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FEDERAL-MOGUL THIRD-QUARTER EARNINGS INCREASE 67 PERCENT

 FEDERAL-MOGUL THIRD-QUARTER EARNINGS INCREASE 67 PERCENT
 SOUTHFIELD, Mich., Oct. 28 /PRNewswire/ -- Dennis J. Gormley,


chairman and chief executive officer of Federal-Mogul Corporation (NYSE: FMO), today reported 1992 third-quarter earnings of $4.2 million or $.15 per common share compared to $2.9 million or $.09 per common share for the same 1991 quarter.
 "Our earnings improvement is the result of additional sales volume, reduced interest burden from previously announced financing actions, and our continued progress in controlling costs," Gormley explained. "Selling, distribution and administrative costs have declined an average of 1 percent of net sales from 1991 levels. However, third-quarter earnings were negatively impacted by approximately three cents per share due to production cutbacks by General Motors resulting from the recent strike at its Lordstown, Ohio, plant," Gormley said.
 Gross margin on sales of the company's products was 16.4 percent in the 1992 third quarter compared to 16.8 percent in the first half of the year. "We continue to experience margin pressures at Glyco AG, our German engine bearing operation," Gormley said. "Benefits from operational actions taken to improve Glyco's performance have not yet been realized, and continuing inflationary pressures in Germany have further contributed to lower than desired operating results. Excluding Glyco, gross margin increased slightly in the 1992 third quarter over the first six months of the year."
 Sales for the quarter ended Sept. 30, 1992, were $297.8 million, compared to $268.0 million for the same 1991 quarter. Gormley said that year-to-year sales by original equipment and distribution operations increased in excess of 14 and 7 percent, respectively, with contributions from nearly all product lines.
 Earnings for the nine months ended Sept. 30, 1992, were $11.7 million, or $.42 per common share, compared to $3.4 million or $.05 per common share for the same 1991 period. Sales for the first three quarters of 1992 totaled $905.9 million, compared to $832.0 million for the same period in 1991.
 Gormley added, "I'm very pleased about our recently completed acquisition of the TRW automotive aftermarket business. The additional engine and chassis product lines provided as a result of this acquisition will enhance our competitive position in the worldwide vehicular aftermarket business as well as open new customer channels."
 The acquisition, valued at approximately $215 million, is the largest in Federal-Mogul's history. As previously announced, Federal- Mogul financed the acquisition largely from the proceeds of an $80 million private placement of convertible exchangeable preferred stock and $125 million in bank financing.
 Headquartered in Southfield, Federal-Mogul is a global distributor and manufacturer of a broad range of precision parts primarily for automobiles, light trucks, heavy trucks, and farm and construction vehicles.
 FEDERAL-MOGUL CORPORATION
 CONDENSED OPERATING RESULTS
 Quarter and Nine Months Ended Sept. 30
 (Millions of dollars, except per-share data)
 Quarter Ended Nine Months Ended
 1992 1991 1992 1991
 Revenues
 Net sales $297.8 $268.0 $905.9 $832.0
 Other income 1.9 1.8 6.2 6.6
 299.7 269.8 912.1 838.6
 Costs and Expenses
 Cost of products sold 249.0 222.0 755.0 693.5
 Selling, distribution
 and administrative
 expenses 38.8 37.3 117.9 117.7
 Net interest expense 3.7 5.4 15.1 17.3
 International currency
 exchange losses 1.6 .5 3.6 2.8
 293.1 265.2 891.6 831.3
 Earnings from continuing
 operations before
 income taxes 6.6 4.6 20.5 7.3
 Income taxes 2.4 1.7 8.8 3.8
 Earnings from continuing
 operations 4.2 2.9 11.7 3.5
 Discontinued operations,
 net of income taxes 0 0 0 (.1)
 Net earnings $4.2 $2.9 $11.7 $3.4
 Earnings per common share $.15 $.09 $.42 $.05
 FEDERAL-MOGUL CORPORATION
 CONDENSED BALANCE SHEET
 (Millions of dollars)
 Sept. 30, Dec. 31,
 1992 1991
 Assets
 Current assets
 Cash and equivalents $87.0 $44.6
 Accounts receivable 121.9 154.0
