Oilgear Reports Third Quarter Results
MILWAUKEE--Nov. 15, 2002--The Oilgear Company today reported sales and earnings for the third quarter ended September 30, 2002.For the third quarter of 2002, Oilgear reported net sales of $18,091,000, compared to sales of $20,188,000 for the same period in 2001. The company reported a net loss of $1,279,000 or $0.66 per share for the third quarter of 2002, compared to a net loss of $1,834,000 or $0.94 per share for the comparable prior period.
For the first nine months of 2002, net sales were $57,425,000, compared to sales of $63,438,000 for the first nine months of 2001. The net loss was $2,441,000 or $1.25 per share for the first nine months of 2002, compared to a net loss of $1,506,000 or $0.77 per share for the same period in the prior year.
"The extended softness in the fluid power market in the United States and a decline in forging, extrusion and other capital equipment projects in the international segment resulted in decreased net sales in the third quarter and first nine months of 2002," said David A. Zuege, president and chief executive officer. "However, based on industry statistics and our own experience, we believe that we have not lost market share."
Zuege indicated that European business levels continue to be steady, and that European net sales increased in the first nine months of 2002 with orders from the Ministry of Defense in the United Kingdom. Overall, orders in the third quarter of 2002 amounted to $28.7 million, up 46.6% from the third quarter of 2001. Order backlog was at $30.9 million at the end of the third quarter, up 50.9% from the beginning of the year. "During the third quarter we received an order for a major hydraulic, electric and electronic controls project with a value of approximately $11 million," Zuege added.
"On the cost reduction front, the plant closing in Longview, Texas, is on schedule. Some of the product lines produced in Longview are already being produced in Milwaukee and the remaining products are scheduled to be transferred to the Milwaukee plant by the end of 2002," said Zuege.
A leader in the fluid power industry, The Oilgear Company provides advanced technology in the design and production of unique fluid power components and electronic controls. The company serves customers in the primary metals, machine tool, automobile, aerospace, petroleum, construction equipment, chemical, plastic, glass, lumber, rubber and food industries.
Certain matters discussed in this press release are "forward-looking statements" intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified as such because the context of the statement will include words such as the company "believes," "anticipates," "expects" or words of similar import. Similarly, statements that describe the company's future plans, objectives or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties which could cause actual results to differ materially from those currently anticipated. In addition to the assumptions and other factors referenced specifically in connection with such statements, the following could impact the business and financial prospects of the Company: continued weakness in the fluid power industry, particularly a reduction in orders of custom products with high value-added features; limitations on the Company's ability to further decrease its costs and to spread its fixed costs over diminishing orders for the Company's products; factors affecting the Company's international operations, including fluctuations in currencies, changes in laws and political or financial insecurity of foreign governments; factors affecting the Company's ability to hire and retain competent employees, including unionization of non-union employees and strikes or work stoppages; factors affecting the economy generally, including an economic slowdown and other conditions that could reduce demand for the Company's products; decrease in stock price as a result of market conditions; changes in the law or standards applicable to the Company, including environmental laws and accounting pronouncements; availability of raw materials; unanticipated technological developments that result in competitive disadvantages and may impair existing assets;factors affecting the fair market value of the Company's common stock or other factors that would negatively impact the funding of the Company's employee benefit plans and the listing of the Company's common stock; and factors set forth in the Company's periodic reports filed with the SEC in accordance with the Securities Exchange Act. Shareholders, potential investors and other readers are urged to consider these factors and those set forth in the company's filings with the SEC carefully in evaluating the forward-looking statements. The forward-looking statements made herein are only made as of the date of this press release and the company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.
News releases and product information from The Oilgear Company are available 24 hours a day on-line at: www.oilgear.com
The Oilgear Company
Consolidated Condensed Earnings Statement
(Unaudited)
Three Months Ended September 30,
2002 2001
Net sales $ 18,091,000 20,188,000
Special costs 492,000
Cost of sales 14,874,000 16,536,000
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Gross profit $ 3,217,000 3,160,000
Special operating expenses 225,000
Operating expenses 4,377,000 4,333,000
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Operating loss $ (1,160,000) (1,398,000)
Interest expense 358,000 434,000
Other income 93,000 55,000
------------- --------------
Loss before income taxes (1,425,000) (1,777,000)
Income taxes 9,000 47,000
------------- --------------
Net earnings (loss) from
minority interest (155,000) 10,000
-------------- --------------
Net loss $ (1,279,000) (1,834,000)
=============== ===============
Basic loss per share of
common stock $ (0.66) $ (0.94)
=============== ===============
Diluted loss per share of
common stock $ (0.66) $ (0.94)
=============== ===============
Dividends per share $ 0.00 $ 0.00
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Basic weighted average
outstanding shares 1,953,000 1,941,000
Diluted weighted average
outstanding shares 1,953,000 1,941,000
Nine Months Ended September 30,
2002 2001
---- ----
Net sales $ 57,425,000 $ 63,438,000
Special costs 492,000
Cost of sales 45,645,000 48,985,000
------------- --------------
Gross profit 11,780,000 13,961,000
Special operating expenses 225,000
Operating expenses 13,323,000 13,792,000
------------- --------------
Operating loss $ (1,543,000) $ (56,000)
Interest expense 986,000 1,255,000
Other income 252,000 56,000
------------- --------------
Loss before income taxes $ (2,277,000) $ (1,255,000)
Income taxes 209,000 206,000
------------- --------------
Net earnings (loss) from
minority interest (45,000) 45,000
------------- --------------
Net loss $ (2,441,000) $ (1,506,000)
============== ===============
Basic (loss) per share of
common stock $ (1.25) $ (0.77)
============== ===============
Diluted (loss) per share of
common stock $ (1.25) $ (0.77)
============== ===============
Dividends per share $ 0.00 $ 0.14
============== ==============
Basic weighted average
outstanding shares 1,950,000 1,948,000
Diluted weighted average
outstanding shares 1,950,000 1,948,000
The Oilgear Company
Consolidated Condensed Balance Sheet
(Unaudited)
September 30, 2002 December 31, 2001
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ASSETS
Current Assets
Cash and cash equivalents $ 3,683,000 $ 4,997,000
Accounts receivable 15,007,000 17,002,000
Inventories 22,883,000 23,910,000
Other current assets 4,684,000 2,186,000
------------- --------------
Total current assets $ 46,257,000 $ 48,095,000
------------- --------------
Net property plant
and equipment 21,344,000 22,701,000
Other assets 1,284,000 1,136,000
------------- --------------
$ 68,885,000 $ 71,932,000
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Current debt $ 11,724,000 $ 7,564,000
Accounts payable 5,120,000 5,377,000
Other current liabilities 7,476,000 8,230,000
------------- --------------
Total current
liabilities $ 24,320,000 $ 21,171,000
------------- --------------
Long-term debt 12,046,000 17,130,000
Unfunded employee
benefit costs 13,996,000 13,996,000
Other non-current liabilities 1,138,000 1,107,000
------------- --------------
Total liabilities $ 51,500,000 $ 53,404,000
------------- --------------
Minority interest in consolidated
subsidiary 858,000 946,000
Shareholders' equity 16,527,000 17,582,000
------------- --------------
$ 68,885,000 $ 71,932,000
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