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GRUMMAN 1992 INCOME FROM CONTINUING OPERATIONS UP 26 PERCENT; REPORTS NET LOSS AFTER FAS 106 ACCOUNTING CHANGE

 BETHPAGE, N.Y., Jan. 25 /PRNewswire/ -- Grumman Corporation (NYSE: GQ) today reported 1992 income from continuing operations of $119.9 million or $3.49 a share compared with $95.2 million or $2.75 a share in 1991. The 1991 results included a pretax charge of $46.5 million for the settlement of claims against Tracor Aviation Inc. Exclusive of this unusual charge, Grumman's pretax earnings from continuing operations were up 2 percent to $146.6 million from $143.7 million. Sales declined 12 percent to $3.50 billion from $3.97 billion.
 In both years, Grumman released tax reserves that resulted from the favorable resolution of several open tax years: $23.5 million last year and $30.7 million in 1991. Interest cost for the year was $55.1 million compared with $85.2 million in 1991.
 Net Loss After Charges
 After a $198 million or $5.88 a share charge for Financial Accounting Standard 106 and a $45 million loss from discontinued operations, the company had a net loss for the year of $123.2 million or $3.73 a share. In 1991, net income was $99.3 million or $2.88 a share including $4.2 million or 13 cents a share in income from the discontinued operations.
 The accounting change for retiree health care benefits had no impact on the cash balances or financial strength of the company. FAS 106 is a required change in accounting practice to accrue the expected cost of providing employee retirement benefits when the employee earns them rather than when they are actually paid.
 The $45 million loss resulted from projected claims for hurricane damage incurred by the company's reinsurance subsidiary, which is being discontinued and offered for sale. Paumanock Insurance Company Ltd. was capitalized in 1973 with $120,000 and has a current book value of $11.1 million.
 $500 Million Cash Generated
 "Our financial performance for 1992 was solid," said Renso Caporali, chairman. "The high point for the year was the generation of over $500 million of cash, which we used in part to pay down debt from $722 million at the end of 1991 to $439 million at year end. Our bank debt was paid off, and interest costs were the lowest since 1986. Our cash balances increased to $299 million from $172 million in 1991. Overall, our liquidity improved by more than $400 million in 1992.
 "Next month we will redeem $75 million of 9-1/2 percent notes, meaning that in 14 months we will have halved our debt and substantially enhanced our cash position," Caporali said.
 1993 Sales and Margins to Hold
 "By putting the FAS 106 charge and the insurance losses behind us, we have set the stage for a better 1993. I'm confident that our sales for 1993 will remain in the $3.5 billion range, and that our margins will be at least equal to what they were in 1992," Caporali stated. "In 1992, our backlog increased to $7.6 billion from $7.2 billion at the end of 1991."
 Fourth Quarter Results
 For the fourth quarter, income from continuing operations of $43.4 million or $1.29 a share was up from $23.1 million or 67 cents a share in the 1991 quarter. Sales in the quarter were $930.8 million compared with $1.11 billion in the same 1991 period.
 After a $46.3 million loss from the discontinued reinsurance operations, there was a net loss in the quarter of $2.9 million or 9 cents a share. Net income in the fourth quarter of 1991 was $24.5 million or 71 cents a share. 1991 fourth quarter net income included $1.4 million or 4 cents a share income from the reinsurance business.
 Quarterly operating margins from continuing operations improved to 5.4 percent from 4.9 percent in the year ago quarter. Interest expense declined 36 percent to $12.4 million. Income tax reserves of $18.7 million from the resolution of open tax years were released in the 1992 quarter.
 Segments Strong In Year
