Amcast Reports Fiscal 2003 Third Quarter Results
DAYTON, Ohio--July 14, 2003--Amcast Industrial Corporation (AICO.OB) today reported financial results for its fiscal 2003 third quarter ended June 1, 2003.Third quarter sales from continuing operations were $111.8 million, down 3% compared with the third quarter of last year. Lower plumbing product sales due to weak markets were partly offset by revenue growth from newly introduced products to U.S. automotive customers. By segment for the quarter, Flow Control sales declined by 18%, and Engineered Components sales rose by 4%.
Amcast previously announced on March 17, 2003 that it sold Speedline, its European wheel business. Including discontinued operations in the fiscal third quarter, the net loss of $1.8 million, or $0.20 per diluted share, was unfavorable to the prior-year quarter loss of $1.6 million, or $0.18 per share. Year-to-date, the Company had a net loss of $111.5 million, or $12.58 per diluted share, compared with a net loss of $12.0 million, or $1.40 per diluted share, in the prior year. The year-to-date net loss included a $62.4 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. Continuing operations, which exclude Speedline, provide the best operating comparison; therefore, this announcement is focused on continuing operations.
The Company earned net income of $0.7 million, or $0.08 per diluted share, from continuing operations in its fiscal third quarter compared with net income of $1.9 million, or $0.22 per diluted share, in the same period last year. The prior-year quarter included one-time income of $0.9 million from ending retiree life insurance benefits and of $1.6 million from the reversal of an employee vacation accrual. Excluding these non-recurring items and adjusting for taxes, net income from continuing operations in the fiscal third quarter would have increased by $0.4 million.
Amcast's wheel business maintained its strong performance during the third quarter. The Company's gravity cast plant in Richmond, Indiana made strong operational progress as product delivery, manufacturing productivity, and costs all improved. The Richmond plant achieved profitability during one month of the third quarter, and coupled with continued strong performance at the Wapakoneta, Ohio plant, the aluminum components business was profitable in the quarter. Flow Control continued to have difficulty in its highly competitive market. While the residential construction market remains slightly better than expected, the more profitable commercial and industrial markets remain weak.
Year-to-date sales from continuing operations were $323.2 million, up almost 5% over the prior year because of the strength of the U.S. automotive market. Sales in the Engineered Components business were up 13%, while Flow Control sales declined by 12%. The year-to-date net loss from continuing operations was $2.5 million, or $0.28 per diluted share, which compares favorably with the prior-year net loss of $3.6 million, or $0.42 per diluted share. Excluding last year's nonrecurring items that were previously mentioned, the year to date was favorable to last year by $2.7 million.
Amcast is working on finalizing negotiations in the fiscal fourth quarter on a three-year extension of its debt with its banks and senior note holders. If the debt extension had been completed in the fiscal third quarter, the balance sheet would show $173.0 million in long-term debt and $6.8 million in current debt.
Byron O. Pond, Chairman of the Board and Chief Executive Officer said, "Amcast's continuing operations returned to profitability after interest and taxes in the fiscal third quarter and reported its fourth consecutive month of positive net income. Amcast has been profitable from continuing operations at the operating income line for six consecutive quarters. Management will continue to focus on increasing profit margins through improved productivity and cost reductions, and by taking advantage of significant upside potential that currently exists in our businesses. In addition, the Company continues progress towards selling its Components Group in the fiscal fourth quarter, and discussions with the prospective buyer are progressing."
Joseph R. Grewe, Chief Operating Officer said, "Amcast's operations have improved in several areas. Richmond achieved profitability for one month during the quarter, and it appears that the new product launch difficulties are behind them. Total selling, general, and administrative expense versus the prior-year quarter decreased by 13% after excluding one-time benefits in the fiscal 2002 third quarter. This was achieved while sales were down by 3%. The company also improved quarterly productivity by 10% as measured by sales per employee and achieved overall cost reductions year to date of $10.1 million. Our major management focus is improving performance in our two automotive gravity cast plants and increasing margins at Flow Control."
Commenting on the pending debt extension, Mr. Pond concluded, "We appreciate the confidence our banks and senior note holders have in Amcast by negotiating to extend our debt maturity. Expected to be completed in the fiscal fourth quarter, this debt extension will provide Amcast with liquidity and operating flexibility while we continue achieving better operating performance. Since the beginning of this fiscal year, Amcast has reduced debt by $8.5 million from continuing operations and by $18.9 million including discontinued operations."
A conference call to discuss the fiscal 2003 third quarter financial performance will be held Tuesday, July 15 at 2 p.m. EDT. The webcast can be accessed through www.amcast.com.
Amcast Industrial Corporation is a leading manufacturer of technology-intensive metal products. Its two business segments are brand name Flow Control Products marketed through national distribution channels and Engineered Components for original equipment manufacturers. The company serves the automotive, construction, and industrial sectors of the economy.
