-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RAfLzRcv0vqNByfJ4m340Rwv9LUwNW4hPl9Cj27U7whIsk4lm6zLxwMg4LTFER5W 2UbaukpamYQHPF1p+HPihQ== 0000094328-00-000006.txt : 20000324 0000094328-00-000006.hdr.sgml : 20000324 ACCESSION NUMBER: 0000094328-00-000006 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000322 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000323 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STEWART & STEVENSON SERVICES INC CENTRAL INDEX KEY: 0000094328 STANDARD INDUSTRIAL CLASSIFICATION: ENGINES & TURBINES [3510] IRS NUMBER: 741051605 STATE OF INCORPORATION: TX FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-11443 FILM NUMBER: 575984 BUSINESS ADDRESS: STREET 1: 2707 N LOOP W CITY: HOUSTON STATE: TX ZIP: 77008 BUSINESS PHONE: 7138687700 MAIL ADDRESS: STREET 1: P O BOX 1637 CITY: HOUSTON STATE: TX ZIP: 77251-1637 8-K 1 RESULTS FOR FOURTH QUARTER AND 1999 YEAR-END SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): MARCH 22, 2000 STEWART & STEVENSON SERVICES, INC. (Exact name of registrant as specified in its charter) TEXAS 0-8493 74-1051605 (State or other (Commission File Number) (I.R.S. Employer jurisdiction Identification No.) of incorporation) 2707 NORTH LOOP WEST HOUSTON, TEXAS 77008 (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code: (713) 868-7700 Item 5. Other Events. On March 22, 2000, Stewart & Stevenson Services, Inc. (the "Company") issued the press release attached hereto as Exhibit 99.1 announcing the fourth quarter and fiscal 1999 year-end results. Item 7. Exhibits. Exhibit 99.1 Company Press Release dated March 22, 2000, titled "Stewart & Stevenson Services, Inc. Announces Results For Fourth Quarter and Fiscal 1999 Year-End Results." 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 hereunto duly authorized. STEWART & STEVENSON SERVICES, INC. Date: March 22, 2000 By: /s/ JOHN H. DOSTER Name: John H. Doster Title: Senior Vice President and Chief Financial Officer EXHIBIT INDEX 99.1 Company Press Release dated March 22, 2000, titled "Stewart & Stevenson Services, Inc. Announces Results For Fourth Quarter and Fiscal 1999 Year-End Results". - ------------------ Exhibit 99.1 EX-99.1 2 RESULTS FOR FOURTH QUARTER AND 1999 YEAR-END Exhibit 99.1 News From: Stewart & Stevenson Corporate Headquarters P.O. Box 1637 Houston, TX 77251-1637 FOR IMMEDIATE RELEASE: STEWART & STEVENSON SERVICES, INC. ANNOUNCES RESULTS FOR FOURTH QUARTER AND FISCAL 1999 YEAR-END RESULTS HOUSTON, TX - March 22, 2000 - STEWART & STEVENSON SERVICES, INC. (NASDAQ:SSSS), a leading manufacturer, distributor, and provider of service for industrial and energy related equipment, and a manufacturer of medium tactical vehicles for the U.S. Army, announced sales for the quarter ended January 31, 2000 totaling $287.4 million compared to sales of $257.1 million in the same period a year ago. Net earnings from continuing operations in the Fourth Quarter of Fiscal 1999 were $4.9 million or $0.17 per share versus a loss of $49.7 million or $1.77 per share in last year's Fourth Quarter. The Fourth Quarter of Fiscal 1999 included an after-tax charge of $3.3 million or $0.12 per share for inventory reserves, partially offset by a $1.2 million or $0.04 per share after tax gain on sale of an investment. Excluding these adjustments, net earnings and earnings per share would have been $7.1 million and $0.25, respectively. Sales for Fiscal 1999 totaled $911.7 million compared to $1,206.8 million in Fiscal 1998, with a planned production hiatus in military trucks accounting for most of the decrease. Net earnings from continuing operations for the year amounted to $17.5 million or $0.62 per share compared with a net loss of $39.0 or $1.34 in the prior year. Fiscal 1999 net earnings included a gain on sale of investments of $3.9 million or $0.14 per share, offset by $4.6 million or $0.17 for inventory charges. Last year's loss included a $56.3 million charge, the equivalent of $1.94 per share, associated with the initial truck contract with the U.S. Army, partially offset by interest income of $5.6 million or $0.19 per share earned on proceeds from the sale of the gas turbine business. Excluding special items discussed