Industrial Holdings, Inc. Releases Fourth Quarter and Year-End Results

Apr 17, 2001, 01:00 ET from Industrial Holdings, Inc.

    HOUSTON, April 17 /PRNewswire/ -- Industrial Holdings, Inc. (Nasdaq:   IHII)
 (the "Company") reported today its financial results for the fourth quarter
 and year ended December 31, 2000.  The Company reported a net loss from
 continuing operations of $11.9 million (a loss of $0.87 per share) on revenues
 of $49.4 million for the three months ended December 31, 2000 as compared to a
 net loss from continuing operations of $12.7 million (a loss of $0.83 per
 share) for the three months ended December 31, 1999 on revenues of
 $39.0 million.  For the year ended December 31, 2000, the Company reported a
 net loss from continuing operations of $17.0 million (a loss of $1.21 per
 share) on revenues of $186.2 million as compared to a net loss from continuing
 operations of $16.2 million (a loss of $1.08 per share) on revenues of
 $202.5 million for the year ended December 31, 1999.  The Company reported a
 net loss from discontinued operations of $23.1 million (a loss of $1.68 per
 share) for the three months ended December 31, 2000 as compared to a net loss
 from discontinued operations of $1.6 million (a loss of $0.12 per share) for
 the three months ended December 31, 1999.  For the year ended December 31,
 2000, the Company reported a net loss from discontinued operations of
 $22.5 million (a loss of $1.60 per share) as compared to a net loss from
 discontinued operations of $2.9 million (a loss of $0.19 per share) for the
 year ended December 31, 1999.
     In December 2000, the Company's Board of Directors made the decision to
 actively seek a purchaser for the Company's Engineered Products Group ("EPG")
 and adopted a plan of disposal.  EPG's customer base is comprised of various
 consumer product industries, including automotive and home furnishings.  Our
 remaining groups, the Energy Group, the Stud Bolt and Gasket Group and the
 Heavy Fabrication Group, each serve various sectors of the energy industry.
 The Company believes that divesting of EPG will allow it to strategically
 focus on the energy market.  The Company also believes the ability to
 concentrate both management and financial resources on a single market will
 allow it to successfully capitalize on the opportunities in that market.
 Additionally, the proceeds from the sale of EPG will be used to reduce the
 Company's indebtedness, resulting in a financially healthier IHI.
     In connection with adopting a plan of disposal for EPG, the Company has
 reclassified EPG's results as Discontinued Operations and restated its prior
 results to exclude EPG from its Continuing Operations.
     Contained within the results from continuing operations for the fourth
 quarter of 2000 were a number of charges, which include approximately
 $7.0 million for the write-off of the Company's investment in Belleli Energy,
 S.r.L.; approximately $2.1 million in losses associated with the Company's
 sale of Blastco Services Company; severance and other personnel expenses of
 approximately $1.0 million; weather-related losses of approximately
 $0.5 million at the Company's Heavy Fabrication subsidiary; and approximately
 $0.5 million in losses on the liquidation of the net assets of one of the
 Company's distribution facilities.  Excluding these charges, the Company's
 earnings before interest, taxes, depreciation and amortization (EBITDA) for
 the fourth quarter of 2000 would have been approximately $3.0 million as
 compared with EBITDA of approximately a negative $3.9 million for the fourth
 quarter of 1999 (excluding certain charges of approximately $7.9 million from
 the fourth quarter of 1999).
     Commenting on the quarter and year, Robert E. Cone, President and CEO,
 said, "We are all very excited about the bright future for IHI.  There seems
 to be some confusion regarding the previously-announced transaction with T-3
 Energy and First Reserve.  When this transaction is completed in the third
 quarter, T-3 Energy will be the majority shareholder in IHI.  The publicly-
 traded corporate entity that is IHI today will be the surviving entity,
 properly capitalized, and positioned to take advantage of the strong trends in
 the oil and gas services industry.  The hard work of a committed team of
 employees, managers, lenders, customers and suppliers has begun to pay off.
 Now we look forward to augmenting our team with T-3 Energy and the financial
 and strategic partner of First Reserve.  A year ago we were facing numerous
 obstacles, including depressed oil prices still recovering from a low of under
 $12 per barrel.  Oil and natural gas prices are strong now and I expect 2001
 to be a banner year for our Energy Group as our energy customers increase
 their capital expenditures.  For example, in the fourth quarter of 2000 sales
 in our Energy Group are up over 40% from 1999 fourth quarter levels.  I hope
 the shareholders that have remained with us through the tough times are as
 upbeat about our future as we are, and I anticipate that they will be rewarded
 for their stamina and support."
     Our summarized financial information for the 3-month and 12-month periods
 for 2000 and 1999 are as follows:
 
