Hallwood Group Reports Results for the Fourth Quarter and Year Ended December 31, 2000

Apr 10, 2001, 01:00 ET from The Hallwood Group Incorporated

    DALLAS, April 10 /PRNewswire/ -- The Hallwood Group Incorporated
 (Amex:   HWG) today reported results for the fourth quarter and year ended
 December 31, 2000.  Results include the former hotels business segment
 reported as a discontinued operation; therefore, 1999 results have been
 reclassified for comparability.
     For the quarter, income from continuing operations was $1.3 million, or
 $0.81 per share, compared to a loss of $237,000, or $0.13 per share for 1999,
 on revenue of $20.0 million and $19.5 million, respectively.  The net loss was
 $4.5 million, or $2.57 per share, compared to net loss of $1.5 million, or
 $0.84 per share, in 1999.  The 2000 quarter loss included a $5.7 million loss
 from discontinued operations, a tax benefit of $1.5 million and an
 $85,000 extraordinary loss from the early extinguishment of debt of its real
 estate affiliate.  The 1999 quarter loss included a $1.5 million loss from
 discontinued operations, a $1.8 million non-cash loss from redemption of
 treasury stock, a tax benefit of $1.2 million and an extraordinary gain from
 early extinguishment of debt of $240,000.
     For the year, income from continuing operations was $3.5 million, or
 $2.25 per share, compared to $4.4 million, or $2.31 per share, in 1999, on
 revenue of $83.3 million and $93.4 million, respectively.  The net loss was
 $4.9 million, or $3.04 per share, compared to net income of $1.7 million, or
 $0.88 per share, in 1999.  The net loss for 2000 included a $8.3 million loss
 from discontinued operations, a tax benefit of $1.2 million and an
 extraordinary loss of $85,000.  The net income for 1999 included a
 $3.0 million loss from discontinued operations, a tax benefit of $1.0 million
 and an extraordinary gain of $240,000.
     Following is a comparison of results by business segment for the fourth
 quarters and years ended December 31, 2000 and 1999:
     Real Estate -- The real estate segment reported income of $582,000, on
 revenue of $1.5 million in the 2000 quarter, compared to income of
 $1.0 million, on revenue of $1.8 million in 1999.
     For the year, the real estate segment reported income of $3.8 million, on
 revenue of $6.5 million, compared to income of $6.5 million, on revenue of
 $9.5 million in 1999.
 
     Energy -- The energy segment reported income of $333,000, on revenue of
 $333,000 in the 2000 quarter, compared to income of $164,000 on revenue of
 $190,000 in 1999.
     For the year, the energy segment reported income and revenue of
 $2.8 million, on the equity method of accounting, compared to income of
 $438,000 and revenue of $2.9 million in 1999, of which $380,000 was income and
 revenue on the equity method.  The Company began accounting for its investment
 in its energy affiliate, Hallwood Energy Corporation (Nasdaq:   HECO), under the
 equity method, effective June 8, 1999.
     On March 30, 2001, Hallwood Energy Corporation announced that it had
 signed a definitive merger agreement pursuant to which Pure Resources II,
 Inc., an indirect wholly owned subsidiary of Pure Resources, Inc., will
 acquire all the outstanding common stock of Hallwood Energy at a price of
 $12.50 per share and all the outstanding shares of Series A Cumulative
 Preferred Stock of Hallwood Energy at a price of $10.84 per share.  The all-
 cash transaction, which is subject to a number of conditions, is structured as
 a first step tender offer followed by a cash merger to acquire all remaining
 shares of Hallwood Energy.  The Company also agreed to tender all of its
 shares of common stock in the tender offer and granted to Pure an irrevocable
 proxy to vote in favor of the merger, on the same terms as provided in the
 merger agreement.
 
     Textile Products -- The textile products segment reported income of
 $140,000 in the 2000 quarter, on revenue of $18.1 million, compared to income
 of $98,000 in the 1999 quarter, on revenue of $17.5 million.
     For the year, the textile products segment reported income of $455,000, on
 revenue of $73.9 million, compared to income of $1.6 million, on revenue of
 $80.7 million in 1999.
 
