Cummins Well Positioned to Emerge from Recession Stronger Than Ever, Chairman and CEO Tim Solso Tells Shareholders
COLUMBUS, Ind.--Despite the current global recession, the Company is taking aggressive actions to ensure that its long-term profitable growth resumes once the economic recovery begins, Cummins Inc. Chairman and Chief Executive Officer Tim Solso told shareholders today at the Company’s annual meeting.
Speaking from the Columbus Engine Plant, Solso told shareholders that Cummins is preparing for little or no global economic growth through the end of 2010, but that the Company expects to remain profitable and generate positive cash flow throughout the recession.
“We have reacted more quickly and decisively in this recession than in any of the previous five recessions I have experienced in my nearly 40 years at Cummins,” Solso said. “We entered this recession in the best financial shape in our history, and our actions to reduce costs, manage our cash and invest strategically in key future products give us confidence that we will emerge a stronger company.”
Solso briefly recapped the Company’s 2008 performance – Cummins’ fifth consecutive year of record sales and profits – and discussed in detail the Company’s response to the global recession, which has significantly affected its markets around the world.
Solso reaffirmed that Cummins expects its sales to decrease slightly more than 30 percent this year from 2008. Earnings Before Interest and Taxes are expected to be approximately 5 percent of sales, excluding restructuring charges associated with workforce reductions announced early this year.
Solso said Cummins’ priorities for managing through the recession are:
The Company already has taken significant steps in the last several months to lower its cost structure and improve cash flow, including:
“We are planning for this recession to be broader, deeper and longer than any we have seen in the past, but we remain confident in the future prospects for the Company,” Solso said. “Our technical leadership, global footprint and the long-range trends around energy availability, environmental regulations and global infrastructure development all play to our strengths.”
Solso also recognized former Cummins Vice Chairman Joe Loughrey for his contributions to Cummins. Loughrey retired in March after more than 35 years with the Company.
“Joe has made an enormous positive impact on Cummins during his career, especially in the last decade when he was instrumental in the Company’s turnaround,” Solso said. “We have been partners for most of my career at Cummins and he will be missed.”
In the business portion of the meeting, Cummins shareholders voted to:
Also today, the Board declared a quarterly common stock cash dividend of 17.5 cents per share, payable June 1, 2009 to shareholders of record on May 22, 2009.
Board members selected
The Board members elected today are: