Amcast Reports Positive Net Income in Fiscal 2003 Fourth Quarter
DAYTON, Ohio--Oct. 1, 20034, 2003--Amcast Industrial Corporation (OTCBB:AICO) today reported financial results for its fiscal 2003 fourth quarter and full year ended August 31, 2003.Profitability increased in the fiscal fourth quarter even as sales declined. Fiscal fourth quarter sales of $100.7 million declined by 6.3% compared with the prior year's fourth quarter sales of $107.5 million. Net income from continuing operations for the quarter was $1.8 million, or $0.19 per diluted share, versus a net loss from continuing operations of $0.8 million, or $0.09 per diluted share, in the prior year's fourth quarter. Including discontinued operations, the net loss in the fourth quarter of fiscal 2002 was $9.1 million, or $1.05 per diluted share.
By segment, customer inventory imbalances and some extended model-year changeover periods were the primary reasons that Engineered Components' sales declined by 11.3% from the prior year's fourth quarter. Somewhat offsetting this decline was an increase in Flow Control sales of 5.1% in the fourth quarter versus the prior year. The fourth quarter profit improvement was mainly attributable to improved performance by Flow Control and at our Richmond, Indiana components plant.
For the full year, sales were $423.9 million. This was up 1.7% from the prior year when sales from continuing operations were $416.8 million. For the year, continuing operations lost $0.7 million, or $0.08 per diluted share, compared with last year's net loss of $4.4 million, or $0.51 per diluted share. During the year, operating income increased by 86.7%, and the Company's operating margin rose from 1.7% to 3.1%. The Company's improved performance was mostly due to manufacturing efficiencies, productivity gains, and company-wide cost reduction actions. Including discontinued operations and the fiscal first quarter cumulative effect of a change in accounting principle, the Company incurred a net loss of $109.7 million, or $12.26 per diluted share, for the fiscal year.
Joseph R. Grewe, Amcast's President and Chief Executive Officer, said, "The Company's continuing operations were profitable after interest and taxes during the second half of the year. During the fourth quarter, the Company experienced positive net income for the first time since the first quarter of fiscal 2001. We are pleased that operating income was positive in every quarter of the last fiscal year and that it improved with each succeeding quarter. Aggressive implementation of the Amcast Production System and a company-wide cost reduction program helped improve profitability. Productivity improved by 11%, and the Company's labor cost to sales ratio declined by 3.8%. Most importantly, eight of the Company' manufacturing plants experienced year-over-year improved operating income, thereby helping Amcast to move closer to break-even performance for the year."
Byron O. Pond, Amcast's Chairman, said, "Our balance sheet improved in many respects during the past year. In the fiscal fourth quarter, we successfully extended our current loan agreements until September, 2006, providing the Company with longer-term debt financing. Further, we reduced inventory by 32%, or $9 million, by continuing implementation of lean manufacturing principles, and capital spending was held to 39% of depreciation. Finally, total debt declined by $10.7 million as a result of payments funded with cash flow from continuing operations and declined by an additional $10.4 million as a result of the Speedline sale. Due to our under-funded pension position, we increased our deferred liabilities and decreased equity by approximately $26.9 million. This was the result of a low discount rate and unfavorable investment performance since the stock market peaked in early 2000. This did not impact our results of operations."
Mr. Grewe added, "We will continue working on the improvement programs that are producing results for the Company. For example, virtually all of Amcast's associates are very involved in the improvement process. Last year, we implemented over nine thousand associate-generated ideas as part of the Amcast Production System. These initiatives to reduce scrap, improve quality systems, increase productivity, and expand output are helping the Company achieve better results with low levels of investment."
Mr. Grewe concluded, "The Amcast associates are proud of the positive results from their commitment to improvement. Everyone at Amcast appreciates the support we received from our associates, lenders, investors, customers, and suppliers."
A conference call to discuss the year's performance will be held on Wednesday, October 15, 2003 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 plumbing distribution channels and Engineered Components for automotive 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, competitive pricing pressures in the Company's automotive and flow control businesses, effectiveness of production improvement plans, inherent uncertainties in connection with international transactions, and labor availability and relations at the company and its customers and the impact of homeland security measures.
