Crompton & Knowles' Third Quarter Earnings Before Extraordinary Items Increase 23 Percent.STAMFORD Stamford, town, England Stamford, town (1991 pop. 18,127), in the Parts of Kesteven, Lincolnshire, E central England, on the Welland River. It is a market town. Products include diesel engines, electrical equipment, bricks, and tiles. , Conn.--(BUSINESS WIRE)--Oct. 26, 1998--Crompton & Knowles Knowles is a surname, and may refer to many people. : Top - 0–9 A B C D E F G H I J K L M N O P Q R S T U V W X Y Z A
See: New York Stock Exchange : CNK CNK Crash Nitro Kart (Playstation 2 video game) CNK Coated Natural Kraft (MeadWestvaco paperboard) CNK Compute Node Kernel CNK Cryptonet Key ) reported today that third quarter earnings before extraordinary losses on 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 increased 23 percent to $30.6 million, or 40 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. 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. (41 cents basic), from $24.8 million, or 32 cents per share diluted (33 cents basic), in the third quarter of 1997. The extraordinary losses on early extinguishment of debt were $5.7 million, or seven cents per share, in the 1998 quarter and $1.9 million, or two cents per share, in the 1997 quarter. Net earnings after the extraordinary losses were $24.9 million, or 33 cents per share diluted (34 cents basic), in the 1998 period compared with $22.9 million, or 30 cents per share diluted (31 cents basic), in the comparable 1997 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 in the third quarter declined three percent to $442.8 million from $455.1 million in the third quarter of 1997. "We are pleased to report another quarter of significant improvement in our earnings before extraordinary items" said Vincent A. Calarco, the company's chairman, president and chief executive officer. "In addition, we continue to strengthen our balance sheet as we refinanced $85 million of the 9% and 10.5% debt and reduced debt by another $12 million, bringing total debt reduction to $75 million for 1998 and $241 million for the last two years. Our average cost of debt is now below 8 percent and our quarterly interest expense declined by 30 percent to below $18 million from over $25 million in last year's third quarter," he said. On September September: see month. 8, 1998, the company announced a program to repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. 7.5 million or 10 percent of the common shares outstanding. To date, the company has completed about one-third of the repurchase program. The weighted average number of shares outstanding in this year's third quarter were 76.3 million diluted (74.5 million basic) compared to 75.6 million diluted (73.5 million basic) in last year's third quarter. On September 17, 1998, the company and Bayer AG Bayer AG German chemical and pharmaceutical company. Founded in 1863 by Friedrich Bayer (1825–1880), it now operates plants in more than 30 countries. Bayer has originated scores of pharmaceuticals, chemicals, and synthetic materials; it was the first developer and , 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). announced an agreement in principle to form a joint venture to serve the agricultural seed treatment market in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . The basis of the joint venture will be the company's Gustafson A derivative of the name Gustav, Gustafson, Gustafsson, Gustavson, and/or Gustavsson, is a group of fairly common surnames of Swedish origin, and may refer to any of the following people: Gustafson For the nine month period, earnings before extraordinary losses increased 23 percent to $102.3 million, or $1.34 per share diluted ($1.37 basic), from $83.2 million, or $1.10 per share diluted ($1.13 basic). Extraordinary losses on early extinguishment of debt were $21.5 million, or 28 cents per share, in 1998 and $3.1 million, or four cents per share, in the first nine months of 1997. Net earnings after the extraordinary losses were $80.9 million, or $1.06 per share diluted ($1.09 basic), versus $80.1 million, or $1.06 per share diluted ($1.09 basic), in the nine months of 1997. Net sales for the nine months declined two percent to $1.39 billion from $1.42 billion in 1997. The weighted average number of