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GOULDS PUMPS REPORTS INCREASES IN SECOND QUARTER ORDERS, SALES AND EARNINGS PER SHARE

 SENECA FALLS, N.Y., July 26 /PRNewswire/ -- Goulds Pumps, Inc. (NASDAQ-NMS: GULD) today announced increases in orders, sales and earnings per share for the second quarter of 1993. According to Stephen V. Ardia, president and CEO, "The strengthening of our financial results is directly attributable to an upturn in our parts business, improvement at Lowara (our Italian subsidiary), reduction of our selling, general and administrative costs compared to last year, and an outstanding performance by our joint venture, Oil Dynamics, Inc."
 Goulds Pumps' financial results for the three and six months ended June 30, 1993 are as follows (in millions of dollars except per share amounts and percentages):
 GOULDS PUMPS, INC.
 Financial Results
 (In millions of dollars except per share amounts and percentages)
 Three months Six months
 Periods ended June 30 1993 1992 1993 1992
 Net sales $ 152.4 $ 147.6 $ 276.8 $ 282.5
 Gross margin percent 29.2 31.3 28.9 31.4
 Tax rate percent 38.5 39.0 38.5 39.0
 Net earnings before
 change in acctg.
 principle $ 8.2 $ 7.6 $ 11.6 $ 14.6
 EPS before change in
 acctg. principle .39 .36 .55 .70
 EPS .39 .36 .55 (.72)
 Total orders for the second quarter were $139.5 million, up 1 percent from $137.5 million in the second quarter of 1992. Total backlog was lowered to $87.0 million from $92.6 million a year earlier. Ardia explained, "Our backlog has decreased as a result of very high shipment levels in the second quarter, especially for the month of June which set a record as the highest shipments month in the history of the company. Additionally, our reduced leadtimes to our customers decreased backlog as our shipments became faster and more reliable, making us more dependent on current order activity."
 Ardia continued, "In other areas of financial significance, we reduced by $1 million our selling, general and administrative costs for the second quarter compared to the same quarter in 1992. This reduction is a result of cost control initiatives that we have implemented and represents a decrease in our overall operating cost base.
 "Our gross margin percentage declined in both operating groups for this quarter versus the second quarter of 1992 as competitive pricing and pump shipment mix created downward pressure on our profitability. Our joint venture, Oil Dynamics, Inc. (ODI) posted outstanding performance on the strength of its continued business in Russia," Ardia said.
 Industrial Products Group (IPG)
 Spurred by a record quarterly shipments level at the Engineered Products Division (EPD), sales for the Industrial Products Group were 19 percent higher than the first quarter of 1993 and 4 percent higher than the second quarter of 1992. "Strong EPD shipments were in part a result of our reduction of pump delinquencies to our lowest level in 1993," explained Ardia.
 Overall order levels at IPG were stable for the same periods. "Specifically, repair orders increased 9 percent compared to the first quarter of 1993 and increased 10 percent for the second quarter year over year, while pump orders softened as customers in our core markets continue to defer capital spending for major projects. We are encouraged by our higher repair parts order rate which we achieved in spite of the impact of the coal strike on our Slurry Pump Division. Improved order rates have traditionally served as a barometer of business improvement," added Ardia.
 The gross margin percentage for the group softened due largely to the continued competitive pricing environment in all regions of the United States and certain international markets. Offsetting this decrease, cost reduction measures allowed IPG to improve its profitability compared to 1992 for the second quarter.
 Water Technologies Group (WTG)
 WTG reported a 3 percent increase in orders and approximately the same shipments level for the second quarter of 1993 as in the second quarter of 1992. Ardia explained, "at WTG-America, sales increased 8 percent compared to the second quarter of last year as recent dry weather conditions in the Northeast and Southeast regions and promotional programs boosted sales. However, promotional costs, pricing pressure, and product shipment mix decreased the division's gross margin and profitability for the quarter. WTG-Europe (Lowara) significantly rebounded from a very weak first quarter, though sales and profitability were lower than the second quarter of 1992 on a translated basis. On a local currency basis, sales actually increased 16 percent due to the shipments of new products as well as the weakening of the lire which makes Italian products more price attractive in other European countries. On a local currency basis, profitability increased 11 percent compared to the same quarter a year ago as the continued investment in selling channels together with price competition lowered the division's gross margin slightly.
 "Although affecting Lowara's translated results, the weakening of the lire does not negatively impact overall WTG results as we have in place a natural hedge since our U.S. purchases of Lowara product equal or exceed Lowara's profitability," explained Ardia.
 In closing
