BY URSULA MILLER
The Cincinnati Enquirer
Shareholders and employees of Zaring National Corp. gave a standing ovation Thursday to Chief Executive Allen G. Zaring III after the founder of the residential construction company announced his newly reassumed responsibilities in day-to-day management.
"I was very moved," Mr. Zaring said of the show of support at the company's annual meeting.
The news of Mr. Zaring's expanded role was no surprise. He retook the reins of the company in late December after firing George Casey as chief executive of Zaring National and Zaring Homes. It was, however, the first formal gathering of shareholders since the company began a general reorganization last fall.
That reorganization included the dismissal of the heads of Zaring's two principal subsidiaries and the creation of a third one.
"While I can't erase the past three years' performance, I will do my best to positively influence the future," said Mr. Zaring, who, as chairman, hadn't been in day-to-day management for several years.
Zaring's stock has struggled since the company went public at $13.50 a share in 1993. Though the momentum has picked up, the stock's average price of $9.68 in the last three months still lags the company's book value of about $11 a share.
The stock closed Thursday at $10.25, down $1.25.
During the meeting, Mr. Zaring outlined management's goals for the company's three subsidiaries.
Atop the agenda for Zaring Homes, the company's largest subsidiary, is margin improvement. Zaring Homes builds traditional houses that average $250,000.
The No. 1 goal for HomeMax, Zaring's division that sells manufactured houses and develops subdivisions for them, is to break even in 1998 and turn profitable in 1999. Zaring created HomeMax in October 1996. HomeMax houses, what the industry used to call mobile homes, start at $25,000.
Mr. Zaring said HomeMax, a money loser now, should make money after the company has 12 fully operational "villages." HomeMax has opened seven subdivisions, with another 19 -- including one in Richwood, Ky. -- under various stages of development.
Hearthside Homes is Zaring's newest subsidiary, created last fall with the acquisition of Legacy Inc. in Indianapolis. Hearthside builds entry-level, single-family houses priced from $90,000 to $140,000. The goal for Hearthside is growth, including planned expansions this year into Nashville and Louisville, where Zaring Homes already is established.
Also Thursday, Zaring announced first-quarter results. As expected, costs associated with HomeMax caused a net loss for the quarter of $1.1 million, down from a profit of $480,000 a year ago, on a 20 percent increase in revenue to $53.1 million.