shares outstanding for the nine months of 1998 were 76.5 million diluted (74.3 million basic) compared to 75.2 million diluted (73.3 million basic) in the comparable period in 1997. Specialty Chemicals A Specialty chemical is a chemical produced for a specialized use. They are produced in lower volume than bulk chemicals, of which petrochemicals, made from oil feedstocks, are the most common. However, both are produced in a chemical plant. Third quarter sales in the Specialty Chemicals segment declined six percent to $352.3 million, primarily as a result of weakening weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak  en·er n. demand in
the Colors business and the impact of unfavorable weather conditions on
the Crop Protection business. Operating profit Operating profit (or loss)Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. for the segment was down seven percent to $56.9 million. Chemicals and Polymers sales of $115.9 million declined four percent from the third quarter of 1997. Rubber chemical sales were off nine percent due primarily to the impact of the General Motors strike and an unfavorable sales mix sales mix See product mix. . EPDM EPDM Ethylene-Propylene-Diene-Monomer EPDM Enterprise Product Data Management EPDM Ethylene Propylene Dimonomer (industrial/commercial piping/plumbing components) EPDM Engineering Product Data Management sales were up eight percent over the 1997 quarter, primarily from improved pricing. Nitrile rubber Nitrile rubber, or Buna-N,is a synthetic rubber copolymer of acrylonitrile (ACN) and butadiene. Some trade names are: Nipol, Krynac and Europrene. sales were down 12 percent as the business continued to be impacted by low-priced imports. Crop Protection sales were down five percent to $86.9 million in the third quarter, as conditions in the U.S. farm economy worsened during the period. Drought drought, abnormally long period of insufficient rainfall. Drought cannot be defined in terms of inches of rainfall or number of days without rain, since it is determined by such variable factors as the distribution in time and area of precipitation during and before , low commodity prices and the lack of grower financing impacted demand for insecticide insecticide Any of a large group of substances used to kill insects. Such substances are mainly used to control pests that infest cultivated plants and crops or to eliminate disease-carrying insects in specific areas. , harvest (tool, networking) Harvest - A highly scalable, customisable system for discovering resources on the Internet. Version: 1.3. http://tardis.ed.ac.uk/harvest/. aid and seed treatment products. In particular, drought conditions "Drought Conditions" is episode 126 of The West Wing. Plot Senator Rafferty, a new presidential candidate garnered much media attention with a ground-breaking speech about health care. in the Southwestern south·west n. 1. Abbr. SW The direction or point on the mariner's compass halfway between due south and due west, or 135° west of due north. 2. An area or region lying in the southwest. 3. part of the U.S. resulted in a significant loss of the cotton crop. Also, international sales were impacted by economic conditions in Russia Russia, officially the Russian Federation, Rus. Rossiya, republic (2005 est. pop. 143,420,000), 6,591,100 sq mi (17,070,949 sq km). , Asia and Central Europe Central Europe is the region lying between the variously and vaguely defined areas of Eastern and Western Europe. In addition, Northern, Southern and Southeastern Europe may variously delimit or overlap into Central Europe. . Specialties sales of $74.7 million declined four percent in the third quarter. Weak demand for urethanes more than offset increased sales from the introduction of a new polymerization polymerization Any process in which monomers combine chemically to produce a polymer. The monomer molecules—which in the polymer usually number from at least 100 to many thousands—may or may not all be the same. inhibitor inhibitor /in·hib·i·tor/ (in-hib´i-tor) 1. any substance that interferes with a chemical reaction, growth, or other biologic activity. 