Mark IV Reports Second Quarter Results
14 September 1999
Mark IV Reports Second Quarter Results
AMHERST, N.Y.--Sept. 14, 1999--Mark IV Industries, Inc. today reported results for its second fiscal quarter and six months ended August 31, 1999. For the second fiscal quarter, the company reported a 16% increase in diluted EPS from continuing operations to $.36 with an eight percent increase in sales to $479.5 million. For the six month period, the company reported a 21% increase in diluted EPS from continuing operations to $.82 with a nine percent increase in sales to $1.0 billion.Operating Results
Results from continuing operations excludes the results from the recently divested Industrial Filter Business for this fiscal years' periods while restatement of last year's results in the like periods also excludes the additional divestitures made at the end of last fiscal year, namely the Automotive Filter Business. All share and share related amounts are diluted, except where otherwise noted.
Sales for the quarter increased eight percent, to $479.5 million from $445.7 million, while operating income (income from continuing operations before interest expense and taxes) for the quarter increased six percent, to $43.5 million from $40.9 million in fiscal 1999. Income from continuing operations was $18.7 million compared to $18.2 million in the like period last year.
Net income for the quarter was $21.1 million, or 40 cents per share, including $1.6 million or three cents per share from discontinued operations, and $800,000 or one cent per share gain from early debt extinguishment, compared to last year's net income of $20.9 million or 35 cents per share, which included $2.7 million or four cents per share from discontinued operations.
For the first half of fiscal 2000, earnings per share from continuing operations increased 21 percent to 82 cents from 68 cents last year, while income from continuing operations increased five percent to $44.1 million from $42.2 million in the comparable period last year.
Sales for the six-month period increased nine percent, to $1.0 billion from $919.5 million last year. Operating income for the first half was up seven percent, to $96.4 million from $89.8 million in the same period last year.
Net income in the first half of fiscal 2000 increased to $47.4 million, or 88 cents per share, including $2.5 million or five cents per share from discontinued operations and $800,000 or one cent per share gain from early debt extinguishment. Net income in the comparable period last year was $45.2 million, or 72 cents per share, which included income from discontinued operations of $5.6 million, or eight cents per share, and an extraordinary loss from early debt extinguishment of $2.6 million, or four cents per share.
Commenting on the company's results, Sal H. Alfiero, chairman and chief executive officer, said, "We are pleased with our financial results for both the second quarter and the six month period. It is important to realize that these results were achieved during a relatively difficult period for many of the end markets we serve, specifically the automotive aftermarket and the seriously depressed agricultural, mining and petrochemical markets worldwide. Our revenue was positively impacted by inclusion of Lombardini FIM S.p.A., acquired in April 1999.
"Finally, we have utilized our improving cash flows and a portion of funds available from sales of non-core businesses to repurchase the company's outstanding common stock and a portion of 7-3/4% senior subordinated notes. In fiscal 2000 alone, the company has repurchased 5.4 million shares of stock at a total cost of $90.2 million (average cost of $16.70 per share), including 1.1 million shares in the second quarter from the newly authorized ten million share repurchase program announced in May 1999. In addition to the stock repurchase, the company repurchased $123.7 million principal amount of our outstanding 7-3/4% senior subordinated notes, the company's highest interest cost debt."
Shortly after the end of the quarter we announced the sale of our Industrial Filter Business for approximately $145 million. The sale of this non-core business is part of our continuing program to improve returns on capital employed by reducing the company's asset base through the disposition of non-core businesses. Mr. Alfiero further commented that, "Proceeds will be used initially to pay down bank debt and ultimately to pursue share repurchases, reduction of high cost debt and strategic acquisitions."
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 $2.0 billion global manufacturing company headquartered in the Buffalo suburb of Amherst, New York, employing 16,000 people worldwide. The company's core technologies include power transmission, fluid transfer, fluid power 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 Six Months Ended
August 31, August 31,
1999 1998(a) 1999 1998(a)
Sales from continuing
operations $479,500 $445,700 $1,001,300 $ 919,500
Operating income (b) $ 43,500 $ 40,900 $ 96,400 $ 89,800
Interest expense $ 13,800 $ 12,400 $ 27,000 $ 23,900
Operating income, net
of interest expense $ 29,700 $ 28,500 $ 69,400 $ 65,900
Income from continuing
operations (c) $ 18,700 $ 18,200 $ 44,100 $ 42,200
Income from discontinued
operations (c)(d) $ 1,600 $ 2,700 $ 2,500 $ 5,600
Extraordinary gain
(loss) (e) $ 800 - $ 800 $ (2,600)
Net income $ 21,100 $ 20,900 $ 47,400 $ 45,200
Basic earnings per share:
Continuing operations $ .39 $ .32 $ .88 $ .71
Discontinued operations .03 .04 .05 .09
Extraordinary gain (loss) .02 - .02 (.04)
-------- -------- ---------- ----------
Net income $ .44 $ .36 $ .95 $ .76
======== ======== ========== ==========
Diluted earnings per share
Continuing operations $ .36 $ .31 $ .82 $ .68
Discontinued operations (d) .03 .04 .05 .08
Extraordinary gain (loss) .01 - .01 (.04)
-------- -------- ---------- ----------
Net income $ .40 $ .35 $ .88 $ .72
======== ======== ========== ==========
Weighted average
number of shares
outstanding: (f)
Basic 48,500 57,600 49,800 59,600
======== ======== ========== =========
Diluted 57,300 66,200 58,500 68,300
======== ======== ========== =========
(a) Restated to reflect the effects of discontinued operations for
the Industrial Filter Business sold in September 1999, as well
as the Automotive Filter Business sold in February 1999.
(b) Income from continuing operations before interest expense and
taxes.
(c) Net of related tax effects.
(d) Amounts for the three and six month periods ended August 31, 1998
include $1.3 million ($.02 per share) and $3.1 million ($.04 per
share), respectively, related to the Automotive Filter Business,
with the balance related to the Industrial Filter Business.
(e) Gain (loss) from early debt extinguishment, net of related tax
effects.
(f) Actual basic and diluted shares outstanding at quarter's end was
48.1 million and 56.8 million, respectively.