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 ERIE, Pa., Aug. 2 /PRNewswire/ -- Zurn Industries, Inc. (NYSE: ZRN) a leading designer, constructor and manufacturer of systems and equipment for power generation and water control, and Lynx golf clubs, today revised its July 22 report of results for the first quarter ended June 30, 1993, to include an after-tax charge of $23,197,000, or $1.87 per share, for the estimated effect of a California jury's verdict against the company in connection with a contract to construct an agricultural waste-burning power plant.
 This reduced the earlier reported earnings of $6,569,000, or $.53 per share, to a net loss of $16,628,000, or $1.34 per share, compared to last year's net income $5,635,000 or $.45 per share.
 The Imperial County Superior Court has yet to rule on motions to be made by the company and Imperial Resource Recovery Associates affecting the jury's $25,746,000 verdict. While the company has recognized a $36,247,000 pre-tax charge in its financial statements, including accounts receivable of $9,747,000 which had not been reserved, the ultimate pre-tax amount could reach $50,000,000 if all issues are lost on appeal. In any case, the after-tax effect on the company's financial position will not be material.
 Commenting on the verdict, Zurn Chairman George H. Schofield said, "The jury's decision was completely unexpected and, based on the facts, we remain absolutely convinced that the company should have prevailed, and we will aggressively pursue an appeal of the final judgment. Any loss is disappointing, but the company's financial position will enable us to carry out our business plans."
 The sales increase for the first quarter to $288,776,000, compared to last year's $143,244,000, is primarily attributable to the Power Systems segment, whose revenues were $208,400,000, up $147,651,000 from a year ago, reflecting major equipment installations and a higher level of construction activity for power generation projects this year. The lower growth in operating income reflects the early construction stages of the Power Systems projects and lower Lynx Golf sales.
 Water Control segment revenues of $61,474,000 were up 5 percent over last year. Sales of plumbing products and revenues from water resource construction projects both increased. Businesses which have been sold contributed $5,144,000 to the segment's sales last year.
 Lynx Golf sales of $9,729,000 were down from last year's all-time high quarterly sales of $13,378,000 and were lower due to continuing delays in the production of the new line of metal woods.
 Orders backlog at June 30, 1993, was $378 million down from $581 million at the beginning of the fiscal year and $410 million a year ago. Reflecting the high level of revenues for the quarter, Power Systems' orders backlog declined to $232 million compared to $277 million a year earlier and $422 million at March 31, 1993. Water Control orders backlog was $126 million at June 30, 1993, compared to $108 million a year earlier.
 Previously, Schofield had stated, "As Power Systems contracts progress we expect significant improvements in the segment's profitability. Although our manufacturing businesses are being impacted by the low levels of nonresidential construction and industrial activity, new product introductions continue to help the plumbing products business increase sales in an off market." He added, "The U.S. golf market has been below last year in recent months, but we continue to anticipate that Lynx will return to profitability this year."
 Statements of Consolidated Operations
 (Thousands Except Per Share Amounts)
 Three Months Ended June 30 1993 1992
 Power Systems $208,400 $ 60,749
 Water Control 61,474 58,523
 Lynx Golf 9,729 13,378
 Others 9,173 10,594
 Net Sales 288,776 143,244
 Costs and Expenses:
 Cost of Products Sold 253,462 111,161
 Operating Expenses 25,768 23,568
 279,230 134,729
 Operating Income 9,546 8,515
 Interest Income 1,104 1,011
 Other Income 379 241
 Interest Expense (520) (822)
 Litigation (36,247) --
 (Loss) Income Before Income Taxes (25,738) 8,945
 Income Tax (Benefit) Expense (9,110) 3,310
 Net (Loss) Income (16,628) 5,635
 (Loss) Earnings Per Share $(1.34) $.45
 Average Shares Outstanding 12,452 12,613
 -0- 8/2/93
 /CONTACT: Steve Adams of Zurn Industries, 814-452-2111/

CO: Zurn Industries, Inc. ST: Pennsylvania IN: OIL SU: ERN

CD-KC -- PG016 -- 8588 08/02/93 18:07 EDT
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Publication:PR Newswire
Date:Aug 2, 1993

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