SPX Corporation Announces Q2 1997 Earnings
22 July 1997
SPX Corporation Announces Second Quarter 1997 Earnings of $0.88 Per Share, Up 21% Over 1996
MUSKEGON, Mich., July 22 -- SPX Corporation today
announced financial results for the second quarter and first six months of
1997.
Net income for the second quarter of 1997 was $12.0 million, or $0.88 per
share, up from second quarter 1996 net income of $3.1 million, or $0.23 per
share. Second quarter 1996 income before restructuring charges and
extraordinary loss was $9.9 million, or $0.72 per share.
The operating margin for the second quarter of 1997 was 9.3% compared to
8% (before restructuring) for the second quarter of 1996. Interest expense
was $2.9 million, down $5.4 million from $8.3 million last year.
Revenues for the second quarter were $230.3 million, compared to second
quarter 1996 revenues of $310.6 million. The decrease reflects the sale of
the Sealed Power and Hy-Lift divisions. Proforma revenues, excluding the two
divisions sold, were $240.1 million in 1996. The decrease from proforma 1996
revenues was primarily the result of second quarter 1996 non-recurring dealer
equipment sales of $12.0 million.
Commenting on the financial results for the second quarter of 1997, John
B. Blystone, Chairman, President and Chief Executive Officer of SPX
Corporation said, "We are pleased with the gain in quarterly earnings, despite
the lower revenues. The improvement reflects the beneficial effects of our
programs for Economic Value Added (EVA), restructuring, cost reduction, and
capital management. Halfway through the year we are on target to achieve our
full year commitment."
"With our new financial strategy now firmly in place, we are focused on
growth. During the quarter we added the Navistar and Mack Truck dealer
equipment programs to our growing number of original equipment dealer networks
served, and we acquired the Chilton automotive repair information data base.
The architecture of that data base is state-of-the-art and will become an
important element of our innovative universal service solutions for the motor
vehicle service industry. Also, construction began on a new die-casting
facility in Pierceton, Indiana, for which the capacity is already booked. We
had a good first half, and we are confident in our outlook for the business in
1997 and beyond," Mr. Blystone said.
Net income for the first half of 1997 was $36.3 million, or $2.59 per
share, compared to first half 1996 net income of $5.9 million, or $0.43 per
share. Excluding unusual items, adjusted first half 1997 income was
$19.6 million, or $1.40 per share, up 39% from adjusted first half 1996 income
of $14.1 million, or $1.03 per share.
Unusual items in first half 1997 income were a $31.2 million gain on the
sale of the Sealed Power division, a pretax $6.5 million ($4.1 million
aftertax) charge on legal fees to be incurred on pending litigation, and a
$10.3 million extraordinary loss on the repurchase of debt. Unusual items in
first half 1996 income were $12.7 million ($7.8 million aftertax) of
restructuring charges and a $0.4 million extraordinary loss on the repurchase
of debt.
The operating margin for the first half of 1997 was 8.0% compared to 6.8%
(before restructuring) for the first half of 1996. Interest expense for the
first half of 1997 was $7.3 million, down $9.8 million from $17.1 million in
the first half of 1996.
For the first half of 1997 revenues were $466.9 million, compared to
$602.9 million in the first half of 1996. The decrease was primarily due to
the previously mentioned divestitures. Excluding the revenues of these two
divisions, proforma first half 1997 revenues were $443.4 million, and
$457.9 million in 1996. The decrease in proforma revenues was primarily the
result of first half 1996 non-recurring dealer equipment sales of
$32.0 million.
SPX Corporation is a global provider of Vehicle Service Solutions to
franchised dealers and independent service locations, Service Support to
Vehicle Manufacturers, and Original Equipment Components to the worldwide
motor vehicle industry.
Statements in this press announcement that are not strictly historical are
"forward-looking" statements within the meaning of the Safe Harbor provisions
of the federal securities laws. Investors are cautioned that such statements
are solely predictions and speak only as of the date of this release. Actual
results may differ materially due to risks and uncertainties that are
described in the Company's Form 10-K for 1996, the 1996 Annual Report to
Shareholders, and Form 10-Q for the first and second quarters of 1997.
SPX CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statements Of Income
(in thousands, except per share amounts)
(Unaudited)
Three months ended Six months ended
June 30, June 30,
1997 1996 1997 1996
Revenues $230,263 $310,623 $466,925 $602,931
Costs and expenses
Cost of products sold 166,079 235,715 340,246 464,148
Selling, general and
administrative 41,841 49,934 87,230 96,876
Goodwill/intangible amortization 818 1,788 1,780 3,665
Minority and equity interests 67 (1,690) 97 (2,583)
Restructuring charge -- 10,255 -- 12,679
Operating income $21,458 $14,621 $37,572 $28,146
Other expense (income), net (458) 640 (66,194) 745
Interest expense, net 2,924 8,292 7,252 17,106
Income before income taxes $18,992 $5,689 $96,514 $10,295
Provision for income taxes 7,027 2,162 49,844 4,004
Income from operations $11,965 $3,527 $46,670 $6,291
Extraordinary item, net of tax -- (379) (10,330) (379)
Net income $11,965 $3,148 $36,340 $5,912
Income (loss) per share:
From operations $0.88 $0.26 $3.33 $0.46
Extraordinary item, net of tax -- (0.03) (0.74) (0.03)
Net income $0.88 $0.23 $2.59 $0.43
Dividends per share $ -- $0.10 $0.10 $0.20
Weighted average number of
common shares outstanding 13,670 13,829 14,040 13,686
Business Segments:
Revenues: (in millions)
Service Solutions $162.1 $174.1 $305.9 $330.7
Original Equipment Components 68.1 136.5 161.0 272.2
Total $230.2 $310.6 $466.9 $602.9
Operating income (loss):
Service Solutions $17.6 $11.0 $27.7 $18.0
Original Equipment Components 9.6 9.3 21.2 20.8
General Corporate (5.7) (5.7) (11.3) (10.7)
Total $21.5 $14.6 $37.6 $28.1
SOURCE SPX Corporation