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NOVEMBER 2000 INDUSTRY NEWS

 

ISO 9000 revisions for publication on 15 December 2000

November 27, 2000 - ISO (International Organization for Standardization) is to publish the year 2000 revisions of its ISO 9000 series of quality management standards on 15 December 2000.

The revised standards ISO 9000, ISO 9001 and ISO 9004 have been overwhelmingly approved by ISO’s membership of national standards institutes.

The ISO 9000 series of International Standards for quality management is among the most widely known and successful of the 13 000 standards published by ISO since it began operations in 1947. The ISO 9000 standards have become an international reference for quality requirements in business to business dealings and form the basis of more than 350 000 certified quality management systems within private and public sector organizations in at least 150 countries.

 

Brown and Sharpe enters into an Acquisition Agreement with Hexagon

North Kingstown, Rhode Island, November 20, 2000 -- Brown & Sharpe Manufacturing Company (NYSE:BNS) today announced that its Board of Directors, at a special meeting held Thursday night, November 16, 2000, unanimously approved entering into an Acquisition Agreement with Hexagon, A.B. of Stockholm, Sweden, in which Hexagon will purchase substantially all of Brown & Sharpe's Worldwide Metrology Business. The purchase price for the Metrology Business is $160 million in cash, plus an additional contingent cash payment up to a potential maximum of $20 million, based on the Company's Year 2000 adjusted Metrology Business Operating Profit. The Metrology Business is comprised of Brown & Sharpe's Measuring Systems Group, headquartered in North Kingstown, Rhode Island, with factories in Italy, Germany, Lithuania and China; its Precision Measuring Instruments Division, headquartered in Renens, Switzerland; and its Custom Metrology Division, headquartered in Telford, U.K. Brown & Sharpe's Metrology Business, which comprises substantially all of the Company's operating business and assets, had sales in 1999 of $321.4 million.

Brown & Sharpe will retain ownership of its Software Development Business, BSIS, Inc., which is focused on the commercialization of its new XACTMEASURE Metrology Software, in development for approximately three years and nearing market introduction. Hexagon has also agreed to invest $2.5 million in BSIS at the closing of this transaction for a 16.7% ownership stake and will invest an additional $1.5 million in each of the next three years, raising its ultimate stake to a maximum of 46.7%. In addition, Hexagon will continue, through the Measuring Systems Group, a close relationship with Wilcox Associates, Inc., who manufactures PC-DMIS, the leading software package currently sold with Brown & Sharpe's Metrology Products.

In addition to its retained interest in BSIS, the value of which embryonic software business is extremely difficult to judge, the Company will retain after the Closing, on a temporary basis, the North Kingstown facility (where it will be the landlord leasing to Hexagon and the third party tenants now in place) and ownership of real estate near Heathrow Airport in the U.K., both of which will be retained only for eventual sale.

 

Revision of the NIST Handbook 150

A draft of the forthcoming revision to NIST Handbook 150, NVLAP Procedures and General Requirements, which contains the new ISO/IEC 17025 requirements in sections 4 and 5, was sent to all NVLAP laboratories and assessors in September. ISO/IEC 17025 has replaced ISO/IEC Guide 25. NIST Handbook 150 will be finalized after the proposed revision is published in the Federal Register and the public comment period is completed.

When the handbook is officially published, all NVLAP laboratories and assessors will be sent a copy. From that time NVLAP laboratories will have one year to comply with the new requirements. Compliance will be verified at a laboratoryþs next regularly scheduled on-site assessment. If a laboratory is assessed during the one year implementation period, the NVLAP assessor will note any nonconformances to the new requirements, but these nonconformances will not affect the accreditation decision. If a NVLAP-accredited laboratory wishes to be accredited to the new ISO/IEC 17025 requirements sooner, it may contact NVLAP to request an earlier on-site assessment. NVLAP will make every effort to accommodate these requests.

Laboratories seeking initial accreditation after the publication of the revised NIST Handbook 150 will have to meet all handbook requirements prior to accreditation.

