Hallwood Group Inc. (HWG, Financial) filed Quarterly Report for the period ended 2010-03-31.
Hallwood Group Inc. has a market cap of $69.9 million; its shares were traded at around $45.8 with a P/E ratio of 4.1 and P/S ratio of 0.4. Hallwood Group Inc. had an annual average earning growth of 6.2% over the past 10 years.
Textiles. The Companys textile products segment generates funds from the dyeing, laminating and finishing of fabrics and their sales to customers in the military, consumer, industrial and medical markets. Brookwood maintains a $25,000,000 Working Capital Revolving Credit Facility with Key Bank. The facility has a maturity date of January 31, 2011. At March 31, 2010, Brookwood had approximately $19,447,000 of unused borrowing capacity on its Working Capital Revolving Credit Facility.
Brookwood paid cash dividends to the Company of $1,000,000 in the 2010 first quarter and $4,500,000 for all of 2009. In addition, Brookwood made a tax sharing payment to the Company of $3,937,000 in the 2010 first quarter and $7,751,000 for all of 2009 under its tax sharing agreement. Future cash dividends and tax sharing payments are contingent upon Brookwoods continued profitability and compliance with its loan covenants contained in the Working Capital Revolving Credit Facility. Brookwoods total debt to total tangible net worth ratio of 0.55 at March 31, 2010 was reduced from 0.66 at December 31, 2009, principally due to its profitable operations during the 2010 first quarter, and was substantially below the maximum allowable ratio of 1.50. In connection with the renewal of the Working Capital Revolving Credit Facility in October 2009, an additional covenant was added that provides for a total funded debt to EBITDA (earnings before interest, taxes, depreciation and amortization), for the trailing four quarters, ratio of not greater than 2.00 to be calculated on a quarterly basis, commencing December 31, 2009. The total funded debt to EBITDA ratio was 0.14 and 0.19 at March 31, 2010 and December 31, 2009, respectively, which was substantially below the maximum allowable ratio.
Brookwood continuously evaluates opportunities to reduce production costs and expand its manufacturing capacity and portfolio of products. Accordingly, Brookwood incurs capital expenditures to pursue such opportunities, as well as for environmental and safety compliance, building upgrades, energy efficiencies, and various strategic objectives. In the 2010 first quarter and for all of 2009, Brookwood met its capital expenditure and equipment maintenance requirements from its operating cash flows and availability under its Working Capital Revolving Credit Facility. There were no material capital commitments as of March 31, 2010, although Brookwood Laminating plans to exercise its lease option for the purchase of its production facility in Connecticut for $3,200,000, which is anticipated to be completed in the 2010 second quarter. Brookwood anticipates obtaining a $2,240,000 loan facility in connection with the acquisition. It is anticipated that Brookwoods future capital expenditure projects will be funded from operations and, if necessary, availability under its Working Capital Revolving Credit Facility Brookwood estimates its 2010 capital expenditures will be within a range of $3,500,000 to $4,500,000, excluding the purchase of the Brookwood Laminating production facility.
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Hallwood Group Inc. has a market cap of $69.9 million; its shares were traded at around $45.8 with a P/E ratio of 4.1 and P/S ratio of 0.4. Hallwood Group Inc. had an annual average earning growth of 6.2% over the past 10 years.
Highlight of Business Operations:
General. The Company, through its Brookwood subsidiary, principally operates in the textile products segment and, until Hallwood Energys bankruptcy reorganization in 2009, the energy business segment. The Companys cash position increased by $1,178,000 during the 2010 first quarter to $9,016,000 as of March 31, 2010. The principal source of cash in the 2010 first quarter was $3,065,000 provided by operations. The primary uses of cash were $869,000 for property, plant and equipment, principally at Brookwood and $1,018,000 for net repayment of the Working Capital Revolving Credit Facility.Textiles. The Companys textile products segment generates funds from the dyeing, laminating and finishing of fabrics and their sales to customers in the military, consumer, industrial and medical markets. Brookwood maintains a $25,000,000 Working Capital Revolving Credit Facility with Key Bank. The facility has a maturity date of January 31, 2011. At March 31, 2010, Brookwood had approximately $19,447,000 of unused borrowing capacity on its Working Capital Revolving Credit Facility.
Brookwood paid cash dividends to the Company of $1,000,000 in the 2010 first quarter and $4,500,000 for all of 2009. In addition, Brookwood made a tax sharing payment to the Company of $3,937,000 in the 2010 first quarter and $7,751,000 for all of 2009 under its tax sharing agreement. Future cash dividends and tax sharing payments are contingent upon Brookwoods continued profitability and compliance with its loan covenants contained in the Working Capital Revolving Credit Facility. Brookwoods total debt to total tangible net worth ratio of 0.55 at March 31, 2010 was reduced from 0.66 at December 31, 2009, principally due to its profitable operations during the 2010 first quarter, and was substantially below the maximum allowable ratio of 1.50. In connection with the renewal of the Working Capital Revolving Credit Facility in October 2009, an additional covenant was added that provides for a total funded debt to EBITDA (earnings before interest, taxes, depreciation and amortization), for the trailing four quarters, ratio of not greater than 2.00 to be calculated on a quarterly basis, commencing December 31, 2009. The total funded debt to EBITDA ratio was 0.14 and 0.19 at March 31, 2010 and December 31, 2009, respectively, which was substantially below the maximum allowable ratio.
Brookwood continuously evaluates opportunities to reduce production costs and expand its manufacturing capacity and portfolio of products. Accordingly, Brookwood incurs capital expenditures to pursue such opportunities, as well as for environmental and safety compliance, building upgrades, energy efficiencies, and various strategic objectives. In the 2010 first quarter and for all of 2009, Brookwood met its capital expenditure and equipment maintenance requirements from its operating cash flows and availability under its Working Capital Revolving Credit Facility. There were no material capital commitments as of March 31, 2010, although Brookwood Laminating plans to exercise its lease option for the purchase of its production facility in Connecticut for $3,200,000, which is anticipated to be completed in the 2010 second quarter. Brookwood anticipates obtaining a $2,240,000 loan facility in connection with the acquisition. It is anticipated that Brookwoods future capital expenditure projects will be funded from operations and, if necessary, availability under its Working Capital Revolving Credit Facility Brookwood estimates its 2010 capital expenditures will be within a range of $3,500,000 to $4,500,000, excluding the purchase of the Brookwood Laminating production facility.
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