Hallwood Group Reports Results for the Fourth Quarter and Year Ended
December 31, 2005
DALLAS, April 13 -- The Hallwood Group
Incorporated (Amex: HWG) today reported results for the fourth quarter and
year ended December 31, 2005.
Continuing Operations. For the quarter, income from continuing
operations was $818,000, or $0.54 per share (assuming dilution), compared
to income of $37.9 million, or $25.18 per share, in 2004, on revenue of
$31.2 million and $39.2 million, respectively. In 2004, income from
continuing operations included a gain from sale of the Company's minority
investment in affiliated Hallwood Energy Corporation in the amount of $62.3
million.
For the year, income from continuing operations was $26.3 million, or
$17.47 per share, compared to income of $54.7 million, or $36.79 per share,
in 2004, on revenue of $134.6 million and $137.3 million, respectively. In
2005, income from continuing operations included a gain from sale of the
Company's minority investment in Hallwood Energy III, L.P. in the amount of
$52.4 million.
Discontinued Operations. For the 2004 quarter, income from discontinued
operations was $604,000, or $0.40 per share, which included a gain from
termination of a hotel lease in the amount of $1.6 million.
For the 2004 year, income from discontinued operations was $39.8
million, or $26.76 per share, which included a gain from sale of
investments in Hallwood Realty Partners, L.P. in the amount of $46.1
million.
Net Income. For the quarter, net income was $818,000, or $0.54 per
share, compared to $38.5 million, or $25.58 per share, in 2004.
For the year, net income was $26.3 million, or $17.47 per share,
compared to $94.5 million or $63.55 per share, in 2004.
Following is a comparison of results for the fourth quarters and years
ended December 31, 2005 and 2004:
Textile Products. For the quarter, textile products segment reported
income before tax of $2.1 million, on revenue of $31.2 million, compared to
income before tax of $4.4 million, on revenue of $38.2 million in 2004.
For the year, the textile products segment reported income before tax
of $11.1 million in 2005, on revenue of $133.1 million, compared to income
before tax of $18.1 million, on revenue of $136.3 million in 2004.
Other Income (Loss). Other income (loss) consisted principally of the
gains on disposition of the Company's investment in Hallwood Energy III,
L.P. in July 2005 and Hallwood Energy Corporation in December 2004, equity
income (loss) from investments in energy affiliates and interest income and
expense.
For the quarter, other income was $454,000, compared to $52.5 million
in 2004.
For the year, other income was $44.8 million, compared to $54.1 million
for 2004.
Income Taxes. For the quarter, income tax expense attributable to
continuing operations was $683,000 and included a current federal tax
benefit of $1.9 million, a non-cash deferred federal tax expense of $3.0
million and state tax benefit of $471,000. For the 2004 quarter, income tax
expense was $16.6 million and included a current federal tax expense of
$10.0 million, a non-cash deferred federal tax expense of $6.6 million and
state tax expense of $68,000.
For the 2005 year, income tax expense attributable to continuing
operations was $18.5 million, which included a current federal tax expense
of $13.7 million, a non-cash deferred federal tax expense of $3.9 million
and state tax expense of $889,000. For the 2004 year, income tax expense
attributable to continuing operations was $11.1 million, which included a
current federal tax expense of $10.4 million, a non-cash deferred federal
tax benefit of $900,000 and state taxes of $1.6 million.
Energy Consolidation. Effective December 31, 2005, Hallwood Energy II,
L.P., and Hallwood Exploration were consolidated into Hallwood Energy 4,
L.P., which was renamed Hallwood Energy, L.P. The Company owns
approximately 26% (22% after consideration of profits interests) of
Hallwood Energy, L.P. During 2005, the Company invested approximately $40.5
million in its energy affiliates, including approximately $22.2 million in
the fourth quarter.
The following table sets forth selected financial information for the
quarters and years ended December 31, 2005 and 2004, respectively.
THE HALLWOOD GROUP INCORPORATED
(In thousands, except per share amounts)
Quarter Ended Year Ended
December 31, December 31,
2005 2004 2005 2004
Revenue $31,185 $39,209 $134,607 $137,280
Operating income $1,047 $2,061 $53 $11,671
Other income $454 $52,455 $44,799 $54,108
Income from continuing
operations before
income taxes $1,501 $54,516 $44,852 $65,779
Income tax expense 683 16,597 18,510 11,079
Income from continuing
operations 818 37,919 26,342 54,700
Income from discontinued
operations --- 604 --- 39,785
Net income $818 $38,523 $26,342 $94,485
PER COMMON SHARE:
BASIC
Income from continuing
operations $0.54 $28.60 $18.22 $41.24
Income from discontinued
operations --- 0.45 --- 30.00
Net income $0.54 $29.05 $18.22 $71.24
Weighted average shares
outstanding 1,511 1,326 1,446 1,326
ASSUMING DILUTION
Income from continuing
operations $0.54 $25.18 $17.47 $36.79
Income from discontinued
operations --- 0.40 --- 26.76
Net income $0.54 $25.58 $17.47 $63.55
Weighted average shares
outstanding 1,526 1,506 1,508 1,487
Certain statements in this press release may constitute
"forward-looking statements", which are subject to known and unknown risks
and uncertainties including, among other things, certain economic
conditions, competition, development factors and operating costs that may
cause the actual results to differ materially from results implied by such
forward-looking statements. These risks and uncertainties are described in
greater detail in the Company's periodic filings with the SEC.
SOURCE The Hallwood Group Incorporated
Web Site: http://www.hallwood.com
