SPX First Quarter Results Exceed Analysts'
Estimates
Revenues Up 8.4% to $680.4 Million
MUSKEGON, Mich., April 24 SPX
Corporation today announced first quarter 2001 financial results.
First quarter 2001 results included $680.4 million in revenues and earnings
per share of $1.14 or $1.21 before special charges.
John B. Blystone, Chairman, President and Chief Executive Officer of SPX
said, "The year is off to a good start. We delivered the 21st consecutive
quarter of meeting our commitments. Despite a very difficult economy, we
reported double-digit revenue growth in two of our three business segments.
The proactive cost control measures we implemented, have positioned the
company to be profitable in a soft economy."
Earnings Per Share - Reported first quarter earnings of $1.14 per share
included pretax charges of $3.4 million ($2.0 million after-tax) or $0.07 per
share. The first quarter 2001 earnings per share without the impact of these
one-time items was $1.21, exceeding the First Call consensus estimate of $1.17
per share.
* First quarter special charges included costs associated with facilities
consolidation primarily at the Fluid Power unit. The consolidations began in
the fourth quarter of 2000 and the company expects them to be complete by the
end of June.
Business Segment Realignment - Beginning with the first quarter 2001, the
company reported the results of operations in three segments, Technical
Products and Systems, Industrial Products and Services, and Service Solutions.
* Laboratory ovens and freezers now report in the Technical Products and
Systems segment, while vehicle components report as part of Industrial
Products and Services.
* The new structure aligns financial reporting with the current structure
of the organization. Upon completion of the acquisition of United Dominion
Industries, which is expected to close on or about May 24, 2001, a fourth
segment, Flow Technology will be added.
Revenues - Revenues for the first quarter grew by 8.4% to $680.4 million
compared with first quarter 2000 revenues of $627.8 million.
First Quarter
Revenue Growth By Segment Reported Internal
Technical Products and Systems 21.6% 10.4%
Industrial Products and Services 11.5% 0.0%
Service Solutions -10.3% -10.3%
Consolidated 8.4% 0.1%
- Technical Products and Systems: In the Technical Products and Systems
segment, internal revenue growth of 10.4% was driven by demand for open
storage networking systems, fire detection and building life-safety products,
digital broadcast antennas and laboratory ovens and freezers. Revenues from
sales of fare collection systems were down as anticipated, due to contract
timing which is expected to reverse by the second quarter and for the
remainder of the year.
- Industrial Products and Services: Strong demand for power transformers
offset by a decline in vehicle components resulted in a flat internal growth
rate for the first quarter. The soft economy has impacted the end markets for
some of the businesses in this segment and will continue to challenge these
units.
- Service Solutions: Timing of several specialty tool programs impacted
revenues in the segment and make a tough year over year comparison. Difficult
year over year comparisons for Service Solutions are expected to persist
through the second quarter 2001 and then improve for the remainder of the
year.
Operating Margins - First quarter operating margins, excluding special
charges, declined by 100 points to 11.3%, compared to 12.3% for the first
quarter 2000.
First Quarter
Operating Margin By Segment 2001 2000
Technical Products and Systems 14.1% 17.2%
Industrial Products and Services 13.7% 14.8%
Service Solutions 8.1% 8.0%
Consolidated 11.3% 12.3%
- Technical Products and Systems: Margin declines for the quarter were
due to the anticipated reduced volume of fare collection systems' revenues
caused by timing of contracts and costs to support the growth of Inrange
expected later in the year.
- Industrial Products and Services: The anticipated margin decline for
the quarter was driven by startup costs associated with plant expansion and
consolidation projects.
Cash Flow - The company generated EBIT of $88.1 million and EBITDA of
$119.3 million for the first quarter 2001, compared to EBIT of $86.4 million
and EBITDA of $113.2 million for the first quarter 2000.
* First quarter 2001 EBITDA margins were 17.5% compared to 18.0% for
first quarter 2000.
* There were no stock purchases during the quarter.
