Baldor Electric Company Announces 2002 Year-End Audited Results
FORT SMITH, Ark., Jan. 30 -- Baldor Electric
Company markets, designs, and manufactures electric motors,
drives, and generators and is based in Fort Smith, Arkansas. Today Baldor
announced the results of the fourth quarter of 2002 and the year ended 2002.
(in thousands
except per share 4th Quarter Year
data) 2002 2001 2002 2001
13 weeks ended 52 weeks ended
Dec 28 Dec 29 % Dec 28 Dec 29 %
2002 2001 Change 2002 2001 Change
Net Sales $135,931 $122,511 11% $549,507 $557,459 -1%
Cost of Sales 97,896 89,974 396,814 401,471
Gross Profit 38,035 32,537 17% 152,693 155,988 -2%
SG&A 26,750 25,773 107,407 111,253
Operating Profit 11,285 6,764 67% 45,286 44,735 1%
Other (Income)
Expense 307 576 2,072 4,067
Profit Sharing 1,294 876 5,285 5,136
Earnings Before
Income Taxes 9,684 5,312 82% 37,929 35,532 7%
Income Taxes 3,584 1,966 14,034 13,147
Net Earnings $6,100 $3,346 82% $23,895 $22,385 7%
Earnings Per
Share - Diluted $0.18 $0.10 80% $0.69 $0.65 6%
Dividends Per
Share $0.13 $0.13 0% $0.52 $0.52 0%
Average Shares
Outstanding 34,552 34,434 0% 34,622 34,506 0%
In commenting on the results, John McFarland, President and CEO, stated,
"Fourth quarter sales increased 11% and earnings per share increased 80% to
$0.18. For the year, a sales decline of 1% and an earnings increase of
7% gave us total earnings per share of $0.69. Our operating margin of
8.3% improved over the third quarter 2002 as well as the fourth quarter 2001."
McFarland also commented, "Incoming orders in January were about the same
as January 2002. Even though we are still in a challenging environment, the
large number of new customers we gained during 2002 encourages us as we head
into the new year."
R. S. Boreham, Jr., Chairman, commented, "During the past 12 months, we
have continued to do the things that make us a better company for the coming
years, such as continued investments in new products and training for our
employees and customers. We believe these investments strengthen our
competitive position."
We have prepared a list of questions and answers often asked by
shareholders. We believe these comments will help you better understand our
Company and our strategies.
Q ... How does your balance sheet look at the end of 2002?
Our balance sheet continued to strengthen during the fourth quarter. Cash
and marketable securities increased to $52 million and cash flow from
operations improved 39% over 2001.
Balance Sheet Summary
(in thousands) 2002 2002 2001
Dec 28 2002 Sep 28 2002 Dec 30 2001
Cash & Marketable Securities $51,670 $45,172 $16,616
Receivables 83,661 92,953 83,182
Inventories 113,140 114,303 126,221
Working Capital 201,703 198,073 173,638
Long-Term Debt 105,285 105,287 98,673
Shareholders' Equity 274,598 270,479 262,485
Cash Flow from Operations (YTD) 53,382 39,184 38,303
Q ... How successful were you with new customers in 2002?
2002 was our most successful year in gaining new customers. Last year,
over 400 new customers accounted for $32 million in sales that we didn't have
in the previous year. We will strive to expand the number of new customers
during 2003.
Q ... How were incoming orders during the quarter?
Fourth quarter orders were up 11.6% over the prior year and up 1.1% over
the third quarter 2002.
Q ... What important new products do you expect to introduce during
2003?
We continue to focus on new product development in motors, drives, and
generators. Recently we introduced a new concept in generators we call
OptiGEN(TM). OptiGEN combines adjustable speed drive technology with a
standby generator, providing higher output, lower cost, and reduced emissions.
Q ... Is your operating margin improving?
http://www.baldor.com/images/q4_operating_margin_chart.jpg
On approximately the same sales as the third quarter 2002, our operating
margin improved 100 basis points.
Q ... What is your outlook for 2003?
Even though times are uncertain, we are optimistic about 2003. During
2002, we introduced many new products and gained over 400 new customers. We
have strengthened our balance sheet, achieved permanent cost reductions, and
improved our competitive position. For these reasons, we are a stronger
company now than before the recession.
Q ... When will you make your next update?
We will make presentations at the Gabelli Pump, Valve, and Motor Symposium
in New York City on February 6, 2003, and at the Wall Street Analyst Forum in
New York City on March 3, 2003.
This document contains statements that are forward-looking, i.e. not
historical facts. The forward-looking statements (generally identified by
words or phrases indicating a projection or future expectation such as
"outlook", "optimistic", "trends", "expect(s)", "assuming", "expectations",
"forecasted", "estimates", "expected") are based on the Company's current
expectations and some of them are subject to risks and uncertainties.
Accordingly, you are cautioned that any such forward looking statements are
not guarantees of future performance and involve risks and uncertainties, and
that actual results may differ materially from those projected in the forward
looking statements as a result of various factors. The factors that might
cause such differences include, among others, the following: (i) changes in
economic conditions, (ii) developments or new initiatives by our competitors
in the markets in which we compete, (iii) fluctuations in the costs of select
raw materials, (iv) the success in increasing sales and maintaining or
improving the operating margins of the Company, and (v) other factors
including those identified in the Company's filings made from time-to-time
with the Securities and Exchange Commission. These statements should be read
in conjunction with the Company's most recent annual report (as well as the
Company's Form 10-K and other reports filed with the Securities and Exchange
Commission) containing a discussion of the Company's business and of various
factors that may affect it.