Chase Industries Reports Q1 EPS of 22 Cents, Before Tender Offer-Related Costs, Compared With 37 Cents, A Year Ago

-- Subcommittee of Board Continues To Evaluate Options

-- Chase Closes Quarter With Strengthened Balance Sheet After Major

Accomplishments

-- Capacity Expansion On Budget and On Time for Q2 2002 Start-up



Apr 25, 2001, 01:00 ET from Chase Industries, Inc.

    MONTPELIER, Ohio, April 25 /PRNewswire/ -- Chase Industries Inc.
 (NYSE:   CSI) today reported first-quarter earnings of $3.4 million, or 22 cents
 per diluted share, compared with $5.7 million, or 37 cents per diluted share,
 in the first quarter last year, excluding the impact of 2001 expenses
 equivalent to 11 cents per diluted share to respond to an unsolicited tender
 offer.  Including the tender offer expenses, net income was $1.7 million, or
 11 cents per diluted share.
     The subcommittee of the board, composed of the four outside directors,
 will continue to evaluate options that it believes are in the best interests
 of the company and its stockholders even though the tender offer expired
 January 31.
     Regarding the first quarter earnings, Martin V. Alonzo, Chairman,
 President and CEO said, "Our financial results were impacted by the economic
 slow down, which began in the third quarter of last year.  However, based on
 historical experience, the two percentage point reduction in interest rates by
 the Federal Reserve since the beginning of the year should reinvigorate the
 economy by year end and result in positive company quarterly comparisons in
 2002."
     Alonzo also stated, "During the quarter we accomplished several important
 objectives and significantly strengthened our balance sheet:
 
     -- "We negotiated a settlement with British Petroleum (BP), the former
        owners of our Montpelier, Ohio brass-rod mill, relating to
        litigation of a number of environmental and financial disputes.  With
        payment to BP of $2 million, the settlement eliminated about
        $28 million of debt and interest payable to BP and approximately
        $1.9 million of interest expense annually. We also avoid the cost and
        uncertainty of continuing the litigation, while BP retains financial
        responsibility for residual contamination on the site. We are very
        pleased to have this behind us.
 
     -- "We sold Leavitt Tube to Pinkert Industrial Group LLC on March 30 for
        approximately $32 million and expect to ultimately realize $40 million
        of cash, including tax benefits.
 
     -- "The combination of the BP settlement and the sale of Leavitt
        eliminated all debt and interest payable -- about $40 million at the
        time of closing -- from our balance sheet and resulted in $17.3 million
        of cash on hand at the end of the quarter.
 
     -- "And finally, we made substantial progress on Phase III of Project 400,
        completing the majority of the buildings and equipment foundations
        necessary to accommodate the new equipment.  We are on budget and on
        time to start-up some of the equipment later this year, with all the
        new equipment fully operational in Q2 of 2002.  Phase III is the final
        step to achieve in excess of 400 million pounds of capacity at our
        Montpelier, Ohio brass-rod mill and represents a $50 million investment
        in new finishing equipment, billet heaters and an extrusion press.  We
        expect to finance the remaining investment with internally generated
        funds."
 
     Net Sales Lower Due To Lower Shipments/Prices
     Net sales decreased 19 percent to $66 million in the first quarter from
 $82 million last year due to lower shipments and prices.  The downturn in the
 economy began impacting brass-rod demand in the third quarter of last year and
 continued into the first quarter, as our customers experienced lower demand
 for their products, and reduced their inventories.  Despite a reduction in
 brass-rod imports, domestic shipments continued to be lower than comparable
 periods last year and this resulted in downward pricing pressures and lower
 prices.
 
     Balance Sheet Strengthened
     The company ended the quarter with no debt and $17.3 million of cash,
 compared with debt of $28.3 million, including accrued interest, and
 $4 million cash at December 31, 2000.  Approximately $7.5 million of capital
 expenditures were incurred, primarily for Project 400.
 
     SG&A/Manufacturing Expenses Reduced
     Selling, general and administrative expenses were $4 million in the first
 quarter compared with $2 million in the first quarter last year, reflecting
 the incremental consulting and legal expenses required to respond to the
 unsolicited tender offer. If these expenses of approximately $2.6 million are
 excluded, SG&A expenses were lower due to spending controls and cost
 reductions instituted in the quarter.
     In response to lower profitability, manufacturing expenses compared with
 the first quarter last year were reduced by eliminating overtime and
 discretionary spending. Manufacturing costs were reduced despite contractual
 labor rate increases and significantly higher utility costs.
 