* Working capital was $45.9 million in the first quarter. Improved
accounts receivable collections were offset by recurring first quarter
incentive payments and accounts payable timing.
* Cash earnings from the EGS joint venture were $10.7 million, exceeding
the reported earnings of $9.4 million.
Acquisition Update - During the quarter, the company completed several
acquisitions for total consideration of $120.4 million.
* In March, SPX signed a definitive agreement to purchase United Dominion
Industries, a $2.3 billion diversified manufacturer of proprietary engineered
products. The transaction is anticipated to close on or about May 24, 2001,
subject to receipt of United Dominion shareholder approval and Court and other
regulatory approvals.
* In order to give the Department of Justice additional time to review
its application, the company has voluntarily withdrawn its application and has
filed a new application for review under the Hart Scott Rodino Antitrust
Improvements Act of 1976 of the acquisition of United Dominion. The waiting
period under the old filing would have expired at midnight on April 26, 2001.
The waiting period under the new filing will expire at midnight on May 23,
2001.
* The company also signed a definitive agreement to purchase VSI
Holdings, Inc., a provider of customer relationship management services,
Internet/Intranet communications, education, training, and integrated
marketing services. VSI will become part of the company's Service Solutions
business. The transaction is expected to close in July.
SPX Corporation is a global provider of technical products and systems,
industrial products and services, and service solutions. The Internet address
for SPX Corporation's home page is http://www.spx.com .
Certain statements in this press release are forward-looking statements
within the meaning of Section 21E of the Securities Exchange Act of 1934, as
amended, and are subject to the safe harbor created thereby. Please refer to
the Company's public filings for discussion of certain important factors that
relate to forward-looking statements contained in this press release. The
words "believe," "expect," "anticipate," "estimate," and similar expressions
identify forward-looking statements. Although the Company believes that the
expectations reflected in its forward-looking statements are reasonable, it
can give no assurance that such expectations will prove to be correct.
SPX CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
($ in millions)
March 31, December 31,
2001 2000
ASSETS
Current assets:
Cash and equivalents $562.9 $73.7
Accounts receivable 546.8 547.7
Inventories 325.9 299.6
Prepaid and other current assets 69.4 57.7
Deferred income taxes and refunds 88.3 84.2
Total current assets 1,593.3 1,062.9
Property, plant and equipment 916.1 884.7
Accumulated depreciation (408.9) (392.7)
Net property, plant and equipment 507.2 492.0
Goodwill and intangible assets, net 1,278.6 1,211.8
Investment in EGS 80.9 82.3
Other assets 352.8 315.6
Total assets $3,812.8 $3,164.6
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $279.1 $289.4
Accrued expenses 312.1 346.3
Income taxes payable 20.5 1.4
Total current liabilities 611.7 637.1
Long-term debt 1,926.4 1,295.6
Deferred income taxes 404.2 403.4
Other long-term liabilities 180.2 192.1
Total long-term liabilities 2,510.8 1,891.1
Minority Interest 27.9 28.2
Shareholders' equity:
Common stock 358.0 357.7
Paid-in capital 496.2 492.5
Retained earnings 213.3 177.8
Unearned compensation (6.0) (9.5)
Accumulated other comprehensive
income (11.8) (23.0)
Common stock in treasury (387.3) (387.3)
Total shareholders' equity 662.4 608.2
Total liabilities and
shareholders' equity $3,812.8 $3,164.6
SPX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
($ in millions)
Three Months Ended
March 31,
2001 2000
Cash flows from operating activities:
Net income $35.4 $29.0
Adjustments to reconcile net income
