BELIZE CITY, Belize, June 19 /PRNewswire/ -- BHI Corporation ("BHI")
(Nasdaq: BHIKF), a leader in the outsourced facilities services market in
North America, reported revenues of $778.9 million and an adjusted net income
of $30.5 million before non-recurring items of $34.8 million for the year
ended April 30, 1998. Diluted earnings per share (before non-recurring items)
for the year ended April 30, 1998 was $2.75 per share.
BHI completed the acquisition of 100% of Aaxis Limited ("Aaxis") in April
1998 and as a result owns ISS International Service System, Inc., ("ISS") one
of North America's leading providers of outsourced facilities services,
including cleaning, maintenance and support services.
The acquisition of Aaxis has been accounted for using the "as if" pooling
of interests method of accounting due to the existence of a common controlling
shareholder in both BHI and Aaxis. This method of pooling of interests
requires that the consolidated financial statements of Aaxis be pooled with
those of BHI for all accounting periods, with a minority interest elimination
for all periods where a non-controlling minority interest existed in the share
capital of Aaxis. Consequently, the consolidated income statement of BHI for
the year ended April 30, 1998 includes 100% of the results of Aaxis for the
entire period.
As a result of the acquisition of Aaxis and the planned expansion of the
building maintenance and facilities services business, BHI has decided to
discontinue and dispose of certain businesses and investments outside
financial services as soon as practicable. In addition, following the
acquisition of Aaxis, the Company incurred significant restructuring charges
at the corporate BHI and ISS level. As a consequence, the Company incurred
non-recurring charges and costs for discontinued activities amounting to $33.3
million in the fourth quarter of fiscal 1998.
Commenting on the results, BHI's CEO, Steve Ruzika said:
"Fiscal 1998 was a year of transition for BHI and we are now firmly
focused on the large and growing facilities services sector. The ISS business
gives us a strong platform for profitable growth and we have a talented and
experienced management team in place. We see considerable opportunities for
revenue and margin growth in the year ahead and will pursue selected
acquisitions that can be integrated into existing operations."
"BHI's financial services business continues to expand and had a very good
year. We are also satisfied with the performance of BHI's principal equity
investments which are meeting our targets. Certain of the Central American
and Caribbean businesses will be sold at the earliest opportunity."
Facilities Services
ISS achieved net sales of $778.9 million for the twelve months ended April
30, 1998. Approximately 80% of ISS's business is in the janitorial and
cleaning segment, which remains very competitive in light of the consolidation
of commercial real estate ownership by REITs and tight labor markets
nationwide. Margins improved only slightly during the period, but are
expected to increase over the next 12 months as the effects of new initiatives
by management take effect.
Major successes during the year include the appointment of ISS as
janitorial contractor for: Du Pont on a nationwide basis; substantially all
of the Saks Holdings premises; Tufts University; and for several key office
buildings including the Met Life building and One Dag Hammarskjold Plaza in
New York. ISS also won a five-year contract renewal to service Hewlett
Packard. ISS is also experiencing good growth in such non-janitorial sectors
as landscape services, aviation services and pest control.
Priorities for the coming year include retaining existing contracts which
go out to competitive bid; improved penetration of existing accounts with a
broader range of services; and aggressive pursuit of selected acquisitions in
attractive, growing markets that can be integrated into existing platform
operations. ISS continues to rationalize its vendors and expects to improve
margins through continued efficiencies and improved customer service, using
call centers and enhanced information technology.
Financial Services
Income from Financial Services increased 17% to $9.3 million. This
reflects a 17% increase in average lending at The Belize Bank, offset by a
reduced net interest margin, resulting in an 8% increase in net interest
income. Non-interest income enjoyed strong growth and was up 26% compared to
the prior year, reflecting increased fee income and an excellent year in the
international financial services sector.
Successes in international financial services included the incorporation
of over 800 international business companies, an increase of 125% over the
prior year. Belize International Services Limited also performed well: the
numbers of companies and ships registered increased to 7,276 and 2,542,
respectively, at April 30, 1998, representing increases of 39% and 37%
compared to the prior year.
