Ogden Corporation Reports Results for Third Quarter 2000.Business Editors NEW YORK--(BUSINESS WIRE)--Nov. 14, 2000 Ogden Ogden, city, United States Ogden, city (1990 pop. 63,909), seat of Weber co., N Utah, at the confluence of the Ogden and Weber rivers; inc. 1851. Aerospace industries and Hill Air Force Base are the major employers. Corporation (NYSE NYSE See: New York Stock Exchange : OG) -- Recurring Base EBIT from Continuing Energy Operations Is $30.7 Million, Compared to $26.9 Million in 1999 Third Quarter, a 14% Increase -- Year-to-Date Recurring Base Energy EBIT Up 27% Over Comparable 1999 Period, To $74.7 Million from $58.8 Million Last Year -- Third Quarter Net Loss of $34.4 Million Reflects Discontinued Operations Ogden Corporation (NYSE: OG) today reported results for the third quarter ended September September: see month. 30, 2000. Recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. base 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 (EBIT EBIT See: Earnings Before Interest and Taxes EBIT See earnings before interest and taxes (EBIT). ) from the Company's continuing Energy operations were $30.7 million for the quarter, compared to $26.9 million for the comparable period of 1999. On a consolidated basis, which includes discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. , the Company reported a net loss of $34.4 million, or a loss of $0.70 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, for the quarter. The third quarter net loss is principally attributable to two items: a $25.3 million currency translation adjustment associated with discontinued operations, which does not affect the Company's cash position or its anticipated proceeds from the disposition of its non-core assets; and $27.5 million in write-offs attributable to a revision in the Company's estimate of realizable proceeds from the sale of discontinued operations, along with certain contractual commitments associated with such dispositions. "Overall, we continue to post strong results in our core Energy operations during this period of 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). ," said Scott G. Mackin, President and Chief Executive Officer of Ogden Corporation. "The losses we reported relate purely to operations we are disposing of as we transform ourselves from a conglomerate conglomerate, in business conglomerate, corporation whose asset growth, often very rapid, comes largely through the acquisition of, or merger with, other firms whose products are largely unrelated to each other or to that of the parent company. into a pure play energy company. Energy recurring base EBIT is up 27% over the comparable nine-month period last year, and we expect that we will meet or modestly exceed our projection of $95 million of recurring base EBIT for the year. We believe our Energy results demonstrate the validity of our underlying business premise, which is that this restructuring will result in a company with excellent growth prospects, generating superior results for shareholders." Third Quarter Results for Energy For the three months ended September 30, 2000, Ogden reported EBIT from its Energy business of $24.9 million on revenues of $233.9 million, compared to EBIT for last year's comparable period of $20.6 million on revenues of $236.0 million. The third quarter 2000 EBIT results included $5.5 million in losses at its OEES subsidiary and $0.3 million in additional depreciation in connection with shortened short·en v. short·ened, short·en·ing, short·ens v.tr. 1. To make short or shorter. 2. estimated useful lives of certain air pollution control equipment resulting from the Clean Air Act Amendments. As previously announced, the Company is currently winding down OEES' construction operations and has signed a definitive agreement for the sale of its consulting operations to AMEC AMEC African Methodist Episcopal Church AMEC Agent Mediated Electronic Commerce AMEC Arctic Military Environmental Cooperation AMEC Advanced Micro-Fabrication Equipment Inc AMEC Association of Media Evaluation Companies . Results for the Company's Energy operations for the comparable period in 1999 included a gain of $0.8 million from the sale of the Company's interest in an independent power production (IPP (Internet Printing Protocol) A protocol for printing and managing print jobs over the Internet using HTTP. Initially conceived by Novell, Xerox and others, the IETF made it a standard in 2000 that includes authentication and encryption. See printing protocol and LPD. ) joint venture, $2.8 million in losses at OEES, and charges of $4.3 million primarily related to additional depreciation in connection with shortened estimated useful lives of certain air pollution control equipment resulting from the Clean Air Act Amendments. Adjusting for these items, the recurring base Energy EBIT for the three months ended September 30, 2000 was $30.7 million, compared to $26.9 million for the comparable period of 1999, a 14% increase. Recurrent recurrent /re·cur·rent/ (re-kur´ent) [L. recurrens returning] 1. running back, or toward the source. 