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GOULDS PUMPS REPORTS EARNINGS AT EXPECTED LEVEL

 SENECA FALLS, N.Y., April 23 /PRNewswire/ -- Goulds Pumps, Inc. (NASDAQ-NMS: GULD), today announced first quarter 1993 results that were "in line" with the company's announcement on March 19 of expected results. The company reported orders of $126.5 million, sales of $124.4 million and earnings per share of 16 cents.
 Stephen V. Ardia, president and chief executive officer of Goulds Pumps, explained, "Our first quarter sales decreased due to persistent recessionary conditions in North America and Europe, continued pricing pressure in the industry, a shift of business at our VPD/California division to the second and third quarters of the year and the impact of wet weather conditions on our Water Systems business. Additionally, European sales of lower margin pumps have also adversely affected earnings for the quarter." In 1992, the company earned 34 cents (after restatement for the current year portion of SFAS 106) on sales of $134.9 million. Ardia added, "We lagged the global recession when we reported record results in 1991 and the first quarter of 1992. The fact that we are continuing to feel the impact of these difficult economic times is a reflection of the capital goods industry trailing the economic recovery."
 Total orders for the quarter were $126.5 million, down 11 percent from record orders in the fist quarter of 1992. Backlog at March 31, 1993, was $100.2 million, up $3.4 million from Dec. 31, 1992. Ardia commented, "The weaker orders level is consistent with that reported by many companies in the industrial sector and among many of our major competitors in the pump industry. While we are disappointed with this downturn, we must also recognize the economic realities of our operating environment." Ardia continued, "Encouraging signs from our first quarter were that orders in the month of March were comparatively stronger to last year than orders in January and February. Especially positive is the strengthening of repair orders in March which actually exceeded repair orders in March 1992 by 3 percent. We view this as a particularly encouraging trend since the upturn of repair orders has generally been a barometer of business improvement.
 "In other operating areas of significance, our total gross margin percentage decreased to 28.6 percent from 31.0 percent (exclusive of the Kuwait contract recovery of $1 million in 1992) as margins softened in both the Industrial Products Group and Water Technologies Group. Oil Dynamics, Inc. (ODI), our 50 percent owned joint venture, posted results that were six times better than the first quarter of 1992. They are experiencing an outstanding second quarter on the strength of significant Russian business and will exceed even our own earlier optimistic expectations. In addition to the greater profitability at ODI, an extra benefit exists in the favorable tax treatment given to our receipt of earnings from ODI, thus keeping our consolidated tax rate at 38.5 percent, which is below our originally projected rate of 40 percent for 1993," said Ardia.
 Ardia continued, "Recognizing that global economic factors, which are outside our control, are influencing our business, we have taken steps internally to maximize our earnings. These initiatives include a decrease in employment through the early retirement program and the restructuring of our Texas facility, a deferral of our employee merit wage increase normally put into effect on April 1 of each year, the tightening of all expense controls and the limiting of our capital spending. These actions will result in expense reductions as we drive our costs down to ensure that we will be an efficient global competitor both now and in the future."
 Industrial Products Group (IPG)
 "Shipments at IPG slid 6 percent and earnings fell more sharply as the group's core markets remained soft and competitive price pressures pushed down operating margins," Ardia said. Overall orders for IPG decreased 13 percent compared to last year, with the most significant declines being in pumps and accessories. At IPG's largest division, the Engineered Products Division (EPD), sales decreased 11 percent on a stable gross margin percentage, compared to last year. At the Vertical Products Division (VPD) in California, shipment volume increased 20 percent on a weaker gross margin percentage as the sales mix shifted to a lower proportion of higher margin parts. The Slurry Pump Division (SPD), in Pennsylvania, was adversely affected by decreased slurry product shipment volume resulting from a lower beginning of the year backlog and competitive price pressures.
 Water Technologies Group (WTG)
 WTG reported a 7 percent decline in first quarter orders, a 10 percent decrease in sales volume compared to a record first quarter in 1992 and a decline in profitability compared to last year. Ardia explained, "Shipments decreased at a greater rate than orders and WTG backlog increased as export and commercial business, which require longer lead times, grew at WTG-America (the Water Systems Division) in the first quarter."
 At WTG America sales declined by 4 percent due to the continuation of the recession and wet weather conditions. Ardia added, "The division's gross margin increased as a result of a price increase that went into effect in 1993 but division profitability declined as we strengthened our commercial and export selling forces and invested in information systems (CATS II implemented Feb. 15, 1993)."
