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HARMON REPORTS RESULTS FOR THIRD QUARTER SOFT ECONOMY SLOWING SALES

             HARMON REPORTS RESULTS FOR THIRD QUARTER
                   SOFT ECONOMY SLOWING SALES
    BLUE SPRINGS, Mo., Nov. 1 /PRNewswire/ -- Harmon Industries Inc. (NASDAQ: HRMN) of Blue Springs, the nation's leading supplier of railroad signalling and communications equipment, reported positive earnings from continuing operations and decreased sales for the third quarter ended Sept. 30, 1991.  Harmon also recognized additional losses from discontinued operations, creating a net loss for the quarter.
    Sales decreased from $19.6 million in 1990 to $17.3 million for the three months ended Sept. 30, 1991.  Earnings for the period decreased from $85,000 or ($0.01) per share in 1990 to a loss of $799,000 or (-$0.16) per share in 1991.
    For the nine months ended Sept. 30, 1991, sales decreased slightly from $53.9 million in 1990 to $52.6 million in 1991.  Net earnings for the period increased from a loss of $1.7 million or (-$0.36) per share in 1990 to a profit of $1.5 million or ($0.30) per share in 1991.
    Included in the third quarter results is the anticipation of a final expense for the liquidation of Cedrite.  "After we signed a letter of intent in June to sell Cedrite, Harmon recognized all aspects of the sale in its second quarter report.  When the agreement was not fulfilled, the company decided to recognize all anticipated costs of liquidating Cedrite in the third quarter," said Bjorn E. Olsson, Harmon's president and chief operating officer.  "Harmon continues to try to sell Cedrite, but management thought it was more prudent to include all anticipated expenses before the year-end."
    During the last 18 months, Harmon significantly restructured and downsized the company while entering a soft economy.  Yet, in the same period, Harmon continued its active product development, accelerated its entry into the rapid transit marketplace, and built record levels of backlog in the systems business.
    "We believe we have taken the needed steps to serve us well for the long-term.  Our entry into the rapid transit marketplace provides us numerous growth opportunities and our corporate downsizing positions us well within an uncertain economy," said Olsson. "However, for the short-term, we must continue to implement a conservative approach as the economy is down and the Class I railroads continue to decrease their spending."
    Harmon Industries is traded in the over-the-counter market and is quoted on the NASDAQ National Market System under the symbol HRMN. For further information, contact Charles M. Foudree, executive vice president - finance, Harmon Industries Inc., 1300 Jefferson Court, Blue Springs, MO  64015.  The telephone number is 816-229-3345.
                    HARMON INDUSTRIES INC.
              Consolidated Statements of Operations
             For Periods Ended Sept. 30, 1991 and 1990
                     In thousands of dollars
                          (Unaudited)
                             Three Months Ended    Nine Months Ended
                                 Sept. 30,            Sept. 30,
                              1991      1990      1991        1990
    Net sales              $17,260     $19,572   $52,557    $53,913
    Cost of sales           11,948      13,089    36,004     37,772
     Gross profit            5,312       6,483    16,553     16,141
    Selling, general and
     administrative
      expenses               3,305       3,607    10,006     10,770
    Amortization of cost
     in excess of fair value
      of net assets of
       subsidiary acquired      33          34       100        100
    Provision for merger of
     manufacturing facilities  ---         525       ---        525
    Miscellaneous income
     (expense)-net               3         (75)     (209)       (53)
     Operating income        1,977       2,242     6,238      4,693
    Interest expense           504         310     1,734      1,166
     Earnings from
      continuing operations
       before income taxes   1,473       1,932     4,504      3,527
    Income tax expense
     (benefit):
     Current                   671         812     1,983      1,605
     Deferred                  (72)        (49)     (216)      (207)
                              $599        $763    $1,767     $1,398
    Earnings from
     continuing operations     874       1,169     2,737      2,129
    Discontinued operations
     (net of tax):
     Loss on operations        ---      (1,084)      ---     (3,539)
     Loss on disposal       (1,568)        ---    (1,842)      (262)
    Earnings (loss) before
     extraordinary item       (694)         85       895     (1,672)
    Extraordinary item:
     Tax benefits from
      utilization of net
       operating loss
        carryforward (1)      (105)        ---       605        ---
     Net earnings (loss)     $(799)        $85    $1,500    $(1,672)
    Earnings (loss) per
     common share:
     Continuing operations    $.17        $.24      $.54       $.45
     Discontinued operations  (.31)       (.23)     (.36)      (.81)
     Extraordinary item       (.02)        ---       .12        ---
       Total earnings
        (loss) per common
         share               $(.16)       $.01      $.30      $(.36)
    Weighted average
     outstanding shares  5,107,147   4,790,619 5,043,137  4,700,736
    (1)  As of Dec. 31, 1990, for financial reporting purposes, the company had available approximately $2,000,000 of operating loss carryforward.  During the six months ended June 30, 1991, the income was large enough to use the entire $2,000,000 carryforward.  However, the third quarter loss from discontinued operations reduced the year-to-date earnings before tax to below the $2,000,000 level, thus necessitating the reversal of a portion of the NOL benefit recognized in prior quarters.
    -0-                      11/1/91
    /CONTACT:  Charles M. Foudree of Harmon Industries, 816-229-3345/
    (HRMN) CO:  Harmon Industries Inc. ST:  Missouri IN: SU:  ERN BB -- DV011 -- 0461 11/01/91 18:29 EST
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No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Date:Nov 1, 1991
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