Exhibit 99.1
CUNO Reports Record Third Quarter Results
| | * Record third quarter Sales of $89.9 million (up 20%)
* Record third quarter diluted EPS of $0.50 (up 14%)
* Record third quarter Orders of $90.1 million (up 19%) |
MERIDEN, Conn., Aug. 25 /PRNewswire-FirstCall/ — CUNO Incorporated (Nasdaq: CUNO) today reported record third quarter results for the period ended July 31, 2004. Sales were $89.9 million, up 20% versus the same period in 2003 and up 17% in local currency. Net income for the third quarter increased by 15% to $8.6 million from $7.5 million reported in the same period in 2003. Diluted earnings per share for the period were a third quarter record $0.50, up 14% compared to $0.44 in the prior year quarter and up approximately 9% on a currency-adjusted basis.
Commenting on the Company’s third quarter results, Mark G. Kachur, Chairman and Chief Executive Officer, said “Our record third quarter results reflect the strength and effectiveness of our business model. We achieved double-digit sales growth in each of our primary markets, including Potable Water, Healthcare and Fluid Processing. Our geographic diversity also contributed to our strong overall results, as international sales increased by 26% (up 20% in local currency), led by strong growth in Japan, Europe and the Asia/Pacific region.”
For the first nine months of fiscal 2004, sales were a record $248.1 million, up 18% (up 12% in local currency), and net income was $24.1 million versus $19.2 million in the prior year period. Strong performance both in our international operations and in North America drove the sales growth. Diluted earnings per share were a record $1.41, up 25% from $1.13 in the first nine months of 2003 and up approximately 15% on a currency-adjusted basis.
Commenting on business conditions and the outlook for CUNO, Mr. Kachur added, “Our incoming orders were a third quarter record $90.1 million and our backlog remains strong. As a result, we expect to achieve continued strong financial results during the fourth quarter, and we are comfortable with the current $1.86 consensus of analysts’ EPS estimates for the full year.”
As previously announced, on August 2, 2004, CUNO completed the acquisition of WTC Industries, Inc. (“WTC”). The aggregate consideration for the outstanding WTC shares (including payment for the settlement of outstanding stock options and warrants) was approximately $115 million (including the assumption of WTC’s outstanding bank debt and all acquisition-related expenses). CUNO funded the acquisition with a combination of existing cash and bank borrowings under a new variable-rate, 5-year, $120 million unsecured revolving credit facility.
Commenting on this recently completed transaction, Mark G. Kachur, CUNO’s Chairman and Chief Executive Officer, said “The acquisition of WTC Industries will broaden CUNO’s product line, technology portfolio and customer base and expand the Company’s presence in the water filtration business. WTC is an excellent strategic fit with our Potable Water business, CUNO’s largest and fastest growing business. Combining CUNO’s and WTC’s capabilities and strengths in engineering, innovative product development, customized manufacturing and highly focused customer support should enable us to provide greater value to our customers and shareholders. With the addition of WTC, we expect our worldwide OMA sales (i.e. sales to OEMs, multi-level marketers, and appliance manufacturers) to exceed $100 million in fiscal 2005 and our future growth prospects in the water filtration business will be significantly enhanced.”
A conference call will be held Thursday, August 26 at 10:00 a.m. (EST) to review the Company’s third quarter financial results and business outlook. The call-in number is 1-888-428-4479 for interested analysts and investors. Alternatively, visit us at http://www.cuno.com for additional information about the Company.
CUNO is a world leader in the design, manufacture and marketing of a comprehensive line of filtration products for the separation, clarification and purification of liquids and gases. CUNO’s products, which include proprietary depth filters and semi-permeable membrane filters, are used in the potable water, healthcare, and fluid processing markets.
CUNO wants to provide shareowners and prospective investors with more meaningful and useful information and, therefore, this press release includes various comments regarding business conditions and the outlook for CUNO, which reflect currently available information. These forward-looking statements are subject to risks and uncertainties which could cause performance or actual results to differ materially from those expressed herein. Such risks and uncertainties include, among other things: those items described in our reports filed with the SEC as well as volumes of shipments of CUNO’s products; changes in product mix and product pricing; relationships with customers and suppliers; costs of raw materials; the rate of economic and industry growth in the U.S. and the other countries in which CUNO conducts business; economic and political conditions in the foreign countries in which CUNO conducts a substantial part of its operations and other risks associated with international operations including exchange rate fluctuations; CUNO’s ability to protect its technology, proprietary products and manufacturing techniques; changes in technology; changes in legislative, regulatory or industrial requirements and risks generally associated with new product introductions and applications; and domestic and international competition in CUNO’s global markets. CUNO assumes no obligation to update the information contained in this press release.
| | Investor contact:
Frederick C. Flynn, Jr.
