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ROHR, INC. REPORTS THIRD QUARTER RESULTS

 ROHR, INC. REPORTS THIRD QUARTER RESULTS
 CHULA VISTA, Calif., May 21 /PRNewswire/ -- Today's industry


conditions are causing Rohr (NYSE: RHR) to cut its cost structure significantly. Total workforce reductions of over 1,300 personnel have been necessary during the first nine months of this fiscal year. These reductions are similar to others occurring in the industry. By the end of the fourth quarter this number will likely exceed 2,000 as Rohr works toward achieving productivity improvements. Rohr currently employs 9,870 personnel, including operations in Europe.
 Rohr announced today that it will be closing one of its 10 U.S. plants and the work relocated principally to other Rohr plants over the next six months. The plant to be closed, located at Auburn, Wash., was initially occupied in 1956 and currently employs 170 workers. The principal role of the Auburn plant has been to provide engine build-up assembly services to The Boeing Co. This assembly activity is now being performed internally at Boeing. Rohr continues to supply nacelle components to Boeing for most models of their current commercial aircraft production programs.
 Rohr has established special provisions to its operating earnings in the third quarter to reflect a variety of recent events and current evaluations. These provisions aggregated $50 million, of which approximately half was directed toward the C-5 spare pylon program, with the remainder being held for several programs whose near-term market prospects have become progressively more difficult to evaluate (such as the 727 re-engine program), plus a variety of other matters.
 The Air Force termination for default on the C-5 program, which was received at the end of the third quarter, is considered by Rohr to be without merit and efforts are underway to have this changed to a termination for convenience of the government. This may take many years for final resolution.
 Rohr has had extensive discussions with the U.S. Attorney's office in Los Angeles, and a timely settlement related to the government's investigations of procedural irregularities at the company's Riverside, Calif. plant, is anticipated. Reserves were also increased for this potential settlement.
 Cash flow from operations increased during the third quarter ($44.7 million) supporting a continued reduction in total financing requirements. Comparing the first nine months of fiscal year 1991 with the first nine months of this fiscal year, the improvement in cash flow from operations is over $150 million. Total financing (debt plus off- balance sheet financing) reduction is a high Rohr priority and will continue to be reduced in the fourth quarter of this fiscal year and in subsequent periods of fiscal year 1993.
 It is Rohr's intent to become less dependent on uncommitted, short- term elements in our debt structure and efforts are underway to replace short-term financing with longer-term financing at fixed rates, even though these will require accepting an increase in interest rates.
 The recent steps taken by the airlines to rationalize their fare structures are viewed favorably by the company. Decisions by the airlines to stretch out their capital aircraft programs are occurring about as expected. Rohr's long-term view of the global commercial transport market remains one of growth albeit with cyclicality.
 There are many issues facing the company which are being dealt with as forthrightly as possible; the most critical of these issues is in reducing employment levels. This is a difficult but necessary part of getting our costs in line. Rohr is doing its very best to help laid-off employees, with the assistance of its employee transition centers which have been very successful in providing alternate employment opportunities.
 In addition, Rohr is implementing many other initiatives to expand its focus on quality and customer service, and to reduce its cost structure and improve its operating performance.
 Discussion of Financial Results
 Rohr reported third quarter sales of $298.8 million with a net loss of $25.2 million or $1.42 per share after $50 million in special operating provisions taken during the third quarter which ended May 3, 1992.