                                Three Months Ended       Twelve Months Ended
                                   December 31,             December 31,
                                2000          1999         2000        1999
                                   (In thousands, except per share data)
                                                (Unaudited)
 
     Sales                    $49,371       $39,033     $186,201    $202,457
 
     Operating loss            (3,047)       (6,772)      (3,258)     (9,848)
 
     Loss from continuing
      operations              (11,890)      (12,721)     (16,977)    (16,180)
 
     Loss from discontinued
      operations              (23,063)       (1,614)     (22,527)     (2,853)
 
     Net loss                $(34,953)     $(14,335)    $(39,504)   $(19,033)
 
     Loss per share -
      Basic and Diluted:
       Continuing              $(0.87)       $(0.83)      $(1.21)     $(1.08)
       Discontinued             (1.68)        (0.12)       (1.60)      (0.19)
       Net loss                $(2.55)       $(0.95)      $(2.81)     $(1.27)
 
     Weighted average common
      stock outstanding:
       Basic and Diluted       13,690        15,111       14,053      14,956
 
     The following highlights provide certain operating data for each of the
 Company's segments for the periods presented (in thousands).
 
 
                                Three Months Ended       Twelve Months Ended
                                   December 31,             December 31,
                                2000          1999         2000        1999
 
     Sales:
       Energy                 $23,970       $18,948      $96,030     $83,242
       Stud Bolt and Gasket    12,098        10,426       50,081      45,408
       Heavy Fabrication       13,303         9,659       40,090      73,807
 
                              $49,371       $39,033     $186,201    $202,457
 
     Operating Income (Loss):
       Energy                    $491       $(3,082)      $5,280       $(162)
       Stud Bolt and Gasket       497          (179)       2,850       1,517
       Heavy Fabrication       (1,950)       (1,748)      (4,686)     (5,686)
       Corporate               (2,085)       (1,763)      (6,702)     (5,517)
 
                              $(3,047)      $(6,772)     $(3,258)    $(9,848)
 
     Fourth Quarter Segment Highlights:
 
     -- On a pro forma basis, excluding the results of Blastco (sold effective
        April 2000), sales for the Energy Group increased 43% over the fourth
        quarter of 1999.  Within the group, individual sales for the various
        manufacturing operations increased from between 31% and 111% over the
        prior year, while sales increased 14% for its energy-related
        distribution operations.  On a pro forma basis, operating income
        increased $2.2 million over the fourth quarter of 1999.  Sales and
        operating income have increased as customers have increased the level
        of oil and gas exploration and production expenditures.
     -- Sales for the Stud Bolt and Gasket Group increased $1.7 million or 16%
        and operating income increased by $0.7 million over the same quarter
        last year.  Over half of the group's sales are to the refining and
        processing industry and approximately one-fourth are to the upstream
        energy industry.  As a result, the Stud Bolt and Gasket Group has been
        positively impacted by increases in the level of exploration and
        production expenditures and by the increasing profitability of the
        refining and processing industry.
     -- Sales for the Heavy Fabrication Group increased $3.6 million or 38%
        over the same quarter last year, while backlog at the Heavy
        Fabrication Group increased from $13.1 million at the end of 1999 to
        $42.9 million at the end of 2000.
 
     Industrial Holdings operates three groups:  the Energy Group which
 remanufactures and sells high pressure valves, pumps and other related
 products to the energy industry including the exploration, completion and
 production industries, the pipeline transportation and storage industries, and
 the petrochemical, chemical and petroleum refining industries; the Stud Bolt
 and Gasket Group which manufactures and distributes stud bolts, nuts, gaskets,
 hoses, fittings and other products primarily to the petrochemical, chemical
 and oil and gas industries; and the Heavy Fabrication Group which manufactures
 and distributes medium and thick-walled pressure vessels, wind towers, gas
 turbine casings, heat exchangers, heat panels and other large machined
 weldments.
     The statements in this press release regarding management's expectations
 concerning the matters described herein constitute "forward-looking
 statements" within the meaning of Section 27A of the Securities Act of 1933
 and Section 21E of the Securities Exchange Act of 1934.  Such statements are
 subject to risks and uncertainties that could cause IHI's results to differ
 materially from those expectations.  Those statements may be accompanied by
 the words "believes", "expects", "anticipates" or "plans" and are based on
 assumptions that the Company believes are reasonable; however, there are many
 factors that could cause the Company's actual future results to differ
 materially from those forward-looking statements.  Those factors include,
 among others:  (i) changes in business and economic conditions generally and
 in the industries in which the Company and its subsidiaries operate; (ii)
 changes in backlog and business mix; (iii) changes in industry capital
 spending; and (iv) the cyclical nature of some of the industries in which the
 Company and its subsidiaries operate.
 
