Printer Friendly


 SENECA FALLS, N.Y., Oct. 28 /PRNewswire/ -- Goulds Pumps, Inc. (NASDAQ-NMS: GULD) today announced increases in sales, net earnings and earnings per share in the third quarter of 1993. According to Stephen V. Ardia, president and CEO, "We are very pleased with our ability to increase our net earnings by 13 percent over the third quarter of 1992. This improvement is largely attributable to an outstanding performance by our joint venture, Oil Dynamics, Inc. (ODI) and a record quarter for our Water Technologies Group. In other exciting news, we have acquired innovative patented pump and seal technology which we expect will become a powerful force in the marketplace, given that it meets stringent environmental requirements."
 Goulds Pumps' financial results for the three and nine months ended Sept. 30, 1993 are as follows (in millions of dollars except per share amounts and percentages):
 Three Months Ended Nine Months Ended
 September 30, September 30,
 1993 1992 1993 1992
 Net Sales $149.9 $147.5 $426.7 $429.9
 Gross Margin (pct) 28.8 30.5 28.9 31.1
 Tax Rate (pct) 34.0 39.0 36.7 39.0
 Net earnings before
 change in acctg.
 principle $ 8.6 $ 7.6 $ 20.2 $ 22.2
 EPS before change
 in acctg. principle .41 .36 .96 1.06
 EPS .41 .36 .96 (.36)
 Weighted average
 shares outstanding
 (in thousands) 21,140 21,057 21,118 21,013
 Total orders for the third quarter were a record $148.7 million on the strength of Water Technologies Group (WTG) volume. Total backlog was lowered to $85.3 million from $87.0 millon on June 30, 1993 and $93.4 million a year ago.
 Ardia added, "We reduced our selling, general and administrative expenses from 20.0% of net sales in the third quarter of 1992 to 19.0 percent of net sales in the third quarter of 1993 as we continue to implement cost-cutting measures. We also benefitted in the current quarter from new accounting rules for income taxes (Financial Accounting Standard No. 109), which resulted in a cumulative adjustment of $.6 million to decrease our year-to-date income tax rate. These pluses, coupled with record performance from our Water Technologies Group, more than offset a decline in the gross margin percentage for both operating groups versus the third quarter of 1992, as competitive pricing and pump shipment mix created downward pressure on our profitability."
 Goulds Pumps earlier this week announced it had acquired the technology to produce a proprietary pump and seal line that will serve the chemical processing industry and which will offer superior reliability, safety and compliance with increasingly stringent OSHA and Clean Air Act mandates. "Sales of these proprietary products developed by Environamics are expected to reach $40 million by the late 1990's as broader environmental regulations become effective", Ardia said.
 Overall, order levels at IPG were 1 percent higher than the second quarter of 1993. However, total orders for the third quarter were 4 percent less than total orders for the same quarter in 1992. "Specifically, repair orders remained stable despite the continued coal strike affecting our Slurry Pump Division, while pump orders declined as customers in our core markets continue to defer capital spending for major projects. IPG's profitability for the quarter decreased compared to last year, as the Group's gross margin percentage weakened by 2 percentage points due largely to the continued competitive pricing environment in all regions of the United States and certain international markets.
 "In response to these continuing difficult business conditions, we are taking steps to boost productivity, increase our customer focus and lower our manufacturing costs. An important milestone on this course was achieved in the first week of October with the implementation at the Engineered Products Division (EPD), our largest division, of phase II of CATS (Competitive Advantage Through Simplification). CATS is a systems-driven overhaul of how we operate, from customer inquiries to order entry to shipment. Additionally, we have accelerated a process that we began 18 months ago to reduce costs. Over the past few weeks we have substantially completed personnel reductions in IPG and on the Corporate staff that will result in savings in excess of $4.0 million per year", Ardia said.
 WTG reported the best quarter in its history for sales and orders, both of which were approximately 5 percent higher than the third quarter of 1992. Ardia explained, "At WTG-America, sales and profitability increased approximately 15 percent compared to the same quarter a year ago as dry weather conditions in the Northeast and South and new products boosted sales volume. WTG-Europe (Lowara) achieved outstanding results on a local currency basis for the current quarter compared to the third quarter of 1992, with a sales increase of 19 percent and a profitability increase of 36 percent. On a translated basis, Lowara's results showed an 8 percent decrease in sales and a 4 percent increase in profitability. Lowara's third quarter activity reflects the shipments of new products as well as increased sales to other European countries, assisted by the devalued lire. WTG's results for the quarter were negatively affected by the Texas Turbine Division, where sales were adversely impacted by domestic economic conditions, especially on the West Coast.
 Ardia concluded, "We are dedicated to increasing shareholder value by accelerating our new product development as evidenced by the acquisition of innovative technology such as the environmental pumps to be produced by Environamics. Concurrent with our commitment to market leadership and customer focus is our responsibility to boost productivity and reduce our operating cost base. To that end, we have cut our selling, general and administrative costs by over $4.0 million per year and implemented phase II of our CATS system. These changes will enable us to become both more performance driven and more cost- competitive.
