Physical Security Services Business Reports Strong Performance
CHICAGO, April 20 /PRNewswire/ -- Borg-Warner Security Corporation
(NYSE: BOR) reported first quarter earnings from continuing operations of
$0.65 million, or 3 cents per basic share, compared with $4.0 million, or
17 cents per basic share, in the first quarter of 1997. The Company also
announced today a definitive agreement to sell its Wells Fargo Alarm business
for approximately $425 million in cash to ADT Security Services, a subsidiary
of Tyco International, Ltd.
Joe Adorjan, chairman and chief executive officer commented, "Our physical
security operations continue to show improvement; we are particularly pleased
with their profitability in this quarter. However, results at our minority-
owned business, Loomis, Fargo & Co., negatively impacted first quarter
results. Specifically, Loomis, Fargo had a net loss of $0.5 million, or
2 cents per basic share, in the first quarter of 1998, compared with net
income of $2.7 million, or 11 cents per basic share, in the first quarter of
1997."
First quarter revenues were $377.4 million, compared with $382.4 million
in the first quarter of 1997. The revenue decline was largely attributable to
the January, 1997 disposition of its Wells Fargo Armored business through the
formation of Loomis, Fargo & Co., which is reported as a 49 percent-owned
equity investment. Excluding the armored business, security services revenues
in the first quarter of 1998 grew by 2.8 percent to $377.4 million, versus
$367.1 million in the first quarter of 1997.
Total debt at March 31, 1998, was $455.0 million compared with $443.5
million at December 31, 1997. The 1998 increase resulted primarily from
decreased cash flow at the company's alarm business.
Adorjan commented, "We continue to make significant progress toward our
strategic objectives. Today's announcement for the sale of Wells Fargo Alarm
will increase our financial capability to pursue value-creating opportunities
for profitable growth. Prospects for the remainder of 1998 are excellent. We
are confident that Loomis, Fargo will continue to improve its operating
performance and that it will contribute positively to earnings during the
second half of this year."
Borg-Warner Security Corporation is North America's largest provider of
security services. The company offers a complete range of services, including
electronic and physical security services under the Wells Fargo and Burns
brand names.
FORWARD LOOKING INFORMATION
Risks and uncertainties that may affect projections include, the cost and
availability of labor, the consequences of debt leverage to the company's
ability to fund its operations, the ability to manage the risks associated
with the services provided by the company, the ability to acquire other
security businesses at attractive prices and successfully integrate such
acquisitions into existing operations, and the other factors listed in Exhibit
99 to the company's Form 10-K for the year ended December 31, 1997. For a
copy of this press release or for additional information on the company,
contact our Web site at http://www.Borg-WarnerSecurity.com or http://www.prnewswire.com.
Borg-Warner Security Corporation
Business Segment Revenue
($ Millions)
Three months ended
March 31,
1998 1997 % Change
Physical Security Services $318.6 $311.1 2.4
Electronic Security Services 58.8 56.0 5.0
Armored Security Services -- 15.3 NM
Total Revenues $377.4 $382.4 (1.3)
BORG-WARNER SECURITY CORPORATION
INCOME STATEMENT
FIRST QUARTER
($ MILLIONS, EXCEPT PER SHARE)
Change
1998 1997 $ %
Revenues $377.4 $382.4 $(5.0) -1.3%
Cost of services 301.7 304.4 (2.7) -0.9%
Gross margin 75.7 78.0 (2.3) -2.9%
% of Revenues 20.1% 20.4%
Selling & administrative 51.2 51.8 (0.6) -1.2%
% of Revenues 13.6% 13.5%
Depreciation 9.4 9.8 (0.4) -4.1%
% of Revenues 2.5% 2.6%
Equity in Loomis (gain) 0.4 (2.2)
Other expense, net 2.7 2.8 (0.1) -3.6%
Earnings before
interest and taxes 12.0 15.8 (3.8) -24.1%
Interest expense 10.9 10.6 0.3 2.8%
Pretax earnings 1.1 5.2 (4.1) -78.8%
Income taxes 0.4 1.2 (0.8) -66.7%
Earnings from
continuing operations $0.7 $4.0 (3.3) -82.5%
Per common share $0.03 $0.17 ($0.14) -82.4%
BORG-WARNER SECURITY CORPORATION
SUMMARY BALANCE SHEET
($ MILLIONS)
March 31, December 31,
1998 1997
Current assets $ 144.3 $ 144.2
Property, plant & equipment 136.0 141.3
Other non-current assets 383.3 374.1
Total assets $663.6 $659.6
Current liabilities 136.6 147.9
Long-term debt 358.4 342.5
Other non-current liabilities 102.3 104.2
Stockholders' equity 66.3 65.0
Total liabilities
& stockholders' equity $663.6 $659.6
SOURCE Borg-Warner Security Corporation
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Related links:
http://www.Borg-WarnerSecurity.com
Company News On-Call: http://www.prnewswire.com or
fax, 800-758-5804, ext. 120940
CONTACT:
Jeff Cartwright of Borg-Warner Security
Corporation, 312-322-8836
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