EXHIBIT 99.1
UNOVA Announces Third Quarter 2004 Results
EVERETT, Wash.--(BUSINESS WIRE)--Nov. 2, 2004--UNOVA, Inc.
(NYSE:UNA):
-- UNOVA reports EPS of $0.10
-- Intermec product and service revenues increased by more than
16%, driven by Systems and Solutions growth of 25% over
prior-year quarter
-- IAS segment profit exceeds projections
-- Cash increases $20 million during quarter
UNOVA, Inc. (NYSE:UNA) today announced financial results for its
third fiscal quarter, which ended September 30, 2004.
UNOVA reported third quarter revenues of $316.7 million and net
earnings of $5.9 million, or $0.10 per share, compared to 2003 third
quarter revenues of $278.0 million and a net loss of ($1.3) million,
or ($0.02) per share. The prior year revenues included a settlement
for an intellectual property (IP) dispute regarding its smart battery
patents, the terms of which are confidential.
Earnings from continuing operations for the third quarter of 2004
were $6.5 million, or $0.11 per share compared to $4.1 million, or
$0.07 per share for the same prior-year period. Loss from discontinued
operations in the third quarter was ($0.6) million as compared to a
loss of ($5.5) million in the comparable period of 2003.
Segment operating profit from continuing operations was $17.4
million for the third quarter of 2004, compared to an operating profit
of $15.8 million for the same prior year period. The prior year
performance included a $9.2 million positive impact on segment
operating profit from IP settlements. Segment operating profit from
product and service revenues increased $10.9 million, or 167 percent,
in the third quarter of 2004 compared to the same prior-year period.
"We are encouraged by our achievements in growth, profitability
and cash flows," said Larry D. Brady, Chairman and CEO. "The
strategies we outlined in late 2003 are proving successful and
producing results."
Corporate expenditures for the third quarter reflected a peak in
incremental spending for outside resources and independent audit fees
related to compliance with the internal control provisions of
Sarbanes-Oxley Section 404. These increased expenditures were offset
by an income tax benefit of $1.2 million reflecting recognition of
certain tax credits and deferred tax assets during the quarter.
The Company's cash and cash equivalent position, including the $50
million classified as restricted cash, increased to $211.4 million as
of September 30, 2004. The restricted cash is required by the
Company's new credit facility until the Company's bonds due in March
2005 are retired. The positive cash flow during the quarter is
primarily attributed to operating results and collections on contract
deliveries in the IAS segment. Total debt remained unchanged at $208.5
million.
Automated Data Systems (ADS)
In the third quarter of 2004, revenues at the Company's ADS
segment, comprising Intermec Technologies, were $194.8 million,
representing a 9 percent increase in revenues over the comparable
prior-year quarter. The prior-year quarter included the effect of an
IP settlement. Product and service revenues for the third quarter of
2004 increased more than 16 percent.
The ADS segment recorded a $17.1 million operating profit for the
third quarter of 2004, compared to an operating profit of $22.2
million, which included $9.2 million of operating profit from the IP
settlement, for the third quarter of 2003. The third quarter of 2004
includes $3.7 million of incremental research and development expenses
compared to the prior-year quarter. Operating margins for ADS product
and service revenues were 8.8 percent in the third quarter of 2004,
including the impact of the incremental research and development
expenses, compared to 7.7 percent for the prior-year quarter.
All major product and service revenue categories grew over the
comparable 2003 quarter. This was primarily led by Systems and
Solutions revenue growth of 25 percent.
Geographically, North America revenues achieved an increase of 14
percent over the comparable prior-year period. Revenues in EMEA
increased 9 percent, revenues in Asia Pacific increased 48 percent and
Latin America revenues increased 68 percent.
Industrial Automation Systems (IAS)
The IAS segment reported third quarter 2004 revenues of $121.9
million and an operating profit of $0.3 million. IAS revenues
increased 23 percent over the comparable quarter of 2003. These
results compare to third quarter 2003 revenues of $99.3 million and an
operating loss of ($6.4) million.
