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GOULDS PUMPS REPORTS SECOND QUARTER SALES AND EARNINGS

 GOULDS PUMPS REPORTS SECOND QUARTER SALES AND EARNINGS
 SENECA FALLS, N.Y., July 21 /PRNewswire/ -- Goulds Pumps, Inc. (NASDAQ-NMS: GULD) today announced sales, earnings and earnings per share for the second quarter of 1992.
 According to Stephen V. Ardia, president and CEO, "Business during the second quarter for our industrial core markets was affected by the weak economic conditions persisting in North America and Europe. The result was lower net income on a sales volume comparable to the same period in 1991, as our gross margin declined for the quarter due to pricing pressures in our industrial markets and a temporary decrease in our higher margin industrial aftermarket business."
 The financial results for the three and six months ended June 30, 1992, are as follows:
 GOULDS PUMPS, INC.
 (In millions of dollars, except per-share amounts and percentages)
 Periods ended Three months Six months
 June 30 1992 1991 1992 1991
 Net sales $147.6 $147.4 $282.5 $279.3
 Gross margin (percent) 31.8 32.5 31.9 31.5
 Tax rate (percent) 39.0 38.9 39.0 38.9
 Net income $8.3 $9.2 $16.1 $16.0
 E.P.S. $.40 $.44 $.77 $.77
 Total orders for the second quarter were $137.5 million or 7 percent below the second quarter of 1991. Orders for the Industrial Products Group (IPG) declined nearly 8 percent, while orders at the Water Technologies Group (WTG) declined almost 5 percent compared to the same period last year. In discussing current orders levels, Ardia said, "Although orders for the full quarter were less than last year, we are pleased to note two positive indicators. The first is that our repair orders level for the second quarter rose to a higher percentage of total orders than in 1991. Secondly, our total June order activity actually exceeded June 1991 by 4 percent." Within the Water Technologies Group, WTG-America (Water Systems Division) experienced orders levels comparable to the same quarter a year ago, while orders at WTG-Europe (Lowara, the Italian subsidiary) declined 7 percent as a result of the continuing European recession.
 Total backlog decreased to $92.6 million at June 30, 1992, compared to $101.7 million at June 30, 1991. Ardia explained, "Our reduced leadtimes to our customers result in faster and more reliable shipments which serve to reduce backlog and make us more dependent on current orders activity."
 Second quarter financial results were also impacted by a sharp decline in oil industry activity and, hence, in the profitability of our joint venture, Oil Dynamics, Inc.
 Ardia added that "we are responding to these weak economic conditions by aggressively targeting reductions in our cost base while pursuing initiatives to enhance asset utilization and labor productivity. For example, since Jan. 1, 1992, we have implemented measures which will reduce selling, general and administrative payroll costs in excess of $3 million on an annualized basis. This focus on expense controls coupled with productivity improvements will further enhance the company's ability to compete effectively in the global marketplace."
 Industrial Products Group
 The Industrial Products Group's sales increased almost 3 percent for the second quarter of 1992 compared to the same period last year. At the same time the group gross margin percentage for the quarter was 30.9 percent for the quarter compared to an all-time high of 33.6 percent in the second quarter of 1991. Ardia explained, "The decline in the gross margin percentage is attributable to price pressure and a temporary softness in repair shipments for the quarter. On a short-term basis our repair business has been impacted by the reduced operating rates of the pulp and paper industry. On a longer-term basis we have recently entered into a significant number of exclusive long-term purchasing agreements with the top pulp and paper producers in North America, which we feel confident will lead to incremental business in the future."
 "A second quarter accomplishment, of which we are especially proud, is that the Engineered Products Division recently became the first division of a U.S. pump company to be certified under ISO 9000 quality standards established by the International Organization for Standardization (ISO). The awarding of this certification positions us favorably for future growth in the international marketplace, where ISO 9000 certification is increasingly becoming a requirement. The fact that we achieved this outstanding distinction with a single site visit is linked directly to the implementation of the Total Quality Process that the company adopted in 1987."
 Water Technologies Group
 The Water Technologies Group finished the quarter with a record month for orders, sales and contribution. For the quarter, WTG sales declined 4 percent and contribution remained comparable with the 1991 second quarter level. Specifically, WTG-America experienced a slight sales increase for the quarter, while WTG-Europe posted a sales decline of nearly 7 percent. Ardia added, "WTG-America has been able to increase their sales volume in the midst of the uneven economy, through the introduction of new products resulting in market share gains, through growth in G&L commercial product sales and through solid marketing strategies. These efforts have also led to an increase in profitability at a faster rate than sales growth. WTG-Europe has been significantly impacted by the European recession and has realized a greater decrease in profitability than in sales due to increased investments in European subsidiaries and the benefit of non-recurring income in 1991. WTG-Asia Pacific experienced excellent sales and profit growth."
