- First Quarter Sales Declined Slightly Compared to 2013 First Quarter
- Sales to Asia Continued at Record Levels
-
Six-Month Backlog at
September 27, 2013 was$58,053,000
Sales for the first three months of fiscal 2014, declined to
Gross margin for the fiscal 2014 first quarter was 31.1 percent,
compared to 28.2 percent in the fiscal 2013 first quarter. The increase
in fiscal 2014 first quarter gross margin was the result of a more
profitable mix of business, primarily driven by increased shipments of
pressure-pumping transmissions to
For the fiscal 2014 first quarter, marketing, engineering and
administrative (ME&A) expenses, as a percentage of sales, were 23.4
percent, compared to 24.2 percent for the fiscal 2013 first quarter.
ME&A expenses decreased
The Company recorded a restructuring charge of
The effective tax rate for the first quarter of fiscal 2014 was 64.4
percent, which is significantly higher than the prior year rate of 46.4
percent. Both years were significantly impacted by non-deductible losses
in certain foreign jurisdictions that are subject to a full valuation
allowance. Adjusting for these non-deductible losses, the fiscal 2014
rate would have been 39.7 percent compared to 36.9 percent for the
fiscal 2013 first quarter. The increase in the fiscal 2014 rate was
primarily driven by adjustments to tax on foreign earnings (
Net earnings attributable to
Earnings before interest, taxes, depreciation and amortization (EBITDA)*
was
Commenting on the results,
The conference call will also be broadcast live over the Internet. To
listen to the call via the Internet, access
About
Forward-Looking Statements
This press release may contain statements that are forward looking as
defined by the
*Non-GAAP Financial Disclosures
Financial information excluding the impact of foreign currency exchange rate changes and the impact of acquisitions, if any, in this press release are not measures that are defined in U.S. Generally Accepted Accounting Principles ("GAAP"). These items are measures that management believes are important to adjust for in order to have a meaningful comparison to prior and future periods and to provide a basis for future projections and for estimating our earnings growth prospects. Non-GAAP measures are used by management as a performance measure to judge profitability of our business absent the impact of foreign currency exchange rate changes and acquisitions. Management analyzes the company's business performance and trends excluding these amounts. These measures, as well as EBITDA, provide a more consistent view of performance than the closest GAAP equivalent for management and investors. Management compensates for this by using these measures in combination with the GAAP measures. The presentation of the non-GAAP measures in this press release are made alongside the most directly comparable GAAP measures.
Definition — Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)
The sum of, net earnings and adding back provision for income taxes, interest expense, depreciation and amortization expenses: this is a financial measure of the profit generated excluding the above mentioned items.
--Financial Results Follow--
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||||||||||
(In thousands, except per-share data; unaudited) |
||||||||||||
Three Months Ended |
||||||||||||
|
|
|||||||||||
Net sales | $ | 66,426 | $ | 68,793 | ||||||||
Cost of goods sold | 45,759 | 49,377 | ||||||||||
Gross profit | 20,667 | 19,416 | ||||||||||
Marketing, engineering and administrative expenses |
15,517 |
16,620 |
||||||||||
Restructuring of operations | 1,094 | - | ||||||||||
Earnings from operations | 4,056 | 2,796 | ||||||||||
Interest expense | 254 | 306 | ||||||||||
Other (income) expense, net | (34 | ) | 127 | |||||||||
Earnings before income taxes and noncontrolling interest |
3,836 |
2,363 |
||||||||||
Income taxes | 2,472 | 1,097 | ||||||||||
Net earnings | 1,364 | 1,266 | ||||||||||
Less: Net earnings attributable to noncontrolling interest, net of tax |
(87 |
) |
(35 |
) |
||||||||
Net earnings attributable to |
$ | 1,277 | $ | 1,231 | ||||||||
Earnings per share: | ||||||||||||
Basic earnings per share attributable to |
$ |
0.11 |
$ |
0.11 |
||||||||
Diluted earnings per share attributable to |
$ |
0.11 |
$ |
0.11 |
||||||||
Weighted average shares outstanding: | ||||||||||||
Basic | 11,234 | 11,368 | ||||||||||
Diluted | 11,240 | 11,446 | ||||||||||
Dividends per share | $ | 0.09 | $ | 0.09 | ||||||||
Net earnings | $ | 1,364 | $ | 1,266 | ||||||||
