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IMO INDUSTRIES REPORTS FOURTH QUARTER AND FULL YEAR 1992 RESULTS

 LAWRENCEVILLE, N.J., Feb. 18 /PRNewswire/ -- Imo Industries Inc. (NYSE: IMD) today reported a profit of $0.02 per share for the fourth quarter ended Dec. 31, 1992.
 For the full year the company had a loss of $4.90 per share, which included charges for unusual items and adoption of an accounting change.
 Net income for the fourth quarter of 1992 was $333,000, or $.02 per share, on sales of $250.2 million. This compares with net income of $2.9 million, or $.17 per share, on sales of $264.5 million in the fourth quarter of 1991.
 "Fourth quarter results trailed those of the prior year primarily because of the lingering effects of production disruptions that occurred during the third quarter at the Electro-Optical operations," said W.J. Holcombe, Imo chairman and CEO.
 "Turbomachinery comparisons were very favorable, aided by completion of units previously delayed. Results of operations of other major sectors of the company, where no clear picture of an economic upturn has yet emerged, were generally mixed."
 For the year ended Dec. 31, 1992, Imo sales amounted to $928.3 million compared with $1.024 billion in 1991, with a net loss of $82.6 million, or $4.90 per share, compared with net income of $11.4 million, or $.68 per share, for 1991. The 1992 loss resulted primarily from the production disruptions reported and includes an after-tax charge of $27.6 million, or $1.64 per share, resulting from the adoption of FASB Statement No. 106 relating to accounting for post- retirement benefits other than pensions, and unusual items of $35.3 million after tax, or $2.09 per share.
 New orders booked during 1992 were $871 million compared with $962 million during 1991. Backlog at year end was $486 million, compared with $539 million at the end of 1991. While automotive bookings and defense orders were off generally, most of the decline occurred during the fourth quarter in night vision and was due both to the loss of the Army Omnibus III procurement and also delay in orders now expected to close during the first quarter of 1993.
 "Given the current environment and our present backlog schedules," Holcombe said, "the first quarter of 1993 will be a difficult one. We expect progressively better results as we move through the year and believe that the year as a whole will be profitable and will generate a positive cash flow. "
 Holcombe added, "The write-offs taken by the company in the third quarter of 1992 resulted in Imo being in default of certain financial covenants in its revolving credit and senior note agreements. In addition, implementation of our previously announced divestiture program requires consent of such lenders.
 The process has been unduly protracted because of the number of lending institutions involved and their differing interests. First Boston Corporation has been retained by the company to work with us to help reconcile these inter-creditor differences. We believe a plan to resolve these differences will be developed and will form the basis for our lenders working with us to effect a successful restructuring of our debt.
 "Despite these unusual events we generated $25.8 million of cash from operations during the year 1992, $16.6 million in the fourth quarter. Imo has been entirely self-financing since last October and ended 1992 with a cash position of approximately $19 million. We continue to generate sufficient cash to meet our needs and obligations.
 "The divestiture program has been rather well received and we are encouraged by the level of interest being reflected. At this time, due diligence visits are beginning to occur at some of the facilities, while the effect of combining the sale of various units as a group is also being studied. "
 Instruments Group sales and operating income in the fourth quarter and for the year were adversely influenced by production disruptions that occurred during the third quarter at the Electro-Optical operations. As a result, group sales were down 18 percent in the fourth quarter compared with a year ago, and there was an operating loss of $676,000 in the period. The group had an operating loss of $35.5 million for the year, including $29.3 million of unusual charges and $11 million of operating charges principally relating to inventory writedowns during the third quarter.
 Excluding the Electro-Optical operations, operating income for the rest of the group was up in the fourth quarter compared with both the third quarter and the prior-year fourth quarter periods, on flat revenues.
