Remember the CADE discussion a few days back??
(Here's the part where I struggle as to whether this will be perceived as blatant stock-hyping or a peer sharing important information.)
Well . . . CADE's due to release its earnings on 2/9 but an alleged Dow Jones article quotes the CADE CEO dropping the numbers today. I say the article is alleged because I haven't been able to verify its veracity. Supposedly it's retrievable on www.wsj.com. I haven't been able to do so but several people on the YAHOO board claim to have been able to do so.
So . . . without further ado here's the "alleged" article which I've cut and pasted here from the Yahoo board. Today's mid-day spike in price and activity may have been linked to this article's release.
The alleged author's phone number and e-mail address are attached if you want to do a bit more DD than I have.
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Cade Indus Puts 4Q Net At 5c/Shr;Sees '99 Earns Up 25%
By NANCY FONTI
Dow Jones Newswires
NEW YORK -- The number of new aircraft delivered each year is a shifty statistic, but Cade Industries Inc. (CADE) is sure of one thing: at some point, all planes need repairs.
The Lansing, Mich., company, which provides and designs components for the aerospace industry, has boosted sales of products used to repair engines and airframes
components to 45% of total sales.
In the 1980s and early 1990s, it relied almost solely on providing composite engine and
airframe products to original equipment manufacturers. About 75% of revenue came
from United Technologies Corp.'s (UTX) Pratt & Whitney aircraft engine unit. But
when the airplane cycle hit a downturn in the early 1990s, Cade's sales plummeted and
forced it to diversify its customer base and products. Now a little more than half of the
company's business is related to OEMs, with the remainder tied to the aftermarket. And
while Pratt & Whitney remains a strong customer - sales have increased even though it
now accounts for only 22% of Cade's business - major airlines also turn to Cade for
service.
The move to repairs has protected Cade from the cyclicality of the aerospace business
and the Asian financial crisis, which has hurt new aircraft orders, President and Chief
Operating Officer Richard Lund told Dow Jones. The company also credits that shift for
the record earnings it expects in 1998 and 1999.
Cade, which will post fourth-quarter and 1998 results on Feb. 9, expects profits of five
cents a share, up from three cents a share, or $700,000, a year ago, Lund said.
Revenue climbed 50% from $17 million in the 1997 quarter, the company said.
For the full year, Cade sees earnings of about $4.2 million, or between 18 cents and 19
cents a share, compared with about $2.3 million, or 11 cents a year ago. It expects
1998 revenue of $94 million, up from $55 million in 1997.
In 1999, earnings should jump another 25%, and margins should push past 5%, Lund
said. As the world's fleet of airplanes grows, so will revenue from overhaul and repair,
which should climb by 30% to 40% in 1999, he said. "This is the fastest-growing part of
our business in terms of percentage growth over the past two years," Lund said.
Cade also plans to expand its line of composite materials used to replace metal in large
commercial airliner engines in 1999, he said. Composite materials, sold to original
equipment manufacturers and used in the overhaul business, account for 50% of sales.
Cade also makes jet engine testing systems, which make up about 35% of
revenue. Its composite airframe products, which it sells to Boeing Co. (BA), bring in
about 11%. About 37% of Cade's sales are in international markets, mainly Europe,
South America and Asia, where it has seen slowing aftermarket demand from some
carriers.
Cade has changed its business strategy, but it can't seem to shake its close association
with the plane and engine makers. Its stock price has fallen about 6% since the end of
1997, a drop Lund, the company's president and chief operating officer, blames on Wall
Street's perception that his company is dependent on Boeing. Boeing has lost orders to
the Asian financial crisis and to European consortium Airbus Industrie.
"Everyone was tying us 100% to Boeing," he said. "They said that if Boeing was going
to cut their production rates, then our business would be down." Boeing makes up just
4% of the company's backlog, he said.
Another reason for the decline, he said, could be lack of exposure - no Wall Street
analysts follow the company now. The stock recently traded at 2 3/8, down 1/32, or
1.3%. Looking into 1999, Cade plans a "substantial increase" in its stock buyback
program in 1999. So far, it has repurchased about 250,000, or 1%, of its shares.
- Nancy Fonti; 201-938-5451
nancy.fonti@cor.dowjones.com |
