Cummins Inc. Reports Earnings for the Fourth Quarter and Full Year 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)--Jan. 23, 2002 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 profit after taxes of $3 million, or $.08 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. , on revenues of $1.46 billion for the fourth quarter of 2001. Earnings for the quarter are up from the fourth quarter of 2000, when the company lost $17 million, or $.45 cents per share on sales of $1.61 billion, exclusive of a pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta charge of $160 million associated with 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). actions. Including the charge, Cummins reported a loss of $120 million or $3.16 per share in the fourth quarter of 2000. In 2001, Cummins reported a loss for the year of $18 million, or $.47 cents per share, excluding a pre-tax charge of $125 million for costs associated with restructuring in the second quarter. Including the charge, Cummins lost $102 million, or $2.66 per share for the full year 2001. Despite the loss, Cummins reported profits in each of the last three-quarters Noun 1. three-quarters - three of four equal parts; "three-fourths of a pound" three-fourths common fraction, simple fraction - the quotient of two integers three-quarters npl → of 2001 on substantially lower sales. "2001 was a challenging year for us, yet we were able to make significant progress in improving our operations and meeting our financial commitments in the face of the most severe market conditions that I can remember," said Chairman and Chief Executive Officer, Tim Solso. "Delivering on our fourth quarter targets demonstrates the resolve that our employees and management team have to do whatever it takes to succeed in today's environment. This resolve, coupled with our restructuring actions, cost reduction efforts, and Six Sigma Not to be confused with Sigma 6. Six Sigma is a set of practices originally developed by Motorola to systematically improve processes by eliminating defects.[1] A defect is defined as nonconformity of a product or service to its specifications. programs will enable us to generate significantly higher profitability as industry conditions improve." Power Generation Revenues of $358 million in Power Generation dropped 2 percent in the fourth quarter of 2001 versus the fourth quarter of 2000, and market weakness is expected to continue through the first quarter of 2002. These markets are seasonally soft at this time of the year, particularly in the rental RENTAL. A roll or list of the rents of an estate containing the description of the lands let, the names of the tenants, and other particulars connected with such estate. This is the same as rent roll, from which it is said to be corrupted. markets, but the fall-off was more dramatic than forecasted. A number of larger projects have been delayed or stopped since September September: see month. 11th, and there are fewer "hot spots hot spots acute moist dermatitis. " demanding generating equipment at this time. These are not lasting declines, and Cummins expects the Power Generation Business to come back strongly in the second quarter as a number of bigger projects are completed and generator generator, in electricity, machine used to change mechanical energy into electrical energy. It operates on the principle of electromagnetic induction, discovered (1831) by Michael Faraday. set demand increases. Cummins expects the Power Generation Business to meet its goals for the full year 2002. 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 of $305 million were essentially flat from the fourth quarter 2000, while 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 improved by $4 million dollars. The Filtration Business continues to make progress on its cost reduction efforts and the exhaust Exhaust may refer to: In mathematics:
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. began. Filtration markets continue to be stable at this point, with any declines in 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 expected to be offset by cost improvement or aftermarket Aftermarket See: Secondary market. aftermarket See secondary market. sales. Engine Business Fourth quarter revenues for the Engine Business were $800 million, down 15 percent from the fourth quarter 2000. Sales of $247 million to the worldwide 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 market were down 23 percent from fourth quarter 2000, reflecting a continuing softness in the market and plant shut downs at several OEMs. In the medium-duty truck and bus segment, sales of $151 million were up 2 percent from last year. Sales to the light-duty adj. 1. not designed for heavy or demanding work; as, a light-duty detergent s>. Opposite of heavy-duty nt>. Adj. 1. light-duty - not designed for heavy work; "a light-duty detergent" automotive and recreational vehicle segment were down 26 percent on sales of $139 million, primarily due to the model changeover (programming) changeover - The time when a new system has been tested successfully and replaces the old system. in 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 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 . Sales of $263 million to agriculture, construction, mining, marine, and other industrial markets were down 6 percent compared to fourth quarter 2000. Outlook The company does not expect a significant improvement in revenue in 2002. Cummins does expect, however, to achieve a profitability improvement over 2001 through continuing cost reduction efforts. With the further deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. in our Power Generation and Engine Business markets, Cummins now expects first quarter 2002 results to be a loss of around $31 million dollars, or $.80 cents per share. The company is also lowering its guidance for the full year to $.70 to $.80 cents per share. This change is due to lower heavy-duty volumes than previously forecasted and weaker markets in the Power Generation Business in the first quarter. These will be somewhat offset by increased volumes for Chrysler Chrys·ler , Walter Percy 1875-1940. American automobile manufacturer who founded the Chrysler Corporation (1925). and additional cost reductions in our Engine Business to reflect the volume decline. The company's conference call to discuss the earnings report will be webcast at 10 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 today. The webcast can be accessed through Cummins website at www.cummins.com on the investor home page. 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)
FOR THE FOURTH QUARTER ENDED Dec. 31, 2001 Dec. 31, 2000
---------------------------- ------------- -------------
Net sales $ 1,463 $ 1,608
Before special charges
Earnings before interest and taxes $ -
Net earnings (loss) (17)
Basic earnings (loss) per share $ (.45)
Diluted earnings (loss) per share (.45)
As reported
Earnings (loss) before interest and taxes $ 28 $ (160)
Net earnings (loss) 3 (120)
Basic earnings (loss) per share $ .08 $ (3.16)
Diluted earnings (loss) per share .08 (3.16)
Weighted-average number of shares
outstanding for EPS:
Basic 38.4 38.3
Diluted 38.5 38.3
FOR THE YEAR ENDED Dec. 31, 2001 Dec. 31, 2000
------------------ ------------- -------------
Net Sales $ 5,681 $ 6,597
Before special charges
Earnings before interest and taxes $ 83 $ 249
Net earnings (loss) (18) 111
Basic earnings (loss) per share $ (.47) $ 2.91
Diluted earnings (loss) per share (.47) 2.91
As reported
Earnings (loss) before interest and taxes $ (42) $ 89
Net earnings (loss) (102) 8
Basic earnings (loss) per share $ (2.66) $ .20
Diluted earnings (loss) per share (2.66) .20
Weighted-average number of shares
outstanding for EPS:
Basic 38.3 38.2
Diluted 38.3 38.2
CUMMINS INC.
CONSOLIDATED STATEMENT OF EARNINGS
(Millions, except per share amounts)
Fourth Quarter Year Ended Third Quarter
-------------- ---------- -------------
2001 2000 2001 2000 2001
---- ---- ---- ---- ----
Net sales $1,463 $1,608 $5,681 $6,597 $1,408
Cost of goods sold 1,198 1,345 4,660 5,338 1,153
------ ------ ------ ------ ------
Gross profit 265 263 1,021 1,259 255
Selling and
administrative expenses 185 197 728 776 177
Research and engineering
expenses 56 64 220 244 53
Net income from joint
ventures and alliances (3) (2) (10) (9) (2)
Interest expense 15 24 76 86 15
Other (income) expense, net (1) 4 - (1) (3)
Restructuring, asset
impairment and other
special charges - 160 125 160 -
------ ------ ------ ------ ------
Earnings (loss) before
income taxes 13 (184) (118) 3 15
Provision (benefit) for
income taxes 2 (67) (42) (19) 2
Minority interest 3 3 15 14 4
Dividends on preferred
securities of
subsidiary trust 5 - 11 - 6
------ ------ ------ ------ ------
Net earnings (loss) $ 3 $ (120) $ (102) $ 8 $ 3
====== ====== ====== ====== ======
Basic earnings (loss)
per share $ .08 $(3.16) $(2.66) $ .20 $ .08
Diluted earnings (loss)
per share .08 (3.16) (2.66) .20 .08
Average number of
shares outstanding:
Basic EPS 38.4 38.3 38.3 38.2 38.2
Diluted EPS 38.5 38.3 38.3 38.2 38.5
Cash dividends
declared per share $ .30 $ .30 $ 1.20 $ 1.20 $ .30
CUMMINS INC.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(Millions, except per share amounts) Dec. 31, 2001 Dec. 31, 2000
------------- -------------
Assets
Current assets:
Cash and cash equivalents $ 92 $ 62
Receivables, net of
allowance of $9 and $8 656 724
Inventories 688 770
Other current assets 199 274
------ ------
1,635 1,830
Investments and other assets 341 338
Property, plant and equipment
less accumulated depreciation
of $1,603 and $1,598 1,405 1,598
Goodwill, net of
