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CLARK REPORTS SOLIDLY PROFITABLE THIRD QUARTER

 SOUTH BEND, Ind., Oct. 22 /PRNewswire/ -- Clark Equipment Company today (NYSE: CKL) announced net income of $10.1 million, or $.58 per share, for the three months ended Sept. 30, 1993. Clark's third quarter results compare to a net loss of $4 million, or $.23 per share in third quarter 1992. Earnings in the second quarter 1993 were $10.8 million, or $.62 per share. Clark sales were $221.5 million in third quarter 1993, compared to $209.2 million in third quarter 1992, and $233.4 million in second quarter 1993. The announcement was made by Leo J. McKernan, Clark chairman and chief executive officer.
 In announcing the results, McKernan said, "The third quarter did not produce a typical seasonal decline, as Melroe in North America and Clark Automotive in Brazil operated at unusually high levels. VME also increased profits despite declining sales. Both gross and operating margins increased compared to second quarter 1993, excluding the effects of several items that combined to lower third quarter net income by $1.7 million, or $.10 per share."
 Specifically, the items were (A) a $3.3 million after-tax charge for manpower reductions at Clark-Hurth Components, (B) an after-tax expense of $4.9 million related to stock appreciation rights created by the increase in the company's share price, (C) a $3.5 million after-tax refund from the U.S. Customs Service in settlement of a disputed duty drawback claim and (D) a reduction of $3 million in the third quarter tax provision reflecting the impact of higher U.S. tax rates on our prepaid tax balance.
 McKernan said that orders for Melroe and Clark Automotive (Brazil) increased compared to third quarter 1992. He added that orders for Clark-Hurth Components declined due to sluggish demand in North America and the ongoing recession for construction equipment in most European economies.
 Incoming orders during the third quarter were $224 million, compared to $242 million in the second quarter and $197 million in third quarter 1992. Order backlog at Sept. 30, 1993, was $155 million, up slightly from the second quarter of 1993 and down $9 million from the same period in 1992.
 Discussing third quarter actions by Clark business units, McKernan said, "In a move that will further reduce its breakeven, Clark-Hurth Components announced that it will eliminate approximately 186 jobs, principally in Europe, generating future annual savings of approximately $5 million. These actions, which will cost $3.3 million (after-tax), will improve Clark-Hurth's ability to respond profitably to future business upturns."
 Reviewing the performance of Clark Automotive's Brazil-based operations, McKernan said, "Clark Automotive sales and income improved substantially in the third quarter, as unit volumes for automobile and light-truck transmissions remained strong. The off-highway components business and export sales of medium-duty truck transmissions also improved slightly. Overall, improved volume and manufacturing cost reductions combined to improve margins and earnings.
 "At Melroe, the usual third quarter seasonal decline was less than anticipated, and both sales and earnings improved substantially compared to third quarter 1992," said McKernan. "The skid-steer market in North America continues to perform very well, with year-to-date industry retail sales more than 20 percent above 1992. Domestic orders and backlog are exceptionally strong." He added that European skid-steer volumes continued to be depressed in the third quarter, with sales more than 10 percent below prior-year levels. European economies, particularly Germany and Italy, remain sluggish.
 Discussing the performance of the VME Group, Clark's 50 percent- owned joint venture, McKernan noted that Clark's share of VME's income increased to $1.8 million in the third quarter from $.9 million in second quarter 1993, and a reported loss of $21 million for third quarter 1992 that included an $8.5 million restructuring reserve. "Higher earnings resulted from increased production, expanded margins due to better price realization and savings from cost-reduction activities. Except in Great Britain, which is beginning to show improvement, conditions remain poor in most of VME's European markets. However, the North American market is showing signs of growth."
