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REXNORD CORPORATION RESULTS REFLECT IMPROVING U.S. ECONOMY, SOFTNESS IN EUROPE

 MILWAUKEE, April 27 /PRNewswire/ -- Rexnord Corporation (NYSE: REX), a Wisconsin-based, worldwide manufacturing company, today reported a 5.8 percent growth in sales and a 19.2 percent improvement in operating profit for the third quarter ended March 31, 1993 over the corresponding quarter last year. Sales for the current quarter were $139.8 million compared st year's operating profit was affected by a $3.1 million pretax restructuring charge related to plant consolidation and other fixed cost reductions implemented during the period. Net earnings before preferred stock dividends totaled $5.7 million or $.32 per share compared to $.8 million or $.15 per share last year. Preferred stock dividends paid in last year's third quarter of $5.5 million reduced earnings available to common stockholders to a loss of $4.7 million or $.94 per share last year.
 Commenting on the company's performance, James R. Swenson, chairman, president and CEO, stated: "Sales of our U.S. based industrial products continued their modest recovery in both the domestic and export markets with sales to these markets improving 3.2 percent, 5.7 percent and 8.9 percent in the first three quarters, respectively, over last year. Unfortunately, these gains were substantially offset by a growing recession in our European markets (principally Germany) and a softening worldwide commercial aerospace market. Overall, sales through nine months were up 3.3 percent on a year over year basis.
 "The recession in Europe and the sagging demand in the commercial aerospace market adversely affected profit margins in the quarter. In reaction to the contracting European markets, cost and employment reductions are fully underway which will help in preserving margins in both the near and longer terms. In addition, profit margins in the third quarter were negatively affected by competitive price pressures in the U.S. market resulting from the lethargic domestic recovery and an unfavorable product mix."
 Net earnings for the first nine months before nonrecurring extraordinary expenses related to the company's recent recapitalization and preferred stock dividends total $14.4 million or $.81 per share as compared to net earnings of $.9 million or $.18 per share last year. The first quarter of fiscal 1993 included the completion of a comprehensive recapitalization of the company whereby the company incurred certain extraordinary charges to earnings resulting from the premiums paid to retire the Subordinated Notes and the write-off of unamortized deferred loan costs. These charges amounted to $27.3 million or $1.54 per share. After considering this nonrecurring change and dividends on preferred stock, the company reported a net loss for the current nine-month period of $.79 per share compared to a loss of $3.07 per share on a historical basis last year.
 Swenson concluded, "Total incoming orders are up 1.4 percent for the quarter and 3.4 percent through nine months over last year despite the weakness in Europe. Although demand in our domestic industrial businesses continues to recover, it's not apparent that marketplace pricing is recovering at the same speed as we've seen in past recoveries. We therefore continue to focus on programs that result in the delivery of increasingly higher quality products at a lower cost to our customers and aggressively expanding our market share. In that regard, we're investing in productivity enhancing programs in manufacturing, customer service and distribution, and we have added to our sales and marketing staffs in key markets worldwide."
 Rexnord is a leading worldwide manufacturer and supplier of mechanical power transmission components and related products. Rexnord employs approximately 4,800 persons at 18 domestic and 7 international manufacturing locations and at other offices, service centers and warehouses throughout the world.
 REXNORD CORPORATION
 Condensed Consolidated Financial Data
 (Unaudited)
 (dollars in thousands, except per share data)
 INCOME STATEMENT DATA:
 Third Quarter Ended
 Historical Pro Forma(a)
 3/31/93 3/31/92 3/31/93 3/31/92
 Net sales $139,758 $132,126 $139,758 $132,126
