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CLARK EQUIPMENT CO. OPERATIONS RETURN TO BLACK

 SOUTH BEND, Ind., April 26 /PRNewswire/ -- Clark Equipment Co. (NYSE: CKL) today announced net income of $8.8 million or $0.50 per share. Included in the first quarter results is a one-time gain of $6.2 million, or $0.35 per share, related to a change in accounting for income taxes from the company's investment in VME Group N.V. Net income from operations for the quarter is $2.6 million, or $0.15 per share. This compares to a net loss of $7.8 million, or $0.45 per share, exclusive of the impact of the discontinued lift truck operations and accounting changes, in the first quarter 1992. The announcement was made by Leo J. McKernan, Clark's chairman, president and chief executive officer.
 Commenting on the results, McKernan said, "We're pleased with the progress of Clark's consolidated operations, which include Melroe, Clark-Hurth Components and Clark Automotive Products. Consolidated operations generated net income of $7.8 million on sales of $199.7 million, which compares to net income of $3.1 million on sales of $189.6 million in first quarter 1992. Importantly, net income increased in all Clark businesses during the three months ended March 31, 1993."
 The beneficial accounting change relates to the adoption by VME of the Financial Accounting Standard No. 109, which allows the recognition of future tax benefits on certain previously-recorded expenses. Clark Equipment Co. adopted this accounting standard in first quarter 1992, recording a gain of $92 million.
 Clark new orders increased to $220 million from $150 million in fourth quarter 1992 and were slightly higher than the adjusted orders for the same period last year. Backlog at March 31, 1993, was $144 million, up slightly from year-end 1992, and down from an adjusted first quarter 1992 level of $178 million.
 Focusing on the company's individual businesses, McKernan said: "Worldwide, markets for most types of off-highway construction machinery served by Clark-Hurth Components remained depressed. While Clark's North American off-highway markets appear to be stable, European markets continue to deteriorate. In the first three months of 1993, sales and order rates declined substantially from comparable 1992 levels. Nevertheless, Clark-Hurth operating profits and net income improved due to continuing stringent cost reduction efforts," said McKernan. He added that order rates improved from their weak fourth quarter performance, especially in the forestry business.
 Regarding the company's Brazil-based Automotive Products business, McKernan said that sales, orders and earnings improved in first quarter 1993 versus last year, and that the business continued to operate profitably. "Overall, the Brazilian economy appears to be slowly improving despite continued political uncertainty and high inflation. Automobile and light truck sales in the first quarter improved substantially versus 1992. However, the heavy truck, agricultural tractor and power-shift transmission markets remain weak." He also said that medium-duty truck exports to the U.S. appear to be improving and are expected to benefit for renewed fleet replacement programs in the second half.
 "Melroe sales and orders improved in the first quarter compared to the same period in 1992, despite a slowing in the European market," said McKernan. He added that domestic orders and backlogs remained exceptionally strong, particularly in the light construction, rental, and industrial markets. "The Bobcat Model 7753, with enhanced vertical lift capability, and the 50 Series skid-steer loader line are selling well. We expect continued strong Melroe earnings in the second quarter," he said.
 Discussing the company's joint venture, McKernan said, "VME continued to suffer the impact of the worldwide recession in construction machinery sales. However, cost-cutting actions contributed to improved VME performance in comparison to last year." Clark's share of the operating loss at VME was $5.2 million in the first quarter, an improvement from the $10.9 million loss a year ago. Worldwide demand for construction machinery remained soft. The German market continued to weaken, while demand in other European countries stabilized at very low levels. North America is the only market that showed signs of recovery.
 "Despite low demand levels, VME's performance is expected to improve during the second half of 1993. Continued tight cost reduction and the recent devaluation of the Krona should benefit margins. Inventory levels are well-balanced with expected sales and productions," said McKernan.