AMCAST INDUSTRIAL CORPORATION
CONDENSED BALANCE SHEETS
($ in thousands)
August 31 August 31
2003 2002
---------- ----------
ASSETS
Current Assets
Cash and cash equivalents $ 5,697 $ 18,868
Accounts receivable 39,979 43,028
Inventories 19,004 27,796
Other current assets 5,338 3,941
--------- ---------
Total current assets of continuing operations 70,018 93,633
Assets of discontinued operations - 185,721
--------- ---------
Total Current Assets 70,018 279,354
Fixed Assets (net) 139,397 154,763
Restricted Cash 7,078 1,067
Goodwill - 8,019
Deferred Taxes 4,204 -
Other Assets 9,627 9,066
--------- ---------
Total Assets $ 230,324 $ 452,269
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 31,419 $ 43,227
Current debt 2,456 11,062
Other current liabilities 21,011 22,682
--------- ---------
Total current liabilities of
continued operations 54,886 76,971
Liabilities of discontinued operations - 86,547
--------- ---------
Total Current Liabilities 54,886 163,518
Long-Term Debt 175,184 177,248
Deferred Liabilities 42,189 20,158
Shareholders' Equity (41,935) 91,345
--------- ---------
Total Liabilities and Shareholders' Equity $ 230,324 $ 452,269
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AMCAST INDUSTRIAL CORPORATION
STATEMENTS OF OPERATIONS
($ in thousands except per share amounts)
Three Months Ended Year Ended
--------------------- ---------------------
August 31 August 31 August 31 August 31
2003 2002 2003 2002
---------- ---------- ---------- ----------
Net Sales $ 100,724 $ 107,464 $ 423,920 $ 416,817
Cost of sales 85,866 95,907 373,329 370,596
--------- --------- --------- ---------
Gross Profit 14,858 11,557 50,591 46,221
Selling, general, and
administrative expenses 8,834 9,920 37,320 39,110
--------- --------- --------- ---------
Operating Income (Loss) 6,024 1,637 13,271 7,111
Other (income) expense (3) (45) (691) (617)
Interest expense 3,222 4,846 15,142 17,130
--------- --------- --------- ---------
Loss Before Income Taxes,
Discontinued Operations,
and Cumulative Effect of
Accounting Change 2,805 (3,164) (1,180) (9,402)
Income taxes (benefit) 1,018 (2,349) (482) (4,991)
--------- --------- --------- ---------
Income (Loss) From
Continuing Operations 1,787 (815) (698) (4,411)
Discontinued Operations
Loss from operations of
assets held for sale,
net of tax - (8,295) (12,024) (16,674)
Loss on sale of assets
held for sale, net of
tax - - (50,423) -
--------- --------- --------- ---------
Loss Before Cumulative
Effect of Accounting
Change 1,787 (9,110) (63,145) (21,085)
Cumulative effect of
accounting change,
net of tax of $464 - - (46,536) -
--------- --------- --------- ---------
Net Loss $ 1,787 $ (9,110) $(109,681) $ (21,085)
========= ========= ========= =========
Basic earnings (loss)
per share
Continuing operations $ 0.19 $ (0.09) $ (0.08) $ (0.51)
Discontinued operations - (0.96) (6.98) (1.94)
--------- --------- --------- ---------
Before cumulative effect
of accounting change 0.19 (1.05) (7.06) (2.45)
Cumulative effect of
accounting change - - (5.20) -
--------- --------- --------- ---------
Net earnings (loss) $ 0.19 $ (1.05) $ (12.26) $ (2.45)
========= ========= ========= =========
Diluted earnings (loss)
per share
Continuing operations $ 0.19 $ (0.09) $ (0.08) $ (0.51)
Discontinued operations - (0.96) (6.98) (1.94)
--------- --------- --------- ---------
Before cumulative effect
of accounting change 0.19 (1.05) (7.06) (2.45)
Cumulative effect of
accounting change - - (5.20) -
--------- --------- --------- ---------
Net earnings (loss) $ 0.19 $ (1.05) $ (12.26) $ (2.45)
========= ========= ========= =========
Average number of shares
outstanding - Basic 9,211 8,653 8,948 8,604
Average number of shares
outstanding - Diluted 9,211 8,653 8,948 8,604