Amcast Reports Fiscal 2002 Third Quarter Results
DAYTON, Ohio--June 25, 2002--Amcast Industrial Corporation, today reported financial results for its fiscal 2002 third quarter ended June 2, 2002.Third quarter sales of $151.4 million were up 11% over the third quarter of fiscal 2001. If Casting Technology Company (CTC) were consolidated last year, sales would be up 5%. The Company incurred a net loss of $1.6 million, or $0.18 per diluted share compared with a loss of $19.2 million, or $2.25 per diluted share, in the third quarter of last year. Last year's reported loss included an after tax loss of $13.6 million in unusual items. For the fiscal year to date, sales were $423.6 million; and with CTC included, sales would be about the same last year. Year to date, the Company has incurred a loss of $12.0 million, or $1.39 per diluted share, compared with last year's loss of $25.9 million, or $3.06 per diluted share, which included an after tax loss of $15.5 million in unusual items.
During the quarter, Engineered Components sales increased by 8.5%, mostly due to new product launches in suspension parts and improved wheel sales in North America. Flow Control sales declined by 5% from last year while pounds shipped were down about 3%. This segment continues to be under pricing pressure.
Operating profit for the quarter was $2.9 million compared with an operating loss of $18.3 million in the same period last year. Last year's operating loss included $15.6 million in unusual items. In the quarter, nine out of eleven Amcast business units were profitable at the operating income line, up from five the previous year. North American Wheels operating income increased over six fold on a 24% sales increase, and the Wapakoneta components operation achieved an operating margin of 5.1% for the quarter.
This is the first positive quarterly operating margin realized by this unit since the third quarter of 1995. Other operations showing improved performance during the quarter were CTC, Cedarburg, Lee Brass, and Elkhart Industrial. In the quarter, the Company also took cost saving actions to eliminate certain retiree life insurance and to change the salaried vacation practice to pay as you go versus a cliff vesting at January 1 of each year. This increased income by $2.5 million. Going forward, the savings for the life insurance elimination will be several million dollars, while the salaried vacation action will reduce cost by helping control employee turnover in the early part of the year.
Joseph R. Grewe, Amcast's President and Chief Operating Officer, commenting on the quarter said, "We are pleased to see signs of improvement in many Amcast operating units. It is clear that the Company has struggled since the U.S. automotive industry's downturn last year. Our performance during the quarter, while better, was adversely affected by unanticipated new product launch costs of approximately $2 million at our Richmond, Indiana facility, continuing operating problems at Speedline and ongoing pricing weakness in our Flow Control segment. We expect Richmond to be on their delivery schedules by mid-July, and we are encouraged by recent indications that pricing might be improving in Flow Control's markets."
Remarking about Amcast's current debt levels, Byron O. Pond, the Company's Chairman and Chief Executive Officer, stated that during the quarter the Company reduced debt by a net of $6.0 million to $185.7 million. He went on to say, "In spite of our weak earnings performance, the Company has continued to work on debt reduction. Since the beginning of this fiscal year, debt has been reduced by $13.3 million. We have continued to improve working capital management. Our operating working capital, excluding cash, as a percent of sales has been reduced from 12.2% in May 2001 to 3.5% at the end of May 2002. In addition, we have reduced capital spending from 94% of depreciation in FY 2001 to 67% of depreciation year to date."
Mr. Pond concluded by saying, "We are continuing to work with our lenders on an extension of our current loan agreement, which expires on September 14, 2002. It is our expectation that we will finalize an extension to September 14, 2003 within the next few weeks. In the interim, our bank group provided a $20 million LIFO facility for the Company on June 4, which currently is unused. We are still on a long journey toward restoring Amcast's financial health. In this process, we would like to thank our shareholders, suppliers, lenders and all other Amcast stakeholders for their patience and cooperation."
A conference call to discuss the fiscal 2002 third quarter financial performance will be held Wednesday, June 26, 2002 at 2 p.m. EDT. The webcast can be accessed through www.amcast.com.
Amcast Industrial Corporation is a leading manufacturer of technology-intensive metal products. Its two business segments are brand name Flow Control Products marketed through national distribution channels and Engineered Components for original equipment manufacturers. The company serves the automotive, construction, and industrial sectors of the economy.
This release includes "forward-looking statements" which are subject to change based on various factors and uncertainties that may cause actual results to differ significantly from expectations. These factors include, among others; general economic conditions less favorable than expected, fluctuating demand in the automotive and housing industries, price pressures in the company's automotive and flow control businesses, effectiveness of production improvement plans, inherent uncertainties in connection with international operations and foreign currency fluctuations, and labor availability and relations at the company and its customers.
STATEMENTS OF OPERATIONS
($ in thousands except per share amounts)
Three Months Ended Nine Months Ended
---------------------- ----------------------
June 02 June 03 June 02 June 03
2002 2001 2002 2001
--------- --------- --------- ---------
Net sales $ 151,423 $ 136,158 $ 423,592 $ 397,068
Cost of sales 135,127 130,074 385,724 364,728
--------- --------- --------- ---------
Gross Profit 16,296 6,084 37,868 32,340
Selling, general
and administrative
expenses 13,436 24,374 40,805 52,419
--------- --------- --------- ---------
Operating Income
(Loss) 2,860 (18,290) (2,937) (20,079)
Other (income)
expense 166 972 (825) 2,582
Interest expense 4,227 4,601 13,212 11,121
--------- --------- --------- ---------
Income (Loss)
before Income
Taxes (1,533) (23,863) (15,324) (33,782)
Income tax
expense (benefit) 37 (4,620) (3,349) (7,884)
--------- --------- --------- ---------
Net Income (Loss) $ (1,570) $ (19,243) $ (11,975) $ (25,898)
========= ========= ========= =========
Basic income
(loss) per
share $ (0.18) $ (2.25) $ (1.39) $ (3.06)
========= ========= ========= =========
Diluted income
(loss) per share $ (0.18) $ (2.25) $ (1.39) $ (3.06)
========= ========= ========= =========
Average number
of shares
outstanding
- Basic 8,601 8,536 8,588 8,451
Average number
of shares
outstanding
- Diluted 8,601 8,536 8,588 8,451
CONDENSED BALANCE SHEETS
($ in thousands)
June 02 August 31
2002 2001
-------- --------
ASSETS
Current Assets
Cash and cash equivalents $ 4,455 $ 14,981
Accounts receivable 77,040 64,408
Inventories 47,483 58,193
Other current assets 9,603 13,846
-------- --------
Total Current Assets 138,581 151,428
Property, Plant and Equipment 234,565 242,292
Goodwill 47,341 48,353
Other Assets 20,956 16,617
-------- --------
Total Assets $441,443 $458,690
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Current debt $180,588 $ 28,694
Accounts payable 72,842 66,032
Other current liabilities 41,720 38,014
-------- --------
Total Current Liabilities 295,150 132,740
Long-Term Debt 5,147 170,296
Deferred Liabilities 37,653 40,142
Shareholders' Equity 103,493 115,512
-------- --------
Total Liabilities and
Shareholders' Equity $441,443 $458,690
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