UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT: January 27, 1999
BAIRNCO CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-8120 13-3057520
(State or other jurisdiction (Commission (IRS Employer
of incorporation or File Number) Identification
organization) Number)
2251 Lucien Way, Suite 300, Maitland, FL 32751
(Address of principal executive offices) (Zip Code)
(407) 875-2222
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former
fiscal year, if changed since last report)
ITEM 5. OTHER EVENTS
Bairnco Corporation (the "Corporation") is filing herewith a
press release issued on Thursday, January 21, 1999, as Exhibit
99.1 which is incorporated by reference herein. This press
release was issued to announce the Corporation's fourth quarter
and full year 1998 operating results and also to announce that
the Corporation had taken a $7.5 million provision for litigation
costs in the fourth quarter of 1998 and certain other matters.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
The following exhibit is incorporated by reference herein:
99.1 Press Release
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
BAIRNCO CORPORATION
By: /s/ Luke E. Fichthorn III
Luke E. Fichthorn III
Chairman & CEO
Date: January 27, 1999
EXHIBIT INDEX
Exhibit Description
99.1 Press Release
EXHIBIT 99.1
BAIRNCO CORPORATION
2251 LUCIEN WAY, SUITE 300
MAITLAND, FLORIDA 32751-7037
(407) 875-2222
PRESS RELEASE
BAIRNCO ANNOUNCES LITIGATION CHARGE IN THE FOURTH QUARTER,
FOURTH QUARTER AND FULL YEAR 1998 RESULTS
Maitland, Florida, January 21, 1999 - Bairnco Corporation (NYSE-
BZ)today reported that in 1998 the court in the Transactions
Lawsuit issued a series of opinions that eliminated certain
claims and parties from the case and set the stage for discovery
and trial as to the claims and parties that remain. In
particular, the court dismissed the RICO claims; all claims
against third-party professionals, including lawyers,
accountants and investment bankers; and all claims against
individuals with the exception of Bairnco's former chairman and
president. The court also narrowed the scope of certain claims
against Bairnco and the other corporate defendants. With the
initial motions phase of the case now complete, Bairnco is
prepared to mount a vigorous defense on the merits. Toward that
end, a $7,500,000 provision for litigation costs was taken in
the fourth quarter.
Performance - Year Ended December 31, 1998
Sales for the year ended December 31, 1998 decreased 1.4% from
$158,708,000 in 1997 to $156,456,000 in 1998. Gross profit
decreased 6.3% to $50,583,000 from $53,996,000 in 1997. Selling
and administrative expenses, excluding the provision for
litigation costs, increased 0.4% to $38,554,000 from
$38,404,000. As a percent of sales, selling and administrative
expenses, excluding the provision for litigation costs, were
24.6% compared to 24.2% in 1997.
Operating profit before the provision for litigation costs was
$12,029,000 down 22.9% from $15,592,000 in 1997.
Net interest expense increased to $1,998,000 in 1998 as compared
to $1,834,000 in 1997 due primarily to higher average
borrowings.
Net income decreased to $1,594,000 from $8,771,000. Diluted
earnings per common share decreased to $.18 from $.94 in 1997 as
a result of the decreased operating income and the provision for
litigation costs. The provision for litigation costs reduced
net income in 1998 by $4,726,000. There were fewer average
shares outstanding as a result of the stock repurchase program.
During 1998, Bairnco repurchased 737,400 shares of its common
stock.
Performance - Fourth Quarter 1998
Sales in the fourth quarter 1998 were $38,933,000, a decrease of
3.4% from $40,321,000 in 1997. Arlon sales decreased 6.0% due
to weak sales in most markets but especially in the electronic
markets as compared to last year when that market was strong.
Kasco sales increased 2.3% due to the continuing modest recovery
in Europe.
Gross profit was down to $12,329,000 from $13,322,000 as the
gross profit margin as a percent of sales decreased from 33.0%
to 31.7% primarily due to continued price pressures in the
electrical and electronic markets.
Selling and administrative expenses, excluding the provision for
litigation costs, increased 0.7% to $9,660,000 from $9,590,000.
As a percent of sales, selling and administrative expenses
increased to 24.8% from 23.8%.