Backlog for all IAS businesses was $237.6 million as of September
30, 2004, compared to $266.4 million at December 31, 2003. The
reduction of the backlog primarily reflects the progress completed to
date on the order to supply a complete engine machining and assembly
system for Hyundai Motor's Alabama plant.
About UNOVA
UNOVA is a leading supplier of mobile computing and wireless
network products for non-office applications and of manufacturing
systems technologies primarily for the automotive and aerospace
industries. www.unova.com
(Forward-looking Statement)
Certain forward-looking statements in this release (as defined by
Section 27A of the Securities Act of 1933, as amended, and Section 21E
of the Securities Exchange Act of 1934) relate to matters that are not
historical facts. They include, but are not limited to, statements
about the Company's ability to continue to improve profit in both its
business segments, reduce expenses, and improve efficiency, leverage
its research and development investment to drive significant future
revenue, and the ability to continue operational improvement and year
over year growth. Such forward-looking statements involve and are
dependent upon certain risks and uncertainties. These include, but are
not limited to, other risks and uncertainties described more fully in
the Company's filings on Form 10-K and 10-Q with the Securities and
Exchange Commission.
UNOVA, INC.
THIRD QUARTER 2004 - EARNINGS CONFERENCE CALL
UNOVA, Inc. will hold a conference call on November 2, 2004 at
7:00 a.m. Pacific / 10:00 a.m. Eastern Standard time to review
financial results from its third quarter of fiscal year 2004, hosted
by UNOVA Chief Executive Officer, Larry D. Brady; Chief Financial
Officer, Michael E. Keane; Intermec President, Thomas O. Miller,
Industrial Automation Systems President, Robert T. Smith and UNOVA
Director of Investor Relations, Kevin P. McCarty. The dial-in number
for participants is 888-787-0198 (Pass code is "UNOVA"). The call also
will be broadcast live on the Internet under the investor information
section of the UNOVA Web site at www.unova.com.
UNOVA, INC.
(Unaudited, amounts in thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -------------------
2004 2003 2004 2003
-------- -------- -------- --------
CONSOLIDATED STATEMENTS OF OPERATIONS (Preliminary)
Sales and Service Revenues $316,733 $278,024 $918,616 $821,734
Costs and Expenses
Cost of sales and service 221,170 185,036 623,415 564,417
Selling, general and
administrative 81,792 76,479 239,701 226,033
Depreciation and amortization 4,299 6,249 13,693 19,651
Special charges 927 988 1,569 2,933
-------- -------- -------- --------
Total Costs and Expenses 308,188 268,752 878,378 813,034
-------- -------- -------- --------
Operating Profit From
Continuing Operations 8,545 9,272 40,238 8,700
Interest, net (3,189) (3,133) (9,443) (10,172)
-------- -------- -------- --------
Earnings (Loss) From Continuing
Operations Before Taxes 5,356 6,139 30,795 (1,472)
Provision (Benefit) for
income taxes (1,163) 2,000 7,979 6,200
-------- -------- -------- --------
Earnings (Loss) From Continuing
Operations 6,519 4,139 22,816 (7,672)
Loss from discontinued
operations, net of tax (616) (5,474) (728) (9,346)
-------- -------- -------- --------
Net Earnings (Loss) $ 5,903 $ (1,335) $ 22,088 $(17,018)
======== ======== ======== ========
Basic Earnings (Loss) per Share
Continuing operations $ 0.11 $ 0.07 $ 0.38 $ (0.13)
Discontinued operations (0.01) (0.09) (0.01) (0.16)
-------- -------- -------- --------
Net earnings (loss) per
share $ 0.10 $ (0.02) $ 0.37 $ (0.29)
======== ======== ======== ========
Diluted Earnings (Loss) per
Share
Continuing operations $ 0.11 $ 0.07 $ 0.37 $ (0.13)