 

NVLAP signs International Laboratory Accreditation Cooperation Mutual Recognition Arrangement (ILAC MRA)

November 20, 2000 - The National Voluntary Laboratory Accreditation Program (NVLAP) and 36 other laboratory accreditation bodies from 28 economies on five continents signed the ILAC MRA on Thursday, 2 November 2000, in Washington, DC. The text of the ILAC MRA can be viewed at NVLAP Mutual Recognition Arrangements.

When the MRA takes effect on January 31, 2001, test and calibration reports produced by NVLAP-accredited laboratories will be accepted by all of the other signatories (and vice versa). This also means that products tested in one economy by a laboratory that is accredited by a signatory to the MRA will be more readily accepted in the economy of other signatories. This is a major step towards reducing or eliminating the need for retesting of products in the importing economy.

Dr. Belinda Collins, outgoing Chair of ILAC, noted the significance of the ILAC MRA signing, "For many years, the retesting of goods by an importing country has been considered as a major technical barrier to trade. The World Trade Organization (WTO) identified such technical barriers as a major concern to world trade since the mid-1970s. Such barriers can not only add significant cost to goods entering a country, but can also delay, and in some cases prevent, the goods being accepted by foreign markets."

Dr. Collins further explained that "ILAC has been working towards overcoming these technical barriers for the last two decades by encouraging the development of regional recognition arrangements culminating in today's global recognition arrangement among representative bodies in each country. This will facilitate the acceptance of goods already tested by an accredited laboratory. Thus, goods tested in one country should enjoy easier access to foreign markets participating in the Arrangement."

 

Transmation Reports Operating Results for 2001 2nd Quarter

ROCHESTER, NY - November 15, 2000 - Transmation, Inc. announced financial results for its second quarter and first half ended September 30, 2000.

The net loss for the fiscal 2001 second quarter was $256,266, or $0.04 per share, on sales of $17.2 million compared to net income for the fiscal 2000 second quarter of $283,448, or $0.05 per diluted share, on sales of $19.6 million. For the fiscal 2001 first half, the net loss was $226,642, or $0.04 per share, on sales of $36.0 million compared to net income of $573,632, or $0.10 per diluted share, on sales of $40.0 million in the first half of fiscal 2000.

Results for the first half of fiscal 2001 reflected the impact of adverse exchange rates on shipping levels in international markets, particularly in the Far East, lower than anticipated sales of distributed products and modified meters in the U.S., and a charge of approximately $400,000 resulting from the continuing operations of the Company's e-commerce initiative Meterasandinstruments.com. Results for the first half of fiscal 2000 benefited significantly from the shipping of back orders resulting from the Company's acquisition of Metermaster.

Mr. Robert G. Klimasewski, President and Chief Executive Officer of Transmation, Inc., stated: "We made significant enhancements to our infrastructure and operations in the first half in keeping with our commitment to our shareholders made in February, 2000.

"We continued to aggressively control expenses and all forms of discretionary spending and have reduced our bank debt. During the first half of fiscal 2001, we took several actions that we believe will have a significant positive impact on our future success.

"Since the product launch in August, the response to our new line of Palm OS®-based PDA Calibrators™ - which are the world's first personal digital assistant (PDA) based family of calibrators and documenting calibrators - has been very positive. The enthusiastic reaction has come from customers, distributors and competitors alike. We are very excited about the implications for this new family of products. It is another example of Transmation's commitment to applying cutting-edge technology to provide our customers with new ways to improve their efficiency. An aggressive sales and marketing campaign for the new PDA Calibrators has begun and we have already received $20,000 in new orders for these products even before the start of that marketing campaign.

"We made considerable progress during the first half in expanding our potential market for testing and calibrating equipment. During the period, we opened a joint venture Cal Lab in Puerto Rico where we believe the market for certified calibration services is substantial. Transmation previously achieved substantial sales volume in Puerto Rico by sending equipment to our New Jersey facility for service. By placing a facility in Puerto Rico, Transmation will be able to provide customers faster turnaround and therefore improvements in operating efficiencies. We have also invested in assets that allowed us to enter the market for testing and calibrating equipment in the rapidly growing fiber optics industry.