A $7,500,000 provision for litigation costs was taken in the
fourth quarter.
Net interest expense increased to $507,000 in 1998 as compared
to $473,000 in 1997 due primarily to higher average borrowings.
Net income declined to a loss of $(3,363,000) from a profit of
$2,086,000 in the fourth quarter of 1997. Basic earnings per
common share decreased to a loss of $(.40) from a profit of
$.23.
During the fourth quarter Bairnco repurchased 178,300 shares of
its common stock.
Bairnco remains in strong financial condition.
The Company also announced today that the 1998 Annual Meeting of
Stockholders in Bairnco Corporation will be held on Thursday,
April 22, 1999, at 9:00 a.m., local time, at Bairnco's Corporate
offices, Maitland, Florida. The record date for determination
of Stockholders is March 8, 1999.
Bairnco Corporation is a diversified multinational company that
operates two distinct businesses - Arlon (Engineered Materials
and Components segment) and Kasco (Replacement Products and
Services segment). Arlon's principal products include high
technology materials for the printed circuit board industry,
cast and calendered vinyl film systems, custom engineered
laminates and pressure sensitive adhesive systems, and special
silicone rubber compounds and components. Kasco's principal
products include replacement band saw blades for cutting meat,
fish, wood and metal, on site maintenance services and
seasonings for ready-to-cook foods for the retail food industry
primarily in the meat and deli departments. Kasco also
distributes equipment to the food industry in Canada and France.
CONTACT: Bob Wilkinson, Bairnco Corporation
Telephone: (407) 875-2222, ext. 228
***********************
<TABLE>
Comparative Results of Operations (Unaudited)
Condensed Income Statements
<S> <C> <C> <C> <C>
Qtr Ended Qtr Ended Year Ended Year Ended
Dec 31, 1998 Dec 31, 1997 Dec 31, 1998 Dec 31, 1997
Net sales $38,933,000 $40,321,000 $156,456,000 $158,708,000
Cost of sales 26,604,000 26,999,000 105,873,000 104,712,000
Gross profit 12,329,000 13,322,000 50,583,000 53,996,000
Selling and administrative
expenses 9,660,000 9,590,000 38,554,000 38,404,000
Provision for litigation
costs 7,500,000 -- 7,500,000 --
Operating profit (loss) (4,831,000) 3,732,000 4,529,000 15,592,000
Interest expense, net 507,000 473,000 1,998,000 1,834,000
Income (loss) before income
taxes (5,338,000) 3,259,000 2,531,000 13,758,000
Provision (benefit) for
income taxes (1,975,000) 1,173,000 937,000 4,987,000
Net income (loss) $(3,363,000) $ 2,086,000 $ 1,594,000 $ 8,771,000
Basic Earnings per Share
of Common Stock $ (0.40) $ 0.23 $ 0.18 $ 0.96
Diluted Earnings per Share
of Common Stock -- $ 0.23 $ 0.18 $ 0.94
Diluted Average Common
Shares Outstanding 8,459,000 9,266,000 8,818,000 9,350,000
</TABLE>
<TABLE>
Condensed Balance Sheets
<S> <C> <C>
Dec 31, 1998 Dec 31, 1997
ASSETS
Cash $ 822,000 $ 1,217,000
Accounts receivable, net 27,999,000 24,939,000
Inventories 26,179,000 26,398,000
Other current assets 5,846,000 5,389,000
Total current assets 60,846,000 57,943,000
Plant and equipment, net 41,402,000 39,913,000
Cost in excess of net assets of purchased businesses 11,840,000 7,607,000
Other assets 4,467,000 3,823,000
Total $118,555,000 $109,286,000
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Short-term debt $ 4,373,000 $ 3,018,000
Current maturities of long-term debt -- 9,000
Accounts payable 9,022,000 8,661,000
Accrued expenses 14,192,000 10,543,000
Total current liabilities 27,587,000 22,231,000
Long-term debt 33,471,000 27,291,000
Other liabilities 11,059,000 7,295,000
Stockholders' investment 46,438,000 52,469,000
Total $118,555,000 $109,286,000
</TABLE>
