Aeroquip-Vickers Reports Best Quarter Ever; Earnings Per Share Are $1.33.MAUMEE Maumee (mômē`), residential city (1990 pop. 15,561), Lucas co., NW Ohio, on the Maumee River; inc. 1838. Maumee was the site of Fort Miami, a British post surrendered to the Americans during the War of 1812. , Ohio--(BUSINESS WIRE)--July 17, 1998--Aeroquip-Vickers, Inc. (ANV ANV Army of Northern Virginia ANV Anvik, AK, USA (Airport Code) ANV Autoritatea Nationala a Vamilor (Romania) ANV Alaska Native village (US) ANV Association of Napata Volunteers :NYSE NYSE See: New York Stock Exchange ) today announced that second-quarter earnings per share were a record $1.33 and a 16% increase over 1997 second-quarter earnings per share of $1.15. Sales increased to a quarterly high of $574.3 million, from $556.3 million in 1997. 1997 second-quarter sales included $17 million in sales from the automotive interior plastics business divested during the year, and the sales increase for the 1998 second quarter was 8.3% after adjusting for the divested business and the effect of exchange rate changes. After these adjustments, approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 25% of the sales increase was due to acquisitions. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. increased $3.5 million, or 5.7%, to a record $65.1 million, and operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: was a best-ever 11.3%. "In addition to the record quarter, the first six months of 1998 were also our best ever," said Darryl Darryl is a common English name from Old English and Old French origin, generally used for males, but also can be the name of a female. It was used since the time of the Norman Saxon invasion of England. F. Allen Al·len , Edgar 1892-1943. American anatomist who is noted for his studies of hormones and for the discovery (1923) of estrogen. , Aeroquip-Vickers chairman, president and chief executive officer. "Sales grew to a record $1.12 billion. Operating income, operating margin, net income and net income per share exceeded previous highs for a six-month period. Within our operations, new highs were achieved in industrial sales; aerospace sales, operating income, operating margin and order intake intake /in·take/ (in-tak´) the substances, or the quantities thereof, taken in and utilized by the body. intake, n the substance or quantities thereof taken in and used by the body. ; and automotive operating margin. "Our aerospace business continued to lead the way in the 1998 second quarter with operating margin again exceeding 18% on record sales. We continue to win a significant majority share of the business we go after for our primary product lines. As one example, through the first six months of this year airlines had to make their choice for pumps and motorpumps on 384 new aircraft. Vickers Vick·ers , Jonathan Stewart Known as "Jon." Born 1926. Canadian tenor widely acclaimed for his performances in operas by Wagner and Verdi. was the choice on 76%, or 287, of the planes. Clearly, our aerospace product quality and reliability, technological expertise, and on-time delivery are valued highly in the marketplace and are driving our impressive results. "In automotive, our sales improved over the 1998 first quarter but declined from a year ago due to the divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). of our interior automotive plastics business in 1997. We recorded a double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. operating margin for the fifth consecutive quarter as we have focused the business on our fluid connectors competencies. We strengthened our global capabilities to serve customers with the purchase of the assets of Aerotech For the automobile, see . For the rocketry company, see . AeroTech is a FASA wargame set in the BattleTech universe. It simulates combat between AeroSpace fighters, troop-carrying DropShips, and interstellar WarShips. South Africa South Africa, Afrikaans Suid-Afrika, officially Republic of South Africa, republic (2005 est. pop. 44,344,000), 471,442 sq mi (1,221,037 sq km), S Africa. , the largest hose and fittings fit·ting adj. Being in keeping with a situation; appropriate. n. 1. The act of trying on clothes whose fit is being adjusted. 2. A small detachable part for a machine or apparatus. 3. manufacturer in South Africa. We also increased capacity for our book of U.S. business with the start-up Start-up The earliest stage of a new business venture. of a facility in Mooresville, North Carolina Mooresville is a town in Iredell County, North Carolina, USA. The population was 18,823 at the 2000 census. It is located approximately 25 minutes north of Charlotte. . In addition, we aggressively began to bring on stream our new Wolfsburg Wolfsburg (vôlfs`b  rkh), city (1994 pop. 128,032), Lower Saxony, N central Germany, on the Midland Canal. , Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). , facility to meet our long-term Long-termThree or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. book of business in Germany for air conditioning air conditioning, mechanical process for controlling the humidity, temperature, cleanliness, and circulation of air in buildings and rooms. Indoor air is conditioned and regulated to maintain the temperature-humidity ratio that is most comfortable and healthful. and power-assisted steering Noun 1. power-assisted steering - automotive steering where engineer power amplifies the torque applied to the steering wheel power steering steering mechanism, steering system - a mechanism by which something is steered (especially a motor vehicle) components and systems. The demand for these components and systems continues strong, especially in Europe Europe (y r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). . Our ability to globally