 Ardia concluded, "Our second quarter results provide evidence that the initiatives we have taken are generating both the cost savings and sales volume that we had expected. Unfortunately, the continued slow growth in the domestic economy, weakness in many international markets and competitive pricing pressures still persist. Looking to the third and fourth quarters of 1993 we still expect results to exceed the comparable results for 1992. The magnitude of the year over year improvement for the fourth quarter is difficult to predict as we have become much more dependent upon short-term order activity.
 "We are confident we are taking the right steps to position ourselves to capitalize on future business expansion in our core markets by streamlining our operations, expanding our market penetration, improving customer service and developing new products."
 GOULDS PUMPS, INC.
 Condensed Consolidated Statements of Earnings
 (Unaudited, in thousands except per share data)
 Three months Six months
 Periods ended June 30 1993 1992(A) 1993 1992(A)
 Net sales $152,424 $147,550 $276,826 $282,461
 Cost and expenses:
 Cost of sales 107,900 101,364 196,734 193,780
 Selling, general and
 administrative expenses 29,692 30,684 58,303 59,161
 Research and development
 expenses 1,707 1,919 3,383 3,923
 Earnings from investments
 and affiliates (1,530) (121) (2,189) (257)
 Interest expense 1,560 1,306 2,630 2,363
 Interest income (703) (463) (1,064) (637)
 Other expense 452 404 145 166
 Earnings before income taxes
 and cumulative effect of
 accounting change 13,346 12,457 18,884 23,962
 Income taxes 5,138 4,859 7,270 9,347
 Earnings before cumulative
 effect of accounting
 change 8,208 7,598 11,614 14,615
 Cumulative effect of change
 in accounting principle,
 net of income tax benefit -- -- -- (29,746)
 Net earnings (loss) 8,208 7,598 11,614 (15,131)
 Earnings before cumulative
 effect of accounting change .39 .36 .55 .70
 Cumulative effect of change
 in accounting principle -- -- -- (1.42)
 Net earnings (loss)
 per common share .39 .36 .55 (.72)
 Dividends per share .20 .20 .40 .40
 Weighted average shares
 outstanding
 (in thousands) 21,120 21,038 21,107 20,991
 (A) Restated for adoption of SFAS 106 as of Jan. 1, 1992.
 GOULDS PUMPS, INCORPORATED
 Condensed Consolidated Balance Sheets
 (Unaudited, in thousands)
 6/30/93 6/30/92(A)
 ASSETS
 Current Assets:
 Cash and cash equivalents $ 13,002 $ 11,917
 Receivables - net 124,444 118,204
 Inventories 105,573 102,428
 Deferred tax asset 15,006 8,220
 Prepaid expenses and other
 current assets 12,689 14,226
 Total current assets 270,714 254,995
 Property, plant & equipment-net 151,051 142,137
 Investments, including investments
 in affiliates 13,952 12,327
 Deferred tax asset 3,117 1,885
 Other assets 13,585 10,608
 Total $452,419 $421,952
 LIABILITIES AND SHAREHOLDERS' EQUITY
 Current Liabilities:
 Current maturities of debt $45,470 $28,633
 Trade payables 38,607 37,722
 Deferred tax liability 1,257 739
 Restructuring accrual 1,279 --
 Other 52,810 51,285
 Total current liabilities 139,423 118,379
 Long-term debt 52,337 42,645
 Pension 13,591 11,930
 Other postretirement
 benefit obligation 51,827 49,422
 Deferred tax liability and other 4,680 997
 Shareholders' Equity:
 Common stock outstanding 21,132 21,052
 Additional paid-in capital 56,680 55,329
 Retained earnings 117,940 116,270
 Cumulative translation
 adjustments and other (5,191) 5,928
 Total shareholders' equity 190,561 198,579
 Total $452,419 $421,952
 (A) -- Restated for adoption of SFAS 106 as of Jan. 1, 1992.
 Selected Major Market Segment Information
 (In thousands)
 Market Segments:
 The company operates in two major market segments, Industrial Products and Water Technologies. The Industrial Products segment produces and sells pumps in various industries including pulp and paper, chemical processing, petrochemical, food and beverages, oil, mining, municipal, and electric utility and provides parts and repair services for various types of pumps and other rotating equipment. The Water Technologies produces and sells pumps for residential, farm, irrigation and commercial/light industrial use.
 Periods ended Three months Six months
 June 30 1993 1992(A) 1993 1992(A)
 Net sales
 Industrial Products $88,682 $85,010 $163,125 $164,553
 Water Technologies 63,742 62,540 113,701 117,908
 Total net sales 152,424 147,550 276,826 282,461
 Operating Earnings:
 Industrial Products
 contribution 10,271 9,802 17,098 21,229
 Less: Allocations(B) 1,806 1,748 3,445 3,535
 Industrial Products
 operating earnings 8,465 8,054 13,653 17,694
 Water Technologies
 contribution 6,602 7,839 9,021 12,245
 Less: Allocations(B) 448 685 1,297 1,095
 Water Technologies
 operating earnings 6,154 7,154 7,724 11,150
 Total operating earnings 14,619 15,208 21,377 28,844
 General corporate expense 1,494 1,625 2,971 3,247
 Earnings from investments
 and affiliates (1,530) (121) (2,189) (257)
 Interest expense 1,560 1,306 2,630 2,363
 Interest income (703) (463) (1,064) (637)
 Other expense 452 404 145 166
 Total $13,346 $12,457 $18,884 $23,962
 (A) -- Restated for adoption of SFAS 106 as of Jan. 1, 1992.
 (B) -- Allocations are comprised of an allocation of applicable corporate expenses and other (income)/expense items.
 -0- 7/26/93
 /CONTACT: John Morphy, chief financial officer and group vice president - industrial products or Diana R. Kurty, corporate controller of Goulds Pump, 315-568-2811/
 (GULD)


CO: Goulds Pumps, Inc. ST: New York IN: SU: ERN

LG-TB -- NY016 -- 5644 07/26/93 11:14 EDT
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Date:Jul 26, 1993
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