October 20, 1999 37% Earnings Per Share Increase
And the stock goes down, go figure....
CHARLOTTE, N.C., Oct. 20 - United Dominion Industries Ltd. (NYSE, TSE, ME: UDI) today reported third quarter earnings of $28.0 million, or 71 cents per share, compared to $21.4 million, or 52 cents per share last year,
a 37% increase in earnings per share. Sales totaled $547 million, up 4 percent from the same period last year.
(http://www.newscom.com/cgi-bin/prnh/19990407/CHW023 )
Excluding non-recurring items, net income would have been $26.7 million or 68 cents per share, compared to
$22.5 million or 55 cents per share reported last year, a 24% improvement in earnings per share. The earnings
increase was the result of operations improvements, cost reduction initiatives, and acquisitions. The
non-recurring items included restructuring charges at four operations and a litigation settlement. These charges
were offset by favorable tax audit settlements which drove the company's effective tax rate down to 27% for the
quarter.
The company completed its 2-million share repurchase program during the quarter, and third-quarter earnings
were calculated on 1.3 million fewer shares outstanding than for the same period last year.
For the nine months ended September 30, the company recorded net income of $69.3 million ($1.74 per share) on
sales of $1,575 million, compared with net income of $62.3 million ($1.53 per share) on sales of $1,493 million
last year. Excluding non-recurring items, net income for the first nine months would have been $68.9 million
($1.73 per share), compared to $61.8 million ($1.51 per share) for the same period last year, a 15% increase in
earnings per share.
''We are pleased with the quarter and the progress we are making in improving operations,'' said William R.
Holland, chairman and chief executive officer. ''The company is investing resources into improving plant
efficiencies and reducing costs. Those efforts are ongoing and in various stages of development under our
UDXcellence initiative.''
Excluding non-recurring items, the company's Flow Technology Segment earned $23.6 million, up 4% from the
third quarter last year. Excluding the acquisition of Bran+Luebbe, a German manufacturer of metering pumps
and analyzers, segment results were essentially flat. The segment's Weil-McLain division, the leading North
American manufacturer of oil and gas-fired cast iron boilers, had a strong quarter as did Waukesha
Cherry-Burrell, a manufacturer of pumps and valves primarily for sanitary markets. These gains offset declines in
divisions negatively impacted by the weak petrochemical industry.
The Machinery Segment had a strong quarter, earning $17.0 million, up 17% from last year. The Compaction
Division's markets continue to be strong in both Europe and in the United States. This division's light
construction equipment unit will move to a new plant next month in Conklin, N.Y. A weak agricultural
equipment market in the United States resulted in a decline in the Agricultural Equipment Division's earnings.
The Specialty Engineered Products Segment, which primarily produces steel doors, loading dock equipment, and
electric resistance heaters, earned $10.4 million, down 12% from last year. Excluding restructuring charges from
both years, the decline would have been 9% and was due largely to competitive pricing pressures. Sales activity
remained strong with volumes increasing 6% year over year.
The Test Instrumentation Segment earned $7.3 million, up 51% from last year, excluding restructuring charges
relating to plant rationalization/consolidation moves. Excluding acquisitions, segment earnings increased 28%.
This increase was led by Radiodetection which produces equipment to locate underground cables and pipes for
utilities and the telecommunications industry.
In addition to Bran+Luebbe with sales of $130 million, the company recently completed three product-line
acquisitions with sales totaling $35 million. These businesses include: TKO Doors, a manufacturer of specialty
dock doors; S. W. Fleming, Canada's leading producer of hollow metal doors; and Bicotest, a U.K.
designer/producer of time domain reflectors used to locate faults in underground wire cables.
United Dominion is a diversified manufacturer of proprietary engineered products in four business segments -
Flow Technology, Machinery, Specialty Engineered Products, and Test Instrumentation. It has annual sales in
excess of $2 billion and 13,000 employees in 21 countries. More information about United Dominion Industries
can be found on its website - www.uniteddominion.com .
This press release contains certain ''forward-looking statements'' within the meaning of Section 27A of the
Securities Exchange Act of 1934, as amended, that represent the Company's current expectations or beliefs
concerning future events. Such forward-looking statements are about matters that are inherently subject to risks
and uncertainties. Factors that could influence the matters discussed in such forward-looking statements include
economic conditions, the current business environment, both in North America and abroad, including interest
rates and consumer and capital spending, competitive factors, pricing pressures, new product development,
changes in laws and regulations, and availability of acquisition candidates at affordable prices. Such factors, and
other factors, are discussed in more detail in the Company's most recent annual report and other documents filed
with the Securities and Exchange Commission and the securities regulatory authorities in the provinces of
Canada.