source our fluid connector product lines wherever manufacturers choose
to build their cars is a competitive advantage that continues to win us
new business."Our industrial business continued to improve with sales a record for any quarter and operating income the second highest ever recorded," Mr. Allen said. "Especially encouraging was a 13.8% increase (exclusive of the effect of exchange rate changes) in our European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. industrial sales led by gains in stationary Stationary can mean:
"We continue to successfully address the delivery and production inefficiencies at our Omaha, Nebraska “Omaha” redirects here. For other uses, see Omaha (disambiguation). Omaha is the largest city in the State of Nebraska, United States. It is the county seat of Douglas County.GR6 As of the 2000 census, the city had a population of 390,007. , pump facility. Our new South Carolina South Carolina, state of the SE United States. It is bordered by North Carolina (N), the Atlantic Ocean (SE), and Georgia (SW). Facts and Figures Area, 31,055 sq mi (80,432 sq km). Pop. (2000) 4,012,012, a 15. piston pump manufacturing facility is coming on stream and combined with other initiatives under way makes for a positive outlook for the industrial and mobile markets we serve around the world. "I am proud of our management team for leading another record performance and of our employees worldwide for embracing the quality and continuous improvement processes that are important to our success." Industrial Segment Industrial sales grew to $323.3 million from $317.5 million in 1997. U.S. industrial sales increased 3%. European sales volume increased 13.8% (exclusive of the effect of exchange rate changes). Sales in Asia-Pacific The term Asia-Pacific generally applies to littoral East Asia, Southeast Asia and Australasia near the Pacific Ocean, plus the states in the ocean itself (Oceania). account for less than 5% of consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: sales, and during the 1998 second quarter Asia-Pacific industrial sales declined approximately 27%, with about half of the decline due to the effect of exchange rate changes. U.S. sales to mobile equipment and truck & bus markets improved from a year ago. Residential and commercial air conditioning sales were flat with a year ago. In Europe, improvement was achieved in stationary equipment, electronic systems and truck & bus sectors. Industrial operating income of $33.1 million compared with $32.6 million a year earlier. Aerospace Segment Aerospace sales increased to $142.8 million, or 17.9% (exclusive of the effect of exchange rate changes), reflecting the strength of the market beyond just large commercial aircraft. Aerospace sales increased 19.1% in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . European sales volume increased 10.6% (exclusive of the effect of exchange rate changes). Increased sales were realized with OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and and aftermarket Aftermarket See: Secondary market. aftermarket See secondary market. customers for both commercial and military markets. Second-quarter operating income increased $4.8 million, or 22.1%, and operating margin was 18.5% compared with 17.8% a year ago. Automotive Segment 1998 second-quarter sales from continuous operations increased 11.0% (exclusive of the effect of exchange rate changes) year over year. The 1997 divestiture of the automotive interior plastics business contributed $17.0 million in sales in the 1997 second quarter. Automotive operating income was a healthy 10.9%, even though the quarter included start-up costs for new facilities. Fluid connector demand continued strong during the quarter with increased sales in the U.S. and Europe and the added contribution of a new operation in South Africa. Aeroquip and Vickers Sales Aeroquip's 1998 second-quarter sales were $280.8 million, compared with $285.0 million a year ago. Facilities that were sold or closed in 1997 contributed $17.0 million of Aeroquip's 1997 second-quarter sales. For the first six months, Aeroquip's sales were $546.8 million, compared with $568.2 million in 1997. Facilities that were sold or closed in 1997 contributed $48.3 million of 1997 six-month sales. Vickers' sales were $293.5 million, compared with $271.3 million in the 1997 second quarter. For the first six months, Vickers' sales were $574.6 million, compared with $526.5 million a year ago. -0-
Consolidated Results
(dollars in millions, except per share data; all per
share amounts are reported on a diluted basis)
2Q 98 2Q 97 1Q 98 4Q 97
----- ----- ----- -----
Sales $574.3 $556.3 $547.1 $522.8
Operating Income 65.1 61.6 57.8 58.3(b)
Operating Margin 11.3% 11.1% 10.6% 11.1%(b)
Net Income 37.8 33.6 31.2(a) 31.4(b)
Net Income Per Share 1.33 1.15 1.10(a) 1.11(b)
3Q 97 Six Months 98 Six Months 97
----- ------------- -------------
Sales $494.8 $1,121.4 $1,094.7
Operating Income 53.1 122.8 80.3(c)
Operating Margin 10.7% 11.0% 7.3%(c)
Net Income 30.1 69.0 39.3(c)
Net Income Per Share 1.05 2.43 1.37(c)
(a) Includes a charge of $2.5 million ($1.5 million net of tax),
or 5 cents per share, for the early retirement of debt.
