Crompton & Knowles Fourth Quarter Earnings Increase 68 Percent Before Special Items.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)--Jan. 27, 1999--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 fourth quarter earnings increased 68 percent before special items to $14.9 million, or 21 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. basic and 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. , from $8.9 million, or 12 cents per share basic and diluted, in the 1997 fourth quarter. Special items in the fourth quarter of 1998 include a non-recurring gain, facility closure costs and an accounting change as described in the notes to the statements of earnings and in 1997 consist of an extraordinary loss 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. Net earnings for the fourth quarter were $80.9 million, or $1.11 per share diluted ($1.13 basic), compared with $6.7 million, or nine cents per share basic and diluted, in the fourth quarter of 1997. 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 fourth quarter were $401.8 million, down six percent from 1997 fourth quarter sales of $428.1 million. The deconsolidation of the 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 "We are pleased to report another quarter of significant improvement in our earnings performance" said Vincent A. Calarco, the company's chairman, president and chief executive officer. "In addition, we continue to strengthen our balance sheet as we reduced debt by another $159 million in the fourth quarter, bringing total debt reduction to $234 million in 1998 and $400 million in the last two years. Our fourth quarter interest expense of $16.5 million declined by 32 percent from the same period last year". For all of 1998, the company's earnings before special items increased 27 percent to $117.3 million, or $1.55 per share diluted ($1.59 basic), from $92.1 million, or $1.22 per share diluted ($1.25 basic). Special items that impacted results include extraordinary losses on early extinguishment of debt as well as the fourth quarter items described above. Net earnings for 1998 were $161.8 million, or $2.14 per share diluted ($2.20 basic), compared with $86.8 million, or $1.15 per share diluted ($1.18 basic) for the prior year. Net sales for 1998 were down three percent to $1.80 billion from $1.85 billion in 1997. On November November: see month. 12, 1998, the company announced the formation of a joint venture with GIRSA GIRSA Grupo Internacional de Representaciones, Sociedad Anónima (Guatemala) , a subsidiary of DESC desc description DESC descending DESC Defense Energy Support Center DESC Defense Electronics Supply Center DESC District Explorer Scout Commissioner (UK) DESC Detroit Executive Service Corps (Michigan) , S.A. de C.V., to produce 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. products in Mexico Mexico, city, Mexico Mexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. . The joint venture will result in the closure of the company's nitrile rubber facility in Painesville, Ohio Painesville is a city in Lake County, Ohio, United States, along the Grand River. Its population was 17,503 as of the 2000 Census. It is the county seat of Lake CountyGR6 and the home of Lake Erie College and Morley Library. , resulting in a fourth quarter pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta charge of $33.6 million. On November 20, 1998, the company announced the formation of a joint venture with Bayer Corporation to serve the seed treatment markets in Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of , Mexico and the United States Relations between the United States and Mexico are among the most important and complex that each nation maintains. They are shaped by a mixture of mutual interests, shared problems, and growing interdependence. . The basis of the joint venture was the company's Gustafson seed treatment business and resulted in cash proceeds to the company of $180 million. The transaction resulted in a fourth quarter pre-tax gain of $153.4 million. On January 15, 1999, the company announced that it had sold its food and pharmaceutical ingredients business to Chr. Hansen Chr. Hansen is a Danish food production company. They sell a wide variety of pharmaceutical grade exipients. The group employs approximately 2,500 employees in more than 30 countries and reported revenue of EUR 521m (DKK 3.77m DKK)in 2005/06. Chr. Holding A/S of Denmark for $103 million. The pre-tax gain to the company of approximately $50 million will be recorded in the first quarter of 1999. On January 25, 1999, 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. an additional 6.8 million shares, or 10 percent of the common shares outstanding. This program is in addition to the September, 1998, authorization The right or permission to use a system resource; the process of granting access. See access control. to repurchase 7.5 million shares. Under the September program, the company has repurchased 7.0 million shares to date. Pursuant to FASB Statement FASB Statement A standard set by the Financial Accounting Standards Board regarding a financial accounting and reporting method. Essentially, FASB statements determine the acceptable accounting practices that Certified Public Accountants use in reporting No. 131, "Disclosures about Segments of an Enterprise and Related Information", the company has redefined its reporting segments. The company's results will be grouped into two major business categories, "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. " and "Polymers and Polymer Processing Equipment". Specialty Chemicals will consist of separate reporting segments for Performance Chemicals (rubber chemicals and specialty additives), Crop Protection, Colors and Other (specialty ingredients). Polymers and Polymer Processing Equipment will consist of separate reporting segments for Polymers (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 , urethanes and nitrile rubber) and Polymer Processing Equipment (specialty process equipment and controls). Specialty Chemicals Fourth quarter Specialty Chemicals sales of $228.2 million declined 12 percent from the fourth quarter of 1997. Four percent of the decline resulted from the deconsolidation of the Gustafson seed treatment business in December 1998. All business segments were lower with the exception of Crop Protection after adjustment for the Gustafson impact. 