 

SOURCE Industrial Holdings, Inc.
    HOUSTON, April 17 /PRNewswire/ -- Industrial Holdings, Inc. (Nasdaq:   IHII)
 (the "Company") reported today its financial results for the fourth quarter
 and year ended December 31, 2000.  The Company reported a net loss from
 continuing operations of $11.9 million (a loss of $0.87 per share) on revenues
 of $49.4 million for the three months ended December 31, 2000 as compared to a
 net loss from continuing operations of $12.7 million (a loss of $0.83 per
 share) for the three months ended December 31, 1999 on revenues of
 $39.0 million.  For the year ended December 31, 2000, the Company reported a
 net loss from continuing operations of $17.0 million (a loss of $1.21 per
 share) on revenues of $186.2 million as compared to a net loss from continuing
 operations of $16.2 million (a loss of $1.08 per share) on revenues of
 $202.5 million for the year ended December 31, 1999.  The Company reported a
 net loss from discontinued operations of $23.1 million (a loss of $1.68 per
 share) for the three months ended December 31, 2000 as compared to a net loss
 from discontinued operations of $1.6 million (a loss of $0.12 per share) for
 the three months ended December 31, 1999.  For the year ended December 31,
 2000, the Company reported a net loss from discontinued operations of
 $22.5 million (a loss of $1.60 per share) as compared to a net loss from
 discontinued operations of $2.9 million (a loss of $0.19 per share) for the
 year ended December 31, 1999.
     In December 2000, the Company's Board of Directors made the decision to
 actively seek a purchaser for the Company's Engineered Products Group ("EPG")
 and adopted a plan of disposal.  EPG's customer base is comprised of various
 consumer product industries, including automotive and home furnishings.  Our
 remaining groups, the Energy Group, the Stud Bolt and Gasket Group and the
 Heavy Fabrication Group, each serve various sectors of the energy industry.
 The Company believes that divesting of EPG will allow it to strategically
 focus on the energy market.  The Company also believes the ability to
 concentrate both management and financial resources on a single market will
 allow it to successfully capitalize on the opportunities in that market.
 Additionally, the proceeds from the sale of EPG will be used to reduce the
 Company's indebtedness, resulting in a financially healthier IHI.
     In connection with adopting a plan of disposal for EPG, the Company has
 reclassified EPG's results as Discontinued Operations and restated its prior
 results to exclude EPG from its Continuing Operations.
     Contained within the results from continuing operations for the fourth
 quarter of 2000 were a number of charges, which include approximately
 $7.0 million for the write-off of the Company's investment in Belleli Energy,
 S.r.L.; approximately $2.1 million in losses associated with the Company's
 sale of Blastco Services Company; severance and other personnel expenses of
 approximately $1.0 million; weather-related losses of approximately
 $0.5 million at the Company's Heavy Fabrication subsidiary; and approximately
 $0.5 million in losses on the liquidation of the net assets of one of the
 Company's distribution facilities.  Excluding these charges, the Company's
 earnings before interest, taxes, depreciation and amortization (EBITDA) for
 the fourth quarter of 2000 would have been approximately $3.0 million as
 compared with EBITDA of approximately a negative $3.9 million for the fourth
 quarter of 1999 (excluding certain charges of approximately $7.9 million from
 the fourth quarter of 1999).
     Commenting on the quarter and year, Robert E. Cone, President and CEO,
 said, "We are all very excited about the bright future for IHI.  There seems
 to be some confusion regarding the previously-announced transaction with T-3
 Energy and First Reserve.  When this transaction is completed in the third
 quarter, T-3 Energy will be the majority shareholder in IHI.  The publicly-
 traded corporate entity that is IHI today will be the surviving entity,
 properly capitalized, and positioned to take advantage of the strong trends in
 the oil and gas services industry.  The hard work of a committed team of
 employees, managers, lenders, customers and suppliers has begun to pay off.
 Now we look forward to augmenting our team with T-3 Energy and the financial
 and strategic partner of First Reserve.  A year ago we were facing numerous
 obstacles, including depressed oil prices still recovering from a low of under
 $12 per barrel.  Oil and natural gas prices are strong now and I expect 2001
 to be a banner year for our Energy Group as our energy customers increase
 their capital expenditures.  For example, in the fourth quarter of 2000 sales
 in our Energy Group are up over 40% from 1999 fourth quarter levels.  I hope
 the shareholders that have remained with us through the tough times are as
 upbeat about our future as we are, and I anticipate that they will be rewarded
 for their stamina and support."
     Our summarized financial information for the 3-month and 12-month periods
 for 2000 and 1999 are as follows:
 