     Other, consisting of administrative expenses and debenture and bank loan
 interest, principally reported a loss of $1.3 million in the 2000 quarter,
 compared to a loss of $2.7 million in the 1999 quarter.  The 1999 quarter
 included a $1.8 million non-cash loss from redemption of treasury stock.
 For the year, the loss was $4.8 million, compared to $5.1 million 1999.
 
     Income taxes (benefit) -- The Company reported an income tax (benefit) of
 $1.5 million in the 2000 quarter, compared to an income tax (benefit) of
 $1.2 million in 1999.
     For the year, the income tax (benefit) was $1.2 million, compared to an
 income tax (benefit) of $1.0 million in 1999.
 
     Discontinued Operations -- The discontinued hotels segment reported a loss
 of $5.7 million in the 2000 quarter, including non-cash charges of
 $4.0 million for impairment of long lived assets and $811,000 for depreciation
 and amortization, compared to a loss of $1.5 million, including a non-cash
 charge for depreciation and amortization of $791,000 in 1999.
     For the year, the loss from discontinued operations was $8.3 million,
 compared to a loss of $3.0 million in 1999.
 
     Extraordinary gain (loss) -- The Company reported an extraordinary loss of
 $85,000 in the fourth quarter of 2000 from the early extinguishment of debt of
 its real estate affiliate, compared to an extraordinary gain of $240,000 in
 the fourth quarter of 1999, from the early retirement of the Company's 7%
 Debentures.
 
     The following table sets forth selected financial information for the
 fourth quarters and years ended December 31, 2000 and 1999, respectively.
 
                        THE HALLWOOD GROUP INCORPORATED
                    (In thousands, except per share amounts)
 
                                  Fourth Quarters Ended       Years Ended
                                       December 31,           December 31,
                                      2000       1999       2000       1999
 
     Revenue                        $19,973    $19,482    $83,252    $93,446
 
     Income (loss) from continuing
      operations before income tax
      (benefit) and extraordinary
      gain (loss)                     $(202)   $(1,471)   $ 2,274    $ 3,422
     Income tax (benefit)            (1,543)    (1,234)    (1,210)    (1,014)
     Income (loss) from continuing
      operations before
      extraordinary gain (loss)       1,341       (237)     3,484      4,436
     Loss from discontinued
      operations, net of tax         (5,747)    (1,534)    (8,266)    (2,957)
     Income (loss) before
      extraordinary gain (loss)      (4,406)    (1,771)    (4,782)     1,479
     Extraordinary gain (loss)          (85)       240        (85)       240
     Net income (loss)               (4,491)    (1,531)    (4,867)     1,719
     Less: Preferred dividends          ---        ---         50         50
     Net income (loss) available
      to common stockholders        $(4,491)   $(1,531)   $(4,917)   $ 1,669
 
     PER COMMON SHARE
     BASIC:
     Income (loss) from continuing
      operations before
      extraordinary gain (loss)      $ 0.94     $(0.13)    $ 2.41      $2.34
     Loss from discontinued
      operations                      (4.03)     (0.84)     (5.80)     (1.58)
     Extraordinary gain (loss)        (0.06)      0.13      (0.06)      0.13
     Net income (loss)               $(3.15)    $(0.84)    $(3.45)     $0.89
 
     Weighted average shares
      outstanding                     1,425      1,833      1,425      1,870
 
     ASSUMING DILUTION:
     Income (loss) from continuing
      operations before
      extraordinary gain (loss)      $ 0.81     $(0.13)    $ 2.25      $2.31
     Loss from discontinued
      operations                      (3.33)     (0.84)     (5.24)     (1.56)
     Extraordinary gain (loss)        (0.05)      0.13      (0.05)      0.13
     Net income (loss)               $(2.57)    $(0.84)    $(3.04)     $0.88
 
     Weighted average shares
      outstanding                     1,727      1,833      1,579      1,899
 
     Certain statements in this press release may constitute "forward-looking
 statements", which are subject to known and unknown risks and uncertainties
 including, among other things, certain economic conditions, competition,
 development factors and operating costs that may cause the actual results to
 differ materially from results implied by such forward-looking statements.
 
