Amcast Reports Fiscal 2003 Second Quarter Results
DAYTON, Ohio--March 26, 2003--Amcast Industrial Corporation, today reported financial results for its fiscal 2003 second quarter ended March 2, 2003.Amcast announced on March 17, 2003 that it sold Speedline, its European wheel business, to a third party. Excluding Speedline, second quarter sales were $99.1 million, up 2% compared with the second quarter of last year from continuing operations. Revenue growth was mostly from newly introduced products to U.S. automotive customers offset by lower plumbing product sales mostly due to weak markets. By segment for the quarter, Flow Control sales declined by 7%, and Engineered Components sales rose by 7%.
The Company incurred a net loss of $55.9 million, or $6.32 per diluted share, in its fiscal second quarter compared with a net loss of $4.9 million, or $0.57 per diluted share, in the same period last year. The second quarter net loss included a loss related to Speedline of $54.6 million, or $6.17 per diluted share. When the Company begins showing sustained profits, it believes it will be able to recognize approximately $31 million in future tax benefits associated with the Speedline sale. SFAS No. 109 prevents this recognition at the present. The net loss from continuing operations of $1.3 million, or $0.15 per share, was favorable to the prior-year second quarter loss of $1.8 million, or $0.21 per share. Improvements occurred mainly in the Engineered Components segment.
The Company's gravity cast plant in Richmond, Indiana is making rapid improvements in delivery and cost, and it anticipates turning the corner on profitability soon. Flow Control improved its performance over the prior year's quarter, which is encouraging. Residential construction remains slightly better than expected; however, the more profitable commercial and industrial markets remain weak.
Year-to-date sales from continuing operations were $211.4 million, up 9% over the prior year due to a strong U.S. automotive market. Sales in Amcast's Engineered Components business was up 18%, while Flow Control sales declined by 8%. Year-to-date the Company lost $109.7 million, or $12.48 per diluted share, compared with a net loss of $10.4 million, or $1.22 per diluted share, in the prior year. The year-to-date net loss included a $59.9 million loss related to Speedline and a $46.5 million loss for the cumulative effect of a change in accounting principle reported in the fiscal first quarter. The year-to-date net loss from continuing operations is $3.2 million, or $0.36 per diluted share. This compares favorably with the prior-year net loss of $5.5 million, or $0.64 per diluted share.
Byron O. Pond, Chairman of the Board and Chief Executive Officer said, "The sale of Speedline will help improve Amcast's performance moving forward. Our European wheel business has been a significant management drain for quite some time, and it has consumed precious resources. We will now be able to focus all of management's attention on our U.S. operations where we see a good deal of opportunity. Amcast has been profitable at the operating income line for five consecutive quarters in its U.S. businesses. The Company still expects to sell its Components Group and the process is moving along. Also, we are continuing to work on plans to refinance the Company, and we remain in compliance on our loan covenants. Since the beginning of this fiscal year, Amcast has reduced debt by $7 million."
Joseph R. Grewe, Chief Operating Officer said, "Amcast's operations have shown improvements in several areas. Selling, general, and administrative expense during the quarter decreased by 7% compared to the prior-year quarter, while sales were up by 2%. The company has also improved productivity by over 7% as measured by sales per full time equivalent employee, and overall cost reduction year to date is $5.2 million." Mr. Grewe concluded, "With Speedline behind us, we can focus more intently on improving performance in our two automotive gravity cast plants and increasing margins at Flow Control."
Mr. Pond concluded, "On March 25, 2003 the New York Stock Exchange announced that trading of Amcast Industrial Corporation common stock will be suspended prior to the opening of trading on April 1, 2003. We agree that the Company does not have the ability to achieve the NYSE listing requirements in the prescribed timeframe. As such, we are taking action to transfer to the OTC Bulletin Board by April 1, 2003.
A conference call to discuss the fiscal 2003 second quarter financial performance will be held Wednesday, March 26 at 3 p.m. EST. The webcast can be accessed through www.amcast.com.
Amcast Industrial Corporation is a leading manufacturer of technology-intensive metal products. Its two business segments are brand name Flow Control Products marketed through national distribution channels and Engineered Components for original equipment manufacturers. The company serves the automotive, construction, and industrial sectors of the economy.