203/238-8847
fflynn@Cuno.com |
| | CUNO Incorporated
Consolidated Statements of Income (unaudited)
(dollars in thousands, except share and per-share amounts) |
| | Three Months Ended
July 31
| Nine Months Ended
July 31
|
|---|
| 2004
| 2003
| 2004
| 2003
|
|---|
| Net sales | | $ 89,945 | | $ 74,965 | | $ 248,099 | | $ 210,707 | |
| Less costs and expenses: | |
| Cost of products | |
| sold | | 50,275 | | 41,088 | | 134,504 | | 115,798 | |
| Selling, general and | |
| administrative | | 22,539 | | 18,826 | | 65,287 | | 54,853 | |
| Research, | |
| development and | |
| engineering | | 4,327 | | 3,855 | | 12,552 | | 10,897 | |
| | | 77,141 | | 63,769 | | 212,343 | | 181,548 | |
| Operating income | | 12,804 | | 11,196 | | 35,756 | | 29,159 | |
| Nonoperating income | |
| (expense): | |
| Interest expense | | (67 | ) | (159 | ) | (237 | ) | (440 | ) |
| Interest and other | |
| income, net | | 154 | | 180 | | 520 | | 361 | |
| | | 87 | | 21 | | 283 | | (79 | ) |
| Income before income | |
| taxes | | 12,891 | | 11,217 | | 36,039 | | 29,080 | |
| Income taxes | | 4,288 | | 3,750 | | 11,987 | | 9,921 | |
| Net income | | $ 8,603 | | $ 7,467 | | $ 24,052 | | $ 19,159 | |
| Basic earnings per | |
| common share | | $ 0.51 | | $ 0.45 | | $ 1.44 | | $ 1.15 | |
| Diluted earnings per | |
| common share | | $ 0.50 | | $ 0.44 | | $ 1.41 | | $ 1.13 | |
| Basic shares outstanding | | 16,714,250 | | 16,685,602 | | 16,698,648 | | 16,629,302 | |
| Diluted shares | |
| outstanding | | 17,160,384 | | 17,088,250 | | 17,068,215 | | 17,000,649 | |
CUNO Incorporated
Consolidated Condensed Balance Sheets
(dollars in thousands)
| (unaudited)
July 31
2004
|
October 31,
2003
|
|---|
| Assets | | | | | |
| Current assets | |
| Cash and cash equivalents | | $ 54,030 | | $ 57,603 | |
| Accounts receivable, net | | 74,067 | | 59,658 | |
| Inventories, net | | 39,448 | | 31,058 | |
| Deferred income taxes | | 9,494 | | 9,020 | |
| Prepaid expenses and other | |
| current assets | | 7,019 | | 4,306 | |
| Total current assets | | 184,058 | | 161,645 | |
| Noncurrent assets | |
| Deferred income taxes | | 1,395 | | 1,340 | |
| Goodwill, net | | 30,999 | | 28,489 | |
| Prepaid pension costs | | 7,923 | | 7,923 | |
| Other noncurrent assets | | 9,598 | | 3,551 | |
| Property, plant and equipment, net | | 90,448 | | 85,060 | |
| Total assets | | $ 324,421 | | $ 288,008 | |
| Liabilities and Stockholders’ Equity | |
| Current liabilities | |
| Current portion of long-term debt | | $ 227 | | $ 849 | |
| Short-term bank loans | | 11,270 | | 11,804 | |
| Accounts payable | | 28,549 | | 20,850 | |
| Accrued payroll and related taxes | | 15,695 | | 17,456 | |
| Other accrued expenses | | 9,694 | | 10,443 | |
| Accrued income taxes | | 5,741 | | 2,558 | |
| Total current liabilities | | 71,176 | | 63,960 | |
| Noncurrent liabilities | |
| Long-term debt, less current portion | | 602 | | 401 | |
| Deferred income taxes | | 10,922 | | 9,862 | |
| Accrued pension liability | | 5,680 | | 5,457 | |
| Other long term liabilities | | 463 | | -- | |
| Total noncurrent liabilities | | 17,667 | | 15,720 | |
| Stockholders’ equity | |
| Preferred Stock | | -- | | -- | |
| Common Stock | | 17 | | 17 | |
| Treasury Stock, at cost | | (57 | ) | (57 | ) |
| Additional paid-in-capital | | 57,584 | | 53,787 | |
| Unearned compensation | | (1,714 | ) | (784 | ) |
| Accumulated other comprehensive | |
| income (loss) -- | |
| Foreign currency | |
| translation adjustments | | 3,614 | | 3,282 | |
| Minimum pension liability, | |
| net | | (2,049 | ) | (2,049 | ) |
| Fair value of derivative | |
| financial instruments, net | | 12 | | 13 | |
| | | 1,577 | | 1,246 | |
| Retained earnings | | 178,171 | | 154,119 | |
| Total stockholders’ equity | | 235,578 | | 208,328 | |
| Total liabilities and | |
| stockholders’ equity | | $ 324,421 | | $ 288,008 | |
SOURCE CUNO Incorporated
-0- 08/25/2004
/CONTACT: Frederick C. Flynn, Jr. of CUNO Incorporated, +1-203-238-8847,
fflynn@Cuno.com/
/Company News On-Call: http://www.prnewswire.com/comp/126696.html/
(CUNO)
CO: CUNO Incorporated
ST: Connecticut
IN: ENV
SU: ERN CCA MAV