Oilgear Reports Fourth Quarter and Year-End Results
MILWAUKEE--March 30, 2004--The Oilgear Company today reported results for the fourth quarter and year ended December 31, 2003.Net sales for the fourth quarter of 2003 increased 19.6% to $21,377,000, from net sales of $17,875,000 for the fourth quarter of 2002. The company reported a net loss of $65,000 or $0.03 per diluted share for the fourth quarter of 2003, compared to a net loss of $3,038,000 or $1.55 per diluted share for the same period in 2002.
Net sales for 2003 were $80,986,000, a 7.6% increase from sales of $75,300,000 in the prior year. The net loss was $1,793,000 or $0.92 per diluted share for 2003, compared to a net loss of $5,478,000 or $2.81 per diluted share in 2002.
"2003 was a challenging year for Oilgear as the fluid power industry lagged the recovery in the overall domestic economy for most of the year. This improved, however, with the anticipated rebound in sales in the fourth quarter. The net loss for 2003 included approximately $1.8 million of expenses and charges related to a production problem at one of our plants that has since been corrected, write-offs related to inventory, receivables and fixed assets in our international segment, and charges related to the downsizing of our labor force," said David A. Zuege, president and chief executive officer of Oilgear. "We believe our continued investment in new products and product enhancements and our ongoing emphasis on reducing operating costs position Oilgear for improvement during a sustained recovery in our industry."
Orders for 2003 totaled $80,336,000, compared to $84,417,000 in 2002. The backlog decreased to $28,912,000 at December 31, 2003, from the backlog of $29,562,000 at the end of 2002. Orders for the fourth quarter were $17,624,000, compared to orders of $16,577,000 in the fourth quarter of 2002.
Zuege said the comparison of sales from 2003 to 2002 is distorted by the effect of the weakened dollar versus the Euro and British pound. Oilgear's domestic sales for the year increased 2.0% over 2002. This increase in domestic sales outperformed the industry, which reported a 1.2% decrease in sales of hydraulics in the United States in 2003 compared to 2002, according to data provided by the National Fluid Power Association.
The comparability of orders and backlog numbers for the two years is also distorted by the currency effect and by an approximately $11 million order received in mid-2002.
"We are encouraged by the recovery in the fluid power industry as reflected in our solid increase in first quarter orders," said Zuege. "We believe that Oilgear's orders for the first quarter of 2004 will exceed $25 million, an increase of about 9% over the first quarter of 2003. All of our plants are currently working overtime to keep up with increased demand. Our optimism is tempered, however, by the fact that costs for health insurance, retiree benefits, liability insurance, legal and audit and Sarbanes-Oxley compliance continue to rise at rates far exceeding our ability to raise prices," 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, systems and electronic controls. The company serves customers in the primary metals, machine tool, automobile, petroleum, construction equipment, chemical, plastic, glass, lumber, rubber and food industries. Its products are sold as individual components or integrated into high performance systems.
The Oilgear Company
Consolidated Condensed Operating Statement
(Unaudited)
Three Months Ended December 31,
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2003 2002
---- ----
Net sales $21,377,000 $17,875,000
Cost of sales 16,503,000 15,266,000
--------------- --------------
Gross profit $ 4,874,000 $ 2,609,000
Selling, general and administrative
expenses 5,429,000 5,155,000
--------------- --------------
Operating loss $ (555,000) $(2,546,000)
Interest expense 343,000 269,000
Other non-operating income, net (116,000) (72,000)
--------------- --------------
Loss before income taxes (1,014,000) (2,887,000)
Income tax expense (recovery) (1,000,000) 45,000
--------------- --------------
Net loss before minority interest (14,000) (2,932,000)
Minority Interest 51,000 106,000
--------------- --------------
Net loss $ (65,000) $(3,038,000)
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Basic loss per share of common stock $ (0.03) $ (1.55)
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Diluted loss per share of common
stock $ (0.03) $ (1.55)
=============== ==============
Basic weighted average outstanding
shares 1,955,000 1,943,000
Diluted weighted average outstanding
shares 1,955,000 1,943,000
Year Ended December 31,
-------------------------------
2003 2002
---- ----
Net sales $80,986,000 $75,300,000
Cost of sales 62,299,000 60,911,000
--------------- --------------
Gross profit 18,687,000 14,389,000
Selling, general and administrative
expenses 19,780,000 18,478,000
--------------- --------------
Operating loss $(1,093,000) $(4,089,000)
Interest expense 1,329,000 1,255,000
Other non-operating income, net 97,000 179,000
--------------- --------------
Loss before income taxes $(2,325,000) $(5,165,000)
Income tax expense (recovery) (611,000) 253,000
--------------- --------------
Net loss before minority interest (1,714,000) (5,418,000)
Minority interest 79,000 60,000
--------------- --------------
Net loss $(1,793,000) $(5,478,000)
=============== ==============
Basic loss per share of common stock $ (0.92) $ (2.81)
=============== ==============
Diluted loss per share of common
stock $ (0.92) $ (2.81)
=============== ==============
Basic weighted average outstanding
shares 1,956,000 1,951,000
Diluted weighted average outstanding
shares 1,956,000 1,951,000
The Oilgear Company
Consolidated Condensed Balance Sheet
(Unaudited)
December 31, 2003 December 31,2002
----------------- ----------------
ASSETS
Current Assets
Cash and cash equivalents $ 6,236,000 $ 4,126,000
Accounts receivable 15,476,000 14,948,000
Inventories 23,647,000 21,556,000
Other current assets 2,988,000 3,487,000
--------------- --------------
Total current assets $48,347,000 $44,117,000
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Net property plant and equipment 19,896,000 21,149,000
Other assets 2,196,000 1,761,000
--------------- --------------
$70,439,000 $67,027,000
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Current debt $ 4,250,000 $ 2,209,000
Accounts payable 8,249,000 5,910,000
Other current liabilities 8,430,000 9,309,000
--------------- --------------
Total current liabilities $20,929,000 $17,428,000
--------------- --------------
Long-term debt 19,586,000 20,986,000
Unfunded employee benefit costs 24,045,000 22,868,000
Other non-current liabilities 916,000 1,027,000
--------------- --------------
Total liabilities $65,476,000 $62,309,000
--------------- --------------
Minority interest in consolidated
subsidiary 938,000 859,000
Shareholders' equity 4,025,000 3,859,000
--------------- --------------
$70,439,000 $67,027,000
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