above, net earnings and earnings per share from continuing operations for Fiscal 1999 would have been $18.2 million and $0.65, respectively. Comparable results for Fiscal 1998 would have been $11.6 million and $0.40, respectively. Net income for the year, including discontinued operations, was $24.3 million or $0.87 per share and included a $6.9 million after-tax reserve adjustment related primarily to elimination of a debt guaranty obligation associated with a power generation facility in Argentina that was sold in January 2000. The Power Products segment, which is responsible for marketing and aftermarket support of a wide range of industrial equipment, recorded Fourth Quarter sales of $139.7 million, a 6% increase over the sales of $131.5 million in the same period of Fiscal 1998. The operating loss totaled $0.4 million versus a $3.2 million loss in the comparable period of last year. The current quarter loss included inventory charges of $1.8 million, and $1.1 million in costs associated with corporate initiatives to improve business performance. Sales for the total year were $536.2 million, 3% lower than last year's sales of $555.5 million. Operating profit for Fiscal 1999 was $15.2 million compared with $23.6 million last year. Performance in the Power Products segment continues to vary by market. Equipment and parts sales were adversely impacted by softness in oil and gas markets. However, eleven branch locations comprising 24% of total year 1999 sales reported double digit sales growth in 1999. The Tactical Vehicle Systems segment, which manufactures tactical vehicles for the U.S. Army and others, recorded sales of $87.3 million in the Fourth Quarter compared to $70.2 million a year ago. Operating profit for the quarter totaled $17.0 million, compared with a $66.4 million loss in the Fourth Quarter of Fiscal 1998. Sales for Fiscal 1999 were $150.9 million versus $455.4 million a year ago. Total year operating profit for Fiscal 1999 was $30.2 million, which compared favorably with a $77.7 million loss a year ago that included $86.5 million in special charges. Improved operating margins resulted from an effective cost reduction program and a higher initial sales price per truck sold in the third quarter to compensate for costs incurred during the production shut down. The Petroleum Equipment segment manufactures equipment for oil and gas exploration, production, and well stimulation industries. Sales in this segment totaled $17.2 million for the Fourth Quarter compared to $33.5 million last year. The operating loss for the Fourth Quarter totaled $0.1 million compared to an operating profit of $3.1 million in the previous year. Fiscal year sales of $82.1 million and $115.8 million were recorded for Fiscal 1999 and 1998, respectively. The segment reported a $2.1 million operating profit in 1999 and a $10.2 million operating profit in 1998. The decrease in sales and operating profit resulted from a depleted order backlog in the depressed oil and gas markets. We continue to anticipate a rebound in order activity driven by the substantial increase in oil and gas prices during the past nine months. The Airline Products segment, known as S&S Tug, which manufactures airline ground support products and mobile railcar movers, recorded sales of $29.9 million in the Fourth Quarter of Fiscal 1999, compared with $9.4 million in the same quarter last year. Operating losses for 1999 and 1998 were $3.2 million and $1.0 million, respectively. Sales for Fiscal 1999 were $104.8 million versus $32.6 million the previous year, and reflected the full year impact from the acquisition of Tug Manufacturing Corporation in December 1998 and improved sales of previously existing products. Net losses were reported for both years: $3.7 million in 1999 and $0.6 million in 1998. The Fiscal 1999 loss included charges of $2.4 million in connection with new product development and $2.4 million in other inventory write offs. Other business activities not identified in a specific segment include predominantly gas compression equipment sales or leases. Sales totaled $13.4 million for the Fourth Quarter, compared to $12.4 million for the comparable period last year. A