Amcast Reports Fiscal 2002 First Quarter Results
DAYTON, Ohio--Dec. 17, 2001--Amcast Industrial Corporation, today reported financial results for its fiscal 2002 first quarter ended December 2, 2001.First quarter sales were $131.2 million, down 5% compared with the fiscal 2001 first quarter. This year, the Company consolidated Casting Technology Company (CTC) because of the fourth-quarter purchase of our minority partner's interest. Had Amcast consolidated CTC in the prior year, sales would have been down 12% in the first quarter. This sales shortfall is due to weakness in the U.S. economy both in vehicle production and in construction. U.S. light vehicle production for the three months ended November declined by approximately 9% versus the same period in the prior year. However, in the past three months vehicle sales have been very strong mostly due to attractive financing incentives. This robust sales activity has kept vehicle inventories at very manageable levels. Sales at Speedline, the Company's European operation, increased by almost 9% compared with the prior year. Speedline sales benefited from a strong vehicle market for the applications they serve and favorable foreign currency exchange rates. By segment for the quarter, Flow Control sales were lower by 10%, and Engineered Components sales declined by 3% compared with the prior year. If CTC were consolidated last year, Engineered Components sales would have decreased by 18%.
The net loss for the quarter was $5.5 million, or $0.64 loss per share, compared with net income of $0.1 million, or $0.01 per share, in the prior-year quarter.
Byron O. Pond, President and Chief Executive Officer, said, "Our first quarter results are disappointing and our performance makes it clear that we have a lot of work ahead of us. While the general economic sluggishness had an impact on our first quarter performance, we were encouraged by November's results when the Company achieved a positive operating profit for the first time in 12 months. Since February, we have been putting significant emphasis on managing cash. We greatly reduced working capital and slowed capital spending while we worked with our lenders to negotiate a new financing arrangement. With this mostly behind us, we are now fully engaged in building Amcast's competitive edge and returning to profitability."
Mr. Pond continued, "Amcast will improve its performance by focusing on lowering cost and improving quality. In doing this, we expect to take full advantage of the Company's scale to improve our cost position. There are initiatives underway to reduce our SG&A expense through consolidation and rethinking the way we are organized. Further, we are aggressively implementing the Amcast Production System and since July have trained over 15% of our U.S. workforce in this lean manufacturing program. In Amcast's production support areas, we are implementing World Class Initiatives that are designed to introduce best practices on a company wide basis. We are convinced that this will help us achieve our manufacturing objectives even faster."
Leo W. Ladehoff, Chairman of the Board, commenting on Amcast's loan agreements said, "We successfully completed our loan agreement renegotiations with the senior note lenders and banks. As part of this agreement, our bank debt maturity date was extended to September 15, 2002. There is a provision to further extend the maturity date to September 2003, and we are negotiating with the banks to complete this during the second quarter. In this press release, we are reporting our bank debt as a short-term liability. We elected not to pay the banks a fee to extend the debt maturity until December 2002 while we are negotiating for the full extension to September 2003. We believe that our customers and vendors will understand management's desire to forego the cash expenditure for a window-dressing benefit."
Mr. Ladehoff added, "We have a LIFO lending agreement with the banks that allows us to borrow an additional $35 million, if required. We are pleased to report that Amcast has been self-funding since March 2001 and has not borrowed against this lending facility. This self-funding includes paying back $5.9 million to lenders in the fiscal 2002 first quarter."
Mr. Pond concluded, "The September 11 terrorist attack dramatically impacted all Americans and put a damper on an already fragile economy. Our planning for fiscal 2002 anticipated an economic recovery during the last half of this calendar year. Obviously, the recovery is now going to be later and the current outlook is for economic improvement to arrive around the middle of next year. Regardless, our mission continues to be to achieve profitability during the last half of our fiscal year."
A conference call to discuss the fiscal 2002 first quarter financial performance will be held Thursday, December 20 at 2:00 p.m. EST. The webcast can be accessed through www.amcast.com.
Amcast Industrial Corporation is a leading manufacturer of technology-intensive metal products. Its two business segments are brand name Flow Control Products marketed through national distribution channels and Engineered Components for original equipment manufacturers. The Company serves the automotive, construction, and industrial sectors of the economy.
This release includes "forward-looking statements" which are subject to change based on various factors and uncertainties that may cause actual results to differ significantly from expectations. These factors include, among others; general economic conditions less favorable than expected, fluctuating demand in the automotive and housing industries, price pressures in the Company's automotive and flow control businesses, effectiveness of production improvement plans, inherent uncertainties in connection with international operations and foreign currency fluctuations, and labor availability and relations at the company and its customers.
STATEMENTS OF INCOME
($ in thousands except per share amounts)
Three Months Ended
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December 02 December 03
2001 2000
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Net sales $ 131,210 $ 137,944
Cost of sales 120,658 121,656
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Gross Profit 10,552 16,288
Selling, general and
administrative expenses 13,655 12,197
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Operating Income (3,103) 4,091
Equity in (income) loss of
joint venture and other
(income) and expense (499) 755
Interest expense 4,794 3,199
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Income before Income Taxes (7,398) 137
Income taxes (1,875) 55
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Net Income (5,523) 82
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Basic earnings per share $ (0.64) $ 0.01
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Diluted earnings per share $ (0.64) $ 0.01
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Average number of shares
outstanding - Basic 8,577 8,406
Average number of shares
outstanding - Diluted 8,577 8,412
CONDENSED BALANCE SHEETS
($ in thousands)
December 02 August 31
2001 2001
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Current Assets
Cash and cash equivalents $ 8,258 $ 14,981
Accounts receivable 66,460 64,408
Inventories 50,592 58,193
Other current assets 11,312 13,846
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Total Current Assets 136,622 151,428
Property, Plant and Equipment 240,371 242,292
Goodwill 48,016 48,353
Other Assets 18,393 16,617
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Total Assets $ 443,402 $ 458,690
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Current Liabilities
Accounts payable $ 63,218 $ 66,032
Current debt 152,604 28,694
Other current liabilities 36,177 38,014
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Total Current Liabilities 251,999 132,740
Long-Term Debt 39,620 170,296
Deferred Liabilities 39,662 40,142
Shareholders' Equity 112,121 115,512
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Total Liabilities and
Shareholders' Equity $ 443,402 $ 458,690
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