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Alpine Group Inc. (NYSE: AGI)
Superior Telecom NYSE: SUT)
1790 Broadway
New York, NY 10019
212-757-3333
Chairman and CEO: Steven S. Elbaum
Net Sales (FYE April 30, 1999): $1.43 billion (Alpine Group)
(FYE December 31, 1998): $486.1 million (Superior Telecom)
Net Income (FYE April 30, 1999): $13.5 million (Alpine Group)
(FYE December 31, 1998): $21.0 million (Superior Telecom)
Market Capitalization: $278 million (Alpine)
$576 million (Superior)
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Business New Haven
9/6/1999
By: BNH
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A few short weeks ago Alpine Group Inc. was a different holding company. In early August Alpine completed the sale of its Premier Refractories International Inc., a manufacturer and supplier of refractory products, to UK-based Cookson Group PLC for $15.6 million in cash and 32.4 million shares of Cookson Group common stock. The transaction eliminated the refractories business from Alpine's portfolio, thus moving the company's focus to its remaining copper cable and wire businesses.
Alpine's 51-percent held subsidiary, Superior TeleCom Inc., manufactures copper cable and wire for telecommunications and equipment for data communication and other electronic purposes. Superior was formed after Alpine acquired Superior TeleTec Inc. in 1993, followed by its 1995 purchase of the copper cable and wire products of Alcatel NA Cable Systems Inc. and Alcatal Canada Wire Inc.
In 1996 the company reorganized Superior Telecommunication Inc. and Connecticut-based DNE Systems Inc. and then completed an initial public offering of 49 percent of Superior Telecom's common stock.
Since then Superior has been growing due to strong demand, improved margins and acquisitions. In 1998 Superior acquired for $24 million a majority (51 percent) interest of the outstanding common stock of Cables of Zion United Works Ltd., a manufacturer of cable and wire located in Israel (its stock trades on the Tel Aviv stock exchange). Cables of Zion then acquired Cvalim-The Electric Wire and Cable Co. of Israel Ltd. In November of last year Superior acquired Essex International Inc. in a deal worth more than $700 million, moving Superior to the top cable and wire producer position in North America and third in world production today.
Essex added electrical and OEM products to Superior's wire and cable business, and the acquisitions of Essex and Cables of Zion added an international dimension to the company. Superior sells its copper wire and wire products in three main markets: communications, electrical and OEM. More than 87 percent of its 1998 net sales were to regional Bell companies and two independent telephone companies. Superior estimated in 1998 that it garnered about 40 percent of the North American market for copper telephone cable.
In Connecticut, Superior's wholly owned subsidiary, DNE Technologies, manufactures equipment for data communications and other electronic equipment for commercial and government applications. The DNE product base also includes dimmers, relays, electronic sensors and controllers. DNE also offers subassembly contract manufacturing for technology-based businesses. DNE recently announced that GTE Government Systems awarded the company two contracts for mulitplexers and converters.
Superior's sales have been on the rise due to its acquisitions and strong demand from its customer base. For the second quarter ended June 30 Superior, with total assets of $2.0 billion, reported net sales of $514.7 million, compared to $146.1 million for the comparable 1998 second quarter. For the six-month period net sales were reported at $1.0 billion, compared to $275 million for the comparable 1998 period.
Operating income has been positively affected by the company's cost-reduction efforts. Operating income for the three-month period ended June 30 reflected a significant increase to $57.6 million, compared to $24.4 million for the comparable 1998 period. Operating income for the six-months ending June 30 was $109.3 million, compared to $44.7 million for the same period a year earlier.
Interest expense of $28.8 million for the three-month period and $58.7 million for the six-month period as well as income tax and extraordinary charges bit into net income for the second quarter and six-month periods. Net income of $12.9 million (63 cents per diluted share) for the quarter and $23.4 million ($1.14 per diluted share) for the six-month period compared to net income of $13.1 million (63 cents per share) and $24.0 million ($1.15 per diluted share) for the comparable 1998 three- and six-month periods, respectively.
As part of the company's plan to improve synergies and integrate acquisitions, Alpine's subsidiary, Superior Essex, announced the closing of its facility in Pawtucket, R.I. as well as facilities in Tiffin, O., Glendale, Ariz. and Pauline, Kan. For the Brownwood, Tex. location, however, the company has announced plans for expansion and has also announced plans for construction of a new facility in Coahuila, Mexico.
Although Superior's fiscal year follows the calendar year, Alpine Group, which controls 51 percent of Superior's stock, follows a fiscal year ending April 30. Alpine reported revenues from continuing operations for its most recent fiscal year of $1.1 billion, reflecting a 121-percent increase over 1998 fiscal year revenues of $517 million. Results included that of the recently acquired Essex International Inc., although Premier Refractories was reported as a discontinued operation.
Operating income for the year was reported at $123.1 million, compared to $69 million for the year before. But charges for restructuring, integration of acquisitions, loss from discontinued operations and extraordinary charges affected the bottom line. Net income attributable to common stock was reported at $13.5 million (72 cents per diluted share) for the fiscal year ended April 30, compared to $15.2 million (81 cents per diluted share) for the prior year. Total assets at April 30 were $2.1 billion, with long-term debt of $1.2 billion.
Alpine has traded to a 52 week high of $18.75 and low of $9.375. The stock closed on August 20 at $18. Superior closed at $29.125 on August 20. Also, Superior's board of directors declared a 6.25 cents-per-share dividend payable August 5 to shareholders of record July 30.
Analysts are positive about Superior Telecom's future performance due to its cost-cutting strategies, its acquisition of Essex, its position as a leader in market share and its future potential in international markets. Also a plus is the demand for copper cable. This outlook must be good news to Alpine because its own performance weights heavily on the results of this majority held subsidiary.
BUSINESS WIRE
By Kristine Hansen
Dell PCs for First Union Employees
CHARLOTTE, N.C. - In an effort to assist employees in becoming more computer-savvy with its online banking services, First Union Corp. (NYSE: FTU) is offering discounts for Dell brand personal computers and is also offering loans at prime rate to assist its employees in purchasing the PCs for home use. The bank hopes that allowing employees to work at home and to familiarize themselves with the bank's products will lead to increased productivity.
Quebecor Acquires 50.4 Percent of World Color
MONTREAL – Quebecor Printing has acquired a controlling interest in World Color Press Inc. (NYSE: WRC) in a deal worth $2.7 billion (all figure U.S. dollars). Although Quebecor hoped to gain control of 62 percent of the shares by August 19, it was successful in obtaining control of 50.4 percent with its offer price of $35.69 per share. Along with the $840 million price tag for the shares, Quebecor plans to issue $600 million of stock and assume World Color debt in the amount of $1.3 billion.
Bridgeport Machines/Goldman Merger Complete
BRIDGEPORT - Bridgeport Machines Inc. (NASDAQ: BPTM) has announced the closing of its merger with Goldman Industrial Group Inc. effective August 19. Bridgeport Machines is now a wholly owned subsidiary. Each share of Bridgeport Machines stock was converted into a right for receipt of $10 cash.
Ames Reports Q2 Loss
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Quarterly Results for Farrel
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Swiss Army Brands Buys Trademark Rights
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Cannondale Year-End Results
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American Bank Increases Dividend
WATERBURY - American Bank of Connecticut's (AMEX: BKC) board of directors increased the quarterly dividend to 23 cents per share from 21 cents per share of its common stock. The dividend is payable September 24 for shareholders of record September 10.
PE Biosystems/Sequenom Sign Pact
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Zygo Reports Year-End Results
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