     Current Outlook
     The company believes the current level of soft demand for brass rod will
 continue during the remainder of the year. Alonzo said, "We are examining all
 aspects of our business for cost reductions, have instituted a hiring freeze,
 and deferred capital expenditures, where appropriate, to reduce costs and
 increase cash flow."  Inventory levels were reduced by $6.5 million or
 22 percent during the first quarter and are being closely monitored to keep
 them in line with lower sales demand.  Alonzo noted that with declining
 interest rates, the economy should turn around by year end.
     Chase Brass & Copper Company, employing more than 300 people at its
 Montpelier, Ohio, plant, is an ISO 9002 certified manufacturer and supplier of
 free-machining brass rod in the United States and Canada.  Its diverse
 customer base of more than 250 companies uses Chase's "Blue Dot" trademark rod
 to produce a variety of products, such as plumbing fixtures, heating and air
 conditioning components, industrial valves, automotive parts, and numerous
 hardware components.
 
     Chase Industries is traded on the New York Stock Exchange under the symbol
 CSI.
 
     Safe Harbor Disclaimer: This press release contains forward looking
 statements regarding the operations of the Company and the industries in which
 it operates.  These statements are identified by the use of words such as
 "believe," "expects," "anticipates," "will," "should" and other words
 referring to events to occur in the future.  Management uses estimates and
 assumptions in forming the basis for such forward looking statements. Such
 estimates and assumptions, including forecasts regarding demand and pricing
 for the Company's products, are subject to risks and uncertainties which could
 cause actual results to differ materially from historical results or those
 anticipated, as described in forward looking statements.  Actual results will
 be affected by general economic and industry conditions in the end use markets
 for the Company's products as well as the impact of competitive products and
 pricing, including without limitation the impact of imports.  Foreign economic
 activity and the relationship of the U.S. dollar to other currencies also
 affect import levels and exports of U.S. manufactured products containing
 parts made from brass rod.  The Company's shipments also will be affected by
 its ability to maintain manufacturing operations at its current levels without
 significant interruption.
 
     For more information about Chase Industries Inc., free of charge via fax,
 dial 1-800-PRO-INFO and use ticker symbol CSI.
 
 
                                   CHASE INDUSTRIES INC.
                                CONSOLIDATED BALANCE SHEET
                                      (in thousands)
 
                                             March 31,  December 31,  March 31,
                                                2001        2000        2000
 
     Assets
 
     Cash and cash equivalents                $17,278      $3,993      $1,187
 
     Receivables, net                          27,880      24,214      31,348
 
     Inventories                               22,595      29,072      20,601
 
     Deferred income taxes                      8,679       3,251       2,654
 
     Other current assets                       1,557      22,853      18,774
 
 
        Current assets                         77,989      83,383      74,564
 
     Net assets of discontinued
       operations                              --          38,161      79,643
 
     Property, plant and
       equipment, net                          81,441      75,659      63,146
 
 
         Total assets                        $159,430    $197,203    $217,353
 
     Liabilities and Stockholders'
       Equity
 
     Accounts payable and accrued
       liabilities                            $20,046     $34,318     $33,166
 
     Accrued income taxes                       2,660       2,692       3,234
 
     Interest payable, seller's
              note                             --           8,345       6,946
 
     Current portion of long-term
       debt, seller's note                     --          20,000      --
 
 
         Current liabilities                   22,706      65,355      43,346
 
     Long-term debt                            --          --          27,361
 
     Other long-term liabilities                8,434      --          --
 
     Deferred income taxes                      8,998      14,354       6,923
 
       Total liabilities                       40,138      79,709      77,630
 
    Stockholders' equity                      119,292     117,494     139,723
 
       Total liabilities and
         stockholders' equity                $159,430    $197,203    $217,353
 
 
 
                                    CHASE INDUSTRIES INC.
                              CONSOLIDATED STATEMENT OF INCOME
                          (In thousands, except per share amounts)
 
                                                    Quarter Ended March 31,
                                                 2001        2000       % Chg
 
     Net sales                                 $66,207     $81,635         (19)
 
     Cost of goods sold                         57,789      68,289         (15)
 
        Gross profit                             8,418      13,346         (37)
 
     Selling, general &
       administrative                            1,450       2,067         (30)
       - Tender offer
           expenses                              2,560       --             --
 
     Depreciation                                1,707       1,543          11
 
        Operating income                         2,701       9,736         (72)
 
     Interest expense, net                         183         361         (49)
 
        Income before income
          taxes                                  2,518       9,375         (73)
 
