2012-11-14 20:50:57 -
DALLAS, TEXAS . . . November 14, 2012 . . . Keystone Consolidated Industries,
Inc. (OTCQB: KYCN), reported operating income before pension and other
postretirement benefit ("OPEB") credits for the third quarter of 2012 of $5.7
million, which approximated the operating results of the third quarter of 2011
as a lower selling price margin over ferrous scrap costs and increased costs
associated with revamping operations at one of Keystone's segments were offset
by lower utility costs, better yield at the Company's largest segment, lower
insurance costs and lower accrued incentive compensation expense.
Because the amount of the Company's net periodic defined benefit pension and
OPEB expense or credits are unrelated to the ongoing operating activities of the
Company, Keystone measures its overall operating performance using operating
income before pension and OPEB expense or credits. A reconciliation of
operating income as reported to operating income adjusted for pension and OPEB
expense or credits is set forth in the following table.
Three months ended
September 30,
-------------------------------------
2011 2012
(In thousands)
Operating income as reported $ 11,666 $
8,442
Defined benefit pension credit (4,750)
(1,346)
OPEB credit (1,299)
(1,403)
Operating income before pension and OPEB $ 5,617 $
5,693
Net income for the third quarter of 2012 was $5.0 million, or $0.41 per diluted
share, as compared to net income of $6.9 million, or $0.57 per diluted share, in
the third quarter of 2011. The decrease in net income was primarily due to a
$3.4 million lower defined benefit pension credit during the third quarter of
2012.
Primarily due to a $45 million decrease in Keystone's pension plans' assets as
well as a 101 basis point reduction in the applicable discount rate during
2011, the Company currently expects to record a defined benefit pension credit
of only $6.9 million during 2012 as compared to the $24.4 million defined
benefit pension credit it recorded during 2011. Accordingly, Keystone recorded
a defined benefit pension credit of $1.3 million during the third quarter of
2012 as compared to the $4.8 million credit recorded during the third quarter of
2011.
This release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Statements in this release
that are not historical in nature are forward-looking and are not statements of
fact. Forward-looking statements represent the Company's beliefs and
assumptions based on currently available information. In some cases you can
identify these forward-looking statements by the use of words such as
"believes," "intends," "may," "should,"
"could," "anticipates," "expected" or
comparable terminology, or by discussions of strategies or trends. Although
Keystone believes the expectations reflected in forward-looking statements are
reasonable, it does not know if these expectations will be correct. Forward-
looking statements by their nature involve substantial risks and uncertainties
that could significantly impact expected results. Actual future results could
differ materially from those predicted. While it is not possible to identify all
factors, the Company continues to face many risks and uncertainties. Among the
factors that could cause Keystone's actual future results to differ materially
from those described herein are the risks and uncertainties discussed from time
to time in the Company's filings with the Securities and Exchange Commission
("SEC") including, but not limited to, the following:
* Future supply and demand for Keystone's products (including cyclicality
thereof),
* Customer inventory levels,
* Changes in raw material and other operating costs (such as ferrous scrap and
energy),
* Availability of raw materials,
* The possibility of labor disruptions,
* General global economic and political conditions,
* Competitive products (including low-priced imports) and substitute products,
* Customer and competitor strategies,
* The impact of pricing and production decisions,
* Environmental matters (such as those requiring emission and discharge
standards for existing and new facilities),
* Government regulations and possible changes thereof,
* Significant increases in the cost of providing medical coverage to
employees,
* The ultimate resolution of pending litigation and U.S. Environmental
Protection Agency investigations,
* International trade policies of the United States and certain foreign
countries,
* Operating interruptions (including, but not limited to, labor disputes,
fires, explosions, unscheduled or unplanned downtime, supply disruptions and
transportation interruptions),
* The Company's ability to renew or refinance credit facilities,
* The ability of the Company's customers to obtain adequate credit,
* Any possible future litigation, and
* Other risks and uncertainties as discussed in the Company's filings with the
SEC.
Should one or more of these risks materialize, if the consequences worsen, or if
the underlying assumptions prove incorrect, actual results could differ
materially from those forecasted or expected. Keystone disclaims any intention
or obligation to update or revise any forward-looking statement whether as a
result of changes in information, future events or otherwise.
In an effort to provide investors with additional information regarding the
Company's results as determined by accounting principles generally accepted in
the United States of America ("GAAP"), the Company has disclosed certain non-
GAAP information, which the Company believes provides useful information to
investors:
* The Company discloses operating income before pension and OPEB expense or
credits, which is used by the Company's management to assess its
performance. The Company believes disclosure of operating income before
pension and OPEB expense or credits provides useful information to investors
because it allows investors to analyze the performance of the Company's
operations in the same way the Company's management assesses performance.
Keystone Consolidated Industries, Inc. is headquartered in Dallas, Texas. The
Company is a leading manufacturer of steel fabricated wire products, industrial
wire and wire rod. Keystone also manufactures wire mesh, coiled rebar, steel
bar and other products. The Company's products are used in the agricultural,
industrial, cold drawn, construction, transportation, original equipment
manufacturer and retail consumer markets. Keystone's common stock is quoted on
the OTCQB (Symbol: KYCN).
* * * * * * * * * *
KEYSTONE CONSOLIDATED INDUSTRIES, INC. AND SUBSIDIARIES
Condensed Summary of Operations
(In thousands, except per share data)
Three months ended Nine months ended
September
September
30, 30,
2011 2012 2011 2012
(unaudited)
Net sales $ 140,973 $ $
$ 439,112
133,072 431,091
Cost of goods
sold (129,700) (122,980) (390,169) (396,377)
Gross $ $ $
$
margin 11,273 10,092 40,922 42,735
Operating $ $ $
$
income 11,666 8,442 41,892 33,021
Income before $ $ $
$
income taxes 11,460 8,027 41,631 31,566
Provision
for income (4,544) (3,046) (17,033) (11,999)
taxes
Net income $ $ $
$
6,916 4,981 24,598 19,567
Basic and
diluted net $ $
$ $
income per 0.57 0.41 2.03 1.62
share
Basic and
diluted
weighted
average
shares
outstanding 12,102 12,102 12,102 12,102
CONTACT: Bert E. Downing, Jr., Vice President and Chief Financial Officer,
(972) 458-0028
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Keystone Consolidated Industries, Inc. via Thomson Reuters ONE
[HUG#1658177]
