Cummins Inc. Reports Earnings for the First Quarter 2001.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 12, 2001 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) today reported a first-quarter loss of $0.68 per share, or $26 million loss after taxes, on sales of $1.35 billion. This compares to the first quarter of 2000, when Cummins reported earnings of $1.09 per share, or $42 million profit after taxes, on sales of $1.65 billion. "While I am disappointed with a loss, as a result of our 2000 restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). activities and an intense focus on cost reduction, we were able to beat our forecast for the quarter," said Chairman and Chief Executive Officer Tim Solso. "We are in a severe 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. in many of our North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. markets, including heavy-duty heav·y-dut·y adj. Made to withstand hard use or wear. heavy-duty Adjective made to withstand hard wear, bad weather, etc. Adj. 1. truck, pickup Pickup A gain in yield made by selling one bond and buying another. Also referred to as "yield pickup." Notes: When the present yield is relatively low compared to the longer-term yields, pickups will be done by investors trying to increase the yield and duration of their trucks, recreational vehicles and Nelson's truck and consumer business. Despite the effects of this downturn, the vast majority of the company's business is profitable. As we have said on many occasions, we will continue to pursue cost reduction even more aggressively during this downturn." Restructuring Update "Short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. , we continue to focus on bringing our costs in line with our current business outlook," said Solso. "We are dedicated to reducing costs as we work through the challenges in the market, and completing the restructuring actions we announced this past December December: see month. . We continue to align align (  līn),v to move the teeth into their proper positions to conform to the line of occlusion. staffing levels to address the drop in demand for engines 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. . Over the last year, we have reduced by 2000 the number of full-time-equivalent employees in our Engine business. We have announced a number of longer-term restructuring activities throughout the company, including the closing and consolidation of five facilities. We expect that these actions, when fully implemented, will save the company approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $55 million per year." Solso continued, " Our goal is to further drive out cost while maintaining the quality and reliability our customers demand and have come to expect from Cummins. We are focused on generating positive cash flow, which includes the sale of non-strategic assets and underutilized properties. We will reduce our working capital with an intense focus on inventory, receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed and payables Payables Related: Accounts payable ." "For the past four years, we have emphasized em·pha·size tr.v. em·pha·sized, em·pha·siz·ing, em·pha·siz·es To give emphasis to; stress. [From emphasis.] Adj. 1. the reduction of selling, administrative and research expenses. We have exceeded our initial targets due to relentless cost reduction implementation of shared services shared services, n.pl the administrative, clinical, or other service functions that are common to two or more hospitals or their health care facilities and used jointly or cooperatively by them. in administrative areas and effective research and engineering investment." In addition, the company said discretionary spending has been essentially eliminated and headcount head count or head·count n. 1. The act of counting people in a particular group. 2. The number of people counted in this way. Noun 1. will continue to be adjusted to reflect demand. Outlook In Cummins' January January: see month. Earnings Teleconference the company indicated that it expected to return to profitability in the second quarter. "We still expect to return to profitability in the second quarter," said Solso. "North American markets are volatile With regard to computer memory, it means "temporary" and not "highly changeable," which is the usual meaning of the word. See volatile memory. 1. (programming) volatile - volatile variable. 2. (storage) volatile - See non-volatile storage. and full year projections are difficult to make. Current earnings estimates of $.90 per share for 2001 are reasonable in this environment." Power Generation Business Power generation sales of $309 million were down $20 million dollars or 6 percent from a year ago. A weakening weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak  en·er n. North American economy
impacted shipments of small gensets to recreational vehicle markets and
reduced growth in the telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. and internet markets. In
addition, shipments to some international markets were weaker than
expected. Earnings before interest and taxes In financial and business accounting, earnings before interest and taxes (EBIT) is a measure of a firm's profitability that excludes interest and income tax expenses.[1]EBIT = Operating Revenue – Operating Expenses + Non-operating Income for the quarter were $8 million, compared to the first quarter of last year, when it reported earnings before interest and taxes of $23 million. 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 Sales of filtration and other products were $272 million, essentially flat compared to the first quarter of 2000. Sales at company-owned distributors in a number of international markets continued to grow during the first quarter of 2000. The Holset Holset may refer to:
n. See turbosupercharger. tur bo·charged adj. business also saw sales increase from a year ago.
Filtration business revenues were down year-over-year, impacted by the
weakness in North American on- and off-highway 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 markets. For the
group, earnings before interest and taxes for the quarter were $20
million, compared to the first quarter of last year, when it reported
earnings before interest and taxes of $30 million.
