Exhibit 19
MAY 19, 2004
FOR IMMEDIATE RELEASE
CUNO REPORTS RECORD SECOND QUARTER RESULTS
- Record second quarter Sales of $82.7 million (up 19%)
- Record second quarter diluted EPS of $0.49 (up 32%)
- Record second quarter Operating Margin of 15.1%
- Record second quarter Orders of $89.9 million
Meriden, CT: CUNO Incorporated (Nasdaq:CUNO) today reported record second
quarter results for the period ended April 30, 2004. Sales were $82.7 million,
up 19% versus the same period in 2003 and up 13% in local currency. Net income
for the second quarter increased by 34% to $8.4 million from $6.3 million
reported in the same period in 2003. Diluted earnings per share for the period
were a second quarter record $0.49, up 32% compared to $0.37 in the prior year
period and up approximately 22% on a currency-adjusted basis.
Commenting on the Company's second quarter results, Mark G. Kachur, Chairman and
Chief Executive Officer, said "Our record second 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. In addition, our geographic diversity contributed to our
strong results, as international sales increased by 26% (up 12% in local
currency), reflecting double-digit Sales growth in each of our major geographic
segments."
For the first six months of 2004, sales were a record $158.2 million, up 17% (up
9% in local currency), and net income was $15.4 million versus $11.7 million in
the prior year first half. Particularly strong sales growth in our international
operations supplemented solid growth in North
America. Diluted earnings per share were a record $0.90, up 30% from $0.69
in the first six months of 2003 and up approximately 19% on a currency-adjusted
basis.
Commenting on business conditions and the outlook for CUNO, Mr. Kachur added,
"Our incoming orders were a second quarter record $89.9 million and our backlog
remains strong. As a result, we expect to achieve strong financial results in
fiscal 2004, and are increasing our previous EPS guidance for the year to the
$1.76-1.84 range (from $1.72-$1.80)."
A conference call will be held Thursday, May 20 at 10:00 a.m. (EDT) to review
the Company's second quarter financial results and business outlook. The call-in
number is 1-888-273-9885 for interested analysts and investors. Alternatively,
visit us at www.cuno.com/investors to access the webcast of our conference call.
Also, visit us at 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: volumes of shipments of CUNO's
products; changes in product mix and product pricing; 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; continuing beneficial
relationships with customers; 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.
CUNO INCORPORATED
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(dollars in thousands, except share and per-share amounts)
THREE MONTHS ENDED SIX MONTHS ENDED
APRIL 30, APRIL 30,
2004 2003 2004 2003
------------ ------------ ------------ ------------
Net sales $ 82,745 $ 69,305 $ 158,154 $ 135,742
Less costs and expenses:
Cost of products sold 43,676 38,027 84,229 74,710
Selling, general and administrative 22,510 18,238 42,748 36,027
Research, development and engineering 4,036 3,372 8,225 7,042
------------ ------------ ------------ ------------
70,222 59,637 135,202 117,779
------------ ------------ ------------ ------------
Operating income 12,523 9,668 22,952 17,963
Nonoperating income (expense):
Interest expense (87) (134) (170) (281)
Interest and other income, net 216 90 366 181
------------ ------------ ------------ ------------
129 (44) 196 (100)
------------ ------------ ------------ ------------
Income before income taxes 12,652 9,624 23,148 17,863
Income taxes 4,208 3,320 7,699 6,171
------------ ------------ ------------ ------------
Net income $ 8,444 $ 6,304 $ 15,449 $ 11,692
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Basic earnings per common share $ 0.51 $ 0.38 $ 0.93 $ 0.70
Diluted earnings per common share $ 0.49 $ 0.37 $ 0.90 $ 0.69
Basic shares outstanding 16,694,466 16,638,881 16,690,853 16,601,152
Diluted shares outstanding 17,214,286 17,014,779 17,211,187 16,956,848
CUNO INCORPORATED
CONSOLIDATED CONDENSED BALANCE SHEETS
(dollars in thousands) (unaudited)
APRIL 30, OCTOBER 31,
2004 2003
--------- ---------
ASSETS
Current assets
Cash and cash equivalents $ 59,737 $ 57,603
Accounts receivable, net 69,082 59,658
Inventories, net 36,696 31,058
Deferred income taxes 9,156 9,020
Prepaid expenses and other current assets 4,812 4,306
--------- ---------
Total current assets 179,483 161,645
Noncurrent assets
Deferred income taxes 1,333 1,340
Goodwill, net 29,379 28,489
Prepaid pension costs 7,943 7,923
Other noncurrent assets 5,232 3,551
Property, plant and equipment, net 88,557 85,060
--------- ---------
Total assets $ 311,927 $ 288,008
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current portion of long-term debt $ 213 $ 849
Short-term bank loans 11,242 11,804
Accounts payable 26,822 20,850
Accrued payroll and related taxes 15,722 17,456
Other accrued expenses 9,430 10,443
Accrued income taxes 5,196 2,558
--------- ---------
Total current liabilities 68,625 63,960
Noncurrent liabilities
Long-term debt, less current portion 539 401
Deferred income taxes 10,003 9,862
Accrued pension liability 5,631 5,457
Other long term liabilities 391 --
--------- ---------
Total noncurrent liabilities 16,564 15,720
STOCKHOLDERS' EQUITY
Preferred Stock -- --
Common Stock 17 17
Treasury Stock, at cost (57) (57)
Additional paid-in-capital 56,771 53,787
Unearned compensation (1,876) (784)
Accumulated other comprehensive income (loss) --
Foreign currency translation adjustments 4,340 3,282
Minimum pension liability, net (2,049) (2,049)
Fair value of derivative financial instruments, net 24 13
--------- ---------
2,315 1,246
Retained earnings 169,568 154,119
--------- ---------
Total stockholders' equity 226,738 208,328
--------- ---------
Total liabilities and stockholders' equity $ 311,927 $ 288,008
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