Cummins Inc. Reports Earnings For The First Quarter 2002.Business Editors COLUMBUS Columbus. 1 City (1990 pop. 178,681), seat of Muscogee co., W Ga., at the head of navigation on the Chattahoochee River; settled and inc. 1828 on the site of a Creek village. , 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 25, 2002 Today Cummins This article is about the diesel engine manufacturer. For other uses, see Cummins (disambiguation). Cummins Inc. (NYSE: CMI) is a maker of diesel and natural gas engines whose corporate headquarters is located in Columbus, Indiana. Inc. (NYSE NYSE See: New York Stock Exchange :CUM) reported a first quarter loss of $.75 per share, or $29 million loss after taxes, on sales of $1.33 billion. This compares to a loss of $.68 per share or $26 million in the first quarter of 2001 on sales of $1.35 billion. "As we forecasted in January January: see month. , the majority of our end markets declined further from what were already extremely low levels, leading to a significant impact on our earnings," said Chairman and Chief Executive Officer Tim Solso. "While I am disappointed in the loss, earnings did beat our estimates and we made strides in several areas as a result of our continuous focus on cost reduction and quality improvements." "The first quarter is historically difficult for our industry, however, we believe demand has hit a trough Trough The stage of the economy's business cycle that marks the end of a period of declining business activity and the transition to expansion. in most of our markets and should gradually grad·u·al adj. Advancing or progressing by regular or continuous degrees: gradual erosion; a gradual slope. n. Roman Catholic Church 1. improve going forward," he continued. "We are well positioned to take advantage of an eventual upturn and substantially improve profitability." A break down of results for Cummins four business units is listed below, including the newly formed International Distributor Business Unit. Filtration filtration: see sewerage; water supply. Filtration The separation of solid particles from a fluidsolids suspension of which they are a part by passage of most of the fluid through a septum or membrane that retains most of the solids Business and Other Revenues for the Filtration and Other segment of $228 million improved 6 percent compared to the first quarter of 2001. Filtration business revenue increased 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. as some of its markets have begun a slow recovery. Revenues at the Holset Holset may refer to:
n. See turbosupercharger. tur  bo·charged adj. business
increased from first quarter 2001, helped in part by higher sales in
China.
Engine Business Total sales in the Engine Business in the first quarter were $776 million, essentially flat with sales of $768 million a year ago. Revenues in automotive markets were up 3 percent year over year, due in part by increases in the light duty automotive and RV businesses. Demand in the heavy duty and medium duty truck markets was still low, however the company believes these markets have finally bottomed, and are showing some signs of a modest improvement. Overall revenue from Industrial markets was down slightly year-over-year, with decreases in construction and mining sales, partially compensated compensated /com·pen·sat·ed/ (kom´pen-sa?tid) counterbalanced; offset. by improved sales in agricultural and marine markets. In April, the Cummins ISX ISX InstallShield Express (Setup software) ISX Internet Service Exchange (Abovenet) ISX Insoluble Starch Xanthate ISX Information Superiority Experiments ISX Infrastructure ISX Incisive Software Extensions became the first engine to be certified See certification. by the Environmental Protection Agency Environmental Protection Agency (EPA), independent agency of the U.S. government, with headquarters in Washington, D.C. It was established in 1970 to reduce and control air and water pollution, noise pollution, and radiation and to ensure the safe handling and (EPA EPA eicosapentaenoic acid. EPA abbr. eicosapentaenoic acid EPA, n.pr See acid, eicosapentaenoic. EPA, n. ) for the October October: see month. 2002 emission standards Emission standards are requirements that set specific limits to the amount of pollutants that can be released into the environment. Many emission standards focus on regulating pollutants released by automobiles (motor cars) and other powered vehicles but they can also regulate . The Engine Business is well positioned for a market upturn and stands to grow share as well as improve profitability. Power Generation Revenues of $283 million in Power Generation were down 8 percent from the first quarter of 2001. Markets were down more than expected as demand fell in the commercial genset For the corporation, see Genset Corporation. A genset (short for "generator setup") is the term used for a self-contained and dedicated electrical generation system, usually portable or mounted on a vehicle such as a boat. business primarily due to lower economic activity, a mild winter in North America, and high inventory levels in the marketplace. Revenues also decreased in 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). and India India, officially Republic of India, republic (2005 est pop. 1,080,264,000), 1,261,810 sq mi (3,268,090 sq km), S Asia. The second most populous country in the world, it is also sometimes called Bharat, its ancient name. India's land frontier (c. ,
but increased in 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. , primarily driven by the continued energy
crisis in Brazil Brazil (brəzĭl`), Port. Brasil, officially Federative Republic of Brazil, republic (2005 est. pop. 186,113,000), 3,286,470 sq mi (8,511,965 sq km), E South America. .
