Volume 36, Issue 9, September 2001

FinancialFlash


Flour City Int'l Announces Contract Termination

Kingsport, Tenn.-based Flour City International (FCI) has announced several contract terminations based on alleged performance defaults by the company. Included in the terminations are contracts relating to Random House World Headquarters, the Four Seasons Hotel & Tower project in Las Olas City Center and the Trump World Towers project. Likewise, FCI had also entered into a binding letter of intent relating to the Bronx Criminal Courthouse project in which its participation has been cancelled.

In addition, FCI also reported it had received a notice of default under its contract relating to the 42D Stubbs Road project in Hong Kong and the Ciro Plaza project in Shanghai. Terminations and defaults have placed FCI in default of its performance bonds. 

Industry sources say that such cancellations are very unusual and generally the result of a company’s inability to meet its payroll or purchase materials. 

Reportedly, FCI is in discussions with its surety and various parties involved with the contracts regarding what steps may be taken to allow it to complete all or some of the projects. However, if agreements are not reached FCI may face claims for damages relating to the contracts.

“We are presently meeting with the developers and bonding agents to see how we can complete these projects,” said a company spokesperson. “We want to find out exactly what happened and correct the issues.” According to the spokesperson the Random House, Four Seasons Hotel and Trump Towers projects were all well under way. The value of the contracts was not released.

Also, in a special meeting of FCI’s international board of directors, chairperson John Tang was re-appointed as chief executive officer, replacing Edward M. Boyle III who had been promoted from president last month. Boyle is no longer employed by FCI. Roger Ulbricht, a 40-year employee who had retired last November, was rehired as interim president. Two board members, Paul Lyman and Eugene Armstrong, have also resigned, but no replacements have been named. 


JPS Industries Announces Results of Third Quarter and First Nine Months

Based in Greenville, S.C., JPS Industries has posted its financial results for the third quarter and nine months ending July 28, 2001.

According to the statement, JPS posted a net income of $1 million, or 10 cents per diluted share, compared with 2000’s third quarter in which the company posted net income from continuing operations of $2 million or 19 cents per share.

In addition, net sales for the company’s third quarter dropped from $43.8 million in 2000 to $34.9 million. EBITDA also decreased to $3.8 million, or 10.8 percent of sales, from $5.3 million, or 12 percent of sales, last year.

For fiscal 2001’s first nine months JPS reported net income of $3.9 million, or 40 cents per diluted share, on sales of $113.1 million. This is compared to 2000’s first nine months in which the company had net income from continuing operations of $4.3 million, or 43 cents per diluted share, on sales of $120 million. EBITDA for the nine months also decreased from $14.4 million, or 12 percent of sales, to $12.9 million, or 11.4 percent of sales. 

“While our third-quarter results would not be satisfactory over the long term, we are very gratified that the strategic repositioning and tactical initiatives we completed in 2000 put us in position to weather what is certainly the most severe downturn that many of our end-use markets have experienced over the past 20 years,” said Michael L. Fulbright, JPS chairman, president and chief executive officer. “Specifically, the commercial and industrial construction markets, which impact our Stevens Roofing Systems business, and the aerospace-related markets, which impact our glass division, weakened through the quarter with perhaps more difficulty ahead.” He continued, “Further, the electronics market … reached new lows that can easily be characterized as recession-like levels, and, as such, led to the reduced performance levels in our JPS glass division.”


CRH PLC Announces Development Initiatives 

CRH PLC, based in Dublin, Ireland, has announced it has undertaken a range of development initiatives totaling 294 million EUR during the first half of 2001. In addition, it acquired Mount Hope Rock Products for 160.5 million EUR in April. 

In the group’s European materials activities, 2.0 million EUR was spent in the ongoing development in Poland with the acquisition of a producer of asphalt and ready-mixed concrete based near Katowice in Silesia. In European products and distribution, the group spent 80.7 million EUR on the expansion of its concrete products and insulation activities in France and Germany, together with bolt-on acquisitions for Ibstock’s clay brick business in Britain and the group’s distribution operations in the Netherlands and in Ile-de-France. In North American materials, the group invested 113.8 million EUR with further acquisitions in Utah, Washington, Michigan and Vermont.