                                Three Months Ended       Twelve Months Ended
                                   December 31,             December 31,
                                2000          1999         2000        1999
                                   (In thousands, except per share data)
                                                (Unaudited)
 
     Sales                    $49,371       $39,033     $186,201    $202,457
 
     Operating loss            (3,047)       (6,772)      (3,258)     (9,848)
 
     Loss from continuing
      operations              (11,890)      (12,721)     (16,977)    (16,180)
 
     Loss from discontinued
      operations              (23,063)       (1,614)     (22,527)     (2,853)
 
     Net loss                $(34,953)     $(14,335)    $(39,504)   $(19,033)
 
     Loss per share -
      Basic and Diluted:
       Continuing              $(0.87)       $(0.83)      $(1.21)     $(1.08)
       Discontinued             (1.68)        (0.12)       (1.60)      (0.19)
       Net loss                $(2.55)       $(0.95)      $(2.81)     $(1.27)
 
     Weighted average common
      stock outstanding:
       Basic and Diluted       13,690        15,111       14,053      14,956
 
     The following highlights provide certain operating data for each of the
 Company's segments for the periods presented (in thousands).
 
 
                                Three Months Ended       Twelve Months Ended
                                   December 31,             December 31,
                                2000          1999         2000        1999
 
     Sales:
       Energy                 $23,970       $18,948      $96,030     $83,242
       Stud Bolt and Gasket    12,098        10,426       50,081      45,408
       Heavy Fabrication       13,303         9,659       40,090      73,807
 
                              $49,371       $39,033     $186,201    $202,457
 
     Operating Income (Loss):
       Energy                    $491       $(3,082)      $5,280       $(162)
       Stud Bolt and Gasket       497          (179)       2,850       1,517
       Heavy Fabrication       (1,950)       (1,748)      (4,686)     (5,686)
       Corporate               (2,085)       (1,763)      (6,702)     (5,517)
 
                              $(3,047)      $(6,772)     $(3,258)    $(9,848)
 
     Fourth Quarter Segment Highlights:
 
     -- On a pro forma basis, excluding the results of Blastco (sold effective
        April 2000), sales for the Energy Group increased 43% over the fourth
        quarter of 1999.  Within the group, individual sales for the various
        manufacturing operations increased from between 31% and 111% over the
        prior year, while sales increased 14% for its energy-related
        distribution operations.  On a pro forma basis, operating income
        increased $2.2 million over the fourth quarter of 1999.  Sales and
        operating income have increased as customers have increased the level
        of oil and gas exploration and production expenditures.
     -- Sales for the Stud Bolt and Gasket Group increased $1.7 million or 16%
        and operating income increased by $0.7 million over the same quarter
        last year.  Over half of the group's sales are to the refining and
        processing industry and approximately one-fourth are to the upstream
        energy industry.  As a result, the Stud Bolt and Gasket Group has been
        positively impacted by increases in the level of exploration and
        production expenditures and by the increasing profitability of the
        refining and processing industry.
     -- Sales for the Heavy Fabrication Group increased $3.6 million or 38%
        over the same quarter last year, while backlog at the Heavy
        Fabrication Group increased from $13.1 million at the end of 1999 to
        $42.9 million at the end of 2000.
 
     Industrial Holdings operates three groups:  the Energy Group which
 remanufactures and sells high pressure valves, pumps and other related
 products to the energy industry including the exploration, completion and
 production industries, the pipeline transportation and storage industries, and
 the petrochemical, chemical and petroleum refining industries; the Stud Bolt
 and Gasket Group which manufactures and distributes stud bolts, nuts, gaskets,
 hoses, fittings and other products primarily to the petrochemical, chemical
 and oil and gas industries; and the Heavy Fabrication Group which manufactures
 and distributes medium and thick-walled pressure vessels, wind towers, gas
 turbine casings, heat exchangers, heat panels and other large machined
 weldments.
     The statements in this press release regarding management's expectations
 concerning the matters described herein constitute "forward-looking
 statements" within the meaning of Section 27A of the Securities Act of 1933
 and Section 21E of the Securities Exchange Act of 1934.  Such statements are
 subject to risks and uncertainties that could cause IHI's results to differ
 materially from those expectations.  Those statements may be accompanied by
 the words "believes", "expects", "anticipates" or "plans" and are based on
 assumptions that the Company believes are reasonable; however, there are many
 factors that could cause the Company's actual future results to differ
 materially from those forward-looking statements.  Those factors include,
 among others:  (i) changes in business and economic conditions generally and
 in the industries in which the Company and its subsidiaries operate; (ii)
 changes in backlog and business mix; (iii) changes in industry capital
 spending; and (iv) the cyclical nature of some of the industries in which the
 Company and its subsidiaries operate.
 
 SOURCE  Industrial Holdings, Inc.