DALLAS, May 15, 2013 /PRNewswire/ -- The Hallwood Group
Incorporated (NYSE MKT: HWG) (the "Company") today reported results
for the first quarter ended March 31,
2013.
For the 2013 first quarter, the Company had a net loss of
$1.3 million, or $(0.88) per share, compared to a net loss of
$9.6 million, or $(6.26) per share for the 2012 first quarter, on
revenue of $31.3 million and
$35.9 million, respectively.
Following is a comparison of results for the 2013 and 2012
periods:
Operating Income (Loss). The operating income (loss) for
the 2013 and 2012 first quarters was $(1.1)
million and $(14.4) million,
respectively. As previously disclosed, the 2012 first quarter
results included a $13.2 million
litigation charge as a result of the decision issued by the United
States District Court on April 24,
2012 in which it entered a final judgment substantially
adopting the proposed findings that the Bankruptcy Court issued in
July 2011 in the Adversary
Proceeding, as more fully described in the Company's quarterly
report on Form 10-Q for the quarter ended March 31, 2013.
The Company operates its principal business in the textile
products industry through its wholly owned subsidiary, Brookwood
Companies Incorporated ("Brookwood"). Brookwood's textile
products sales of $31,283,000
decreased by $4,596,000, or 12.8%, in
the 2013 first quarter, compared to $35,879,000 in the 2012 first quarter. The
decrease in 2013 was principally due to reduced sales of specialty
fabric to U.S. military contractors as a result of decreases in
orders from the military to Brookwood's customers. Military sales
accounted for $15,714,000 in the 2013
first quarter period, compared to $21,675,000 in the 2012 first quarter.
Military sales represented 50.2% and 60.4% of Brookwood's net sales
in the 2013 and 2012 first quarters, respectively. Military sales
have historically been cyclical in nature. Additionally, the
results included costs and expenses incurred by the Company and
Brookwood in the Hallwood Energy and Nextec litigation matters
totaling $60,000 and $1,770,000 for the 2013 and 2012 first quarters,
respectively, each of which is more fully described in the
Company's quarterly report on Form 10-Q for the quarter ended
March 31, 2013.
Other Income (Loss). Other income (loss)
principally consists of interest expense, along with interest and
other income. For the 2013 and 2012 first quarters,
other income (loss) was $(193,000)
and $(24,000), respectively.
The interest expense component relates to the Company's loan with
Hallwood Family (BVI), L.P., which was entered into in May 2012, and Brookwood's revolving credit
facility.
Income Tax Expense (Benefit). For the 2013 first
quarter, the income tax expense was $7,000, which included state tax expense of
$7,000. The federal tax benefit
for the 2013 first quarter in the amount of $491,000 was offset by a full valuation
allowance, due to the uncertainty related to taxable income in
future periods. For the 2012 first quarter, income tax benefit was
$4.9 million, which included a
$1.0 million current federal tax
benefit, a $3.9 million deferred
federal tax benefit, and an $11,000
state tax expense.
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THE
HALLWOOD GROUP INCORPORATED
(In
thousands, except per share amounts)
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|
|
|
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March
31,
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|
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2013
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2012
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Revenue
|
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$
31,283
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$
35,879
|
|
|
|
|
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Operating
loss
|
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$
(1,144)
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$
(14,439)
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Other
income (loss)
|
|
(193)
|
|
(24)
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|
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Loss
before income taxes
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(1,337)
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(14,463)
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Income tax
expense (benefit)
|
|
7
|
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(4,911)
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Net
loss
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$
(1,344)
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$
(9,552)
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PER COMMON
SHARE
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BASIC:
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Net loss
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$
(0.88)
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$
(6.26)
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|
|
|
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Weighted average shares
outstanding
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1,525
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1,525
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|
|
|
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DILUTED:
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|
|
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Net loss
|
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$
(0.88)
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$
(6.26)
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|
|
|
|
|
|
|
Weighted average shares
outstanding
|
|
1,525
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|
1,525
|
|
|
|
|
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This press release includes "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as
amended (the "Securities Act"), and Section 21E of the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
Forward-looking statements generally can be identified by the use
of forward-looking terminology, such as "may," "will," "would,"
"expect," "intend," "could," "estimate," "should," "anticipate",
"doubt" or "believe." The Company intends that all
forward-looking statements be subject to the safe harbors created
by these laws. All statements other than statements of
historical information provided herein are forward-looking and may
contain information about financial results, economic conditions,
trends, and known uncertainties. All forward-looking statements are
based on current expectations regarding important risk
factors. Many of these risks and uncertainties are beyond the
Company's ability to control, and, in many cases, the Company
cannot predict all of the risks and uncertainties that could cause
actual results to differ materially from those expressed in the
forward-looking statements. Actual results could differ
materially from those expressed in the forward-looking statements,
and readers should not regard those statements as a representation
by the Company or any other person that the results expressed in
the statements will be achieved. Important risk factors that
could cause results or events to differ from current expectations
are described in the Company's annual report on Form 10-K for the
year ended December 21, 2012 under
Item 1A –"Risk Factors". These factors are not intended to be
an all-encompassing list of risks and uncertainties that may affect
the operations, performance, development and results of the
Company's business. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as
of the date hereof. The Company undertakes no obligation to
release publicly the results of any revisions to these
forward-looking statements which may be made to reflect events or
circumstances after the date hereof, including without limitation,
changes in its business strategy or planned capital expenditures,
growth plans, or to reflect the occurrence of unanticipated events,
although other risks and uncertainties may be described, from time
to time, in the Company's periodic filings with the SEC.
SOURCE The Hallwood Group Incorporated