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 OGDEN, Utah, Oct. 21 /PRNewswire/ -- Thiokol Corp.'s (NYSE: TKC) net income for the three months ended Sept. 30, 1993, before recognition of a one-time, non-cash cumulative effect of accounting changes, was $14.0 million, or $.68 per share, a 4 percent increase, compared to $13.5 million, or $.67 per share, for the prior year. Sales for the quarter of $257.7 million decreased 11 percent when compared to $289.0 million last year.
 Net income for the quarter, before the one-time charge, was favorably affected by higher Trident incentive fees, higher fastening systems income, lower interest expense and positive income tax-related items. Space income declined due to a retroactive fee increase recognized on the Space Shuttle solid rocket motor program last year and lower current year sales. Propulsion systems' results for the prior year included $3 million of nonrecurring recoveries in U.S. Government revenues of tax-related costs expensed in prior periods.
 Current quarter net income before the one-time charge includes the cumulative effect of the tax rate increase recently enacted by Congress retroactive to Jan. 1, 1993. The impact of the rate change increased income tax expense by $1.5 million. The company also recognized interest income of $3.9 million on a tax refund.
 As previously announced, the new accounting standards adopted include Statement of Financial Accounting Standards (SFAS) No. 106 "Employers' Accounting for Postretirement Benefits Other than Pensions" and SFAS No. 112 "Employers' Accounting for Postemployment Benefits." SFAS 106 requires the company to accrue the expected cost of postretirement benefits other than pensions, primarily health care, during the period of employee eligible service rather than as the amounts are paid. SFAS 112 requires the company to accrue the expected cost of postemployment benefits provided to former employees or their beneficiaries rather than the current method of charging these costs against earnings as the amounts are paid. SFAS 112 was adopted earlier than required by the provisions of the Statement. In addition to the one-time charge, the adoption of SFAS No. 106 will increase fiscal year 1994 retiree medical expense by approximately $3 million. A significant portion of the charges are expected to be recovered under government contracts as amounts are funded or allocated to contracts.
 The net loss for the quarter ended Sept. 30, 1993, including the one-time after tax charge for the accounting changes, was $49.8 million, or $2.42 per share. The one-time after tax charge of $63.8 million, or $3.10 per share, reflects the after tax liability recognized at July 1, 1993, due to the adoption of SFAS No. 106 and 112 of $51.6 and $12.2 million, respectively.
 James R. Wilson, president and chief executive officer, said, "We elected to record a one-time cumulative charge for the accounting changes rather than amortize the adjustment over the current and future years. The recognition of the liability from the new accounting standards will not impact cash flow. Earnings for the year should continue to benefit from lower interest expense and improved fastening systems profits."
 Space sales of $112.7 million decreased 16 percent or $21.7 million, compared to 1993 and related operating income decreased 36 percent to $11.3 million from prior year's $17.6 million. Space Shuttle rocket motor, ASRM nozzle development, Castor and STAR motor sales declined for the quarter. The decline in income also resulted from the recognition of a retroactive increase in the fee rate on the Space Shuttle rocket motor program last year and the nonrecurring recovery of tax related costs as noted above.
 Strategic sales decreased 34 percent to $41.1 million while operating income of $10.8 million increased 93 percent from $5.6 million in 1993. The sales decrease was caused by a large decline in Peacekeeper motor deliveries. The last Peacekeeper motor was delivered during the first quarter. The notable rise in income resulted from significantly higher incentive fees recognized on the Trident program.
 Tactical sales of $21.8 million increased 25 percent while an operating loss of $2.3 million for the current quarter compares to operating income of $1.2 million in 1993. The sales increase resulted primarily from the resumption of Sidewinder deliveries and an increase in sales on the Maverick program. A major portion of the loss relates to a cost overrun on the Standard Missile program.
 Ordnance sales increased 14 percent to $42.5 million, compared to $37.4 million last year, and operating income of $2.3 million increased 35 percent over the prior year. The increase in sales and income resulted from significantly higher flare deliveries.
 Huck's fastening systems segment sales of $39.6 million increased 6 percent for the quarter while operating income of $3.4 million increased $2.2 million or 183 percent from last year. Higher domestic industrial sales combined with lower costs and improved efficiency contributed to the increase in profit.
 General and administrative expenses for the quarter decreased $.6 million or 4 percent when compared to the prior year. The $2.7 million decrease in interest expense resulted from the reduction in long-term debt at June 30, 1993.
 During the quarter 506,200 shares of common stock were repurchased under the company's share repurchase program announced in April 1993.
 Thiokol Corp. (TKC) is traded on the New York Stock Exchange. The company is a major producer of solid propulsion systems, ordnance and composite products for the space and defense industries and high technology, proprietary fastening systems.
 Below are unaudited comparative results for the first quarter of fiscal year 1994 (in thousands, except per share data):
 Consolidated Statement of Income
 Fiscal Years 1994-1993
 Three Months Ended
 Sept. 30,
 1993 1992
 Net sales $257,664 $289,014
 Interest and other income 4,621 1,460
 262,285 290,474
 Deductions from income:
 Cost of sales 213,322 241,323
 General and administrative expense 16,429 17,033
 Research and development expense 3,747 4,302
 Interest expense 3,662 6,335
 237,160 268,993
 Income before income taxes and cumulative
 effect of accounting changes 25,125 21,481
 Income taxes 11,096 8,010
 Net income before cumulative effect
 of accounting changes 14,029 13,471
 Cumulative effect of accounting changes (63,838) ---
 Net (loss) income ($49,809) $13,471
 Net (loss) income per share:
 Income before cumulative effect
 of accounting changes $.68 $.67
 Cumulative effect of accounting changes ($3.10) ---
 Net (loss) income ($2.42) $.67
 Average number of common and common
 equivalent shares outstanding 20,614 20,150
 -0- 10/21/93
 /CONTACT: Steve Lawson of Thiokol, 801-629-2257/

CO: Thiokol Corp. ST: Utah IN: ARO SU: ERN

JL-LS -- LA001 -- 4946 10/21/93 08:01 EDT
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Publication:PR Newswire
Date:Oct 21, 1993

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