Global Fastener News

1995 FIN – Milwaukee Journal Places Fastener Firm on ‘Loser List’

June 15
00:00 2015

January 5, 1995 FIN – Milwaukee, Wisconsin-based Medalist Industries, Inc. had the dubious distinction of being named to second place on the Milwaukee Journal’s “10 Largest Losers” list for one-year total return.
According to the Journal, medalist had a 39.13% loss in one-year total return through the period ending June 30, 1994. The stock price a year earlier had been $11.50 and it closed at $7 last June 30.
Ajay Sports Inc. fared worse, however. Ajay’s $.50 shares dropped to $.28 during the same period for a 43.75% plummet.
Medalist CFO John Paprocki told the Journal that the stock slide was precipitated by a company announcement. In June Medalist announced that it would report a second-quarter loss because of problems in productivity, pricing and sales in its fastener division, even though sales were expected to approach the previous year’s $34.7 million.
The lower price attracted the attention of some stock analysts and Dain Bosworth last summer began rating Medalist as “a buy” because of low price.    
As of January 6, 1995, Medalist’s stock had not recovered as it stood at $6.25.
In a separate article on the Top 100 corporate paychecks in Wisconsin, The Business Journal of Milwaukee named Medalist chairman and president Edward Hopkins as the 60th-highest paid executive of publicly held corporations in Wisconsin. Hopkins’ cash compensation for the previous fiscal year was $356,064. ©1995/2015 Fastener Industry News.
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1995 FIN � Medalist Fires Chairman

March 15, 1995 FIN – The board of Milwaukee, Wisconsin-based Medalist Industries announced it would not renew the contract for chairman Edward Hopkins, which expired March 1.
The Milwaukee Sentinel headlined its story,”Medalist axes CEO as profit plunges 99%.
“The remaking of Medalist Industries Inc., has been in turmoil since at least mid-1993,” Rich Kirchen of The Milwaukee Business Journal wrote.” And during that time top executive Edward Hopkins fired the presidents of Medalist’s two largest divisions and the corporation’s chief financial officer. On Feb. 21, Hopkins met the same fate as his former execs.”
Kirchen reported the board “gave no reason for the decision. One board member and chief financial officer John Paprocki declined to discuss the issue”
“The board has not disclosed the reasons – just that they decided not to renew his contract,” Paprocki told the Business Journal.
By letting Hopkins go at the close of his contract, Medalist avoided paying a $950,000 lump sum severance package required during the contract.
Hopkins was paid $356,064 in 1993.
Hopkins, 58, was Medalist chairman, CEO and president since August 1989. He succeeded Peter Fischer, the son of Medalist founder Norm Fischer.
Kirchen noted that Hopkins has resigned his previous job, as president and CEO of the Interlake Corp., and that Medalist was the longest stint of his corporate career.
Hopkins graduated from the Air Force Academy and was a fighter pilot for 11 years. He held management positions at several corporations, including General Electric and Sherwin-Williams.
Hopkins had presided over a restructuring of Medalist, which included selling off apparel and concrete forming systems to focus on fasteners.
Medalist acquired screw and bolt manufacturer Pioneer Screw & Nut Co. of Elk Grove Village, Illinois, and industrial fastener distributor C-Tech Systems of Minneapolis, Minnesota, in 1992.
Medalist reported customer service problems in 1993 and Hopkins replaced the division’s president, Henry Key, with Bruce Woodward in 1994. Pioneer’s sales declined through much of 1994 and customer service problems resurfaced, causing Medalist to declare its earnings would drop, and the stock plummeted from $13.25 per share to $7.
“Ted’s particular skills and strengths are geared more toward the big picture than they are to operations,” Dain Bosworth analyst Blair Brumley told the Business Journal.
Medalist’s sales for 1994 totaled $133.5 million, up 1.5%. The company’s net income was $327,000, or $.9 per share, compared with $525,000, or $.13 per share, in 1993.
The board is searching for a successor and will have to decide whether to sell C-Tech, which has drawn outside interest, and whether to keep the headquarters in Milwaukee’s Park Place or consolidate into the facilities in Elk Grove Village or Minneapolis.
William Nasgovitz, president of Heartland Advisors Inc., told the Sentinel he was surprised by Hopkin’s ouster. Heartland owns 28% of Medalist’s stock.
“We did not know this was in the works, nor had we lobbied for it,” Nasgovitz said. “I only presume that the board felt a change was necessary in light of last year’s performance – sales went up and earnings went down. It’s as simple as that.”
In the past year, Medalist stock has ranged from $5 to $14.50. The stock was at $13.50 when it closed before the board’s announcement that Hopkins was gone.©1995/2015 Fastener Industry News.
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