Unsolicited Merger Discussions Terminated
CHICAGO, Aug. 3 /PRNewswire/ -- Burns International Services Corporation
(NYSE: BOR) today reported earnings from continuing operations in the second
quarter 1999 of $6.8 million, or $0.29 per share, compared with a loss from
continuing operations of $4.0 million, or $0.16 per share, in the year ago
quarter. During the quarter, the company resolved all legal matters related
to its former Centaur Reinsurance subsidiary. This, together with other
non-recurring items, generated a contribution to earnings per share of
approximately $0.02. Second quarter 1998 results include an $8.6 million, or
$0.36 per share, non-recurring after-tax charge for reorganization costs and
asset revaluation's following the sale of the company's Wells Fargo Alarm
Services business. Excluding non-recurring items, earnings from continuing
operations increased $0.07 per share, or 35 percent.
Second quarter revenues increased 4.5 percent to $338.6 million compared
with $323.9 million in the second quarter 1998. A 5.5 percent gain in core
industrial revenues was partially offset by a decrease in Energy and
Government revenues.
Commentary on Quarterly Results
John Edwardson, chairman and chief executive officer, stated, "We
performed well in the quarter despite the challenges posed by continued tight
labor markets. Revenue growth in our core industrial operations was
accompanied by improved gross margins, employee retention, and customer
retention."
"Other achievements during the quarter, targeted at building shareholder
value, included repurchasing 4.35 million shares of common stock from
affiliates of Merrill Lynch, retiring our 9 5/8 percent senior subordinated
notes, forming a strategic alliance with Grupo Multisistemas de Seguridad
Industrial, the largest provider of contract guard services in Mexico, and
announcing our brand unification strategy, including changing our corporate
name to Burns International Services Corporation."
Year-to-Date Results
For the first six months of 1999, earnings from continuing operations were
$13.3 million compared with break-even results from continuing operations in
the year ago period. Year-to-date, net earnings were $1.2 million, or $0.05
per share, versus year ago net earnings of $13.9 million, or $0.57 per share.
Six-month revenues increased 4.1 percent to $669.1 million from $642.5 million
in the comparable year ago period.
Earnings Per Share Summary Table
Second quarter and year-to-date earnings per share results compare as follows:
Second Quarter Six Months
1999 1998 1999 1998
Continuing operations $0.29 ($0.16) $0.56 --
Discontinued operations -- 1.62 -- 0.83
Extraordinary loss - early
extinguishment of debt (0.52) (0.26) (0.51) (0.26)
Net earnings (loss) per share ($0.23) $1.20 $0.05 $0.57
Discontinued 0perations
Second quarter and year-to-date 1998 earnings from discontinued operations
reflect a $42.5 million after-tax gain on the sale of the company's Wells
Fargo Alarm business. This gain was partially offset by a $15.9 million
after-tax charge to write-off the company's investment in Pony Express Courier
and to provide for costs associated with its disposition.
Extraordinary Items
In the second quarter 1999, the company recorded an extraordinary charge
of $12.1 million relating to the early retirement of $125 million principal
amount of 9-5/8 percent senior subordinated notes. In the second quarter
1998, the company recorded an extraordinary charge of $6.3 million for the
early retirement of $150 million principal amount of 9-1/8 percent senior
subordinated notes.
Including the impact of early extinguishment of debt in both the second
quarter of 1999 and 1998, and the sale of Wells Fargo Alarm Services and Pony
Express Courier in the year ago quarter, the company reported a second quarter
1999 net loss of $5.3 million, or $0.23 per share, compared with net earnings
of $29.1 million, or $1.20 per share a year ago.
Unsolicited Merger Discussions Terminated
Separately, the company announced today that discussions regarding the
unsolicited preliminary indication of interest in a business combination
previously recieved by the company have been terminated.
Company Description
Burns International Services Corporation is North America's largest
provider of physical security and related services with 75,000 employees and
more than 300 offices throughout the United States, Canada, the United Kingdom
and Colombia. The company offers a complete range of security solutions
including armed and unarmed physical security, foot and vehicle patrol, access
control and monitoring, background and drug screening, investigative services,
contract staffing, and other specialized security and support services.
INCOME STATEMENT
SECOND QUARTER
($ MILLIONS, EXCEPT PER SHARE)
Change
1999 1998 $ %
Net Service Revenues $338.6 $323.9 $14.7 4.5%
Cost of Services 284.9 273.0 11.9 4.4%
Gross Margin 53.7 50.9 2.8 5.5%
% of Revenues 15.9% 15.7%
Selling, General &
Administrative 36.4 50.0* (13.6) -27.2%
% of Revenues 10.8% 15.4%
Depreciation 1.3 1.0 0.3 30.0%
% of Revenues 0.4% 0.3%
Other Expense, Net 1.0 2.1 (1.1) -52.4%
Earnings (Loss) before
Interest and Taxes 15.0 (2.2) 17.2 NM
Interest Expense and
Finance Charges 3.9 4.2 (0.3) -7.1
Earnings (Loss) before
Income Taxes 11.1 (6.4) 17.5 NM
Provision for Income Taxes 4.3 (2.4) 6.7 NM
Earnings (Loss) from
Continuing Operations 6.8 (4.0) 10.8 NM
Gain from Discontinued
Operations, Net
of Income Taxes -- 39.4 (39.4) NM
Extraordinary Loss - Early
Extinguishment of Debt (12.1) (6.3) (5.8) NM
Net Earnings (Loss) ($5.3) $29.1 ($34.4) NM
Earnings (Loss) Per Share-Diluted:
Continuing operations $0.29 ($0.16)* $0.45 NM
Discontinued operations -- 1.62 (1.62) NM
Extraordinary loss - early
extinguishment of debt (0.52) (0.26) (0.26) NM
Net Earnings (Loss) Per
Share ($0.23) $1.20 ($1.43) NM
* Earnings per share would have been $0.20 excluding a $14.4 million,
non-recurring charge, related to reorganization costs and asset
revaluations.
INCOME STATEMENT
SIX MONTHS
($ MILLIONS, EXCEPT PER SHARE)
Change
1999 1998 $ %
Net Service Revenues $669.1 $642.5 $26.6 4.1%
Cost of Services 562.3 542.1 20.2 3.7%
Gross Margin 106.8 100.4 6.4 6.4%
% of Revenues 16.0% 15.6%
Selling, General &
Administrative 72.6 85.7* (13.1) -15.3%
% of Revenues 10.9% 13.3%
Depreciation 2.5 2.0 0.5 25.0%
% of Revenues 0.4% 0.3%
Other Expense, Net 2.3 4.5 (2.2) -48.9%
Earnings before Interest
and Taxes 29.4 8.2 21.2 258.5%
Interest Expense and
Finance Charges 7.7 8.4 (0.7) -8.3%
Earnings (Loss) before
Income Taxes 21.7 (0.2) 21.9 NM
Provision for Income Taxes 8.4 (0.1) 8.5 NM
Earnings (Loss) from Continuing
Operations 13.3 (0.1) 13.4 NM
Gain from Discontinued Operations,
Net of Income Taxes -- 20.3 (20.3) NM
Extraordinary loss - early
extinguishment of debt (12.1) (6.3) (5.8) NM
Net Earnings $1.2 $13.9 ($12.7) -91.4%
Earnings (Loss) Per Share-Diluted:
Continuing Operations $0.56 --* $0.56 NM
Discontinued Operations -- 0.83 (0.83) NM
Extraordinary loss - early
extinguishment of debt (0.51) (0.26) (0.25) NM
Net Earnings Per Share $0.05 $0.57 ($0.52) NM
* Earnings per share would have been $0.36 excluding a $14.4 million,
non-recurring charge, related to reorganization costs and asset
revaluations.
SUMMARY BALANCE SHEET
($ MILLIONS)
June 30, December 31,
1999 1998
Cash and cash equivalents $26.9 $105.7
Other current assets 102.0 124.8
Property, plant & equipment 21.4 18.1
Other non-current assets 181.3 183.3
Total assets $331.6 $431.9
Current liabilities 135.7 132.8
Long-term debt 108.3 124.4
Other non-current liabilities 69.0 77.8
Stockholders' equity 18.6 96.9
Total liabilities & stockholders'
equity $331.6 $431.9
SOURCE Burns International Services Corporation
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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 Burns International
Services Corporation
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