Oilgear Reports First Quarter Results
20 April 1999
Oilgear Reports First Quarter Results
MILWAUKEE--April 20, 1999--The Oilgear Company today reported record-high first quarter sales and an increase in earnings for the quarter ended March 31, 1999.The manufacturer of fluid power components, systems and electronic controls posted sales of $23,210,000 for the first quarter of 1999, up 6% from sales of $21,971,000 for the same period in 1998. Net earnings were $482,000 or $0.25 per share for the first quarter of 1999, a 20% increase from earnings of $402,000 or $0.21 per share in the first quarter of 1998.
"The first quarter sales were a record for the company, reflecting strong systems sales in our international operations. The increase in earnings is largely due to increased revenue from international operations and a reduction in U.S. operating expenses," said David A. Zuege, president and chief executive officer. "While our U.S. orders are down, our European and other international markets are strong, particularly in the systems area where our unique mix of fluid power and electronic capabilities gives us a significant competitive advantage in the marketplace. Our strategy of geographic diversification and technical leadership continues to be a positive factor for us."
Zuege said orders stood at $24.0 million at the end of 1999's first quarter, down from the record high $28.6 million for the first quarter of the prior year. "While first quarter orders were down from record levels in the prior first quarter, orders exceeded shipments in the first quarter of this year," Zuege said. "As a result, backlog increased to $23.0 million at the end of the most recent quarter, a 4% increase from backlog at year-end 1998. Lower orders are primarily due to the weak U.S. fluid power market. The U.S. fluid power market continues to suffer from lagging demand and we are particularly affected by sluggish performance in the systems market for the forging, steel and wood products sectors, which are important markets for Oilgear," Zuege said.
Zuege said that while productivity improvement programs are under way at Oilgear's piston pump plant in Fremont, Nebraska, it was premature to identify specific results. "Our new process improvement program and productivity improvements and cost reductions from a new $2.4 million machining cell, currently being installed, give us cause for optimism," he added.
On the new product front, Zuege said that the initial market reception for two recently introduced new sizes of PVV piston pumps is encouraging. "These additions to our popular PVV line will strengthen our position in an important market for us," Zuege added.
Oilgear serves customers in the primary metals, machine tool, automobile, petroleum, construction equipment, chemicals, plastics, glass, lumber, rubber and food industries. Products include piston pumps, motors, valves, manifolds, hydraulic and electric systems, as well as aftermarket sales and service.
Certain matters discussed in this press release are "forward-looking statements" intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified as such because the context of the statement will include words such as the company "believes," "anticipates," "expects" or words of similar import. Similarly, statements that describe the company's future plans, objectives or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties which could cause actual results to differ materially from those currently anticipated. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements. The forward-looking statements made herein are only made as of the date of this press release and the company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.
News releases and product information from The Oilgear Company
are available 24 hours a day on-line at:
http://www.oilgear.com
The Oilgear Company
Consolidated Condensed Earnings Statement
(Unaudited)
Three Months Ended March 31,
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1999 1998
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Net sales $ 23,210,000 $ 21,971,000
Cost of sales 16,591,000 15,574,000
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Gross profit $ 6,619,000 $ 6,397,000
Operating expenses 5,603,000 5,529,000
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Operating income $ 1,016,000 $ 868,000
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Interest expense (448,000) (462,000)
Other income 87,000 135,000
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Earnings before income taxes 655,000 541,000
Income taxes 152,000 125,000
Net earnings from minority interest 21,000 14,000
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Net earnings $ 482,000 $ 402,000
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Basic earnings per share
of common stock $ 0.25 $ 0.21
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Diluted earnings per share
of common stock $ 0.25 $ 0.21
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Dividends per share $ 0.07 $ 0.07
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Basic weighted average
outstanding shares 1,966,160 1,930,028
Diluted weighted average
outstanding shares 1,966,440 1,943,308
The Oilgear Company
Consolidated Condensed Balance Sheet
(Unaudited)
March 31, 1999 December 31, 1998
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ASSETS
Current Assets
Cash and cash equivalents $ 4,276,000 $ 4,059,000
Accounts receivable 18,217,000 17,639,000
Inventories 28,745,000 30,084,000
Other current assets 2,554,000 2,782,000
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Total current assets $ 53,792,000 $ 54,564,000
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Net property plant and equipment 28,630,000 29,480,000
Other assets 6,585,000 6,814,000
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$ 89,007,000 $ 90,858,000
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Current debt $ 2,113,000 $ 2,142,000
Accounts payable 5,251,000 7,785,000
Other current liabilities 9,365,000 8,791,000
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Total current liabilities $ 16,729,000 $ 18,718,000
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Long-term debt 24,919,000 24,558,000
Unfunded employee benefit costs 12,455,000 12,455,000
Other non-current liabilities 1,716,000 1,648,000
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Total liabilities $ 55,819,000 $ 57,379,000
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Minority interest in
consolidated subsidiary 653,000 632,000
Stockholders' equity 32,535,000 32,847,000
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$ 89,007,000 $ 90,858,000
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