Baldwin-Doesn't look too good

Billbrpt@AOL.COM Billbrpt@AOL.COM
Mon, 21 May 2001 23:25:49 EDT


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List,

The latest news.

Bill Bremmer RPT
Madison, Wisconsin

Baldwin Piano Reports First Quarter Results

  
MASON, Ohio, May 21 /PRNewswire/ -- Baldwin Piano & Organ Company (Nasdaq: <A HREF="aol://4785:BPAO">
BPAO</A>) today announced results for the first quarter ended March 31, 2001.  
First quarter sales were down 22 percent to $15.6 million, from $19.9 million 
for the same period a year ago.  Lower sales were caused by higher than 
normal seasonal dealer inventories resulting from the overall economic 
slowdown during the fourth quarter 2000 and continuing throughout the first 
quarter. 

The Company incurred a net loss from continuing operations during the quarter 
of $4.8 million, or a net loss of $1.38 per share, compared to a net loss 
from continuing operations of $2.1 million, or a net loss of  $0.60 per share 
in the first quarter of 2000.   Excluding one-time charges taken during the 
first quarter 2001, the Company net loss was $2.3 million, or a net loss of 
$0.66 per share for the first quarter. 

One-time charges taken during the quarter previously disclosed in press 
releases and 8-K filings included a pre-tax charge of $2.5 million, or $0.47 
per share to shutdown the Company's Greenwood, Mississippi facility and a 
pre- tax charge of $1.3 million, or $0.25 per share related to certain 
management contract severance payouts triggered by the sale of the Company's 
Contract Electronics division.  These one-time charges are included in Other 
Operations (Expenses) Income, Net on the attached Consolidated Summary of 
Operations. 

Earnings from discontinued operations in 2000 of $0.34 per share included the 
gain on the sales of the Company's Retail Finance subsidiaries of $0.21 per 
share, and income during the 2000 first quarter for Retail Finance and 
Contract Electronics of $0.04 per share and $0.09 per share respectively. 
Operating results of Contract Electronics were breakeven prior to the sale of 
the division on January 25, 2001. 

Since the beginning of the year, Baldwin's business has experienced 
significant change with the sale of its Contract-Electronics division in 
January; the announced closure of its Greenwood, Mississippi facility in 
June; the sale of the Company's retail stores; and the appointments of Robert 
J. Jones as Chief Executive Officer and Kenneth W. Pavia, Sr. as Chairman of 
the Board. 

Newly appointed Chief Executive Officer, Robert J. Jones, said,  "Despite 
limited time at Baldwin, our new management team is aggressively implementing 
its strategic plan to return the Company to profitability.  While the first 
quarter results reflect the problems we have previously outlined, in addition 
to other legacy issues, we believe Baldwin, with the help of its 
dealer/partners and its committed workforce, will return to the prominent 
position as the leading piano manufacturer in the United States. 

"Management is currently reviewing all aspects of the Company's current and 
past operations practices, including past employee contracts, inventory, 
manufacturing synergies between plants, operational procedures as well as 
other areas in our organization," Jones added.  "We have also begun 
implementing manufacturing alternatives that should lead to higher profit 
margins and increased quality of our product.  While the Company's current 
liquidity remains a concern, we continue to work with our lending partner and 
seek alternative sources of financing.  I am confident, that given the 
opportunity to implement our plan, management will demonstrate improved 
financial and operational performance within the near future." 

Baldwin Piano & Organ Company, the maker of America's best selling pianos, 
has marketed keyboard musical products for over 140 years. 

"Safe Harbor" statement under the Private Securities Litigation Reform Act of 
1995: This release  contains forward-looking statements that are subject to 
risks and uncertainties, including, but not limited to, the impact of 
competitive products and pricing, product demand and market acceptance, 
reliance on key strategic alliances, fluctuation in operating results and 
other risks detailed from time-to-time in the Company's filings with the 
Securities and Exchange Commission. 

BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES   

CONSOLIDATED SUMMARY OF OPERATIONS   

(In Thousands, except earnings per share)   

(Unaudited)   

Three Months Ended   

March 31,   

2001              2000  

Net sales                                    $15,637           $19,861   

Cost of goods sold                            14,177            17,767   

Gross profit                                 1,460             2,094   

Other operating (expense) income, net         (2,541)              167   

Selling, general and administrative           (4,763)           (4,919)   

Interest expense                              (1,102)             (700)   

Earnings (loss) before income taxes         (6,946)           (3,358)   

Income taxes                                  (2,153)           (1,264)   

Net earnings (loss) from continuing   

operations                                   (4,793)           (2,094)   

Discontinued operations:   

Income from operations, net of tax               0               461   

Net loss on sales, net of tax                    0               725   

Net earnings (loss)                          $(4,793)            $(908)  

Earning (loss) per share   

Basic   

Earnings (loss) from   

continuing operations                    $(1.38)           $(0.60)   

Earnings from discontinued operations       0.00              0.34   

Net earnings (loss)                       $(1.38)           $(0.26)   

Diluted   

Earnings (loss) from   

continuing operations                    $(1.38)           $(0.60)   

Earnings from discontinued operations       0.00              0.34   

Net earnings (loss)                       $(1.38)           $(0.26)  

Average number of shares outstanding           3,463             3,463  

Diluted number of shares outstanding           3,463             3,463  

CONSOLIDATED SUMMARY BALANCE SHEETS   

(In Thousands)  

March 31,   March 31,  December 31,   

2001         2000        2000   

(unaudited) (unaudited)   

Assets   

Receivables, net                    $11,217      $7,559      $9,375   

Installment receivables retained      3,549       4,124       4,027   

Inventories                          39,524      34,199      43,567   

Other current assets                 15,673      12,859      15,839   

Net assets of discontinued operations     0      15,407       8,700   

Total current assets               69,963      74,148      81,508   

Property, plant and equipment, net   15,993      18,486      17,525   

Other assets                         11,587      14,244       8,704   

Total assets                      $97,543    $106,878    $107,737  

Liabilities and Shareholders'   

Equity   

Current portion of long-term debt    $4,101      $9,670      $4,416   

Other liabilities                    23,041      26,939      21,644   

Total current liabilities          27,142      36,609      26,060   

Long-term debt, less current   

portion                             30,207      15,447      36,383   

Other liabilities                     1,928       2,051       1,975   

Shareholders' equity                 38,266      52,771      43,319   

Total liabilities and   

shareholders' equity             $97,543    $106,878    $107,737  

MAKE YOUR OPINION COUNT -  Click Here   

http://tbutton.prnewswire.com/prn/11690X57969901  

SOURCE  Baldwin Piano   

CO:  Baldwin Piano & Organ Company 

ST:  Ohio 

IN:  MUS REA ENT 

SU:  ERN 

05/21/2001 16:53 EDT http://www.prnewswire.com 



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