     Provision for income taxes                    894       3,562         (75)
 
        Income from continuing
          operations                             1,624       5,813         (72)
 
     Discontinued operations:
        Income (loss), net of income
          taxes                                    $79       ($136)       (158)
 
 
         Net income                             $1,703      $5,677         (70)
 
     Average shares outstanding:
        Basic                                   15,290      15,235          --
 
        Diluted                                 15,488      15,347           1
 
     Basic earnings per share:
       Continuing operations                     $0.11       $0.38         (71)
       Discontinued operations                   --         ($0.01)       (100)
 
                                                 $0.11       $0.37         (70)
 
     Diluted earnings per share:
       Continuing operations                     $0.10       $0.38         (74)
       Discontinued operations                   $0.01      ($0.01)       (200)
 
                                                 $0.11       $0.37         (70)
 
 
 
                                    CHASE INDUSTRIES INC.
                            CONSOLIDATED STATEMENT OF CASH FLOWS
                                       (in thousands)
 
                                                       Quarter Ended March 31,
                                                       2001              2000
     Operating activities:
 
     Income from continuing
        operations                                   $1,624            $5,813
 
     Depreciation                                     1,707             1,543
 
     Change in receivables,
       inventory, payables and
       liabilities                                  (11,014)          (14,282)
 
     BP settlement                                   (2,000)              --
 
     Deferred income tax expense                        602                53
 
     Other, net                                        (271)            3,068
 
 
     Net cash (used in)
       continuing operations                         (9,352)           (3,805)
 
     Net cash (used in)
       discontinued operations                       (1,515)           (1,947)
 
        Net cash (used in)
          operating activities                      (10,867)           (5,752)
 
     Investing activities:
 
        Proceeds from sale of
          discontinued operations                    31,546               --
 
        Expenditures for property,
           plant and equipment                       (7,489)           (2,553)
 
            Net cash provided by
              (used in) investing
              activities                             24,057            (2,553)
 
     Financing activities:
 
       Net borrowings of debt                           --                361
 
       Issuance of common stock -
         options exercised                              95               --
 
 
          Net cash provided by
            financing activities                        95               361
 
 
     Net increase (decrease) in
       cash and cash equivalents                    13,285            (7,944)
 
     Cash and cash equivalents at
       beginning of period                           3,993             9,131
 
 
     Cash and cash equivalents at
       end of period                               $17,278            $1,187
 
 
                     MAKE YOUR OPINION COUNT -  Click Here
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SOURCE Chase Industries, Inc.
    MONTPELIER, Ohio, April 25 /PRNewswire/ -- Chase Industries Inc.
 (NYSE:   CSI) today reported first-quarter earnings of $3.4 million, or 22 cents
 per diluted share, compared with $5.7 million, or 37 cents per diluted share,
 in the first quarter last year, excluding the impact of 2001 expenses
 equivalent to 11 cents per diluted share to respond to an unsolicited tender
 offer.  Including the tender offer expenses, net income was $1.7 million, or
 11 cents per diluted share.
     The subcommittee of the board, composed of the four outside directors,
 will continue to evaluate options that it believes are in the best interests
 of the company and its stockholders even though the tender offer expired
 January 31.
     Regarding the first quarter earnings, Martin V. Alonzo, Chairman,
 President and CEO said, "Our financial results were impacted by the economic
 slow down, which began in the third quarter of last year.  However, based on
 historical experience, the two percentage point reduction in interest rates by
 the Federal Reserve since the beginning of the year should reinvigorate the
 economy by year end and result in positive company quarterly comparisons in
 2002."
     Alonzo also stated, "During the quarter we accomplished several important
 objectives and significantly strengthened our balance sheet:
 
     -- "We negotiated a settlement with British Petroleum (BP), the former
        owners of our Montpelier, Ohio brass-rod mill, relating to
        litigation of a number of environmental and financial disputes.  With
        payment to BP of $2 million, the settlement eliminated about
        $28 million of debt and interest payable to BP and approximately
        $1.9 million of interest expense annually. We also avoid the cost and
        uncertainty of continuing the litigation, while BP retains financial
        responsibility for residual contamination on the site. We are very
        pleased to have this behind us.
 
     -- "We sold Leavitt Tube to Pinkert Industrial Group LLC on March 30 for
        approximately $32 million and expect to ultimately realize $40 million
        of cash, including tax benefits.
 
     -- "The combination of the BP settlement and the sale of Leavitt
        eliminated all debt and interest payable -- about $40 million at the
        time of closing -- from our balance sheet and resulted in $17.3 million
        of cash on hand at the end of the quarter.
 