Discontinued operations (0.01) (0.09) (0.01) (0.16)
-------- -------- -------- --------
Net earnings (loss) per
share $ 0.10 $ (0.02) $ 0.36 $ (0.29)
======== ======== ======== ========
Shares Used in Computing
Earnings (Loss) per Share
Basic 60,631 58,970 60,408 58,621
Diluted 62,098 60,830 62,079 58,621
SELECTED SEGMENT INFORMATION (Preliminary)
Sales and Service Revenues
Automated Data Systems $194,814 $178,721 $574,398 $520,643
Industrial Automation Systems 121,919 99,303 344,218 301,091
-------- -------- -------- --------
Total Sales and Service
Revenues $316,733 $278,024 $918,616 $821,734
======== ======== ======== ========
Operating Profit (Loss) From
Continuing Operations
Segment Operating Profit (Loss)
Automated Data Systems $ 17,084 $ 22,177 $ 60,729 $ 52,674
Industrial Automation Systems 277 (6,419) (1,819) (22,850)
-------- -------- -------- --------
Total Segment Operating
Profit 17,361 15,758 58,910 29,824
Corporate and Other (7,889) (5,498) (17,103) (18,191)
Special Charges (927) (988) (1,569) (2,933)
-------- -------- -------- --------
Operating Profit From
Continuing Operations $ 8,545 $ 9,272 $ 40,238 $ 8,700
======== ======== ======== ========
UNOVA, INC.
CONSOLIDATED BALANCE SHEETS (Preliminary)
(Unaudited, amounts in thousands)
September 30, December 31,
2004 2003
---------- ----------
Assets
Current Assets
Cash and cash equivalents $ 161,379 $ 238,447
Restricted cash 50,000 -
Accounts receivable, net 326,774 275,594
Inventories, net of progress billings 146,734 132,324
Deferred tax assets 67,199 71,229
Assets held for sale 19,639 23,840
Other current assets 12,530 19,513
---------- ----------
Total Current Assets 784,255 760,947
Property, Plant and Equipment, Net 73,144 77,292
Goodwill and Other Intangibles, Net 74,992 75,639
Deferred Tax Assets 123,730 111,820
Other Assets 56,197 65,119
---------- ----------
Total Assets $1,112,318 $1,090,817
========== ==========
Liabilities and Shareholders' Investment
Current Liabilities
Accounts payable and accrued expenses $ 253,246 $ 265,626
Payroll and related expenses 45,050 54,893
Current portion of long-term obligations 108,500 -
---------- ----------
Total Current Liabilities 406,796 320,519
Long-term Obligations 100,000 208,500
Other Long-term Liabilities 143,310 130,970
Shareholders' Investment
Common stock 610 605
Additional paid-in capital 698,475 690,745
Retained deficit (235,478) (257,566)
Accumulated other comprehensive loss (1,395) (2,956)
---------- ----------
Total Shareholders' Investment 462,212 430,828
---------- ----------
Total Liabilities and Shareholders'
Investment $1,112,318 $1,090,817
========== ==========
UNOVA, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS (Preliminary)
Nine Months Ended September 30, 2004
(Unaudited, amounts in thousands)
Cash and Cash Equivalents at Beginning of Period $ 238,447
Cash Flows from Operating Activities:
Net earnings 22,088
Adjustments to reconcile net earnings to net cash
used in operating activities:
Depreciation and amortization 13,693
Changes in working capital and other operating activities (61,388)
---------
Net Cash Used in Operating Activities (25,607)
---------
Cash Flows from Investing Activities:
Capital expenditures (9,229)
Other investing activities 4,640
---------
Net Cash Used in Investing Activities (4,589)
---------
Cash Flows from Financing Activities:
Cash restricted for repayment of debt (50,000)
Stock options exercised 2,836
Other financing activities 292
---------
Net Cash Used in Financing Activities (46,872)
---------
Resulting Decrease in Cash and Cash Equivalents (77,068)
---------
Cash and Cash Equivalents at End of Period $ 161,379
=========
CONTACT: UNOVA, Inc.
Michael E. Keane, 425-265-2402
mkeane@unova.com
or
Kevin P. McCarty, 425-265-2472
kmccarty@unova.com