Fourth Quarter operating profit of $0.4 million included a $1.9 million gain on sale of an investment, an operating profit on gas compression, and $2.3 million in charges for inventory reserves and under-liquidated costs of pooled manufacturing operations. An operating loss of $5.3 million was recorded during the Fourth Quarter of 1998. Total Fiscal 1999 sales were $37.7 million, a $9.8 million decrease from Fiscal 1998 sales of $47.5 million, largely due to sale of a Cogen facility in 1998. Operating losses for Fiscal 1999 and 1998 were $0.7 million and $4.5 million, respectively. Non-operating interest income for Fiscal 1998 totaled $10.9 million and represented interest earned on proceeds from the sale of Gas Turbine Operations to General Electric Company. Net cash provided by operating activities of continuing operations totaled $91.6 million for the year and resulted in a $56.7 million decrease in net debt. A $61 million payment from the U.S. government was received on February 4, 2000. Michael L. Grimes, President and Chief Executive Officer, stated that "we have delivered four consecutive quarters of earnings improvement, significantly improved our balance sheet, and have enjoyed very strong cash flow generation this year, largely due to considerable progress in our Tactical Vehicle Systems segment. Further earnings growth will come from a rebound in oil and gas markets, growth opportunities in the service businesses, and lower material costs resulting from supply chain initiatives." This press release contains forward-looking statements that are based on management's current expectations, estimates, and projections. These statements are not guarantees of future performance and involve a number of risks, uncertainties and assumptions and are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Many factors, including those discussed more fully elsewhere in this release and in the Company's filings with the Securities and Exchange Commission, particularly its latest annual report on Form 10-K, as well as others, could cause results to differ materially from those stated. These factors include, but are not limited to, risks associated with newly acquired businesses; increasing price and product/service competition by foreign and domestic competitors; rapid technological developments and changes; the ability to continue to introduce competitive new products and services on a timely, cost effective basis; the mix of products/services; the achievement of lower costs and expenses; reliance on large customers; technological, implementation and cost/financial risks in use of large, multi-year contracts; the cyclical nature of the markets served; the outcome of pending and future litigation and governmental proceedings; the continued availability of financing, financial instruments and financial resources in the amount, at the times and on the terms required to support the Company's business; the assessment of unanticipated taxes by foreign or domestic governmental authorities; the risk of cancellation or adjustment of specific orders and termination of significant government programs; and failure of the Company or unrelated third parties on whom the Company relies for essential products or services to become Year 2000 capable. In addition, such forward-looking statements could be affected by general industry and market conditions and growth rates, general domestic and international conditions including interest rates, inflation and currency exchange rates and other future factors. Actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. Contact: Mr. David R. Stewart, Treasurer Phone: (713) 868-7657 Fax: (713) 863-1519 Email: d.stewart@ssss.com HTTP://www.ssss.com STEWART & STEVENSON SERVICES, INC. CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS (LOSS) (In thousands, except per share data)