 Looking ahead at the remainder of 1993, McKernan said: "Sales in the fourth quarter are expected to be up substantially from the prior year, but our current order rates suggest they will be relatively flat compared to the third quarter. Although Europe remains depressed, economic activity is gradually improving in much of the rest of the world."
 Clark Equipment Company's business is the 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
 (Unaudited; amounts in thousands, except per-share data)
 Periods ended Third Quarter Nine Months
 Sept. 30 1993 1992 1993 1992
 Net sales $221,490 $209,223 $654,634 $611,446
 Operating costs
 and expenses:
 Cost of goods sold 174,515 173,321 521,076 506,702
 Selling, general &
 adminis. expenses 34,066 25,572 88,228 73,329
 Total 208,581 198,893 609,304 580,031
 Operating income 12,909 10,330 45,330 31,415
 Other income, net 5,010 5,273 11,026 12,817
 Interest expense (6,626) (6,575) (18,785) (19,970)
 Pre-tax income from
 consolidated
 operations 11,293 9,028 37,571 24,262
 Provision for
 income taxes 3,264 907 11,805 8,625
 Income from
 consolidated opers. 8,029 8,121 25,766 15,637
 Equity in net income
 (loss) of associated
 company 1,787 (21,013) (2,547) (40,720)
 Income (loss) from
 continuing operations 9,816 (12,892) 23,219 (25,083)
 Discontinued operations:
 Income (loss) from
 operations 256 355 256 (6,701)
 Gain on sale -- 8,519 -- 8,519
 Income from discontinued
 operations 256 8,874 256 1,818
 Income (loss) before
 effect of change in
 accounting principle 10,072 (4,018) 23,475 (23,265)
 Effect of accounting
 change-income taxes -- -- 6,150 92,000
 Net income (loss) 10,072 (4,018) 29,625 68,735
 Add: Income retained
 (accumulated deficit)
 at beginning of
 period 64,346 51,854 44,869 (20,899)
 Deduct: Excess cost of
 treasury shares issued
 over the cost of certain
 employee benefits (53) -- 23 --
 Income retained at
 end of period $ 74,471 $ 47,836 $ 74,471 $ 47,836
 Income (loss) per share:
 From continuing
 operations $.56 $(.74) $1.33 $(1.44)
 From discontinued
 operations .02 .51 .02 .10
 From effect of
 accounting change -- -- .35 5.31
 Net income (loss) $.58 $(.23) $ 1.70 $3.97
 Avg. no. of shares 17,419 17,338 17,418 17,328
 Number of shares
 outstanding at end
 of period 17,374 17,340 17,374 17,340
 Sales by classes of
 products (in millions):
 Off-highway $166.6 $163.3 $516.4 $500.1
 On-highway 54.9 45.9 138.2 111.3
 Total net sales $221.5 $209.2 $654.6 $611.4
 Condensed Balance Sheet
 (Amounts in Thousands)
 Sept. 30, 1993 Dec. 31, 1992
 Assets Unaudited Audited
 Current Assets:
 Cash, equivalents and
 short-term investments $233,435 $191,924
 Accounts and notes receivable 81,545 66,151
 Accounts receivable from
 associated companies 2,300 1,046
 Inventories 111,729 100,817
 Investment in discontinued
 operations - remaining
 insurance operations 5,320 9,648
 Deferred tax assets 21,617 21,341
 Other current assets 6,184 5,198
 Total current assets 462,130 396,125
 Investments and advances -
 associated companies 120,865 121,314
 Deferred tax assets-net 105,953 101,831
 Property, plant and
 equipment - net 203,051 216,196
 Assets held for sale 6,868 9,676
 Goodwill 76,106 81,653
 Other assets 34,574 31,896
 Total assets $1,009,547 $958,691
 Liabilities And Stockholder's Equity
 Current Liabilities:
 Notes payable $21,179 $23,821
 Accounts payable and
 accrued liabilities 137,343 118,195
 Income taxes payable 7,000 3,320
 Accrued postretirement
 benefits 19,000 19,000
 Deferred income taxes 963 963
 Current installments on
 long-term debt 9,777 21,570
 Total current liabilities 195,262 186,869
 Long-term borrowings 208,087 186,629
 Other non-current liabilities 90,167 90,508
 Accrued postretirement
 benefits 232,133 229,903
 Deferred income taxes 12,137 12,195
 Total liabilities 737,786 706,104
 Stockholders' Equity:
 Capital stock 323,352 323,164
 Retained earnings 74,471 44,869
 Cumulative translation and
 other adjustments (40,077) (28,843)
 Common stock held in
 treasury at cost (50,333) (50,951)
 Leveraged employee stock
 ownership
 Plan shares (35,652) (35,652)
 Total stockholders' equity 271,761 252,587
 Total liabilities and
 stockholders' equity $1,009,547 $958,691
 Debt/Capitalization Ratio 46.8 pct. 47.9 pct.
 Year-to-date capital
 expenditures $ 18,685 $ 37,284
 Year-to-date depreciation
 charges $ 27,715 $ 44,120
 -0- 10/22/93
 /CONTACT: Joseph Fimbianti of Clark Equipment, 219-239-0176/
 (CKL)


CO: Clark Equipment Company ST: Indiana IN: CST SU: ERN

MK -- NY046 -- 5756 10/22/93 13:18 EDT
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Date:Oct 22, 1993
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