Oilgear Reports Second Quarter Results
16 August 1999
Oilgear Reports Second Quarter Results
MILWAUKEE--Aug. 13, 1999--The Oilgear Company today reported sales and earnings for the second quarter ended June 30, 1999.For the second quarter of 1999, Oilgear reported net sales of $22,357,000, compared to sales of $25,079,000 for the same period in 1998. Net earnings were $341,000 or $0.17 per share for the second quarter of 1999, compared to earnings of $685,000 or $0.35 per share for the comparable prior period.
For the first half of 1999, net sales were $45,567,000, compared to sales of $47,050,000 for the first half of 1998. Net earnings were $823,000 or $0.42 per share for the first six months of 1999, compared to earnings of $1,087,000 or $0.56 per share for the same period in the prior year.
"Despite continued strong performance in our European and international markets, sales in the second quarter reflect continued softness in the U.S. hydraulic market, both in the industrial and mobile sectors. And despite decreased operating expenses largely due to a downsizing just prior to the beginning of this year, profit margins continue to be impacted by a soft market for piston pumps and higher than planned production costs at our piston pump manufacturing facility," said David A. Zuege, president and chief executive officer. "While our production costs at the Fremont, Nebraska, manufacturing facility have improved, we have yet to realize the advantages of the new automated machining cells that are nearing full production status. We anticipate seeing improvements in production costs in future quarters," he added.
Orders totalled $22.5 million in the second quarter of 1999, compared to orders of $25.7 million in the second quarter of 1998. "U.S. systems orders were particularly weak during the second quarter, but we're beginning to see some additional activity in the marketplace for these products. Our European and international systems orders continue to be strong and our aftermarket business continues to be steady," Zuege said.
"We are very excited about our business alliance with Moog, Inc., the worldwide manufacturer of precision motion control components and systems, which was announced in early June. This partnership has gotten off to a fast and productive start in Europe. This is particularly important at this time due to the softness of the domestic market. Together, Moog and Oilgear can offer customers a stronger package and we're looking forward to the benefits we expect to achieve from this alliance," said Zuege.
The company's backlog was $23.2 million at the end of the second quarter, up from the backlog of $22.2 million at the end of the first quarter.
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 June 30,
---------------------------
1999 1998
---- ----
Net sales $ 22,357,000 $ 25,079,000
Cost of sales 16,136,000 17,945,000
----------------- ----------------
Gross profit $ 6,221,000 $ 7,134,000
Operating expenses 5,453,000 5,890,000
----------------- ----------------
Operating income $ 768,000 $ 1,244,000
----------------- ----------------
Interest expense (423,000) (535,000)
Other income 116,000 137,000
Earnings before income taxes 461,000 846,000
----------------- ----------------
Income taxes 105,000 180,000
Net earnings (loss) from
minority interest 15,000 (19,000)
----------------- -----------------
Net earnings $ 341,000 $ 685,000
================= ================
Basic earnings per share of
common stock $ 0.17 $ 0.35
================= ===============
Diluted earnings per share of
common stock $ 0.17 $ 0.35
================= ================
Dividends per share $ 0.07 $ 0.07
================= ================
Basic weighted average
outstanding shares 1,989,000 1,944,000
Diluted weighted average
outstanding shares 1,989,000 1,961,000
Six Months Ended June 30,
-------------------------
1999 1998
---- ----
Net sales $ 45,567,000 $ 47,050,000
Cost of sales 32,727,000 33,520,000
----------------- ----------------
Gross profit $ 12,840,000 $ 13,530,000
Operating expenses 11,056,000 11,419,000
----------------- ----------------
Operating income $ 1,784,000 $ 2,111,000
----------------- ----------------
Interest expense (871,000) (996,000)
Other income 203,000 272,000
----------------- ----------------
Earnings before income taxes 1,116,000 1,387,000
Income taxes 257,000 305,000
Net earnings (loss) from
minority interest 36,000 (5,000)
----------------- -----------------
Net earnings $ 823,000 $ 1,087,000
================= ================
Basic earnings per share
of common stock $ 0.42 $ 0.56
================= ================
Diluted earnings per share
of common stock $ 0.42 $ 0.56
================= ================
Dividends per share $ 0.14 $ 0.14
================= ================
Basic weighted average
outstanding shares 1,977,000 1,937,000
Diluted weighted average
outstanding shares 1,977,000 1,952,000
The Oilgear Company
Consolidated Condensed Balance Sheet
(Unaudited)
June 30, 1999 December 31, 1998
------------- ----------------
ASSETS
Current Assets
Cash and cash equivalents $ 5,005,000 $ 4,059,000
Accounts receivable 18,197,000 18,055,000
Inventories 25,541,000 28,661,000
Other current assets 3,159,000 3,513,000
----------------- ----------------
Total current assets $ 51,902,000 $ 54,288,000
----------------- ----------------
Net property plant and equipment 27,720,000 29,480,000
Other assets 6,691,000 6,814,000
----------------- ----------------
$ 86,313,000 $ 90,583,000
================= ================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Current debt $ 2,097,000 $ 2,142,000
Accounts payable 5,724,000 7,785,000
Other current liabilities 8,413,000 8,880,000
----------------- ----------------
Total current liabilities $ 16,234,000 18,807,000
----------------- ----------------
Long-term debt 23,508,000 24,558,000
Unfunded employee benefit costs 12,455,000 12,455,000
Other non-current liabilities 1,386,000 1,284,000
----------------- ----------------
Total liabilities $ 53,583,000 $ 57,104,000
----------------- ----------------
Minority interest in consolidated
subsidiary 667,000 632,000
Stockholders' equity 32,063,000 32,847,000
----------------- ----------------
$ 86,313,000 $ 90,583,000
================= ================
(a) Note: Certain amounts reported in 1998 have been reclassified to
conform with the 1999 presentation