April 22, 1998 - First Quarter Earnings Up 40 Percent
United Dominion Industries Ltd. reported first quarter net income of $14.3
million or 35 cents per share, compared with $11.2 million or 25 cents per share
for the same period last year, a 40 percent increase in earnings per share. Sales
in the first quarter increased $121 million over 1997 results, and totaled $444
million, benefiting from acquisitions. Backlog stood at $394 million, up 32
percent from the same period last year.
"We are very pleased with these results," said William R. Holland, chairman and
chief executive officer. "Despite a relatively warm winter that adversely
impacted results at our heating related businesses, operating results were
strong. Total segment profit of $38.7 million was up $10.8 million, or 39
percent, from 1997.
"All four business segments showed improved earnings over last year. The Flow
Technology Segment was up 8 percent. Businesses in our "Hard-Focus Group" that
underperformed last year accounted for most of the increase.
"Operating earnings for the Machinery Segment were up significantly. The
Compaction Division continues to report excellent results, and the newly acquired
Agricultural Equipment Division also had a strong quarter. The Specialty
Engineered Products Segment was up with good results at the Door Products
Division and a solid improvement at Fenn. Recent acquisitions boosted the Test
Instrumentation Segment's increase."
During the first quarter the company made three product-line acquisitions:
Radiodetection, a designer and manufacturer of equipment to locate underground
pipes and cables, including fiber optics; APV Ice Cream that makes Waukesha
Cherry-Burrell a dominant supplier in the ice cream equipment industry; and
Tex-Steel, a producer of metal doors that complements the company's Door Products
Division. United Dominion also completed a joint-venture agreement creating the
Japanese firm, Flair-Nagao. These four businesses have annualized sales of
approximately $100 million.
United Dominion also completed its share buyback program, repurchasing three
million shares at a total cost of $79 million.
Mr. Holland said the company remains optimistic about results for the balance of
1998, based on business momentum and the global economic outlook.
United Dominion is a diversified manufacturer of proprietary engineered products
with 87 manufacturing operations in 18 countries, 11,000 employees, and annual
sales of $2 billion.
The following four pages give detailed first-quarter financial information:
Consolidated Statements of Income
For the Quarters Ended March 31, 1998 and 1997 Stated in Thousands of U.S.
Dollars)
Quarters Ended
Mar. 31, Mar. 31,
1998 1997
(Restated)
Sales $444,135 $322,809
Costs and expenses
Cost of sales 314,263 229,534
Selling, general and
administrative expenses 98,865 70,429
Total costs and expenses 413,128 299,963
Operating income 31,007 22,846
Interest -- net (7,899) (4,010)
Income before income taxes 23,108 18,836
Income tax provision 8,781 7,451
Income from continuing operations 14,327 11,385
Loss from discontinued operations - (214)
Net income $14,327 $11,171
Earnings per common share
Continuing operations $0.35 $0.25
Discontinued operations 0.00 (0.00)
Net earnings $0.35 $0.25
Average common shares
outstanding (thousands) 41,027 45,240
In 1997, the company sold its Varco-Pruden, Centria and Windsor Door businesses.
These units were part of the company's former Building Products segment.
Accordingly, the results of operations and cash flows for prior periods have been
restated to show amounts related to these units as discontinued operations. This
restatement does not affect net income or net earnings per share as previously
reported.
Consolidated Statements of Cash Flows
For the Quarters Ended March 31, 1998 and 1997 (Stated in Thousands of U.S.
Dollars)
Mar. 31, Mar. 31,
1998 1997
(Restated)
Cash provided from (used by) operating activities
Continuing operations
Income from continuing operations $14,327 $11,385
Add (deduct) items not
affecting cash
Depreciation 9,586 7,787
Amortization 5,122 3,483
Deferred income taxes 421 2,221
Other 675 1,804
Net increase in working
capital other than cash (43,819) (38,129)
Asset securitization (11,900) (12,500)
(25,588) (23,949)
Cash provided from (used by) investing activities
Additions to fixed assets (15,706) (7,933)
Acquisition of businesses (100,778) (24,124)
Net proceeds from disposal of assets 10,131 28,239
Proceeds from (investments in)
other assets (162) 1,392
Other (1,319) (711)
(107,834) (3,137)
Cash provided from (used by) financing activities
Net addition to borrowings 198,599 991
Issuance of common stock 4,296 1,266
Repurchase of common stock (78,658) (10,439)
Dividends (3,645) (3,165)
120,592 (11,347)
Cash used by discontinued operations - (3,423)
Decrease in cash during the period (12,830) (41,856)
Cash at beginning of period 64,587 166,269
Cash at end of period $51,757 $124,413
Consolidated Statements of Financial Position
As of March 31, 1998 and December 31, 1997 Stated in Thousands of U.S.
Dollars)
Mar. 31, Dec. 31,
1998 1997
Current assets
Cash and short-term
investments $51,757 $64,587
Accounts and notes
receivable 289,306 259,209
Inventories 365,860 330,335
Other current assets 45,667 42,383
Total current assets 752,590 696,514
Fixed assets 308,232 294,702
Goodwill and
other intangibles 728,540 669,286
Other assets 105,577 118,045
$1,894,939 $1,778,547
Current liabilities
Notes payable to banks $144,887 $74,436
Current portion of
long-term debt 41,088 41,131
Accounts payable 144,901 131,959
Income taxes payable
Accrued liabilities 145,754 171,681
Customer advances 20,631 13,932
Total current liabilities 497,261 433,139
Long-term debt 424,412 297,488
Other liabilities 152,555 163,920
1,074,228 894,547
Shareholders' equity
Common shares 556,371 591,502
Contributed surplus 3,133 1,859
Retained earnings 298,962 326,305
858,466 919,666
Equity adjustment from
foreign currency
translation (37,755) (35,666)
Total shareholders' equity 820,711 884,000
$1,894,939 $1,778,547
Segment Information
Sales
Quarters
Ended
March 31,
1998 1997
Flow Technology $212.8 $174.1
Machinery 95.2 59.7
Specialty Engineered Products 80.4 72.7
Test Instrumentation 56.1 14.4
Divested business 0.0 2.4
444.5 323.3
Less intersegment sales (0.4) (0.5)
$444.1 $322.8
Segment Profit
Quarters
Ended
March 31,
1998 1997
Flow Technology $16.7 $15.5
Machinery 8.5 2.2
Specialty Engineered Products 9.3 8.9
Test Instrumentation 4.2 1.3
Divested business 0.0 (0.1)
$38.7 $27.9
Reconciliation of Segment Profit to Net Income
Quarters
Ended
March 31,
1998 1997
Segment profit $38.7 $27.9
Corporate expenses (6.7) (6.2)
Interest - net (7.9) (4.0)
Other income (expense) (1.0) 1.2
Income from continuing operations
before income taxes 23.1 18.8
Income taxes (8.8) (7.5)
Income from continuing operations 14.3 11.4
Loss from discontinued operations 0.0 (0.2)
Net income $14.3 $11.2
Note: Stated in Millions of U.S. Dollars.
TEL: (704) 347-6838 United Dominion Industries
Nancy Spurlock, Media TEL: (704) 347-6529 United Dominion Industries
Michael Morgan, Analyst |