"Additionally, we have reconfigured and refocused our sales operations throughout the company. We are expanding our sales force, aggressively following up on quotations to customers, reestablishing sales relationships with customers whose recent purchasing patterns suggest additional sales opportunities, enhancing the quality of our customer databases, and increasing our sales presence with our customers to foster a sound customer/supplier relationship. We believe that these proactive actions will markedly contribute to an enhanced level of sales in the future.

"While we believe that the Internet affords us the opportunity to leverage our existing infrastructure in order to enter new markets, we are reevaluating the business focus of our MetersandInstruments.com subsidiary in light of our experiences with e-commerce over the past several months. Although we believe that the profit potentials are substantial, we believe that our efforts to build a viable e-commerce operating unit must be matched to the pace of our customers' implementation and use of e-procurement. Accordingly, we have begun an in-depth review of this market opportunity with a view towards implementing a plan for the subsidiary to achieve sustainable growth and profitability."

 

Hart Scientific Receives Accreditation

Hart Scientific’s temperature calibration lab received NVLAP accreditation (NVLAP Lab Code 200348-0) for a variety of temperature calibrations as well as resistance and voltage readout devices and DC resistance.

A review of accreditation scopes of other labs shows that Hart’s accredited uncertainties for temperature calibration are the lowest in the U.S. outside of NIST. They are also lower than most commercial accredited labs anywhere in the world, including all labs accredited by UKAS (United Kingdom) and DKD (Germany).

Hart’s scope of accreditation includes calibrations of:

  • fixed-point cells
  • SPRTs by fixed point
  • SPRTs and PRTs by comparison
  • thermistors by comparison
  • thermocouples by fixed point
  • DC resistance
  • digital thermometers (readouts)

 

Sypris Solutions Reports Third Quarter Earnings

LOUISVILLE, Ky.--(BUSINESS WIRE)-Nov. 10, 2000--Sypris Solutions, Inc. reported third quarter earnings of $0.4 million, or $0.04 per diluted share, excluding special charges, as compared to $2.8 million, or $0.28 per diluted share, for the same quarter in 1999. Revenue for the third quarter increased 11.6% to $53.9 million from $48.3 million for the prior year quarter. Including special charges, the Company reported earnings of $0.1 million, or $0.01 per diluted share, for the third quarter of 2000. The special charges of $0.3 million, after tax for the quarter, were previously announced and related to expenses incurred to consolidate certain operations within the Company's Electronics Group.

For the nine months ended October 1, 2000, the Company reported earnings of $3.7 million, or $0.37 per diluted share, excluding special charges, as compared to $6.8 million, or $0.69 per diluted share, for the prior-year period. Revenue for the first nine months increased 10.0% to $156.7 million from $142.5 million for the year-earlier period. Including special charges of $2.0 million after tax, the Company reported earnings of $1.7 million, or $0.16 per diluted share, for the first nine months of 2000.

Results for the third quarter of 2000 included an income tax benefit of approximately $0.6 million, or $0.06 per diluted share, primarily related to a revision of the Company's effective tax rate for the year. The lower effective tax rate results primarily from research and development tax credits and foreign sales corporation tax benefits.

"The results for the third quarter were substantially in line with the revised expectations we announced during September," said Jeffrey T. Gill, president and chief executive officer. "Orders, revenue and backlog continued to increase during the period, but not enough to offset the impact of component shortages and the downturn in the heavy-duty truck market. The overall demand for the Company's services remains strong, but the combined effect of these factors on volume and the timing of shipments is likely to place pressure on the Company's margins at least into the first half of next year."

"Our strategy going forward remains customer focused and process driven. We will continue to invest in the people and technology required to support the Company's growing volumes, in the assets required to modernize the Company's facilities and in the information technology required to improve our interactions with customers and suppliers," stated Gill. "Although the short-term consequence of these actions has been to place additional pressure on margins, we continue to believe that these investments will significantly benefit the Company's competitiveness and profitability over the long-term."

