second quarter of this year. Although we have seen some indications of an increase in activity, sales of sock knitting machinery (primarily closed toe machines) remain slow as domestic manufacturers continue to have concerns about the impact of foreign made goods on the U.S. market. Sales of large projects in our laundry division have also declined, reflecting the continued sluggishness of the hospitality industry. "Although our equipment backlog of firm commitments was $3.2 million at the end of the first quarter compared to $10.2 million at the end of our first quarter last year, it has increased to $7.7 million in the past month." The Company will conduct a conference call to review its financial and operating results. The conference call is scheduled for Tuesday, November 11, 2003, at 3:00 p.m. E.T. Interested parties can access the live call and replay via the web at http://www.vcall.com/ . Speizman Industries is a leader in the sale and distribution of specialized industrial machinery, parts and equipment. The Company acts as distributor in the United States, Canada, and Mexico for leading Italian manufacturers of textile equipment and is a leading distributor in the United States of industrial laundry equipment representing several United States manufacturers. Certain matters within this press release are discussed using forward- looking statements as specified in the 1995 Private Securities Litigation Reform Law. These statements are based on management's current expectations about the industry and the markets in which the Company operates. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties or other factors that may cause the actual results, performance or achievements of the Company to differ from those projected in the forward-looking statement. From time to time, these risks are discussed in the Company's filings with the Securities and Exchange Commission. For additional information on Speizman Industries, please visit the Company's web site at http://www.speizman.com/ . To receive Speizman Industries' latest news release and other corporate documents, please contact Gail Gormly at 1-704-559-5777 or email . Financial Tables to follow. SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS For the Three Months Ended September 27, September 28, 2003 2002 (13 Weeks) (13 Weeks) (unaudited) (unaudited) REVENUES $9,665,000 $16,828,000 COST OF SALES 8,347,000 14,218,000 GROSS PROFIT 1,318,000 2,610,000 SELLING EXPENSES 741,000 1,010,000 GENERAL AND ADMINISTRATIVE EXPENSES 1,092,000 1,374,000 OPERATING LOSS (515,000) 226,000 NET INTEREST EXPENSE 436,000 400,000 LOSS BEFORE TAX BENEFIT (951,000) (174,000) TAX BENEFIT (221,000) (47,000) NET LOSS $(730,000) $(127,000) Basic loss per share $(0.22) $(0.04) Diluted loss per share $(0.22) $(0.04) Weighted average shares Outstanding: Basic 3,255,428 3,255,428 Diluted 3,255,428 3,255,428 CONDENSED CONSOLIDATED BALANCE SHEETS September 27, June 28, 2003 2003 (unaudited) Current assets $23,868,000 $26,016,000 Property, plant & equipment, net 5,943,000 6,092,000 Goodwill, net 3,790,000 3,790,000 Other long-term assets including deferred taxes 2,298,000 2,505,000 Total assets $35,899,000 $38,403,000 Current liabilities excluding current maturities of long-term debt $6,487,000 $10,132,000 Revolving line of credit 9,366,000 7,301,000 Current maturities of long-term debt 1,591,000 1,219,000 Long-term debt 2,992,000 3,520,000 Obligation under capital lease 4,201,000 4,239,000 Total liabilities 24,637,000 26,411,000 Stockholders' equity 11,262,000 11,992,000 Total liabilities and stockholders' equity $35,899,000 $38,403,000 DATASOURCE: Speizman Industries, Inc. CONTACT: Paul R.M. Demmink, Chief Financial Officer of Speizman Industries, Inc., +1-704-559-5777, or General Info., Marilynn Meek, +1-212-445-8451, Analyst Info., Susan Garland, +1-212-445-8458, or Media Info., Suzie Pileggi, +1-212-445-8454, all of Financial Relations Board Web site: http://www.speizman.com/

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