CHICAGO, Feb. 2 /PRNewswire/ -- Borg-Warner Security Corporation
(NYSE: BOR) today reported fourth quarter 1998 net earnings per diluted share
of $0.35 compared with net earnings of $0.26 per share for the fourth quarter
1997, an increase of 35 percent. Earnings from continuing operations in the
fourth quarter 1998 were also $0.35 per diluted share versus $0.31 per share
in the prior year quarter.
Full year net earnings per diluted share were $1.21 in 1998 compared with
$0.79 in 1997, an increase of 53 percent. Earnings from continuing operations
were $0.64 per share in 1998, net of a $0.36 per share charge associated with
asset revaluation and restructuring of administrative support operations
following the May 29, 1998 sale of Wells Fargo Alarm Services. In 1997,
earnings from continuing operations were $1.07, including an $0.11 per share
contribution related to the first quarter sale of Wells Fargo Armored
Services.
Fourth quarter 1998 revenue increased 4.1 percent to $344.3 million
compared with $330.6 million in the fourth quarter of 1997. For the full year
1998, revenues were $1,323.4 million compared with $1,304.6 million for the
full year 1997. Excluding 1997 revenue from the divested Wells Fargo Armored
business, full year revenue grew 2.6 percent to $1,323.4 million versus
$1,289.3 million in 1997.
Total net debt at December 31, 1998 was $105.7 million compared with
$443.5 million at December 31, 1997. These amounts include $82.4 million and
$102.4 million of off-balance sheet receivables financing in 1998 and 1997,
respectively. The decreased debt primarily reflects proceeds received from
the sale of Wells Fargo Alarm Services. These proceeds have been applied to
redeem the company's 9-1/8% senior subordinated notes and eliminate borrowings
under its revolving credit facility.
Joe Adorjan, chairman and chief executive officer, stated, "We performed
well in the quarter, despite challenges posed by continued tight labor markets
and some revenue loss in our Energy & Government business due to competitive
pricing which would have yielded unacceptable profitability to the company.
We remain focused on improving performance in our core security business,
strengthening employee and customer retention, implementation of Total
Security Solutions and utilizing the company's financial flexibility to drive
future revenue and earnings growth."
Borg-Warner Security Corporation is the world's leading provider of
security services. The company offers a complete range of security solutions
under the Burns and Wells Fargo brand names.
Risks and uncertainties that may affect projections include the cost and
availability of labor, the ability to manage the risks associated with the
services provided by the company, the ability to acquire other security
businesses at attractive prices and successfully integrate such acquisitions
into existing operations, and other factors listed in Exhibit 99 to the
company's Form 10-K for the year ended December 31, 1997.
For a copy of this press release or for additional information on the
company, contact the company's web site at http://www.Borg-WarnerSecurity.com or
http://www.prnewswire.com.
Income Statement
Fourth Quarter
($ Millions, Except Per Share)
Change
1998 1997 $ %
Net Service Revenues $344.3 $330.6 $13.7 4.1%
Cost of Services 290.4 278.8 11.6 4.2%
Gross margin 53.9 51.8 2.1 4.1%
% of Revenues 15.7% 15.7%
Selling, General & Administrative 34.5 30.8 3.7 12.0%
% of Revenues 10.0% 9.3%
Depreciation 1.2 1.1 0.1 9.1%
% of Revenues 0.3% 0.3%
Other Expense, Net 0.7 2.7 (2.0) (74.1%)
Earnings before Interest and Taxes 17.5 17.2 0.3 1.7%
Interest Expense and Finance Charges 3.7 4.0 (0.3) (7.5%)
Earnings before Income Taxes 13.8 13.2 0.6 4.5%
Provision for Income Taxes 5.4 5.5 (0.1) (1.8%)
Earnings from Continuing Operations 8.4 7.7 0.7 9.1%
Loss from Discontinued Operations, Net
of Income Taxes -- (1.5) 1.5 100.0%
Net Earnings $8.4 $6.2 $2.2 35.5%
Earnings (Loss) per Share -- Diluted:
Continuing Operations $0.35 $0.31 $0.04 12.9%
Discontinued Operations -- (0.05) 0.05 100.0%
Net Earnings (loss) per Share $0.35 $0.26 $0.09 34.6%
Income Statement
Full Year
($ Millions, Except Per Share)
Change
1998 1997 $ %
Net Service Revenues $1,323.4 $1,304.6 $18.8 1.4%
Cost of Services 1,116.7 1,100.7 16.0 1.5%
Gross margin 206.7 203.9 2.8 1.4%
% of Revenues 15.6% 15.6%
Selling, General & Administrative 155.7 134.3 21.4 15.9%
% of Revenues 11.8% 10.3%
Depreciation 4.2 5.0 (0.8) (16.0%)
% of Revenues 0.3% 0.4%
Other Expense, Net 6.4 7.0 (0.6) (8.6%)
Earnings before Interest and Taxes 40.4 57.6 (17.2) (29.9%)
Interest Expense and Finance Charges 15.5 16.7 (1.2) (7.2%)
Earnings before Income Taxes 24.9 40.9 (16.0) (39.1%)
Provision for Income Taxes 9.8 15.1 (5.3) (35.1%)
Earnings from Continuing Operations 15.1 25.8 (10.7) (41.5%)
Gain (Loss) from Discontinued Operations,
Net of Income Taxes 20.3 (6.8) 27.1 398.5%
Earnings before Extraordinary Item 35.4 19.0 16.4 86.3%
Extraordinary Item:
Loss from Early Extinguishment of Debt (6.3) -- (6.3) NM
Net Earnings $29.1 $19.0 $10.1 53.2%
Earnings (Loss) per Share -- Diluted:
Continuing Operations $0.64 $1.07 ($0.43) (40.2%)
Discontinued Operations 0.83 (0.28) 1.11 396.4%
Extraordinary Item (0.26) -- (0.26) NM
Net Earnings (loss) per Share $1.21 $0.79 $0.42 53.2%
SOURCE Borg-Warner Security
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Related links:
http://www.Borg-WarnerSecurity.com
Company News On-Call:
http://www.prnewswire.com/comp/120940.html or fax,
800-758-5804, ext. 120940
CONTACT:
Analysts, Jeff Cartwright, 312-322-8836, or
Media, Lynne Glovka, 312-322-8511, both of Borg-Warner Security
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