 Fourth quarter revenue of the Mechanical Controls Group was down 10 percent from the prior year's level because of reduced sales at the group's automotive operations in Italy and the adverse effect of foreign currency rate changes. The group's aerospace sales were up during the quarter compared with last year, while cable control products revenue was aided by the recent acquisition of the remaining 52 percent of a formerly unconsolidated joint ownership company in Germany. Operating income was adversely affected primarily by the decline in automotive sales.
 Power Transmission Group operating income increased 21 percent in the fourth quarter compared with a year ago, on an 8 percent sales decline. Operating margin improved on an increase in sales at the group's gear operations, and at the aerospace activities despite a decline there in revenue. Margins were flat for the pump operations, which experienced a decline in revenue caused mainly by lower Navy business than last year.
 Power Products and Services Group revenue and operating income were up sharply in the fourth quarter over prior-year levels, due to strong gains in production of turbomachinery units and spare parts. Some of this increase reflects completion of units delayed from the third quarter. Results of the TurboCare and Condenser operations also improved from the third period, but were down slightly from the fourth quarter a year ago.
 The group's operating loss of $11.5 million for 1992 includes $22.1 million of unusual items recognized in the third quarter. Excluding these unusual charges, operating income for the year declined from that of the prior year primarily as the result of lower spare parts and aftermarket service revenues compared to unit shipments, resulting in lower combined margins. The backlog of turbomachinery business grew during 1992, particularly aided by strong order activity in the Pacific Rim region in the second and third quarters. Shipments of these products are planned to begin in the second half of the current year.
 Imo supplies analytical and optical instruments, electronic and mechanical controls, engineered power products and their support services to industrial and defense customers worldwide.
 IMO INDUSTRIES INC. AND SUBSIDIARIES
 Condensed Consolidated Statements of Income (Unaudited)
 (Amounts in thousands, except per share data)
 Three Months Ended Dec. 31 1992 1991
 Net Sales $250,183 $264,519
 Gross Profit 64,434 67,874
 Unusual Items (A) --- ---
 Segment Operating Income (Loss) (A) 17,667 19,766
 Income (Loss) Before Income Taxes,
 Minority Interest and Cumulative
 Effect of Change in Accounting
 Principle (A) $630 $4,388
 Income Taxes 202 1,667
 Minority Interest 95 (193)
 Income (Loss) Before Cumulative Effect
 of Change in Accounting Principle 333 2,914
 Cumulative Effect of Change in
 Accounting Principle (B) --- ---
 Net Income (Loss) $333 $2,914
 Earnings (Loss) Per Share: (A)
 Before Cumulative Effect of Change
 in Accounting Principle $0.02 $0.17
 Net Income (Loss) $0.02 $0.17
 Average Shares Outstanding 16,874 16,867
 Bookings:
 Instruments and Controls $80,103 $165,084
 Power Systems 78,497 70,515
 Total Bookings $158,600 $235,599
 12 Months Ended Dec. 31 1992 1991
 Net Sales $928,257 $1,023,986
 Gross Profit 218,284 264,105
 Unusual Items (A) (51,942) ---
 Segment Operating Income (Loss) (A) (17,868) 81,971
 Income (Loss) Before Income Taxes,
 Minority Interest and Cumulative
 Effect of Change in Accounting
 Principle (A) (80,642) 20,196
 Income Taxes (25,886) 7,674
 Minority Interest 244 1,111
 Income (Loss) Before Cumulative Effect
 of Change in Accounting Principle (55,000) 11,411
 Cumulative Effect of Change in
 Accounting Principle (B) (27,590) ---
 Net Income (Loss) $(82,590) $11,411
 Earnings (Loss) Per Share: (A)
 Before Cumulative Effect of Change
 in Accounting Principle $(3.26) $0.68
 Net Income (Loss) $(4.90) $0.68
 Average Shares Outstanding 16,869 16,811
 Bookings:
 Instruments and Controls $506,829 $622,196
