September 28, 1998 - Expects Earnings To Be Below Analysts' Estimates
The Company Also Announces Recent Organizational Changes and Two Million Share Repurchase Program
CHARLOTTE, N.C., Sept. 28 /CNW/ -- United Dominion Industries Ltd. (NYSE, TSE, ME: UDI) today announced that it expects third-quarter earnings per share to be between $.50 and $.55, which is below the current range of analysts' estimates ($.65 to $.72).
"In our second quarter earnings release, we commented on a concern about softening industrial markets," said William R. Holland, chairman and chief executive officer. "At that time the softness was isolated to a few of the markets we serve but was offset by strength in other areas. Clearly, weak economic conditions in many parts of the world are now affecting us both here and abroad, in terms of bookings and pricing. Like many other diversified industrial companies, these conditions have resulted in increased softness in several of the markets we serve. We still expect year-over-year organic sales growth but less than originally expected and at lower than anticipated margins."
The company also said that, for the same economic reasons, it expects full year earnings to be impacted and to be between $2.15 and $2.25 per share. These amounts reflect the current outlook as well as anticipated restructuring charges at certain operating units.
"Despite being below analysts' estimates ($2.25 to $2.50), these results would be a 12 to 18 percent improvement over last year and would reflect a 19 to 23 percent increase in EBITDA. With a strong foundation in place, we continue to be committed to our strategies and confident in the long-term prospects for growth and margin improvement in our businesses," Mr. Holland said.
NEW ORGANIZATION
United Dominion also announced an organizational structure along the lines of its four segments. The company has appointed four segment presidents to enhance the company's focus on strategy, growth and synergies at the segment level.
-- James M. Gibbs, formerly president of the company's Marley Division (Marley Cooling Tower and Marley Pump), becomes president of the Flow Technology Segment. This segment designs and manufactures equipment to control the flow of air and fluids and represents approximately 47 percent of the company's sales.
-- Lothar Wahl, a senior vice president of the company, becomes president of the Machinery Segment, which accounts for approximately 22 percent of the company's sales. Mr. Wahl's responsibilities include Compaction Equipment, of which he is currently president, as well as the company's Agricultural Equipment Division.
-- B. Bernard Burns, Jr., a senior vice president of the company, who most recently led the company's Door Products Division, now heads the Specialty Engineered Products Segment. This segment principally includes the company's door products and material handling operations, and accounts for approximately 17 percent of sales.
-- Glenn A. Eisenberg expands his operating role by leading the Test Instrumentation Segment. This segment is principally involved in the design and manufacture of various testing and measuring equipment, and accounts for approximately 14 percent of United Dominion's sales. Mr. Eisenberg remains executive vice president and chief financial officer.
Messrs. Gibbs, Burns, and Eisenberg (in his operating role) will report to David R. Zimmer, executive vice president -- operations, while Mr. Wahl will report to Mr. Holland.
In addition, the company announced two officer appointments. Richard F. Bradbury, President of Flair, is named senior vice president, and Nancy H. Spurlock, head of corporate communications, is named assistant vice president.
United Dominion also announced that Jan Ver Hagen, vice-chairman, will retire as a corporate officer at year-end. "Jan, formerly president and chief operating officer, has made significant contributions since joining the company in 1994. We will miss his day-to-day involvement," Mr. Holland said.
SHARE REPURCHASE PROGRAM
The company also announced that its Board of Directors has authorized the company to repurchase up to 5 percent (approximately 2 million) of its outstanding shares.
"Given current stock market conditions and the company's strong balance sheet, we are initiating a share repurchase program to take advantage of a low share price," said Mr. Holland.
The repurchases will be accomplished through a normal course issuer bid in Canada, subject to approval of the Toronto and Montreal stock exchanges. The actual number of shares purchased, the timing of purchases, and the prices paid will depend upon future market conditions. The company currently has 40.8 million common shares outstanding and plans to cancel shares repurchased under the program. Over the previous twelve months, the company has purchased 3.6 million of its shares, 3 million of which were purchased in January 1998 pursuant to a substantial issuer bid.
United Dominion is a $2 billion diversified manufacturer of proprietary engineered products in four business segments -- Flow Technology, Machinery, Specialty Engineered Products, and Test Instrumentation. It has 12,000 employees at 87 locations in 18 countries.
This announcement contains forward-looking statements regarding the anticipated results of the company. Actual results may differ materially from those indicated in this announcement, as they are subject to a number of factors, including but not limited to changes in the current and future business environment, both in North America and internationally, capital and consumer spending, weather, material prices and availability, competitive factors and competitor tactics, successful development and introduction of new products, and changes in laws and regulations, including taxes. The company undertakes no obligation to make further announcements to revise any forward- looking statements contained herein to reflect events or circumstances occurring after the date of this announcement, or to reflect the occurrence of unanticipated events.
For further information: Media - Nancy Spurlock, 704-347-6838 or e-mail: spurlockuniteddominion.com, or Analysts - Thomas Snyder, 704-347-6874 or e-mail: tsnyderuniteddominion.com, or Michael Morgan, 704-347-6529 or e-mail: mmorganuniteddominion.com, all of United Dominion Industries Ltd./ |