2. and the recent plant expansion for synthetic Synthetic A financial instrument that is created artificially by simulating another instrument with the combined features of a collection of other assets. Notes: lubricants lubricants preparations for the lubrication of passages to reduce frictional injury, e.g. oily preparations, including petroleum jelly, lanolin or water-soluble preparations such as methyl cellulose. . Colors sales of $53.2 million were 15 percent below the 1997 third quarter. Increased imports of finished apparel from Asia lowered the demand for domestic dye products and both price (down 2%) and unit volume weakened weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak en·er n. .Specialty A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. Ingredients sales of $21.6 million in the third quarter decreased eight percent, primarily from last year's rationalization rationalization, in psychology: see defense mechanism. of low margin products. Specialty Process Equipment and Controls With strong shipments in both the U.S. and 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). , Specialty
Process Equipment and Controls sales grew 13 percent in the third
quarter to $90.5 million. Operating profit increased 16 percent from the
prior year primarily from the improved unit volume. Despite a record
quarter of shipments, order backlog BacklogThe total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. increased to $117 million at quarter-end, from $115 million at the end of the second quarter. Crompton Cromp·ton , Samuel 1753-1827. British inventor of the spinning mule (1779). & Knowles Corporation is a producer and marketer of specialty chemicals and equipment. -0-
(UNAUDITED)
CROMPTON & KNOWLES CORPORATION AND SUBSIDIARIES Consolidated
Statements of Earnings Third quarter
and nine months ended 1998 and 1997
(In thousands of dollars, except per share data)
Third Quarter
-------------------------
1998 1997
------------- -----------
Net sales
Chemicals and Polymers $ 115,869 $ 120,313
Crop Protection 86,900 91,381
Specialties 74,669 77,589
Colors 53,249 62,438
Ingredients 21,635 23,607
------------- -----------
Specialty Chemicals 352,322 375,328
Specialty Equipment and Controls 90,446 79,748
------------- -----------
Total net sales 442,768 455,076
Costs and expenses
Cost of products sold 279,600 287,626
Selling, general and administrative 64,219 67,713
Depreciation and amortization 20,164 20,092
Research and development 13,080 13,543
Severance and other costs - 13,000
Special environmental provision - 15,000
------------- -----------
Operating profit 65,705 38,102
Interest expense 17,916 25,641
Other income (1,055) (27,910)
------------- -----------
Earnings before income taxes
and extraordinary loss 48,844 40,371
Provision for income taxes 18,252 15,549
------------- -----------
Earnings before extraordinary loss 30,592 24,822
Extraordinary loss on early
extinguishment of debt (5,674) (1,882)
------------- -----------
Net earnings $ 24,918 $ 22,940
------------- -----------
Basic earnings per common share
Earnings before extraordinary
loss $ 0.41 $ 0.33
------------ -----------
Net earnings $ 0.34 $ 0.31
------------- -----------
Diluted earnings per common share
Earnings before extraordinary
loss $ 0.40 $ 0.32
------------- -----------
Net earnings $ 0.33 $ 0.30
------------- -----------
Operating profit
Specialty Chemicals $ 56,902 $ 61,407
Specialty Equipment and Controls 11,814 10,165
Severance and other costs - (13,000)
Special environmental provision - (15,000)
General corporate expense (3,011) (5,470)
------------- -----------
Total operating profit $ 65,705 $ 38,102
------------- -----------
Nine months Ended
-------------------------
1998 1997
------------ ----------
Net sales
Chemicals and Polymers $ 360,178 $ 374,172
Crop Protection 295,287 311,071
Specialties 234,907 235,236
Colors 178,959 196,396
Ingredients 69,786 75,462
------------- ----------
Specialty Chemicals 1,139,117 1,192,337
Specialty Equipment and Controls 255,207 230,754
------------- ----------
Total net sales 1,394,324 1,423,091
Costs and expenses
Cost of products sold 874,156 904,636
Selling, general and administrative 197,566 204,152
Depreciation and amortization 60,651 60,245
Research and development 39,443 39,481
Severance and other costs - 13,000
Special environmental provision - 15,000
------------- ----------
Operating profit 222,508 186,577
Interest expense 62,034 79,175
Other income (2,602) (27,129)
