Coltec Industries completes sale of three automotive units.NEW YORK--(BUSINESS WIRE)--June 18, 1996--Coltec Industries Inc (NYSE NYSE See: New York Stock Exchange :COT) has completed the sale of its Holley Automotive, Coltec Automotive and Performance Friction Products businesses to Borg-Warner Automotive (NYSE: BWA (Broadband Wireless Access) High-speed wireless access. Typically refers to wireless last mile access to the Internet. See WiMAX and broadband. ) for $283 million in cash. These divisions provide components primarily to the domestic automotive original equipment manufacturers and had combined sales in 1995 of $255 million. The transaction will result in an after-tax gain of $34 million, or 49 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. , net of liabilities retained, transaction costs Transaction Costs Costs incurred when buying or selling securities. These include brokers' commissions and spreads (the difference between the price the dealer paid for a security and the price they can sell it). and obligations related to the sale. The gain will be booked in the second quarter as a gain from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . The cash proceeds, net of expenses and taxes, approximate $250 million. Of this, $160 million will be applied to reduce indebtedness including repurchase or defeasance of $75 million of high-yield debt and repayment of $85 million of bank debt. In addition, up to $90 million of common equity, or 10% of the shares outstanding if purchased at today's prices, will be repurchased in the open market over the next six months. Assuming this transaction had been consummated on January 1, 1995, pro forma earnings pro forma earnings Income not necessarily calculated in accordance with generally accepted accounting principles. For example, a company might report pro forma earnings that exclude depreciation expense and nonrecurring expenses such as restructuring costs. from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the for the full year, excluding the special charge, would have been $66.7 million versus $88.7 million reported. 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 1995 earnings per share from continuing operations would have been $1.06 versus reported earnings per share of $1.27. On the same basis, pro forma first quarter 1995 earnings from continuing operations would have been $17.1 million, equal to 27 cents per share versus 34 cents reported. Pro forma first quarter 1996 earnings from continuing operations, excluding the charge related to Fokker, would have been $12.7 million, or 20 cents per share versus 24 cents reported. In both years, the automotive businesses had a relatively strong performance in the first quarter. John W. Guffey, Jr., chairman, president and chief executive officer, said, "This transaction positions Coltec to focus greater management and financial resources on its industrial and aerospace businesses where it has far stronger market positions and excellent long-term growth prospects. Furthermore, I am convinced that our equity market value does not adequately reflect either our improving financial or our improving operating positions. Therefore, I believe that reinvesting a portion of the transaction proceeds in our stock will provide our shareholders with handsome rewards from current prices." Coltec Industries is a diversified manufacturing company serving primarily aerospace and general industrial markets. CONTACT: Michael Dunn Coltec Industries Inc (212) 940-0523 |
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