KATY INDUSTRIES, INC.
REPORTS
2006
SECOND
QUARTER RESULTS
ARLINGTON
,
VA
–
November
13,
2006
–
Katy
Industries,
Inc.
(NYSE:
KT)
today
reported
net
income
in
the
third
quarter
of
2006
of
$1.8
million
[$0.06
per
diluted
share],
versus
net
income
of
$1.8
million
[$0.07
per
diluted
share],
in
the
third
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
third
quarter
of
2006
of
($1.8)
million
[($0.07)
per
diluted
share],
versus
net
income
of
$1.3
million
[$0.05
per
diluted
share],
in
the
same
period
of
2005.
The
operating
income,
as
adjusted
to
exclude
all
restructuring
and
other
non-recurring
or
unusual
items,
was
$4.5
million
[3.7%
of
net
sales]
in
the
third
quarter
of
2006,
compared
to
an
operating
income,
as
adjusted,
of
$4.1
million
[3.1%
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.
Details
regarding
these
items
are
provided
in
the
“Reconciliations
of
GAAP
Results
to
Results
Excluding
Certain
Unusual
Items”
accompanying
this
press
release.
Katy
also
reported
a
net
loss
for
the
nine
months
ended
September
30,
2006
of
($1.2)
million
[($0.15)
per
diluted
share],
versus
a
net
loss
of
($2.7)
million
[($0.34)
per
diluted
share],
for
the
nine
months
ended
September
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
nine
months
ended
September
30,
2006
of
($9.5)
million
[($1.19)
per
diluted
share],
versus
a
net
loss
of
($9.4)
million
[($1.18)
per
diluted
share],
in
the
same
period
of
2005.
The
operating
income,
as
adjusted
to
exclude
all
restructuring
and
other
non-recurring
or
unusual
items,
was
$2.8
million
[1.0%
of
net
sales]
for
the
nine
months
ended
September
30,
2006,
compared
to
an
operating
loss,
as
adjusted,
of
($0.5)
million
[(0.2%)
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.
Details
regarding
these
items
are
provided
in
the
“Reconciliations
of
GAAP
Results
to
Results
Excluding
Certain
Unusual
Items”
accompanying
this
press
release.
During
the
third
quarter
of
2006,
Katy
reported
restructuring
and
other
non-recurring
or
unusual
items
of
($4.1)
million
pre-tax
[($0.15)
per
diluted
share],
including
loss
from
discontinued
operations
of
($3.4)
million
and
s
everance,
restructuring
and
related
costs
of
($0.7)
million.
During
the
third
quarter
of
2005,
Katy
reported
restructuring
and
other
non-recurring
or
unusual
items
of
($1.2)
million
pre-tax
[($0.05)
per
diluted
share],
including
loss
from
discontinued
operations
of
($1.0)
million
and
severance,
restructuring
and
related
costs
of
($0.2)
million.
For
the
nine
months
ended
September
30,
2006,
Katy
reported
restructuring
and
other
non-recurring
or
unusual
items
of
($6.3)
million
pre-tax
[($0.79)
per
diluted
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,
severance,
restructuring
and
related
costs
of
($1.6)
million
and
loss
from
discontinued
operations
of
($4.0)
million.
For
the
nine
months
ended
September
30,
2005,
Katy
reported
restructuring
and
other
non-recurring
or
unusual
items
of
($4.3)
million
pre-tax
[($0.54)
per
diluted
share],
including
severance,
restructuring
and
related
costs
of
($2.8)
million,
and
loss
from
discontinued
operations
of
($1.5)
million.
Financial
highlights
for
the
third
quarter
of
2006,
as
compared
to
the
same
period
in
the
prior
year,
included:
· Net
sales
in
the
third
quarter
of
2006
were
$121.2
million,
down
$12.0
million
compared
to
the
same
period
in
2005
primarily
due
to
weaker
sales
in
the
Electrical
Products
Group.
Overall,
the
decrease
of
9%
resulted
from
lower
volumes
of
21%
offset
by
higher
pricing
of
11%
and
favorable
currency
translation
of
1%.
Lower
net
sales
in
the
Electrical
Group
resulted
from
the
reduction
of
certain
product
lines
with
certain
of
our
customers,
primarily
due
to
a
much
milder
hurricane
season
in
2006,
as
net
sales
in
our
Maintenance
Products
Group
was
comparable
to
prior
year.
·
Gross
margins
were
13.4%
in
the
third
quarter
of
2006,
versus
12.6%
in
the
third
quarter
of
2005.
Our
margin
improvement
is
primarily
driven
by
production
efficiencies
gained
in
our
Abrasives
unit
over
the
past
nine
months.
