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Amcast Reports Fiscal 2002 Fourth Quarter and Total Year Results

    DAYTON, Ohio--Oct. 16, 2002--Amcast Industrial Corporation, today reported financial results for its fiscal 2002 fourth quarter and full year ended August 31, 2002.
    Fiscal fourth quarter sales of $152.6 million were up by over 15% versus $132.3 million in the prior year. The net loss for the quarter was $9.1 million, or $1.05 per diluted share, versus a prior-year quarterly net loss of $11.2 million, or $1.31 per diluted share. Excluding unusual items of $5.3 million, the net loss for the prior-year quarter would have been $5.9 million or $0.69 per diluted share.
    The quarterly sales increase was due to strong automotive demand in both North America and Europe. North American Automotive sales grew by 30% over the prior-year quarter. Sales at Speedline, the Company's European operation, were up almost 18% versus the prior-year quarter. Flow Control segment sales declined by almost 11% in the fourth quarter versus last year, primarily due to a weak market and competitive pricing pressures.
    Amcast's quarterly net loss of $9.1 million compared favorably to last year's fourth quarter loss by $2.1 million. Excluding unusual items of $5.9 million in last year's quarter, the current-quarter loss increased by $3.2 million. The main causes of the increased loss were non-operational. Taxes increased by $2.1 million because of a lower tax benefit. In addition, non-operating expenses in our Italian operation were unfavorable to last year by $0.9 million, and interest expense was higher than last year by $0.3 million.
    For fiscal year 2002, sales were $576.2 million, up almost 9% from the prior year's $529.4 million. After adjusting the prior year to include a full year of sales for the Company's CTC operation, total sales grew by about 4%. Last year, CTC was a joint-venture accounted for as an equity investment until Amcast purchased 100% of the venture in the fourth fiscal quarter of last year. The net loss for the year was $21.1 million, or $2.45 per diluted share, compared with a loss of $37.1 million, or $4.38 per diluted share, last year.
    The prior year included unusual items of $20.9 million, or $2.46 per diluted share. Excluding unusual items, the current-year net loss was $4.9 million unfavorable to last year. The two main reasons for the increased loss were higher interest expenses of $2.4 million and a lower tax benefit of $2.4 million.
    Joseph R. Grewe, President and Chief Operating Officer, said, "Signs of operational improvement continued during the year, although the full-year financial results were far below expectations mostly due to $7 million in unplanned new product launch costs at our Richmond, Indiana plant and continuing poor performance at Speedline. In addition, Flow Control operating income declined by 51% from the prior year. This segment's declining performance was due to lower overall market demand, the cost of a new computer system, and weak raw material costs that resulted in depressed pricing. Automotive sales were strong and product quality improved due to more management focus. More importantly, our Wapakoneta, Ohio plant became consistently profitable in the third fiscal quarter and posted a positive annual operating profit for the first time since the plant opened in 1995."
    Mr. Grewe continued, "One of the most important internal initiatives that is improving operating and financial performance is the Amcast Production System. Plants with the most experience implementing this system show much better results. The Amcast Production System is a lean manufacturing training and certification process for manufacturing cells. The Amcast Production System was instrumental in achieving a significant productivity improvement during the year as output per person increased by over 12%, and total labor cost as a percent of sales declined by more than 5%. More specifically in our North American wheel business, where we have been most aggressive in implementing the Amcast Production System, the results have been encouraging. On a 25% increase in revenue, the North American wheel plants more than doubled their operating income. A 21% reduction in scrap, a 26% increase in output per person, and a 37% improvement in safety further enhanced wheel performance. In addition, inventory turnover tripled, and net assets employed in the wheel business actually declined by 20%."
    Byron O. Pond, Chairman and Chief Executive Officer, said, "In the fiscal fourth quarter, we successfully extended our current loan agreements to September, 2003 for the bank group and to November, 2003 for the senior lenders. This provides the Company with operating capital while we prepare for longer-term debt financing. During fiscal 2002, we successfully reduced net operating assets by $28.6 million even while sales increased. In addition, we repaid $19.5 million in debt in compliance with our loan agreements. We accomplished this through cost reduction programs, effective working capital management, and controls on capital spending. During the year, Amcast held capital spending to less than 66% of depreciation."
    Mr. Grewe added, "Even with the operational improvements achieved during the fiscal year, much remains to be done. The current focus is to improve profitability through the Amcast Production System, reduce scrap, improve quality, and continue a company-wide SG&A cost reduction program. In addition, we will concentrate on improving operations at the Richmond, Indiana plant and at Speedline."
    Mr. Pond concluded, "I want to thank the Amcast associates for their continuing effort to raise Amcast's performance level and increase our commitment to improvement. Also, everyone at Amcast is very appreciative of the support given to us by our lenders, investors, customers, and suppliers. We are looking forward to a much-improved fiscal 2003."
    A conference call to discuss the year's performance will be held Thursday, October 17, 2002 at 3 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         Year Ended
                        ----------------------  ---------------------
                         August 31   August 31   August 31  August 31
                           2002        2001        2002        2001
                        ----------- ----------- ----------- ----------
Net sales               $ 152,568   $ 132,305   $ 576,160   $ 529,373