Engine Business Revenues for the engine business were $768 million, down 27 percent from the first quarter of 2000. Worldwide heavy-duty truck sales of $236 million were down compared to the first quarter of 2000, with a 60 percent decrease in unit shipments to the North American heavy-duty truck market. In the medium-duty truck and bus market, sales of $144 million were 4 percent lower than a year ago, due to a 30 percent drop in North American medium duty truck engine volumes. Sales to light duty automotive and recreational vehicle markets were $121 million, down 43 percent from the year-ago quarter, due to reduced engine shipments for recreational vehicles and to DaimlerChrysler for the Dodge Ram
The Ram is a full-size pickup truck from Chrysler LLC's Dodge brand. The name was first used in 1981 on the redesigned Ram and Power Ram, though it came from the hood ornament used on pickup truck. Sales of $267 million to agriculture, construction, mining, marine, and other industrial markets were level compared to the year-ago quarter. The engine business reported a loss before interest and taxes of $34 million, compared to the first quarter of last year, when it reported earnings before interest and taxes of $28 million. The company's conference call to discuss the earnings report will be webcast at 11:00 a.m. Eastern Daylight For other uses, see Daylight (disambiguation). Daylight or the light of day is the combination of all direct and indirect sunlight outdoors during the daytime (and perhaps twilight). Time. The webcast can be accessed through Cummins' website at www.cummins.com. Access the investor home page and connect to the link to the conference call. Cummins, headquartered in Columbus, Ind., is the world's largest producer of commercial diesel engines above 50 horsepower horsepower, unit of power in the English system of units. It is equal to 33,000 foot-pounds per minute or 550 foot-pounds per second or approximately 746 watts. . The company provides products and services for customers in markets worldwide for engines, power generation, and filtration. In 2000, Cummins reported sales of $6.6 billion. Press releases by fax may be requested by calling News on Demand at 888-329-2305. Information provided and statements made on the webcast and in this release that are not 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. It 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 25, 2001 March 26, 2000
--------------------------- -------------- --------------
Net sales $ 1,349 $ 1,648
Earnings (loss) before interest and taxes (6) 81
Net earnings (loss) (26) 42
Basic earnings (loss) per share $ (.68) $ 1.09
Diluted earnings (loss) per share (.68) 1.09
Weighted-average number of shares for EPS:
Basic 38.2 38.2
Diluted 38.2 38.3
CUMMINS INC.
CONSOLIDATED STATEMENT OF EARNINGS
Unaudited
First Quarter Fourth Quarter
Millions, except per share amounts 2001 2000 2000
---------------------------------- ---- ---- ----
Net sales $1,349 $1,648 $1,608
Cost of goods sold 1,117 1,313 1,345
------ ------ ------
Gross profit 232 335 263
Selling and administrative expenses 183 194 197
Research and engineering expenses 53 59 64
Income from joint ventures
and alliances (2) (1) (2)
Interest expense 23 19 24
Other expense, net 4 2 4
Restructuring, asset impairment
and other special charges - - 160
------ ------ ------
Earnings (loss) before income taxes (29) 62 (184)
(Benefit) provision for income taxes (7) 17 (67)
Minority interest 4 3 3
------ ------ ------
Net earnings (loss) $ (26) $ 42 $ (120)
====== ====== ======
Basic earnings (loss) per share $ (.68) $ 1.09 $(3.16)
Diluted earnings (loss) per share (.68) 1.09 (3.16)
Average number of shares:
Basic EPS 38.2 38.2 38.3
Diluted EPS 38.2 38.3 38.3
Cash dividends declared per share $ .30 $ .30 $ .30
CUMMINS INC.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited
Millions, except per share amounts Mar. 25, 2001 Dec. 31, 2000
---------------------------------- ------------- -------------
Assets
Current assets:
Cash and cash equivalents $ 94 $ 62
Receivables, net of allowance of $8 773 724
Inventories 759 770
Other current assets 280 274
------ ------
1,906 1,830
Investments and other assets 357 338
Property, plant and equipment less
accumulated depreciation of $1,634
and $1,598 1,600 1,598
Goodwill, net of amortization
of $43 and $42 351 354
