SPX Corporation Reports Q1 Earnings
21 April 1998
SPX Corporation Reports First Quarter EPS of $1.54 Per Share
MUSKEGON, Mich., April 21 -- SPX Corporation
today announced first quarter 1998 financial results. First quarter
performance exceeds First Call consensus estimates and marks the ninth
consecutive quarter of year over year operational improvement. Highlights
follow:
EARNINGS PER SHARE - First quarter diluted earnings per share was $1.54.
. Reported earnings per share of $1.54 includes a $0.66 per share gain on
our investment in Echlin stock, net of costs associated with the proposed
acquisition.
. First quarter 1997 earnings per share of $1.68 included a $2.14 per
share gain on the sale of the Sealed Power division, a $0.28 per share charge
associated with certain litigation with Snap-on Incorporated, and a $0.71 per
share extraordinary charge related to debt retirement.
REVENUES - Revenues for the first quarter were $230.4 million, an 8%
improvement over 1997 pro forma revenues of $213.2 million.
. Revenue growth was largely attributable to strong sales of hand-held
diagnostic equipment, dealer equipment and gas emissions testing equipment
from the Service Solutions segment.
. Gross margins strengthened 100 points to 27.4%, up from 26.4% in the
first quarter 1997.
OPERATING MARGIN - First quarter consolidated operating margin, before
unusual items, increased to 8.7% compared to 6.8% in the first quarter of
1997.
. Service Solutions operating margin rose to 9.7% from 7.0% in first
quarter 1997, as a result of increased revenues and cost savings.
. Vehicle Components achieved a 14.0% operating margin, up from 12.5% in
the first quarter of 1997. This improvement is attributed to a change in
product mix.
. Selling, General and Administrative costs declined 7% from the first
quarter 1997. This reflects continuing cost reduction actions.
EVA - EVA improved by $5.8 million in the first quarter. This brings
total EVA improvement since the program was started in 1996 to $51.2 million
making SPX EVA positive.
Commenting on the company's financial results, John B. Blystone, Chairman,
President and Chief Executive Officer of SPX Corporation said, "SPX is doing
extremely well. With our first quarter results we have delivered another in a
string of nine great quarters continuing the dramatic turnaround of this
business. We are off to another great year."
SPX Corporation is a global provider of Vehicle Service Solutions to
franchised dealers and independent service locations, Service Support to
Vehicle Manufacturers, and Vehicle 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 1997 and the Company's 1998 First
Quarter Form 10-Q which will be filed within the next three weeks.
SPX CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(in thousands, except per share amounts)
(Unaudited)
Three months ended
March 31,
1998 1997
Revenues $ 230,364 $ 236,662
Costs and expenses
Cost of products sold 167,225 174,167
Selling, general and administrative 42,228 45,389
Goodwill/Intangible amortization 810 962
Minority and equity interests 75 30
Special charges and gains (12,783) 6,500
Operating income $ 32,809 $ 9,614
Other expense (income), net (747) (72,236)
Interest expense, net 3,718 4,328
Income before income taxes $ 29,838 $ 77,522
Provision for income taxes 10,742 42,817
Income from operations $ 19,096 $ 34,705
Extraordinary item, net of tax - (10,330)
Net income $ 19,096 $ 24,375
Basic income (loss) per share:
From operations $ 1.59 $ 2.44
Extraordinary item, net of tax - (0.73)
Net income $ 1.59 $ 1.71
Weighted average number of
Common shares outstanding 12,023 14,226
Diluted income (loss) per share:
From operations $ 1.54 $ 2.39
Extraordinary item, net of tax - (0.71)
Net income $ 1.54 $ 1.68
Weighted average number of
Common shares outstanding 12,437 14,546
Dividends per share $ - $ 0.10
Business Segments:
Revenues: (in millions)
Service Solutions $ 162.4 $ 143.8
Vehicle Components 68.0 92.9
Total $ 230.4 $ 236.7
Operating income (loss):
Service Solutions $ 15.7 $ 3.6
Vehicle Components 9.5 11.6
General Corporate 7.6 (5.6)
Total $ 32.8 $ 9.6
SOURCE SPX Corporation