     -- "And finally, we made substantial progress on Phase III of Project 400,
        completing the majority of the buildings and equipment foundations
        necessary to accommodate the new equipment.  We are on budget and on
        time to start-up some of the equipment later this year, with all the
        new equipment fully operational in Q2 of 2002.  Phase III is the final
        step to achieve in excess of 400 million pounds of capacity at our
        Montpelier, Ohio brass-rod mill and represents a $50 million investment
        in new finishing equipment, billet heaters and an extrusion press.  We
        expect to finance the remaining investment with internally generated
        funds."
 
     Net Sales Lower Due To Lower Shipments/Prices
     Net sales decreased 19 percent to $66 million in the first quarter from
 $82 million last year due to lower shipments and prices.  The downturn in the
 economy began impacting brass-rod demand in the third quarter of last year and
 continued into the first quarter, as our customers experienced lower demand
 for their products, and reduced their inventories.  Despite a reduction in
 brass-rod imports, domestic shipments continued to be lower than comparable
 periods last year and this resulted in downward pricing pressures and lower
 prices.
 
     Balance Sheet Strengthened
     The company ended the quarter with no debt and $17.3 million of cash,
 compared with debt of $28.3 million, including accrued interest, and
 $4 million cash at December 31, 2000.  Approximately $7.5 million of capital
 expenditures were incurred, primarily for Project 400.
 
     SG&A/Manufacturing Expenses Reduced
     Selling, general and administrative expenses were $4 million in the first
 quarter compared with $2 million in the first quarter last year, reflecting
 the incremental consulting and legal expenses required to respond to the
 unsolicited tender offer. If these expenses of approximately $2.6 million are
 excluded, SG&A expenses were lower due to spending controls and cost
 reductions instituted in the quarter.
     In response to lower profitability, manufacturing expenses compared with
 the first quarter last year were reduced by eliminating overtime and
 discretionary spending. Manufacturing costs were reduced despite contractual
 labor rate increases and significantly higher utility costs.
 
     Current Outlook
     The company believes the current level of soft demand for brass rod will
 continue during the remainder of the year. Alonzo said, "We are examining all
 aspects of our business for cost reductions, have instituted a hiring freeze,
 and deferred capital expenditures, where appropriate, to reduce costs and
 increase cash flow."  Inventory levels were reduced by $6.5 million or
 22 percent during the first quarter and are being closely monitored to keep
 them in line with lower sales demand.  Alonzo noted that with declining
 interest rates, the economy should turn around by year end.
     Chase Brass & Copper Company, employing more than 300 people at its
 Montpelier, Ohio, plant, is an ISO 9002 certified manufacturer and supplier of
 free-machining brass rod in the United States and Canada.  Its diverse
 customer base of more than 250 companies uses Chase's "Blue Dot" trademark rod
 to produce a variety of products, such as plumbing fixtures, heating and air
 conditioning components, industrial valves, automotive parts, and numerous
 hardware components.
 
     Chase Industries is traded on the New York Stock Exchange under the symbol
 CSI.
 
     Safe Harbor Disclaimer: This press release contains forward looking
 statements regarding the operations of the Company and the industries in which
 it operates.  These statements are identified by the use of words such as
 "believe," "expects," "anticipates," "will," "should" and other words
 referring to events to occur in the future.  Management uses estimates and
 assumptions in forming the basis for such forward looking statements. Such
 estimates and assumptions, including forecasts regarding demand and pricing
 for the Company's products, are subject to risks and uncertainties which could
 cause actual results to differ materially from historical results or those
 anticipated, as described in forward looking statements.  Actual results will
 be affected by general economic and industry conditions in the end use markets
 for the Company's products as well as the impact of competitive products and
 pricing, including without limitation the impact of imports.  Foreign economic
 activity and the relationship of the U.S. dollar to other currencies also
 affect import levels and exports of U.S. manufactured products containing
 parts made from brass rod.  The Company's shipments also will be affected by
 its ability to maintain manufacturing operations at its current levels without
 significant interruption.
 
     For more information about Chase Industries Inc., free of charge via fax,
 dial 1-800-PRO-INFO and use ticker symbol CSI.
 