This release includes "forward-looking statements" which are subject to change based on various factors and uncertainties that may cause actual results to differ significantly from expectations. These factors include, among others: general economic conditions less favorable than expected, fluctuating demand in the automotive and housing industries, price pressures in the Company's automotive and flow control businesses, effectiveness of production improvement plans, inherent uncertainties in connection with international transactions and foreign currency fluctuations, and labor availability and relations at the company and its customers, and the impact of war with Iraq and homeland security measures.
Amcast Industrial Corporation
News Release - Page 4 of 5
July 14, 2003
STATEMENTS OF OPERATIONS
($ in thousands except per share amounts)
Three Months Ended Nine Months Ended
------------------- --------------------
June 1 June 2 June 1 June 2
2003 2002 2003 2002
--------- --------- ---------- ---------
Net Sales $111,829 $115,637 $323,196 $309,353
Cost of sales 98,227 99,973 287,463 274,689
--------- --------- ---------- ---------
Gross Profit 13,602 15,664 35,733 34,664
Selling, general, and
administrative expenses 9,123 9,187 28,486 29,190
--------- --------- ---------- ---------
Operating Income (Loss) 4,479 6,477 7,247 5,474
Other (income) expense (665) (44) (688) (572)
Interest expense 4,061 3,925 11,920 12,284
--------- --------- ---------- ---------
Loss Before Income Taxes,
Discontinued Operations,
and Cumulative Effect of
Accounting Change 1,083 2,596 (3,985) (6,238)
Income taxes (benefit) 391 742 (1,500) (2,642)
--------- --------- ---------- ---------
Income (Loss) From Continuing
Operations 692 1,854 (2,485) (3,596)
Discontinued Operations
Loss from operations of
assets held for sale, net
of tax expense (benefit) of
$0, $(705), $793, ($707) (1,906) (3,424) (12,024) (8,379)
Loss on anticipated sale of
assets held for sale, net
of tax expense of $0
and $7,589 (601) - (50,423) -
--------- --------- ---------- ---------
Loss Before Cumulative Effect
of Accounting Change (1,815) (1,570) (64,932) (11,975)
Cumulative effect of
accounting change, net of
tax of $464 - - (46,536) -
--------- --------- ---------- ---------
Net Loss $(1,815) $(1,570) $(111,468) $(11,975)
========= ========= ========== =========
Basic earnings (loss) per
share
Continuing operations $0.08 $0.22 $(0.28) $(0.42)
Discontinued operations (0.28) (0.40) (7.05) (0.98)
--------- --------- ---------- ---------
Before cumulative effect of
accounting change (0.20) (0.18) (7.33) (1.40)
Cumulative effect of
accounting change - - (5.25) -
--------- --------- ---------- ---------
Net earnings (loss) $(0.20) $(0.18) $(12.58) $(1.40)
========= ========= ========== =========
Diluted earnings (loss) per
share
Continuing operations $0.08 $0.22 $(0.28) $(0.42)
Discontinued operations (0.28) (0.40) (7.05) (0.98)
--------- --------- ---------- ---------
Before cumulative effect of
accounting change (0.20) (0.18) (7.33) (1.40)
Cumulative effect of
accounting change - - (5.25) -
--------- --------- ---------- ---------
Net earnings (loss) $(0.20) $(0.18) $(12.58) $(1.40)
========= ========= ========== =========
Average number of shares
outstanding - Basic 9,016 8,601 8,861 8,588
Average number of shares
outstanding - Diluted 9,016 8,601 8,861 8,588
Amcast Industrial Corporation
News Release - Page 5 of 5
July 14, 2003
CONDENSED BALANCE SHEETS
($ in thousands)
June 1 August 31
2003 2002
--------- ---------
ASSETS
Current Assets
Cash and cash equivalents $4,897 $16,810
Restricted cash 7,076 1,067
Accounts receivable 39,825 43,028
Inventories 18,369 27,796
Other current assets 5,684 3,941
--------- ---------
Total current assets of continuing operations 75,851 92,642
Assets of discontinued operations - 185,721
--------- ---------
Total Current Assets 75,851 278,363
Fixed Assets (net) 142,249 154,763
Goodwill - 8,019
Other Assets 14,920 9,066
--------- ---------
Total Assets $233,020 $450,211
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $30,722 $41,169
Current debt 179,849 11,062
Other current liabilities 23,769 22,682
--------- ---------
Total current liabilities of continued operations 234,340 74,913
Liabilities of discontinued operations - 86,547
--------- ---------
Total Current Liabilities 234,340 161,460
Long-Term Debt - 177,248
Deferred Liabilities 15,602 20,158
Shareholders' Equity (16,922) 91,345
--------- ---------
Total Liabilities and Shareholders' Equity $233,020 $450,211
========= =========