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GOULDS PUMPS ANNOUNCES FULL YEAR AND FOURTH QUARTER RESULTS

 SENECA FALLS, N.Y. Jan. 27 /PRNewswire/ -- Goulds Pumps, Inc. (NASDAQ-NMS: GULD), today announced 1992 results including record orders of $560.1 million, sales of $558.9 million and a loss per common share of ($.38) after providing for the cumulative effect of the adoption of Financial Accounting Standard No. 106 (FAS 106), "Employers' Accounting for Postretirement Benefits Other Than Pensions."
 According to Stephen V. Ardia, president and C.E.O., "Our results were dramatically affected by a one-time pre-tax $6.3 million restructuring charge ($.19 after-tax per share) and the impact of the adoption of FAS 106 ($1.56 per share). Without these incremental charges, our earnings per share would have been $1.37 compared to $1.51 a year ago. Operationally, we were pleased to attain record orders levels and maintain stable gross margins despite difficult economic conditions throughout the world. We believe these accomplishments position us well to capitalize on the expected recovery in the industrial sector.
 "As mentioned above, the fourth quarter of 1992 reflected a restructuring charge of $6.3 million pre-tax or $.19 per share after- tax. The purpose of this restructuring was to reduce our work force through an early retirement program ($2.9 million pre-tax charge); more efficiently utilize our manufacturing facilities by moving the industrial sump pump line (model 3171) from our Texas Division to our Slurry Pump Division in Pennsylvania; increase our focus on the turbine marketplace by assigning the Texas Division operations to our Water Technologies Group; and improve our customer service capabilities by centralizing our contract engineering for high specification products in Seneca Falls." Mr. Ardia added, "We made all of the above investments to immediately produce short- and long-term earnings benefits."
 Additionally, FAS 106, which requires employers to record the cost of postretirement benefits over the working lives of employees rather than as incurred on a cash basis, was recorded as of Jan. 1, 1992. The cumulative effect of the accounting principle change was recorded as a one-time, non-recurring after-tax charge of $29.7 million or $1.42 per share. Quarterly results for this year were also restated to reflect the current year FAS 106 incremental expense of $4.9 million ($3.0 million after-tax or $.14 per share). According to Mr. Ardia, "We expect our 1993 incremental expense under FAS 106 to be about $.10 per share on an after-tax basis as a result of plan design changes which will increase the retiree contribution for many retirements after July 1, 1993."
 Total orders for the year reached a record level of $560.1 million with slight orders increases in both the Industrial Products Group (IPG) and the Water Technologies Group (WTG). Orders for the fourth quarter of 1992 were approximately the same as those of the fourth quarter of 1991. Total backlog, which is composed primarily of IPG orders, increased to $96.8 million at Dec. 31, 1992, from $92.0 million at the same time last year.
 In other financial highlights for the year, Mr. Ardia commented, "We are especially pleased with our ability to maintain our gross margin percentage at a level consistent with last year. This was accomplished despite a difficult pricing environment, lower levels of repair parts sales in the pulp and paper marketplace and the adoption of FAS 106 which by itself reduced the gross margin by one-half of 1 percent over the prior year.
 "Our selling, general and administrative (SG&A) expenses would have been almost $2 million lower if the incremental FAS 106 expense were excluded, bringing our SG&A expenses as a percentage of sales to 21.1 percent from 20.4 percent last year."
 Results for the year were also impacted by a 29.5 percent increase in research and development expenditures, a 21.3 percent decrease in interest due to lower borrowing rates and a sharp decline in the profitability of the company's joint venture, Oil Dynamics, Inc., which was depressed by softness in the domestic oil industry during 1992. This joint venture should achieve significant profit growth in 1993 based upon recent and anticipated order levels from the oil marketplace in Russia.
 Industrial Products Group (IPG) Highlights
 IPG orders were 1 percent greater than last year's total and 3 percent lower than the fourth quarter of 1991. Mr. Ardia added, "As reported throughout the year, our repair orders have been running about 5 percent lower than last year primarily due to reduced operating rates in the pulp and paper industry. We have offset some of this decline through a higher level of orders for pumps and accessories. However, this mix shift coupled with pricing pressures has decreased the group's gross margin by slightly more than 1 percentage point compared to 1991."
 Water Technologies Group (WTG) Highlights
 WTG completed 1992 with record orders, sales and near-record contribution. WTG-America (Water Systems Division) posted a 3 percent increase in sales compared to 1991 with more than a full percentage point increase in gross margin. Mr. Ardia added, "WTG-America has been able to maintain its sales volume and improve margins in the midst of an uneven economy through the introduction of new products resulting in market share gains, through manufacturing efficiencies and through solid marketing strategies."
