The Auto Channel
The Largest Independent Automotive Research Resource
The Largest Independent Automotive Research Resource
Official Website of the New Car Buyer

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

Click here