This release includes "forward-looking statements" which are subject to change based on various factors and uncertainties that may cause actual results to differ significantly from expectations. These factors include, among others: general economic conditions less favorable than expected, fluctuating demand in the automotive and housing industries, price pressures in the Company's automotive and flow control businesses, effectiveness of production improvement plans, inherent uncertainties in connection with international transactions and foreign currency fluctuations, and labor availability and relations at the company and its customers, and the impact of war with Iraq and homeland security measures.
STATEMENTS OF OPERATIONS
($ in thousands except per share amounts)
Three Months Ended Six Months Ended
------------------ --------------------
March 02 March 03 March 02 March 03
2003 2002 2003 2002
--------- -------- ---------- ---------
Net Sales $99,145 $97,030 $211,367 $193,716
Cost of sales 88,143 87,020 189,236 174,716
--------- -------- ---------- ---------
Gross Profit 11,002 10,010 22,131 19,000
Selling, general, and
administrative expenses 9,194 9,919 19,363 20,003
--------- -------- ---------- ---------
Operating Income (Loss) 1,808 91 2,768 (1,003)
Other (income) expense 9 (365) (23) (528)
Interest expense 3,888 3,884 7,859 8,359
--------- -------- ---------- ---------
Loss Before Income Taxes,
Discontinued Operations,
and Cumulative Effect of
Accounting Change (2,089) (3,428) (5,068) (8,834)
Income taxes (benefit) (752) (1,607) (1,891) (3,384)
--------- -------- ---------- ---------
Loss From Continuing
Operations (1,337) (1,821) (3,177) (5,450)
Discontinued Operations
Loss from operations of
assets held for sale, net
of tax expense (benefit) of
$396, $96, $793, ($2) (4,766) (3,061) (10,118) (4,955)
Loss on anticipated sale of
assets held for sale, net of
tax of $7,589 (49,822) - (49,822) -
--------- -------- ---------- ---------
Loss Before Cumulative Effect
of Accounting Change (55,925) (4,882) (63,117) (10,405)
Cumulative effect of
accounting change, net of tax
of $464 - - (46,536) -
--------- -------- ---------- ---------
Net Loss $(55,925) $(4,882) $(109,653) $(10,405)
========= ======== ========== =========
Basic earnings (loss) per
share
Continuing operations $(0.15) $(0.21) $(0.36) $(0.64)
Discontinued operations (6.17) (0.36) (6.82) (0.58)
--------- -------- ---------- ---------
Before cumulative effect of
accounting change (6.32) (0.57) (7.18) (1.22)
Cumulative effect of
accounting change - - (5.30) -
--------- -------- ---------- ---------
Net earnings (loss) $(6.32) $(0.57) $(12.48) $(1.22)
========= ======== ========== =========
Diluted earnings (loss) per
share
Continuing operations $(0.15) $(0.21) $(0.36) $(0.64)
Discontinued operations (6.17) (0.36) (6.82) (0.58)
--------- -------- ---------- ---------
Before cumulative effect of
accounting change (6.32) (0.57) (7.18) (1.22)
Cumulative effect of
accounting change - - (5.30) -
--------- -------- ---------- ---------
Net earnings (loss) $(6.32) $(0.57) $(12.48) $(1.22)
========= ======== ========== =========
Average number of shares
outstanding - Basic 8,852 8,587 8,784 8,582
Average number of shares
outstanding - Diluted 8,852 8,587 8,784 8,582
CONDENSED BALANCE SHEETS
($ in thousands)
March 02 August 31
2003 2002
--------- ---------
ASSETS
Current Assets
Cash and cash equivalents $4,206 $16,810
Restricted cash 7,074 1,067
Accounts receivable 42,476 43,028
Inventories 20,078 27,796
Other current assets 6,336 3,941
--------- ---------
Total current assets of continuing operations 80,170 92,642
Assets of discontinued operations 82,694 185,721
--------- ---------
Total Current Assets 162,864 278,363
Fixed Assets (net) 146,094 154,763
Goodwill - 8,019
Other Assets 14,963 9,066
--------- ---------
Total Assets $323,921 $450,211
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $36,382 $41,169
Current debt 181,337 11,062
Other current liabilities 23,388 22,682
--------- ---------
Total current liabilities of discontinued
operations 241,107 74,913
Liabilities of discontinued operations 81,694 86,547
--------- ---------
Total Current Liabilities 322,801 161,460
Long-Term Debt - 177,248
Deferred Liabilities 16,518 20,158
Shareholders' Equity (15,398) 91,345
--------- ---------
Total Liabilities and Shareholders' Equity $323,921 $450,211
========= =========