Mark IV Reports Fiscal Year; First Quarter Results
18 June 1999
Mark IV Reports Fiscal Year; First Quarter Results
AMHERST, N.Y.--June 17, 1999--Mark IV Industries, Inc. today reported results for its first quarter ended May 31, 1999. Income from continuing operations increased to $26.3 million from $25.1 million last year, while related diluted earnings per share for the period increased 23 percent to 48 cents from 39 cents. Basic earnings per share rose 27 percent to 52 cents from 41 cents last year.Sales for the quarter increased 10 percent, to $559.0 million from $509.7 million last year. Excluding the effects of the acquisition of Lombardini FIM S.p.A. on April 1, 1999, sales for the quarter reflect an increase of three percent over the comparable prior year period. Operating income (income before interest expense and taxes) for the quarter was $55.6 million, up eight percent from $51.7 million in the first quarter of fiscal 1999. All first quarter fiscal 1999 results have been restated to reflect discontinued operations due to last year's disposition of the Purolator Automotive Filter Business.
Basic and diluted weighted average shares outstanding in the quarter decreased 17 and 15 percent respectively, to 51.0 and 59.5 million shares from last year's levels of 61.5 and 70.3 million shares, due to the company's share repurchase program completed on May 20, 1999. Actual basic and diluted shares outstanding at quarter's end was 49.1 million and 57.6 million respectively. All share amounts are diluted unless otherwise stated.
Net income for the quarter was $26.3 million, or 48 cents per share, compared to $24.3 million, or 37 cents per share in fiscal 1999, an increase in per share results of 30 percent. Fiscal 1999 results include income from discontinued operations of $1.8 million, or two cents per share, and an extraordinary loss from early debt repayment of $2.6 million, or $.04 per share. There were no special items in this year's first quarter.
Commenting on the quarter, Sal H. Alfiero, chairman and chief executive officer of Mark IV, said, "Excluding revenue from the Lombardini acquisition, Mark IV's Automotive revenues were up nine percent in the quarter. Industrial revenue was down three percent, primarily due to tough comparisons in the quarter for the agriculture, petroleum, petrochemical and mining markets. Last year, these markets performed much stronger in the first half of the year, but fell off significantly in the second half. Our expectation is that comparisons of the industrial segment will improve as the current fiscal year moves into the second half. Finally, foreign currency translations reduced sales in the quarter by nine million dollars and earnings by one cent per share, and lower pension income assumptions reduced earnings by an additional one cent per share.
"Notwithstanding the negative effect of these items, the continuing improvement in income and cash flow, completion of our restructuring program, implementation of the aftermarket repositioning, and the sale of non-core businesses, coupled with strategic acquisitions, are what we have been, and will continue to focus on in order to meet our oft-stated goal of improving shareholder value. As a result of these improving dynamics, Mark IV's Board of Directors announced during the quarter, the authorization to repurchase up to an additional 10 million shares of its common stock. Since April 1997 to date, the company has repurchased an aggregate of 17.3 million shares, representing 26 percent of the then outstanding stock.
"In the first quarter of Fiscal 2000 we acquired Lombardini FIM S.p.A., an Italian-based manufacturer of small diesel engines, for $148 million. Lombardini is a widely known and a highly regarded European market leader in the manufacture of these engines. Although the net income impact of Lombardini after interest and integration costs was marginal in the quarter, this acquisition affords us an opportunity to expand our industrial business, particulary in Europe. But of equal, if not greater importance, it is also the cornerstone of our entree into the faster growing city car/city van segment of the European vehicle market. Our product offering will be power pacs consisting of the engine and continuously variable transmission combinations. The power pac will not only be offered for city car/city van use but will also be available for a wide range of applications for both on-road and off-road use. We expect that Lombardini's contribution to the company's earnings will improve as the year progresses and we get these up front costs behind us."
This press release contains forward-looking statements that involve risk and uncertainties as detailed from time to time in the company's SEC reports, including its report on Form 10-K for its fiscal year ended February 28, 1999. These risks and uncertainties could affect the company's actual results and cause them to differ materially from those expressed in any forward-looking statements made by, or on behalf of, the company.
Mark IV Industries, Inc. is a $2.2 billion global manufacturing company headquartered in the Buffalo suburb of Amherst, New York, employing 17,000 people worldwide. The company's core technologies include power transmission, power train, fluid transfer and specialty filtration systems and components for global industrial and automotive markets. For more information on Mark IV, visit the company's web site at http://www.mark-iv.com.
MARK IV INDUSTRIES, INC.
(Amounts in thousands, except per share data)
Three Months Ended
May 31,
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1999 1998(A)
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Sales from continuing operations $ 559,000 $ 509,700
Operating income (B) $ 55,600 $ 51,700
Interest expense $ 14,500 $ 12,600
Operating income, net of
interest expense $ 41,100 $ 39,100
Income from continuing operations (C) $ 26,300 $ 25,100
Income from discontinued operations (C) - $ 1,800
Extraordinary loss (D) - $ (2,600)
Net income $ 26,300 $ 24,300
Basic earnings per share:
Continuing operations $ 0.52 $ 0.41
Discontinued operations - 0.03
Extraordinary loss - (0.04)
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Net income $ 0.52 $ 0.40
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Diluted earnings per share:
Continuing operations $ 0.48 $ 0.39
Discontinued operations - 0.02
Extraordinary loss - (0.04)
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Net income $ 0.48 $ 0.37
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Weighted average number of
shares outstanding:
Basic 51,000 61,500
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Diluted 59,500 70,300
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(A) Restated to reflect the effects of discontinued operations. (B) Income from continuing operations before interest expense and taxes. (C) Net of related tax effects. (D) Loss from early debt extinguishment, net of related tax effects.