Oilgear Reports Fourth Quarter and Year-End Results
13 March 2000
Oilgear Reports Fourth Quarter and Year-End Results
MILWAUKEE--March 13, 2000--The Oilgear Company today reported results for the fourth quarter and year ended December 31, 1999.Net earnings for 1999 were $1,328,000 or $0.67 per diluted share, up 131% percent from earnings of $574,000 or $0.29 per diluted share in 1998. Net sales were $90,709,000 in 1999, a 6% decrease from sales of $96,455,000 in the prior year.
For the fourth quarter of 1999, net earnings were $204,000 or $0.10 per diluted share, compared to a net loss of $682,000 or $0.35 per diluted share for the fourth quarter of 1998. Net sales were $22,848,000 for the fourth quarter of 1999, down 3% from sales of $23,485,000 for the comparable prior period.
"We are pleased with the turnaround in earnings in 1999. Our ongoing efforts to reduce manufacturing costs and increase efficiency were the major contributors to the improved earnings. Operating costs have been reduced at all of our facilities, including our expanded piston pump plant in Fremont, Nebraska," said David A. Zuege, president and chief executive officer of Oilgear. "The improved 1999 earnings are especially significant in view of the industry-wide recession that occurred in the United States fluid power market throughout most of the year."
Orders for 1999 totaled $87,339,000, an 8% decrease from orders of $94,650,000 for the same period in 1998. Orders for the fourth quarter of 1999 were $17,384,000, a slight decrease from orders of $17,997,000 for the same period in 1998. The backlog was $18,844,000 at December 31, 1999, a 15% decrease from the backlog of $22,214,000 at the end of 1998. "Although sales and orders declined in 1999, the decrease was in line with industry demand and we do not believe we lost market share," said Zuege.
Zuege noted that the company's balance sheet improved in 1999. Inventory was reduced by 19% and debt declined 22% to $20,719,000 at year end. The company's debt-to-total capitalization ratio improved from 45% at the end of 1998 to 39% at the end of 1999. "Our improved balance sheet provides the foundation for future growth and enables us to weather fluctuations in our industry such as the slowdown in fluid power in 1999," he said.
"The U.S. fluid power industry improved slightly in the fourth quarter of 1999, compared to the same period in 1998. This is a positive indicator that the industry may continue to strengthen in the coming year. With our industry-leading products, international presence and technical expertise, we believe we are positioned to take advantage of growth opportunities in each of the three markets we serve: hydraulic and electrohydraulic systems, piston pumps and aftermarket services," Zuege said.
A leader in the fluid power industry, The Oilgear Company provides advanced technology in the design and production of unique fluid power components, systems and electronic controls. The company serves customers in the primary metals, machine tool, automobile, petroleum, construction equipment, chemical, plastic, glass, lumber, rubber and food industries. Its products are sold as individual components or integrated into high performance systems.
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: www.oilgear.com
The Oilgear Company
Consolidated Condensed Earnings Statement
(Unaudited)
Three Months Ended December 31,
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1999 1998
---- ----
Net sales $ 22,848,000 23,485,000
Cost of sales 16,908,000 17,281,000
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Gross profit 5,940,000 6,204,000
Operating expenses 5,503,000 6,302,000
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Operating income 437,000 (98,000)
Interest expense 431,000 595,000
Other income 166,000 167,000
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Earnings before income taxes 172,000 (526,000)
Income tax expense (benefit) (111,000) 172,000
------------- -------------
Net earnings before minority interest 283,000 (698,000)
Minority interest 79,000 (16,000)
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Net earnings $ 204,000 (682,000)
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Basic earnings per share of common
stock $ 0.10 (0.35)
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Diluted earnings per share of common stock 0.10 (0.35)
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Dividends per share $ 0.07 0.07
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Basic weighted average outstanding
shares 1,991,000 1,959,000
Diluted weighted average outstanding
shares 1,991,000 1,961,000
Twelve Months Ended December 31,
1999 1998
---- ----
Net sales $ 90,709,000 96,455,000
Cost of sales 65,521,000 70,634,000
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Gross profit 25,188,000 25,821,000
Operating expenses 21,881,000 22,914,000
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Operating income 3,307,000 2,907,000
Interest expense 1,693,000 2,154,000
Other income 250,000 531,000
------------- -------------
Earnings before income taxes 1,864,000 1,284,000
Income tax expense 370,000 677,000
------------- -------------
Net earnings before minority interest 1,494,000 607,000
Minority interest 166,000 33,000
------------- -------------
Net earnings $ 1,328,000 574,000
============= =============
Basic earnings per share of common
stock $ 0.67 0.29
============= =============
Diluted earnings per share of common stock 0.67 0.29
============= =============
Dividends per share $ 0.28 0.28
============= =============
Basic weighted average outstanding
shares 1,983,000 1,947,000
Diluted weighted average outstanding
shares 1,984,000 1,956,000
The Oilgear Company
Consolidated Condensed Balance Sheet
(Unaudited)
December 31, 1999 December 31, 1998
----------------- -----------------
ASSETS
Current Assets
Cash and cash equivalents $ 6,698,000 4,059,000
Accounts receivable 17,563,000 18,055,000
Inventories 23,233,000 28,661,000
Other current assets 1,867,000 3,514,000
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Total current assets 49,361,000 54,289,000
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Net property plant and equipment 26,586,000 29,480,000
Other assets 5,418,000 6,814,000
------------- -------------
$ 81,365,000 90,583,000
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Current debt $ 2,173,000 2,142,000
Accounts payable 6,219,000 7,785,000
Other current liabilities 7,469,000 8,880,000
------------- -------------
Total current liabilities 15,861,000 18,807,000
------------- -------------
Long-term debt 18,546,000 24,558,000
Unfunded employee benefit costs 11,599,000 12,455,000
Other non-current liabilities 1,484,000 1,284,000
------------- -------------
Total liabilities 47,490,000 57,104,000
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Minority interest in consolidated
subsidiary 797,000 632,000
------------- -------------
Shareholders' equity 33,078,000 32,847,000
------------- -------------
$ 81,365,000 90,583,000
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Note: Certain amounts reported in 1998 have been reclassified to
conform with the 1999 presentation.