 WTG-Europe (Lowara) also finished 1992 with record sales and orders, benefiting from translation favorability as the division posted a 2 percent decrease in sales on a local currency basis. Profitability at Lowara compared to last year declined due primarily to the absence of non-recurring income received in 1991 and, to a lesser extent, increased investments in new products and sales channels. "These investments are expected to have a very positive effect on business activity next year," explained Mr. Ardia.
 In Closing
 Mr. Ardia concluded, "1992 was a challenging year for Goulds Pumps. However, it was a year of many accomplishments as we balanced the needs of our business and work force while establishing the strategic direction that Goulds will pursue in the years ahead. We fully expect that our initiatives, supported by our 1992 restructuring plan, will bring increased profitability in 1993 and beyond. We are dedicated to increasing shareholder value and feel we are positioned to accomplish this on both a near-term and longer-term basis."
 GOULDS PUMPS, INC.
 Condensed Consolidated Statements of Earnings (Unaudited)
 (In thousands except per share data)
 Periods ended Three Months Twelve Months
 Dec. 31 1992 1991 1992 1991
 Net sales $128,963 $138,478 $558,903 $566,566
 Cost and exps., net:
 Cost of sales 89,322(A) 96,910 385,567(A) 390,664
 S,G&A expenses 31,058(A) 29,484 119,752(A) 115,673
 R&D expenses 2,024 1,483 7,939 6,129
 Restructuring charge 6,300 -- 6,300 --
 Environmental provision -- 2,000 -- 2,000
 Earns. from investments
 and affiliates (358) (822) (711) (2,479)
 Interest expense 1,349 1,255 4,998 6,351
 Interest income (345) (439) (1,407) (2,225)
 Other (income)
 expenses - net 225 (1,094) 636 (839)
 Total 129,575 128,777 523,074 515,274
 Earnings before income
 taxes, extraordinary
 charge and cumulative
 effect of accounting
 change (612) 9,701 35,829 51,292
 Income taxes (239) 3,825 13,976 20,004
 Earns. before extraord.
 charge and cum. effect
 of accounting change (373) 5,876 21,853 31,288
 Extraord. charge from
 early extinguishment
 of debt, net of income
 tax benefit -- 557 -- 557
 Cum. effect of change
 in accounting principle,
 net of income tax benefit -- -- 29,746 --
 Net earnings (loss) $ (373) $ 5,319 $ (7,893) $ 30,731
 Net earnings (loss) per
 common share:
 Earnings before extraord.
 charge and cumulative
 effect of accounting
 change $ .02 $ .29 $ 1.04 $ 1.51
 Extraordinary charge -- .03 -- .03
 Cumulative effect of
 change in accounting
 principle -- -- (1.42) --
 Net earnings (loss)
 per common share $(.02) $ .26 $ (.38) $ 1.48
 (A) -- Includes incremental expense related to the adoption of SFAS No. 106:
 Periods ended Dec. 31, 1992 Three months Twelve months
 Cost of sales $ 739 $2,950
 S,G&A expenses 492 1,972
 Total $1,231 $4,922
 GOULDS PUMPS, INC.
 Condensed Consolidated Balance Sheets
 (In thousands)
 12/31/92 12/31/91
 (Unaudited) (Audited)
 ASSETS
 Current assets:
 Cash and cash equivalents $ 13,681 $ 16,372
 Receivables - net 98,349 100,249
 Inventories 102,031 91,920
 Deferred tax asset 13,498 5,891
 Prepaid expenses and
 other current assets 9,171 9,213
 Total current assets 236,730 223,645
 Property, plant and equipment-net 154,586 140,767
 Investments, including
 investments in affiliates 12,735 13,572
 Deferred tax asset 2,221 --
 Other assets 12,485 17,881
 Total $418,757 $395,865
 LIABILITIES AND SHAREHOLDERS' EQUITY
 Current liabilities:
 Current maturities of debt $ 24,379 $ 19,795
 Trade payables 40,244 34,365
 Deferred tax liability 1,257 --
 Restructuring accrual 3,204 --
 Other 45,558 47,429
 Total current liabilities 114,642 101,589
 Long-term debt 40,887 44,419
 Pension 13,981 11,339
 Other postretirement benefit
 obligation 50,864 --
 Deferred taxes liability and other 5,598 19,263
 Shareholders' equity 192,785 219,255
 Total $418,757 $395,865
 Selected Major Market Segment Information
 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.
 (In thousands)
 Periods ended Three Months Twelve Months
 Dec. 31 1992 1991 1992 1991
 Net sales:
 Industrial Products $ 81,076 $ 92,953 $337,317 $346,013
 Water Technologies 47,887 45,525 221,586 220,553
 Total net sales 128,963 138,478 558,903 566,566
 Operating earnings:
 Industrial Products
 contribution 7,661 11,751 40,009 44,511
 Less: allocations (A) (1,986) (2,867) (7,691) (8,409)
 Industrial Products
 operating earnings 5,675 8,884 32,318 36,102
 Water Technologies
 contribution 4,065 4,209 25,764 25,897
 Less: allocations (A) (860) (1,114) (1,997) (2,094)
 Water Technologies
 operating earnings 3,205 3,095 23,767 23,803
 Total operating earnings 8,880 11,979 56,085 59,905
 General corporate expense 1,090 1,378 5,518 5,805
 Restructuring charge 6,300 -- 6,300 --
 Incremental postretirement
 benefit expense 1,231 -- 4,922 --
 Interest expense 1,349 1,255 4,998 6,351
 Interest income (345) (439) (1,407) (2,225)
 Earnings from investments
 and affiliates (358) (822) (711) (2,479)
 Environmental provision -- 2,000 -- 2,000
 Other (income) expense - net 225 (1,094) 636 (839)
 Total $ (612) $ 9,701 $ 35,829 $ 51,292
 (A) -- Allocations are comprised of an allocation of applicable corporate expenses and other income/(expense) items.
 -0- 1/27/93
 /CONTACT: John Morphy, chief financial officer and group vice president - Industrial Products Group of Goulds Pumps, 315-568-2811/
 (GULD)


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

GK-OD -- NY021 -- 9525 01/27/93 10:26 EST
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