2. returning after remissions. re·cur·rent adj. 1. EBIT for Energy, or EBIT without regard to one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. items, grew significantly as a result of strong performance and enhanced pricing at numerous IPP and waste-to-energy Waste-to-energy (WtE) or energy-from-waste (EfW) in its strictest sense refers to any waste treatment that creates energy in the form of electricity and/or heat from a waste source that would have alternatively been disposed of in landfill, also called energy recovery (WTE WTE Waste To Energy WTE Whole Time Equivalent WTE WebSphere Test Environment WTE Wassertechnik GmbH (Germany Water Company) WTE Web Telephony Engine WTE Wind Tunnel Enterprise (NASA) ) plants, both in terms of energy pricing and waste disposal pricing where the company has merchant capacity, plus the full operation of new IPP facilities during the quarter. Revenues from continuing Energy operations for the third quarter of 2000 reflect a decrease of $2.1 million over the comparable period of 1999. The Energy segment experienced an increase in service revenues of $13.5 million due to increased production, higher energy rates, and annual escalation es·ca·late v. es·ca·lat·ed, es·ca·lat·ing, es·ca·lates v.tr. To increase, enlarge, or intensify: escalated the hostilities in the Persian Gulf. v.intr. adjustments experienced at several IPP and WTE facilities, an increase of $2.8 million associated with plants in The Philippines Philippines officially Republic of the Philippines Island country, western Pacific Ocean, on an archipelago off the southeast coast of Asia. Area: 122,121 sq mi (316,294 sq km). Population (2005 est.): 84,191,000. and Thailand Thailand (tī`lănd, –lənd), Thai Prathet Thai [land of the free], officially Kingdom of Thailand, constitutional monarchy (2005 est. pop. 65,444,000), 198,455 sq mi (514,000 sq km), Southeast Asia. that commenced operations during 1999, and an increase of $1.8 million in the environmental consulting Environmental consulting is often a form of compliance consulting, in which the consultant ensures that the client maintains an appropriate measure of compliance with environmental regulations. business. These increases were offset by reduced construction revenues from WTE, Water and Wastewater and OEES of $19.4 million and a gain in 1999 of $0.8 million from the sale of the Company's interest in an IPP joint venture. Discussion of Third Quarter Results In the third quarter, as noted above, the Company recorded special charges of $25.3 million related to a non-cash currency translation adjustment, and $27.5 million associated with asset values of discontinued operations. The currency translation adjustment relates to certain foreign assets and liabilities denominated in foreign currency that the Company marks to market on its balance sheet each quarter. Because these items have, over time, been recorded in "Accumulated Other Comprehensive Income In 1997 the Financial Accounting Standards Board issued a Statement on Financial Accounting Standards entitled “Comprehensive Income”. This statement required all income statement items to be reported either as a regular item in the income statement and or a special item as " on the Company's balance sheet, there is no adverse impact on the balance sheet when this item is recognized in the income statement. This adjustment relates solely to discontinued operations. In addition to the above, in the third quarter, the Company recorded a special charge of $5.2 million related to fees for the previously announced extension of the Company's bank credit facilities credit facilities npl → facilidades fpl de crédito credit facilities npl → facilités fpl de paiement credit facilities and a non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. of $2.2 million related to the accelerated depreciation Accelerated Depreciation Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years of the life of an asset. Notes: The straight-line depreciation method spreads the cost evenly over the life of an asset. of the New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Corporate MIS (1) (Management Information System) An information system that integrates data from all the departments it serves and provides operations and management with the information they require. System, which will not be needed on an ongoing basis. Year-to-Date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. Results for Energy For the nine months ended September 30, 2000 Ogden reported EBIT from its Energy business of $71.7 million, on revenues of $706.3 million, compared to EBIT for the comparable period in the prior year of $72.1 million on revenues of $685.4 million. The 2000 EBIT results included: 1) $15.2 million in losses at its OEES subsidiary; 2) $2.3 million in additional depreciation in connection with