MONTPELIER - With no apparent end to a stalemate over two competing buyout offers, Chase Industries, Inc., yesterday announced slightly improved sales and profits in 2000 but warned of waning demand for metal tubing sold to manufacturers of plumbing fixtures and other products.
The rural Williams County firm said annual sales rose 3 percent to $19.1 million, or $1.24 a share, from $18.6 million, or $1.21 a share in 1999. The results beat Wall Street expectations of $1.19 a share, according to First Call investment research.
Sales rose 2 percent to $409 million from $401 million the year before.
But conditions deteriorated in the last three months of the year, with profits dropping 12 percent to $4.3 million from $4.9 million in the fourth quarter of 1999 and sales off 9 percent to $89 million from $98 million a year ago.
Factors included a slowing economy, a strong U.S. dollar that made imported products cheaper, and higher energy costs, executives said.
The trends continued into the new year. For 2001, executives expect profits to drop 7 percent to $18 million and sales to fall 4 percent to $386 million, according to documents filed with the U.S. Securities and Exchange Commission in connection with the competing purchase offers.
As time ticks down on a bid from a group formed by Chase's largest shareholder, a unit of the banking concern Citicorp, Inc., it is unclear whether the ownership of the company will change. Citicorp Venture Capital, whose parent company owns 48 per cent of Chase's stock, has offered $10.50 a share to obtain a controlling interest in the company.
Saying the price is too low, Chase's board of directors rejected the bid. The bidders have refused to raise the offer, which expires today.
Meanwhile, the bidders, operating as Chase Acquisition Corp., have rejected a rival offer valued at $12 to $13 a share that was made by an unidentified third party recruited by the Williams County company's board. The deal won't happen without the agreement of the Citicorp group, company executives have said.
Asked whether the upshot of the often bitter six-week dispute could be that ownership stays as is, Chief Executive Martin Alonzo said: “I wouldn't want to speculate.
“We'll see what happens Wednesday night.”
Mr. Alonzo, a major shareholder who joined with Citicorp to buy Chase Industries in 1990, has helped lead opposition to the Citicorp group's offer. He criticized the group's rejection of the rival offer. “They are frustrating the will of all of the other shareholders,” the chief executive said.
A spokesman for the buyout group, Robert Logan, couldn't be reached for comment.
In a letter to the board dated Jan 26 and filed Monday with the SEC, the Citicorp group contended that the rival bidders failed to say how they would finance the deal, would have to obtain the approval of their board of directors, and conditioned the purchase on the sale of Chase's Leavitt Tube unit.
“In short, the company has obtained a soft letter of interest conditioned upon a sale of a subsidiary that has had disappointing results, that is in an industry plagued by overcapacity, and where in fact management has been trying to sell Leavitt Tube for over a year,” the original bidders wrote.