Exhibit 99.1
Immediate Release
Margaret B. Zminda
Treasurer and Director
Investor Relations
(215) 517-2010
SPS TECHNOLOGIES ANNOUNCES SECOND QUARTER EARNINGS
Jenkintown, PA -July 30, 2003 - SPS TECHNOLOGIES, INC. (NYSE - ST) reports that net earnings for the second quarter of 2003 were $6.1 million or $0.47 per diluted share, an increase of $0.5 million or $0.05 per diluted share over the net earnings reported for the second quarter of 2002 of $5.6 million or $0.42 per diluted share. The Company recorded pre-tax operating losses of plants to be closed and other restructure related costs totaling $0.6 million for the second quarter, $0.4 million after-tax or $0.03 after-tax per diluted share. In the second quarter of 2002, the Company recorded pre-tax charges of $1.5 million, $1.1 million after-tax or $0.08 after-tax per diluted share. These charges included pre-tax operating losses of plants to be closed and other restructuring related costs, net of a benefit associated with the settlement of a previously accrued trial court judgment. Proforma net earnings before restructure related costs for the second quarter of 2003 were $6.5 million or $0.50 per diluted share. This compares to proforma net earnings before restructure related costs and legal settlement impacts of $6.7 million or $0.50 per diluted share reported for the second quarter of 2002. A reconciliation of proforma net earnings before restructure related costs and legal settlement impacts to reported net earnings appears in the financial schedules which accompany this news release.
Net sales for the second quarter were $214.2 million compared to $215.6 million last year. For the second quarter, the Company realized lower revenues and operating margins in the Aerospace Fasteners and Components segment and the Magnetic Products segment in comparison to the same period a year ago. These results reflect continued weakening of end-market demand for aerospace products along with weakness in demand for products serving the reprographics market. The impact of these reductions was largely offset by improved revenues and margins in both the Specialty Materials and Alloys segment and the Engineered Products segment compared to the second quarter of 2002.
Incoming orders for the second quarter were $200.3 million, an 8% reduction from the $218.7 million reported a year ago. This reduction was primarily due to reductions in orders in the Magnetic Products segment, where orders were down $10.9 million, or 37%, from the level recorded in the second quarter of 2002. In addition, orders for the Aerospace Fasteners and Components segment were down $6.4 million, or 8%, from the second quarter of 2002. Backlog at June 30, 2003 was $282.2 million, up 1% from December 31, 2002.
For the six months ended June 30, 2003, incoming orders were $427.4 million compared to $420.5 million for the same period a year ago. Net sales were $426.8 million compared to $423.7 million for the first six months of 2002. Net earnings for the first half of 2003 were $11.1 million or $0.85 per diluted share compared to $8.7 million or $0.65 per diluted share for the same period in 2002. Proforma net earnings before restructure related costs for the first half of 2003 were $12.0 million or $0.92 per diluted share. This result compares to proforma net earnings of $12.4 million or $0.93 per diluted share for the same period a year ago, which excludes restructure related costs and legal settlement impacts. A reconciliation of proforma net earnings before restructure related costs and legal settlement impacts to reported net earnings appears in the financial schedules which accompany this news release.
As of June 30, 2003, the Company had cash balances of $68.6 million and total debt of $222.6 million. The ratio of net debt to total capitalization was 30% at June 30, 2003, down from 31% at the end of the first quarter of 2003.
SPS Technologies, Inc. will hold its Second Quarter 2003 Financial Results conference call at 11:00 AM (EDT) on Thursday, July 31, 2003. The conference call is open to the public and can be accessed via dial-in. Access numbers are as follows: 1-888-203-1112 for U.S. and Canadian callers or 1-719-457-0820 for International callers.Callers are requested to identify that they wish to participate in the SPS Technologies, Inc. Conference Call and to reference the Conference I.D. - 302542. It is recommended that participants dial in approximately 10 minutes prior to the scheduled start time for the call. A replay of the call will be available 24 hours a day beginning at 3:00 PM on July 31, 2003 until Thursday, August 7, 2003 by calling the following access numbers: 1-888-203-1112 for U.S. and Canadian callers or 1-719-457-0820 for International callers. The Conference I.D. required to access the replay of the call is 302542. In addition, a replay of the call can be accessed und er Corporate Presentations in the Investor Relations section of the Company's website (www.spstech.com).