 

SOURCE The Hallwood Group Incorporated
    DALLAS, April 10 /PRNewswire/ -- The Hallwood Group Incorporated
 (Amex:   HWG) today reported results for the fourth quarter and year ended
 December 31, 2000.  Results include the former hotels business segment
 reported as a discontinued operation; therefore, 1999 results have been
 reclassified for comparability.
     For the quarter, income from continuing operations was $1.3 million, or
 $0.81 per share, compared to a loss of $237,000, or $0.13 per share for 1999,
 on revenue of $20.0 million and $19.5 million, respectively.  The net loss was
 $4.5 million, or $2.57 per share, compared to net loss of $1.5 million, or
 $0.84 per share, in 1999.  The 2000 quarter loss included a $5.7 million loss
 from discontinued operations, a tax benefit of $1.5 million and an
 $85,000 extraordinary loss from the early extinguishment of debt of its real
 estate affiliate.  The 1999 quarter loss included a $1.5 million loss from
 discontinued operations, a $1.8 million non-cash loss from redemption of
 treasury stock, a tax benefit of $1.2 million and an extraordinary gain from
 early extinguishment of debt of $240,000.
     For the year, income from continuing operations was $3.5 million, or
 $2.25 per share, compared to $4.4 million, or $2.31 per share, in 1999, on
 revenue of $83.3 million and $93.4 million, respectively.  The net loss was
 $4.9 million, or $3.04 per share, compared to net income of $1.7 million, or
 $0.88 per share, in 1999.  The net loss for 2000 included a $8.3 million loss
 from discontinued operations, a tax benefit of $1.2 million and an
 extraordinary loss of $85,000.  The net income for 1999 included a
 $3.0 million loss from discontinued operations, a tax benefit of $1.0 million
 and an extraordinary gain of $240,000.
     Following is a comparison of results by business segment for the fourth
 quarters and years ended December 31, 2000 and 1999:
     Real Estate -- The real estate segment reported income of $582,000, on
 revenue of $1.5 million in the 2000 quarter, compared to income of
 $1.0 million, on revenue of $1.8 million in 1999.
     For the year, the real estate segment reported income of $3.8 million, on
 revenue of $6.5 million, compared to income of $6.5 million, on revenue of
 $9.5 million in 1999.
 
     Energy -- The energy segment reported income of $333,000, on revenue of
 $333,000 in the 2000 quarter, compared to income of $164,000 on revenue of
 $190,000 in 1999.
     For the year, the energy segment reported income and revenue of
 $2.8 million, on the equity method of accounting, compared to income of
 $438,000 and revenue of $2.9 million in 1999, of which $380,000 was income and
 revenue on the equity method.  The Company began accounting for its investment
 in its energy affiliate, Hallwood Energy Corporation (Nasdaq:   HECO), under the
 equity method, effective June 8, 1999.
     On March 30, 2001, Hallwood Energy Corporation announced that it had
 signed a definitive merger agreement pursuant to which Pure Resources II,
 Inc., an indirect wholly owned subsidiary of Pure Resources, Inc., will
 acquire all the outstanding common stock of Hallwood Energy at a price of
 $12.50 per share and all the outstanding shares of Series A Cumulative
 Preferred Stock of Hallwood Energy at a price of $10.84 per share.  The all-
 cash transaction, which is subject to a number of conditions, is structured as
 a first step tender offer followed by a cash merger to acquire all remaining
 shares of Hallwood Energy.  The Company also agreed to tender all of its
 shares of common stock in the tender offer and granted to Pure an irrevocable
 proxy to vote in favor of the merger, on the same terms as provided in the
 merger agreement.
 
     Textile Products -- The textile products segment reported income of
 $140,000 in the 2000 quarter, on revenue of $18.1 million, compared to income
 of $98,000 in the 1999 quarter, on revenue of $17.5 million.
     For the year, the textile products segment reported income of $455,000, on
 revenue of $73.9 million, compared to income of $1.6 million, on revenue of
 $80.7 million in 1999.
 
