CTB International Corp. Reports First Quarter Earnings of $2.6 Million Excluding Previously Announced Accounting Change.Business Editors MILFORD, Ind IND Investigational new drug Therapeutics A status assigned by the FDA to a drug before allowing its use in humans, exempting it from premarketing approval requirements so that experimental clinical trials may be conducted. See Phase 1.2, 3 studies, Sponsorship. .--(BUSINESS WIRE)--April 23, 2002 CTB CTB Council Tax Benefit (UK) CTB Coopération Technique Belge (French: Belgian Technical Cooperation) CTB Commonwealth Transportation Board (Virginia Department of Transportation) International Corp. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : CTBC CTBC Computer Take Back Campaign CTBC Cape Town Bridge Club (South Africa) ) today reported first quarter results of $2.6 million in net income before the cumulative effect of a required accounting change, or 24 cents 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. For the first quarter, net income before the accounting change improved 15 percent from last year's $2.3 million, while earnings per diluted share before the accounting change improved 14 percent from 21 cents a year ago. Results after the required accounting change and pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma results in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting are described below. The Company also reported first quarter net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight of $49.8 million, a primarily market-driven decline of 6.5 percent from 2001's first quarter. The primary impacts on sales in the quarter were continued weakness in the U.S. egg production market and weak export levels from 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. , offset somewhat by improvement in the domestic poultry poultry, domesticated fowl kept primarily for meat and eggs; including birds of the order Galliformes, e.g., the chicken, turkey, guinea fowl, pheasant, quail, and peacock; and natatorial (swimming) birds, e.g., the duck and goose. market. The Company attributed its earnings strength despite its sales decline to continued operational improvements. "Even though market conditions have continued to negatively impact our sales volumes, we are pleased with the success of our ongoing internal improvement efforts," said Victor A. Mancinelli, president and chief executive officer. "These efforts have helped us achieve strong profitability for the first quarter, before the effect of the accounting change. We will continue our drive for additional improvements throughout the months ahead." "While the impact of some factors influencing our markets is yet unknown, we still expect to achieve our full year earnings per share growth goals," Mancinelli continued. "Factors we are watching include new weakness in the domestic hog market, the fallout fallout, minute particles of radioactive material produced by nuclear explosions (see atomic bomb; hydrogen bomb; Chernobyl) or by discharge from nuclear-power or atomic installations and scattered throughout the earth's atmosphere by winds and convection currents. of the Russian Russian associated in some way with Russia. Russian blue a breed of cats with short, dense, silver-tipped blue-colored coat and vivid green eyes. restriction on poultry imports from the United States, the impact on our raw material prices of the current volatility in the U.S. steel The United States Steel Corporation (NYSE: X) is an integrated steel producer with major production operations in the United States and Central Europe. The company is the world's seventh-largest steel producer ranked by sales (see list of steel producers). market, and the potential impact on our markets of the pending federal farm bill. We are also following spring planting progress to see if acres planted in corn meet the increased levels projected in the USDA USDA, n.pr See United States Department of Agriculture. planting intentions report." The Company reiterated its previously announced expectations for diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of growth, before the cumulative effect of the accounting change, in the low- to mid- mid- pref. Middle: midbrain. 20 percent range for full year 2002, which includes 16 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. for the elimination of goodwill amortization. This equates to diluted earnings per share in the range of $1.54 to $1.62 for the year. The estimate is based on current market and business conditions and could vary more or less depending on the variable factors listed above. SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 142 In accordance with the required adoption of Statement of Financial Accounting Standards 142 (SFAS 142), CTB stopped amortizing goodwill as of January 1, 2002. The accounting change from the adoption resulted in a one-time, non-cash write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. by the Company in the first quarter of $7.6 million, or 69 cents per diluted share, for impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of goodwill. The total charge reflects the cumulative effect of adopting the accounting change and represents 10 percent of the Company's total goodwill net of prior amortization. The Company's net loss for the first quarter, after the required accounting change, totaled $5.0 million dollars, or 45 cents per diluted share. To facilitate comparison of results, pro forma results exclude goodwill amortization from 2001, net of tax. On that basis, pro forma net income for 2001 was $2.7 million, or 25 cents per diluted share, compared to $2.6 million in net income before the cumulative effect of the required accounting change, or 24 cents per diluted share. Impairment of goodwill from the Company's 1997 acquisition of its Netherlands-based Fancom B.V. business unit resulted in $4.0 million of the charge, primarily due to reduced sales from prolonged pro·long tr.v. pro·longed, pro·long·ing, pro·longs 1. To lengthen in duration; protract. 