International Distributor Business Sales for the International Distributor Business were $124 million in the first quarter of 2002, a decrease of $9 million from last year. The majority of the decrease resulted from certain 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 sales now being reported in the Engine Business. Excluding the effect of this change, sales for the segment increased by 6 percent, with higher sales in Asia and Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. partially offset by reduced sales in Argentina Argentina (ärjəntē`nə, Span. ärhāntē`nä), officially Argentine Republic, republic (2005 est. pop. 39,538,000), 1,072,157 sq mi (2,776,889 sq km), S South America. due to the devaluation devaluation, decreasing the value of one nation's currency relative to gold or the currencies of other nations. It is usually undertaken as a means of correcting a deficit in the balance of payments. of the peso. Outlook "As we look forward to the remainder of 2002, we believe the worst is behind us, but we do not expect significant broad recovery in the near term," said Solso. "Through our cost reduction efforts, we have substantially improved our cost structure and lowered our breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations point. This will continue to benefit us in the near term and positions us well for the market upturn." Cummins expects earnings per share of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $.20 for the second quarter 2002. Guidance for 2002 remains in the previously announced range of $.70 to $.80 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. , though it is now expected to be at the lower end of the range. The company expects the Power Generation markets to remain low as excess inventory continues to be used up, leading to flat to down 5 percent sales levels for 2002. The company expects this to be offset by the Engine Business as preliminary signs of improvement in some markets indicate modest sales growth in the 5 to 10 percent range for the year. The stable growth in the International Distributor Business and the Filtration and Other Business, coupled with the continued emphasis on cost reduction in all units will also contribute toward the company's expectations of full year profitability. A global power leader, Cummins Inc., is a corporation of complementary business units that design, manufacture, distribute, and service electrical power generation systems, engines, and related technologies, including fuel systems, controls, air handling, filtration, and emissions emissions npl → émissions fpl emissions npl → Emissionen pl solutions. Headquartered in Columbus, Indiana Columbus (IPA: [kəˈlʌm.bəs]) is the county seat of Bartholomew County, Indiana. The population was 39,059 at the 2000 census. The current mayor is Fred Armstrong. (USA), Cummins serves its customers through more than 500 company-owned and independent distributor locations in 131 countries and territories. With 24,900 employees worldwide, Cummins reported sales of $5.7 billion in 2001. Press releases by fax can be requested by calling News On Demand (toll free) at 888-329-2305. Cummins home page can be found at www.cummins.com. Information provided and statements made on the webcast and in this release that are nor purely historical are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995, including statements regarding the company's expectations, hopes, beliefs, and intentions on strategies regarding the future. Its is important to note that the company's actual future results could differ materially from those projected in such forward-looking statements because of a number of factors, including but not limited to general economic, business and financing conditions, labor relations, governmental action, competitor pricing activity, expense volatility Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the , and other risks detailed from time to time in Cummins Securities and Exchange Commission Filings.
Cummins Inc.
($ Millions, except per share amounts)
Unaudited
For The First Quarter Ended March 31, 2002 March 25, 2001
-------------- --------------
Net sales $ 1,333 $ 1,349
Earnings (loss) before interest
and income taxes (15) (6)
Net earnings (loss) (29) (26)
Amortization of goodwill expense -- 3
Net earnings (loss) adjusted (29) (23)
Basic earnings (loss) per share $ (.75) $ (.68)
Amortization of goodwill expense -- .07
As adjusted (.75) (.61)
Diluted earnings (loss) per share (.75) (.68)
Amortization of goodwill expense -- .07
As adjusted (.75) (.61)
Weighted-average number of
shares outstanding
Basic EPS 38.5 38.2
Diluted EPS 38.5 38.2
Cummins Inc.