This news release contains statements, which may constitute forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect SPS Technologies' current views about future events and financial performance. Investors should not rely on forward-looking statements because they are subject to a variety of assumptions, risks and uncertainties that could cause actual results, performance or achievements of SPS Technologies to differ materially from the Company's expectations. The Company's actual results could differ materially from those mentioned in such forward-looking statements as a result of the risks associated with the Company's business, changes in general economic conditions, and changes in the assumptions used in making the forward-looking statements. The Company expressly does not undertake any duty to update forward-looking statements and does not undertake any obligation to publicly release any forward-looking information t o reflect anticipated or unanticipated events or circumstances after the date of this news release. Additional information regarding these risk factors and uncertainties is detailed in the Company's Securities and Exchange Commission filings.
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SPS TECHNOLOGIES, INC. | ||||||
STATEMENTS OF CONSOLIDATED OPERATIONS | ||||||
(Unaudited--Thousands of dollars, except per share data) | ||||||
Three Months Ended | Six Months Ended | |||||
June 30, | June 30, | |||||
2003 | 2002 | 2003 | 2002 | |||
Net sales | $ 214,193 | $ 215,605 | $ 426,810 | $ 423,658 | ||
Cost of goods sold | 175,853 | 177,478 | 351,955 | 350,132 | ||
Gross Profit | 38,340 | 38,127 | 74,855 | 73,526 | ||
Selling, general and | ||||||
administrative expense | 25,254 | 24,368 | 50,285 | 50,932 | ||
Restructurings & | ||||||
impairments | 0 | 900 | 0 | 900 | ||
Operating earnings | 13,086 | 12,859 | 24,570 | 21,694 | ||
Other income (expense): | ||||||
Interest income | 161 | 198 | 459 | 418 | ||
Interest expense | (4,141) | (4,660) | (8,219) | (9,272) | ||
Other, net | (76) | (77) | (360) | (230) | ||
Earnings before income taxes | 9,030 | 8,320 | 16,450 | 12,610 | ||
Provision for income taxes | 2,950 | 2,730 | 5,360 | 3,930 | ||
Net earnings | $ 6,080 | $ 5,590 | $ 11,090 | $ 8,680 | ||
Earnings Per Share: | ||||||
Basic | $ 0.47 | $ 0.42 | $ 0.86 | $ 0.66 | ||
Diluted | $ 0.47 | $ 0.42 | $ 0.85 | $ 0.65 | ||
Shares used to compute: | ||||||
Basic EPS | 12,920 | 13,154 | 12,954 | 13,137 | ||
Diluted EPS | 12,989 | 13,288 | 13,017 | 13,262 | ||
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SPS TECHNOLOGIES, INC. | ||||||
PRO FORMA STATEMENTS OF CONSOLIDATED OPERATIONS | ||||||
EXCLUDING CHARGES LISTED BELOW | ||||||
(Unaudited--Thousands of dollars, except per share data) | ||||||
Three Months Ended | Six Months Ended | |||||
June 30, | June 30, | |||||
2003 | 2002 | 2003 | 2002 | |||
Net sales | $ 214,193 | $ 215,605 | $ 426,810 | $ 423,658 | ||
Cost of goods sold | 175,853 | 177,478 | 351,955 | 350,132 | ||
Gross Profit | 38,340 | 38,127 | 74,855 | 73,526 | ||
Selling, general and | ||||||
administrative expense | 24,637 | 23,782 | 48,945 | 46,172 | ||
Operating earnings | 13,703 | 14,345 | 25,910 | 27,354 | ||
Other expense, net | 4,056 | 4,539 | 8,120 | 9,084 | ||
Earnings before income | ||||||
taxes | 9,647 | 9,806 | 17,790 | 18,270 | ||