 

Faro Technologies Reports 3rd Quarter Results

LAKE MARY, Florida, November 10, 2000 - FARO Technologies, Inc. (Nasdaq: FARO), a leading provider of computer-aided manufacturing measurement (CAM2) solutions, today announced that revenue during the third quarter of 2000 grew 25.4% to $8.8 million from $7.0 million in the third quarter of 1999. Gross margins ratio for the third quarter of 2000 increased to 63.7% from 51.7% in 1999. The Company's net loss for the third quarter of 2000 decreased 79% to $360,000, or 3 cents per basic and diluted share, from a loss of $1.7 million, or 15 cents per basic and diluted share for the year ago quarter. Earnings before interest, taxes, depreciation and amortization (EBITDA) for the third quarter of 2000 improved $1.5 million from a loss of $1.4 million in the third quarter of 1999 to income of $131,000.

For the nine months ended September 30, 2000, revenues increased 31.2% to $29.6 million, from $22.5 million for the same period in 1999. The Company's gross margins during the first three-quarters of 2000 improved to 62.4%, compared to 57.5% for the same period in 1999. The Company's net loss for the nine months ended September 30, 2000 decreased to $187,000, or 2 cents per basic and diluted share, from a loss of $3.0 million, or 27 cents per basic and diluted share in 1999. For the nine months ended September 30, 2000, EBITDA was $1.5 million, compared to a loss of $1.5 million in the same period of 1999.

FARO Technologies' President & CEO, Simon Raab said, "We are pleased with the third quarter revenue improvements in the USA and Europe before the unfavorable foreign currency 04rec201-043.doc FARO - 2 exchange rates impact in the amount of $430,000. We were also able to sustain a strong Gross Margin in the slower summer season quarter when price discounts are aggressively applied."

Regionally, sales in the United States during the third quarter of 2000 increased 91% to $4.4 million from $2.3 million in the same quarter of 1999. Excluding the impact of unfavorable foreign exchange, sales in the three European countries where the Company has a direct presence - France, Germany and the United Kingdom - for the quarter, increased by 15%, from $2.7 million in 1999 to $3.1 million in 2000, before the unfavorable effect of foreign currency exchange. Sales in other geographic markets decreased by 11%, from $2.0 million to $1.8 million. The Company's financial conditions remain very strong with virtually no debt and $18 million of cash and marketable securities.

"We have recently expanded into Japan and Spain and, accordingly, our efforts to extend our market penetration in Asia and Europe continue to be promising. We expect to begin to see increased sales from these territories in early 2001. Additionally, we have received strong market interest on our new product - 'Control Station' - which we launched early this quarter and we are confident that it will contribute to our overall revenue growth in 2001," added Raab.

"With our continued sales growth, strong capitalization and efforts underway that will further expand our product line and improve its customer acceptance, we continue to be excited about our prospects in the last quarter of 2000 and for 2001," Raab concluded.

 

ISO 9000: the Year 2000 revisions

November 9, 2000 - The revised core series of the ISO 9000 family of International Standards for quality management is targeted for publication in December 2000. In addition to carrying out these revisions, ISO/TC 176, Quality management and quality assurance - the ISO technical committee responsible for the ISO 9000 family - has also been developing and periodically releasing a whole set of supporting documents. These documents have the following aims:

  • keeping current and future ISO 9000 users informed of the progress of the revisions, as well as of their evolving content,
  • answering frequently asked questions about them, and
  • providing guidance to assist organizations in making the transition to the new versions.

New additions to these supporting documents and the most recent versions of ones have been posted to the ISO Online website, along with a selection of related ISO press releases or articles. The supporting documents are the work of ISO/TC 176’s Subcommittee 2, which is responsible for revising ISO 9001 and ISO 9004, and which has its own Web site where the documents are also posted. The new ISO 9000:2000 standards will be available from the ANSI Online Electronic Standards Store in the near future.

