Hallwood Group prunes losses in nine months to Sept 30

For the third quarter of 2013, the Company had net income of $633,000, or $0.42 per share, compared to a net loss of $1.1 million, or $(0.70) per share for the 2012 third quarter, on revenue of $30.3 million and $27.1 million, respectively, for the same periods.

For the nine months ended September 30, 2013, the Company had a net loss of $1.1 million, or $(0.70) per share, compared to a net loss of $11.8 million, or $(7.76) per share, for the same period in 2012 on revenue of $94.0 million and $100.2 million, respectively.

 Following is a comparison of results for the 2013 and 2012 periods:

Operating Income (Loss). The operating income (loss) for the 2013 and 2012 third quarters was $780,000 and $(1.4) million, respectively. The operating income (loss) for the nine months ended September 30, 2013 and 2012 was $(323,000) and $(17.7) million, respectively.

As previously disclosed, the 2012 first quarter results included a $13.2 million litigation charge. The results for the 2013 third quarter included a litigation charge credit of $1,082,000 in connection with the Hallwood Energy litigation matters.

The Company operates its principal business in the textile products industry through its wholly owned subsidiary, Brookwood Companies Incorporated ("Brookwood"). Brookwood's textile products sales in the 2013 third quarter of $30,273,000 increased by $3,127,000, or 11.5%, compared to $27.1 million for the same period in 2012.

Sales for the nine month period ended September 30, 2013 of $94,040,000 decreased by $6,167,000, or 6.2%, compared to $100,207,000 for the same period in 2012. The variances in 2013 were principally due to fluctuations in sales of specialty fabric to U.S. military contractors as a result changes to orders from the military to Brookwood's customers.

Military sales accounted for $16,932,000 and $49,035,000 in the 2013 third quarter and nine month period ended September 30, 2013, respectively, compared to $12,924,000 and $54,155,000 for the same periods in 2012. The military sales represented 55.9% and 47.6% of Brookwood’s net sales in the 2013 and 2012 third quarters, respectively, and 52.1% and 54.0% in the 2013 and 2012 nine month periods, respectively.

Additionally, the results included costs and expenses incurred by the Company and Brookwood in the Hallwood Energy and Nextec litigation matters totaling $403,000 and $355,000 for the 2013 and 2012 third quarters, respectively, and $734,000 and $3,895,000 for the 2013 and 2012 nine month periods, respectively. These legal matters are more fully described in the Company's quarterly report on Form 10-Q for the quarter ended September 30, 2013.

Hallwood Group