SPX Corporation Reports Q3 Results
23 October 1997
SPX Corporation Third Quarter EPS Up 95%, Revenues Up 12%
MUSKEGON, Mich., Oct. 23 -- SPX Corporation today
announced financial results for the third quarter and first nine months of
1997. Double-digit growth in the third quarter demonstrates the company's
growth strategies are beginning to materialize.
Highlights follow:
1. Third quarter net income increased 95% over comparable third quarter
1996.
* Net income for the third quarter of 1997 was $9.9 million, or $0.80
per share.
* Net income for the third quarter of 1996 was $5.8 million, or $0.41
per share before restructuring and extraordinary items.
2. Revenues for the third quarter were $213.7 million, a 12% improvement
over last year (pro forma).
* Service Solutions revenues increased 13.7%.
* Vehicle Components revenues improved 7.9% (pro forma).
3. Third quarter consolidated operating margin was 8.4% compared to 6.6%
for 1996 before restructuring.
4. Third quarter EVA improvement accelerated to $4.7 million, nearly one-
half of the year to date improvement of $9.7 million.
5. The company generated operating cash flow of $25 million.
* Inventories decreased $3 million from second quarter, even after
planning for incremental fourth quarter emissions testing equipment
and program tool sales.
* Debt, net of cash, is $180.8 million, approximately $1 million
lower than second quarter.
6. The company purchased 376,100 shares during the quarter for $20.2
million.
* Total shares purchased to date is 2.5 million or 17% of total
shares outstanding at the beginning of the year.
* The Board of Directors authorized the company to continue open
market purchases of up to another 659,000 shares.
7. Yesterday, the Board of Directors approved an amendment to the
Shareholder Rights Plan to increase the ownership threshold for
triggering the Rights from 15% to 20%.
8. Tom Riordan, President of OE Tool and Equipment Group, has assumed the
added responsibility for SPX's Aftermarket Tool and Equipment Group.
* The goal is to identify synergies between the two businesses and
further improve EVA.
* The company is developing actions to improve its cost structure in
response to shifting market dynamics and changing product
technology.
Commenting on the financial results for the third quarter of 1997, John B.
Blystone, Chairman, President and Chief Executive Officer of SPX Corporation
said, "We are very pleased to report the seventh consecutive quarter of
improved earnings. Revenues were up 12%, in spite of continuing softness in
the market for "big box" engine diagnostic and wheel service equipment."
Mr. Blystone said, "With double-digit growth in the third quarter, we are
beginning to see our growth strategies materialize and we remain committed to
an overall 7% increase in revenue for the full year and double-digit revenue
growth rates in 1998 and beyond."
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. The Internet address for SPX Corporation's home page
is http://www.spx.com.
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 millions, except per share amounts)
(Unaudited)
Three months ended Nine months ended
September 30 September 30
1997 1996 1997 1996
Revenues $213.7 $255.0 $680.6 $857.9
Gross profit 61.3 63.3 188.0 202.1
Selling, general
and administrative 42.4 46.1 129.7 142.9
Goodwill/intangible
amortization 0.8 1.8 2.6 5.4
Minority and equity
interests 0.1 (1.5) 0.2 (4.0)
Restructuring charge - 3.2 - 15.9
Operating income $18.0 $13.7 $55.5 $41.9
Other expense (income), net (0.4) (0.3) (66.6) 0.5
Interest expense, net 3.3 7.8 10.6 24.9
Income before income taxes $15.1 $6.2 $111.5 $16.5
Provision for income taxes 5.2 2.4 55.0 6.4
Income before extraordinary
item $9.9 $3.8 $56.5 $10.1
Extraordinary item,
net of tax - (0.7) (10.3) (1.1)
Net income $9.9 $3.1 $46.2 $9.0
Income (loss) per share:
Before extraordinary item $0.80 $0.27 $4.17 $0.73
Extraordinary item,
net of tax - (0.05) (0.76) (0.08)
Net income $0.80 $0.22 $3.41 $0.65
Weighted average number of
common shares outstanding 12.406 14.209 13.547 13.881
Business Segments:
Revenues:
Service Solutions $151.0 $132.8 $456.9 $463.5
Vehicle Components 62.7 122.2 223.7 394.4
Total $213.7 $255.0 $680.6 $857.9
Operating income (expense):
Service Solutions $15.3 $7.9 $43.0 $26.0
Vehicle Components 8.7 11.2 29.9 32.0
General Corporate (6.0) (5.4) (17.4) (16.1)
Total $18.0 $13.7 $55.5 $41.9
Proforma Revenues (1):
Service Solutions $151.0 $132.8 $456.9 $463.5
Vehicle Components 62.7 58.1 200.2 185.3
Total $213.7 $190.9 $657.1 $648.8
(1) Assumes the sale of the Sealed Power and Hy-Lift divisions as of the
beginning of 1997 and 1996 respectively.
SOURCE SPX Corporation