IPEC Holdings Inc. Reports Third-Quarter Revenue Growth of 47% and
Increases its Projected 2004 EPS Guidance IPEC Also Announces the
Launch of Two Additional Product Lines to Complete Its Standard
38mm Closure Portfolio NEW CASTLE, Pa., Oct. 26
/PRNewswire-FirstCall/ -- IPEC Holdings Inc. ("IPEC" or the
"Company") (OTC:IPEC) today announced its results for the third
quarter ended September 30, 2004. Net income available to common
shares for the third quarter of 2004 was $0.05 per common share.
2004 THIRD QUARTER FINANCIAL HIGHLIGHTS: -- Net income available to
common shares for the third quarter of 2004 increased significantly
to $544,655 or $0.05 per common share from $77,836 or $0.00 per
common share in the third quarter of 2003. -- Operating income for
the third quarter of 2004 was approximately four times the level of
operating income for the third quarter of 2003 reaching $1,018,913
in the 2004 period from $256,699 in the 2003 period. -- Sales
increased to $6.4 million for the quarter, a 47% increase as
compared to the third quarter in 2003 and the highest level of
quarterly sales obtained in the Company's history. -- The Company
remains financially sound with borrowing capacity plus cash on hand
at over $3,400,000. The Company is also announcing that it is in
the final product development stages for two additional product
offerings to complete its standard 38mm closure portfolio. IPEC's
38mm foil-lined closures and its 38mm screw closure will be
available for market consumption in the first and second quarters
of 2005, respectively. The new product lines are anticipated to
have a minimal replacement effect on the Company's existing sales
base and primarily result in incremental revenue growth to IPEC.
The Company's 38mm screw closure offering was designed to produce a
lighter, faster closure than existing market versions while
maintaining the reputation of the closure style for having one of
the tightest seals in the industry. Commenting on the additional
product lines, Joseph Giordano, Jr., the Company's Chief Executive
Officer, stated, "We are really excited about getting these
products out into the marketplace. The market demand for these
product lines in the dairy industry is significant and their
addition to our portfolio will enable us to penetrate a dairy
customer base that was previously inaccessible. Furthermore, their
launch will permit us to increase sales in our existing product
portfolio due to common purchase requirements of multiple closure
product lines by a single customer." With respect to IPEC's
financial performance during the third quarter, Shawn C. Fabry, the
Company's Chief Financial Officer, explained, "The Company's
positive third quarter results are a reflection of our low cost
production process and strict adherence to a financially prudent
new customer acceptance process. In addition, we believe there
remain substantial volume efficiencies that can be realized when
giving consideration to our plants' existing excess capacity levels
coupled with minimal capital expenditure requirements." IPEC has
increased its estimate of 2004 fiscal earnings per common share to
$0.15 per common share, barring the occurrence of any unforeseen or
unusual conditions affecting the industry or IPEC. The Company also
estimates fiscal 2004 revenues will approximate $22 million. The
projection of $0.02 earnings per common share for the fourth
quarter of 2004 compared to IPEC's previous quarters of 2004 bears
a direct correlation to the historical effect of seasonality on the
Company's business and does not reflect a projected deterioration
in the Company's earnings structure. ABOUT IPEC HOLDINGS INC.: IPEC
Holdings Inc. manufactures and sells tamper evident plastic
closures. These closures are predominantly used in the bottling of
non-carbonated beverages including bottled water, milk and fruit
and sports drinks. The Company also designs and manufactures
equipment for the bottling industry. IPEC's customer base primarily
consists of dairy and bottled water manufacturers both domestically
and internationally. The Company's two principal manufacturing
facilities are located in the United States of America in
Pennsylvania and Alabama. FOR ADDITIONAL INFORMATION CONTACT: Shawn
C. Fabry Chief Financial Officer 185 Northgate Circle New Castle,
PA 16105 Website: http://www.ipec.biz/ Phone: (724) 658-3004 x235
Fax: (724) 658-3054 FORWARD-LOOKING STATEMENTS: This news release
contains forward-looking statements that are based on current
expectations, estimates and projections about IPEC's business,
management's beliefs and assumptions made by management. These
statements are not guarantees of future performance and involve
certain risks, uncertainties and assumptions which are difficult to
predict. Therefore, actual outcomes and results may differ
materially from what is expressed or forecasted in such
forward-looking statements. IPEC HOLDINGS INC. UNAUDITED FINANCIAL
RESULTS Q3 04 Q3 03 YTD 04 YTD 03 Sales $6,386,774 $4,331,360
$17,112,976 $12,125,265 Operating expenses: Cost of goods sold
4,456,962 3,364,017 12,161,831 9,053,431 Selling 361,972 344,336
943,487 1,050,026 General and administrative 548,927 366,308
1,492,226 1,137,509 Operating expenses 5,367,861 4,074,661
14,597,544 11,240,966 Operating income 1,018,913 256,699 2,515,432
884,299 Non-operating expense: Interest expense 92,799 153,497
335,285 454,343 Other expense (income) 18,355 (19,025) 35,496
(22,705) Non-operating expenses 111,154 134,472 370,781 431,638
Income before taxes 907,759 122,227 2,144,651 452,661 Income taxes
363,104 44,391 857,861 172,891 Net income $544,655 $77,836
$1,286,790 $279,770 Average Shares of Common Stock - Basic
9,972,912 9,972,912 9,972,912 9,972,912 Average Shares of Common
Stock - Diluted 10,112,928 10,041,945 10,156,754 10,181,480 Basic
Income Per Share $0.05 $0.00 $0.13 $0.03 Diluted Income Per Share
$0.05 $0.00 $0.13 $0.03 Net Income Plus: Interest Expense 92,799
153,497 335,285 454,343 Income Taxes 363,104 44,391 857,861 172,891
Depreciation expense 451,339 446,468 1,327,045 1,285,381 EBITDA (a)
(b) $1,451,897 $722,192 $3,806,981 $2,192,385 EBITDA as a % of
Sales (a) (b) 23% 17% 22% 18% (a) EBITDA represents, for any
relevant period, income (loss) before income taxes, depreciation of
property, plant and equipment, interest expense (including
amortization of debt issuance costs) and amortization of intangible
assets. (b) EBITDA is not intended to represent and should not be
considered more meaningful than, or an alternative to, net income
(loss), cash flow or other measures of performance in accordance
with generally accepted accounting principles. EBITDA data is
included because the Company understands that such information is
used by certain investors and Company analysts. This release was
issued through eReleases(TM). For more information, visit
http://www.ereleases.com/. DATASOURCE: IPEC Holdings Inc. CONTACT:
Shawn C. Fabry, Chief Financial Officer, IPEC Holdings,
+1-724-658-3004 x235, Fax: +1-724-658-3054 Web site:
http://www.ipec.biz/
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