 WTG-Europe (Lowara) reported break-even results for the quarter on a 16 percent decrease from the first quarter of 1992 on translated sales dollar volume. On a local currency basis, sales volume remained comparable on a quarter over quarter basis. Ardia explained, "The decline in Lowara's profitability is largely attributable to unusually high levels of shipments to a Middle East distributor of a specific pump model which we currently sell at a margin loss. This model, which is important to our full line of pump offerings, will be manufactured more profitably later in the year when we move its production to a lower labor cost country. This unfavorable product shipment mix is not expected to recur in 1993."
 In Closing
 Ardia concluded, "Though we are disappointed that so many factors combined to reduce our first quarter results, we are encouraged by the stabilization of our parts orders, the strong performance of Oil Dynamics, Inc. and the rebounding of profitability at Lowara, which provides us with a solid basis for optimism about our short-term performance. Looking at the balance of 1993, we expect that the earnings for each of the remaining quarters will exceed the earnings for each of the same quarters last year.
 "We remain dedicated to increasing shareholder value and will continue to take the actions necessary to position us for achieving improved profitability on a near-term and longer-term basis."
 GOULDS PUMPS, INC.
 Condensed Consolidated Statements of Earnings
 (Unaudited, in thousands, except per share data)
 Three months ended March 31 1993 1992(A)
 Net sales $124,402 $134,911
 Cost and expenses:
 Cost of sales 88,834 92,416
 SG&A expenses 28,611 28,477
 Research and development expenses 1,676 2,004
 Earnings from investments and affiliates 659 136
 Interest expense 1,070 1,057
 Interest income 361 174
 Other income -- net 307 238
 Earnings before income taxes and cumulative
 effect of accounting change 5,538 11,505
 Income taxes 2,132 4,488
 Earnings before cumulative effect
 of accounting change 3,406 7,017
 Cumulative effect of change in
 accounting principle, net of
 income tax benefit -- (29,746)
 Net earnings (loss) $ 3,406 $(22,729)
 Net earnings (loss) per share:
 Earnings before cumulative effect
 of accounting change $.16 $ .34
 Cumulative effect of change
 in accounting principle -- (1.42)
 Net earnings (loss) per share $.16 $(1.08)
 Dividends per share $.20 $.20
 Weighted average shares outstanding
 (in thousands) 21,094 20,944
 (A) -- Restated for adoption of SFAS 106 as of Jan. 1, 1992.
 GOULDS PUMPS, INC.
 Condensed Consolidated Balance Sheets
 (In thousands, unaudited)
 3/31/93 3/31/92(A)
 ASSETS
 Current assets:
 Cash and cash equivalents $ 16,895 $ 13,976
 Receivables - net 103,146 104,279
 Inventories 107,587 101,815
 Deferred tax asset 14,233 7,386
 Prepaid expenses and other current assets 10,227 13,446
 Total current assets 252,088 240,902
 Property, plant & equipment - net 151,547 142,333
 Investments, including investments
 in affiliates 13,396 12,610
 Deferred tax asset 2,347 1,041
 Other assets 12,588 15,650
 Total $431,966 $412,536
 LIABILITIES AND SHAREHOLDERS' EQUITY
 Current liabilities:
 Current maturities of debt $ 31,368 $ 18,035
 Trade payables 41,452 38,298
 Deferred tax liability 1,160 740
 Restructuring accrual 1,750 --
 Other 44,674 47,445
 Total current liabilities 120,404 104,518
 Long-term debt 55,674 50,252
 Pension 13,353 11,900
 Other postretirement benefit obligation 51,346 48,701
 Deferred tax liability and other 4,917 1,279
 Shareholders' equity:
 Common stock outstanding 21,118 21,002
 Additional paid-in capital 56,405 54,644
 Retained earnings 113,960 112,882
 Cum. translation adjustments & other (5,211) 7,358
 Total shareholders' equity 186,272 195,886
 Total $431,966 $412,536
 (A) -- Restated for adoption of SFAS 106 as of Jan. 1, 1992.
 Selected Major Market Segment Information
 (In thousands, unaudited)
 Market Segments:
 The company operates in two major 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 March 31 1993 1992(A)
 Net sales:
 Industrial Products $ 74,443 $ 79,543
 Water Technologies 49,959 55,368
 Total net sales 124,402 134,911
 Operating earnings:
 Industrial Products contribution 6,827 11,427
 Less: allocations (B) 1,639 1,787
 Industrial Products operating earnings 5,188 9,640
 Water Technologies contribution 2,419 4,406
 Less: allocations (B) 849(C) 410
 Water Technologies operating earnings 1,570 3,996
 Total operating earnings 6,758 13,636
 General corporate expenses 1,477 1,622
 Earnings from investments and affiliates 659 136
 Interest expense 1,070 1,057
 Interest income 361 174
 Other income - net 307 238
 Total $ 5,538 $ 11,505
 (A) -- Restated for adoption of SFAS 106 as of Jan. 1, 1992.
 (B) -- Allocations are comprised of an allocation of applicable corporate expenses and other (income)/expense items.
 (C) -- Increase due to change in group "other income and expense" from $212K expense in 1992 to $268K of transaction foreign currency gains in 1993.
 -0- 4/23/93
 /CONTACT: John Morphy, chief financial officer and group vice president-industrial products of Goulds Pumps, 315-568-2811/
 (GULD)


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

GK-TO -- NY021 -- 9969 04/23/93 10:44 EDT
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