shortened estimated useful lives of certain air pollution control equipment resulting from the Clean Air Act Amendments; and 3) $14.5 million in nonrecurring Non`re`cur´ring a. 1. Nonrecurrent; as, the costs of a layoff are considered as a nonrecurring expense s>. income primarily associated with the receipt of insurance proceeds related to a WTE facility in the first half of 2000. Results for the Company's Energy operations for the comparable period in 1999 included: 1) a receipt of $9.3 million for the termination and restructuring of a service agreement at a WTE facility; 2) a $9.0 million favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. adjustment associated with the resolution of matters related to an IPP facility; 3) $8.0 million in losses at OEES; 4) a gain of $5.7 million from the sale of the Company's interest in an IPP joint venture; 5) a charge of $4.3 million mainly associated with additional depreciation in connection with shortened estimated useful lives of certain air pollution control equipment as noted above; and 6) $1.6 million in nonrecurring income associated with the settlement of a domestic IPP contract. Adjusting for these items, the recurring base Energy EBIT for the nine months ended September 30, 2000, was $74.7 million, compared to $58.8 million for the comparable period of 1999. Revenues from continuing Energy operations for the first nine months of 2000 reflect an increase of $20.9 million over the comparable period of 1999. The increase in Energy segment revenues includes: 1) $23.8 million in increased revenues associated with plants in The Philippines and Thailand that commenced operations for Ogden during 1999; 2) $7.3 million due to the June June: see month. 1999 acquisition of an additional 50% interest in a domestic power plant; 3) an increase of $25.5 million due to increased production, higher energy rates and annual escalation adjustments at several IPP and WTE facilities; 4) an increase of $3.3 million at the environmental consulting business; and 5) an increase of $12.2 million due to insurance proceeds related to a WTE facility. These increases were offset in part by reduced construction revenues from WTE, Water and Wastewater and OEES of $45.5 million, and a gain of $5.7 million in 1999 from the sale of the IPP joint venture mentioned above. Non-Core Asset Sales "Consistent with our strategy of becoming a pure-play energy company, we have made substantial progress in the disposition of our non-core assets this quarter. We have announced agreements to sell our aviation fixed base operations (FBO FBO Federal Business Opportunities FBO FedBizOpps (formerly Commerce Business Daily) FBO Fixed Base Operator FBO For the Benefit Of (finance) FBO Fixed Base Operation FBO Faith Based Organization ) business and our OEES consulting unit, and we expect to close the sale of our aviation ground services business to John Menzies John Menzies plc is a Scottish business established in 1833. It has two main divisions: Menzies Distribution and Menzies Aviation. Menzies Distribution is a major distributor of newspapers and magazines throughout the United Kingdom. plc by the end of this month," said Mr. Mackin. "After we close the Ground Services, FBO and OEES transactions, and with the disposition of the majority of our Entertainment businesses and certain other sales behind us, we will have generated approximately $475 million in cash and eliminated more than $120 million in debt obligations through our divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). program. When the Ground Services and FBO transactions close, we will have approximately $80 million of remaining assets in discontinued operations, and we are actively engaged in the process of selling our remaining non-core assets. The closing of some of these sales will carry over into next year and the sales process A sales process is a systematic approach for performing product or service sales. The reasons for having a sales process include seller and buyer risk management, achieving standardized customer interaction in sales and scalable revenue generation. for certain assets, like Datacom, will not commence until the first quarter of 2001." Outlook Mr. Mackin continued, "We are very far advanced in the adoption of a term sheet that extends all of our existing bank facilities through May 31, 2002. We are in the process of documenting that transaction, and we expect to complete the documentation in December December: see month. . We believe this facility will provide the stability necessary to complete the non-core asset sale program in an effective manner, allow us to focus on maximizing the results of our existing Energy assets and further allow for prudent, targeted development, contingent on Adj. 1. contingent on - determined by conditions or circumstances that follow; "arms sales contingent on the approval of congress" contingent upon, dependant on, dependant upon, dependent on, dependent upon, depending on, contingent the Company's continued success in the non-core asset sales process." "Overall, we are pleased with how our core Energy business is performing. As we have said, our goal, over the long run, is to achieve a 20% to 30% growth rate in EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. , which is in line with our IPP peers. Until the asset sales process and our transformation to a pure-play energy company is completed, we are targeting a growth rate in recurring base Energy EBIT of 10%. For the full year 2001, we expect recurring base Energy EBIT of approximately $105 million. Our growth is premised upon intrinsic intrinsic /in·trin·sic/ (in-trin´sik) situated entirely within or pertaining exclusively to a part. in·trin·sic adj. 1. Of or relating to the essential nature of a thing. 2. growth in our portfolio, having our Quezon Quezon, province (1990 pop. 1,372,445), E central Luzon, the Philippines. Lucena is the capital. A long, narrow province bordering on the Philippine Sea and containing in part the rugged Sierra Madre Mts., it is an excellent source of timber. project on line for a full year versus a partial year in 2000, and certain smaller plants under construction in Asia and Europe coming on line. We also have new project prospects and, blending in considerable third party equity at the IPP project level, we intend to take to financial closing certain projects next year that will provide additional growth. We remain very confident that our strategy of transforming Ogden into a focused energy company is the right strategy, and one that is working." Ogden Energy Group, a division of Ogden Corporation, is a global developer/owner and operator of independent power projects and provides related infrastructure services. On September 17, 1999, Ogden announced its intent to sell its Entertainment and Aviation businesses to focus exclusively on its role as a leading energy company. Ogden Water Systems, a wholly owned unit of Ogden Energy Group, offers communities single-source design/build/operate services for water and wastewater treatment infrastructure. Additional information about Ogden can be obtained via the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at www.ogdencorp.com, or through the Company's automated information system The term automated information system means an assembly of computer hardware, software, firmware, or any combination of these, configured to accomplish specific information-handling operations, such as communication, computation, dissemination, processing, and storage of at (888) 643-3612. Any statements in this communication, which may be considered to be "forward looking statements", as that term is defined in 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, are subject to certain risk and uncertainties. The factors that could cause actual results to differ materially from those suggested by any such statements include, but are not limited to, those discussed or identified from time to time in the Company's public filings with the Securities and Exchange Commission and more generally, general economic conditions, including changes in interest rates and the performance of the financial markets; changes in domestic and foreign laws, regulations, and taxes; changes in competition and pricing. In accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with the requirements of the Securities and Exchange Commission's Regulation FD, guidance as to anticipated financial results and other material information regarding the Company will be provided in the form of public press releases, publicly available filings with the SEC or publicly accessible conference calls with members of the Company's management. These press releases, filings and conference calls will be archived on the Company's website and the SEC filings will be available through the SEC's website. The Company will enter a "quiet period" on the fifteenth In music, a fifteenth (sometimes abbreviated 15ma) is the interval between one musical note and another with one-quarter or quadruple the frequency. It corresponds to two octaves. It is the fourth harmonic. day before the end of each fiscal quarter, which will extend through the date of the next quarterly release of financial results, during which the Company would not expect to comment about future events or anticipated financial results.
OGDEN CORPORATION
EARNINGS
(000's Omitted)
Quarter ended September 30,
---------------------------
2000 1999
--------- ----------
ENERGY SEGMENT:
REVENUE
Energy Operations $ 203,925 $ 200,500
OEES 29,964 35,454
--------- ----------
TOTAL ENERGY REVENUE 233,889 235,954
--------- ----------
DIRECT COSTS
Energy Operations 169,255 167,869
OEES 32,788 34,506
--------- ----------
TOTAL ENERGY DIRECT COSTS 202,043 202,375
--------- ----------
GROSS MARGIN
Energy Operations 34,670 32,631
OEES (2,824) 948
--------- ----------
TOTAL ENERGY GROSS MARGIN 31,846 33,579
% of Revenue 13.62% 14.23%
S.G.& A.