Applied Films Posts Fourth-Quarter Loss

Based in Longmont, Colo., Applied Films Corp. has posted a fourth-quarter net loss compared to a profit a year ago, and said its glass business would be hurt by weakness in the cell-phone industry. Applied Films sells coated glass for use in electronic devices such as cell phones and calculators.

In its fiscal fourth quarter, which ended June 30, Applied Films lost $1.2 million (21 cents per share) compared to net income of $1.5 million (24 cents a share) last year. Excluding goodwill, the company posted fourth-quarter profit of $10 million, or 15 cents per share.

In addition, Applied Films expects first- and second-quarter results to range from a 4-cents-per-share loss to a 2-cents-per-share profit. It expects earnings before goodwill to be in the range of 6 cents to 15 cents per share.

LBL Skysystems Reports Record Sales 

LBL Skysystems of Quebec, has released its results for fiscal 2000-2001, posting sales of $58.6 million (CND), a 10.3-percent increase from last year. In the fourth quarter the company’s sales were $14.2 million (CND) compared to $13.9 million (CND) in the same period last year.

“Through a variety of organizational achievements, including among others, the move into the new 125,000-square-foot plant, we significantly increased our products’ competitiveness by multiplying by four our monthly production and by significantly reducing our production costs,” said Louis Potvin, president and chief operating officer.

Correction
In the August 2001 issue of USGlass (see page 30) Asahi Glass Co.’s expected group-operating profit for the year that started April 1, 2001 was misstated. The correct amount is $966 million. 


Stock Watch

As the industry approached the Labor Day weekend, the publicly owned glass companies or companies that own glass concerns were split over how the summer treated them financially. Nine companies saw decreases, while eight reported increases. Flour City reported the greatest drop at 85 percent. The Dwyer Group, however, fared well during the months of July and August, with a 32-percent increase.

Company Name                 Monthly Range (Jun 1-Jun 29)                     52-Wk Range                                 P/E Ratio

3M Corp. (MMM)                      115.62-104.20                                             80.50-127.00                                    26.90
Apogee (APOG)                         11.59-10.32                                                  4.31-15.70                                       15.40
Applied Films Corp. (AFCO)      19.00-20.25                                                  7.69-37.94                                       NE
Alcoa (AA) -owns Alumax          39.89-37.49                                                  23.13-45.71                                     22.30
& Kawneer
Asahi (ASGLY)                           81.40-54.50                                                 0.00-0.00                                         NE
Butler Mfg. (BBR)                       24.96-24.49                                                  22.00-28.75                                     9.20
-owns Vistawall
Compudyne (CDCY)                   8.80-8.00                                                     5.13-10.25                                       11.10
-owns Norment
CRH plc (CRHCY)                     17.25-17.25                                                 13.63-19.94                                      14.90
-owns Oldcastle Glass Group
Donnelly (DON)                           14.20-15.35                                                 11.55-16.20                                     14.80
Dow Chemical (DOW)                 33.63-34.84                                                 23.00-39.67                                     99.50
Dupont (DD)                                47.10-40.53                                                 38.19-49.88                                      39.30
Dwyer Group (DWYR)                2.50-3.29                                                     1.44-3.77                                         10.00
-owns the Glass Doctor
Flour City Int’l (FCIN)                 3.25-0.49                                                       0.38-4.74                                        0.90
Lilly Industries (LI)                        31.69-31.69                                                   0.00-0.00                                       NE
Pilkington plc (PILK)                    99.75-112.00 pounds                                     NA                                                 NA
PPG (PPG)                                  51.61-52.87                                                    36.00-59.75                                   18.50
Solutia (SOI)                                13.47-13.74                                                    10.19-15.32                                   44.30
ThermoView Ind. (THV)               1.41-1.24                                                       0.19-1.70                                       17.70
Vitro (VTO)                                  2.65-2.95                                                       1.81-3.62                                       16.40
-owns VVP America

NA = Not Applicable; NE = Negative Earnings.


USG

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