-----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, Bd7cSJKW9PzX5817Gg7Ttrh4wnlbJ4qBRKa4oSdIis/oI37dPrWTXOvliWJOjZbT EX2sD9E9iI/VZLBt/dvoQA== /in/edgar/work/20000824/0000094328-00-000023/0000094328-00-000023.txt : 20000922 0000094328-00-000023.hdr.sgml : 20000922 ACCESSION NUMBER: 0000094328-00-000023 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000824 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000824 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STEWART & STEVENSON SERVICES INC CENTRAL INDEX KEY: 0000094328 STANDARD INDUSTRIAL CLASSIFICATION: [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: 709203 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 0001.txt SECOND QUARTER RESULTS 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): AUGUST 24, 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 August 24, 2000, Stewart & Stevenson Services, Inc. (the "Company") issued the press release attached hereto as Exhibit 99.1 announcing the Company's Second Quarter Results. Item 7. Exhibits. -------- Exhibit 99.1 Company Press Release dated August 24, 2000, titled "Stewart & Stevenson Reports Second Quarter 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: August 24, 2000 By: /s/ JOHN H. DOSTER Name: John H. Doster Title: Senior Vice President and Chief Financial Officer EX-99.1 2 0002.txt SECOND QUARTER RESULTS EXHIBIT INDEX 99.1 Company Press Release August 24, 2000, titled "Stewart & Stevenson Reports Second Quarter Results." - ------------------ Exhibit 99.1 Client: Stewart & Stevenson Services, Inc. Contact: John Doster, CFO Stewart & Stevenson Services, Inc. 713-868-7602 Ken Dennard / kdennard@easterly.com Lisa Elliott / lisae@easterly.com Easterly Investor Relations 713-529-6600 STEWART & STEVENSON SERVICES REPORTS SECOND QUARTER RESULTS SECOND QUARTER REVENUES UP 32 PERCENT NET EARNINGS INCREASE 159 PERCENT DILUTED EPS GROWS 145 PERCENT TO $0.27 HOUSTON - AUGUST 24, 2000 - Stewart & Stevenson Services, Inc. (NASDAQ:SSSS), a leading manufacturer and distributor of industrial and energy related equipment, announced today that sales for the second fiscal quarter ended July 29, 2000 grew 32 percent to $265.1 million compared to sales of $200.6 million for the second quarter of 1999. Net earnings for the second quarter of 2000 increased 159 percent to $7.8 million, or $0.27 per diluted share, compared to net earnings of $3.0 million, or $0.11 per share, in the second quarter of 1999. Sales for the first six months of 2000 grew 35 percent to $524.3 million versus $389.6 million for the first six months of 1999. First half net earnings tripled to $15.3 million, or $0.54 per diluted share, compared to $5.1 million, or $0.18 per share, in last year's first half. Michael L. Grimes, President and Chief Executive Officer, stated: "We are very pleased with the growth we achieved during the second quarter, which is our sixth consecutive quarter of improved earnings. We have dramatically improved our balance sheet which enhances our future business options. Recent organization changes have resulted in further identification of business process improvement opportunities, as evidenced by further rationalization of the Airline Products product line and revisions to bid and proposal activity in the newly established power generation business. We continue to focus on five key initiatives to: (1) strengthen business leadership, (2) improve cash flow management, (3) enhance supply chain productivity, (4) revitalize business growth, and (5) implement a new enterprise-wide information system. We are counting on these initiatives to continue to drive earnings improvements." SEGMENT DATA The Tactical Vehicle Systems segment, which manufactures and services transportation systems for the U.S. Army and others, recorded sales of $55.7 million, compared to $78.7 million in the first quarter of 2000 and $5.8 million for the second quarter of 1999. The U.S. Army's most recent delivery schedule shifted some truck deliveries from the second quarter to the fourth quarter of fiscal 2000. Operating profit for the second quarter of 2000 amounted to $14.3 million, compared to $14.6 million in the first quarter and $2.0 million a year ago, and included a $3.1 million recovery from a canceled Australian contract and a $1.0 million favorable adjustment for lower than expected overhead costs and additional billing recoveries. The Petroleum Equipment segment manufactures and services equipment for oil and gas exploration, production and well stimulation industries. Sales for this segment totaled $18.1 million for the second quarter, compared to $14.9 million in the first quarter and $23.6 million for the second quarter of 1999. Operating profit for Petroleum Equipment totaled $0.4 million, compared