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RELIANCE ELECTRIC COMPANY ANNOUNCES THIRD QUARTER RESULTS

 CLEVELAND, Oct. 20 /PRNewswire/ -- Reliance Electric Company (NYSE: REE) announced slightly higher net sales for the quarter ended Sept. 30, 1993, of $402 million compared to 1992 third quarter sales of $398 million.
 Earnings before interest and taxes of $24 million for the quarter were below 1992 third quarter earnings of $34 million. Earnings before taxes were $18 million for the third quarter of 1993 versus $29 million for the same period last year. Net earnings were $10 million in the 1993 third quarter versus $15 million in the third quarter of 1992. On a per share basis, earnings before extraordinary items were $.19 versus $.22 for 1992. Financial results in 1992 have been restated to reflect the effects of retroactively adopting FAS109 Accounting for Income Taxes. The per share change in earnings reflects lower interest expense and preferred dividends resulting from the elimination of high-cost debt and preferred stock made possible by the recapitalization in May 1992.
 Net sales for the first nine months of 1993 were $1.2 billion, a 4 percent increase over 1992 same period sales of $1.15 billion. Earnings before extraordinary items for the first nine months of 1993 were $31 million, or $.61 per share, compared to $33 million, or $.47 per share, for the same period in 1992. Net earnings available for common stock in the nine months were $24 million, or $.47 per share, compared with a loss of $2 million, or $.06 per share last year.
 Commenting on the third quarter results, John C. Morley, president and chief executive officer of Reliance Electric Company, stated that "The third quarter business mix for Reliance was unfavorable. Additionally, lower volumes than expected, along with pricing pressures, caused further margin deterioration and earnings declines. These trends continue to have an adverse effect on certain parts of our business."
 Morley continued by commenting that "We were not able to bring our costs in line with the shifts in mix and rate of growth as effectively as planned. Despite the actions taken to lower our costs, including restructuring actions and manpower adjustments to match current business levels, we have not sufficiently met the cost challenge. Programs already underway have been accelerated and additional efforts at all levels of the organization have been initiated to remedy this unacceptable situation."
 Reliance Electric Company, headquartered in Cleveland, designs, manufactures, sells and services a broad range of industrial and telecommunications equipment and had 1992 annual sales in excess of $1.5 billion. Reliance operates 47 manufacturing plants worldwide in nc?ountries and employs approximately 14,000 people.
 RELIANCE ELECTRIC COMPANY
 Earnings Information
 (unaudited)
 (in millions except share and per share data)
 Three Months Ended Sept. 30
 1993 1992(A)
 Net sales $ 402 $ 398
 Cost and expenses:
 Cost of sales 310 298
 Selling, general and administrative 67 65
 Restructure 0 1
 Other expense, net 1 0
 Earnings before interest and taxes 24 34
 Interest expense 6 5
 Earnings before taxes 18 29
 Provision for income taxes 8 14
 Earnings before extraordinary items 10 15
 Extraordinary items, net of tax (0) (0)
 Net earnings (loss) $ 10 $ 15
 Earnings from operations before
 extraordinary items $ 10 $ 15
 Less preferred stock dividends and
 accretion 0 4
 Earnings before extraordinary item
 for computation of net earnings
 per equivalent share of common stock 10 11
 Extraordinary item 0 0
 Net earnings available for common stock $ 10 $ 11
 Net earnings per equivalent share of
 common stock (after preferred
 stock dividends and accretion):
 Earnings before extraordinary items $ .19 $ .22
 Extraordinary items 0 (.01)
 Net earnings $ .19 $ .21
 Weighted average equivalent shares of
 common stock outstanding (thousands) 50,732 50,681
 (A) Restated to reflect retroactive adoption of Financial Accounting Standards ("SFAS") 109 - Accounting for Income Taxes.
 RELIANCE ELECTRIC COMPANY
 Earnings Information
 (unaudited)
 (in millions except share and per share data)
 Nine Months Ended Sept. 30
 1993 1992(B)
 Net sales $1,203 $1,154
 Cost and expenses:
 Cost of sales 916 857
 Selling, general and administrative 202 195
 Restructure 4 1
 Other expense, net 3 (1)
 Earnings before interest and taxes 78 102
 Interest expense 20 39
 Earnings before taxes 58 63
 Provision for income taxes 27 30
 Earnings before extraordinary items 31 33
 Extraordinary items, net of tax (7) (22)
 Net earnings (loss) $ 24 $ 11
 Earnings from operations before
 extraordinary item $ 31 $ 33
 Less preferred stock dividends and
 accretion 0 13
 Earnings before extraordinary items
 for computation of net earnings
 per share of common stock 31 20
 Extraordinary items (7) (22)
 Net earnings available for common stock $ 24 ( 2)
 Net earnings per equivalent share of
 common stock (after preferred
 stock dividends and accretion):
 Earnings before extraordinary items $ .61 $ .47
 Extraordinary items (.14) (.53)
 Net earnings $ .47 $ (.06)
 Weighted average equivalent shares of
 common stock outstanding (thousands) 50,698 42,275
 (B) Restated to reflect retroactive adoption of Financial Accounting Standards ("SFAS") 109 - Accounting for Income Taxes.
 -0- 10/20/93
 /CONTACT: P. Kelly Tompkins, of Reliance Electric, 216-266-5809/
 (REE)


CO: Reliance Electric Company ST: Ohio IN: MFG SU: ERN

KL -- CL010 -- 4379 10/20/93 08:36 EDT
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Date:Oct 20, 1993
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