EXHIBIT 99.1
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Denison International Meets Q1 2003 Earnings
Expectations; Q1 2003 EPS of $0.37.
Q1 2003 net sales 16% above Q1 2002
MARYSVILLE, Ohio -- (BUSINESS WIRE)--April 16, 2003--Denison International plc
(NASDAQ:DENHY) today reported results for its first quarter and three months
ended March 31, 2003.
Special Note:
Effective January 1, 2002 Denison International (the "Company") adopted
Statement of Financial Accounting Standards No. 142 "Goodwill and Other
Intangible Assets" (SFAS 142). In 2002, the Company also adopted Statement of
Financial Accounting Standards No. 141 "Business Combinations" (SFAS 141), which
requires that in a business combination in which the fair value of the net
assets acquired exceeds cost, any residual negative goodwill is recognized as an
extraordinary gain in the period in which the business combination is initially
recognized. At the time of adoption of SFAS 142 the Company was carrying a
balance of negative goodwill of $1.858 million. In accordance with SFAS 141,
upon the adoption of SFAS 142, the negative goodwill balance was written-off in
the first quarter of 2002 and recorded as a Change in Accounting Principle. For
comparative purposes, the table below summarizes the impact of the accounting
change related to the negative goodwill, on 2003 and 2002 results:
$000 Q1 2003 Q1 2002
------- -------
Diluted EPS before
Cumulative Effect of
Change in Accounting $0.37 $0.28
Principle
Cumulative Effect of
Change in Accounting
Principle $-0- $0.18
----- -----
Reported Diluted EPS $0.37 $0.46
===== =====
Quarterly Results
For the three months ended March 31, 2003, the Company's net sales increased
16.3% to $44.4 million from first quarter 2002 net sales of $38.2 million. Net
income for the current quarter increased 27.6%, or $0.8 million, to $3.7
million, from $2.9 million recorded, before the 2002 Cumulative Change in
Accounting Principle, discussed above, in the comparable quarter a year ago.
Reported diluted earnings per share of $0.37 for the current first quarter were
$0.09 per share higher than first quarter 2002 results, before the 2002
Cumulative Change in Accounting Principle.
Gross margin as a percent of sales of 36.3% in the current first quarter was
favorable to the 35.6% gross margin recorded for the same quarter of 2002. Gross
margin was favorably impacted by manufacturing efficiencies gained through
higher capacity utilization to support the increased volume. SG&A, as a percent
of sales, was 24.8% for the first quarter of 2003 versus 24.5% for the first
quarter of 2002. Operating income for the first quarter 2003 were $5.1 million,
up $0.9 million or 20.9% from first quarter 2002. Operating margins, as a
percent of net sales, were 11.6% for the three months ended March 31, 2003
versus 11.2% for the same period of 2002. The effective tax rate for the three
months ended March 31, 2003 was 30%, compared to a 2002 effective tax rate of
30.9%.
Net working capital at the end of March 2003 was $92.7 million, compared to
$88.4 million at December 2002. While several of the components of working
capital decreased from December 31, 2002 balances in local currencies, the
impact on translation of the Company's European operations at favorable currency
exchange rates versus those at
the end of 2002 resulted in the increased working capital realized. Cash, net of
debt, at March 31, 2003 was $39.3 million compared to $38.9 million at December
31, 2002. In the quarter ended March 31, 2003 the Company repurchased 83,600 of
its shares under the shareholder approved share repurchase program at an average
price of $15.96 per share. Under the share repurchase program, which began in
2000, the Company has repurchased 1,183,600 shares, nearly 11% of the shares
outstanding.
Order Activity
Order receipts for the first quarter of 2003 increased 21.8% from a year ago to
$46.7 million, or up 7.6% on a currency adjusted volume basis. North American
order receipts were favorable by 12.4% to the first quarter of 2002, while
European orders increased by 30.1%, or 7.3% on a currency adjusted volume basis.
Asia-Pacific orders increased by 8.5%, or 1.0% on a currency adjusted volume
basis. Order backlog at March 31, 2003 was $29.7 million compared to $26.3
million at December 31, 2002, a 12.9% increase.
CEO Comments and Outlook
Commenting on the performance, President and CEO David Weir said "We expected a
strong start to 2003, and results were in line with our expectations. Sales
revenues at $44.4 million are the highest ever recorded for a quarter, helped by
the weaker dollar/Euro relationship, and a continuation of the improving trend
in North America."
Weir continued "Order intake during the quarter was up 22% over the same period
in 2002 and we should see the strong start to the year continue through the
second quarter. The balance sheet continues to strengthen with cash net of
borrowings increasing to $39.3 million."
