Monday November 25 8:44 AM EDT
Varlen reports record third quarter sales, operating profit
NAPERVILLE, Ill.--(BUSINESS WIRE)--Nov. 25, 1996-- Varlen Corp
posted record sales and operating profit in the third quarter on
the strength of its newly acquired Brenco railcar bearing subsidiary
and the automotive products business, but higher interest expense
from acquiring Brenco reduced net income from the same period a year
ago.
"Though net income did decline in the third quarter, we're seeing
once again that the strength of our core businesses can help us to
endure the periods of weaker demand in certain of our served
markets," said Richard L. Wellek, Varlen president and chief
executive officer.
Net income for the quarter ended Nov. 2, 1996, was $4.1 million,
or 53 cents per share on a fully diluted basis, compared with $5.2
million, or 64 cents per fully diluted share in the year-ago
quarter.
Sales were $119.9 million in the third quarter vs. $94.2 million
in the third quarter of 1995.
For the year-to-date period, Varlen sales were $302.9 million
compared to $298.9 million in the first three quarters of 1995.
Net income for 1996 year-to-date was $14.9 million, or $1.86 per
fully diluted share, compared to $16.3 million, or $1.99 per fully
diluted share for the first three quarters of 1995. During the
second quarter of 1996, a non-core laboratory appliance business
was sold, resulting in a $2.1 million or 23 cents per fully diluted
share after-tax gain.
Automotive products maintained its momentum with record results
in the quarter, gaining in both sales and operating profit over
the same period a year ago while the rest of the market was
relatively flat. This was achieved despite work disruptions
experienced at General Motors in Canada and the United States.
The huge jump in Varlen sales came from Brenco, which contributed
to Varlen's quarterly results for an entire quarter for the first
time since it was acquired at the end of the 1996 second quarter.
On Nov. 8, 1996, Varlen sold Brenco's Rail Link Inc. unit to
Genesee and Wyoming for $9 million and additional proceeds based
on future performance. This sale will not have any impact on net
income. The proceeds from divesting of Rail Link, a non-core
business involved in railroad switching and related services,
were used to reduce Varlen's outstanding debt.
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VARLEN CORPORATION AND SUBSIDIARIES
RESULTS OF OPERATIONS
(Unaudited)
(In Thousands, Except Per Share Amounts)
For The Third Quarter For The Nine Months
Ended Ended
11/2/96 10/28/95 11/2/96 10/28/95
Net sales $ 119,898 $ 94,209 $ 302,898 $ 298,931
Gross profit 28,245 23,685 74,521 75,121
Selling, general
and administrative
expenses 17,737 13,365 46,084 42,803
Gain on sale of
business --- --- 3,730 ---
Interest expense,
net 3,107 1,066 5,586 3,458
Income taxes 3,264 4,017 11,722 12,554
Net earnings 4,137 5,217 14,859 16,306
Primary earnings
per share(a) $ .69 $ .84 $ 2.46 $2.65
Fully diluted earnings
per share(a) $ .53 $ .64 $1.86 $1.99
Weighted average
number of shares
outstanding(a):
Primary 6,009 6,185 6,038 6,133
Fully diluted 9,064 9,250 9,092 9,218
(a) 1995 amounts have been restated for a 10 percent stock
dividend.
BUSINESS SEGMENTS
(Unaudited)
(In Thousands)
For The Third Quarter For The Nine Months
Ended Ended
11/2/96 10/28/95 11/2/96 10/28/95
Net Sales:
Transportation products $ 110,097 $ 79,268 $ 267,290 $ 243,237
Analytical instruments 9,801 14,941 35,608 55,694
---------------------------------------------
$ 119,898 $ 94,209 $ 302,898 $ 298,931
Operating Profits(b)
Transportation products $ 10,867 $ 9,532 $ 28,374 $ 29,821
Analytical instruments 1,420 2,517 8,265 7,066
--------------------------------------------
$ 12,287 $ 12,049 $ 36,639 $ 36,887
(b) Before interest and general corporate expenses.
CONTACT: Varlen Corp.
Richard L. Wellek, President and CEO or
Richard A. Nunemaker, Vice President and CFO,
630-420-0400 |
