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 CHANTILLY, Va., Nov. 17 /PRNewswire/ -- The Fairchild Corporation (NYSE: FA) is a leading aerospace, industrial products and communications services company. The Company reported sales of $106,350,000 and an operating loss of $459,000 in the current year first quarter compared to sales of $118,000,000 and operating income of $9,696,000 in the prior year first quarter. Despite the continuing record performances of two of its operating segments, D-M-E Company and Fairchild Communications Services Company, overall sales and operating income were severely impacted by the Aerospace Fasteners segment, caused by the continual decline in aircraft production due to the depressed airline industry. The 23 percent drop in sales in the Aerospace Fasteners segment was partially offset by a sales increase of 5 percent in the Industrial Products segment and a sales increase of 14 percent in the Communications Services segment. The decline in operating income of $11,100,000 in the Aerospace Fastener segment was due to reduced demand, price erosion and higher quality costs; and was slightly offset by the continued strength shown in the Industrial Products and Communications Services segments. Although quality costs in the Aerospace Fastener segment have been steadily increasing, the first quarter costs were much higher than anticipated due to non-recurring inspection and other requirements imposed upon the Company by a major customer. Also, re-engineering efforts at the Aerospace Fastener units have taken longer than anticipated. However, the Company has made substantial progress in completing these efforts, which include a reduction in personnel of over 35 percent, the close-down of several plants and the retraining of the remaining work force.
 Before certain non-cash charges related to one-time accounting changes, the Company reported a loss of $11,417,000 or $.71 loss per share which, when added to the non-cash charges of $10,950,000, amounted to a net loss of $22,367,000 or $1.39 loss per share in the fiscal 1994 first quarter compared to a net loss of $15,261,000 or $.95 loss per share in the prior year comparable quarter. The fiscal 1994 first quarter included an increase in net interest expense of $1,867,000 as compared to the prior year first quarter and non-cash charges of $10,950,000, resulting from the cumulative effects on prior years of adopting new required accounting rules related to postretirement benefits and income taxes. Of the total non-cash charges, $8,000,000 was the Company's share of charges taken by its affiliate, Rexnord Corporation. In addition, the Company's equity earnings were adversely impacted by $2,900,000, representing the Company's share of restructuring charges taken by Rexnord Corporation in the fiscal 1994 first quarter.
 Commenting on first quarter results, Chairman and Chief Executive Officer Jeffrey J. Steiner, stated, "We are continuing to take significant actions in response to the decline in sales and operating income caused by shrinking order rates and price erosion in the aerospace industry, including exiting unprofitable product lines and consolidating manufacturing facilities, to further reduce costs and improve operating margins."
 Mr. Steiner noted the continued strong performance of D-M-E Company and Fairchild Communications Services Company. He stated that although the first quarter net results were negatively impacted by one-time, nonrecurring charges related to restructuring actions and accounting changes at Rexnord Corporation, Fairchild's 44 percent investment in Rexnord Corporation has an imputed market value, at today's NYSE trading price of approximately $145 million, more than $95 million higher than the carrying value on Fairchild's books.
 Summary Income Statement
 (In thousands, except per share data)
 First Quarter Ended
 10/3/93 9/27/92
 Aerospace fasteners $ 51,578 $ 67,156
 Industrial products 36,629 35,025
 Communications services 18,143 15,919
 Total $106,350 $118,100
 Segment operating income:
 Aerospace fasteners (6,377) 4,710
 Industrial products 4,572 4,017
 Communications services 3,931 3,474
 Total 2,126 12,201
 Corporate expenses (4,460) (4,971)
 Corporate income 1,875 2,466
 Total operating (loss) income (459) 9,696
 Equity in earnings of affiliates 2,081 3,363
 Minority interest (605) (518)
 Net interest expense (18,990) (17,123)
 Investment income (loss) 1,743 (133)
 Loss from continuing operations
 before taxes (16,230) (4,715)
 Tax benefit 4,842 1,715
 Loss from continuing operations (11,388) (3,000)
 Loss from discontinued operations (29) (37)
 Loss before extraordinary items (11,417) (3,037)
 Extraordinary items - net (A) -- (12,224)
 Changes in accounting for
 postretirement benefits (8,015) --
 Change in accounting for income taxes (2,935) --
 Net loss $(22,367) $(15,261)
 Earnings (loss) per share:
 Continuing operations (.71) (.19)
 Extraordinary items -- (.76)
 Change in accounting postretirement
 benefits (.50) --
 Change in accounting income taxes (.18) --
 Net loss per share (1.39) (.95)
 Common shares outstanding 16,103 16,133
 (A) Loss in quarter ended September 27, 1992, primarily attributed to Fairchild's share of an extraordinary charge taken by Fairchild's 44 percent owned affiliate, Rexnord Corporation, related to Rexnord's recent recapitalization.
 -0- 11/17/93
 /CONTACT: Mike Alcox, Chief Financial Officer of The Fairchild Corporation, 703-478-5824/

CO: The Fairchild Corporation ST: Virginia IN: ARO SU: ERN

LG-WJ -- NY085 -- 5612 11/17/93 15:28 EST
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Publication:PR Newswire
Date:Nov 17, 1993

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