BELIZE CITY, Belize, March 9 /PRNewswire/ -- BHI Corporation
(Nasdaq: BHIC), a leader in the outsourced facilities services sector in North
America, reported revenue of $203.3m and net income from continuing operations
of $8.9m for the three months ended January 31, 1999. Diluted earnings per
share for the quarter was $0.79. Revenue and net income from continuing
operations for the nine months ended January 31, 1999, were $586.8m and $25.3m
respectively. Diluted earnings per share for the nine months was $2.25.
Highlights of the third quarter included a new name for the facilities
services division -- OneSource -- reflecting the company's business strategy
to offer its customers a complete range of facility services through one
single source. OneSource achieved net sales growth of 5% through both
internal growth and small acquisitions and continued to improve margins. The
operating margin for the current quarter was 2.8% compared to 2.0% and 2.3% in
quarters one and two, respectively.
Commenting on the results, BHI's Chief Executive Officer, Michael A.
Ashcroft, said:
"The third quarter was marked by significant progress on all major fronts.
Sales momentum has increased and we won several important facilities services
contracts during the quarter. At the same time, customer retention has
improved significantly as a result of service quality improvement, a
restructuring of the work force and new incentivization schemes which are
designed to reward customer retention successes. Our acquisitions program
remains steady, selective and successful. We continue to focus on
acquisitions that increase market share, add management talent and add new
services."
Mr. Ashcroft added:
"As we continue to focus on growth and profitability, we have also taken
steps to make BHI more attractive to the widest possible investment audience
by granting voting rights to the ordinary shares. Our core financial services
business in Belize continues to be a strong performer."
Facilities Services
BHI changed the name of the facilities services division from ISS to
OneSource in January to emphasize the company's business strategy of providing
a full range of services. This market-driven strategy responds to market
needs for "one-stop shopping" and will simplify the procurement process for
facility managers nationwide.
OneSource achieved revenue of $203.3m for the three months ended
January 31, 1999 (1998 -- $194.1m), an increase of 5%, bringing revenue for
the first nine months to $586.8m. The sales increase reflects the success of
internal efforts to win new business and to retain existing business as well
as contributions from previously announced small acquisitions. In addition, a
program earlier in the year to weed out unprofitable business was successful
and the amount of cancelled business was significantly reduced during the
third quarter. Improvements in both the gross margin and the operating margin
reflect ongoing efforts to streamline all purchasing functions and positive
impacts from quickly integrating acquisitions.
A concentrated sales effort at OneSource from the new management's sales
teams paid off during the third quarter. Important new accounts include
contracts to provide janitorial/cleaning services at facilities of major
corporations such as Dupont, Ford Motor Co., Dow Jones and TCI
(Telecommunications, Inc.), as well as a contract to clean Landmark Towers, a
premier office building in Cleveland, OH.
The OneSource call center has expanded to serve customers in the
Southeast, outside of Florida, and new customers are automatically offered the
call center service as part of our standard sales presentation. The service
will be offered to the rest of the customer base during 1999. BHI Security
Services continues to expand geographically, principally in New Jersey and
Pennsylvania, and has begun marketing security services to business and
residential customers in the suburbs of Baltimore and Washington D.C.
In February, 1999, OneSource completed the acquisition of Hudson Shatz,
the leading commercial painting contractor in the Northeast. The acquisition
will contribute $25 million in annual revenue and, importantly, added a new
service to OneSource's offerings to the rest of the customer base, beginning
immediately in the Northeast. This brings the number of acquisitions
completed since September 1998 to 12, adding a total of approximately
$85 million in annual revenue in 1999.
Financial Services
Income from Financial Services increased 18% to $3.3m for the three months
ended January 31, 1999 (1998- $2.8m).
Income from Financial Services for the nine months ended January 31, 1999
increased 23% to $8.7m (1998 - $7.1m). The results for the nine months
reflect a 16% increase in net interest, driven by a 12% increase in the
average loan portfolio of The Belize Bank combined with an increase in the net
interest margin. Non-interest income continued to grow strongly and was up
21%, mainly reflecting growth in both banking and International Financial
Services.
As part of the strong growth in International Financial Services, the
number of international business companies formed increased 175% in the nine
months compared to the prior year. Belize International Services Limited
continued its strong performance. In the nine months ended January 31, 1999,
2,262 companies (up 68%) and 675 ships (tonnage up 20%) were registered. As
of January 31, 1999, there were 9,542 companies and 4,153 ships registered.
