Global Announces Sale of Marion Power Shovel, New Stock Repurchase Program
The sale of Marion to Bucyrus International Inc. (Bucyrus) for $40.1 million will complete Global's previously disclosed plan to exit the construction and mining equipment industry. Global expects to receive $39.0 million in cash net of selling expenses and commissions associated with the disposition.
Largely as a result of the sale of Marion, as well as the write down of certain assets (primarily inventory) that the Company has identified as being overstated in the Specialty Equipment Segment, Global will recognize a pre-tax charge to earnings of $26.0 million in the third fiscal quarter ending July 31, 1997. Accordingly, Global will not pay any U.S. Federal taxes during fiscal 1997, and will pay significantly reduced U.S. Federal taxes in fiscal 1998.
Considering these factors, the Company expects to report net earnings before the special charge in the range of $2.00 and $2.15 per share for the fiscal year ending October 31, 1997. The Company's per share earnings from continuing operations, applying the previously anticipated 25% tax rate, would be in a range of $1.60 and $1.75 for the fiscal year.
"We believe the actions we are announcing today, and the strength of our core operations, position us well to meet our stated objective of achieving average annual earnings per share growth of 15%," said J.L. Jackson, Chairman and Chief Executive Officer of Global. "Because of our confidence in the outlook for our businesses, we have asked the Board to authorize the purchase of up to 10% of Global's outstanding common stock as part of an enhanced stock buyback program.
"Our performance for the year is being affected by a number of temporary business issues, including short-term production disruptions at Ameri-Forge, weaker-than-anticipated demand for certain refractory raw materials sold by Global's Minerals Segment and the impact of a strong U.S. dollar versus European currencies," continued Jackson. "However, several operating factors provide us with encouragement for our future performance. At Harbison-Walker, for example, operating profits for fiscal 1997 should be up a minimum of 15% versus year-ago levels. Operating profits are being enhanced by cost cutting measures and significant new business. In addition to the Raytheon sale in January, we have just signed the largest contract in the history of our refractory business: a three-year, $27 million contract to supply refractory products to Compania Siderurgica Huachipato in Chile."
"Our Industrial Tool segment is enjoying a record year in sales and earnings, and we expect momentum to continue into fiscal 1998," said Jackson. "While Ameri-Forge turned in disappointing results year-to-date due to manufacturing equipment problems, replacement equipment is now operational, and once the refurbishing of original equipment is completed we will have significant new capacity to meet customer demand."
Global Industrial Technologies is a major manufacturer of technologically advanced industrial products that support high-growth markets worldwide.
Forward-looking statements concerning divestitures, earnings and results from operations are contained in this announcement. The following important factors could cause actual results to differ materially from those described in such statements: the timing of any divestiture transaction and its resultant value to the Company; foreign exchange rates; unanticipated realization of contingent liabilities; unanticipated delays in production or shipments; and significant variances in sales or costs at a major business unit.
SOURCE Global Industrial Technologies, Inc.
/CONTACT: Investors: George Pasley, V.P. Communication, 214-953-4510, or Media: Larry Nance, Manager, Corp. Relations and Public Affairs, 214-953-4518, both of Global Industrial Technologies, Inc./
CO: Global Industrial Technologies, Inc.; Marion Power Shovel Company;
Bucyrus International Inc. ST: Texas IN: SU: TNM
KO -- NYW192 -- 8998 07/23/97 17:54 EDT http://www.prnewswire.com
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|Date:||Jul 23, 1997|
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