(b) Includes a gain of $1.7 million ($1 million net of tax), or 4
cents per share, the net effect of income from recovery of previously
incurred development and pre-production costs arising from the
termination of a component design and production supply contract and a
charge to recognize a product liability claim from an industrial
customer for a unique product that is no longer manufactured.
(c) Includes a special charge of $30.0 million ($18.5 million net
of tax), or 62 cents per share, to exit the automotive interior
plastics business. Before the special charge, operating income and
operating margin were $110.3 million and 10.1%, and net income and net
income per share were $57.8 million and $1.99, for the first six
months of 1997.
Segment Analysis
(dollars in millions)
Industrial
2Q 98 2Q 97 1Q 98 4Q 97
----- ----- ----- -----
Sales $323.3 $317.5 $310.4 $282.8
Operating Income 33.1 32.6 27.1 21.4(a)
Operating Margin 10.3% 10.3% 8.7% 7.6%(a)
Order Intake 311.0 320.7 314.1 303.1
Order Backlog 210.5 216.1 232.4 232.7
3Q 97 Six Months 98 Six Months 97
----- ------------- -------------
Sales $278.1 $633.7 $609.3
Operating Income 28.5 60.2 57.2
Operating Margin 10.2% 9.5% 9.4%
Order Intake 285.0 625.1 638.3
Order Backlog 216.7 210.5 216.1
(a) Includes a charge of $2.6 million to recognize a product
liability claim from an industrial customer for a unique product that
is no longer manufactured.
Aerospace
2Q 98 2Q 97 1Q 98 4Q 97
----- ----- ----- -----
Sales $142.8 $121.5 $134.9 $128.6
Operating Income 26.4 21.6 24.0 28.9(a)
Operating Margin 18.5% 17.8% 17.8% 22.5%(a)
Order Intake 141.9 138.4 152.5 115.8
Order Backlog 395.7 366.1 396.7 379.2
3Q 97 Six Months 98 Six Months 97
----- ------------- -------------
Sales $119.2 $277.7 $240.2
Operating Income 20.8 50.4 40.3
Operating Margin 17.5% 18.2% 16.8%
Order Intake 147.2 294.4 267.5
Order Backlog 391.4 395.7 366.1
(a) Includes income of $4.3 million from recovery of previously
incurred development and pre-production costs with an aerospace
customer arising from the termination of a component design and
production supply contract.
Automotive
2Q 98 2Q 97 1Q 98 4Q 97
----- ----- ----- -----
Sales $ 108.2 $117.3 $101.7 $111.5
Operating Income 11.8 13.1 12.7 14.2
Operating Margin 10.9% 11.2% 12.5% 12.7%
3Q 97 Six Months 98 Six Months 97
----- ------------- -------------
Sales $ 97.4 $210.0 $245.2
Operating Income 10.2 24.5 (5.4)(a)
Operating Margin 10.5% 11.7% --%(a)
(a) Includes a special charge of $30.0 million to exit the
automotive interior plastics business. Before the special charge,
automotive operating income and operating margin were $24.6 million
and 10.0% for the first six months of 1997.
STATEMENT OF FINANCIAL POSITION
Aeroquip-Vickers, Inc.
(Dollars in thousands, except share data)
(Unaudited)
June 30 December 31
1998 1997
------------ ------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 27,806 $ 18,736
Receivables 379,584 348,822
Inventories 304,650 294,767
Other current assets 49,892 49,323
---------- ----------
TOTAL CURRENT ASSETS 761,932 711,648
Plants and properties 1,060,986 993,002
Less accumulated depreciation 542,628 518,860
---------- ----------
518,358 474,142
Goodwill 122,116 111,905
Other assets 83,553 78,901
---------- ----------
TOTAL ASSETS $1,485,959 $1,376,596
---------- ----------
---------- ----------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable $ 128,271 $ 84,044
Accounts payable 119,619 111,800
Income taxes 38,806 30,496
Other current liabilities 196,857 212,800
Current maturities of long-term debt 864 1,857
---------- ----------
TOTAL CURRENT LIABILITIES 484,417 440,997
Long-term debt 264,160 256,707
Postretirement benefits other than
pensions 122,769 122,272
Other liabilities 45,677 46,421
SHAREHOLDERS' EQUITY
Common stock - par value $5 a share
Authorized - 100,000,000 shares
Outstanding - 28,216,414 and
28,064,981 shares,
respectively (after deducting
6,064,432 and 6,215,865 shares,
respectively, in treasury) 141,082 140,325
Additional paid-in capital 45,276 41,288
Retained earnings 423,076 366,676
Currency translation adjustments (40,498) (38,090)
---------- ----------
TOTAL SHAREHOLDERS' EQUITY 568,936 510,199
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $1,485,959 $1,376,596
---------- ----------
---------- ----------
CONDENSED STATEMENT OF INCOME
Aeroquip-Vickers, Inc.