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 Specialty Chemicals was $3.3 million compared to $17.5 million in the fourth quarter of 1997. The current quarter includes a charge of $8.0 million for an accounting change in the Colors business from the last-in, first-out last-in, first-out n. A method of inventory accounting in which the most recently acquired items are assumed to have been the first sold. In a period of rising prices, this method yields a lower ending inventory, a higher cost of goods sold, a lower (LIFO (Last In-First Out) A queueing method in which the next item to be retrieved is the item most recently placed in the queue. Contrast with FIFO. LIFO - stack ) method of accounting for inventory costs to the first-in, first-out first-in, first-out n. A method of inventory accounting in which the oldest remaining items are assumed to have been the first sold. In a period of rising prices, this method yields a higher ending inventory, a lower cost of goods sold, a higher gross (FIFO (First In First Out) A storage method that retrieves the item stored for the longest time. Contrast with LIFO. See traffic engineering methods. FIFO - first-in first-out ) method. Excluding the impact of the accounting change, operating profit in Specialty Chemicals was down 36 percent primarily in Performance Chemicals and Colors. Performance Chemicals sales of $105.0 million declined nine percent from the fourth quarter of 1997. Rubber chemical sales were off eight percent due primarily to lower unit volume and an unfavorable sales mix sales mix See product mix. . Specialty additives sales were off nine percent due primarily to lower unit volume as domestic customers lowered inventories and the Asian effect continued. Performance Chemicals operating profit of $7.4 million declined 44 percent from the fourth quarter of 1997. Operating profit was primarily impacted in the current quarter by lower unit volume, unfavorable manufacturing variances and an unfavorable product mix. Crop Protection sales of $52.7 million increased seven percent from the fourth quarter of 1997 after adjustment for the deconsolidation of the Gustafson seed treatment business in December, 1998. The improvement was primarily in unit volume. Operating profit for the seasonally low fourth quarter improved to $500 thousand from a $2.1 million operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. in the fourth quarter of 1997. Improved product mix and lower operating costs operating costs npl → gastos mpl operacionales contributed to the higher operating profit. Colors sales of $50.8 million decreased 17 percent from the fourth quarter of 1997. Increased imports of finished apparel from Asia lowered the demand for domestic dye products and both price (down two percent) 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. . An operating loss of $5.3 million was recorded
in the current quarter after providing for a charge of $8.0 million for
an accounting change from the last-in, first-out (LIFO) method of
accounting for inventory costs to the first-in, first-out (FIFO) method.
Excluding the accounting change, operating profit was $2.7 million or 50
percent below the fourth quarter of 1997. Operating profit was primarily
impacted by lower unit volume and pricing.Other sales and operating profit consist of the specialty ingredients business which was sold effective the first day of fiscal 1999. Polymers and Polymer Processing Equipment Fourth quarter sales of $173.6 million for Polymers and Polymer Processing Equipment increased three percent from the fourth quarter of 1997. An increase in Polymer Processing Equipment was partially offset by a decrease in Polymers. Operating profit of $32.8 million increased 32 percent from the fourth quarter of 1997 as both business segments improved. Polymers sales of $84.3 million decreased four percent from the fourth quarter of 1997. EPDM sales were unchanged as pricing increased eight percent offset by lower unit volume. Urethane urethane (yoor´ithān´), n ethyl carbamate used as an anesthetic agent for laboratory animals, formerly used as a hypnotic in humans. and nitrile rubber sales were lower by six percent and 10 percent, respectively, due primarily to lower unit volume. Polymers operating profit of $19.2 million was 29 percent higher than the fourth quarter of 1997 primarily as a result of higher prices and lower raw material costs in the EPDM business. Polymer Processing Equipment sales of $89.3 million increased 10 percent from the fourth quarter of 1997. The improvement was primarily attributable to improved unit volume. Operating profit of $13.6 million increased 36 percent from the fourth quarter of 1997. Operating profit was primarily impacted by increased unit volume and improved product mix. The order backlog Backlog The 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. at the end of 1998 was $118 million compared to $106 million at the end of 1997.