to net cash from operating activities -
Special charges 3.4 -
Earnings of EGS, net of
distributions 1.3 (2.6)
Loss on early extinguishment of
debt, net of tax - 8.8
Deferred income taxes (3.3) 2.6
Depreciation 19.2 17.2
Amortization of goodwill and
intangibles 12.0 9.6
Employee benefits (7.7) (7.3)
Other, net 3.2 (3.6)
Changes in operating assets and
liabilities, net of
effects from acquisitions and
divestitures (44.5) (28.5)
Net cash from operating activities
before taxes on sale of Best Power 19.0 25.2
Taxes paid on the sale of Best Power - (69.0)
19.0 (43.8)
Cash flows from (used in) investing
activities:
Business acquisitions and
investments (120.4) (81.3)
Capital expenditures (33.0) (29.6)
Other, net 8.1 -
Net cash (used in) investing
activities (145.3) (110.9)
Cash flows from (used in) financing
activities:
Net borrowings (repayments) under
revolving credit agreement (220.0) 71.0
Net borrowings under other debt
agreements 853.3 498.0
Payments under other debt agreements (25.3) (432.5)
Treasury stock purchased - (36.8)
Common stock issued under stock
incentive programs 7.5 8.8
Net cash from financing activities 615.5 108.5
Net increase (decrease) in cash and
equivalents 489.2 (46.2)
Cash and equivalents, beginning of
period 73.7 78.8
Cash and equivalents, end of period $562.9 $32.6
SPX CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
($ in millions, except per share data)
Three months ended
March 31,
2001 2000
Revenues $680.4 $627.8
Costs and expenses:
Cost of products sold 463.3 421.6
Selling, general and administrative 129.3 119.4
Goodwill/intangible amortization 10.8 9.6
Special charges 3.4 -
Operating income 73.6 77.2
Other (expense) income, net 1.7 (0.1)
Equity in earnings of EGS 9.4 9.3
Interest expense, net (24.7) (22.3)
Income before income taxes 60.0 64.1
Provision for income taxes (24.6) (26.3)
Income before loss on early
extinguishment of debt 35.4 37.8
Loss on early extinguishment of debt,
net of tax - (8.8)
Net income $35.4 $29.0
Basic income per share of common
stock
Income before loss on early
extinguishment of debt $1.17 $1.22
Loss on early extinguishment of
debt - (0.28)
Net income per share $1.17 $0.94
Weighted average number of common
shares outstanding 30.285 30.920
Diluted income per share of common
stock
Income before loss on early
extinguishment of debt $1.14 $1.20
Loss on early extinguishment of
debt - (0.28)
Net income per share $1.14 $0.92
Weighted average number of common
shares outstanding 30.976 31.588
SPX CORPORATION
STATEMENTS OF OPERATING INCOME BY SEGMENT
($ in millions)
Three months ended
March 31,
2001 2000 %
Technical Products and Systems
Revenues $208.0 $171.0 21.6%
Gross profit 86.2 72.4
Selling, general & administrative 55.2 42.4
Goodwill/intangible amortization 1.7 0.6
Operating income $29.3 $29.4 -0.3%
as a percent of revenues 14.1% 17.2%
Industrial Products and Services
Revenues $320.9 $287.9 11.5%
Gross profit 88.0 86.6
Selling, general & administrative 39.0 38.9
Goodwill/intangible amortization 5.0 5.0
Operating income $44.0 $42.7 3.0%
as a percent of revenues 13.7% 14.8%
Service Solutions
Revenues $151.5 $168.9 -10.3%
Gross profit 42.9 47.2
Selling, general & administrative 26.6 29.6
Goodwill/intangible amortization 4.1 4.1
Operating income $12.2 $13.5 -9.6%
as a percent of revenues 8.1% 8.0%
Corporate expenses $8.5 $8.4
SPX CORPORATION
RECONCILIATION OF
RESULTS ON A COMPARABLE BASIS EXCLUDING UNUSUAL ITEMS
($ in millions, except per share amounts)
Three months ended
March 31,
2001 2000
Income before income taxes $60.0 $64.1
Special charges:
Restructuring and other special
charges 3.4 -
Pretax income excluding unusual
items 63.4 64.1
Income taxes (26.0) (26.3)
Net income from continuing
operations excluding unusual items $37.4 $37.8
Diluted EPS from continuing
operations excluding unusual items $1.21 $1.20
Shares Outstanding 30.976 31.588
MAKE YOUR OPINION COUNT - Click Here
http://tbutton.prnewswire.com/prn/11690X74882133
