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PALMER TUBE REPORTS LOWER EARNINGS ON INCREASED REVENUES FOR FIRST QUARTER

 CHICAGO, Oct. 29 /PRNewswire/ -- Palmer Tube Mills Limited (NASDAQ: PTMLY), a leader in manufacturing welded steel tubing, today reported that continuing tight conditions in the U.S. resulted in the company reporting an 84 percent decrease in net income for the first quarter despite higher revenues.
 PROFIT DOWN 84 PERCENT FOR QUARTER ON REVENUE INCREASE OF 16 PERCENT
 For the three months ended Sept. 30, 1993, Palmer reported net income of $0.28 million, or 4 cents per ADR (American Depository Receipt), an 84 percent decrease compared with $1.8 million, or 26 cents per ADR, for the corresponding period last year.
 Revenue of $50 million for the quarter was up 16 percent from last year's $43 million.
 Although Palmer Tube is incorporated in Australia, all figures were prepared using U.S. generally accepted accounting principles and are reported in U.S. dollars.
 DIVIDEND DECLARED
 Palmer Tube's board of directors maintained the quarterly dividend of 20 cents per ADR payable on Jan. 10, 1994 to all shareholders of record on Dec. 31, 1993.
 U.S. MARKET PRICING REMAINS DIFFICULT
 In commenting on the first quarter's results, Chairman Ross Palmer said that improvements in the company's Australian operations had been more than offset by continuing depressed prices in the U.S. market. "Rising prices for Hot Rolled Coil, the company's primary raw material, had not been fully recouped in selling prices on tubular products. The situation was more acute in the Standard Pipe market where, despite increased raw material prices, selling prices had actually declined for the period."
 "Full commissioning of the larger diameter API pipe finishing operations has been delayed due to problems with the new Induction Welder. The German supplier has to date been unable to achieve specified performance criteria. This is unlikely to be rectified until the third quarter."
 OUTLOOK FOR THE SECOND QUARTER
 Looking ahead to the next quarter, Palmer sees tight conditions remaining in the U.S. at least until the beginning of 1994. This is expected to depress earnings again for the next period. "However, current order bookings indicate that volumes will pick up sharply as we enter the second half of our fiscal year. Pricing, however, will still be dependent on economic conditions," he noted. In Australia, the market has slowed from its strong showing in the first quarter. With uncertainties surrounding the Federal Budget now resolved, the steady growth shown in the Australian economy over the past year can be expected to resume.
 COMMERCIAL SALES OF HOLLOW FLANGE BEAM TO COMMENCE
 In commenting on the company's new product, Palmer noted, "The first commercial sales of this product will commence next week and I am encouraged by early market reaction. Additional production runs were scheduled in response to initial demand and sufficient product should be sold over the balance of the fiscal year for us to assess the long-term potential of this product."
 Palmer Tube Mills is one of the largest publicly held companies to specialize in producing welded steel tube for structural, mechanical and low pressure reticulation applications. Its products are used in over 61 different industries, from heavy equipment to commercial construction. Although headquartered in Australia, approximately 70 percent of its production capacity is located in the U.S. Its ADRs trade on NASDAQ under the symbol PTMLY.
 PALMER TUBE MILLS LIMITED AND SUBSIDIARIES
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