Consolidated Statement Of Earnings
Unaudited
$ Millions, except per share amounts
First Quarter Fourth Quarter
-------------- --------------
2002 2001 2001
------- ------- -------
Net sales $ 1,333 $ 1,349 $ 1,463
Cost of goods sold 1,107 1,117 1,198
------- ------- -------
Gross margin 226 232 265
Operating expenses:
Selling and administrative
expenses 186 183 185
Research and engineering
expenses 56 53 56
Income from joint ventures
and alliances -- (2) (3)
Amortization of goodwill expense -- 3 2
Other (income) expense, net (1) 1 (3)
------- ------- -------
Earnings (loss) before interest
and income taxes (15) (6) 28
Interest expense 14 23 15
Provision (benefit) for income taxes (9) (7) 2
Minority interest 3 4 3
Dividends on preferred
securities of subsidiary trust 6 -- 5
------- ------- -------
Net earnings (loss) $ (29) $ (26) $ 3
======== ======== =======
Basic earnings (loss) per share $ (.75) $ (.68) $ .08
Diluted earnings (loss) per share (.75) (.68) .08
Diluted earnings (loss)
per share adjusted(a) (.75) (.61) .14
Average number of shares:
Basic EPS 38.5 38.2 38.4
Diluted EPS 38.5 38.2 38.5
Cash dividends declared per share $ .30 $ .30 $ .30
(a) Reflects Cummins 2001 earnings (loss) adjusted for
non-amortization of goodwill.
Cummins Inc.
Consolidated Statement Of Financial Position
Unaudited
$ Millions Mar. 31, 2002 Dec. 31, 2001
------------- -------------
Assets
Current assets:
Cash and cash equivalents $ 93 $ 92
Receivables, net of allowance
of $9 and $9 742 656
Inventories 708 688
Other current assets 199 199
------- -------
1,742 1,635
Investments and other assets
Investment in and advances to
joint ventures and alliances 214 216
Other assets 118 125
------- -------
332 341
Property, plant and equipment 2,980 3,008
Less accumulated depreciation 1,612 1,603
------- -------
1,368 1,405
Goodwill, net of amortization
of $51 and $51 343 343
Deferred income taxes 422 422
Other intangibles and deferred charges 184 189
------- -------
Total assets $ 4,391 $ 4,335
======= =======
Liabilities and shareholders' investment
Current liabilities:
Loans payable $ 101 $ 21
Current maturities of long-term debt 134 9
Accounts payable 433 366
Other accrued expenses 522 574
------- -------
1,190 970
Long-term debt 784 915
------- -------
Other liabilities 1,053 1,051
------- -------
Minority interest 85 83
------- -------
Cummins obligated mandatorily redeemable
convertible preferred securities of
subsidiary trust holding solely
convertible subordinated debentures
of Cummins 291 291
------- -------
Shareholders' investment:
Common stock, $2.50 par value,
150 million shares authorized,
48.4 and 48.6 million shares issued 121 121
Additional contributed capital 1,125 1,131
Retained earnings 525 567
Accumulated other comprehensive income (331) (326)
Common stock in treasury, at cost,
7.0 and 7.2 million shares (281) (289)
Common stock held in trust for
employee benefit plans, 2.8
and 2.9 million shares (137) (140)
Unearned compensation (34) (39)
------- -------
988 1,025
------- -------
Total liabilities and
shareholders' investment $ 4,391 $ 4,335
======= =======
Cummins Inc.
Consolidated Statement Of Cash Flows
Unaudited
First Quarter Ended
------------------------------
$ Millions March 31, 2002 March 25, 2001
-------------- --------------
Cash flows from operating activities:
Net earnings (loss) $ (29) $ (26)
------ ------
Adjustments to reconcile net
earnings (loss) to net cash
flows from operating activities:
Depreciation and amortization 54 59
Restructuring and other
non-recurring actions (7) (12)
Equity in losses of joint
ventures and alliances 7 2
Changes in assets and liabilities:
Receivables (105) (47)
Proceeds (repayments) from
sale of receivables 35 (26)
Inventories (31) (3)
Accounts payable and accrued
expenses 45 93
Income taxes payable (18) (10)
Other 6 13
------ ------
Net cash provided by (used in)
operating activities (43) 43
------ ------
Cash flows provided by (used in)
investing activities:
Property, plant and equipment:
Additions (18) (62)
Disposals 2 1
Investments in and advances to
joint ventures and alliances (6) (23)
Other -- 1
------ ------
Net cash used in investing
activities (22) (83)
------ ------
Net cash used in operating and
investing activities (65) (40)
------ ------
Cash flows provided by (used in)
financing activities:
Payments on borrowings (1) (4)
Net borrowings under short term
credit agreements 81 96
Dividend payments on common stock (12) (12)
Other (1) (8)
------ ------
Net cash provided by financing
activities 67 72
------ ------
Effect of exchange rate changes
on cash and cash equivalents (1) --
------ ------
Net change in cash and cash equivalents 1 32
Cash and cash equivalents at the
beginning of the year 92 62
------ ------
Cash and cash equivalents at the
end of the quarter $ 93 $ 94
===== =====
Cummins Inc.
Segment Information
Unaudited
Filtration
Power and International Elimin-
$ Millions Engine Generation Other Distributor ations Total
------ ---------- ------- ------------- ------- -------
First Quarter
Ended March 31,
2002:
Net sales $ 776 $ 283 $ 228 $ 124 $ (78) $ 1,333
Earnings
(loss)
before
interest
and income
taxes (19) (15) 18 1 -- (15)
Net assets 761 332 639 170 -- 1,902
First Quarter
Ended March 25,
2001:
Net sales $ 768 $ 309 $ 215 $ 133 (76) $ 1,349
Earnings
(loss)
before
interest
and income
taxes (34) 8 16 4 -- (6)
Net assets 1,069 486 699 216 -- 2,470
Product Revenues as Percent of Total Sales
------------------------------------------
% of Consolidated Sales Q1 Q2 Q3 Q4 YTD
2002:
Engines 44 44
Non-Engine Products 56 56
2001:
Engines 47 46 45 43 45
Non-Engine Products 53 54 55 57 55
Sales
-----
$Millions Q1 Q2 Q3 Q4 YTD
2002:
Engine Business
Heavy-Duty Truck 219 219
Medium Duty Truck+Bus 138 138
Light Duty Auto+RV 157 157
Industrial 262 262
Total Engine
Business 776 776
Power Generation 283 283
Int'l. Distributors 124 124
Filtration / Other 228 228
Eliminations (78) (78)
TOTAL 1,333 1,333
2001:
Engine Business
Heavy-Duty Truck 236 235 222 247 940
Medium Duty Truck+Bus 144 147 135 151 577
Light Duty Auto+RV 121 151 165 139 576
Industrial 267 253 245 263 1,028
Total Engine
Business 768 786 767 800 3,121
Power Generation 309 384 371 358 1,422
Int'l. Distributors 133 143 136 150 562
Filtration / Other 215 225 211 238 889
Eliminations (76) (77) (77) (83) (313)
TOTAL 1,349 1,461 1,408 1,463 5,681
Engine Shipments
----------------
Units Q1 Q2 Q3 Q4 YTD
----- -- -- -- -- ---
2002:
Midrange 60,500 60,500
Heavy-duty 11,200 11,200
High Horsepower 2,100 2,100
TOTAL 73,800 73,800
2001:
Midrange 58,300 66,500 61,500 57,200 243,500
Heavy-duty 14,600 14,400 14,000 14,400 57,400
High Horsepower 2,800 2,800 2,800 2,600 11,000
TOTAL 75,700 83,700 78,300 74,200 311,900
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion