United Dominion Industries Limited - Discusses Transformation
United Dominion Industries Ltd. officers discussed the company's transformation into an
industrial manufacturer and its recent acquisition of Core Industries in a meeting with stock
analysts in New York.
"Over the past five years, United Dominion has systematically divested low margin, more highly
cyclical businesses and built its industrial muscle by investing in new manufacturing
businesses," said William R. Holland, chairman and chief executive officer. "Approximately 75
percent of our current businesses were acquired over that time period. We have only three
businesses predating 1992."
The company noted that the reshaping strategy continued in 1997 with the divestiture of its more
cyclical building products businesses and the addition of Core.
"Core Industries fits the profile of the new United Dominion," Holland said. "It is a diversified
manufacturer, comprised of market-leader businesses. It has had a solid growth record over the
past five years with sales from its existing businesses growing at a compound annual rate of nine
percent and earnings at 12 percent without the impact of acquisitions. Core will move us closer to
Vision '99, our five-year strategic plan."
Through Vision '99, United Dominion's goal is to increase sales to $3 billion and earnings to
$3.10 per share by the end of 1999. Since Vision '99 was initiated in 1995, the company has
improved its operating margins from 7 percent to over 11 percent.
In the meeting, Holland said the company expects to report net earnings for the third quarter and
the year within the range of analysts' expectations, providing a significant year-over-year gain.
Earnings per share from continuing operations during the third quarter and full year 1996
excluding one-time adjustments were 39 cents and $1.52 respectively. However, the company
will incur some one-time restructuring charges in the quarter for reductions in force and the
implementation of new processes related to its margin improvement program. According to
United Dominion, these charges are expected to be more than offset by the one-time benefit of an
$8 million fee the company received in connection with Imo Industries' termination of the two
companies' merger agreement.
The company said that its compaction, door products, dock equipment and electrical resistance
heating businesses should reach record profitability levels.
However, it noted that its fluid handling, air filtration, and water and petroleum pump units are
producing less than planned earnings because of delays in implementing new manufacturing
processes and from some market softness.
"The actions we are taking will better position these companies competitively," Holland said.
"They are part of efforts under our margin improvement program to improve efficiency,
productivity and quality."
United Dominion manufactures proprietary engineered products for customers worldwide. The
company employs 10,500 people at 68 plants in 16 countries. |
