LUKENS ORDERS REBOUND FOLLOWING STRIKE
LUKENS ORDERS REBOUND FOLLOWING STRIKE COATESVILLE, Pa., April 14 /PRNewswire/ -- Lukens Inc. (NYSE: LUC),
a Fortune 500 company, today reported relatively strong sales despite the combined effects of the recession and a steelworkers' strike which ended in January.
First quarter 1992 sales of $140,083,000 generated net earnings of $5,240,000, compared to sales of $156,132,000 and net earnings of $8,816,000 in the first quarter of 1991. Primary earnings per share of $.57 compared to $1 per share for the 1991 first quarter. R.W. Van Sant, chairman and chief executive officer of Lukens Inc., said, "We are extremely pleased with the results of the first quarter. Despite the continued recession, the impact of costs resulting from the strike at the Coatesville steelmaking operations and the fact that the first quarter is traditionally slow, we achieved earnings in each of the company's four operating groups. In addition, we had a relatively strong order rate in the Steel Group during the quarter." Lukens' consolidated backlog improved over the end of 1991, reflecting orders received by the Steel and Safety Products Groups. The backlog at the end of the 1992 first quarter was $115.5 million, compared to $111.2 million at the end of 1991 and $189.3 million at the end of the 1991 first quarter. The 1991 first quarter backlog reflected four large pipe-coating orders that were completed by the Corrosion Protection Group in 1991. Steel Group sales of $100,089,000 were 13 percent below the $114,965,000 reported in the first quarter of 1991. The $9,213,000 in operating earnings for the first quarter of 1992 compared to the $13,349,000 in 1991 operating earnings. Van Sant said several factors resulted in lower results for the Steel Group, including a lower-value product mix, combined with the lingering effects of a downturn in steel demand. The quarter was also impacted by the strike at the Coatesville plate steel facility and transition costs associated with the return of hourly workers. Following the contract settlement on Jan. 13, sales began improving, although prices continue to be at historically low levels. First quarter plate steel shipments were 157,000 tons compared to 172,000 tons a year ago. The Steel Group backlog of $80.5 million was 5 percent higher than the backlog of $76.6 million recorded at the end of 1991 and 31 percent below last year's first quarter. Additionally, it's expected that record backlogs for clad steel plate orders in March will translate into strong clad shipments in the second quarter. Clad steel plate is used extensively in environmental control systems. Earlier this year, Lukens' directors approved a capital expenditure of $7.3 million to upgrade and expand the clad facilities. Lukens entered into a definitive agreement on March 28 to acquire all the stock of Washington Steel Corporation, for a cash purchase price of $280 million, subject to certain adjustments. "This acquisition will have long-term, positive implications for our employees, customers, and shareholders," said the Lukens CEO. "Both Lukens Steel and Washington will benefit by taking advantage of the synergistic values that will evolve through the sharing of common technologies, while serving broader markets." Washington Steel, a producer of stainless steel sheet and strip products, is headquartered in Washington, Pa. The company has production facilities in Pennsylvania and Ohio, in addition to seven stainless steel distribution centers in the United States and Canada. Washington Steel ended its June 30, 1991, fiscal year with sales of $415 million. "Washington is regarded as one of the country's leading stainless steel
companies," Van Sant said. "It produces and distributes products that serve the consumer and capital goods markets, providing diversification opportunities from the capital goods markets Lukens Steel currently serves." Van Sant said the closing of the sale is expected to be completed in the second quarter.
First quarter sales for the Safety Products Group of $13,010,000 were down slightly from sales of $13,462,000 for the 1991 first quarter. However, operating earnings of $618,000 were 27 percent above 1991 first quarter earnings of $486,000. The quarter represents the highest first quarter operating earnings ever achieved by the Safety Products Group. Although the delay in funding a new highway bill and deteriorating prices for glass beads lessened sales for this group, operating earnings improved significantly. In November, Congress passed a new Surface Transportation Act, authorizing $156 billion over the next six years. Lukens' safety products companies are well-positioned to serve those traffic safety market needs. At the end of the first quarter, the Safety Products Group backlog of $5.7 million represented nearly a 70 percent increase over the backlog at the end of 1991. The backlog for the first quarter of 1991 was $7.3 million. Corrosion Protection Group sales for the first quarter were $18,825,000 compared to $19,192,000 for last year. Operating earnings of $268,000 for the first quarter of the year compared to $687,000 for the 1991 first quarter. The Corrosion Protection Group had an outstanding year in 1991. However, it will not match last year's performance, due to the lack of large coating projects that were present in 1991. Sales in the first quarter, traditionally a slow season for the Corrosion Protection Group, reflect lower volume and adverse pricing. Operating earnings for the first quarter 1992 were lower; however, 1991 first quarter results included the favorable settlement of a litigation claim. Even though the low price of natural gas has inhibited new pipeline development, connecting transmission lines will have to be constructed in the future to meet the growing demand for natural gas. This group has facilities strategically located to serve new and existing market opportunities. The Corrosion Protection Group backlog of $27.2 million at the end of 1992 first quarter compared to the $62.7 million first quarter 1991 backlog, which included the four projects completed in 1991. Diversified Group sales for the quarter were $8,159,000, a slight decrease from 1991 sales of $8,513,000. Group operating earnings for the quarter of $871,000 compared to operating earnings of $1,314,000 in the 1991 first quarter. Backlog at the end of the quarter was $2.2 million, compared to $2.4 million one year ago. Van Sant characterized the year ahead: "1992 is going to be a challenging year for American business. The economy is not rebounding quickly and the world-wide economic downturn will continue to impact U.S. companies. Lukens is prepared to compete in the markets we serve by maintaining our strong focus on total quality management to enhance customer satisfaction. Additionally, the Washington Steel acquisition opens new avenues for growth at Lukens. Stainless steel continues to provide growth opportunities as existing markets expand and new cost- effective applications for stainless steel are developed." Addressing the second quarter, Van Sant said, "We are positive regarding our outlook for the second quarter. The summer months provide a seasonally stronger period for Lukens' industrial products operations and plate steel sales are continuing to be solid." Lukens Inc. is a Fortune 500 company with subsidiaries that provide plate steels, pipe-coating services, cathodic corrosion protection services, traffic and industrial safety products, industrial screening and heavy materials handling equipment. LUKENS INC. FIRST QUARTER, 1992 13 Weeks 13 Weeks First quarter 3/28/92 3/30/91 Net Sales $140,083,000 $156,132,000 Operating Earnings 8,216,000 13,932,000 Earnings Before Taxes 8,451,000 13,994,000 Net Earnings 5,240,000 8,816,000 Pct. Net Sales 3.7 5.6 Earnings Per Share: Primary $.57 $1.00 Fully Diluted .54 .92 LUKENS INC. Segment Financial Data First Quarter 1992 1991 NET SALES: Steel $100,089,000 $114,965,000 Safety Products 13,010,000 13,462,000 Corrosion Protection 18,825,000 19,192,000 Diversified 8,159,000 8,513,000 Total $140,083,000 $156,132,000 OPERATING EARNINGS (LOSS): Steel $ 9,213,000 $ 13,349,000 Safety Products 618,000 486,000 Corrosion Protection 268,000 687,000 Diversified 871,000 1,314,000 Corporate (2,754,000) (1,904,000) Total $ 8,216,000 $ 13,932,000 /delval/ -0- 4/14/92 /CONTACT: W. Evelyn Walker of Lukens, 215-383-2504/ (LUC) CO: Lukens, Inc. ST: Pennsylvania IN: MNG SU: ERN
LJ -- PH018 -- 8217 04/14/92 11:17 EDT
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|Date:||Apr 14, 1992|
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