RDO Equipment Lowers Expectations for Fiscal 2000
14 January 2000
RDO Equipment Lowers Expectations for Fiscal 2000
FARGO, N.D.--Jan. 14, 2000--RDO Equipment Co. expects that earnings per share for its fiscal year ending January 31, 2000 will be below analysts' current estimates. The Company said that increases in revenues, primarily in its truck operations, are not sufficient to offset challenges in its agricultural operations and declines in equipment margins.The Company stated that it currently expects earnings per share from operations for fiscal 2000 will be approximately 50 cents compared to 13 cents for fiscal 1999. Last year's results included $17.2 million, or 77 cents per share, in charges related to inventory and asset writedowns, reserves and severance costs taken in connection with a series of corporate actions designed to generate cash, to fund future growth opportunities, to discontinue non-strategic operations and to achieve more cost-efficient operations.
"We are experiencing continued deterioration in agriculture and increased competitive pressures in our markets which is causing a decline in margins, especially in the sale of new and used equipment," stated Paul T. Horn, President of the Company. "In addition to the initiatives we undertook a year ago which have improved our focus on asset management and inventories, we have strengthened our management team and our focus on bottom-line results with the recent addition of Gary L. Weihs as Chief Operating Officer."
The Company also referred to another news release issued today in which it announced the signing of an agreement to sell RDO Rental Co., its construction equipment rental operations in the Southwest. Company officials stated that this transaction would further strengthen the Company's balance sheet and allow the expansion of business units in which the Company has strategic advantage.
RDO Equipment Co. is one of the leading companies engaged in the restructuring and consolidation of the equipment and truck retail industries in the United States. It operates the largest network of John Deere construction and agricultural equipment stores and Volvo truck centers in North America. Information about the Company, including recent news and product information, is available at its web site - www.rdoequipment.com.
The future results of the Company, including results related to forward-looking statements in this news release, involve a number of risks and uncertainties. Important factors (such as customer confidence, economic conditions, weather, actions of the Company's suppliers and competitors, and risks associated with the Company's growth strategies) that will affect future results of the Company, including factors that could cause actual results to differ materially from those indicated by forward-looking statements, are discussed in the Company's filings with the Securities and Exchange Commission. The Company's forward-looking statements are based upon assumptions relating to these factors. These assumptions are sometimes based upon estimates, data, communications and other information from suppliers, government agencies and other sources that are often revised. The Company makes no commitment to revise forward-looking statements, or to disclose subsequent facts, events or circumstances that may bear upon forward-looking statements.