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 ERIE, Pa., Oct. 21 /PRNewswire/ -- Zurn Industries, Inc. (NYSE: ZRN), a leading designer, constructor and manufacturer of systems and equipment for power generation and water control, and Lynx golf equipment, announced today that net income for the quarter ended Sept. 30, 1993 was $6,825,000, or $.55 per share, compared to last year's $6,234,000, or $.50 per share. Sales for the quarter were $215,493,000, compared to last year's $177,520,000.
 The second quarter results included the company's recovery of $8,363,000, or $.41 per share, for amounts due for the design and construction of a tire burning power plant that had been written off in fiscal 1992. In addition, higher taxes attributable to an increase in the on-going effective tax rate to 39.5 percent were more than offset in the quarter by revaluation of the company's net deferred tax assets because of new federal tax legislation and resulted in a net beneficial effect of $.12 per share. Partially offsetting those gains was a charge of $9,000,000, or $.44 per share, to cover the costs of realigning operations and writing off certain assets. Excluding these unusual items, net income for the quarter was $5,692,000, or $.46 per share.
 For the first half, the company posted a net loss of $9,803,000, or $.79 per share, compared to last year's earnings of $11,869,000, or $.95 per share. Excluding a first quarter after-tax charge of $23,197,000, or $1.87 per share, for a California jury's verdict against the company, which is being appealed, in connection with a contract to construct an agricultural waste-burning power plant, and the second quarter unusual items, the first half's net income was $12,261,000, or $.99 per share. Sales were $504,269,000, up from $320,764,000 in last year's first six months.
 Orders backlog at Sept. 30, 1993 was $266 million down from $378 million at the end of the first quarter and $464 million a year ago.
 Power Systems second quarter sales were $128,396,000, up 35 percent from last year. First half sales were $336,796,000, more than double the prior year, reflecting the high volume of power plant design and construction work initiated late last year. One new project, a $25 million 73-megawatt natural gas fired plant in California, was added in the second quarter, bringing the orders backlog at Sept. 30 to $149 million compared to $232 million at the end of the previous quarter and $336 million a year earlier.
 Water Control sales for last year's second quarter were $63,888,000, including $5,770,000 from operations which have since been sold. This year, sales by the remaining operations were up 17 percent to $68,287,000 for the second quarter and up 16 percent to $129,761,000 for the first half. Higher plumbing products sales and water resource construction revenues more than offset the expected decline in fire sprinkler systems revenues in the first half. Water Control backlog at Sept. 30 was $101 million compared to $126 million at June 30, 1993 and $93 million a year earlier for the continuing operations.
 Lynx Golf sales for the second quarter increased to $9,486,000 from $7,786,000 last year. For the first six months sales were $19,215,000, 9 percent below last year.
 Chairman George H. Schofield stated, "First half sales reached a record level, driven by the large orders backlog at the beginning of the year. Power plant construction was especially strong in this period, while the steam generating equipment market continued in decline. Due to the economic situation in both the United States and Canada, the independent power and cogeneration markets have slowed significantly. Lower power plant construction activity coupled with declining demand in our nonresidential, industrial and worldwide golf markets will result in second half sales and earnings below those attained in the same period last year. Sales are expected to be down 15 percent." He further commented that, "Anticipated sales and profitability levels of the Lynx Golf business were not reached in the first half and results for the next six months will not be as anticipated." He also emphasized that, "As market conditions have changed, aggressive productivity actions have been, and continue to be, taken, including reducing payrolls, consolidating operations and closing facilities."
 (Thousands Except Per Share Amounts)
 Three Months Ended Six Months Ended
 Sept. 30 Sept. 30
 1993 1992 1993 1992
 Power Systems $128,396 $ 94,853 $336,796 $155,602
 Water Control 68,287 63,888 129,761 122,411
 Lynx Golf 9,486 7,786 19,215 21,164
 Others 9,324 10,993 18,497 21,587
 Net Sales 215,493 177,520 504,269 320,764
 Costs and Expenses:
 Cost Of Products
 Sold 184,060 145,063 437,522 256,224
 Operating Expenses 15,195 23,527 40,963 47,095
 Restructuring 9,000 9,000
 208,255 168,590 487,485 303,319
 Operating Income 7,238 8,930 16,784 17,445
 Interest Income 1,194 811 2,298 1,822
 Other Income 517 655 896 896
 Interest Expense (484) (502) (1,004) (1,324)
 Litigation (36,247)
 Income (Loss) Before
 Income Taxes 8,465 9,894 (17,273) 18,839
 Income Tax Expense
 (Benefit) 1,640 3,660 (7,470) 6,970
 Net Income (Loss) $ 6,825 $ 6,234 $ (9,803) $ 11,869
 Earnings (Loss) Per
 Share $.55 $.50 $(.79) $.95
 Average Shares
 Outstanding 12,461 12,476 12,456 12,544
 The 1993 quarter includes an $8,363 ($.41 per share) recovery of a receivable written off in fiscal 1992, the $1,510 ($.12 per share) net benefit from revaluing net deferred tax assets as a result of federal tax legislation and increasing the on-going effective tax rate to 39.5 percent primarily because of reduced earnings expectations in states with relatively lower tax rates, and restructuring costs of $9,000 ($.44 per share).
 The $36,247 ($1.87 per share) litigation charge was recognized in the first quarter as the result of a jury verdict against the company in connection with a contract to construct an agricultural waste-burning power plant. If all issues are lost on the appeal which is being aggressively pursued, the ultimate amount could reach $55,000.
 -0- 10/21/93
 /CONTACT: Steve Adams of Zurn Industries, 814-452-2111/

CO: Zurn Industries, Inc. ST: Pennsylvania IN: OIL SU: ERN

CD -- PG013 -- 5433 10/21/93 16:36 EDT
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Publication:PR Newswire
Date:Oct 21, 1993

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