---------------------------------- ---------------------------------- TWELVE MONTHS ENDED THREE MONTHS ENDED JANUARY 31, JANUARY 31, --------------------------------- ---------------------------------- 2000 1999 2000 1999 --------------------------------- ---------------------------------- (UNAUDITED) (UNAUDITED) Sales $911,702 $1,206,772 $287,435 $ 257,102 Cost of sales 776,864 1,178,088 249,359 303,034 -------------- -------------- -------------- -------------- Gross profit 134,838 28,684 38,076 (45,932) Selling and administrative expenses 109,038 90,857 32,607 28,846 Interest expense 9,991 12,244 1,179 3,376 Other income, net (7,396) (12,706) (3,618) 391 -------------- -------------- -------------- -------------- 111,633 90,395 30,168 32,613 -------------- -------------- -------------- -------------- Earnings (loss) from continuing operations before income taxes 23,205 (61,711) 7,908 (78,545) Income tax expense (benefit) 8,642 (22,804) 2,969 (28,764) -------------- -------------- -------------- -------------- Earnings (loss) from continuing operations of consolidated companies 14,563 (38,907) 4,939 (49,781) Equity in net earnings (loss) of unconsolidated affiliates 142 (98) - 91 Gain on sale of investment, net of tax of $846 2,746 - - - -------------- -------------- -------------- -------------- Net earnings (loss) from continuing operations 17,451 (39,005) 4,939 (49,690) Gain (loss) on disposal of discontinued operations, net of tax of $4,112, $(21,985), $4,112, and $(10,235) 6,879 (33,979) 6,879 (13,979) -------------- ---------------- ---------------- ---------------- Net earnings (loss) $ 24,330 $(72,984) $ 11,818 $(63,669) ============== ================ ================ ================ Weighted average shares outstanding: Basic 27,989 29,006 27,992 27,984 Diluted 28,042 29,006 28,059 27,984 Earnings (loss) per share: Basic and Diluted Continuing operations $ 0.62 $ (1.34) $ 0.17 $ (1.77) Gain (loss) on disposal of discontinued operations 0.25 (1.17) 0.25 (0.50) -------------- -------------- ---------------- --------------- $ 0.87 $ (2.51) $ 0.42 $ (2.27) ============== ============== =============== ================ Cash dividends per share $ 0.34 $ 0.34 $ 0.085 $ 0.085 ============== =============== ================ ================
STEWART & STEVENSON SERVICES, INC. SEGMENT INFORMATION (In thousands)
------------------------------------------------------- Twelve Months Ended Three Months Ended January 31, January 31, --------------------------- -------------------------- --------------------------- -------------------------- 2000 1999 2000 1999 (Unaudited) (Unaudited) Sales Power Products $536,236 $ 555,507 $139,658 $ 131,502 Tactical Vehicle Systems 150,884 455,399 87,296 70,239 Petroleum Equipment 82,085 115,800 17,186 33,540 Airline Products 104,785 32,603 29,922 9,416 Other Business Activities 37,712 47,463 13,373 12,405 ------------ ------------ ------------ ------------ Total $911,702 $1,206,772 $287,435 $ 257,102 ============ ============ ============ ============ Operating Profit (Loss) Power Products $ 15,244 $ 23,638 $ (416) $ (3,161) Tactical Vehicle Systems 30,217 (77,717) 16,969 (66,354) Petroleum Equipment 2,099 10,245 (123) 3,110 Airline Products (3,697) (630) (3,150) (950) Other Business Activities (652) (4,476) 424 (5,334) ------------ ------------ ------------ ------------ Total $ 43,211 $ (48,940) $ 13,704 $ (72,689) ============ ============ ============ ============ Corporate expense, net (10,044) (11,452) (4,617) (4,716) Non-operating interest income 29 10,925 - 2,236 Interest expense (9,991) (12,244) (1,179) (3,376) ------------ ------------ ------------ ------------ Earnings (loss) from continuing operations before income taxes $ 23,205 $ (61,711) $ 7,908 $ (78,545) ============ ============ ============ ============
STEWART & & STEVENSON SERVICES, INC. CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (In thousands)