 Power Systems 363,824 340,063
 Total Bookings $870,653 $962,259
 Backlog $485,988 $538,966
 IMO INDUSTRIES INC. AND SUBSIDIARIES
 Segment Information (Unaudited)
 (Dollars in thousands)
 Three Months Ended Dec. 31 1992 1991
 Net Sales:
 Instruments and Controls:
 Instruments $81,864 $99,610
 Mechanical Controls 55,254 61,599
 137,118 161,209
 Power Systems:
 Power Transmission 49,527 53,569
 Power Products and Services 63,538 49,741
 113,065 103,310
 Total Net Sales 250,183 264,519
 Segment Operating Income (Loss):
 Instruments and Controls:
 Instruments (C) (676) 6,465
 Mechanical Controls 3,203 4,279
 2,527 10,744
 Power Systems:
 Power Transmission 4,771 3,944
 Power Products and Services (D) 10,369 5,078
 15,140 9,022
 Total Segment Operating Income (Loss) (A) 17,667 19,766
 Equity in Income of
 Unconsolidated Companies 1,240 1,400
 Net Interest Expense (14,747) (13,754)
 Corporate Expense (3,530) (3,024)
 Income (Loss) Before Income Taxes,
 Minority Interest and Cumulative
 Effect of Change in Accounting
 Principle (A) $630 $4,388
 Twelve Months Ended Dec. 31 1992 1991
 Net Sales:
 Instruments and Controls:
 Instruments $328,968 $385,884
 Mechanical Controls 236,839 241,123
 565,807 627,007
 Power Systems:
 Power Transmission 196,311 207,771
 Power Products and Services 166,139 189,208
 362,450 396,979
 Total Net Sales 928,257 1,023,986
 Segment Operating Income (Loss):
 Instruments and Controls:
 Instruments (C) (35,516) 19,422
 Mechanical Controls 14,187 17,967
 (21,329) 37,389
 Power Systems:
 Power Transmission 14,997 19,278
 Power Products and Services (D) (11,536) 25,304
 3,461 44,582
 Total Segment Operating Income (Loss) (A) (17,868) 81,971
 Equity in Income of
 Unconsolidated Companies 6,297 4,878
 Net Interest Expense (58,538) (57,698)
 Corporate Expense (10,533) (8,955)
 Income (Loss) Before Income Taxes,
 Minority Interest and Cumulative
 Effect of Change in Accounting
 Principle (A) $(80,642) $20,196
 (A) The 12 months ended Dec. 31, 1992, include unusual items totalling $51.9 million ($35.3 million or $2.09 per share after tax). These charges include provisions for the estimated costs associated with pending litigation, and certain warranty and claim settlements of $27 million; costs associated with operational disruptions and restructuring at the Electro-Optical operations, including revised estimates-to-complete on current contracts, of $22 million; and other costs related to the write-down of assets, principally inventories, to net realizable value of $2.9 million.
 (B) The 12 months ended Dec. 31, 1992, include a charge related to the adoption of Financial Accounting Standards Board Statement No. 106 "Employer's Accounting for Postretirement Benefits Other Than Pensions."
 This charge has been reported as a cumulative effect of a change in accounting principle and has been adopted and retroactively applied as of Jan. 1, 1992.
 (C) The 12 months ended Dec. 31, 1992, include unusual items totalling $29.3 million relating to the following: provisions for the estimated costs associated with pending litigation, and certain warranty and claim settlements of $5 million; costs associated with operational disruptions and restructuring at the Electro-Optical operations, including revised estimates-to-complete on current contracts, of $22 million; and a $2.3 million write-down of assets, principally inventories, to net realizable value.
 (D) The 12 months ended Dec. 31, 1992, include unusual items totalling $22.1 million related principally to provisions for the estimated costs associated with pending litigation, and certain warranty and claim settlements.
 /delval/
 -0- 2/18/93
 /CONTACT: Paul B. Lazovick, director of Investor Relations for Imo Industries, 609-896-7615/
 (IMD)


CO: Imo Industries Inc. ST: New Jersey IN: SU: ERN

JS -- PH046 -- 8053 02/18/93 16:04 EST
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Date:Feb 18, 1993
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