 "We expect that our fourth quarter results will exceed those of the fourth quarter of 1992. It is unlikely, though, given the continuing difficulty of the worldwide economy, that we will fully offset the first quarter shortfall. Therefore, we expect that our 1993 results will be similar to our 1992 results, exclusive of the restructuring charge taken last year.
 "We continue to push forward and to do the right things in the right markets. These strategies have resulted in improved financial results for the past two quarters and position us to capitalize on a future upturn in the capital goods industry."
 Condensed Statements of Consolidated Income (Unaudited)
 Goulds Pumps, Incorporated
 (In thousands except per share data)
 Three Months Ended Nine Months Ended
 September 30, September 30,
 1993 1992(A) 1993 1992(A)
 Net sales $149,895 $147,479 $426,721 $429,940
 Cost and expenses:
 Cost of sales 106,734 102,465 303,468 296,245
 Selling, general and
 expenses 28,408 29,534 86,711 88,695
 Research and
 development expenses 1,893 1,992 5,276 5,915
 Earnings from
 investments and
 affiliates (1,872) (96) (4,061) (353)
 Interest expense 1,259 1,286 3,889 3,649
 Interest income (269) (425) (1,333) (1,062)
 Other expense 718 245 863 411
 Earnings before income
 taxes and cumulative
 effect of accounting
 change 13,024 12,478 31,908 36,440
 Income taxes 4,433 4,867 11,703 14,214
 Earnings before
 cumulative effect
 of accounting
 change 8,591 7,611 20,205 22,226
 Cumulative effect of
 change in accounting
 principle, net of
 income tax benefit -- -- -- (29,746)
 Net earnings (loss) $ 8,591 $ 7,611 $ 20,205 $ (7,520)
 Net earnings (loss)
 per share:
 Earnings before
 cumulative effect
 of accounting
 change .41 .36 .96 1.06
 Cumulative effect
 of change in
 principle -- -- -- (1.42)
 Net earnings (loss)
 per common share $ .41 $ .36 $ .96 $ (.36)
 Dividends per share $ .20 $ .20 $ .60 $ .60
 Weighted Average
 Shares Outstanding
 (in thousands) 21,140 21,057 21,118 21,013
 (A) -- Restated for adoption of SFAS 106 as of January 1, 1992.
 Condensed Consolidated Balance Sheets (Unaudited)
 Goulds Pumps, Incorporated
 (In thousands) September 30,
 1993 1992(A)
 Current assets:
 Cash and cash equivalents $ 15,923 $ 13,577
 Marketable securities 6,205 --
 Receivables - net 116,332 116,333
 Inventories 104,078 106,024
 Deferred tax asset 14,758 8,893
 Prepaid expenses and other
 current assets 13,270 15,025
 Total current assets 270,566 259,852
 Property, plant & equipment - net 148,041 146,569
 Investments, including investments
 in affiliates 13,205 12,388
 Deferred tax asset 4,585 2,587
 Other assets 13,744 10,679
 Total $450,141 $432,075
 Current liabilities:
 Current maturities of debt $ 35,958 $ 20,746
 Trade payables 36,646 38,728
 Deferred tax liability 1,257 737
 Restructuring accrual 1,065 --
 Accrued liabilities 60,642 56,024
 Total current liabilities 135,568 116,235
 Long-term debt 54,223 43,907
 Pension 13,311 13,247
 Other postretirement benefit obligation 52,279 50,143
 Deferred tax liability and other 4,274 600
 Common stock outstanding 21,145 21,065
 Additional paid-in capital 56,899 55,543
 Retained earnings 122,303 119,577
 Cumulative translation adjustments
 and other (9,861) 11,758
 Total shareholders' equity 190,486 207,943
 Total $450,141 $432,075
 (A) -- Restated for adoption of SFAS 106 as of January 1, 1992.
 (B) -- The marketable securities are being held to collateralize short-term debt from financial institutions.
 Market Segments:
 The company operates in two major market segments, Industrial Products and Water Technologies. The Industrial Products segment produces and sells pumps used in various industries including pulp and paper, chemical processing, petrochemical, food and beverage, oil, mining, municipal, and electric utility and provides parts and repair services for various types of pumps and other rotating equipment. The Water Technologies segment produces and sells pumps for residential, farm, irrigation and commercial/light industrial use.
 Three Months Ended Nine Months Ended
 September 30, September 30,
 1993 1992(A) 1993 1992(A)
 Net Sales:
 Industrial Products $ 78,993 $ 80,035 $242,118 $244,588
 Water Technologies 70,902 67,444 184,603 185,352
 Total net sales $149,895 $147,479 $426,721 $429,940
 Operating Earnings:
 Industrial Products
 contribution $ 5,866 $ 8,149 $ 22,964 $ 29,378
 Less: allocations(B) 1,202 1,825 4,647 5,360
 Industrial Products
 operating earnings 4,664 6,324 18,317 24,018
 Water Tech.
 contribution 10,134 8,975 19,155 21,220
 Less: allocations(B) 603 388 1,900 1,483
 Water Technologies
 operating earnings 9,531 8,587 17,255 19,737
 Total operating
 earnings $ 14,195 $ 14,911 $ 35,572 $ 43,755
 General corporate
 expense 1,335 1,423 4,306 4,670
 Earnings from investments
 and affiliates (1,872) (96) (4,061) (353)
 Interest expense 1,259 1,286 3,889 3,649
 Interest income (269) (425) (1,333) (1,062)
 Other expense 718 245 863 411
 Total $ 13,024 $ 12,478 $ 31,908 $ 36,440
 (A) -- Restated for adoption of SFAS 106 as of January 1, 1992.
 (B) -- Allocations are comprised of an allocation of applicable corporate expenses and other income/(expense) items.
 -0- 10/28/93
 /CONTACT: Sean Murphy, vice president and chief financial officer, or Diana Kurty, corporate controller, of Goulds Pumps, 315-568-2811/

CO: Goulds Pumps, Inc. ST: New York IN: ENV SU: ERN

BM -- CL008 -- 7762 10/28/93 09:41 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Oct 28, 1993

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters