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VARLEN FOURTH QUARTER EARNINGS DOUBLE ON INCREASED SALES AND IMPROVED MARGINS; OUTLOOK FAVORABLE FOR YEAR AHEAD

 NAPERVILLE, Ill., March 8 /PRNewswire/ -- Varlen Corp. (NASDAQ-NMS: VRLN) today announced it continued to benefit from increased sales and improved margins, and reported that net earnings doubled for its 1992 fiscal fourth quarter over comparable year-ago results.
 The company reported that earnings for the full year more than doubled before considering a one-time charge for the cumulative effect of a change in accounting principle.
 Richard L. Wellek, president and chief executive officer, said that "Varlen's long-term commitment to market expansion, product development and cost reductions paid off in 1992.
 "We outperformed many of our markets and strengthened our position in the niche markets we serve. Increased volume had a dramatic impact on our operating margins despite heavy pressure on selling prices." Wellek also noted that Varlen's international sales continued to be strong in 1992.
 Commenting on the future, Wellek said, "Varlen is well positioned for the economic recovery that is underway. We are more optimistic about the coming year than we were at this time a year ago."
 Wellek said, "Investments we have made in products, people and facilities should allow us to maintain our earnings momentum. We will continue to seek out growth opportunities through product line extensions and new markets for existing products."
 He noted that although many of Varlen's markets are mature, the company saw growth opportunities through technology changes, market share gains and international expansion.
 Results
 For the 1992 fiscal fourth quarter ended Jan. 31, 1993, Varlen reported net earnings of $1,582,000 or 38 cents per share compared with $794,000 or 18 cents per share in the comparable year-ago period. Sales for the 1992 fiscal fourth quarter increased 18 percent to $66,113,000 from $55,901,000 in the 1991 fiscal fourth quarter.
 For the full year, Varlen reported earnings before the cumulative effect of a change in accounting principle of $7,668,000 or $1.72 per share compared to $3,444,000 or 77 cents per share in the 1991 fiscal year.
 After a $1,351,000 (30 cents per share) charge to reflect the cumulative effect of a change in accounting for retiree health care and life insurance costs in accordance with Statement of Financial Accounting Standards No. 106, Varlen reported net earnings of $6,317,000 or $1.42 per share for the 1992 fiscal year.
 Sales for the 1992 fiscal year increased 15 percent to $266,054,000 compared with $230,517,000 for the previous fiscal year.
 Transportation Products Segment Sales Up 23 Percent
 Varlen's CEO noted that the company's sharp growth in 1992 earnings came primarily from its transportation products segment where sales increased 23 percent, resulting in a 52 percent increase in operating profit.
 "All markets in this segment strengthened in 1992, with the greatest improvement in the large truck and trailer markets, followed by the railroad industry."
 Wellek said the company's sales to the large truck and trailer markets increased 30 percent due to improved market penetration as well as increased industry volume. The company also benefitted from increased railroad maintenance spending driven by industry increases in both revenue ton miles and car loadings.
 He said U.S. car and light truck sales began a slow recovery in 1992 with auto and light truck production up approximately 9 percent over 1991. Varlen sales to the industry increased by an equal amount, even though its largest automotive customer built only 2.3 percent more light vehicles.
 Wellek said that the company's laboratory and other products segment had approximately a 2 percent increase in revenues and operating profit in 1992 compared to the prior year. "After getting off to a reasonably good start, order demand slackened across the segment as the year wore on, particularly in the laboratory appliance market. Nevertheless, although results were mixed, our market share was either maintained or increased," he said.
 Varlen designs, manufactures and markets engineered industrial products, primarily for specialized applications in the transportation and laboratory equipment markets. The company serves U.S. and foreign markets with operating locations in the United States and Germany. Headquarters are in Naperville. The common stock is traded over-the- counter on the NASDAQ National Market System under the symbol VRLN.
 VARLEN CORP.
 (In thousands, except per share amounts)
 Three months ended Jan. 31 1993 1992
 (Unaudited)
 RESULTS OF OPERATIONS
 Net sales $66,113 $55,901
 Gross profit 15,787 12,546
 Selling, general and admin. expenses 11,762 9,173
 Interest expense, net 1,056 1,299
 Income taxes 1,387 1,280
 Net earnings $ 1,582 $ 794
 Net earnings per share $0.38 $0.18
 Weighted average number of shares
 outstanding 4,219 4,494
 BUSINESS SEGMENTS
 Net sales:
 Transportation products $45,315 $35,109
 Laboratory and other products 20,798 20,792
 Total $66,113 $55,901
 Operating profits (A):
 Transportation products $ 4,783 $ 3,072
 Laboratory and other products 849 1,429
 Total $ 5,632 $ 4,501
 Twelve months ended Jan. 31 1993 1992
 RESULTS OF OPERATIONS
 Net sales $266,054 $230,517
 Gross profit 63,225 50,517
 Selling, general and admin. expenses 44,021 37,557
 Interest expense, net 4,830 5,626
 Income taxes 6,706 3,890
 Earnings before cumulative effect
 of change in accounting principle 7,668 3,444
 Cumulative effect of accounting change (1,351) --
 Net earnings $ 6,317 $ 3,444
 Earnings per share:
 Before cumulative effect of
 change in accounting principle $1.72 $0.77
 Cumulative effect of accounting change (.30) --
 Net earnings $1.42 $0.77
 Weighted average number of shares
 outstanding 4,452 4,492
 BUSINESS SEGMENTS
 Net sales:
 Transportation products $182,880 $148,867
 Laboratory and other products 83,174 81,650
 Total $266,054 $230,517
 Operating Profits (A):
 Transportation products $ 19,005 $ 12,520
 Laboratory and other products 4,866 4,794
 Total $ 23,871 $ 17,314
 (A) -- Before interest and general corporate expenses.
 -0- 3/8/92
 /CONTACT: Richard L. Wellek, president and CEO, or Richard A. Nunemaker, vice president-finance and CFO of Varlen, 708-420-0400; or Nicholas G. Biro of O'Connor Biro & Associates, 708-498-2284, for Varlen/
 (VRLN)


CO: Varlen Corp. ST: Illinois IN: TRN SU: ERN

GK -- NY070 -- 4109 03/08/93 14:52 EST
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Date:Mar 8, 1993
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