 Ardia concluded, "Goulds Pumps is being affected by the continuing weakness in the global economy. While these conditions are outside of our control we are responding with an accelerated cost reduction program, yet maintaining our commitment to training and total quality. We are encouraged that through six months we are on track with our 1991 record results."
 GOULDS PUMPS, INCORPORATED
 Statements of Consolidated Income
 (In thousands except per-share data; unaudited)
 Periods ended Three months Six months
 June 30 1992 1991 1992 1991
 Net sales $147,550 $147,445 $282,461 $279,294
 Cost of goods sold 100,627 99,545 192,304 191,270
 S,G&A expenses 30,191 30,033 58,174 57,719
 R&D expenses 1,919 1,745 3,923 2,976
 Income from operations 14,813 16,122 28,060 27,329
 Interest expense 1,306 1,877 2,363 3,486
 Interest income 463 479 637 1,372
 Income from investments
 and affiliates 121 555 257 1,297
 Other expense - net 404 178 166 329
 Income before income taxes 13,687 15,101 26,425 26,183
 Provision for income taxes 5,338 5,874 10,306 10,185
 Net income 8,349 9,227 16,119 15,998
 Net income per share $.40 $.44 $.77 $.77
 Dividends per share .20 .20 .40 .40
 Weighted average shares
 outstanding (in thousands) 21,038 20,781 20,991 20,743
 (A) -- Note that research and development expenses, which were previously classified in cost of goods sold, have been reclassified as a separate income statement line item for all years presented.
 Consolidated Balance Sheets
 (In thousands)
 6/30/92 12/31/91
 (Unaudited) (Audited)
 Assets
 Current assets:
 Cash and cash equivalents $11,065 $16,372
 Marketable securities 852 926
 Receivables - net 118,204 100,249
 Inventories 102,428 91,920
 Deferred tax benefit 7,084 5,891
 Prepaid expenses and other current
 assets 14,226 8,287
 Total current assets 253,859 223,645
 Property, plant & equipment - net 142,137 140,767
 Investments, including investments
 in affiliates 12,327 13,572
 Other assets 10,701 17,881
 Total 419,024 395,865
 Liabilities and Shareholders' Equity
 Current liabilities:
 Current liabilities of debt 28,633 19,795
 Trade payables 37,722 34,365
 Other 50,267 47,429
 Total current liabilities 116,622 101,589
 Long-term debt 42,645 44,419
 Pension 11,930 11,339
 Deferred taxes and other 17,998 19,263
 Shareholders' equity 229,829 219,255
 Total 419,024 395,865
 Market Segments:
 The company operates in two major market segments, Industrial Products and Water Technologies. The industrial products segment produces and sells pumps used in various industries including pulp and paper, chemical processing, petrochemical, food and beverage, oil, mining, municipal, and electric utility and provides parts and repair services for various types of pumps and other rotating equipment. The Water Technologies segment produces and sells pumps for residential, farm, irrigation and commercial/light industrial use.
 Selected Major Market Segment Information
 (In thousands)
 Periods ended Three months Six months
 June 30 1992 1991 1992 1991
 Net sales:
 Industrial products $89,662 $87,258 $172,534 $167,132
 Water technologies 57,888 60,187 109,927 112,162
 Total net sales 147,550 147,445 282,461 279,294
 Operating earnings:
 Industrial products
 contribution 11,092 11,983 23,335 23,142
 Less: allocations(A) 1,872 1,791 3,752 3,380
 Industrial Products
 operating earnings 9,220 10,192 19,583 19,762
 Water Technologies
 contribution 7,698 7,625 12,440 11,377
 Less: allocations(A) 561 105 878 696
 Water Technologies
 operating earnings 7,137 7,520 11,562 10,681
 Total operating earnings 16,357 17,712 31,145 30,443
 General corporate expense 1,544 1,590 3,085 3,114
 Interest expense 1,306 1,877 2,363 3,486
 Interest income 463 479 637 1,372
 Income from investments
 and affiliates 121 555 257 1,297
 Other expense - net 404 178 166 329
 Total 13,687 15,101 26,425 26,183
 (A) -- Allocations are comprised of an allocation of applicable corporate expenses and other income/(expense) items.
 -0- 7/21/92
 /CONTACT: John Morphy, VP and CFO of Goulds Pumps, 315-568-2811/
 (GULD) CO: Goulds Pumps, Inc. ST: New York IN: SU: ERN


CK-OS -- NY042 -- 1313 07/21/92 12:00 EDT
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