Equity Investments
BHI's principal equity investments are 26% of Belize Telecommunications
Limited and 23% of the NUMAR Group, which has interests in agro-processing and
distribution.
BHI Corporation is a leader in the outsourced facilities services sector
in North America and provides janitorial, landscaping, security services,
commercial interior painting services, general repair and maintenance and
other specialized services to more than 10,000 commercial, institutional and
industrial accounts. The company also owns and operates selected businesses
in Central America.
There will be a conference call with management today, Tuesday, March 9,
at 10:30 a.m. Eastern Standard time. To participate, please call
800-289-0493 and ask for the BHI Corporation conference call.
Forward-Looking Statement
Certain statements in this press release constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. In particular, statements contained herein regarding expectations
with respect to future revenue and business expansion, are subject to known
and unknown risks, uncertainties and contingencies, many of which are beyond
the control of BHI, which may cause actual results, performance or
achievements to differ materially from anticipated results, including, among
others, overall economic and business conditions, the demand for BHI's
services, competitive factors, regulatory approvals and the uncertainty of
consummation of future acquisitions. Additional factors which may affect
BHI's business and performance are set forth in BHI's filings with the
Securities and Exchange Commission.
BHI Corporation
Consolidated Statement of Income (unaudited)
US dollars in millions except per share data
3 months to 9 months to
January 31, January 31,
1999 1999
Non-Financial Services
Net sales 203.3 586.8
Cost of sales (174.7) (509.7)
Selling, general and
administrative expenses (22.9) (63.1)
Operating income --
Non-Financial Services 5.7 14.0
Financial Services:
Interest income 6.3 18.1
Interest expense (2.4) (7.0)
Non interest income
less expenses (0.6) (2.4)
Operating income --
Financial Services 3.3 8.7
Total operating income 9.0 22.7
Associates 2.2 7.6
Hurricane reserve (0.5) (1.0)
Interest income 0.2 1.2
Interest expense (1.2) (3.0)
Income before income taxes 9.7 27.5
Income taxes (0.6) (1.7)
Income after income taxes 9.1 25.8
Minority interests (0.2) (0.6)
Income from continuing operations 8.9 25.2
Income from discontinued operations-- 0.1
Net income 8.9 25.3
Diluted earnings from
continuing operations per share $0.79 $2.25
BHI Corporation
Consolidated Balance Sheet (unaudited)
US Dollars in millions
January 31, April 30,
1999 1998
Assets
Non-Financial Services
Current assets:
Cash and cash equivalents 16.9 44.4
Trade accounts receivable 101.5 85.7
Inventories 2.0 2.2
Assets held for disposal 12.4 12.9
Other current assets 12.8 12.2
Total Non-Financial
Services current assets 145.6 157.4
Premises and equipment 13.1 16.4
Associates 61.1 57.6
Goodwill and other intangibles 141.2 114.5
Other long-term assets 1.4 2.3
Total Non-Financial
Services assets 362.4 348.2
Financial Services
Cash, cash equivalents
and due from banks 13.8 14.1
Interest-bearing deposits
with correspondent banks 15.5 27.1
Loans (net of unearned income
and allowance for loan losses) 140.1 116.4
Other assets 20.8 8.2
Total Financial Services assets 190.2 165.8
Total assets 552.6 514.0
BHI Corporation
Consolidated Balance Sheet (unaudited)
US Dollars in millions
January 31, April 30,
1999 1998
Liabilities and shareholders' equity
Non-Financial Services
Current liabilities:
Short-term debt 12.9 15.8
Accounts payable 9.3 7.4
Accrued personnel costs 30.3 24.8
Insurance reserves --
current portion 25.6 28.7
Other current liabilities 23.9 34.4
Total Non-Financial Services
current liabilities 102.0 111.1
Insurance reserves --
long-term portion 81.5 86.4
Other long-term liabilities 33.6 24.2
Total Non-Financial
Services liabilities 217.1 221.7
Financial Services
Deposits 163.4 145.2
Short-term debt 5.2 5.2
Other liabilities 2.4 2.1
Total Financial
Services liabilities 171.0 152.5
Total liabilities 388.1 374.2
Total shareholders' equity 164.5 139.8
Total liabilities and
shareholders' equity 552.6 514.0
SOURCE BHI Corporation
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CONTACT:
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