 
                                   CHASE INDUSTRIES INC.
                                CONSOLIDATED BALANCE SHEET
                                      (in thousands)
 
                                             March 31,  December 31,  March 31,
                                                2001        2000        2000
 
     Assets
 
     Cash and cash equivalents                $17,278      $3,993      $1,187
 
     Receivables, net                          27,880      24,214      31,348
 
     Inventories                               22,595      29,072      20,601
 
     Deferred income taxes                      8,679       3,251       2,654
 
     Other current assets                       1,557      22,853      18,774
 
 
        Current assets                         77,989      83,383      74,564
 
     Net assets of discontinued
       operations                              --          38,161      79,643
 
     Property, plant and
       equipment, net                          81,441      75,659      63,146
 
 
         Total assets                        $159,430    $197,203    $217,353
 
     Liabilities and Stockholders'
       Equity
 
     Accounts payable and accrued
       liabilities                            $20,046     $34,318     $33,166
 
     Accrued income taxes                       2,660       2,692       3,234
 
     Interest payable, seller's
              note                             --           8,345       6,946
 
     Current portion of long-term
       debt, seller's note                     --          20,000      --
 
 
         Current liabilities                   22,706      65,355      43,346
 
     Long-term debt                            --          --          27,361
 
     Other long-term liabilities                8,434      --          --
 
     Deferred income taxes                      8,998      14,354       6,923
 
       Total liabilities                       40,138      79,709      77,630
 
    Stockholders' equity                      119,292     117,494     139,723
 
       Total liabilities and
         stockholders' equity                $159,430    $197,203    $217,353
 
 
 
                                    CHASE INDUSTRIES INC.
                              CONSOLIDATED STATEMENT OF INCOME
                          (In thousands, except per share amounts)
 
                                                    Quarter Ended March 31,
                                                 2001        2000       % Chg
 
     Net sales                                 $66,207     $81,635         (19)
 
     Cost of goods sold                         57,789      68,289         (15)
 
        Gross profit                             8,418      13,346         (37)
 
     Selling, general &
       administrative                            1,450       2,067         (30)
       - Tender offer
           expenses                              2,560       --             --
 
     Depreciation                                1,707       1,543          11
 
        Operating income                         2,701       9,736         (72)
 
     Interest expense, net                         183         361         (49)
 
        Income before income
          taxes                                  2,518       9,375         (73)
 
     Provision for income taxes                    894       3,562         (75)
 
        Income from continuing
          operations                             1,624       5,813         (72)
 
     Discontinued operations:
        Income (loss), net of income
          taxes                                    $79       ($136)       (158)
 
 
         Net income                             $1,703      $5,677         (70)
 
     Average shares outstanding:
        Basic                                   15,290      15,235          --
 
        Diluted                                 15,488      15,347           1
 
     Basic earnings per share:
       Continuing operations                     $0.11       $0.38         (71)
       Discontinued operations                   --         ($0.01)       (100)
 
                                                 $0.11       $0.37         (70)
 
     Diluted earnings per share:
       Continuing operations                     $0.10       $0.38         (74)
       Discontinued operations                   $0.01      ($0.01)       (200)
 
                                                 $0.11       $0.37         (70)
 
 
 
                                    CHASE INDUSTRIES INC.
                            CONSOLIDATED STATEMENT OF CASH FLOWS
                                       (in thousands)
 
                                                       Quarter Ended March 31,
                                                       2001              2000
     Operating activities:
 
     Income from continuing
        operations                                   $1,624            $5,813
 
     Depreciation                                     1,707             1,543
 
     Change in receivables,
       inventory, payables and
       liabilities                                  (11,014)          (14,282)
 
     BP settlement                                   (2,000)              --
 
     Deferred income tax expense                        602                53
 
     Other, net                                        (271)            3,068
 
 
     Net cash (used in)
       continuing operations                         (9,352)           (3,805)
 
     Net cash (used in)
       discontinued operations                       (1,515)           (1,947)
 
        Net cash (used in)
          operating activities                      (10,867)           (5,752)
 
     Investing activities:
 
        Proceeds from sale of
          discontinued operations                    31,546               --
 
        Expenditures for property,
           plant and equipment                       (7,489)           (2,553)
 
            Net cash provided by
              (used in) investing
              activities                             24,057            (2,553)
 
     Financing activities:
 
       Net borrowings of debt                           --                361
 
       Issuance of common stock -
         options exercised                              95               --
 
 
          Net cash provided by
            financing activities                        95               361
 
 
     Net increase (decrease) in
       cash and cash equivalents                    13,285            (7,944)
 
     Cash and cash equivalents at
       beginning of period                           3,993             9,131
 
 
     Cash and cash equivalents at
       end of period                               $17,278            $1,187
 
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X85467387
 
 SOURCE  Chase Industries, Inc.