CHICAGO, Oct. 28 /PRNewswire/ -- Burns International Services Corporation
(NYSE: BOR) today reported earnings from continuing operations in the third
quarter of 1999 of $0.33 per share compared with $0.29 per share in the year
ago quarter, an increase of 13.8 percent. Third quarter revenues increased
3.8 percent to $349.4 million compared with $336.6 million in the third
quarter of 1998. A 5.1 percent gain in core U.S. industrial guard revenues
was partially offset by a decrease in revenues from the Energy and Government
business unit.
Commentary on Quarterly Results
John Edwardson, chairman and chief executive officer, stated, "We are
strongly encouraged by the continued growth of our core U.S. industrial guard
business. Our key performance indicator for that business, permanent hours
delivered to customers, is growing at its fastest pace in three years. On a
year-to-date basis, both customer and employee retention have improved, and
that is evident in our permanent hours performance. We are pleased to see
that the investments we have made in marketing and training are beginning to
realize measurable benefits."
"In addition, our pipeline for national account sales is very strong. We
expect positive announcements regarding new national account agreements to be
finalized in the fourth quarter, which will provide additional momentum for us
going into 2000."
"These positive trends were partially offset in the third quarter by
issues with our operations in the United Kingdom, Globe Aviation, and Energy
and Government business units. We have taken corrective actions in all three
areas and anticipate that these issues will be substantially behind us by the
end of 1999. In the U.K., we have hired T. David Cairns as the managing
director effective in November. He comes to us with a strong operational
background, having held senior management positions in a major security
services firm in the U.K."
"For the fourth quarter of 1999, we are projecting EPS of $0.35 to $0.37
from continuing operations, excluding any non-recurring items. This would
lead to full year 1999 EPS from continuing operations of $1.22 to $1.24, or
$1.16 to $1.18 excluding non-recurring income. For the year 2000, we
anticipate EPS growth of 8 to 10 percent over the $1.16 to $1.18 for 1999."
"Over the past several years, we have significantly repositioned the
company. This has resulted in a series of one-time accounting gains and
losses, as well as challenges in projecting earnings. We are now in a
substantially better position to achieve predictable and sustainable growth in
the future."
"We are pleased that the Merrill Lynch entities have decided to distribute
their shares as described in a separate press release today. This is positive
news for Burns shareholders as it will increase the number of shares available
for trading."
Year-to-Date Results
For the first nine months of 1999, net earnings from continuing operations
were $20.0 million, or $0.88 per share, compared with $6.7 million, or $0.29
per share, in the first nine months of 1998. Year-to-date, total net earnings
were $7.9 million versus year ago total net earnings of $20.7 million. The
decrease in year-to-date comparative total net earnings was a result of the
discontinued operations and extraordinary items described below. Nine-month
revenues increased 4.0 percent to $1,018.5 million from $979.1 million in the
comparable year ago period.
Earnings Per Share Summary Table
Third quarter and year-to-date earnings per share results compare as
follows:
Third Quarter Nine Months
1999 1998 1999 1998
Continuing operations 0.33 0.29 0.88 0.29
Discontinued operations -- -- -- 0.83
Extraordinary loss --
early extinguishments
of debt -- -- (0.53) (0.26)
Net earnings (loss)
per share $0.33 $0.29 $0.35 $0.86
Discontinued Operations
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 the disposition.
Extraordinary Items
Year-to-date 1999 results reflect a second quarter extraordinary charge of
$12.1 million for the early retirement of $125 million principal amount of
9 5/8 percent senior subordinated notes. Year-to-date 1998 results reflect an
extraordinary charge of $6.3 million for the early retirement of $150 million
principal amount of 9 1/8 percent senior subordinated notes.
Other Matters
The Company announced the resignation of Tim Wood, vice president and
chief financial officer, to pursue other interests. John Edwardson said,
"Tim has played an active role in repositioning our company. With this
largely completed, he will assist me with several transition matters until
January 3, 2000 and then pursue a new challenge. On behalf of the company and
our board of directors, we wish him well."
The Company also announced that the Board of Directors has adopted a
Stockholder Rights Plan designed to enhance the Board's ability to protect
stockholders. The Plan was adopted to protect against, among other things,
unsolicited attempts to acquire control of Burns that do not offer an adequate
price to all stockholders or are otherwise not in the best interests of Burns
and its stockholders. Mr. Edwardson stated that, "The Plan was not adopted in
response to any specific effort to acquire control of Burns, and the Company
is not aware of any such effort." The Rights generally will be exercisable
only if a person or group acquires, or commences a tender or exchange offer
that would result in a person or group acquiring, beneficial ownership of 15%
or more of Burns' common stock.
