Baldor Electric Company 2000 Year-End Audited
Results
FORT SMITH, Ark., Feb. 5 Baldor Electric Company
markets, designs, and manufactures electric motors and drives and
is based in Fort Smith, Arkansas. Today Baldor announced sales and earnings
for the fourth quarter of 2000 and record sales and earnings for fiscal year
2000.
Baldor is pleased to report sales for fiscal year 2000 were a record
$621.2 million, up 6%. Earnings were also a record at $46.3 million, up 6%
over 1999. Earnings per share were also a record at $1.34, up 13% over 1999
earnings per share. Operating and gross margins were records for the 9th
straight year.
For the fourth quarter, sales were a record $144.7 million, up 3% over the
fourth quarter of 1999. Earnings in the fourth quarter were $10.0 million,
down 8% from the same quarter in 1999. Fourth quarter earnings per share were
$0.29 versus $0.30 in 1999.
In the second half of the year and in particular during the fourth
quarter, there were several non-recurring items that affected the company's
performance. These included the company's reorganization in Europe and an
expansion of the company's plant in Ozark, Arkansas.
In the fourth quarter Baldor continued to make progress on the
consolidation of their German and U.K. manufacturing facilities to Bristol,
England. Consolidation of these facilities will help improve the service to
the company's customers and also improve the profitability of their European
operations. While this consolidation has been expensive, it will be
beneficial to earnings after its completion in the first quarter of this year.
During the fourth quarter Baldor completed the expansion of their facility
in Ozark, Arkansas. In the first quarter of 2001, production of certain
motors currently produced in Columbus, Mississippi, will be moved to the Ozark
plant. This will allow Baldor to increase output at both plants and is
expected to improve profitability at each location.
Some material cost began to increase during the fourth quarter. A price
increase has been announced for the middle of March and will offset increased
costs of copper, aluminum, freight, and other items. This is the first
general price increase in five years.
Baldor is disappointed that growth in their motor and drive business
slowed during the fourth quarter. The company is moving aggressively to
introduce additional new products, expand their sales force, and add customers
in new markets.
During the fourth quarter Baldor completed the acquisition of Pow'R Gard
Generator Corporation. Pow'R Gard is a premier manufacturer of portable and
standby generators from 1.3 kW to 140 kW. Baldor has begun to expand the
distribution of the Pow'R Gard product line to include many potential
customers not reached previously. Also, the company is expanding the standby
generator product line to larger ratings allowing us to service businesses
that require uninterrupted power. At $25 million in sales, Pow'R Gard has
been a niche player in the billion-dollar generator market in the United
States. Baldor believes their strong sales organization and marketing
strength will help them to expand this business quickly.
Our country is faced with higher electricity costs and uncertain
availability of electricity. With over half of the electricity generated in
the United States being used to run electric motors, Baldor is in a position
to help industrial electricity consumers lower their costs through the use of
Baldor high efficiency motors and drives. Their Super-E(R) motors meet every
recommended efficiency level of the Consortium for Energy Efficiency (CEE).
In some applications, electric motor users can save as much as half of the
electricity consumed by using Baldor variable speed drives to control the
performance of motors. Many believe electricity will increase greatly in cost
and some areas will be in short supply. Baldor believes it is well positioned
to help solve many of these problems.
(all data in thousands except for per share data)
4th Quarter Year
2000 1999 2000 1999
13 weeks ended % 52 weeks ended %
Dec 30 Jan 1 Change Dec 30 Jan 1 Change
2000 2000 2000 2000
Net Sales * $144,657 $140,549 3% $ 621,242 $ 585,551 6%
Cost of Sales 99,779 95,434 423,861 399,833
Gross Profit 44,878 45,115 -1% 197,381 185,718 6%
SG&A 26,330 24,968 111,610 104,903
Operating Profit 18,548 20,147 -8% 85,771 80,815 6%
Other Income (Expense) (483) (54) (2,003) (847)
Profit Sharing 2,028 2,478 9,747 9,445
Earnings Before Income
Taxes 16,037 17,615 -9% 74,021 70,523 5%
Income Taxes 6,014 6,695 27,758 26,800
Net Earnings $ 10,023 $ 10,920 -8% $ 46,263 $ 43,723 6%
Earnings Per Share
- Diluted $0.29 $0.30 -3% $1.34 $1.19 13%
Dividends Per Share $0.13 $0.12 8% $0.50 $0.45 11%
Average Shares
Outstanding 34,422 36,485 -6% 34,570 36,787 -6%
Balance Sheet Summary
2000 1999
Cash & Marketable Securities $ 15,005 $ 42,908
Receivables 100,494 98,470
Inventories 120,951 106,185
Working Capital 174,803 183,956
Long-Term Debt 99,832 56,305
Shareholders' Equity 260,845 266,109
Cash Flow from Operations 46,353 52,942
* Net Sales has been restated to comply with revised accounting standards
to reflect the reclassification of gross freight costs. This change
has no effect on current or historical net earnings or earnings per
share.
This press release may contain "forward-looking" statements within the
meaning of applicable securities laws. These statements include or imply
projections of future performance that are based upon the Company's
expectations and assumptions. These expectations and assumptions, as well as
the Company's future performance, are subject to a number of risks and
uncertainties that may be inherent by nature and discussed in the Company's
various SEC filings.
