Exhibit 99.1
Immediate Release
Margaret B. Zminda
Treasurer and
Director, Investor
Relations
(215) 517-2010
SPS TECHNOLOGIES ANNOUNCES THIRD QUARTER EARNINGS
Jenkintown, PA -October 22, 2003 - SPS TECHNOLOGIES, INC. (NYSE - ST) reports that net earnings for the third quarter of 2003 were $4.6 million or $0.35 per diluted share compared with the loss of $6.3 million or $0.48 per diluted share reported for the third quarter of 2002. Results for the third quarter of 2003 include $2.0 million in pre-tax costs ($1.3 million after-tax or $0.10 per diluted share) associated with the Company's pending acquisition by Precision Castparts Corp. (NYSE - PCP) announced on August 18, 2003. Results for the third quarter of 2002 include a pre-tax charge of $16.0 million ($11.2 million after tax or $0.85 per diluted share) recorded in connection with the Company's 2002 restructuring plan and restructure related costs of $0.4 million ($0.3 million after tax or $0.02 per diluted share). Proforma net earnings before acquisition related costs for the third quarter of 2003 were $5.9 million or $0.45 per diluted share. This compares to pro forma net earnings before restructure related costs of $5.2 million or $0.39 per diluted share reported for the third quarter of 2002. A reconciliation of proforma net earnings before acquisition and restructure related costs to reported net earnings appears in the financial schedules that accompany this news release.
Net sales for the third quarter were $203.9 million compared to $205.1 million last year. For the third quarter, the impact of changes in foreign exchange rates, particularly in the UK and Eurozone currencies, increased revenues over the same period a year ago by $3.5 million. This impact along with increased sales by the Specialty Materials and Alloys segment and the U.K. operations of the Aerospace Fasteners and Components segment were offset by lower revenues of the Magnetic Products segment and the North American operations of the Aerospace Fasteners and Components segment in comparison to the same period a year ago. The Company realized operating margin improvement in comparison to the same period a year ago in spite of the volume declines, particularly in the Magnetic Products segment.
Incoming orders for the third quarter were $196.2 million, a 2% decline from the $200.4 million reported a year ago. This reduction was primarily due to reductions in orders in the Magnetic Products segment, where orders were down $4.0 million, or 15%, from the level recorded in the third quarter of 2002 and in the Specialty Materials and Alloys segment, where orders were down $2.4 million, or 8%, from the third quarter of 2002. The effect of exchange rate changes improved reported orders by $3.0 in comparison to last year. Orders for the Engineered Products segment, excluding currency impacts were down $3.5 million, or 5% from 2002 levels but orders for Aerospace Fasteners and Components, excluding currency impacts, were up $2.9 million, or 4%, over the same period a year ago. The book to bill ratio for the third quarter was 0.96 and the absolute value of orders was down $4.2 million, or 2%, from the second quarter of 2003. Backlog at September 30, 2003 was $279.0 mil lion, essentially unchanged from backlog reported at December 31, 2002.
For the nine months ended September 30, 2003, incoming orders were $623.5 million compared to $620.9 million for the same period a year ago. The impact of exchange rate changes increased incoming orders by $10.4 million versus the first nine months of 2002. Net sales were $630.7 million compared to $628.8 million for the first nine months of 2002. The impact of exchange rate changes increased net sales for the nine months ended September 30, 2003 by $10.8 million versus the same period in 2002. Year-to-date net earnings for the nine months ended September 30, 2003 were $15.7 million or $1.20 per diluted share compared to $2.4 million or $0.18 per diluted share for the same period in 2002. Proforma net earnings before acquisition and restructure related costs for the first nine months of 2003 were $17.9 million or $1.37 per diluted share. This result compares to proforma net earnings of $17.6 million or $1.33 per diluted share for the same period a year ago, which exclu des 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 that accompany this news release.
As of September 30, 2003, the Company had cash balances of $74.8 million and total debt of $224.4 million. The ratio of net debt to total capitalization was 28% at September 30, 2003, down from 30% at the end of the second quarter of 2003. Condensed Balance Sheet information is included in the financial schedules that accompany this news release.
Cash provided by operating activities for the third quarter was $5.0 million, compared with $9.0 million for the same period a year ago. Cash provided by operating activities for the third quarter included pension contributions for the Company's U.S. defined benefit pension plans of $11.8 million, compared with a contributions of $1.0 million for the same period a year ago. The 2003 contributions include discretionary pension contributions of approximately $7.0 million over the required funding levels in order to improve the funded status of the plans. Net cash flow for the third quarter was $6.2 million, compared to a net cash outflow of $24.3 million for the same period in 2002. Capital expenditures for the third quarter were $6.4 million, compared to $3.8 million for the third quarter of 2002. The Company received $5.7 million in proceeds from the exercise of stock options in the third quarter of 2003.
Year to date cash provided by operating activities was $11.6 million compared with $28.5 million for the same period a year ago. Year to date net cash flow is a net outflow of $1.2 million compared with a net cash outflow of $24.9 million for the same period in 2002. Year to date capital expenditures were $18.6 million for the period ended September 30, 2003 compared to $17.4 million for the same period in 2002.
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 to 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.
PR 03-10 MBZ
