BZ Boise Inc.

Bairnco Announces Improved Second Quarter 2005 Results LAKE MARY, Fla., July 21 /PRNewswire-FirstCall/ -- Bairnco Corporation (NYSE:BZ) today reported improved operating results for the second quarter 2005 as compared to the same period last year. Sales were up 5.7% to $44,088,000, net income increased 33.5% to $1,509,000 and diluted earnings per share increased 33.3% to $.20. Performance Sales in the second quarter 2005 increased 5.7% to $44,088,000 from $41,700,000 in 2004. Arlon's Electronic Materials sales increased 6.7% due primarily to increased activity in the wireless telecommunications markets. Arlon's Coated Materials sales increased 3.7% as domestic graphics markets have strengthened although foreign sales and certain automotive and industrial markets have remained weak. Kasco's sales increased 8.5% from the second quarter 2004 due to continued growth in North American service and repair revenue as well as improved U.S. export markets. Kasco's European sales improved slightly both in local currency and U.S. dollars due to the change in exchange rates. Gross profit increased 9.6% to $13,199,000 from $12,044,000 due to increased sales, higher production volumes and reduced relocation and closing costs in the second quarter of 2005 versus 2004. The gross profit margin as a percent of sales increased to 29.9% from 28.9%. The second quarter 2005 gross profit was reduced by $248,000 due primarily to the program to relocate Kasco's manufacturing operations to Mexico including the curtailment costs of Kasco's hourly employees' (union) pension plan and some China related expenses. The second quarter 2004 gross profit was reduced by $632,000 from relocation and closing expenses related to the consolidation of Arlon's industrial engineered coated product's businesses. Selling and administrative expenses increased 7.3% to $10,845,000 in 2005 as compared to $10,109,000 in 2004. $100,000 of the increase was due to increased expenses related to the development of the new China plant. Net interest expense was $33,000 in 2005 as compared to $197,000 in 2004 due to the reduced outstanding borrowings. The effective tax rate for the second quarter 2005 and 2004 was 35.0%. Net income increased 33.5% to $1,509,000 as compared to $1,130,000 in the second quarter of 2004. Diluted earnings per common share increased 33.3% to $.20 from $.15 in 2004. Sales for the first six months of 2005 were down slightly to $84,210,000 from $84,277,000 in 2004 as the improved second quarter results of the Arlon businesses offset the weak results during January and February. Gross profit improved 2.2% to $25,282,000 from $24,741,000 due to improved results in the second quarter and reduced relocation and plant development costs. Selling and administrative expenses increased 3.3% to $21,360,000 from $20,673,000. Net income increased 5.3% to $2,511,000 from $2,385,000 and diluted earnings per share increased 3.1% to $.33 from $.32 in 2004. "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995 Statements in this press release referring to the expected future plans and performance of the Corporation are forward-looking statements. Actual future results may differ materially from such statements. Factors that could affect future performance include, but are not limited to, changes in U.S. or international economic or political conditions, such as inflation or fluctuations in interest or foreign exchange rates; the impact on production output and costs from the availability of energy sources and related pricing; changes in the market for raw or packaging materials which could impact the Corporation's manufacturing costs; changes in the pricing of the products of the Corporation or its competitors; the market demand and acceptance of the Corporation's existing and new products; the impact of competitive products; changes in the product mix; the loss of a significant customer or supplier; production delays or inefficiencies; the ability to achieve anticipated revenue growth, synergies and other cost savings in connection with acquisitions and plant consolidations; the costs and other effects of legal and administrative cases and proceedings, settlements and investigations; the costs and other effects of complying with environmental regulatory requirements; disruptions in operations due to labor disputes; and losses due to natural disasters where the Corporation is self-insured. While the Corporation periodically reassesses material trends and uncertainties affecting the Corporation's results of operations and financial condition in connection with its preparation of its press releases, the Corporation does not intend to review or revise any particular forward-looking statement referenced herein in light of future events. Bairnco Corporation is a diversified multinational company that operates two distinct businesses -- Arlon (Electronic Materials and Coated Materials segments) and Kasco (Replacement Products and Services segment). Arlon's principal products include high technology materials for the printed circuit board industry, cast and calendered vinyl film systems, custom-engineered laminates and special silicone rubber compounds and components. Kasco's principal products include replacement band saw blades for cutting meat, fish, wood and metal, and on site maintenance primarily in the meat and deli departments. Kasco also distributes equipment to the food industry in France. Comparative Results of Operations (Unaudited) Quarter Ended Six Months Ended Condensed Income July 2, July 3, July 2, July 3, Statements 2005 2004 2005 2004 Net sales $44,088,000 $41,700,000 $84,210,000 $84,277,000 Cost of sales 30,889,000 29,656,000 58,928,000 59,536,000 Gross profit 13,199,000 12,044,000 25,282,000 24,741,000 Selling and administrative expenses 10,845,000 10,109,000 21,360,000 20,673,000 Operating profit 2,354,000 1,935,000 3,922,000 4,068,000 Interest expense, net 33,000 197,000 59,000 399,000 Income before income taxes 2,321,000 1,738,000 3,863,000 3,669,000 Provision for income taxes 812,000 608,000 1,352,000 1,284,000 Net income $1,509,000 $1,130,000 $2,511,000 $2,385,000 Basic Earnings per Share of Common Stock $0.20 $0.15 $0.34 $0.32 Diluted Earnings per Share of Common Stock $0.20 $0.15 $0.33 $0.32 Basic Average Common Shares 7,398,000 7,352,000 7,397,000 7,348,000 Diluted Average Common Shares 7,654,000 7,515,000 7,666,000 7,483,000 Condensed Balance Sheets July 2, Dec 31, 2005 2004 ASSETS Cash $1,830,000 $3,451,000 Accounts receivable, net 27,049,000 24,912,000 Inventories 26,636,000 24,964,000 Other current assets 7,481,000 7,702,000 Total current assets 62,996,000 61,029,000 Plant and equipment, net 35,628,000 34,429,000 Cost in excess of net assets of purchased businesses, net 14,411,000 14,542,000 Other assets 7,969,000 8,781,000 Total Assets $121,004,000 $118,781,000 LIABILITIES AND STOCKHOLDERS' INVESTMENT Short-term debt $2,520,000 $1,030,000 Current maturities of long-term debt 100,000 663,000 Accounts payable 12,157,000 10,601,000 Accrued expenses 9,465,000 10,515,000 Total current liabilities 24,242,000 22,809,000 Long-term debt 340,000 231,000 Other liabilities 11,246,000 10,974,000 Stockholders' investment 85,176,000 84,767,000 Total Liabilities and Stockholders' Investment $121,004,000 $118,781,000 DATASOURCE: Bairnco Corporation CONTACT: Larry C. Maingot of Bairnco Corporation, +1-407-875-2222, ext. 230 Web site: http://www.bairnco.com/

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