------------- ----------
Earnings before income taxes
and extraordinary loss 163,076 134,531
Provision for income taxes 60,746 51,330
------------- ----------
Earnings before extraordinary loss 102,330 83,201
Extraordinary loss on early
extinguishment of debt (21,468) (3,109)
------------- ----------
Net earnings $ 80,862 $ 80,092
------------- ----------
Basic earnings per common share
Earnings before extraordinary
loss $ 1.37 $ 1.13
------------- ----------
Net earnings $ 1.09 $ 1.09
------------- ----------
Diluted earnings per common share
Earnings before extraordinary
loss $ 1.34 $ 1.10
------------- ----------
Net earnings $ 1.06 $ 1.06
------------- ----------
Operating profit
Specialty Chemicals $ 205,019 $ 206,039
Specialty Equipment and Controls 32,012 25,913
Severance and other costs 0 (13,000)
Special environmental provision 0 (15,000)
General corporate expense (14,523) (17,375)
------------- ----------
Total operating profit $ 222,508 $ 186,577
------------- ----------
September 26, 1998 UNAUDITED
CROMPTON & KNOWLES CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets September 26, 1998 and December 27, 1997
(In thousands of dollars)
September 26, December 27,
1998 1997
--------------- --------------
ASSETS
CURRENT ASSETS
Cash $ 8,803 $ 10,607
Accounts receivable 288,311 262,412
Inventories 357,921 356,716
Other current assets 71,843 85,314
----------- ----------
Total current assets 726,878 715,049
NON-CURRENT ASSETS
Property, plant and equipment 476,292 474,892
Cost in excess of acquired net assets 180,023 181,025
Other assets 161,690 177,854
----------- ----------
$ 1,544,883 $ 1,548,820
----------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable $ 11,595 $ 1,770
Accounts payable 147,435 145,405
Accrued expenses 149,331 149,910
Income taxes payable 48,022 38,909
Other current liabilities 26,420 27,094
----------- ----------
Total current liabilities 382,803 363,088
----------- ----------
NON-CURRENT LIABILITIES
Long-term debt 811,769 896,291
Postretirement health care liability 148,392 149,344
Other liabilities 144,148 160,187
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock 7,733 7,733
Additional paid-in capital 236,761 232,213
Accumulated deficit (96,878) (174,019)
Accumulated translation adjustment (34,894) (42,045)
Treasury stock at cost (51,357) (40,228)
Deferred compensation (834) (984)
Pension liability adjustment (2,760) (2,760)
----------- ----------
Total stockholders' equity
(deficit) 57,771 (20,090)
----------- ----------
$ 1,544,883 $ 1,548,820
------------ --------------
UNAUDITED
CROMPTON & KNOWLES CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows Nine months ended
September 26, 1998 and September 27, 1997
(In thousands of dollars)
Sept. 26, Sept. 27,
Increase (decrease) to cash 1998 1997
--------------------------- -------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $ 80,862 $ 80,092
Adjustments to reconcile net earnings
to net cash provided by operations:
Extraordinary loss on early
extinguishment of debt 21,468 3,109
Depreciation and amortization 60,651 60,245
Noncash interest 4,977 10,541
Deferred taxes 6,442 21,689
Changes in assets and liabilities,
net (8,916) (9,292)
-------------- -------------
Net cash provided by operations 165,484 166,384
-------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions (5,927) -
Capital expenditures (42,084) (27,900)
Other investing activities 380 3,008
-------------- -------------
Net cash used by investing activities (47,631) (24,892)
-------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES
Redemption of 11% and 12% notes (352,802) -
Proceeds (payments) on long-term
borrowings 259,438 (136,975)
Proceeds (payments) on short-term
borrowings 9,825 (5,901)
Premium paid on early extinguishment
of debt (22,984) (4,123)
Treasury stock acquired (20,922) -
Dividends paid (3,721) (3,671)
Other financing activities 10,669 3,612
-------------- -------------
Net cash used by financing activities (120,497) (147,058)
-------------- -------------
CASH
Effect of exchange rates on cash 840 (400)
-------------- -------------
Change in cash (1,804) (5,966)
Cash at beginning of period 10,607 21,120
-------------- -------------
Cash at end of period $ 8,803 $ 15,154
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