Fourth Quarter Conference Call – Fiscal 2002
11 / 13 / 2002Highlights
R.T. Brady, Chairman and CEOR.R. Banta, CFORecent Conference Calls
Before we begin, we call your attention to the fact that we may make forward-looking statements during the course of this conference call. These forward-looking statements are not guarantees of our future performance and are subject to risks, uncertainties and other factors that could cause actual performance to differ materially from such statements. A description of these risks, uncertainties and other factors is contained in our news release of today’s date, our Form 10-Q for the quarter ended June 30, 2002, and in certain of our other public filings with the SEC.
Good morning. Thanks for joining us. This morning, we’re reporting results for the fourth quarter of fiscal ‘02 and our final results for fiscal ‘02. We’ll also discuss the trends that have become evident in recent months and we’ll update our projection for fiscal ’03.
The fourth quarter was a very strong quarter. Earnings of $10.3 million were 5 1/2% of $186 million in sales. Earnings in the quarter were 38% over last year’s reported results. We do have the benefit of FAS-142 this year. However, if we added back goodwill to last year’s numbers, our net earnings this year were still up 19%. This result is all the more remarkable because sales were almost the same as last year. On a per-share basis, earnings for the quarter were 67 cents.
This sizable earnings increase on a relatively small sales change was the result of a number of factors. Gross margins were up. R&D increased only slightly. SG&A expenses were actually down from last year, as was interest expense. So, pre-tax earnings were up 32% from last year and our tax rate was slightly lower this year than last.
Our EBITDA for the quarter was $27.8 million, up from $27.1 million one year ago.
Results for the whole of fiscal year ’02 were very much like the most recent quarter. We had a big increase in net earnings (35%) on a very modest sales increase. Sales of $719 million were up only 2% from last year.
Part of the earnings increase was the result of FAS-142. But, if we add goodwill back to last year’s numbers, our net earnings increase is still 16%. On a per-share basis, earnings for the year were $2.50.
If we look at the elements of the income statement, the earnings increase came about because of a substantial improvement in gross margins. Increased expenditures for R&D and SG&A were partly offset by lower interest expense. Our tax rate was lower than last year. The result was $37.6 million in net earnings, 5.2% of sales, up from 4.6% of sales last year.
Our EBITDA for the year was $105 million, or 14.6% of sales. This result is comparable to last year’s $106 million. Bob Banta will discuss cash flow and debt levels and some details about our pension situation.
Our fiscal 2002 began 19 days after 9/11. Given the impact of that event on the commercial aircraft part of our business, and the fact that we’ve been operating in a relatively weak industrial environment, we’re very happy with the results that we’ve achieved in fiscal 2002. The strength of our military aircraft business, and particularly the aftermarket in military aircraft, and a very strong margin performance that I’ll describe momentarily, have allowed us to slightly exceed targets we established two months before 9/11 occurred.
R.T. Brady, Chairman and CEO
Good morning. Thanks for joining us. This morning, we’re reporting results for the fourth quarter of fiscal ‘02 and our final results for fiscal ‘02. We’ll also discuss the trends that have become evident in recent months and we’ll update our projection for fiscal ’03.
The fourth quarter was a very strong quarter. Earnings of $10.3 million were 5 1/2% of $186 million in sales. Earnings in the quarter were 38% over last year’s reported results. We do have the benefit of FAS-142 this year. However, if we added back goodwill to last year’s numbers, our net earnings this year were still up 19%. This result is all the more remarkable because sales were almost the same as last year. On a per-share basis, earnings for the quarter were 67 cents.
This sizable earnings increase on a relatively small sales change was the result of a number of factors. Gross margins were up. R&D increased only slightly. SG&A expenses were actually down from last year, as was interest expense. So, pre-tax earnings were up 32% from last year and our tax rate was slightly lower this year than last.
Our EBITDA for the quarter was $27.8 million, up from $27.1 million one year ago.
Results for the whole of fiscal year ’02 were very much like the most recent quarter. We had a big increase in net earnings (35%) on a very modest sales increase. Sales of $719 million were up only 2% from last year.
Part of the earnings increase was the result of FAS-142. But, if we add goodwill back to last year’s numbers, our net earnings increase is still 16%. On a per-share basis, earnings for the year were $2.50.
If we look at the elements of the income statement, the earnings increase came about because of a substantial improvement in gross margins. Increased expenditures for R&D and SG&A were partly offset by lower interest expense. Our tax rate was lower than last year. The result was $37.6 million in net earnings, 5.2% of sales, up from 4.6% of sales last year.
Our EBITDA for the year was $105 million, or 14.6% of sales. This result is comparable to last year’s $106 million. Bob Banta will discuss cash flow and debt levels and some details about our pension situation.
Our fiscal 2002 began 19 days after 9/11. Given the impact of that event on the commercial aircraft part of our business, and the fact that we’ve been operating in a relatively weak industrial environment, we’re very happy with the results that we’ve achieved in fiscal 2002. The strength of our military aircraft business, and particularly the aftermarket in military aircraft, and a very strong margin performance that I’ll describe momentarily, have allowed us to slightly exceed targets we established two months before 9/11 occurred.
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