Equity Investments
BHI's principal equity investments include 23% of the NUMAR group, which
has interests in agro-processing and distribution and 26% of Belize
Telecommunications Limited. These two investments continue to show a strong
performance.
BHI Corporation is a leader in the outsourced facilities services sector
in the United States and has investments in Central America, including a
significant financial services operation based in Belize. BHI prepares its
consolidated financial statements in US dollars and in accordance with US
GAAP.
BHI Management will be presenting at the Wall Street Forum Conference on
Monday, June 22, 1998 at The New York Marriott East Side. Interested
investors who cannot attend the conference can listen in real time on the
Internet by registering with the Forum's web site at
http://www.wallstreetforum.com before 5:00 p.m. on Friday, June 19, 1998 where
they will receive instructions on how to register for next Monday's
presentation. Investors who register will receive an e-mail from the Forum
with approval to participate if they are from the investment community. This
presentation can also be accessed up to 90 days after the meeting on The
Forum's web site.
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, earnings 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 United
States Securities and Exchange Commission.
BHI Corporation
Consolidated Statement of Income
US dollars in millions
Year ended April 30, 1998
Non-Financial Services operations:
Net sales 778.9
Cost of sales (686.7)
Selling, general and administrative expenses (76.5)
Operating income - Non-Financial Services 15.7
Financial Services:
Interest income 22.3
Interest expense (9.5)
Non interest income less expenses (3.5)
Operating income - Financial Services 9.3
Operating income before restructuring
and non-recurring charges 25.0
Restructuring and non-recurring charges (18.8)
Interest income 1.6
Interest expense (5.5)
Associates 10.1
Income before income taxes 12.4
Income taxes (1.5)
Income after income taxes 10.9
Minority interests (0.7)
Income from continuing operations 10.2
Loss from discontinued operations (14.5)
Net loss (4.3)
Basic net loss per share ($0.49)
Diluted earnings per share before non-recurring items* $2.75
* Based on 11.1 million shares and adjusted net income of $30.5 million
before non-recurring charges of $18.8 million, discontinued operations of
$14.5 million and other items of $1.5 million.
BHI Corporation
Consolidated Balance Sheet
US Dollars in millions
April 30, 1998
Assets
Non-Financial Services operations
Current assets:
Cash and cash equivalents 44.4
Trade accounts receivable 88.2
Inventories 2.2
Assets held for disposal 15.7
Other current assets 9.7
Total Non-Financial Services current assets 160.2
Premises and equipment 16.4
Associates 54.8
Goodwill and other intangibles 114.5
Other long-term assets 2.3
Total Non-Financial Services assets 348.2
Financial Services
Cash, cash equivalents and due from banks 14.1
Interest-bearing deposits with correspondent banks 27.1
Loans (net of unearned income and allowance for loan losses) 116.4
Other assets 8.2
Total Financial Services assets 165.8
Total assets 514.0
BHI Corporation
Consolidated Balance Sheet
US Dollars in millions
April 30, 1998
Liabilities and shareholders' equity
Non-Financial Services operations
Current liabilities:
Short-term debt 15.8
Accounts payable 7.4
Accrued personnel costs 24.8
Insurance reserves - current portion 28.7
Other current liabilities 36.8
Total Non-Financial Services current liabilities 113.5
Insurance reserves - long-term portion 86.4
Other long-term liabilities 21.7
Total Non-Financial Services liabilities 221.6
Financial Services
Deposits 145.2
Short-term debt 5.2
Other liabilities 2.2
Total Financial Services liabilities 152.6
Total liabilities 374.2
Total shareholders' equity 139.8
Total liabilities and shareholders' equity 514.0
SOURCE BHI Corporation
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CONTACT:
Angela E. Entwistle, 561-368-3899, or Eileen
M. Halsch, 212-232-2222, both of BHI
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