-------------------- -------------------- Twelve Months Ended Three Months Ended January 31, January 31, -------------------- -------------------- -------------------- -------------------- 2000 1999 2000 1999 (Unaudited) (Unaudited) OPERATING ACTIVITIES Net earnings (loss) from continuing operations $17,451 $(39,005) $ 4,939 $(49,690) Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities: Accrued postretirement benefits (271) (237) (1,046) (237) Depreciation and amortization 22,298 19,636 6,403 5,590 Deferred income taxes, net (2,310) (10,760) (2,085) (7,861) (Gain) loss on sale of business assets (5,804) 53 (1,850) (190) Change in operating assets and liabilities net of the effect of acquisition, divestiture and discontinued operations: Accounts and notes receivable, net (76,192) 31,318 (46,291) 45,413 Recoverable costs and accrued profits not yet billed 90,946 39,111 257 79,257 Inventories 24,839 (35,711) 1,617 (11,459) Accounts payable 8,077 (14,465) 23,512 (14,506) Current income taxes, net 20,442 (122,815) 4,444 (61,514) Other current liabilities (13,805) 33,421 (4,601) 54,390 Other--principally long-term assets and liabilities 5,890 11,529 13,924 8,983 ----------- ---------- ----------- ---------- NET CASH PROVIDED BY (USED IN) CONTINUING OPERATIONS 91,561 (87,925) (777) 48,176 NET CASH PROVIDED BY (USED IN) DISCONTINUED OPERATIONS (3,287) 516,000 (3,287) - ----------- ----------- ----------- ---------- NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 88,274 428,075 (4,064) 48,176 INVESTING ACTIVITIES Expenditures for property, plant and equipment (38,573) (39,565) (13,883) (15,953) Proceeds from sale of business assets 8,303 4,597 7,628 (13,708) Acquisition of businesses (5,832) (33,659) (5,832) (3) Disposal of property, plant and equipment, net 14,082 3,378 122 1,447 ----------- ----------- ----------- ---------- NET CASH USED IN INVESTING ACTIVITIES (22,020) (65,249) (11,965) (28,217) FINANCING ACTIVITIES Additions to long-term borrowings 16,234 25,000 - - Payments on long-term borrowings (82,016) (242,780) (120) (16,321) Net short-term borrowings (payments) 7,801 (22,714) 10,308 5,323 Dividends paid (9,517) (9,758) (2,379) (2,378) Repurchase of common stock - (120,000) - - Exercise of stock options - 1,398 - 639 ----------- ----------- ----------- --------- NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (67,498) (368,854) 7,809 (12,737) ----------- ----------- --------------- -------------- (Decrease) increase in cash and cash equivalents (1,244) (6,028) (8,220) 7,222 Cash and cash equivalents, beginning of period 12,959 18,987 19,935 5,737 ----------- ----------- --------------- -------------- Cash and cash equivalents, end of period $ 11,715 $ 12,959 $ 11,715 $ 12,959 =========== =========== =============== ==============
STEWART & STEVENSON SERVICES, INC. CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL POSITION (In thousands)
January 31, 2000 January 31, 1999 (Unaudited) ASSETS CURRENT ASSETS Cash and cash equivalents $ 11,715 $ 12,959 Accounts and notes receivable, net 242,625 164,547 Recoverable costs and accrued profits not yet billed 8,151 99,097 Income tax receivable 35,331 48,596 Inventories: Power Products 150,844 182,894 Petroleum Equipment 30,151 40,560 Airline Products 26,029 10,079 Other Business Activities 33,762 30,143 Excess of current cost over LIFO values (49,839) (48,474) -------------- ------------- 190,947 215,202 Prepaid expense 728 1,413 -------------- ------------- TOTAL CURRENT ASSETS 489,497 541,814 PROPERTY, PLANT AND EQUIPMENT 290,355 271,658 Allowances for depreciation and amortization (160,821) (142,913) -------------- ------------- 129,534 128,745 DEFERRED INCOME TAX ASSET 166 7,904 INVESTMENTS AND OTHER ASSETS 23,153 27,314 -------------- ------------- $642,350 $705,777 ============== ============= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Notes payable $ 25,269 $ 17,468 Accounts payable 90,163 83,127 Accrued payrolls and incentives 18,701 17,123 Current income taxes 3,257 2,931 Current portion of long-term debt 8,955 69,488 Other current liabilities 65,903 95,349 -------------- ------------- TOTAL CURRENT LIABILITIES 212,248 285,486 -------------- ------------- COMMITMENTS AND CONTINGENCIES LONG-TERM DEBT 78,281 83,530 DEFERRED INCOME TAXES 958 43 ACCRUED POSTRETIREMENT BENEFITS 12,748 13,019 DEFERRED COMPENSATION 2,436 3,336 OTHER LONG-TERM LIABILITIES 600 - SHAREHOLDERS' EQUITY Common Stock, without par value, 100,000,000 shares authorized; 27,992,203 and 27,984,035 shares issued at January 31, 2000 and 1999, respectively 47,722 47,819 Retained earnings 287,357 272,544 -------------- ------------- TOTAL SHAREHOLDERS' EQUITY 335,079 320,363 -------------- ------------- $642,350 $705,777 ============== =============
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