CROMPTON & KNOWLES CORPORATION AND SUBSIDIARIES
Consolidated Statements of Earnings
Fourth quarter and year ended 1998 and 1997
(In thousands, except per share data)
Fourth Quarter Year Ended
---------------------------------------
1998 1997 1998 1997
------ ------ ------ ------
Net sales $401,795 $428,089 $1,796,119 $1,851,180
Costs and expenses
Cost of products sold (a) 272,044 291,394 1,146,200 1,196,030
Selling, general
and administrative 67,144 65,253 264,710 269,405
Depreciation
and amortization 19,885 19,611 80,536 79,856
Research and development 13,332 14,130 52,775 53,611
Facility closure costs (b) 33,600 -- 33,600 --
Severance and other costs -- -- -- 13,000
Special environmental charge -- -- -- 15,000
------ ------ ------ ------
Operating profit (loss) (4,210) 37,701 218,298 224,278
Interest expense 16,486 24,174 78,520 103,349
Other income (c) (156,336) (688) (158,938) (27,817)
------ ------ ------ ------
Earnings before income taxes
and extraordinary loss 135,640 14,215 298,716 148,746
Income taxes 54,747 5,345 115,493 56,675
------ ------ ------ ------
Earnings before
extraordinary loss 80,893 8,870 183,223 92,071
Extraordinary loss on early
extinguishment of debt -- (2,133) (21,468) (5,242)
------ ------ ------ ------
Net earnings $80,893 $6,737 $161,755 $86,829
------ ------ ------ ------
Basic earnings per common share
Earnings before
extraordinary loss $1.13 $0.12 $2.48 $1.25
------ ------ ------ ------
Net earnings $1.13 $0.09 $2.20 $1.18
------ ------ ------ ------
Weighted avg. shares
outstanding 71,790 73,564 73,696 73,373
------ ------ ------ ------
Diluted earnings per common share
Earnings before
extraordinary loss $1.11 $0.12 $2.42 $1.22
------ ------ ------ ------
Net earnings $1.11 $0.09 $2.14 $1.15
------ ------ ------ ------
Weighted avg. shares
outstanding 72,728 75,788 75,700 75,358
------ ------ ------ ------
(a) Includes a fourth quarter charge of $7,960 ($5,000 after-tax) for
an accounting change in the Colors business from the last-in,
first-out method of accounting for inventory costs to the
first-in, first-out method.
(b) Facility closure costs of $33,600 ($21,100 after-tax) relate
primarily to the closure of the nitrile rubber facility in
Painesville, Ohio.
(c) Includes a fourth quarter gain of $153,429 ($92,053 after-tax)
from the sale of a 50% interest in the Gustafson seed treatment
business.
CROMPTON & KNOWLES CORPORATION AND SUBSIDIARIES
Segment Sales and Operating Profit
Fourth quarter and year ended 1998 and 1997
(In thousands of dollars)
Fourth Quarter Year Ended
---------------------- ---------------------
1998 1997 1998 1997
---------- ---------- --------- ---------
Net Sales
Specialty Chemicals
Performance Chemicals $ 104,964 $ 114,829 $ 441,800 $ 469,434
Crop Protection 52,713 59,020 348,000 370,091
Colors 50,764 61,242 229,723 257,638
Other 19,803 24,728 89,589 100,190
-------------- ------------ ---------- ---------
228,244 259,819 1,109,112 1,197,353
-------------- ------------ ---------- ---------
Polymers & Polymer Processing Equipment
Polymers 84,278 87,351 342,527 342,154
Polymer Processing
Equipment 89,273 80,919 344,480 311,673
-------------- ------------ ---------- ---------
173,551 168,270 687,007 653,827
-------------- ------------ ---------- ---------
Total net sales $ 401,795 $ 428,089 $1,796,119 $1,851,180
-------------- ------------ ---------- ---------
Operating Profit (Loss)
Specialty Chemicals
Performance Chemicals $ 7,430 $ 13,231 $ 50,010 $ 67,730
Crop Protection 500 (2,127) 78,747 77,343
Colors (a) (5,309) 5,314 13,504 30,121
Other 668 -----
Polymers & Polymer Processing Equipment
Polymers 19,230 14,902 77,414 55,485
Polymer Processing
Equipment (33,600) -
Severance and other
co -------------- ------------ ---------- ---------
a)Includes a fourth quarter charge of $7,960 for an accounting
change from the last-in, first-out m 1998
1997
------------------- ---------ts
77,422 85,314
-------------------- -------------------
Total current assets 597,756 ----- -------------------
$1,408,893 $1,548,820
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable 27,094
-------------------- -------------------
Total current liabilities 394,372 363,088
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock 7,733 7,733
Additional paid-in capital 238,615 232,213
Accdjustment (953) (2,760)
-------------------- -------------------
Total stockholders' equity
(deficit) 66,703 (20,090)
---ted Statements of Cash Flows
Years ended December 26, 1998 and December 27, 1997
(In thousands of dollars)
Dec. 26, Dec. 27,
Increase (decrease) to cash 1998 1997
--------------------------- ------------ -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $ 161,755 $ 86,829
Adjustments to reconcile net earnings
to net 21,468 5,242
Depreciat FROM INVESTING ACTIVITIES
Proceeds from sale of Gustafson 180,000 -
Capital expenditures (66,628) (50,176)
A4,607)
------------------ -------------
CASH FLOWS FROM FINANCING ACTIVITIES
Redemption of 11% and 12% notes 80,000 -
Premium paid on early extinguishment
of debt (22,984) (7,065)
Treasury stock acquired ities (271,859) (180,788)
------------------ -------------
CASH
Effect of exchange rates on cash 179 Cash at end of period
$ 12,104 $ 10,607
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