amortization of $51 and $42 343 354
Other intangibles, deferred taxes
and deferred charges 611 380
------ ------
Total assets $4,335 $4,500
====== ======
Liabilities and Shareholders' investment
Current liabilities:
Loans payable $ 21 $ 156
Current maturities of long-term debt 9 8
Accounts payable 366 388
Other current liabilities 574 671
------ ------
970 1,223
------ ------
Long-term debt 915 1,032
------ ------
Other liabilities 1,051 837
------ ------
Minority interest 83 72
------ ------
Cummins obligated mandatorily redeemable
convertible preferred securities of
subsidiary trust holding solely
convertible subordinated debentures
of Cummins 291 -
------ ------
Shareholders' investment:
Common stock, $2.50 par value,
48.6 shares issued 121 122
Additional contributed capital 1,131 1,137
Retained earnings 567 718
Accumulated other comprehensive income (326) (167)
Common stock in treasury,
at cost, 7.2 shares (289) (290)
Common stock held in trust for employee
benefit plans, 2.9 and 3.1 shares (140) (151)
Unearned compensation (ESOP) (39) (33)
------ ------
1,025 1,336
------ ------
Total liabilities and
shareholders' investment $4,335 $4,500
====== ======
CUMMINS INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
Year Ended
----------
(Millions) Dec. 31, 2001 Dec. 31, 2000
------------- -------------
Cash flows from operating activities:
Net earnings (loss) $ (102) $ 8
------ ------
Adjustments to reconcile net earnings
to net cash from operating activities:
Depreciation and amortization 231 240
Restructuring and other
non-recurring actions 49 132
Accounts receivable 202 54
Increase (decrease) in sale
of receivables program (164) 219
Inventories 67 9
Accounts payable (10) (54)
Accrued expenses (92) (82)
Income taxes payable (68) (105)
Equity in losses of joint
ventures and alliances 8 9
Other 23 (42)
------ ------
Total adjustments 246 380
------ ------
Net cash provided by operating activities 144 388
------ ------
Cash flows from investing activities:
Property, plant and equipment:
Additions (206) (228)
Disposals 20 11
Proceeds from sale-leasebacks 143 -
Investments in joint ventures and alliances (46) (53)
Acquisition and disposition of businesses 1 (42)
Other 2 -
------ ------
Net cash used in investing activities (86) (312)
------ ------
Net cash flows provided by operating
and investing activities 58 76
------ ------
Cash flows from financing activities:
Proceeds from borrowings - 1
Payments on borrowings (9) (65)
Net borrowings under credit agreements (248) 49
Repurchase of common stock - (16)
Dividend payments on common stock (50) (50)
Issuance of preferred securities
of subsidiary trust 291 -
Other (11) (5)
------ ------
Net cash used in financing activities (27) (86)
------ ------
Effect of exchange rate changes on cash (1) (2)
------ ------
Net change in cash and cash equivalents 30 (12)
Cash and cash equivalents at
the beginning of the year 62 74
------ ------
Cash and cash equivalents at
the end of the year $ 92 $ 62
====== ======
CUMMINS INC.
SEGMENT INFORMATION
Unaudited
Operating segment information is as follows:
Power Filtration
(Millions) Engine Generation And Other Total
------ ---------- ---------- -----
Fourth Quarter Ended
December 31, 2001
--------------------
Net sales $ 800 $ 358 $ 305 $ 1,463
Earnings (loss) before
interest and income taxes (15) 12 31 28
Net assets 741 315 804 1,860
Fourth Quarter Ended
December 31, 2000
--------------------
Net sales $ 936 $ 364 $ 308 $ 1,608
Earnings (loss) before
interest, income taxes
and special charges (52) 25 27 -
Special charges 131 19 10 160
Earnings (loss) before
interest and income taxes (183) 6 17 (160)
Net assets 1,148 543 899 2,590
Year Ended
December 31, 2001
-----------------
Net sales $ 3,121 $ 1,422 $ 1,138 $ 5,681
Earnings (loss) before
interest, income taxes
and special charges (91) 81 93 83
Special charges 118 5 2 125
Earnings (loss) before
interest and income taxes (209) 76 91 (42)
Year Ended
December 31, 2000
-----------------
Net sales $ 4,050 $ 1,395 $ 1,152 $ 6,597
Earnings before interest,
income taxes and
special charges 24 103 122 249
Special charges 131 19 10 160
Earnings (loss) before
interest and income taxes (107) 84 112 89
Product Revenues as Percent of Total Sales
------------------------------------------
% of Consolidated Sales Q1 Q2 Q3 Q4 YTD
-- -- -- -- ---
2001:
Engines 47 46 44 43 45
Non-Engine Products 53 54 50 57 55
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 236 235 222 247 940
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 Business 309 384 371 358 1,422
Filtration / Other 272 291 270 305 1,138
TOTAL 1,349 1,461 1,408 1,463 5,681
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 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
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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