SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
For the month of November 1999.
DENISON INTERNATIONAL plc
---------------------------------
(Translation of registrant's name into English)
Masters House
107 Hammersmith Road
London W14 0QH
England
(Address of principal executive offices)
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DENISON INTERNATIONAL REPORTS RESULTS FOR THE THIRD
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QUARTER AND NINE MONTHS
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MARYSVILLE, Ohio - October 29, 1999 - Denison International plc (NASDAQ: DENHY)
today reported results for the third quarter and nine month period ended
September 30, 1999.
For the current three months ended September 30, 1999, the Company's net sales
decreased 11.2% to $30.2 million, from $34.0 million in the third quarter of
1998. Restated, net sales (at 1998 third quarter exchange rates) for the current
third quarter were $30.5 million, a 10.3% decrease over the comparable 1998
period. Net income was $.9 million, or $.08 per diluted share, for the third
quarter of 1999, compared to net income of $4.2 million and diluted earnings per
share of $.38 for the comparable 1998 period.
Year-to-date 1999 net sales of $101.3 million declined by $5.5 million, or 5.1%
versus the same period in 1998. Restated, net sales (at 1998 year-to-date
exchange rates) were $101.4 million for the nine months ended September 30,
1999, a decline of $5.3 million or 4.9% versus 1998. Net income year-to-date
1999 was $6.6 million, or $.60 per diluted share, as compared with $12.9
million, or $.1.16 per diluted share for 1998.
Commenting on the results, President and CEO David Weir stated, "the results for
the quarter were negatively impacted by the effects of the strike by hourly
employees at the Marysville, Ohio piston product manufacturing facility which
supplies Denison sales companies worldwide. The strike was settled in late
August, after 10 weeks, and reduced earnings in the current third quarter by
$.12 per share versus the third quarter of 1998. Demand from North American
OEM's associated with drilling, mining, and processing of basic commodities such
as oil, gas, gold, steel and copper remained weak and, in addition, reduced
production as part of a planned inventory reduction campaign also adversely
impacted profits. Business in the Asia-Pacific region showed encouraging signs
of recovery in the quarter, but competitive pricing put pressure on margins. We
are pleased with the results of the Lokomec Oy acquisition made late in 1998.
The division is performing well above our original expectations."
Weir also stated that, "The Company's inventory reduction plans are progressing
well with a decrease of $4.7 million achieved in the first nine months of 1999,
and cash and equivalents increased $4.7 million in the quarter to $31.8 million.
We are continuing to review and are aggressively pursuing acquisition
opportunities in keeping with our long-term growth strategy. Finally, the
increase in basic commodity pricing is starting to result in increased customer
orders and we expect much stronger demand from this important sector of our
business next year."
Segment Information
On a segment basis versus third quarter 1999 results, sales in Europe for the
quarter ended September 30, 1999 decreased 2.5% or $.5 million, while sales in
the Asia-Pacific region increased by $1.2 million or 33.2%. Sales in North
America declined by $4.5 million or 35.9%.
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European net income for the quarter of $1.3 million was $1.7 million or 56.9%
unfavorable to 1998. North American reported a loss for the quarter ended
September 30, 1999 of $.9 million, as compared to net income of $1.3 million for
the third quarter of 1998. Net income in the Asia-Pacific region was constant
with 1998 levels.
Year-to-date 1999 European net sales were $57.8 million, 5.7% favorable to 1998,
reflecting the impact of the Lokomec acquisition made late in 1998. Net sales in
the Asia-Pacific region of $12.9 million were$1.2 million or 10.0% favorable to
1998. North American year-to-date net sales of $30.6 million were 24.1% or $9.7
million unfavorable to 1998. Year-to-date net income in Europe of $6.9 million
was unfavorable to 1998 by $2.3 million or 25.0%, while a net loss in the North
American region of $.4 million was $4.1 million unfavorable to 1998.
Asia-pacific region year-to-date recorded a net loss of $.3 million, compared to
break even results for 1998.
Denison International plc designs, manufactures, distributes and services highly
engineered fluid power systems and components. Denison distributes its products
and services globally to a diverse group of original equipment manufacturers and
end users in a broad array of industrial applications, including machine tools
and material handling equipment, mobile construction, agricultural and utility
equipment, and marine applications, including military equipment.
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 are
subject to certain risks and uncertainties which could cause actual results to
differ materially from those currently anticipated. Shareholder, 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.
/CONTACT: Bruce A. Smith, Chief Financial Officer, Denison International at
937-644-4437; or Carolyn Snider at National Editorial Services at 248-548-7444
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DENISON INTERNATIONAL, plc
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
USD - (000's) 1999 1998 1999 1998
------------- ---------------- --------------- ---------------
Net Sales $30,192 $34,016 $101,254 $106,730
Cost of Sales 21,021 21,096 67,111 65,868
Gross Profit 9,171 12,920 34,143 40,862
% 30.4% 38.0% 33.7% 38.3%
SG&A 7,446 7,633 24,292 23,961
Operating Income 1,725 5,287 9,851 16,901
% 5.7% 15.5% 9.7% 15.8%
Other (Income)/Expense 261 - 442 -
Net Interest Income 64 408 199 900
Income Before Taxes 1,528 5,695 9,608 17,801
Tax Provision 643 1,483 2,964 4,882
Net Income $885 $4,212 $6,644 $12,919
Basic earnings per share $0.08 $0.38 $0.60 $1.17
Diluted earnings per share $0.08 $0.38 $0.60 $1.16
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DENISON INTERNATIONAL, plc
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, December 31,
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1999 1998
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USD - (000's) Current Assets:
Cash & Cash Equivalents $31,811 $35,799
Accounts receivable, net 27,800 29,716
Inventories 33,536 38,236
Other current assets 3,417 4,513
Total current assets 96,564 108,264
Property, plant and Equipment, net 26,303 24,726
Other assets 8,983 10,467
Total assets $131,850 $143,457
Current liabilities:
Notes payable to bank $5,643 $12,532
Accounts payable and other accrued
liabilities 23,722 29,300
Total current liabilities 29,365 41,832
Noncurrent liabilities 21,017 23,098
Shareholders equity:
Retained earnings 81,049 74,405
Other shareholders equity 419 4,122
Total shareholders equity 81,468 78,527
Total liabilities and
shareholders equity $131,850 $143,457
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
DENISON INTERNATIONAL plc
By: /s/ Bruce A. Smith
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Bruce A. Smith
Chief Financial Officer
Date: November 15, 1999
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