 Inventories 164.8 160.2
 Income tax benefits, prepaid
 expenses and other 31.8 40.5
 Total current assets 405.5 399.3
 Property, plant and equipment 369.2 380.9
 Business investments and
 other assets 100.5 104.0
 Total assets $875.2 $884.2
 Liabilities and shareholders' equity
 Current liabilities
 Short-term debt and current
 maturities of long-term debt $22.4 $47.5
 Accounts payable and accrued
 liabilities 159.6 156.0
 Total current liabilities 182.0 203.5
 Long-term debt 239.8 304.0
 Deferred taxes, pensions
 and other liabilities 115.5 120.5
 Total liabilities 537.3 628.0
 Shareholders' equity 337.9 256.2
 Total liabilities and
 shareholders' equity $875.2 $884.2
 FEDERAL-MOGUL CORPORATION
 CONDENSED CASH FLOWS
 Nine Months Ended Sept. 30
 (Millions of dollars)
 1992 1991
 Cash provided from operating
 activities:
 Net earnings $11.7 $3.4
 Depreciation and amortization 34.8 40.2
 Net changes to working capital (16.2) (4.7)
 Cash provided from operating
 activities 30.3 38.9
 Cash used by investing activities:
 Expenditures for property,
 plant and equipment (23.4) (33.9)
 Other (2.7) (1.2)
 Cash used by investing activities (26.1) (35.1)
 Cash provided from (used by)
 financing activities:
 Issuance of Series D
 preferred shares 77.0 0
 Net decrease in debt (83.9) (2.8)
 Sale of accounts receivable 55.0 0
 Dividends paid to common
 shareholders (8.1) (15.4)
 Dividends paid to preferred
 shareholders (3.1) (2.4)
 Other 1.3 (.3)
 Cash provided from (used by)
 financing activities 38.2 (20.9)
 Increase (decrease) in cash
 and equivalents 42.4 (17.1)
 Cash and equivalents at
 beginning of period 44.6 26.9
 Cash and equivalents at end
 of period $87.0 $9.8
 FEDERAL-MOGUL CORPORATION
 NOTES TO CONDENSED FINANCIAL STATEMENTS
 SEPT. 30, 1992
 1. Issuance of Preferred Stock
 On Sept. 24, 1992, Federal-Mogul completed a private placement of 1,600,000 shares of its $3.875 Series D convertible exchangeable preferred stock. Sold to institutional investors, the stock has a liquidation preference of $50. The shares are convertible into Federal- Mogul common stock at a conversion price of $18 per share of Federal- Mogul common stock. Federal-Mogul used the net proceeds of $77 million to finance a portion of its acquisition of TRW Inc.'s automotive aftermarket business. (See Note 2.)
 2. Subsequent Event
 On Oct. 20, 1992, Federal-Mogul completed its acquisition of substantially all of TRW Inc.'s independent automotive aftermarket business. Federal-Mogul and TRW Inc. also completed a long-term supply contract and a trademark agreement making Federal-Mogul the exclusive supplier of TRW-brand engine and chassis parts to the independent automotive aftermarket. Federal-Mogul financed the transaction, valued at approximately $215 million, largely from net proceeds from the issuance of convertible exchangeable preferred stock (see Note 1) and with proceeds of a $125 million long-term bank financing.
 3. Postretirement Benefits
 Financial Accounting Standards Board Statement No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions," must be adopted no later than the first quarter of 1993. Federal-Mogul has not yet determined the exact effect of this accounting change on its financial position and results of operations or whether it will adopt the Statement in the current year. However, based on preliminary calculations which use a number of estimates and assumptions, Federal- Mogul does not expect the effect of the accumulated costs of these postretirement benefits at the date of adoption to exceed $90 million, on an after-tax basis. The annual incremental after-tax expense is expected to be in the range of $4 million to $9 million depending upon whether Federal-Mogul elects to immediately recognize the transition obligation or amortize it over 20 years. Implementation of the new Statement will not affect Federal-Mogul's cash flow.
 -0- 10/28/92
 /CONTACT: Peggy Brewer of Federal-Mogul, 313-354-2685/
 (FMO) CO: Federal-Mogul Corporation ST: Michigan IN: AUT SU: ERN


ML -- DE008 -- 5822 10/28/92 09:20 EST
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