 Cost of goods sold 91,053 85,303 91,053 85,303
 S,G & A expense 26,607 27,848 26,607 27,848
 Goodwill amortization 2,107 2,107 2,107 2,107
 Other (income) expense (532) (349) (532) (349)
 Operating profit 20,523 17,217 20,523 17,217
 Operating profit pct. 14.7 13.0 14.7 13.0
 Interest expense, net 10,087 13,626 10,087 9,216
 Pretax profit 10,436 3,591 10,436 8,001
 Tax provision 4,696 2,816 4,696 4,009
 Earnings before
 extraordinary loss and
 dividends on preferred
 stock $5,740 $775 $5,740 $3,992
 Dividends on preferred
 stock (b) -- (5,468) -- --
 Extraordinary loss -
 recapitalization (c) -- -- -- --
 Net earnings (loss)
 applicable to common
 stockholders $5,740 $(4,693) $5,740 $3,992
 Earnings per share:
 Earnings before
 extraordinary loss
 and dividends on
 preferred stock $0.32 $0.15 $0.32 $0.23
 Dividends on preferred
 stock (b) -- (1.09) -- --
 Extraordinary loss -
 recapitalization (c) -- -- -- --
 Net earnings (loss)
 per share $0.32 $(0.94) $0.32 $0.23
 Shares used in EPS
 calculation (000s) 18,155 5,010 18,155 17,289
 EBITDA $26,354 $22,439 -- --
 Net new orders $145,738 $143,724 -- --
 Nine Months Ended
 Historical Pro Forma(a)
 3/31/93 3/31/92 3/31/93 3/31/92
 Net sales $391,978 $379,276 $391,978 $379,276
 Cost of goods sold 255,722 251,495 255,722 251,495
 S,G & A expense 76,779 76,421 76,779 76,421
 Goodwill amortization 6,322 6,322 6,322 6,322
 Other (income) expense (3,772) (1,818) (3,772) (1,818)
 Operating profit 56,927 46,856 56,927 46,856
 Operating profit pct. 14.5 12.4 14.5 12.4
 Interest expense, net 30,233 42,930 29,814 28,700
 Pretax profit 26,694 3,926 27,113 18,156
 Tax provision 12,257 3,000 12,368 9,095
 Earnings before
 extraordinary loss and
 dividends on preferred
 stock $14,437 $926 $14,745 $9,061
 Dividends on preferred
 stock (b) (1,158) (16,320) -- --
 Extraordinary loss -
 recapitalization (c) (27,303) -- -- --
 Net earnings (loss)
 applicable to common
 stockholders $(14,024) $(15,394) $14,745 $9,061
 Earnings per share:
 Earnings before
 extraordinary loss
 and dividends on
 preferred stock $0.81 $0.18 $0.81 $0.52
 Dividends on preferred
 stock (b) (0.06) (3.25) -- --
 Extraordinary loss -
 recapitalization (c) (1.54) -- -- --
 Net earnings (loss)
 per share $(0.79) $(3.07) $0.81 $0.52
 Shares used in EPS
 calculation (000s) 17,745 5,010 18,127 17,289
 EBITDA $74,461 $63,334 -- --
 Net new orders $410,435 $396,894 -- --
 REXNORD CORPORATION
 CONDENSED CONSOLIDATED FINANCIAL DATA
 (Dollars in thousands, except per share data)
 (Unaudited)
 BALANCE SHEET DATA: 3/31/93 6/30/92
 Pro forma(d) Historical
 Current assets $199,464 $194,661 $184,167
 Other noncurrent assets 25,582 19,627 24,843
 Goodwill 299,107 305,429 305,429
 Property, net 145,756 148,784 148,784
 Total assets $669,909 $668,501 $663,223
 Current liabilities $109,850 $85,686 $98,464
 Long-term debt 367,923 387,047 404,573
 Long-term accrued liabilities 51,563 66,706 66,706
 Deferred income taxes 13,290 14,128 14,128
 Preferred stock issued by
 subsidiary -- -- 4,866
 Stockholders' equity 127,283 114,934 74,486
 -- $669,909 $668,501 $663,223
 (a) Pro forma adjusts interest expense and preferred stock dividends as if the recapitalization occurred on July 1, 1992 for fiscal 1993 data, and on July 1, 1991 for fiscal 1992 data.
 (b) In connection with the recapitalization, all outstanding preferred stock was retired. The final dividend on the preferred stock amounted to $1,158 and was paid during the first quarter of 1993 fiscal.
 (c) In connection with the recapitalization during the first quarter ended September 1992, extraordinary charges related to the premium paid to retire the Subordinated Notes and the write-off of unamortized loan costs were incurred. These nonrecurring charges amounted to $27.3 million ($1.54 per share), net of income tax benefits of $10.6 million.
 (d) The company completed a major recapitalization on July 9, 1992. Pro forma balance sheet information as of June 30, 1992 is presented as if the recapitalization had occurred on June 30, 1992.
 -0- 4/27/93
 /CONTACT: Thomas Jansen of Rexnord, 414-643-2252/
 (REX)


CO: Rexnord Corporation ST: Wisconsin IN: SU: ERN

AL -- MN017 -- 1597 04/27/93 16:38 EDT
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Date:Apr 27, 1993
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