Consolidated Statements of Income
For the Quarters and Nine Months Ended September 30, 1999 and 1998
(Stated in Thousands of U.S. Dollars)
Quarters Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
1999 1998 1999 1998
Sales $546,998 $524,755 $1,574,674 $1,492,582
Costs and expenses
Cost of sales 376,052 365,064 1,095,543 1,041,690
Selling, general and
administrative expenses 112,404 108,518 322,510 309,196
Goodwill and other
intangibles amortization 6,102 5,559 17,539 15,692
Restructuring charges 3,239 1,287 4,601 1,287
Total costs and
expenses 497,797 480,428 1,440,193 1,367,865
Operating income 49,201 44,327 134,481 124,717
Other income (expense)
Interest -- net (9,384) (9,285) (27,996) (26,181)
Other (1,500) (500) (1,500) 2,148
Income before income taxes 38,317 34,542 104,985 100,684
Income tax provision (10,361) (13,164) (35,695) (38,371)
Net income $27,956 $21,378 $69,290 $62,313
Earnings per common share $0.71 $0.52 $1.74 $1.53
Average common shares
outstanding (thousands) 39,454 40,750 39,843 40,813
Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 1999 and 1998
(Stated in Thousands of U.S. Dollars)
1999 1998
Cash provided from (used by) operating activities
Net income $69,290 $62,313
Add (deduct) items not affecting cash
Depreciation 35,612 31,020
Amortization 19,466 16,667
Deferred income taxes 2,906 (47)
Other 1,174 487
Net increase in working capital other than cash (30,471) (59,231)
Asset securitization (300) (2,600)
97,677 48,609
Cash provided from (used by) investing activities
Additions to fixed assets (45,388) (36,547)
Acquisition of businesses (136,146) (171,846)
Net proceeds from disposal of businesses - 7,508
Proceeds from (investments in) other assets (4,414) 9,434
Other (259) (4,157)
(186,207) (195,608)
Cash provided from (used by) financing activities
Net additional borrowings 94,025 247,164
Issuance of common stock 1,537 7,110
Repurchase of common stock (38,476) (78,811)
Dividends (10,770) (10,961)
46,316 164,502
Increase (decrease) in cash during the period (42,214) 17,503
Cash at beginning of period 123,455 64,587
Cash at end of period $81,241 $82,090
Consolidated Statements of Financial Position
As of September 30, 1999 and December 31, 1998
(Stated in Thousands of U.S. Dollars)
September 30, Dec. 31,
1999 1998
(Restated)
Current assets
Cash and short-term investments $81,241 $123,455
Accounts and notes receivable 375,725 335,424
Inventories 405,596 379,969
Other current assets 53,892 81,679
Total current assets 916,454 920,527
Fixed assets 347,752 317,853
Goodwill and other intangibles 852,581 774,820
Other assets 77,684 69,734
$2,194,471 $2,082,934
Current liabilities
Notes payable to banks $75,128 $53,672
Current portion of long-term debt 46,445 51,665
Accounts payable 171,399 158,708
Accrued liabilities 161,971 194,682
Customer advances 14,319 23,181
Total current liabilities 469,262 481,908
Long-term debt 624,011 544,771
Other liabilities 198,211 170,425
1,291,484 1,197,104
Shareholders' equity
Common shares 537,038 557,574
Contributed surplus 4,260 4,057
Retained earnings 404,905 360,796
946,203 922,427
Equity adjustment from foreign
currency translation (43,216) (36,597)
Total shareholders' equity 902,987 885,830
$2,194,471 $2,082,934
New accounting guidelines issued in Canada adopt the asset and liability approach to accounting for income
taxes. The company has elected to adopt this new standard effective January 1, 1999. The 1998 statement of
financial position has been restated to reflect the retroactive application of the new rules. This restatement does
not materially affect net income or net earnings per share as previously reported for 1998, therefore they have not
been restated.
Segment Information
For the Quarters and Nine Months Ended September 30, 1999 and 1998
(Stated in Thousands of U.S. Dollars)
Sales
Quarters Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
Flow Technology $250,612 $239,046 $708,014 $688,690
Machinery 120,391 121,170 362,506 362,463
Specialty Engineered
Products 99,814 94,608 273,804 246,203
Test Instrumentation 76,181 69,931 230,350 195,226
$546,998 $524,755 $1,574,674 $1,492,582
Segment Profit
Quarters Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
Flow Technology $23,468 $21,729 $64,833 $59,205
Machinery 17,020 14,523 44,765 45,179
Specialty Engineered
Products 10,414 11,870 29,781 29,524
Test Instrumentation 6,126 4,590 17,713 15,353
$57,028 $52,712 $157,092 $149,261
Reconciliation of Segment Profit to Net Income
Quarters Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
Segment profit $57,028 $52,712 $157,092 $149,261
Corporate expenses (6,319) (7,668) (17,594) (21,853)
Interest - net (9,384) (9,285) (27,996) (26,181)
Other expense (3,008) (1,217) (6,517) (543)
Income before
income taxes 38,317 34,542 104,985 100,684
Income taxes (10,361) (13,164) (35,695) (38,371)
Net income $27,956 $21,378 $69,290 $62,313
For further information: media, Nancy Spurlock, (704) 347-6838, or e-mail, spurlock(at)uniteddominion.com , or
analysts, Thomas Snyder, (704) 347-6874, or e-mail, tsnyder(at)uniteddominion.com , or Michael Morgan, (704)
347-6529, or e-mail, mmorgan(at)uniteddominion.com , all of United Dominion Industries Ltd. |