(In thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30 June 30
---------------------- ----------------------
1998 1997 1998 1997
---------- ---------- ---------- ----------
Net sales $ 574,314 $ 556,278 $1,121,369 $1,094,704
Cost of products
sold 422,739 409,241 825,562 815,192
---------- ---------- ---------- ----------
MANUFACTURING INCOME 151,575 147,037 295,807 279,512
Selling and general
administrative
expenses 68,042 68,027 136,193 133,974
Engineering, research
and development
expenses 18,469 17,432 36,780 35,262
Special charge -- -- -- 30,000
---------- ---------- ---------- ----------
OPERATING INCOME 65,064 61,578 122,834 80,276
Interest expense (7,126) (6,994) (13,853) (14,365)
Other income (expense)
- net (2,297) (3,654) (7,467) (8,387)
---------- ---------- ---------- ----------
INCOME BEFORE
INCOME TAXES 55,641 50,930 101,514 57,524
Income taxes 17,800 17,300 32,500 18,200
---------- ---------- ---------- ----------
NET INCOME $ 37,841 $ 33,630 $ 69,014 $ 39,324
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
NET INCOME PER SHARE
Basic $ 1.34 $ 1.20 $ 2.45 $ 1.41
Diluted 1.33 1.15 2.43 1.37
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Cash dividends per
common share $ .22 $ .20 $ .44 $ .40
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
CONDENSED STATEMENT OF CASH FLOWS
Aeroquip-Vickers, Inc.
(In thousands)
(Unaudited)
Six Months Ended
June 30
------------------------
1998 1997
------ ------
OPERATING ACTIVITIES
Net income $ 69,014 $ 39,324
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation 33,835 33,510
Amortization 4,290 2,911
Special charge - 30,000
Changes in certain components of
working capital other than debt (30,394) (21,715)
Other (10,317) (11,313)
-------- --------
NET CASH PROVIDED BY OPERATING
ACTIVITIES 66,428 72,717
INVESTING ACTIVITIES
Capital expenditures (74,229) (60,707)
Businesses acquired (23,544) -
Sale of businesses - 26,785
Other 1,783 (2,044)
-------- --------
NET CASH USED BY INVESTING ACTIVITIES (95,990) (35,966)
FINANCING ACTIVITIES
Net increase (decrease) in short- and
long-term debt 47,553 (22,653)
Cash dividends (12,400) (11,189)
Purchase of common stock (248) (12,107)
Stock issuance under stock plans 4,769 12,780
Other (680) (452)
-------- --------
NET CASH PROVIDED (USED) BY
FINANCING ACTIVITIES 38,994 (33,621)
Effect of exchange rate changes on cash (362) (346)
-------- --------
INCREASE IN CASH AND CASH EQUIVALENTS 9,070 2,784
Cash and cash equivalents at beginning
of period 18,736 23,934
-------- --------
CASH AND CASH EQUIVALENTS AT END
OF PERIOD $ 27,806 $ 26,718
-------- --------
-------- --------
NOTES TO FINANCIAL STATEMENTS Aeroquip-Vickers, Inc. June June: see month. 30, 1998 (Unaudited) Redemption The liberation of an estate in real property from a mortgage. Redemption is the process by which land that has been mortgaged or pledged is bought back or reclaimed. It is accomplished through a payment of the debt owed or a fulfillment of the other conditions. of Debt In December December: see month. 1997, the Company called its 9.55% senior sinking fund sinking fund, sum set apart periodically from the income of a government or a business and allowed to accumulate in order ultimately to pay off a debt. A preferred investment for a sinking fund is the purchase of the government's or firm's bonds that are to be paid debentures in the principal amount of $42 million for redemption on February February: see month. 3, 1998. The pretax loss pretax loss A loss reported before tax benefits are considered. from redemption of the 9.55% senior sinking fund debentures amounting to $2.5 million was recognized in Other income (expense) - net in the 1998 first quarter. In June 1997, the Company called its 6% convertible subordinated debentures subordinated debenture An unsecured bond with a claim to assets that is subordinate to all existing and future debt. Thus, in the event that the issuer encounters financial difficulties and must be liquidated, all other claims must be satisfied before in the principal amount of $100 million for redemption. The 6% convertible debentures Convertible Debenture Any type of debenture that can be converted into some other security. Notes: For example, a convertible bond can be converted into stock. , which were due to mature on October October: see month. 