GenTek's Third-Quarter Revenues Up 25% on Strength of Telecom Segment
13 November 2000
GenTek's Third-Quarter Revenues Up 25% on Strength of Telecom Segment
Income from continuing operations before non-recurring items up
37% on growth in network architecture business
HAMPTON, N.H., Nov. 13 GenTek Inc. today
announced that its revenues in the third quarter of 2000 rose 25%, driven by
strong performance in its telecommunications segment, while income from
operations, excluding nonrecurring charges, increased 37%. All periods have
been restated to reflect the acquisition of the Digital Communications Group
of Prestolite Wire Corporation ("Prestolite-Digital"), which was accounted for
in a manner similar to a pooling-of-interests.
GenTek achieved revenues of $353.4 million in the three months ended Sept.
30, 2000, compared with $283.8 million in the corresponding period of last
year. Excluding nonrecurring adjustments in both years that were principally
related to acquisitions, income from operations was $15.2 million, or $0.59
per diluted share, compared with $11.0 million, or $0.52 per diluted share, in
the third quarter of 1999.
In the latest period, nonrecurring adjustments consisted of a $5.8 million
charge ($3.5 million after-tax) related to the write-off of in-process
research and development in conjunction with GenTek's acquisition of Con-X
Corporation and net non-recurring tax charges of $0.7 million. Excluded from
the prior year results is a non-recurring tax benefit of $0.3 million related
to Prestolite-Digital's status as an S-Corporation prior to its acquisition.
On an as-reported basis, third quarter net income was $11.0 million, or $0.43
per diluted share, compared to $11.3 million, or $0.52 per diluted share, in
the corresponding quarter of last year.
"Our telecommunications equipment segment strengthened its performance as
our enhanced portfolio of advanced throughput systems and services is meeting
the market's need for increased bandwidth and network speed," said Paul M.
Montrone, chairman of GenTek. "To capitalize on the growing demand for our
products, we have increased our telecommunications investment program and are
continuing our efforts to enhance our leadership position in the network
architecture business."
Separately, GenTek's recent Vigilant Networks acquisition has accelerated
the company's rollout of its promising network diagnostic services business.
Vigilant's unique signal acquisition technology, which enables the company to
characterize and diagnose live network performance issues in all seven layers
of the communications network, including the physical layer, has generated
strong interest from GenTek's sophisticated network architecture customers.
Based on this favorable response, the company will continue to invest in the
people and infrastructure required to grow this service platform successfully.
In addition, Vigilant is playing an increasing role in the growth of the
company's overall telecommunications product suite, highlighted by pull-
through sales of GenTek's TrueNET(TM) structured cabling system. TrueNET, a
breakthrough in data networking, is specifically designed to prevent bit
errors caused by inefficient or faulty network construction.
Year-to-Date Results
For the first nine months of 2000, GenTek sales increased 58% to $1,045.2
million from $660.7 million in the corresponding period of last year.
Excluding nonrecurring charges, income from continuing operations rose 49% to
$45.1 million, or $1.81 per diluted share, compared with $30.3 million, or
$1.41 per diluted share, in the first nine months of 1999. The latest period
results exclude $5.8 million ($3.3 million after-tax) of nonrecurring in-
process research and development and tax adjustments. The prior-period results
exclude $6.2 million ($4.6 million after-tax) of nonrecurring charges
primarily related to the spinoff of GenTek from its predecessor company and
the S-Corporation status of Prestolite-Digital prior to its acquisition of
GenTek. Including all nonrecurring charges, current year nine-month income
from continuing operations rose 63% to $41.8 million, or $1.67 per diluted
share, compared with $25.7 million, or $1.19 per diluted share, in the
corresponding period of last year.
Earnings from continuing operations before interest, taxes, depreciation
and amortization (EBITDA), excluding non-recurring charges, rose 28% to $64.0
million and 58% to $184.9 million for the third quarter and first nine months
of this year, respectively, compared with $50.1 million and $117.3 million in
the corresponding 1999 periods.
GenTek Inc. is a technology-driven manufacturer of telecommunications
equipment and other products. Additional information on GenTek is available
online at http://www.gentek-global.com.
This announcement includes forward-looking statements. GenTek has based
these forward-looking statements on its current expectations and projections
about future events. Although GenTek believes that its assumptions made in
connection with the forward-looking statements are reasonable, no assurances
can be given that its assumptions and expectations will prove to have been
correct. These forward-looking statements are subject to various risks,
uncertainties and assumptions. GenTek undertakes no obligation to publicly
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise. In light of these risks,
uncertainties and assumptions, the forward-looking events discussed in this
announcement might not occur.
GenTek Inc.
CONSOLIDATED STATEMENT OF OPERATIONS
(In millions, except per share amounts)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
Sales $353.4 $283.8 $1,045.2 $ 660.7
Cost of sales 253.4 210.6 751.0 493.7
Selling, general and
administrative
expenses 55.2 37.7 163.0 90.3(1)
Purchased in-process
research and
development 5.8 - 5.8 -
Operating profit 39.0 35.5 125.4 76.7
Interest expense, net 18.6 14.1 54.4 28.0
Other (income)
expense, net (0.6) (0.7) (3.4) (0.9)
Income from
continuing
operations before
income taxes and
extraordinary item 21.1 22.1 74.4 49.6
Income tax expense 10.1 10.8 32.6 23.9
Income from continuing
operations before
extraordinary item 11.0 11.3 41.8 25.7
Income from
discontinued
operations
(net of tax) - - - 1.0
Income before
extraordinary item 11.0 11.3 41.8 26.7
Extraordinary item -
loss from
extinguishment
(net of tax) - - - 4.9
Net income $11.0 $11.3 $41.8 $21.8
Weighted average
common shares 25.3 21.0 24.4 20.9
Weighted average
common and
equivalent shares 25.8 21.4 25.0 21.4
Earnings per share
from continuing
operations
- Basic $0.44 $0.54 $1.71 $1.22
- Diluted $0.43 0.52 $1.67 $1.19
Earnings per share
- Basic $0.44 $0.54 $1.71 $1.04
- Diluted $0.43 $0.52 $1.67 $1.01
Basis of Presentation: All figures in this schedule reflect the actual
financial results of Prestolite-Digital consolidated with those of GenTek for
the entirety of all periods discussed.
NOTE(1): Includes $6.2 million nonrecurring charge primarily related to
the spinoff of GenTek from its predecessor company.