Citation Reports First Quarter Fiscal 1999
19 January 1999
Citation Reports First Quarter Fiscal 1999 First Quarter Earnings Reach $0.20 Per Share, Exceeding Analysts' Estimates
BIRMINGHAM, Ala.--Jan. 19, 1999--Citation Corporation today reported first quarter fiscal 1999 earnings that exceeded analysts' estimates. The results also represented a strong turnaround from the fiscal 1998 fourth quarter.Net income for the first fiscal quarter of 1999 ended Dec. 27, 1998 was $3.6 million or $0.20 per share, compared to $5.1 million, or $0.28 a share in the year ago period. The First Call consensus estimate for the quarter was $.12 per share. Revenues for the first quarter of 1999 increased 8.6% to $184.9 million, versus $170.2 million in the comparable period a year ago.
F. F. "Rick" Sommer, President and Chief Executive Officer said, "We are pleased with our progress in the 1999 first quarter which represents a strong turnaround from Citation's fourth fiscal quarter of 1998. The improvement is due primarily to strong sales in our automotive, heavy truck and aerospace sectors, as well as successful product launches."
Citation's sales in its newly formed Automotive Group increased 21.2% to $81.6 million in the first fiscal quarter, compared to results of a year ago. The increase includes the acquisitions of Camden Castings and Dycast, Inc. Excluding these acquisitions, the Automotive Group's same store sales increased by 7.8%.
Sommer said, "Our Automotive Group successfully completed its product launches during the first quarter and we are seeing much improved performance. Our iron casting operations are near capacity, although we still have some capacity left in aluminum castings. We expect continued good performance by our Automotive Group throughout fiscal 1999 fueled by additional capacity and better efficiency in our Camden Castings unit, as well as the continued push by automakers to reduce weight on passenger cars and light trucks by substituting aluminum castings.
"Citation Precision's operation, which serves the Aerospace and Aircraft market, remains at capacity," said Sommer. "We believe we have an opportunity to add more capacity at that facility and will continue to study ways to accomplish this objective," he said.
"Citation's shipments to construction equipment, mining equipment, farm implement, and oil tool industries continue to be slow." Sommer added that, "A major drag on Citation's earnings remains the continued weakness in these capital goods markets, which are approximately 25% to 30% of Citation's total business and impacts several of our operating groups including our Industrial Group, Special Foundry Group, and Interstate Forging Industries. We do not anticipate any significant improvement in this business in the near term and we are taking appropriate measures to improve performance and control costs in these operations."
Sommer said that during the quarter, Citation completed the acquisition of Custom Products, Inc. and CT South, which has been renamed Citation-Marion. Sommer said that Custom Products is expected to generate between $60 to $70 million in revenues in fiscal 1999 and that Citation-Marion is expected to contribute about $30 million in the current fiscal year.
Sommer concluded that, "The goal remains to build Citation into a world class, multi-faceted supplier to our customers. Toward that objective, in late fiscal 1998, we reorganized our operating groups from a process orientation to a market and customer focus, wherever possible. We have strengthened management at both the corporate and divisional levels. We have undertaken a corporate-wide study of our cultures and are working to establish a unified culture that places the proper emphasis on customers, employees and shareholders."
Citation Corporation is a metal components producer for capital goods and durable goods industries with 21 divisions located in 10 states. Citation has approximately 7,000 employees.
Note: The statements in this news release that are not historical fact are forward-looking statements that involve risks and uncertainties including, but not limited to, changes in the economy, demand for durable goods, pricing by competitors, entry of new competitors, and other risks detailed in the Company's Form 10-K for the fiscal year ended Sept. 27, 1998, and other filings with the Securities and Exchange Commission.
CITATION CORPORATION
Earnings Highlights
(All figures in Thousands except Earnings Per Share
and Shares Outstanding)
Three Months Ended
27-Dec 28-Dec
1998 1997
(unaudited) (unaudited)
Sales $184,860 $170,223
Gross Profit 26,668 26,998
S,G & A Expenses 16,035 15,381
Operating Income 10,633 11,617
Interest Expense, net 4,643 3,225
Income before Taxes 5,990 8,392
Taxes 2,396 3,273
Net Income $3,594 $5,119
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Earnings per Share -
Basic $0.20 $0.29
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Weighted Avg. Number of
Shares Outstanding -
Basic 17,889,113 17,781,325
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Earnings per Share -
Diluted $0.20 $0.28
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Weighted Avg. Number of
Shares Outstanding -
Diluted 17,940,418 18,013,716
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