Applied Power Announces Record Earnings and Accelerating Growth in Electronics Segment.Business Editors WAUKESHA Waukesha (wô`kĭshô), city (1990 pop. 56,958), seat of Waukesha co., SE Wis., on the Fox River; inc. 1896. It is an industrial center in a dairy area. , WI--(BUSINESS WIRE)--March 17, 2000 Applied Power Inc. (NYSE NYSE See: New York Stock Exchange : APW APW All Pro Wrestling APW Altmar Parish Williamstown (School District; Parish, New York) APW Add-Printer Wizard (Microsoft Windows) APW Augmented Plane Wave APW Apparent Polar Wander ) today announced record revenues and earnings for the second quarter and six months ended February February: see month. 29, 2000. Excluding one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. costs associated with the pending spin-off The situation that arises when a parent corporation organizes a subsidiary corporation, to which it transfers a portion of its assets in exchange for all of the subsidiary's capital stock, which is subsequently transferred to the parent corporation's shareholders. of APW Electronics and an extraordinary charge for early extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. of debt, cash earnings (excluding non-cash amortization) were $ 31.9 million or $0.79 per 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. share, an increase of 25% over the $25.5 million, or $0.63 per diluted share in the prior year quarter. For the quarter, net earnings, excluding the spin-off costs and extraordinary charge, were $24.8 million, or $0.61 per diluted share, an increase of 27% over the $19.3 million, or $0.48 per diluted share, in the prior year quarter. Included in the current quarter earnings is a $5.3 million realized gain Realized Gain A gain resulting from selling an asset at a price higher than the original purchase price. Notes: There may be tax consequences for a realized profit. from the unwinding of interest rate swaps Interest Rate Swap A deal between banks or companies where borrowers switch floating-rate loans for fixed rate loans in another country. These can be either the same or different currencies. . This gain will be partially offset by increased interest expense in the third and fourth quarters of this year. On a reported basis, including the $3.5 million of one-time spin-off costs and the $2.1 million, net of tax, extraordinary charge to extinguish Extinguish Retire or pay off debt. long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. , net income was $20.5 million, or $0.51 per diluted share compared with $19.3 million, or $0.48 per diluted share, in the year-ago quarter. Sales for the quarter were $461.2 million, a 9% increase over the prior year. For the six months ended February 29, 2000, excluding one-time items from both the current and prior year periods, cash earnings were $61.9 million or $1.53 per diluted share, an increase of 17% over the $52.7 million or $1.31 per diluted share last year. Net earnings, excluding one-time items from both periods, were $47.6 million or $1.18 per diluted share, a 17% increase over the $40.4 million or $1.01 for the first six months of last year. Sales for the first half of fiscal 2000 were a record $923.3 million, an increase of 8% over the same period last year. Revenues for APW Electronics were $277.1 million, an increase of 11% over the prior year's second quarter. Excluding the negative effect of currency, revenues grew 15% from the prior year. APW Electronics earnings before interest, taxes, and amortization (EBITA EBITA Earnings Before Interest Taxes Amortization ) were $29.4 million, an increase of 33% over the prior year. Second quarter revenues in the Industrial segment were $184.1 million, an increase of 7% over the prior year. Excluding the negative effect of currency, revenues grew 10% from the prior year. EBITA for Industrial was $33.7 million, an increase of 2% over the prior year. 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. Sim (1) (Society for Information Management, Chicago, IL, www.simnet.org) Founded in 1968 as the Society for MIS, it is a membership organization made up of corporate and division heads of IT organizations. , Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Applied Power commented, "We are extremely pleased with all our results in the second quarter and particularly with the accelerating growth in our Electronics segment. In the last six months our APW Electronics business has won more than $950 million of new program business that has an annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. revenue run rate of nearly $300 million. This new business represents 70 new programs from 40 customers. This rate of new business wins indicates that the growth in APW Electronics will continue to accelerate in coming quarters." Sim continued, "We are on schedule in doing the work required to spin-off and take off-shore our Electronics segment. We remain excited about the benefits this change will bring to our shareholders." About Applied Power Inc. Applied Power Inc., headquartered in Milwaukee, Wisconsin For other places with the same name, see Milwaukee (disambiguation). Milwaukee is the largest city within the state of Wisconsin and 25th largest (by population) in the United States. , is a global company comprised of two business segments. Electronics supplies electronic enclosures, power supplies, thermal thermal /ther·mal/ (ther´m'l) pertaining to or characterized by heat. ther·mal adj. 1. Of, relating to, using, producing, or caused by heat. 2. systems, backplanes, and cabling either as products or integrated as a system supplied along with new product design, supply chain management, assembly and test services. Industrial is composed of standard and customized 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 products sold to a wide array of end users through distribution or directly into a variety of niche markets A niche market also known as a target market is a focused, targetable portion (subset) of a market sector. By definition, then, a business that focuses on a niche market is addressing a need for a product or service that is not being addressed by mainstream providers. . For further information contact: Applied Power Inc. Susan SUSAN Smallest Univalue Segment Assimilating Nucleus SUSAN Sub Saharan African Network SUSAN Smart Ultrasonic System for Aircraft NDE Hrobar, Vice President 262-523-7600 www.apw1.com To receive a faxed copy of this or other recent Applied Power communications, please call the Company's "News on Demand" service at 1-800-549-0679. Certain of the above comments represent forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. made pursuant to the provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Management cautions that these projections are based on current estimates of future performance and are highly dependent upon a variety of factors, which could cause actual results to differ from these estimates. Applied Power's results are also subject to continued market acceptance of the Company's new product introductions, the successful integration of recent acquisitions, operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: risk due to competitive pricing, foreign currency fluctuations and interest rate risk.
Applied Power Inc.
Comparative Statement of Earnings
(In thousands, except per share amounts)
Three Months Ended
Feb. 29, 2000 Feb. 28, 1999 % Change
Net sales $ 461,177 $ 421,955 9.3%
Cost of products sold 323,199 295,445 9.4%
Gross Profit 137,978 126,510 9.1%
Engineering, selling and
administrative expense 77,847 74,236 4.9%
Amortization of intangible assets 8,003 7,088
Corporate reorganization expenses 3,487 -
Operating Earnings 48,641 45,186 7.6%
Other Expense (Income):
Net financing costs 17,326 15,489
Other (4,740) (965)
Earnings Before Income Taxes 36,055 30,662 17.6%
Income tax expense 13,430 11,376
Income Before Extraordinary Item 22,625 19,286 17.3%
Extraordinary loss on
extinguishment of debt,
net of income tax benefit
of $1.25 million (2,083) -
Net Earnings $ 20,542 $ 19,286 6.5%
=============---===========
Cash Earnings $ 27,655 $ 25,477 8.5%
=============---===========
Cash Earnings Per Share:
Earnings Per Share before
extraordinary item $ 0.74 $ 0.63 17.5%
Extraordinary loss on
extinguishment of debt,
net of income tax benefit (0.05) -
Earnings Per Share $ 0.69 $ 0.63 9.5%
=============---===========
Weighted Average Common
and Equivalent
Shares Outstanding (000's) 40,374 40,415
=============---===========
Diluted Earnings Per Share:
Earnings Per Share before
extraordinary item $ 0.56 $ 0.48 16.7%
Extraordinary loss on
extinguishment of debt,
net of income tax benefit (0.05) -
Earnings Per Share $ 0.51 $ 0.48 6.3%
=============---===========
Weighted Average Common and
Equivalent
Shares Outstanding (000's) 40,374 40,415
============---===========
Applied Power Inc.
Comparative Statement of Earnings
(In thousands, except per share amounts)
Six Months Ended
Feb. 29, 2000 Feb. 28, 1999 % Change
Net sales $ 923,344 $ 857,615 7.7%
Cost of products sold 645,836 593,703 8.8%
Gross Profit 277,508 263,912 5.2%
Engineering,
selling and
administrative
expense 156,741 156,654 0.1%
Amortization of
intangible assets 15,798 14,153
Contract termination
(recovery) costs (1,446) 7,824
Corporate reorganization
expenses 3,487 -
Operating Earnings 102,928 85,281 20.7%
Other Expense (Income):
Net financing costs 33,664 29,388
Other (4,603) (972)
Earnings Before
Income Taxes 73,867 56,865 29.9%
Income tax expense 27,560 21,178
Income Before
Extraordinary Item 46,307 35,687 29.8%
Extraordinary loss
on extinguishment
of debt, net of
income tax benefit
of $1.25 million (2,083) -
Net Earnings $ 44,224 $ 35,687 23.9%
==========---===========
Cash Earnings $ 58,450 $ 48,014 21.7%
==========---===========
Cash Earnings Per Share:
Earnings Per Share
before
extraordinary item $ 1.50 $ 1.19 26.1%
Extraordinary loss
on extinguishment
of debt,
net of income
tax benefit (0.05) -
Earnings Per Share $ 1.45 $ 1.19 21.8%
========== ===========
Weighted Average
Common and Equivalent
Shares Outstanding
(000's) 40,343 40,251
========== ===========
Diluted Earnings
Per Share:
Earnings Per Share
before
extraordinary item $ 1.15 $ 0.89 29.2%
Extraordinary loss
on extinguishment of debt,
net of income tax benefit (0.05) -
Earnings Per Share $ 1.10 $ 0.89 23.6%
========== ===========
Weighted Average
Common and Equivalent
Shares Outstanding (000's) 40,343 40,251
========== ===========
Applied Power Inc.
Comparative Balance Sheet
(Dollars in thousands)
February 29, August 31,
2000 1999
ASSETS
Current Assets
Cash and cash equivalents $ 7,510 $ 22,258
Accounts receivable 168,994 149,525
Inventories 230,414 207,518
Prepaid expenses 33,972 29,735
Total Current Assets 440,890 409,036
Property, Plant and Equipment
Gross Property, Plant and Equipment 554,316 549,112
Less: Accumulated depreciation (286,825) (275,210)
Net Property, Plant and Equipment 267,491 273,902
Goodwill 838,151 845,704
Other intangible assets 40,721 42,618
Other assets 51,768 53,586
Total Assets $ 1,639,021 $ 1,624,846
=============-============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-term borrowings $ 2,383 $ 230
Trade accounts payable 155,727 157,515
Accrued compensation and benefits 44,601 47,089
Income taxes payable 39,139 36,491
Other current liabilities 67,594 82,340
Total Current Liabilities 309,444 323,665
Long-term Debt 792,953 808,438
Deferred Income Taxes 16,641 15,869
Other Deferred Liabilities 60,092 59,045
Total Liabilities 1,179,130 1,207,017
Shareholders' Equity
Common stock 7,817 7,796
Additional paid-in capital 13,971 12,388
Retained earnings 455,916 412,863
Accumulated other comprehensive income (17,813) (15,218)
Total Shareholders' Equity 459,891 417,829
Total Liabilities and
Shareholders' Equity $ 1,639,021 $ 1,624,846
============= ============
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