KATY INDUSTRIES, INC.
REPORTS
2007
SECOND
QUARTER
RESULTS
ARLINGTON, VA –
August
20,
2007 –
Katy
Industries,
Inc.
(OTC
BB:
KATY)
today
reported
a
net
loss
in
the
second
quarter
of
2007
of
($0.4)
million
[($0.05)
per
share],
versus
a
net
loss
of
($1.0)
million
[($0.13)
per
share],
in
the
second
quarter
of
2006,
as
adjusted
to
exclude
restructuring
and
other
non-recurring
or
unusual
items,
which
are
discussed
below.
Including
these
items,
Katy
reported
net
income
in
the
second
quarter
of
2007
of
$1.8
million
[$0.23
per
share],
versus
a
net
loss
of
($1.9)
million
[($0.24)
per
share],
in
the
same
period
of
2006.
Operating
income,
as
adjusted
to
exclude
all
restructuring
and
other
non-recurring
or
unusual
items,
was
$0.3
million
[0.4%
of
net
sales]
in
the
second
quarter
of
2007,
compared
to
an
operating
income,
as
adjusted,
of
$0.1
million
[0.1%
of
net
sales]
in
the
same
period
in
2006.
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,
2007
of
($3.6)
million
[($0.45)
per
share],
versus
a
net
loss
of
($3.3)
million
[($0.42)
per
share],
for
the
six
months
ended
June
30,
2006,
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,
2007
of
($2.0)
million
[($0.25)
per
share],
versus
a
net
loss
of
($7.7)
million
[($0.96)
per
share],
in
the
same
period
of
2006.
The
operating
loss,
as
adjusted
to
exclude
all
restructuring
and
other
non-recurring
or
unusual
items,
was
($2.9)
million
[(1.7%)
of
net
sales]
for
the
six
months
ended
June
30,
2007,
compared
to
an
operating
loss,
as
adjusted,
of
($2.3)
million
[(1.5%)
of
net
sales]
in
the
same
period
in
2006.
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
2007,
Katy
reported
restructuring
and
other
non-recurring
or
unusual
items
of
$2.8
million
pre-tax
[$0.36
per
share],
including
a
gain
on
the
sale
and
operating
activities
of
the
discontinued
businesses
of
$6.9
million
offset
by
severance,
restructuring
and
related
costs
of
($2.4)
million
and
loss
on
sale
of
assets
of
($1.7)
million.
During
the
second
quarter
of
2006,
Katy
reported
no
significant
restructuring
and
other
non-recurring
or
unusual
items.
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,
2007,
Katy
reported
restructuring
and
other
non-recurring
or
unusual
items
of
$4.6
million
pre-tax
[$0.57
per
share],
including
a
gain
on
the
sale
and
operating
activities
of
discontinued
businesses
of
$8.8
million
offset
by
severance,
restructuring
and
related
costs
of
($2.6)
million
and
loss
on
sale
of
assets
of
($1.6)
million.
For
the
six
months
ended
June
30,
2006,
Katy
reported
restructuring
and
other
non-recurring
or
unusual
items
of
($1.8)
million
pre-tax
[($0.23)
per
share],
including
severance,
restructuring
and
related
costs
of
($0.9)
million,
loss
from
discontinued
operations
of
($0.7)
million
and
costs
of
($0.8)
million
related
to
the
cumulative
effect
of
a
change
in
accounting
principle
for
the
implementation
of
SFAS
No.
123R,
Accounting
for
Stock-Based
Compensation
offset
by
gain
on
SESCO
joint
venture
transaction
of
$0.6
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
2007,
as
compared
to
the
same
period
in
the
prior
year,
included:
·
Net
sales
in
the
second
quarter
of
2007
were
$81.5
million,
a
decrease
of
$3.1
million
compared
to
the
same
period
in
2006
primarily
due
to
lower
volume
activity
in
the
Electrical
Products
Group.
Overall,
the
decrease
in
net
sales
of
4%
resulted
from
lower
volumes
of
13%
offset
by
higher
pricing
of
9%.
Lower
net
sales
in
the
Electrical
Products
Group
resulted
from
lower
demand
from
its
major
customers
along
with
its
timing
as
the
second
quarter
volume
level
slightly
offsets
the
volume
improvement
reflected
in
the
first
quarter
of
2007.
In
addition,
the
Electrical
Products
Group
has
increased
prices
driven
by
the
significant
change
in
copper
prices
over
the
past
year.
·
Gross
margins
were
12.2%
in
the
second
quarter
of
2007,
versus
13.1%
in
the
second
quarter
of
2006.
In
2007,
our
margins
were
adversely
impacted
by
higher
copper
costs
within
our
Electrical
Products
Group,
a
significant
portion
of