Provision for income taxes | 3,135 | 3,102 | 5,762 | 5,872 | ||
Proforma net earnings | $ 6,512 | $ 6,704 | $ 12,028 | $ 12,398 | ||
Proforma diluted EPS | $ 0.50 | $ 0.50 | $ 0.92 | $ 0.93 | ||
Reconciliation of Pro Forma to Reported Net Earnings | ||||
Proforma net earnings | $ 6,512 | $ 6,704 | $ 12,028 | $ 12,398 |
Net of tax: | ||||
Restructurings & | ||||
impairments | 0 | (690) | 0 | (690) |
Other restructure | ||||
related charges | (432) | (816) | (938) | (1,700) |
Legal settlement charges | 0 | 392 | 0 | (1,328) |
Reported net earnings | $ 6,080 | $ 5,590 | $ 11,090 | $ 8,680 |
Diluted EPS | $ 0.47 | $ 0.42 | $ 0.85 | $ 0.65 |
Shares used to compute: | ||||
Diluted EPS | 12,989 | 13,288 | 13,017 | 13,262 |
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SPS TECHNOLOGIES, INC. | ||||||
SEGMENT INFORMATION | ||||||
(Unaudited--Thousands of dollars) | ||||||
Three Months Ended | Six Months Ended | |||||
June 30, | June 30, | |||||
2003 | 2002 | 2003 | 2002 | |||
Incoming Orders: | ||||||
Aerospace Fasteners | ||||||
and Components | $72,545 | $78,985 | $154,087 | $144,203 | ||
Engineered Fasteners | ||||||
and Components | 77,507 | 77,017 | 157,128 | 151,535 | ||
Specialty Materials | ||||||
and Alloys | 31,412 | 32,882 | 70,950 | 65,445 | ||
Magnetic Products | 18,869 | 29,812 | 45,209 | 59,280 | ||
$200,333 | $218,696 | $427,374 | $420,463 | |||
Net Sales: | ||||||
Aerospace Fasteners | ||||||
and Components | $75,576 | $77,484 | $152,959 | $154,700 | ||
Engineered Fasteners | ||||||
and Components | 80,635 | 77,321 | 158,021 | 147,035 | ||
Specialty Materials | ||||||
and Alloys | 34,184 | 32,594 | 65,592 | 65,750 | ||
Magnetic Products | 23,798 | 28,206 | 50,238 | 56,173 | ||
$214,193 | $215,605 | $426,810 | $423,658 | |||
Operating earnings: | ||||||
Aerospace Fasteners | ||||||
and Components | $6,099 | $5,575 | $11,896 | $12,253 | ||
Engineered Fasteners | ||||||
and Components | 4,310 | 3,425 | 7,805 | 5,854 | ||
Specialty Materials | ||||||
and Alloys | 4,811 | 4,371 | 8,267 | 8,535 | ||
Magnetic Products | 1,156 | 2,668 | 3,162 | 1,342 | ||
Unallocated | ||||||
Corporate Cost | (3,290) | (3,180) | (6,560) | (6,290) | ||
$13,086 | $12,859 | $24,570 | $21,694 | |||
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SPS TECHNOLOGIES, INC. | ||||||
SEGMENT INFORMATION | ||||||
(Unaudited--Thousands of dollars) | ||||||
Three Months Ended | Six Months Ended | |||||
June 30, | June 30, | |||||
2003 | 2002 | 2003 | 2002 | |||
Pro Forma operating earnings excluding legal settlement charges and expenses and wind-down losses related to restructure actions: | ||||||
Aerospace Fasteners | ||||||
and Components | $6,099 | $6,521 | $11,896 | $13,905 | ||
Engineered Fasteners | ||||||
and Components | 4,911 | 4,593 | 9,045 | 7,444 | ||
Specialty Materials | ||||||
and Alloys | 4,811 | 4,371 | 8,267 | 8,535 | ||
Magnetic Products | 1,172 | 2,040 | 3,262 | 3,760 | ||
Unallocated | ||||||
Corporate Cost | (3,290) | (3,180) | (6,560) | (6,290) | ||
13,703 | 14,345 | 25,910 | 27,354 | |||
Legal settlement charges | 0 | 670 | 0 | (2,150) | ||
Expenses and wind-down | ||||||
losses related to | ||||||
restructure actions | (617) | (2,156) | (1,340) | (3,510) | ||
Reported operating | ||||||
earnings | $13,086 | $12,859 | $24,570 | $21,694 | ||