Energy Operations 11,693 12,020
OEES 2,657 3,755
--------- ----------
TOTAL ENERGY S.G.& A. 14,350 15,775
ENERGY OPERATING INCOME 17,496 17,804
% of Revenue 7.48% 7.55%
ENERGY EQUITY INCOME 8,357 3,428
Minority interests (985) (636)
--------- ----------
ENERGY EBIT 24,868 20,596
OTHER SEGMENT:
Revenue 12,491 19,669
Operating income (loss) (4,219) 431
Unallocated corporate overhead (12,497) (3,919)
Interest-Net (7,873) (8,230)
--------- ----------
Pre-tax income (loss) 279 8,878
Income taxes 2,422 (525)
--------- ----------
INCOME (LOSS) FROM CONTINUING OPERATIONS 2,701 8,353
--------- ----------
INCOME (LOSS) FROM DISCONTINUED OPERATIONS (37,072) (16,069)
COMPANY NET INCOME (LOSS) $ (34,371) $ (7,716)
========= ==========
EPS-Continuing operations
Basic $ 0.05 $ 0.17
Fully Diluted $ 0.05 $ 0.17
EPS-Discontinued operations
Basic $ (0.75) $ (0.33)
Fully Diluted $ (0.75) $ (0.33)
OGDEN CORPORATION
EARNINGS
(000's Omitted)
Nine Months ended September 30,
-------------------------------
2000 1999
--------- ----------
ENERGY SEGMENT:
REVENUE
Energy Operations $ 613,990 $ 574,310
OEES 92,280 111,097
--------- ----------
TOTAL ENERGY REVENUE 706,270 685,407
--------- ----------
DIRECT COSTS
Energy Operations 501,021 465,447
OEES 99,490 107,115
--------- ----------
TOTAL ENERGY DIRECT COSTS 600,511 572,562
--------- ----------
GROSS MARGIN
Energy Operations 112,969 108,863
OEES (7,210) 3,982
--------- ----------
TOTAL ENERGY GROSS MARGIN 105,759 112,845
% of Revenue 14.97% 16.46%
S.G.& A.
Energy Operations 38,823 35,009
OEES 7,940 11,975
--------- ----------
TOTAL ENERGY S.G.& A. 46,763 46,984
--------- ----------
ENERGY OPERATING INCOME 58,996 65,861
% of Revenue 8.35% 9.61%
ENERGY EQUITY INCOME 15,814 9,372
Minority interests (3,149) (3,178)
--------- ----------
ENERGY EBIT 71,661 72,055
OTHER SEGMENT:
Revenue 36,651 57,110
Operating income (loss) (15,654) (2,140)
Unallocated corporate overhead (44,808) (7,871)
Interest-Net (26,089) (21,806)
--------- ----------
Pre-tax income (loss) (14,890) 40,238
Income taxes 3,003 (11,558)
--------- ----------
INCOME (LOSS) FROM CONTINUING OPERATIONS (11,887) 28,680
--------- ----------
INCOME (LOSS) FROM DISCONTINUED OPERATIONS (128,871) (883)
Cumulative effect of change in
accounting principle - (3,820)
--------- ----------
COMPANY NET INCOME (LOSS) $(140,758) $ 23,977
========= ==========
EPS-Continuing operations
Basic $ (0.24) $ 0.59
Fully Diluted $ (0.24) $ 0.58
EPS-Discontinued operations
Basic $ (2.60) $ (0.02)
Fully Diluted $ (2.60) $ (0.02)
EPS-Cumulative effect of change in accounting principle
Basic $ (0.08)
Fully Diluted $ (0.08)
|
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion