CHICAGO, Oct. 27 /PRNewswire/ -- Borg-Warner Security Corporation
(NYSE: BOR) today reported third quarter 1998 net earnings per diluted share
of $0.29 compared with net earnings per diluted share of $0.19 for the third
quarter 1997, an increase of 53 percent. Earnings from continuing operations
in the third quarter 1998 were also $0.29 per diluted share versus $0.28 per
diluted share in the prior year quarter. The 1997 third quarter results
include a $1.1 million, or $0.05 per share, non-recurring after-tax gain from
curtailment of certain company pension plans.
Nine month net earnings per diluted share were $0.86 in 1998 compared with
$0.53 in 1997, an increase of 62 percent. Earnings from continuing operations
were $0.29 in 1998 and $0.76 for the same period last year. The 1998 results
reflect a $0.36 per share charge associated with asset revaluation and
restructuring of administrative support operations following the May 29 sale
of Wells Fargo Alarm Services. Conversely, the 1997 results reflect an $0.11
per share contribution related to the first quarter sale of Wells Fargo
Armored Services.
Third quarter 1998 revenue increased 1.8 percent to $336.6 million
compared with $330.5 million in the third quarter of 1997. For the first nine
months of 1998, revenues were $979.1 million compared with $974.0 million for
the first nine months of 1997. Excluding 1997 revenue from the divested Wells
Fargo Armored business, year-to-date revenue grew 2.1 percent to
$979.1 million versus $958.7 million in the first nine months of 1997.
Total net debt at September 30, 1998 was $115.3 million compared with
$443.5 million at December 31, 1997. The decreased debt reflects proceeds
received from the sale of Wells Fargo Alarm Services. To date, these proceeds
have been applied to redeem the Company's 9-1/8% senior subordinated notes and
eliminate borrowings under its revolving credit facility.
Joe Adorjan, chairman and chief executive officer, stated, "We performed
well in the quarter, despite challenges posed by continued tight labor markets
and some revenue loss in our Energy & Government business due to competitive
pricing which would have yielded unacceptable profitability to the company.
We remain focused on improving performance in our core security business,
exiting lower margin business, and maintaining the company's financial
flexibility."
Adorjan further commented, "Our strategic objectives for 1999 remain
consistent with those previously communicated -- profitable growth of our core
security business, increasing employee and customer retention, continuing
implementation of Total Security Solutions, and pursuing value-creating
transactions to drive future revenue and earnings growth." He also added that
the company is comfortable with current 1999 First Call estimates for revenue
growth of 5 percent and earnings per share of $1.40.
Borg-Warner Security Corporation is the world's leading provider of
security services. The company offers a complete range of security solutions
under the Burns and Wells Fargo brand names.
Risks and uncertainties that may affect projections include the cost and
availability of labor, the ability to manage the risks associated with the
services provided by the company, the ability to acquire other security
businesses at attractive prices and successfully integrate such acquisitions
into existing operations, and the other factors listed in Exhibit 99 to the
company's Form 10-K for the year ended December 31, 1997.
For a copy of this press release or for additional information on the
company, contact the company's web site at http://www.Borg-WarnerSecurity.com or
http://www.prnewswire.com.
INCOME STATEMENT
THIRD QUARTER
($ MILLIONS, EXCEPT PER SHARE)
Change
1998 1997 $ %
Net Service Revenues $336.6 $330.5 $6.1 1.8%
Cost of Services 284.2 279.9 4.3 1.5%
Gross Margin 52.4 50.6 1.8 3.6%
% of Revenues 15.6% 15.3%
Selling, General
& Administrative 35.5 32.6 2.9 8.9%
% of Revenues 10.5% 9.9%
Depreciation 1.0 1.1 (0.1) -9.1%
% of Revenues 0.3% 0.3%
Other Expense, Net 1.2 2.6 (1.4) -53.8%
Earnings before
Interest and Taxes 14.7 14.3 0.4 2.8%
Interest Expense
and Finance Charges 3.4 3.7 (0.3) -8.1%
Earnings (Loss) before
Income Taxes 11.3 10.6 0.7 6.6%
Provision (Benefit) for
Income Taxes 4.5 3.9 0.6 15.4%
Earnings (Loss) from
Continuing Operations 6.8 6.7 0.1 1.5%
Gain (Loss) from Discontinued
Operations, Net
of Income Taxes 0.0 (2.0) 2.0 100.0%
Net Earnings (Loss) $6.8 $4.7 $2.1 44.7%
Earnings (Loss) per
Share - Diluted:
Continuing Operations $0.29 $0.28 $0.01 3.6%
Discontinued Operations -- (0.09) 0.09 100.00
Net Earnings (Loss)
per Share $0.29 $0.19 $0.10 52.6%
INCOME STATEMENT
NINE MONTHS
($ MILLIONS, EXCEPT PER SHARE)
Change
1998 1997 $ %
Net Service Revenues $979.1 $974.0 $5.1 0.5%
Cost of Services 826.3 821.9 4.4 0.5%
Gross Margin 152.8 152.1 0.7 0.5%
% of Revenues 15.6% 15.6%
Selling, General
& Administrative 121.2 103.5 17.7 17.1%
% of Revenues 12.4% 10.6%
Depreciation 3.0 3.9 (0.9) -23.1%
% of Revenues 0.3% 0.4%
Other Expense, Net 5.7 4.3 1.4 32.6%
Earnings before
Interest and Taxes 22.9 40.4 (17.5) -43.3%
Interest Expense
and Finance Charges 11.8 12.7 (0.9) -7.1%
Earnings (Loss) before
Income Taxes 11.1 27.7 (16.6) -59.9%
Provision (Benefit) for
Income Taxes 4.4 9.6 (5.2) -54.2%
Earnings (Loss) from
Continuing Operations 6.7 l8.1 (11.4) -63.0%
Gain (Loss) from Discontinued
Operations, Net
of Income Taxes 20.3 (5.3) 25.6 483.0%
Earnings before
Extraordinary Item 27.0 12.8 14.2 110.9%
Extraordinary Item:
Loss from Early
Extinguishment of Debt (6.3) -- -- --
Net Earnings (Loss) $20.7 $12.8 $7.9 61.7%
Earnings (Loss) per
Share - Diluted:
Continuing Operations $0.29 $0.76 $(0.47) -61.8%
Discontinued Operations 0.83 (0.23) 1.06 460.9%
Extraordinary Item (0.26) -- (0.26) --
Net Earnings (Loss)
per Share $0.86 $0.53 $O.33 62.3%
SOURCE Borg-Warner Security
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Related links:
http://www.Borg-WarnerSecurity.com
Company News On-Call:
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 Borg-Warner Security
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