BRYAN, Texas, Oct. 27 /PRNewswire/ --
Neutral Posture Ergonomics, Inc. (Nasdaq: NTRL) today announced that a
management-led group, including Rebecca Boenigk, Jaye Congleton and other
members of the executive management team of the Company, has proposed to
acquire all of the outstanding shares of Neutral Posture Ergonomics, Inc.
common stock not already owned by the management group for a cash price of
$1.72 per share of common stock. The acquisition would be accomplished
through a merger of the Company into a new corporation that would be owned by
the management-led group. The management-led group currently owns 62 % of the
Company's outstanding shares of common stock.
The Board of Directors of the Company has established a special committee
consisting of three independent directors to consider the proposal. The
management-led group's proposal is subject to the approval of the special
committee of the Board of Directors and the shareholders of the Company, the
negotiation and execution of a definitive Merger Agreement and the
satisfaction of the conditions to be set forth in the Merger Agreement. The
management-led group has reserved its right to amend or withdraw its proposal
at any time in its sole discretion.
This press release is not an offer or the solicitation of an offer to buy
any securities of Neutral Posture Ergonomics, Inc., and no such offer or
solicitation will be made except in compliance with the applicable securities
laws.
The Company also reported results for the quarter ended
September 30, 2000. The Company reported net income of $92,964 ($.03 per
share -- basic and diluted) for the three-month period ended
September 30, 2000 as compared to $286,356 ($.09 per share -- basic and
diluted) for the corresponding 1999 period. Per share amounts are based on
weighted average shares outstanding for both periods.
Net sales for the three-month period ended September 30, 2000 were
$4.6 million, an increase of approximately 6% as compared to $4.4 million for
the similar 1999 period. Gross profit for the three-month period ended
September 30, 2000 of approximately $1.8 million was slightly above gross
profit for the same 1999 period. As a percentage of sales, gross profit
margin for the three-month period ended September 30, 2000 was 37.9% as
compared to the prior year's comparable three-month period margin of 38.3%.
The decrease in the margin percentage was primarily due to increased freight
costs as the Company moved to a freight-included program at certain standard
discount levels that became effective at the beginning of fiscal year 2001.
Slight increases in labor and research and development costs also contributed
to the decrease. The decreases in margin were partially offset by improved
material costs.
Selling, general and administrative costs ("SG&A") for the three-month
period ended September 30, 2000 increased to $1.6 million, a 29% increase from
the $1.3 million level for the three-month period ended September 30, 1999.
The increase in SG&A expenses is primarily the result of hiring two additional
regional sales directors late in fiscal 2000 and six territory marketing
managers. The Company also recorded an additional write-off for bad debt of
approximately $97,000 related to the Relax-the-Back corporate-owned stores.
These increases in SG&A expenses were partially offset by a reimbursement of
legal fees from our insurance carrier in the amount of approximately $90,000.
Subsequent to the three-month period ended September 30, 2000, the Company
received an additional reimbursement of legal fees from our insurance carrier
in the amount of $100,000. The Company continues to seek possible further
reimbursement of legal fees incurred related to the ongoing Ergobilt/Bodybilt
arbitration from our insurance carrier.
The N-hancements accessory line contributed approximately $125,000 to the
increase in sales for the current quarter. In early October, one of our major
suppliers of keyboard arm mechanisms notified NPE, and reportedly all other
ergonomic distributor customers, that they will no longer sell certain arm
mechanisms and related components but instead will be selling direct to
dealers and end users. We have secured a fixed number of these mechanisms in
our inventory; however, there could be a delay in ordering and receiving
replacement mechanisms from other sources, as the demand on alternative
vendors will increase significantly.
Commenting on the decrease in earnings for the first quarter of fiscal
2001, Rebecca Boenigk, Chief Executive Officer for the Company stated, "We are
pleased that sales for the quarter are above last year's comparable quarter
amounts and we are looking to increase sales during the rest of the fiscal
year. We added two regional sales directors late last fiscal year and have
placed six Company-employed territory marketing managers around the country to
focus 100% of their time selling the Company's products. Although we did not
see significant growth in sales during the quarter, we believe our new
strategy and focus on sales and marketing are beginning to pay off as our
backlog at September 30, 2000 almost doubled compared to the backlog at
September 30, 1999. While SG&A costs have increased this quarter over last
year due to this focus on our sales and marketing efforts, we look for our
increase in SG&A costs to balance out as sales increase in these targeted
areas."