15, 2002, were convertible into common shares of the Company at a conversion price of $52.50 per share. Special Charge In the 1997 first quarter, the Company announced plans to exit its automotive interior plastics business and recorded a special charge of $30 million ($18.5 million net, or diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. net income per share of $.62 for the 1997 six-month period [$.63 for the year]), comprised principally of severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when , lease termination The point where a line, channel or circuit ends. See SCSI termination and hybrid. and asset disposition Act of disposing; transferring to the care or possession of another. The parting with, alienation of, or giving up of property. The final settlement of a matter and, with reference to decisions announced by a court, a judge's ruling is commonly referred to as disposition, regardless of costs. As a result, the Company sold or closed eight facilities during 1997 that had combined 1997 sales of approximately $67 million (approximately $17 million in the 1997 second quarter and $48 million in the six-month period ended June 30, 1997). Income Taxes The effective income tax rate for the 1998 second quarter and six-month period was 32%. The income tax provision for the six-month period ended June 30, 1997 included a credit of $11.5 million related to the special charge for costs to exit the automotive interior plastics business. The effective income tax rate for the 1997 second quarter and six-month period exclusive of this item was 33.9%. Net Income per Share Following is a reconciliation of income and average shares for purposes of calculating basic and diluted net income per share (in thousands, except per share amounts): -0-
Three Months Ended Six Months Ended
June 30 June 30
--------------------- --------------------
1998 1997 1998 1997
-------- -------- ------- -------
Basic Net Income per Share
Net income $ 37,841 $ 33,630 $ 69,014 $ 39,324
--------- --------- --------- ---------
--------- --------- --------- ---------
Average common shares
outstanding 28,199 27,948 28,158 27,966
--------- --------- --------- ---------
--------- --------- --------- ---------
Basic Net Income
per Share $ 1.34 $ 1.20 $ 2.45 $ 1.41
--------- --------- --------- ---------
--------- --------- --------- ---------
Diluted Net Income
per Share
Net income $ 37,841 $ 33,630 $ 69,014 $ 39,324
After-tax equivalent
of interest expense
on 6% convertible
debentures -- 930 -- 1,860
--------- --------- --------- ---------
Income for purposes
of computing
diluted net income
per share $ 37,841 $ 34,560 $ 69,014 $ 41,184
--------- --------- --------- ---------
--------- --------- --------- ---------
Average common shares
outstanding 28,199 27,948 28,158 27,966
Dilutive stock options 255 167 240 155
Assumed conversion of
6% convertible
debentures -- 1,905 -- 1,905
--------- --------- --------- ---------
Average common shares
for purposes of
computing diluted
net income per share 28,454 30,020 28,398 30,026
--------- --------- --------- ---------
--------- --------- --------- ---------
Diluted Net Income
per Share $ 1.33 $ 1.15 $ 2.43 $ 1.37
--------- --------- --------- ---------
--------- --------- --------- ---------
The 6% convertible debentures were redeemed in July 1997.
Aeroquip-Vickers is two companies, Aeroquip Corporation and Vickers, Incorporated, worldwide leaders in the design, manufacture and distribution of engineered components to the industrial, aerospace and automotive markets. CONTACT: Aeroquip-Vickers, Inc. Investor: William William, crown prince of Germany William or Frederick William, 1882–1951, crown prince of Germany, son of William II. In World War I he commanded (1914) an army on the Western Front and was nominal commander in the German attack R. Ammann Ammann can mean:
Media: Richard Ri·chard , Joseph Henri Maurice Known as "Rocket." 1921-2000. Canadian hockey player. A right wing for the Montreal Canadiens (1942-1960), he led his team to eight Stanley Cup championships and was the first player to score 50 goals in a G. Rump Rump The name given to the group of investors refusing to tender their shares into a corporate action, such as a merger or acquisition. Notes: Should the quantity of rump shares be large enough, a corporate action may be stalled or halted. , 419/867-2292 |
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