CHICAGO, Oct. 27 /PRNewswire/ -- Borg-Warner Security Corporation
(NYSE: BOR) reported third quarter net earnings of $4.7 million, or 19 cents
per share, compared with a loss of $23.2 million, or $.99 per share in the
third quarter of 1996. Income from continuing operations for the third
quarter of 1997 was 19 cents per share versus 14 cents per share, an increase
of 35.7 percent compared with the third quarter of 1996.
Revenues in the third quarter of 1997 were $390.8 million down from
$434.9 million in the third quarter of 1996. Core security services revenues
in the third quarter of 1997 were $390.8 million versus $372.3 million in the
third quarter of 1996, an increase of 5.0 percent. The decline in reported
revenue results from the January 1997 combination of the company's Wells Fargo
Armored business with Loomis Armored, which created Loomis, Fargo & Co. Wells
Fargo Armored is no longer consolidated and the company now accounts for its
interest in Loomis, Fargo as a 49 percent-owned equity investment.
For the first nine months of 1997, net income was $12.8 million, or 53
cents per share, up from a loss of $20.8 million, or 88 cents per share for
the first nine months of 1996. Income from continuing operations for the
first nine months of 1997 was 53 cents per share versus 33 cents per share, an
increase of 60.6 percent compared with the first nine months of 1996.
Revenues for the first nine months of 1997 were $1151.8 million compared with
$1267.3 million for the first nine months of 1996. Excluding the armored
services business, core security services revenues for the first nine months
of 1997 were $1136.5 million versus $1085.0 million for the first nine months
of 1996, an increase of 4.7 percent.
Total debt at September 30, 1997 was $445.6 million compared with
$549.8 million at December 31, 1996 and $436.7 million at June 30, 1997. The
1997 decrease resulted from cash proceeds received in the armored services
business combination and operating cash flow.
Joe Adorjan, chairman and chief executive officer, stated, "While we are
satisfied with the operating performance of our physical security business,
results from our electronic security business continue to lag expectations.
We have invested over $3.5 million on new product development, information
systems, and marketing programs in 1997. The return on this investment has
fallen short of expectations, however, we are confident in our long-term
strategy and are committed to positioning the company for sustained growth and
profitability."
Adorjan also noted that the company took several steps toward its long-
term objective of shifting from defined benefit to defined contribution
pension plans. "Third quarter results include non-recurring, after-tax income
of $1.8 million resulting from plan changes. This was largely offset by
certain reserve adjustments and Loomis, Fargo & Co. performance. While
Loomis, Fargo pricing continues to improve, the timing of rate increases has
somewhat lagged increases in compensation costs. This situation, along with
certain cargo loss problems, has resulted in a short-term decline in
profitability."
Borg-Warner Security Corporation is the nation's largest provider of
security services. The company offers a complete range of services, including
electronic and physical security services under the Wells Fargo and Burns
brand names.
Risks and uncertainties which may affect projections are listed in Exhibit
99 to the company's Form 10-K for the year ended December 31, 1996.
For a copy of this press release or for additional information on the
company, contact our web site at http://www.Borg-WarnerSecurity.com or
http://www.prnewswire.com.
Borg-Warner Security Corporation
Business Segment Revenue
($ Millions)
Three months ended Nine months ended
September 30 September 30
1997 1996 1997 1996
Physical Security Services $319.9 $301.4 $927.4 $873.0
Electronic Security
Services 70.9 70.9 209.1 212.0
Armored Security Services -- 62.6 15.3 182.3
Total Revenues $390.8 $434.9 $1151.8 $1267.3
Income Statement
Third Quarter
($ Millions, Except Per Share)
Change
1997 1996 $ %
Revenues $390.8 $434.9 $(44.1) -10.1%
Cost of services 313.8 348.2 (34.4) -9.9%
Gross margin 77.0 86.7 (9.7) -11.2%
% of Revenues 19.7% 19.9%
Depreciation 9.9 11.7 (1.8) -15.4%
% of Revenues 2.5% 2.7%
Selling & administrative 45.8 51.8 (6.0) -11.6%
% of Revenues 11.7% 11.9%
Other expense, net 3.3 3.4 (0.1) -2.9%
Earnings before
interest and taxes 18.0 19.8 (1.8) -9.1%
Interest expense 10.6 14.1 (3.5) -24.8%
Income taxes 2.7 2.5 0.2 8.0%
Income from
continuing operations 4.7 3.2 1.5 46.9%
Loss from discontinued
operations,
net of income taxes -- (26.4) 26.4 N/A
Net earnings $4.7 ($23.2) $27.9 N/A
Earnings (loss) per common share:
Continuing operations $0.19 $0.14 $0.05 35.7%
Discontinued operations -- (1.13) 1.13 N/A
Net earnings (loss)
per share $0.19 ($0.99) $1.18 N/A
Income Statement
Nine Months
($ Millions, Except Per Share)
Change
1997 1996 $ %
Revenues $1,151.8 $1,267.3 (115.5) -9.1%
Cost of services 918.6 1,010.0 (91.4) -9.0%
Gross margin 233.2 257.3 (24.1) -9.4%
% of Revenues 20.2% 20.3%
Depreciation 29.5 35.6 (6.1) -17.1%
% of Revenues 2.6% 2.8%
Selling & administrative 146.0 156.7 (10.7) -6.8%
% of Revenues 12.7% 12.4%
Other expense, net 6.7 10.1 (3.4) -33.7%
Earnings before
interest and taxes 51.0 54.9 (3.9) -7.1%
Interest expense 31.4 42.7 (11.3) -26.5%
Income taxes 6.8 4.5 2.3 51.1%
Income from continuing
operations 12.8 7.7 5.1 66.2%
Loss from discontinued operations,
net of income taxes -- (28.5) 28.5 N/A
Net earnings $12.8 ($20.8) $33.6 N/A
Earnings (loss) per common share:
Continuing operations $0.53 $0.33 $0.20 60.6%
Discontinued operations -- (1.21) 1.21 N/A
Net earnings (loss)
per share $0.53 ($0.88) $1.41 N/A
BORG-WARNER SECURITY CORPORATION
SUMMARY BALANCE SHEET
($ MILLIONS)
September 30, December 31,
1997 1996
Current assets $ 132.1 $ 167.1
Property, plant & equipment 148.2 203.1
Other non-current assets 377.8 390.6
Total assets $ 658.1 $ 760.8
Current liabilities 145.6 178.1
Long-term debt 343.5 438.2
Other non-current liabilities 113.6 103.3
Stockholders' equity 55.4 41.2
Total liabilities
& stockholders' equity $ 658.1 $ 760.8
SOURCE Borg-Warner Security Corporation
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CONTACT:
Jeff Cartwright of Borg-Warner Security,
312-322-8836
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