"The N-hancements accessory line contributed approximately $125,000 to the
increase in sales for the current quarter. While we believe this was a good
start in getting the line in place and promoting the new line in the
marketplace, we expect our sales to grow during the remainder of fiscal 2001.
Although we are disappointed with the additional setback in obtaining arm
mechanisms for our new accessory line, we believe that the N-hancements
accessory line will be a contributing factor to the growth of the Company."
Neutral Posture Ergonomics, Inc. manufactures, markets and distributes
ergonomic products. Neutral Posture Ergonomics, Inc. is a certified Women
Business Enterprise and its common stock is currently listed on the Nasdaq
Small Cap Market under the symbol NTRL.
PRESS CONTACT:
Gregory A. Katt, Vice President and CFO
979-778-0502, Ext. 111
This press release may include certain statements that may be deemed to be
"forward-looking" within the meaning of the Securities Act of 1933, as
amended, and the Securities Exchange Act of 1934, as amended. There are
certain important factors which could cause actual results to differ
materially from those anticipated by the forward-looking statements. Certain
of the important factors which could cause actual results to differ materially
from those in the forward-looking statements include, among other things,
changes from anticipated levels of sales, the ability to integrate acquired
product lines and related businesses, future national or regional economic and
competitive conditions, changes in relationships with customers, customer
acceptance of existing and new products, pricing pressures due to excess
capacity, raw material cost increases, change of tax rates, change of interest
rates, declining conditions in the industry, validity of patents, results of
arbitration and litigation, availability of key component parts, casualty to
or other disruption of the Company's production facility and equipment, delays
and disruptions in the shipment of the Company's products and other factors
that generally affect business. Readers are cautioned not to place undue
reliance on these forward-looking statements, which reflect management's
analysis only as of the date hereof. The Company undertakes no obligation to
publicly revise these forward-looking statements to reflect events or
circumstances that arise after the date hereof. Readers should carefully
review the risk factors described in other documents the Company files from
time to time with the Securities and Exchange Commission.
Neutral Posture Ergonomics, Inc.
Summarized Statements of Income
(In thousands, except for per share amounts)
For the Three Months
Ended September 30,
2000 1999
Net sales $4,628 $4,384
Cost of sales 2,873 2,704
Gross Profit 1,755 1,680
Selling, general and administrative 1,624 1,255
Operating Income 131 425
Interest (income) expense and other, net (30) (24)
Income Before Income Taxes 161 449
Income taxes 68 162
Net Income $93 $286
Earnings Per Common Share (EPS):
Basic $.03 $.09
Diluted $.03 $.09
Weighted Average Shares Outstanding:
Basic 3,272 3,309
Diluted 3,272 3,313
Summarized Balance Sheets
(In thousands)
September 30, June 30,
2000 2000
Assets
Current Assets:
Cash $2,969 $3,139
Accounts Receivable - net 2,860 2,719
Inventory 1,325 1,289
Other 530 573
Total current assets 7,684 7,720
Property and Equipment - net 2,266 2,267
Other Assets 378 389
Total Assets $10,328 $10,376
Liabilities
Current Liabilities $1,841 $1,974
Long-term debt 493 501
Deferred income tax liability 69 69
Shareholders' equity 7,925 7,832
Total Liabilities and
Shareholders' Equity $10,328 $10,376
SOURCE Neutral Posture Ergonomics, Inc.
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Related links:
http://www.neutralposture.com
Company News On-Call:
http://www.prnewswire.com/comp/125652.html or fax,
800-758-5804, ext. 125652
CONTACT:
Gregory A. Katt, Vice President and CFO of
Neutral Posture Ergonomics, Inc., 979-778-0502, Ext. 111
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