 

Signing of International Arrangement to Enhance Trade

An international arrangement, signed in Washington, DC, on 2 November 2000, will enhance the acceptance of technical data accompanying goods crossing national borders. The Arrangement, which involves 37 member bodies from 28 economies represented at the General Assembly of the International Laboratory Accreditation Cooperation (ILAC), means that goods tested in one country by a laboratory that is accredited under a signatory to the Arrangement, will be accepted by other signatories. This is a major step towards reducing or eliminating the need for re-testing of the goods by the importing country.

The Arrangement enters into force from 31 January 2001.

Belinda Collins, Chair of ILAC, noted the significance of the signing, "For many years, the retesting of goods by an importing country has been considered as a major technical barrier to trade. The World Trade Organization (WTO) identified such technical barriers as a major concern to world trade since the mid-1970s. Such barriers can not only add significant cost to goods entering a country, but can also delay, and in some cases prevent, the goods being accepted by foreign markets."

Dr. Collins further explained that "ILAC has been working towards overcoming these technical barriers for the last two decades by encouraging the development of regional recognition arrangements culminating in today's global recognition arrangement among representative bodies in each country. This will facilitate the acceptance of goods already tested by an accredited laboratory. Thus, goods tested in one country should enjoy easier access to foreign markets participating in the Arrangement."

The key to the Arrangement is the developing network of accredited testing and calibration facilities around the globe that are evaluated and recognized as being competent by specific authorities, known as laboratory accreditation bodies. These bodies are located in many economies and many of them participate in ILAC.

 

General Electric To Acquire Honeywell in a Tax-Free Merger for $45 Billion

New York City – October 22, 2000 – The General Electric Company (NYSE: GE) and Honeywell (NYSE: HON) tannounced that GE has agreed to acquire Honeywell in a tax-free merger valued at $45 billion dollars, plus assumed debt. As part of this definitive agreement, Honeywell shareowners will receive 1.055 shares of GE stock in exchange for one share of Honeywell. Along with other customary deal protections, GE will receive an option for 19.9% of Honeywell’s outstanding stock.

The announcements were made today by John F. Welch, Chairman and CEO of GE, and Michael R. Bonsignore, Chairman and CEO of Honeywell. Mr. Bonsignore will become a member of the GE Board of Directors. Two additional Honeywell directors will join Bonsignore on the GE Board.

The Boards of Directors of both companies have approved the merger agreement, which is subject to regulatory approval and the approval of Honeywell shareowners. The merger is expected to be completed in early 2001.

"Honeywell’s core group of businesses -- Avionics, Automated Controls, Performance Materials and its new microturbine technology -- are a perfect complement to four of GE’s major businesses," Mr. Welch said. "Not only are the businesses a perfect fit, but so are the people and processes. GE’s operating system and social architecture, coupled with both companies’ common culture based on the initiatives of Six Sigma, Services, Globalization and e-Business are also a perfect fit."

Said Mr. Bonsignore: "This transaction preserves and strengthens the Honeywell brand worldwide while providing superior value to our shareowners, customers and employees. Honeywell’s rich global heritage of technology and innovation will be substantially enhanced as part of GE. I look forward to working with Jack Welch as a member of the GE board to ensure a seamless transition and to make a continuing contribution to one of the world’s greatest companies."

Mr. Welch will stay on as Chairman and CEO of GE until the end of 2001, through the Honeywell transition.

Silas S. Cathcart, the longest-serving GE director and chairman of GE’s Management Development and Compensation Committee, said: "We have three objectives: to make the largest acquisition in GE’s history when the time is right; to proceed on schedule with succession actions to name a Chairman-elect before year end; and to use Jack Welch’s vast experience for several more months to ensure that this, our largest acquisition, is also our most successful."

GE expects to account for the Honeywell acquisition as a pooling of interests. Operations are expected to have double-digit accretion to the company’s earnings per share in the first full year, excluding any one-time charges. GE will use the "GE-Honeywell" brand name in some key product lines.

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