ARLINGTON
,
VA
–
August
2,
2006
–
Katy
Industries,
Inc.
(NYSE:
KT)
today
reported
a
net
loss
in
the
second
quarter
of
2006
of
($1.3)
million
[($0.16)
per
share],
versus
a
net
loss
of
($2.4)
million
[($0.30)
per
share],
in
the
second
quarter
of
2005,
as
adjusted
to
exclude
restructuring
and
other
non-recurring
or
unusual
items,
which
are
discussed
below.
Including
these
items,
Katy
reported
a
net
loss
in
the
second
quarter
of
2006
of
($1.9)
million
[($0.24)
per
share],
versus
a
net
loss
of
($6.0)
million
[($0.76)
per
share],
in
the
same
period
of
2005.
The
operating
loss,
as
adjusted
to
exclude
all
restructuring
and
other
non-recurring
or
unusual
items,
was
($0.4)
million
[(0.4%)
of
net
sales]
in
the
second
quarter
of
2006,
compared
to
an
operating
loss,
as
adjusted,
of
($2.5)
million
[(2.7%)
of
net
sales]
in
the
same
period
in
2005.
Net
income
(loss),
as
adjusted,
and
operating
income
(loss),
as
adjusted,
are
non-GAAP
financial
measures
and
are
further
discussed
below.
Katy
also
reported
a
net
loss
for
the
six
months
ended
June
30,
2006
of
($3.6)
million
[($0.45)
per
share],
versus
a
net
loss
of
($5.3)
million
[($0.67)
per
share],
for
the
six
months
ended
June
30,
2005,
as
adjusted
to
exclude
restructuring
and
other
non-recurring
or
unusual
items,
which
are
discussed
below.
Including
these
items,
Katy
reported
a
net
loss
for
the
six
months
ended
June
30,
2006
of
($7.7)
million
[($0.96)
per
share],
versus
a
net
loss
of
($10.7)
million
[($1.35)
per
share],
in
the
same
period
of
2005.
The
operating
loss,
as
adjusted
to
exclude
all
restructuring
and
other
non-recurring
or
unusual
items,
was
($2.8)
million
[(1.6%)
of
net
sales]
for
the
six
months
ended
June
30,
2006,
compared
to
an
operating
loss,
as
adjusted,
of
($6.0)
million
[(3.2%)
of
net
sales]
in
the
same
period
in
2005.
Net
income
(loss),
as
adjusted,
and
operating
income
(loss),
as
adjusted,
are
non-GAAP
financial
measures
and
are
further
discussed
below.
During
the
second
quarter
of
2006,
Katy
reported
restructuring
and
other
non-recurring
or
unusual
items
of
$0.5
million
pre-tax
[$0.07
per
share],
including
income
from
discontinued
operations
of
$0.6
million
offset
by
severance,
restructuring
and
related
costs
of
($0.1)
million.
During
the
second
quarter
of
2005,
Katy
reported
restructuring
and
other
non-recurring
or
unusual
items
of
($2.3)
million
pre-tax
[($0.29)
per
share],
including
severance,
restructuring
and
related
costs
of
($2.4)
million
offset
by
income
from
discontinued
operations
of
$0.1
million.
Details
regarding
these
items
are
provided
in
the
“Reconciliations
of
GAAP
Results
to
Results
Excluding
Certain
Unusual
Items”
accompanying
this
press
release.
For
the
six
months
ended
June
30,
2006,
Katy
reported
restructuring
and
other
non-recurring
or
unusual
items
of
($1.2)
million
pre-tax
[($0.15)
per
share],
including
costs
of
($0.7)
million
related
to
the
cumulative
effect
of
a
change
in
accounting
principle
for
the
implementation
of
SFAS
No.
123R,
Accounting
for
Stock-Based
Compensation
and
severance,
restructuring
and
related
costs
of
($0.9)
million
offset
by
income
from
discontinued
operations
of
$0.4
million.
For
the
six
months
ended
June
30,
2005,
Katy
reported
restructuring
and
other
non-recurring
or
unusual
items
of
($2.1)
million
pre-tax
[($0.27)
per
share],
including
severance,
restructuring
and
related
costs
of
($2.6)
million
offset
by
income
from
discontinued
operations
of
$0.5
million.
Details
regarding
these
items
are
provided
in
the
“Reconciliations
of
GAAP
Results
to
Results
Excluding
Certain
Unusual
Items”
accompanying
this
press
release.
Financial
highlights
for
the
second
quarter
of
2006,
as
compared
to
the
same
period
in
the
prior
year,
included:
·
Net
sales
in
the
second
quarter
of
2006
were
$92.1
million,
down
$1.8
million
compared
to
the
same
period
in
2005
primarily
due
to
weaker
sales
in
both
operating
segments,
the
Electrical
Products
Group
and
the
Maintenance
Products
Group.
Overall,
the
decrease
of
2%
resulted
from
lower
volumes
of
10%
offset
by
higher
pricing
of
7%
and
favorable
currency
translation
of
1%.
Lower
net
sales
in
the
Maintenance
Group
resulted
from
lower
volumes
with
our
consumer
plastics
and
abrasives
businesses.
Lower
net
sales
in
the
Electrical
Group
resulted
from
the
loss
of
certain
product
lines
with
certain
of
our
customers.
Both
operating
segments
were
able
to
reduce
the
impact
of
lower
volume
by
increased
pricing.
·
Gross
margins
were
13.3%
in
the
second
quarter
of
2006,
versus
11.5%
in
the
second
quarter
of
2005.
In
2005,
our
margins
were
negatively
impacted
by
higher
raw
material
costs,
a
significant
portion
of
which
were
not
passed
on
through
pric