Segment Results
Sales in North America increased 3.2% to $12.0 million for the current quarter
versus 2002. Sales in the Asia-Pacific region increased 6.5% to $5.5 million
versus $5.2 million recorded in the first quarter of 2002. Sales in Europe
increased by 26% to $26.9 million in the current quarter versus 2002, and were
favorable to the 2002 first quarter by 3.8% after adjusting for the change in
currency rates.
North America reported operating income of $1.2 million for the current quarter,
compared to operating income of $0.5 million for the first quarter of 2002,
resulting from increased sales volume, production and cost controls. Operating
income in the Asia-Pacific region was $0.3 million, equal to operating income
recorded for the comparable quarter of 2002. European operating income increased
22.9%, or $0.7 million, to $3.9 million for the current quarter from a year ago.
Denison International plc (NASDAQ:DENHY), is an industrial manufacturer and
servicer of highly engineered hydraulic fluid power systems and components. For
more information about our products and services, please visit us at
www.denisonhydraulics.com
Notice of Conference call: Denison's conference call will be held on Thursday,
April 17, 2003 at 2:00 p.m. ET to discuss the Company's first quarter 20023
results and will be available to all interested parties via live audio webcast
or through archive on the company's website at www.denisonhydraulics.com.
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 Act of 1995. Such forward-looking statements,
including statements in the CEO Comments paragraph regarding future prospects
and performance, 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.
Contacts: Bruce A. Smith, CFO Melodye Demastus, President
(937) 644-4437 Melrose Consulting
(614) 771-0860
-three pages of tables to follow-
DENISON INTERNATIONAL plc
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
($000 except share data) (unaudited)
Three Months Ended
------------------
March 31
--------
2003 2002
---- ----
Net Sales $ 44,444 $ 38,186
Cost of Sales 28,293 24,590
------ ------
Gross Profit 16,151 12,733
% 36.3% 35.6%
S,G&A 11,002 9,338
------ ------
Operating Income 5,149 4,258
% 11.6% 11.2%
Other Income/(expense) 91 (169)
Net Interest Income 101 207
--- ---
Income Before Taxes 5,341 4,296
Tax Provision 1,599 1,329
----- -----
Net Income, Before Cumulative
Effect of a change in Accounting
Principle 3,742 2,967
Cumulative Effect of a Change in
Accounting Principle, Net of
Taxes 0 1,858
- -----
Net Income $ 3,742 $ 4,825
=========== ===========
Basic Earnings Per Share, Before
Cumulative Effect of a change in
Accounting Principle $0.37 $0.28
Cumulative Effect of a Change in
Accounting Principle $0 $0.18
-- -----
Basic Earnings per Share $0.37 $0.46
===== =====
Diluted Earnings Per Share $0.37 $0.46
===== =====
Basic Shares for Period 10,011,073 10,567,700
========== ==========
Diluted Shares for Period 10,024,926 10,603,402
========== ==========
DENISON INTERNATIONAL plc
CONDENSED CONSOLIDATED BALANCE SHEETS
USD-(000's) (audited) (audited)
March 31 December 31,
2003 2002
---------------- ----------------
Current assets:
Cash & cash equivalents $ 40,424 $ 39,752
Accounts receivable, net 37,826 32,554
Inventories 45,408 45,324
Other current assets 5,120 5,590
---------------- ----------------
Total current assets 128,778 123,220
Property, plant & equipment,
net 30,847 31,132
Other assets 15,686 15,187
---------------- ----------------
Total assets $ 175,311 $ 169,539
================ ================
Current liabilities:
Notes payable to bank $ 1,159 $ 898
Accounts payable and other
accrued liabilities 34,898 33,925
---------------- ----------------
Total current liabilities 36,057 34,823
Noncurrent liabilities 19,171 18,360
Shareholders equity:
Retained earnings 112,309 109,900
Other shareholders equity 7,774 6,456
---------------- ----------------
Total shareholders equity 120,083 116,356
Total liabilities and
shareholders equity $ 175,311 $ 169,539
================ ================
DENISON INTERNATIONAL plc
SEGMENT INFORMATION
Three Months Ended
($000) March 31
---------------------
2003 2002
---------- ---------
Net Sales
---------
Europe 26,922 21,374
North America 11,993 11,622
Asia-Pacific 5,529 5,190
Corporate - -
---------- ---------
Consolidated 44,444 38,186
Gross Earnings
--------------
Europe 10,677 8,255
North America 3,983 3,329
Asia-Pacific 1,690 1,633
Corporate / IC Profit
Elim (199) 379
---------- ---------
Consolidated 16,151 13,596
Operating Income
----------------
Europe 3,933 3,199
North America 1,204 455
Asia-Pacific 257 296
Corporate / IC Profit
Elim (245) 308
---------- ---------
Consolidated 5,149 4,258
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