Other comprehensive income: | ||||||||||||
Foreign currency translation adjustment | 1,880 | 1,264 | ||||||||||
Benefit plan adjustments, net | 450 | 668 | ||||||||||
Comprehensive income | 3,694 | 3,198 | ||||||||||
Comprehensive income attributable to noncontrolling interest |
(87 |
) |
(35 |
) |
||||||||
Comprehensive income attributable to |
$ |
3,607 |
$ |
3,163 |
||||||||
RECONCILIATION OF CONSOLIDATED NET EARNINGS TO EBITDA | ||||||||||
(In thousands; unaudited) |
||||||||||
Three Months Ended |
||||||||||
|
|
|||||||||
Net earnings attributable to |
$ |
1,277 |
$ | 1,231 | ||||||
Interest expense | 254 | 306 | ||||||||
Income taxes | 2,472 | 1,097 | ||||||||
Depreciation and amortization | 2,603 | 2,632 | ||||||||
Earnings before interest, taxes, depreciation and amortization |
$ | 6,606 | $ | 5,266 | ||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||||
(In thousands; unaudited) | ||||||||||||
|
|
|||||||||||
2013 | 2013 | |||||||||||
ASSETS | ||||||||||||
Current assets: | ||||||||||||
Cash | $ | 24,062 | $ | 20,724 | ||||||||
Trade accounts receivable, net | 37,471 | 46,331 | ||||||||||
Inventories, net | 103,106 | 102,774 | ||||||||||
Deferred income taxes | 5,366 | 5,280 | ||||||||||
Other | 11,807 | 13,363 | ||||||||||
Total current assets | 181,812 | 188,472 | ||||||||||
Property, plant and equipment, net | 61,106 | 62,315 | ||||||||||
Goodwill | 13,319 | 13,232 | ||||||||||
Deferred income taxes | 5,111 | 7,614 | ||||||||||
Intangible assets, net | 3,079 | 3,149 | ||||||||||
Other assets | 8,729 | 10,676 | ||||||||||
TOTAL ASSETS | $ | 273,156 | $ | 285,458 | ||||||||
LIABILITIES AND EQUITY | ||||||||||||
Current liabilities: | ||||||||||||
Short-term borrowings and current maturities of long-term debt | $ | 3,664 | $ | 3,681 | ||||||||
Accounts payable | 17,344 | 20,651 | ||||||||||
Accrued liabilities | 33,342 | 39,171 | ||||||||||
Total current liabilities | 54,350 | 63,503 | ||||||||||
Long-term debt | 21,171 | 23,472 | ||||||||||
Accrued retirement benefits | 46,987 | 48,290 | ||||||||||
Deferred income taxes | 2,723 | 2,925 | ||||||||||
Other long-term liabilities | 3,542 | 3,706 | ||||||||||
Total liabilities | 128,773 | 141,896 | ||||||||||
|
11,159 |
13,183 |
||||||||||
Retained earnings | 184,372 | 184,110 | ||||||||||
Accumulated other comprehensive loss | (23,523 | ) | (25,899 | ) | ||||||||
172,008 | 171,394 | |||||||||||
Less treasury stock, at cost |
28,238 |
28,890 |
||||||||||
Total |
143,770 | 142,504 | ||||||||||
Noncontrolling interest | 613 | 1,058 | ||||||||||
Total equity | 144,383 | 143,562 | ||||||||||
TOTAL LIABILITIES AND EQUITY | $ | 273,156 | $ | 285,458 | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||
(In thousands; unaudited) |
||||||||||||
Three Months Ended | ||||||||||||
|
|
|||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||
Net earnings | $ | 1,364 | $ | 1,266 | ||||||||
Adjustments to reconcile net earnings to net cash provided by operating activities: |
||||||||||||
Depreciation and amortization | 2,603 | 2,632 | ||||||||||
Restructuring of operations | 1,094 | - | ||||||||||
Other non-cash changes, net | 2,323 | 2,223 | ||||||||||
Net change in working capital, excluding cash and debt, and other |
2,338 |
(4,039 |
) |
|||||||||
Net cash provided by operating activities | 9,722 | 2,082 | ||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||
Acquisitions of fixed assets | (866 | ) | (1,337 | ) | ||||||||
Proceeds from sale of fixed assets | - | 31 | ||||||||||
Other, net | - | (293 | ) | |||||||||
Net cash used by investing activities | (866 | ) | (1,599 | ) | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||
Principal payments of notes payable | (14 | ) | (88 | ) | ||||||||
(Payments of) proceeds from long-term debt | (2,305 | ) | 6,935 | |||||||||
Proceeds from exercise of stock options | - | 129 | ||||||||||
Dividends paid to shareholders | (1,015 | ) | (1,026 | ) | ||||||||
Dividends paid to noncontrolling interest | (486 | ) | (204 | ) | ||||||||
Excess tax benefits from stock compensation | 435 | 1,316 | ||||||||||
Payments of withholding taxes on stock compensation | (2,126 | ) | (1,700 | ) | ||||||||
Net cash (used) provided by financing activities | (5,511 | ) | 5,362 | |||||||||
Effect of exchange rate changes on cash | (7 | ) | (53 | ) | ||||||||
Net change in cash and cash equivalents | 3,338 | 5,792 | ||||||||||
Cash and cash equivalents: | ||||||||||||
Beginning of period | 20,724 | 15,701 | ||||||||||
End of period | $ | 24,062 | $ | 21,493 |
Source:
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