 For the Three Months Ended Sept. 30, 1993
 (In Thousands, Except per ADR Data)
 U.S. DOLLAR, U.S. GAAP
 Quarter Ended Sept. 30,
 1993 1992
 NET SALES $ 49,761 $ 42,763
 COST OF GOODS SOLD 39,901 32,586
 GROSS PROFIT 9,860 10,177
 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 8,065 6,515
 OPERATING PROFIT 1,795 3,662
 INTEREST EXPENSE 1,374 830
 INCOME before income taxes 421 2,832
 PROVISION for income taxes 139 1,076
 NET INCOME 282 1,745
 DIVIDENDS declared on common stock (1,345) (1,487)
 RETAINED EARNINGS at the beginning
 of the period 4,373 5,865
 RETAINED EARNINGS at the end of the period 3,310 6,134
 A$/U.S$ EXCHANGE RATE .6461 .7240
 INCOME PER ADR $.04 $.26
 Based Upon the Weighted Average
 ADR and ADR Equivalents Outstanding
 During the Period 6,937 6,841
 DIVIDENDS DECLARED FOR ADR $.20 $.22
 CONSOLIDATED STATEMENTS OF CONDENSED CASH FLOWS
 For the Three Months Ended Sept. 30, 1993
 (Unaudited, In Thousands)
 U.S. DOLLAR, U.S. GAAP
 Quarter Ended Sept. 30,
 1993 1992
 CASH FLOWS FROM OPERATING ACTIVITIES
 Net Income $ 282 $ 1,756
 Depreciation and Amortization 1,310 1,391
 Changes in Operating Net Assets (716) (4,317)
 NET CASH PROVIDED BY (USED IN) OPERATING
 ACTIVITIES 876 (1,170)
 CASH FLOWS FROM INVESTING ACTIVITIES
 Capital Expenditures (2,568) (4,026)
 Increase In Intangibles (104) (382)
 NET CASH (USED IN) INVESTING ACTIVITIES (2,672) (4,408)
 CASH FLOWS FROM FINANCING ACTIVITIES
 Net Borrowings (Repayments) Under
 Credit Facilities (518) (3,392)
 Proceeds From Issuance Of Common Stock -- 10,346
 Dividends Declared (1,345) (1,487)
 NET CASH PROVIDED BY (USED IN)
 FINANCING ACTIVITIES (1,863) 5,467
 EFFECT OF EXCHANGE RATE CHANGES ON CASH (260) 6
 CASH AT THE BEGINNING OF THE FINANCIAL PERIOD 7,324 1,530
 CASH AT THE END OF THE FINANCIAL PERIOD 3,405 1,425
 CONDENSED CONSOLIDATED BALANCE SHEETS
 As of Sept. 30, 1993 (Unaudited, In Thousands)
 U.S. DOLLAR, U.S. GAAP
 9/30/93 6/30/93
 CURRENT ASSETS
 Cash 3,405 7,324
 Receivables 24,971 25,465
 Inventories 41,977 41,655
 Other Current Assets 3,795 2,117
 TOTAL CURRENT ASSETS 74,148 76,561
 NON-CURRENT ASSETS
 Property, Plant and Equipment, Net 82,140 81,956
 Intangibles, Net 12,742 10,710
 Other Assets 12,255 15,738
 TOTAL NON-CURRENT ASSETS 107,137 108,404
 TOTAL ASSETS 181,285 184,965
 CURRENT LIABILITIES
 Short Term Debt 2,178 4,467
 Current Portion of Long-Term Debt 4,265 4,656
 Accounts Payable 26,887 27,043
 Dividends Payable 2,689 2,781
 Income Taxes Payable 428 463
 Other Accrued Expenses 6,286 5,270
 TOTAL CURRENT LIABILITIES 42,733 44,680
 NON-CURRENT LIABILITIES
 Long-Term Debt 62,687 61,467
 Deferred Income Taxes 15,917 17,041
 Other Liabilities 1,146 1,127
 TOTAL NON-CURRENT LIABILITIES 79,750 79,635
 TOTAL LIABILITIES 122,483 124,315
 SHAREHOLDERS' EQUITY
 Common Stock 44,823 46,654
 Additional Paid-In Capital 6,557 6,825
 Retained Earnings 3,310 4,373
 Cumulative Foreign Currency
 Translation Adjustment 4,112 2,796
 TOTAL SHAREHOLDERS' EQUITY 58,802 60,650
 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 181,285 184,967
 A$/U.S.$ EXCHANGE RATE .6461 .6725
 For further information on Palmer Tube Mills fax, dial 800-PRO-INFO, ext. 072.
 -0- 10/29/93
 /CONTACT: Stephen J. Bayers, CFO of Palmer Tube Mills Ltd., 312-646-7884; or George Zagoudis (general info), or Donna Limper (analysts), 312-266-7800, both of FRB/
 (PTMLY)


CO: Palmer Tube Mills Limited ST: Illinois IN: MNG SU: ERN

CK -- NY101 -- 8760 10/29/93 18:16 EDT
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Date:Oct 29, 1993
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