BELIZE CITY, Belize, May 26 /PRNewswire/ -- BHI Corporation
(Nasdaq: BHIC), a leader in the outsourced facilities services sector in North
America, reported revenue of $136.7m and net income before non-recurring items
of $6.7m for the two months ended March 31, 1999. Diluted earnings per share
before non-recurring items for the two months ended March 31, 1999 was $0.60.
Revenue and net income before non-recurring items for the 11 months ended
March 31, 1999 were $723.5m and $31.9m, respectively (fiscal year 1998 -
$778.9m and $29.0m, respectively). Diluted earnings per share before
non-recurring items for the 11 months ended March 31, 1999 was $2.82 (fiscal
year 1998 - $2.75). Restructuring charges of $4.5m incurred in the two months
ended March 31, 1999 principally represent redundancy costs in the Facility
Services business.
On May 21, 1999, BHI announced that its proposed merger with Carlisle
Holdings Limited (London: CLH), had been approved and will become effective on
June 1, 1999. BHI will change its name to Carlisle Holdings Limited and has
changed its fiscal year end to March 31 to reflect the merger.
The strong sales reflect both the successful integration of a number of
small acquisitions that closed in fiscal 1999, combined with focused retention
efforts that have helped stabilize the existing customer base. The operating
margin for the two months to March 1999 was 3.0%, compared to 2.8% in the
third quarter and a substantial improvement over the 2.0% and 2.3% achieved in
quarters one and two, respectively.
Commenting on the results, BHI's Chief Executive Officer, Michael A.
Ashcroft, said:
"OneSource, our facilities services business, made great strides in fiscal
1999 and achieved the solid results we expected. We weeded out unprofitable
accounts; introduced call center technology to improve customer service;
expanded our service offerings with selected acquisitions which were quickly
integrated; and rationalized our support functions at headquarters so that our
field sales staff can focus exclusively on building business. OneSource now
has the efficient structure needed for continued profitable growth.
At the annual operating income level, OneSource is approximately 27% ahead of
fiscal 1998."
Mr. Ashcroft added:
"We now look forward to the next phase of expansion -- the merger of BHI
and Carlisle Holdings Limited will create a Trans-Atlantic leader in the
services sector, with approximately $1 billion in annual sales. The name
change to Carlisle Holdings Limited will be effective when the merger is
completed. The "new" Carlisle Holdings will be well positioned to build
shareholder value by capitalizing on growth opportunities as the demand for
outsourced services expands in Europe and North America."
Facilities Services
OneSource reported revenue of $136.7m for the two months ended
March 31, 1999 (4Q98 -- $192.2m), bringing revenue for the 11 months ended
March 31, 1999 to $723.5m (fiscal year 1998 -- $778.9m). The current revenue
run rate, based on sales in March 1999, would produce annual sales of
approximately $836m, an increase of 10.6% over the annualized run rate at the
same time last year. Both acquisitions and a significantly enhanced internal
growth effort contributed to the increase in sales. Operating income for the
eleven-month period ended March 31, 1999, was $18.1m, a significant increase
of 14.6% over operating profit of $15.8m for the 12 months ended
April 30, 1998. The discontinuance of unprofitable accounts, centralization
of administrative functions, a significant improvement in safety and risk
management techniques and controls, as well as successful marketing, all
contributed to the improvement in operating income and margin.
OneSource continues to add new accounts at a steady pace. Important new
janitorial contracts include relationships with Amdahl Corporation, the Los
Angeles World Trade Center and Pitney Bowes. The retail customer base
continues to expand and new agreements were signed with Neiman Marcus for
locations in California and Scottsdale, AZ; Saks Fifth Avenue in Huntington,
NY; and Home Depot in Atlanta, GA. In addition, the engineering services
business added additional revenues by winning contracts to provide mechanical
services for six major office buildings in New York City.
The OneSource Solution Center is now a standard service offered to all new
customers. The heart of the operation is a sophisticated work order system
running on proprietary software. The combination of technology and trained
operators, available 24 hours per day, 7 days a week, clearly distinguishes
OneSource from the competition and ensures a higher level of service.
The acquisition initiative continues with a particular focus on janitorial
companies that will increase market share. In addition, we are aggressively
pursuing acquisitions which expand our current service offerings to new and
existing customers. All acquisitions must be accretive to earnings per share.
Financial Services
Income from Financial Services amounted to $2.5m for the two months ended
March 31, 1999.
Income from Financial Services increased 20% (annualized, over 30%) to
$11.2m for the 11 months ended March 31, 1999 (fiscal year 1998 - $9.3m). The
results for the 11 months reflect a 9% increase in net interest income, driven
by a 13% 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 13%, mainly reflecting growth in both banking and
international financial services.
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.
Other Matters
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. Following the merger with Carlisle on June 1st, the
Company will immediately have representation in certain of these outsourcing
services in the United Kingdom and will also add a staffing services business
in that area. The Company also owns and operates selected businesses in
Central America.
Michael A. Ashcroft is making a presentation at the Merrill Lynch Business
& Education Services Conference at the St. Regis Hotel in New York on
Wednesday, June 2 at 2:00 p.m. The merger of BHI and Carlisle Holdings
Limited will be completed by then and Mr. Ashcroft will be presenting an
overview of the "new" Carlisle Holdings Limited and the Company's growth
potential.
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 the
consummation and benefits of future acquisitions as well as expectations with
respect to future revenues, operating efficiencies, net income 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, performance or achievements. Factors that might affect
such forward-looking statements include, 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 businesses and
performance are set forth in BHI's filings with the Securities and Exchange
Commission.
BHI Corporation
Financial Information
Summarized Statements of Income (unaudited)
US dollars in millions except per share data
2 months to 11 months to 12 months to
March 31, March 31, April 30,
1999 1999 1998
Net sales -- Facilities Services 136.7 723.5 778.9
Operating income -- Facilities Services 4.1 18.1 15.8
Operating income -- Financial Services 2.5 11.2 9.3
Total operating income 6.6 29.3 25.1
Associates 1.5 8.1 10.1
Net interest expense (0.2) (2.0) (3.9)
Income before income taxes 7.9 35.4 31.3
Income taxes (1.1) (2.8) (1.5)
Income after income taxes 6.8 32.6 29.8
Minority interests (0.1) (0.7) (0.8)
Income from continuing operations 6.7 31.9 29.0
Earnings per ordinary share from
continuing operations before
non-recurring items:
Basic $0.63 $2.98 $3.01
Diluted $0.60 $2.82 $2.75
The results above are stated
before the following:
Restructuring and non-recurring charges (4.5) (4.5) (18.8)
Loss from discontinued operations (0.1) -- (14.5)
BHI Corporation
Financial Information
Summarized Balance Sheets (unaudited)
US dollars in millions
March 31, April 30,
1999 1998
Assets
Facilities Services
Current assets:
Cash and cash equivalents 17.6 44.4
Other current assets 117.4 113.0
Total current assets 135.0 157.4
Property, plant and equipment 18.5 16.4
Associates and other assets 62.9 59.9
Goodwill and other intangibles 144.8 114.5
Total Facilities Services assets 361.2 348.2
Financial Services net assets 21.0 13.3
Total assets 382.2 361.5
Liabilities and shareholders' equity
Facilities Services
Current liabilities:
Short-term debt 22.9 15.8
Other current liabilities 97.8 95.3
Total current liabilities 120.7 111.1
Long-term liabilities 94.7 110.6
Total Facilities Services liabilities 215.4 221.7
Total shareholders' equity 166.8 139.8
Total liabilities and shareholders' equity 382.2 361.5
SOURCE BHI Corporation
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