 In the first quarter, VME and Hitachi Construction Machinery signed a letter of intent to explore a joint venture in the mining equipment business. This venture will allow both parties to closely coordinate the sale of large mining excavators and rigid dump trucks to major mining customers.
 Regarding the remainder of the year, McKernan said, "We are cautiously optimistic about the remainder of 1993. Domestic demand appeared to stabilize in late 1992 and showed overall improvement in the first quarter. On the other hand, European demand has definitely weakened. We remain firmly committed to continued cost reduction programs in all Clark businesses and expect improved earnings in second quarter 1993."
 Clark Equipment Co.'s business is in design, manufacture and sale of skid-steer loaders, construction machinery, transmissions for on-highway vehicles, and axles and transmissions for off-highway equipment.
 CLARK EQUIPMENT CO. AND CONSOLIDATED SUBSIDIARIES
 Statement of Income and Retained Earnings
 (Amounts in thousands, except per share data)
 Periods ended March 31 1993 1992(a)
 Net sales $199,719 $189,602
 Operating costs and expenses:
 Cost of goods sold 160,569 155,928
 Selling, general &
 adminis. expenses 25,134 23,388
 185,703 179,316
 Operating income 14,016 10,286
 Other income, net 2,852 3,267
 Interest expense (5,686) (6,818)
 Pre-tax income from
 consolidated operations 11,182 6,735
 Provision for income taxes 3,356 3,597
 Income from consolidated
 operations 7,826 3,138
 Equity in net loss of
 associated company (5,222) (10,945)
 Income (loss) from continuing
 operations 2,604 (7,807)
 Loss from discontinued operations 0 (1,544)
 Income (loss) before effect of
 change in accounting
 principles 2,604 (9,351)
 Effect of accounting
 change--income taxes 6,150 92,000
 Net income 8,754 82,649
 ADD:
 Income retained (accumulated deficit)
 at beginning of period 44,869 (20,899)
 DEDUCT:
 Excess cost of treasury shares issued
 over the cost of certain
 employee benefits 72 0
 Income retained at
 end of period $ 53,551 $ 61,750
 Income (loss) per share:
 From continuing operations $ .15 $ (.45)
 From discontinued operations -- (.09)
 From effect of accounting changes .35 5.31
 Net income $ .50 $ 4.77
 Average number of shares 17,359 17,319
 Number of shares outstanding
 at end of period 17,362 17,322
 Sales by classes of products (in millions):
 Off-highway $ 162.8 $ 161.8
 On-highway 36.9 27.8
 Total net sales $ 199.7 $ 189.6
 NOTE: (a) Restated to reflect the deconsolidation of the material
 handling business.
 CLARK EQUIPMENT CO. AND CONSOLIDATED SUBSIDIARIES
 Condensed Balance Sheet
 (Amounts in Thousands)
 March 31, Dec. 31,
 1993 1992
 Assets
 Current Assets:
 Cash, equivalents and
 short-term investments $173,161 $191,924
 Accounts and notes receivable 87,844 66,151
 Accounts receivable from
 associated companies 2,402 1,046
 Inventories 101,480 100,817
 Investment in discontinued
 operations-remaining
 insurance operations 5,032 9,648
 Prepaid income taxes 21,341 21,341
 Other current assets 6,364 5,198
 Total current assets 397,624 396,125
 Investments and advances
 --associated companies 120,092 121,314
 Prepaid income taxes--net 101,574 101,831
 Property, plant and
 equipment--net 208,659 216,196
 Assets held for sale 9,320 9,676
 Goodwill 77,422 81,653
 Other assets 32,423 31,896
 Total assets $947,114 $956,691
 Liabilities and stockholder's equity
 Current Liabilities:
 Notes payable $ 27,036 $ 23,821
 Accounts payable and
 accrued liabilities 115,549 118,195
 Income taxes payable 5,730 3,320
 Accrued postretirement
 benefits 19,000 19,000
 Deferred income taxes 963 963
 Current installments on
 long-term debt 20,121 21,570
 Total current liabilities 188,399 186,869
 Long-term borrowings 179,178 186,629
 Other non-current liabilities 83,470 90,508
 Accrued postretirement benefits 230,724 229,903
 Deferred income taxes 12,141 12,195
 Total liabilities 693,912 706,104
 Stockholders' Equity:
 Capital stock 323,180 323,164
 Retained earnings 53,551 44,869
 Cumulative translation and
 other adjustments (37,238) (28,843)
 Common stock held in
 treasury at cost (50,639) (50,951)
 Leveraged Employee Stock Ownership
 Plan shares (35,652) (35,652)
 Total stockholders' equity 253,202 252,587
 Total liabilities and
 stockholders' equity $947,114 $958,691
 Debt/capitalization ratio (pct.) 47.2 47.9
 Current year capital
 expenditures $ 4,586 $ 37,284
 Current year depreciation
 charges $ 9,387 $ 44,120
 -0- 4/26/93
 /CONTACT: Joseph Fimbianti of Clark Equipment, 219-239-0176/
 (CKL)


CO: Clark Equipment Co. ST: Indiana IN: SU: ERN

TM -- NY114 -- 0935 04/26/93 16:21 EDT
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Date:Apr 26, 1993
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