Other intangibles, deferred taxes and
deferred charges 381 380
------ ------
Total assets $4,595 $4,500
====== ======
Liabilities and shareholders' investment
Current liabilities:
Loans payable $ 25 $ 156
Current maturities of long-term debt 9 8
Accounts payable 439 388
Other current liabilities 682 671
------ ------
1,155 1,223
------ ------
Long-term debt 1,255 1,032
------ ------
Other liabilities 835 837
------ ------
Minority interest 78 72
------ ------
Shareholders' investment:
Common stock, $2.50 par value,
48.5 and 48.6 shares issued 121 122
Additional contributed capital 1,132 1,137
Retained earnings 680 718
Accumulated other comprehensive income (192) (167)
Common stock in treasury, at cost,
7.3 and 7.2 shares (291) (290)
Common stock held in trust for
employee benefit plans, 3.1 shares (148) (151)
Unearned compensation (ESOP) (30) (33)
------ ------
1,272 1,336
------ ------
Total liabilities and shareholders'
investment $4,595 $4,500
====== ======
CUMMINS INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited
First Quarter Ended
Millions March 25, 2001 March 26, 2000
-------- -------------- --------------
Cash flows from operating activities:
Net earnings (loss) $ (26) $ 42
----- -----
Adjustments to reconcile net
earnings (loss) to net cash from
operating activities:
Depreciation and amortization 59 57
Restructuring actions (12) (2)
Accounts receivable (47) (141)
Decrease in sale of receivables program (26) -
Inventories (3) (42)
Accounts payable and accrued expenses 93 100
Income taxes payable (10) (5)
Equity in losses of joint ventures
and alliances 2 2
Other 13 (2)
----- -----
Total adjustments 69 (33)
----- -----
Net cash provided by operating activities 43 9
----- -----
Cash flows from investing activities:
Property, plant and equipment:
Additions (62) (31)
Disposals 1 7
Investments in joint ventures and alliances (23) (18)
Acquisition and disposition of businesses - (35)
Other 1 -
----- -----
Net cash used in investing activities (83) (77)
----- -----
Net cash flows used in operating
and investing activities (40) (68)
----- -----
Cash flows from financing activities:
Proceeds from borrowings - 138
Payments on borrowings (4) (4)
Net borrowings (payments) under short
term credit agreements 96 (46)
Repurchases of common stock - (16)
Dividend payments (12) (12)
Other (8) 2
----- -----
Net cash provided by financing activities 72 62
----- -----
Net change in cash and cash equivalents 32 (6)
Cash and cash equivalents at the
beginning of the year 62 74
----- -----
Cash and cash equivalents at the
end of the quarter $ 94 $ 68
===== =====
CUMMINS INC.
SEGMENT INFORMATION
Unaudited
Operating segment information is as follows:
Power Filtration
Millions Engine Generation And Other Total
-------- ------ ---------- --------- -----
First Quarter Ended
March 25, 2001
-------------------
Net sales $ 768 $ 309 $ 272 $1,349
Earnings (loss) before
interest and income taxes (34) 8 20 (6)
Net assets 1,069 486 915 2,470
First Quarter Ended
March 26, 2000
-------------------
Net sales $1,045 $ 329 $ 274 $1,648
Earnings before interest
and income taxes 28 23 30 81
Net assets 1,108 565 854 2,527
Product Revenues as Percent of Total Sales
------------------------------------------
% of Consolidated Sales Q1 Q2 Q3 Q4 YTD
-- -- -- -- ---
2001:
Engines 47 47
Non-Engine Products 53 53
2000:
Engines 55 54 51 49 52
Non-Engine Products 45 46 49 51 48
Sales
-----
$Millions Q1 Q2 Q3 Q4 YTD
-- -- -- -- ---
2001:
Engine Business
Heavy-Duty Truck 236
Medium Duty Truck+Bus 144
Light Duty Auto+RV 121
Industrial 267
Total Engine Business 768
Power Generation Business 309
Filtration / Other 272
TOTAL 1,349
2000:
Engine Business
Heavy-Duty Truck 415 401 306 322 1,444
Medium Duty Truck+Bus 150 183 176 148 657
Light Duty Auto+RV 211 226 211 187 835
Industrial 269 297 269 279 1,114
Total Engine Business 1,045 1,107 962 936 4,050
Power Generation Business 329 368 334 364 1,395
Filtration / Other 274 294 276 308 1,152
TOTAL 1,648 1,769 1,572 1,608 6,597
Engine Shipments
----------------
Units Q1 Q2 Q3 Q4 YTD
----- -- -- -- -- ---
2001:
Midrange 58,300
Heavy-duty 14,600
High Horsepower 2,800
TOTAL 75,700
2000:
Midrange 78,900 89,100 79,000 71,200 318,200
Heavy-duty 27,400 25,800 19,600 19,100 91,900
High Horsepower 2,500 3,000 2,800 3,400 11,700
TOTAL 108,800 117,900 101,400 93,700 421,800
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