2. To lengthen in extent. poor European hog market conditions, while goodwill resulting from the Company's 1996 leveraged buyout leveraged buyout, the takeover of a company, financed by borrowed funds. Often, the target company's assets are used as security for the loans acquired to finance the purchase. transaction relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc its Egg Production Systems business unit (located in Milford, Indiana Milford is the name of two places in the U.S. state of Indiana:
Segment Information The Company operates in three business segments. These include the Grain Segment and the Protein Group Segment, which each focus their efforts primarily in the U.S. and Canada, and the International Segment, which focuses its efforts primarily outside the U.S. and Canada. First quarter sales for the Company's Protein Group Segment were $17.3 million, down nearly 10 percent from the year-ago quarter. This downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. was due primarily to weak conditions in the U.S. egg production market, offset somewhat by improved U.S. poultry production system sales System sales is a business term used in the franchising industry. Franchisors provide supplies, marketing and administration services to franchisees in return for a part of the franchisees' revenues. Some franchisors also operate some outlets directly. . Sales for the quarter for CTB's Grain Segment totaled $13.1 million, up 4 percent from the prior year's quarter. CTB's International Segment had first quarter sales of $19.4 million in the quarter, down nearly 10 percent from 2001's first quarter, due in part to project timing and to the negative impact of currency exchange rates on exports from the U.S. to many parts of the world. Earnings Conference Call CTB is hosting a live webcast of its conference call on the investor section of its Web site (www.ctbinc.com/invest.htm) today at 11:00 a.m. Eastern Time (10:00 a.m. in Milford). To listen to the call on the Web, please visit the site at least fifteen minutes early to download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. and install any necessary audio software. A replay of the call will also be available on the site for three weeks. About CTB CTB International Corp. is a leading designer, manufacturer and marketer of systems for the poultry, hog, egg production, and grain industries. Celebrating its 50th anniversary this year, CTB operates from facilities in the U.S.A., Europe and Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. as well as through a worldwide distribution network. CTB continues to focus on its strategy of emerging as the best cost manufacturer in the industries it serves, emphasizing its product-driven focus, expanding its global physical presence, extending its competitive advantage through accretive acquisitions Accretive Acquisition An acquisition that will increase the acquiring company's EPS. Notes: As they are expected to increase the acquiring company's future earnings, these acquisitions tend to be favorable for the company's market price. and/or other beneficial business arrangements, and enhancing its financial strength. Disclosure Regarding 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. In addition to historical information, this document contains certain statements representing the Company's expectations or beliefs concerning future events. These statements are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, which provides a safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. for such statements. The use of words such as "anticipates," "believes," "estimates," "expects," "intends," "plans," "projects," "could," "may," "will" or similar expressions are intended to identify these statements. The forward-looking statements contained in this document include, without limitation, statements related to implementation of operational improvements; achievement of anticipated earnings growth; market conditions; impact of the Russian restriction on poultry imports; raw material prices for steel; market impact of the pending federal farm bill and planting plans. They also involve certain risks and uncertainties regarding CTB International Corp.'s business and operations and the agriculture industry. The Company's actual results could differ materially from those expressed or implied by such forward-looking statements. The Company cautions that these statements are further qualified by other important factors, including, but not limited to those set forth in the Company's Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. filing and its other filings with the Securities and Exchange Commission. The Company undertakes no obligation to release publicly any revisions to forward-looking statements in this document to reflect new circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or or unanticipated events as they occur.
CTB International Corp. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
For the Three Months Ended
March 31,
--------------------------
2002 2001
---- ----
NET SALES $ 49,748 $ 53,185 -6.5%
COST OF SALES 35,657 38,625 -7.7%
----------- ----------
Gross profit 14,091 14,560 -3.2%
28.3% 27.4%
OTHER OPERATING EXPENSE:
Selling, general, and 9,582 9,428 1.6%
administrative expenses 19.3% 17.7%
Amortization of goodwill - 583 -100.0%
----------- ----------
OPERATING INCOME 4,509 4,549 -0.9%
9.1% 8.6%
INTEREST EXPENSE - Net (321) (576) -44.3%
OTHER INCOME (EXPENSE) - Net 12 (174) 106.9%
----------- ----------
INCOME BEFORE INCOME TAXES AND 4,200 3,799 10.6%
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE
INCOME TAXES 1,587 1,520 4.4%
----------- ----------
INCOME BEFORE CUMULATIVE EFFECT OF 2,613 2,279 14.7%
CHANGE IN ACCOUNTING PRINCIPLE 5.3% 4.3%
CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING PRINCIPLE (7,595) - N/A
----------- ----------
NET (LOSS) INCOME $ (4,982) $ 2,279 -318.6%
=========== ==========
-10.0% 4.3%
DILUTED EARNINGS (LOSS) PER SHARE:
Before cumulative effect of
change in accounting principle 0.24 0.21 14.3%
Cumulative effect of change in
accounting principle (0.69) - N/A
----------- ----------
Earnings per share $ (0.45) $ 0.21 -314.3%
=========== ==========
Weighted average shares 11,107 11,087 0.2%
=========== ==========
CTB International Corp. and Subsidiaries
Summary by Business Segment
(In thousands)
(Unaudited)
For the Three Months Ended
March 31,
---------------------------------
---------------------------------
2002 2001
---- ----
External net sales
Protein Group $ 17,254 $ 19,128 -9.8%
Grain 13,141 12,645 3.9%
International 19,353 21,412 -9.6%
-------------- --------------
Total $ 49,748 $ 53,185 -6.5%
============== ==============
Operating income
Protein Group $ 2,687 $ 3,531 -23.9%
Grain 1,707 1,956 -12.7%
International 3,133 2,831 10.7%
Other(1) (3,018) (3,769) -19.9%
-------------- --------------
Total $ 4,509 $ 4,549 -0.9%
============== ==============
(1) Consists primarily of CTB's centralized and/or corporate
functions (shared services, profit sharing and bonus plans,
and shared manufacturing cost centers) and includes
inter-company eliminations.
CTB International Corp. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
As of As of
March 31, December 31,
2002 2001
---- ----
ASSETS
Current assets $ 60,318 $ 53,478
Property, plant, and equipment -
net 47,518 46,412
Intangibles - net 70,148 77,527
Other assets 860 862
------------- -------------
Total assets $ 178,844 $ 178,279
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $ 33,671 $ 29,569
Long-term debt 38,679 37,159
Deferred income taxes 8,779 8,782
Accrued postretirement benefit
cost and other 3,442 3,281
------------- -------------
Total liabilities 84,571 78,791
Shareholders' equity 94,273 99,488
------------- -------------
Total liabilities and
shareholders' equity $ 178,844 $ 178,279
============= =============
CTB International Corp. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
For the Twelve Months Ended
March 31,
------------------------------
2002 2001
---- ----
Net cash flows from
operating activities $ 5,638 $ 549
Net cash flows from
investing activities (6,476) (1,191)
Net cash flows from
financing activities 1,934 599
------------- -------------
Net increase (decrease) in cash
and cash equivalents 1,096 (43)
Net effect of translation differences 51 (2)
Cash and cash equivalents,
beginning of period 3,242 2,009
------------- -------------
Cash and cash equivalents,
end of period $ 4,389 $ 1,964
============= =============
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