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, Ireland, 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.
Risks and uncertainties that may affect projections include the cost and
availability of labor, the consequences of debt leverage to the company's
ability to fund its operations, 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 1O-K for the year ended December 31, 1998.
For a copy of this press release or for additional information on the
company, contact the company's web site at http://www.burnsinternational.com or
prnewswire.com.
Income Statement
Third Quarter
($ Millions, Except Per Share)
Change
1999 1998 $ %
Net Service Revenues $349.4 $336.6 $12.8 3.8%
Cost of Services 295.0 284.2 10.8 3.8%
Gross Margin 54.4 52.4 2.0 3.8%
% of Revenues 15.6% 15.6% -- --
Selling, General
& Administrative* 37.5 35.5 2.0 5.6%
% of Revenues 10.7% 10.5% -- --
Depreciation 1.5 1.0 0.5 50.0%
% of Revenues 0.4% 0.3% -- --
Other Expense, Net 0.8 1.2 (0.4) -33.3%
Earnings before Interest
and Taxes 14.6 14.7 (0.1) -0.7%
Interest Expense and
Finance Charges 4.0 3.4 0.6 17.6%
Earnings before Income
Taxes 10.6 11.3 (0.7) -6.2%
Provision for Income
Taxes 3.9 4.5 (0.6) -13.3%
Earnings from Continuing
Operations 6.7 6.8 (0.1) -1.5%
Discontinued Operations,
Net of Income Taxes -- -- -- --
Extraordinary Loss - Early
Extinguishment of Debt -- -- -- --
Net Earnings $6.7 $6.8 ($0.1) -1.5%
Earnings per Share-Diluted:
Continuing Operations $0.33 $0.29 $0.04 $13.8%
Discontinued Operations -- -- -- --
Extraordinary Loss
- Early Extinguishment
of Debt -- -- -- --
Net Earnings Per Share $0.33 $0.29 $0.04 13.8%
* The company had non-recurring income net of non-recurring expenses
of $155,000 for the third quarter of 1999.
Income Statement
Nine Months
($ Millions, Except Per Share)
Change
1999 1998 $ %
Net Service Revenues $1,018.5 $979.1 $39.4 4.0%
Cost of Services 857.3 826.3 31.0 3.8%
Gross Margin 161.2 152.8 8.4 5.5%
% of Revenues 15.8% 15.6% -- --
Selling, General
& Administrative 110.1 121.2 (11.1) -9.2%
% of Revenues 1O.8% 12.4% -- --
Depreciation 4.0 3.0 1.0 33.3%
% of Revenues 0.4% 0.3% -- --
Other Expense, Net 3.1 5.7 (2.6) -45.6%
Earnings before Interest
and Taxes 44.0 22.9 21.1 92.1%
Interest Expense and
Finance Charges 11.7 11.8 (0.1) -0.8%
Earnings before
Income Taxes 32.3 11.1 21.2 191.0%
Provision for
Income Taxes 12.3 4.4 7.9 179.5%
Earnings from Continuing
Operations 20.0 6.7 13.3 198.5%
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 $7.9 $20.7 ($12.8) 198.5%
Earnings (Loss) per
Share-Diluted:
Continuing Operations $0.88 $0.29 $0.59 203.4%
Discontinued Operations -- 0.83 (0.83) NM
Extraordinary Loss
- Early Extinguishment
of Debt (0.53) (0.26) (0.27) NM
Net Earnings Per
Share $0.35 $O.86 ($0.51) -59.3%
Summary Balance Sheet
($ Millions)
September 30, December 31,
1999 1998
Cash and cash equivalents $10.5 $105.7
Other current assets 111.1 124.8
Property, plant & equipment 22.5 18.1
Other non-current assets 180.3 183.3
Total assets $324.4 $431.9
Current liabilities 117.9 132.8
Long-term debt 114.3 124.4
Other non-current liabilities 66.8 77.8
Stockholders' equity 25.4 96.9
Total liabilities &
stockholders' equity $324.4 $431.9
SOURCE Burns International Services Corporation
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Related links:
http://www.Burnsinternational.com
Company News On-Call:
http://www.prnewswire.com/comp/120940.html or fax,
800-758-5804, ext. 120940
CONTACT:
Analysts, Anne Ireland, 312-322-8550, Media,
Lynne Glovka, 312-322-8511, both of Burns International Services
Corporation
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