     Other, consisting of administrative expenses and debenture and bank loan
 interest, principally reported a loss of $1.3 million in the 2000 quarter,
 compared to a loss of $2.7 million in the 1999 quarter.  The 1999 quarter
 included a $1.8 million non-cash loss from redemption of treasury stock.
 For the year, the loss was $4.8 million, compared to $5.1 million 1999.
 
     Income taxes (benefit) -- The Company reported an income tax (benefit) of
 $1.5 million in the 2000 quarter, compared to an income tax (benefit) of
 $1.2 million in 1999.
     For the year, the income tax (benefit) was $1.2 million, compared to an
 income tax (benefit) of $1.0 million in 1999.
 
     Discontinued Operations -- The discontinued hotels segment reported a loss
 of $5.7 million in the 2000 quarter, including non-cash charges of
 $4.0 million for impairment of long lived assets and $811,000 for depreciation
 and amortization, compared to a loss of $1.5 million, including a non-cash
 charge for depreciation and amortization of $791,000 in 1999.
     For the year, the loss from discontinued operations was $8.3 million,
 compared to a loss of $3.0 million in 1999.
 
     Extraordinary gain (loss) -- The Company reported an extraordinary loss of
 $85,000 in the fourth quarter of 2000 from the early extinguishment of debt of
 its real estate affiliate, compared to an extraordinary gain of $240,000 in
 the fourth quarter of 1999, from the early retirement of the Company's 7%
 Debentures.
 
     The following table sets forth selected financial information for the
 fourth quarters and years ended December 31, 2000 and 1999, respectively.
 
                        THE HALLWOOD GROUP INCORPORATED
                    (In thousands, except per share amounts)
 
                                  Fourth Quarters Ended       Years Ended
                                       December 31,           December 31,
                                      2000       1999       2000       1999
 
     Revenue                        $19,973    $19,482    $83,252    $93,446
 
     Income (loss) from continuing
      operations before income tax
      (benefit) and extraordinary
      gain (loss)                     $(202)   $(1,471)   $ 2,274    $ 3,422
     Income tax (benefit)            (1,543)    (1,234)    (1,210)    (1,014)
     Income (loss) from continuing
      operations before
      extraordinary gain (loss)       1,341       (237)     3,484      4,436
     Loss from discontinued
      operations, net of tax         (5,747)    (1,534)    (8,266)    (2,957)
     Income (loss) before
      extraordinary gain (loss)      (4,406)    (1,771)    (4,782)     1,479
     Extraordinary gain (loss)          (85)       240        (85)       240
     Net income (loss)               (4,491)    (1,531)    (4,867)     1,719
     Less: Preferred dividends          ---        ---         50         50
     Net income (loss) available
      to common stockholders        $(4,491)   $(1,531)   $(4,917)   $ 1,669
 
     PER COMMON SHARE
     BASIC:
     Income (loss) from continuing
      operations before
      extraordinary gain (loss)      $ 0.94     $(0.13)    $ 2.41      $2.34
     Loss from discontinued
      operations                      (4.03)     (0.84)     (5.80)     (1.58)
     Extraordinary gain (loss)        (0.06)      0.13      (0.06)      0.13
     Net income (loss)               $(3.15)    $(0.84)    $(3.45)     $0.89
 
     Weighted average shares
      outstanding                     1,425      1,833      1,425      1,870
 
     ASSUMING DILUTION:
     Income (loss) from continuing
      operations before
      extraordinary gain (loss)      $ 0.81     $(0.13)    $ 2.25      $2.31
     Loss from discontinued
      operations                      (3.33)     (0.84)     (5.24)     (1.56)
     Extraordinary gain (loss)        (0.05)      0.13      (0.05)      0.13
     Net income (loss)               $(2.57)    $(0.84)    $(3.04)     $0.88
 
     Weighted average shares
      outstanding                     1,727      1,833      1,579      1,899
 
     Certain statements in this press release may constitute "forward-looking
 statements", which are subject to known and unknown risks and uncertainties
 including, among other things, certain economic conditions, competition,
 development factors and operating costs that may cause the actual results to
 differ materially from results implied by such forward-looking statements.
 
 SOURCE  The Hallwood Group Incorporated