 In the aerospace segment, operating income for the year increased 12.3 percent to $134.5 million from $119.8 million. The 1991 income included the $46.5 million Tracor settlement charge. Aerospace sales declined 19 percent in 1992 to $2.34 billion from $2.90 billion, mainly as the result of fewer F-14 and A-6 aircraft deliveries to the U.S. Navy. In 1992, the company took an $8.5 million charge from previously announced problems with wing control surfaces for the U.S. Air Force/McDonnell Douglas C-17 aircraft.
 Operating income in the special purpose vehicle segment increased 31 percent to $27.6 million from $21.2 million, although sales declined 6.2 percent to $343.4 million from $366.1 million. Profit margins increased to 8 percent from 5.8 percent. The gains were primarily from efficiencies on the Post Office's Long Life Vehicle program and discontinuing the emergency products business in 1991.
 GRUMMAN CORPORATION AND SUBSIDIARIES
 Consolidated Financial Data
 (Unaudited, dollars in thousands except per share amounts)
 Condensed Income Statement
 Three months ended Dec. 31 1992 1991
 Sales $ 930,765 $ 1,113,226
 Income before taxes 37,491 35,547
 Provision (credit) for federal
 income taxes (5,900) 12,400
 Income from continuing operations 43,391 23,147
 Income (loss) from discontinued
 operations (46,335) 1,369
 Net income (loss) $ (2,944) $ 24,516
 Primary earnings (loss) per share:
 From continuing operations $1.29 $.67
 Income (loss) from
 discontinued operations (1.38) .04
 Net income (loss) $(.09) $.71
 Twelve months ended Dec. 31 1992 1991
 (Audited)
 Sales $ 3,503,950 $ 3,973,851
 Income before taxes 146,561 97,171
 Provision for federal income taxes 26,700 2,000
 Income from continuing operations 119,861 95,171
 Income (loss) from
 discontinued operations (45,035) 4,166
 Cumulative effect of change
 in accounting for
 postretirement benefits (198,000) --
 Net income (loss) $ (123,174) $ 99,337
 Primary earnings (loss) per share:
 From continuing operations $3.49 $2.75
 Income (loss) from
 discontinued operations (1.34) .13
 Cumulative effect of accounting change (5.88)
 Net income (loss) $(3.73) $2.88
 Balance Sheet Data
 Dec. 31 1992 1991
 Working capital $ 876,007 $ 1,171,601
 Net property, plant and equipment 399,421 433,877
 Long-term Debt 355,244 711,619
 Preferred Stock -- 32,360
 Shareholders' equity - common 792,890 951,712
 Shareholders' equity per common share $23.66 $28.61
 Common shares outstanding 33,518,907 33,265,391
 BACKLOG at December 31(A) $7.6 Billion $7.2 Billion
 (A) -- Includes authorized but unfunded amounts.
 GRUMMAN CORPORATION AND SUBSIDIARIES
 Summary of Sales and Income by Business Segments
 (Unaudited, dollars in thousands)
 Three months ended
 Dec. 31 1992 1991
 Operating Operating
 Sales Income (Loss) Sales Income (Loss)
 Aerospace $574,759 $31,665 $ 805,220 $46,731
 Electronics
 Systems 220,484 6,104 168,111 3,758
 Information &
 Other Services 141,731 8,965 155,947 7,206
 Special Purpose
 Vehicles 86,282 6,160 84,399 (1,418)
 Corporate Items &
 Eliminations (92,491) (3,004) (100,451) (1,318)
 Consolidated $930,765 49,890 $1,113,226 54,959
 Interest Expense 12,399 19,412
 Income from continuing
 operations before
 Federal Income Taxes $37,491 $35,547
 Twelve months ended
 Dec. 31 1992 1991
 Operating Operating
 Sales Income (Loss) Sales Income (Loss)
 Aerospace $2,339,799 $134,476 $2,895,794 $119,753(A)
 Electronics
 Systems 610,850 13,715 505,395 13,855
 Information &
 Other Services 593,152 28,189 622,314 31,555
 Special Purpose
 Vehicles 343,350 27,646 366,072 21,165
 Corporate Items &
 Eliminations (383,201) (2,400) (415,724) (3,921)
 Consolidated $3,503,950 201,626 $3,973,851 182,407
 Interest Expense 55,065 85,236
 Income from continuing
 operations before
 Federal Income Taxes $146,561 $ 97,171
 (A) -- Includes a $46.5 million charge arising from the settlement of claims against the Tracor Aviation, Inc. (Tax reserves of $30.7 million were released and included in net income in the first quarter of 1991.)
 -0- 1/25/93
 /CONTACT: Robert Harwood of Grumman, 516-575-5287/
 (GQ)


CO: Grumman Corporation ST: New York IN: ARO SU: ERN

TS -- NY091 -- 8691 01/25/93 16:13 EST
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Date:Jan 25, 1993
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