 Sales for the third quarter were down 17 percent over fiscal year 1991's third quarter of $358.2 million and down 5 percent for the equivalent nine month period in fiscal year 1991. Commercial sales amounted to 85 percent with government sales the remaining 15 percent for the third quarter. Operating profit (excluding the $50 million in special operating provisions) was $18.6 million or 6.2 percent of third quarter sales.
 Cash flow from operations during the third quarter was a positive $44.7 million. The improvement in cash flow from operations for the first nine months of fiscal year 1992 (compared to the first nine months of fiscal year 1991) is over $150 million.
 Rohr has also increased interest expense -- net by $18.3 million in the third quarter to reflect IRS audit adjustments to our federal tax returns for 1984 and 1985. In connection with this charge, the company utilized tax reserves of $11.7 million previously provided for tax issues which essentially equaled the effect of the interest adjustment after taxes.
 Firm backlog increased to $1.9 billion up from $1.7 billion The anticipated backlog of Rohr contract options we expect customers to exercise based on the company's market projections is at $2.3 billion, down from the $2.8 billion at the end of the second quarter fiscal year 1992.
 ROHR INC. AND SUBSIDIARIES
 CONDENSED STATEMENTS OF EARNINGS
 ($000 except per share data)
 Three Months Ended Nine Months Ended
 5/03/92 4/28/91 5/03/92 4/28/91
 Sales $298,759 $358,182 $930,449 $979,953
 Costs and expenses 330,185 330,224 911,396 911,209
 Operating income (loss) (31,426) 27,958 19,053 68,744
 Interest expense - net 30,459 14,228 53,566 39,593
 Income (loss) before
 taxes on income (61,885) 13,730 (34,513) 29,151
 Taxes (benefit) on income (36,700) 4,730 (26,710) 9,850
 Net income (loss) ($25,185) $9,000 ($7,803) $19,301
 Net income (loss) per
 average share of
 common stock ($1.42) $0.51 ($0.44) $1.10
 Total common stock and
 common stock equivalents 17,706 17,512 17,658 17,514
 Statistics (percent):
 Operating income to sales (10.5) 7.8 2.1 7.0
 Effective tax (benefit) rate (59.3) 34.5 (77.4) 33.8
 Net income to sales (8.4) 2.5 (.8) 2.0
 ROHR INC. AND SUBSIDIARIES
 Condensed Balance Sheets ($000)
 5/3/92 7/31/91
 Assets
 Cash and short-term investments $38,546 $25,558
 Accounts receivable 134,899 173,018
 Inventories - net 824,373 838,967
 Prepaid expenses and other
 current assets 14,108 12,128
 Total Current Assets 1,011,926 1,049,671
 Property, plant and
 equipment - net 251,913 237,434
 Investment in Leases and
 Other Assets 98,217 120,964
 Total $1,362,056 $1,408,069
 Liabilities and Shareholders' Equity
 Trade accounts and other payables $142,168 $135,646
 Other accrued liabilities 78,418 107,601
 Short-term debt 60,000 77,000
 Current portion of long-term debt 34,297 16,904
 Total Current Liabilities 314,883 337,151
 Deferred Taxes on Income 46,953 52,380
 Long-Term Debt 515,258 542,166
 Other Obligations 46,763 34,971
 Shareholders' Equity 438,199 441,401
 Total $1,362,056 $1,408,069
 ROHR INC. AND SUBSIDIARIES
 Condensed Statements of Cash Flows ($000)
 Increase (Decrease) in Cash and Short-Term Investments
 Three Months Ended Nine Months Ended
 5/03/92 4/28/91 5/03/92 4/28/91
 Operating Activities:
 Net income (loss) ($25,185) $ 9,000 ($7,803) $19,301
 Depreciation and
 amortization 7,024 7,095 20,402 20,739
 Decrease (increase) in
 receivables 37,072 17,420 38,119 (26,756)
 Decrease (increase) in
 inventories 54,496 (3,170) 14,594 (68,362)
 Other (28,663) (48,023) (2,385) (32,439)
 Net cash provided by
 (used in) operating
 activities 44,744 (17,678) 62,927 (87,517)
 Investing Activities:
 Purchase of property,
 plant and equipment (16,755) (11,940) (37,314) (22,922)
 Other, including leases 985 (2,466) 3,491 2,607
 Net cash used in
 investing activities (15,770) (14,406) (33,823) (20,315)
 Financing Activities:
 Issuance of medium-term
 notes (repayment) --- --- (5,000) 50,000
 Short-term borrowings 5,000 20,000 (17,000) 30,000
 Long-term borrowings-net (11,516) 18,010 (4,736) 34,813
 Other 1,740 (710) 10,620 (3,369)
 Net cash provided by
 (used in) financing
 activities (4,776) 37,300 (16,116) 111,444
 Increase in cash and
 short-term investments 24,198 5,216 12,988 3,612
 Cash and short-term
 investments, beginning
 of year 14,348 23,914 25,558 25,518
 Cash and short-term
 investments, end of year $38,546 $29,130 $38,546 $29,130
 -0- 5/21/92
 /CONTACT: John Walsh of Rohr Inc., 619-691-2808/
 (RHR) CO: Rohr Inc. ST: California IN: ARO SU: ERN


KJ -- SD004 -- 3092 05/21/92 17:34 EDT
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