Cost of sales             141,054     123,852     526,778     488,580
                        ----------- ----------- ----------- ----------
Gross Profit               11,514       8,453      49,382      40,793

Selling, general and
 administrative expenses   14,711      18,764      55,516      71,183
                        ----------- ----------- ----------- ----------
Operating Income (Loss)    (3,197)    (10,311)     (6,134)    (30,390)

Other (income) expense         57        (938)       (768)      1,644
Interest expense            5,294       6,411      18,506      17,532
                        ----------- ----------- ----------- ----------
Income (Loss) before
 Income Taxes              (8,548)    (15,784)    (23,872)    (49,566)

Income tax expense 
 (benefit)                    562      (4,551)     (2,787)    (12,435)
                        ----------- ----------- ----------- ----------
Net Income (Loss)       $  (9,110)  $ (11,233)  $ (21,085)  $ (37,131)
                        ----------- ----------- ----------- ----------
                        ----------- ----------- ----------- ----------

Basic income (loss)
 per share              $  (1.05)   $  (1.31)   $  (2.45)   $  (4.38)
                        ----------- ----------- ----------- ----------
                        ----------- ----------- ----------- ----------
Diluted income (loss)
 per share              $  (1.05)   $  (1.31)   $  (2.45)   $  (4.38)
                        ----------- ----------- ----------- ----------
                        ----------- ----------- ----------- ----------
Average number of shares
 outstanding- Basic         8,653       8,577       8,604       8,482

Average number of shares
 outstanding- Diluted       8,653       8,577       8,604       8,482

                       CONDENSED BALANCE SHEETS

($ in thousands)

                                            August 31   August 31
                                               2002       2001
                                            ---------  ---------
ASSETS

Current Assets
Cash and cash equivalents                    $ 19,158   $ 14,981
Accounts receivable                            70,941     64,408
Inventories                                    51,983     58,193
Other current assets                            4,834     12,098
                                             ---------  ---------
Total Current Assets                          146,916    149,680

Property, Plant and Equipment                 237,956    244,040
Goodwill                                       47,000     48,353
Other Assets                                   18,338     16,617
                                             ---------  ---------

Total Assets                                 $450,210   $458,690
                                             ---------  ---------
                                             ---------  ---------

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities
Current debt                                 $ 22,914   $ 28,694
Accounts payable                               74,281     66,032
Other current liabilities                      42,069     38,014
                                             ---------  ---------

Total Current Liabilities                     139,264    132,740

Long-Term Debt                                175,791    170,296
Deferred Liabilities                           43,810     40,142
Shareholders' Equity                           91,345    115,512
                                             ---------  ---------

Total Liabilities and Shareholders' Equity   $450,210   $458,690
                                             ---------  ---------
                                             ---------  ---------