Oilgear Reports Increased Third Quarter Sales and Earnings
MILWAUKEE--Nov. 1, 20045, 2004--The Oilgear Company today reported sales and earnings for the third quarter ended September 30, 2004.For the third quarter of 2004, Oilgear reported net sales of $25,033,000, an increase of 33.3% compared to sales of $18,785,000 for the same period in 2003. The company reported net earnings of $202,000 or $0.10 per share for the third quarter of 2004, compared to a net loss of $583,000 or $0.30 per share for the third quarter of 2003.
Net sales for the first three quarters of 2004 were $69,595,000, an increase of 16.8% from sales of $59,609,000 for the same period in 2003. Net earnings for the first three quarters of 2004 were $214,000 or $.11 per share, compared to a net loss of $1,729,000 or $.88 per share for the same period in 2003.
Orders for the third quarter of 2004 were $24,753,000, an increase of 37.2% compared to orders of $18,041,000 for the same period in 2003. Orders for the first three quarters of 2004 were $76,201,000, a 21.5% increase from orders of $62,712,000 for the same period in 2003. The backlog at September 30, 2004 was $35,517,000, a 22.9% increase from the beginning of the year.
"The improved conditions in the fluid power industry continued through the third quarter of 2004 and were the primary driver behind our increased orders and shipments. Orders in the third quarter included a $1.7 million order for Ball meters for the U.S. military, which will be delivered in the first half of 2005. Orders for piston pumps also remained strong in the third quarter as our target account program continues to generate positive results. Orders in the fourth quarter to date have remained strong," said David A. Zuege, president and chief executive officer.
"Our profitability in 2004 represents a significant improvement over previous years, however, our margin levels are still not back to prior levels. Rising material costs, health care and pension costs, the high costs of Sarbanes-Oxley compliance, and intense price competition in our industry make margin improvement one of our most difficult challenges. We are also working to restructure our debt. We are confident that this will be completed satisfactorily by the end of 2004," said Zuege.
"Economists presenting their forecasts at the National Fluid Power Association economic conference held in August of 2004 projected that shipments of fluid power equipment would be up 11-16% for 2004 vs. 2003. We believe we are on track with these industry trends for 2004. These economists also forecasted that the industry will experience growth in the 6-7% range in 2005," said Zuege.
"Our increase in orders, the healthy backlog and the current level of sales activity give us cause for some optimism about the remainder of 2004," added Zuege.
A leader in the fluid power industry, The Oilgear Company provides advanced technology in the design and production of unique fluid power components 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 applications.
The Oilgear Company
Consolidated Condensed Operating Statement
(Unaudited)
Three Months Ended
September 30,
2004 2003
------------ ------------
Net sales $25,033,000 $18,785,000
Cost of sales 19,443,000 14,301,000
------------ ------------
Gross profit $5,590,000 $4,484,000
Selling, general and administrative expenses 4,876,000 4,563,000
------------ ------------
Operating income (loss) $714,000 $(79,000)
------------ ------------
Interest expense 346,000 323,000
Other non-operating income, net 59,000 (11,000)
------------ ------------
Earnings (loss) before income taxes 427,000 (413,000)
Income tax expense 224,000 177,000
------------ ------------
Net earnings (loss) before minority interest 203,000 (590,000)
Minority Interest 1,000 (7,000)
------------ ------------
Net earnings (loss) $202,000 $(583,000)
============ ============
Basic earnings (loss) per share of common
stock $0.10 $(0.30)
============ ============
Diluted earnings (loss) per share of common
stock $0.10 $(0.30)
============ ============
Basic weighted average outstanding shares 1,961,000 1,955,000
Diluted weighted average outstanding shares 1,979,000 1,955,000
The Oilgear Company
Consolidated Condensed Operating Statement
(Unaudited)
Nine Months Ended
September 30,
2004 2003
------------ ------------
Net sales $69,595,000 $59,609,000
Cost of sales 53,339,000 45,796,000
------------ ------------
Gross profit $16,256,000 $13,813,000
Selling, general and administrative expenses 14,546,000 14,351,000
------------ ------------
Operating income (loss) $1,710,000 $(538,000)
------------ ------------
Interest expense 1,003,000 987,000
Other non-operating income (loss), net 49,000 213,000
------------ ------------
Earnings (loss) before income taxes 756,000 (1,312,000)
Income tax expense 486,000 389,000
------------ ------------
Net earnings (loss) before minority interest 270,000 (1,701,000)
Minority Interest 56,000 28,000
------------ ------------
Net earnings (loss) $214,000 $(1,729,000)
============ ============
Basic earnings (loss) per share of common
stock $0.11 $(0.88)
============ ============
Diluted earnings (loss) per share of common
stock $0.11 $(0.88)
============ ============
Basic weighted average outstanding shares 1,960,000 1,955,000
Diluted weighted average outstanding shares 1,979,000 1,955,000
The Oilgear Company
Consolidated Condensed Balance Sheet
(Unaudited)
September 30, December 31,
2004 2003
------------- ------------
ASSETS
Current Assets
Cash and cash equivalents $4,475,000 $6,236,000
Accounts receivable 15,206,000 15,476,000
Inventories 24,515,000 23,647,000
Other current assets 4,809,000 2,988,000
------------- ------------
Total current assets $49,005,000 $48,347,000
------------- ------------
Net property plant and equipment 18,202,000 19,896,000
Other assets 2,389,000 2,196,000
------------- ------------
$69,596,000 $70,439,000
============= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Current debt $21,231,000 $4,250,000
Accounts payable 8,970,000 8,249,000
Other current liabilities 8,239,000 8,430,000
------------- ------------
Total current liabilities $38,440,000 $20,929,000
------------- ------------
Long-term debt 1,652,000 19,586,000
Unfunded employee benefit costs 23,705,000 24,045,000
Other non-current liabilities 812,000 916,000
------------- ------------
Total liabilities $64,609,000 $65,476,000
------------- ------------
Minority interest in consolidated subsidiary 993,000 938,000
Shareholders' equity 3,994,000 4,025,000
------------- ------------
$69,596,000 $70,439,000
============= ============