Owosso Corporation Announces Results for the Third Quarter of Fiscal 2001
Owosso Corporation Announces Results for the Third Quarter of Fiscal 2001
KING OF PRUSSIA, Pa., Aug. 28 Owosso Corporation today announced a net loss available for common shareholders of ($1.3 million), or ($0.22) per share, for its third fiscal quarter ended July 29, 2001, as compared to a net loss available for common shareholders of ($85,000) or ($0.01) per share, for the prior year third quarter. Third quarter net sales were $21.6 million, as compared to $29.6 million in the prior year quarter; loss from operations was ($619,000), as compared to income from operations of $1.4 million in the prior year quarter. Net income available for common shareholders for the prior year quarter includes income from discontinued operations, representing the operations of Sooner Trailer, which was sold in January 2001, of $79,000, or $0.01 per share. For the nine months ended July 29, 2001, the Company reported a net loss for common shareholders of ($4.7 million), or ($0.80) per share, as compared to a net loss for common shareholders of ($351,000) or ($0.06) per share, for the prior year period. Net sales for the nine month period ended July 29, 2001 were $64.5 million, as compared to $90.8 million in the prior year period; loss from operations was ($1.3 million), as compared to income from operations of $3.4 million in the prior year period. For the nine months ended July 29, 2001, loss from discontinued operations was ($434,000), or ($0.08) per share, as compared to income from discontinued operations of $579,000, or $0.10 per share, in the prior year period. The net loss available for common shareholders for the third quarter of 2001 includes a non-cash pretax charge of $1.1 million recorded to adjust the carrying value of the net assets of the Cramer Company ("Cramer"), based upon ongoing negotiations for the sale of those assets. Sales volume at all business units has been adversely affected by the general economic slowdown effecting the Company's primary markets, particularly the heavy truck and recreational vehicle markets. In this economic environment, the Company continues to take actions to further reduce fixed costs both at the corporate and operating unit levels and is considering further sales of assets and/or business units. While the Company is currently in compliance with covenants under its revolving credit facility, management does not expect the Company to be in compliance with such covenants during the fourth quarter of fiscal 2001. Accordingly, management is negotiating with its banks for further modifications to the revolving credit facility. Income from operations for the Motors segment was $1.7 million on net sales of $13.1 million in the third quarter of 2001, as compared to $1.9 million on net sales of $14.8 million in the prior year third quarter. For the nine-month period of 2001, income from operations for the Motors segment increased to $4.4 million on net sales of $39.8 million, as compared to $4.1 million on net sales of $43.5 million in the prior year period. The third quarter results reflect an 11.6% decrease in net sales caused by lower demand from the recreational vehicle, healthcare and heavy truck markets, as well as, increased selling, general and administrative costs resulting from increased medical costs. Income from operations for the nine-month period improved despite lower sales primarily as a result of improved productivity and decreased selling, general and administrative expenses. The Coils segment reported income from operations of $68,000 for the third quarter of 2001 on net sales of $7.8 million, as compared to a loss from operations of ($154,000) on net sales of $10.5 million in the prior year third quarter. For the nine-month period ended July 29, 2001, the Coils segment reported a loss from operations of ($1.1 million) on net sales of $22.2 million, as compared to income from operations of $574,000 on net sales of $33.7 million in the prior year period. The current year nine-month period includes a charge of $700,000 to adjust the carrying value of the assets of Astro Air UK, Ltd. ("Astro UK") to their estimated fair value, recorded in connection with the sale of Astro UK, completed in May 2001. The decrease in operating results also reflects lower sales volume partially offset by decreased selling, general and administrative costs. The lower sales results reflect the loss of a customer that represented 17% of net sales in fiscal 2000. However, during the second quarter of 2001, the Company again began to supply this customer and has since regained most of the former business of this customer. The decrease in net sales as compared to the prior year is also a result of continuing weak demand from the heavy truck market. Production for this market is reported to be down 45% for the last twelve months ended July 2001 versus the comparable prior year period. The Company's Other segment reported a loss from operations of ($1.2 million) in the third quarter of 2001, as compared to income from operations of $713,000 in the prior year third quarter. For the nine-month period ended July 29, 2001, the Other segment reported a loss from operations of ($1.5 million), as compared to income from operations of $1.9 million in the prior year period. The current period loss includes a charge of $1.1 million for the write-down of net assets held for sale related to the anticipated sale of the remaining Cramer assets. These results also include the effect of the sale, in November 2000, of Dura-Bond, which had income from operations of $433,000 in the third quarter of 2000. Operating results from Cramer, the only remaining business in this segment, decreased as a result of the sale of the timer and switch line in December 2000. To receive additional information on Owosso Corporation visit Owosso's website, http://www.owosso.com. This press release contains forward-looking statements that involve a number of risks and uncertainties. Factors that could cause actual results to differ materially from those reflected in the forward-looking statements include changes in demand from substantial customers, as well as other factors as discussed in the Company's Annual Report on Form 10-K for the year ended October 29, 2000 in the section captioned "Management's Discussion and Analysis of Financial Condition and Results of Operations." OWOSSO CORPORATION (in thousands, except per share data) Income Statement Data: Three Months Ended Nine Months Ended July 29, July 30, July 29, July 30, 2001 2000 2001 2000 Net sales $21,636 $29,608 $64,541 $90,793 Gross profit 3,518 5,201 9,755 15,409 Income (loss) from operations (619) 1,449 (1,295) 3,442 Income (loss) from continuing operations before taxes (1,462) 203 (4,461) (256) Income (loss) from continuing operations (965) 118 (3,183) (91) Income (loss) from discontinued operations -- 79 (434) 579 Change in accounting principle, net -- -- (67) -- Net loss available for common shareholders ** (1,295) (85) (4,668) (351) Income (loss) per basic and diluted share: Continuing operations $(0.22) $(0.02) $ (0.71) $(0.16) Discontinued operations -- 0.01 (0.08) 0.10 Change in accounting principle, net -- -- (0.01) -- $(0.22) $(0.01) $ (0.80) $(0.06) Average basic shares outstanding 5,874 5,850 5,863 5,842 July 29, October 29, 2001 2000 Current assets $ 26,661 $ 42,746 Net property, plant and equipment 19,525 22,058 Total assets 65,711 85,754 Current liabilities 40,637 40,599 Total debt, including current portion 35,171 50,279 Stockholders' equity $ 13,905 $ 18,432 ** For the three-month periods, net income (loss) available for common shareholders is stated after deduction of preferred stock dividends of $225 and $188 for 2001 and 2000, respectively, and after deduction of accretion in the book value of preferred stock of $105 and $94 for 2001 and 2000, respectively. For the nine-month periods, net income (loss) available for common shareholders is stated after deduction of preferred stock dividends of $675 and $563 for 2001 and 2000, respectively, and after deduction of accretion in the book value of preferred stock of $309 and $276 for 2001 and 2000, respectively. Segment Data : (in thousands) Three Months Ended Nine Months Ended July 29, July 30, July 29, July 30, 2001 2000 2001 2000 Net sales: Motors $13,104 $14,821 $39,831 $43,523 Coils 7,823 10,473 22,167 33,685 Other 709 4,314 2,543 13,585 Net sales $21,636 $29,608 $64,541 $90,793 Income (loss) from operations: Motors $1,690 $1,897 $4,365 $4,090 Coils 68 (154) (1,066) 574 Other (1,179) 713 (1,452) 1,866 Unallocated corporate charges (1,198) (1,007) (3,142) (3,088) Income (loss) from operations $(619) $1,449 $(1,295) $3,442
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