Sequa Reports First Quarter Results
NEW YORK--May 15, 2002--With sales down eight percent and operating income sharply lower, Sequa Corporation posted a loss of $3.1 million or 35 cents per basic and diluted share for the first quarter ended March 31, 2002.In the same period of 2001, Sequa reported a loss of $0.3 million or eight cents per basic and diluted share.
As previously announced, first quarter 2002 results were ahead of the company's original forecast for several reasons: stronger-than-expected results from operations in the latter part of the quarter; the settlement of a tax issue in the United Kingdom that added $1.1 million or 11 cents per share to net results; and the recording of a gain ($1.4 million, included in other income) from a change in March in the fair market value of a natural gas swap, which increased net results by $0.9 million or nine cents per share.
The decline in operating results for the first quarter primarily reflects the downturn at the Chromalloy Gas Turbine unit, which makes up the largest of Sequa's five segments. A supplier of advanced component repairs and related services to the global airline industry, Chromalloy has been hurt by fallout from September 11.
Results of Sequa's other four segments were mixed. Metal coatings moved sharply higher, the result of increased market share, continued efficiency gains and lower natural gas costs. Propulsion posted lower sales but narrowed its loss due, in part, to reduced administrative costs. Specialty chemicals' results were lower, with currency issues continuing to affect both operating margins and reported profits. The other products segment recorded a smaller loss than a year ago, as the can machinery unit generated a $3.4 million favorable swing in results and operated at a profit for the quarter. These favorable developments tempered the impact of a sharp decline at MEGTEC Systems due to a downturn in the graphic arts market and continued softness at After Six, the men's formalwear unit. For all five segments, first quarter 2002 results benefited from the absence of goodwill amortization, which, in the same quarter of 2001, amounted to $3.2 million.
Sequa Corporation is a diversified manufacturer whose interests are in the fields of aerospace, propulsion, metal coating, specialty chemicals, can machinery, industrial equipment, automotive products, and men's formalwear. For additional information, visit the company's web site at www.sequa.com.
Sequa Corporation and Subsidiaries
Report for the Three Months Ended March 31,
(Amounts in thousands, except per share)
(Unaudited)
Three Months
2002 2001
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Sales $ 396,912 $430,119
Costs and expenses 389,632 417,810
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Operating income 7,280 12,309
Other income (expense)
Interest expense (15,954) (14,602)
Interest income 879 1,215
Other, net 512 609
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(14,563) (12,778)
Loss before income taxes (7,283) (469)
Tax benefit 4,200 200
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Net loss $ (3,083) $ (269)
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Net loss per basic and
diluted share $ (0.35) $ (0.08)
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Results by Business Segment
(Amounts in thousands) Three Months
2002 2001
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Sales
Aerospace $ 164,444 $191,675
Propulsion 66,832 69,047
Metal Coating 52,709 48,415
Specialty Chemicals 35,781 35,343
Other Products 77,146 85,639
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Total $ 396,912 $430,119
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Operating Income (Loss)
Aerospace $ 7,758 $ 14,919
Propulsion (195) (521)
Metal Coating 3,061 322
Specialty Chemicals 3,337 3,776
Other Products (316) (819)
Corporate (6,365) (5,368)
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Total $ 7,280 $ 12,309
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