to a $0.7 million loss in the first quarter and a $1.7 million profit a year ago. The order backlog for petroleum equipment, which now exceeds $55 million, has increased substantially during the first half and is expected to drive future earnings improvement in this segment. The Power Products segment, which is responsible for marketing and aftermarket support of a wide range of industrial equipment, recorded second quarter sales of $154.1 million, compared to $127.1 million in the first quarter and $144.9 million for the second quarter of 1999. Operating profit for the Power Products segment totaled $3.2 million for the quarter compared to a $0.8 million loss in the first quarter and a $7.7 million profit a year ago. Second quarter results were adversely impacted by $2.1 million lower than expected profit margins on orders in the newly established power generation business and a $2.5 million increase in reserves primarily for inventories. The first quarter included special charges totaling $6.4 million, principally in connection with a potentially uncollectible account and note receivable. The Airline Products segment, which manufactures airline ground support products and mobile railcar movers, recorded sales of $28.3 million in the second quarter, equal to the first quarter sales and 20 percent above last year's second quarter results of $23.6 million. The $4.3 million operating loss for the quarter included $4.3 million in inventory write downs, principally associated with a decision to make changes in the existing product portfolio. These actions are being taken by the new S&S Tug management leadership team, which was assembled earlier this year, after completing an assessment of current and future product planning requirements. This segment reported breakeven results in the first quarter of fiscal 2000 and a $0.8 million loss for the second quarter of fiscal 1999. Other business activities not identified in a specific segment include predominantly gas compression equipment sales or leases. Sales in the second quarter totaled $8.9 million, compared to $10.2 million in the first quarter and $2.7 million for the second quarter of 1999. Operating profit for the second quarter totaled $3.3 million and included a $5.6 million gain on sale of the gas compression leasing business. Operating losses for the first quarter of 2000 and second quarter of 1999 were $0.6 million and $0.4 million, respectively. Cash balances and equivalents at the end of the second quarter totaled $61.9 million, an increase of $46.5 million which included $44.6 million in cash proceeds from the sale of the gas compression rental business. Net cash provided by operating activities totaled $14.0 million in the second quarter and $39.5 million for the first half. Management's 11:00AM EDT conference call discussing today's release will be webcast live on Stewart & Stevenson Services' website at www.ssss.com. Stewart & Stevenson Services, Inc., founded in 1902, is a billion-dollar company that manufactures and distributes a wide range of industrial products and diesel-powered equipment to key industries worldwide, including petroleum, power generation, defense, airline, marine and transportation. 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; and the risk of cancellation or adjustment of specific orders and termination of significant government programs. 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. -TABLES TO FOLLOW -
STEWART & STEVENSON SERVICES, INC. CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS (In thousands, except per share data) SIX MONTHS ENDED THREE MONTHS ENDED -------------------------------------- ---------------------------- JULY 29, 2000 JULY 31, 1999 JULY 29, 2000 JULY 31, 1999 ------------- ------------- ------------- ------------- (Unaudited) (Unaudited) Sales $ 524,272 $ 389,551 $ 265,065 $ 200,640 Cost of sales 441,367 328,410 228,050 169,360 -------------- ------------- ------------- ------------- Gross profit 82,905 61,141 37,015 31,280 Selling and administrative expenses 59,483 50,265 23,392 24,774 Interest expense 4,356 6,710 2,047 3,259 Other income, net (5,225) (3,439) (791) (1,244) -------------- ------------- ------------- ------------- 58,614 53,536 24,648 26,789 -------------- ------------- ------------- ------------- Earnings before income taxes 24,291 7,605 12,367 4,491 Income tax expense 9,014 2,816 4,588 1,663 -------------- ----------- ------------- ------------- Earnings of consolidated companies 15,277 4,789 7,779 2,828 Equity in net earnings of unconsolidated affiliates - 334 - 175 -------------- ----------- ------------- ------------- Net earnings $ 15,277 $ 5,123 $ 7,779 $ 3,003 ============== =========== ============= ============= Weighted average shares outstanding: Basic 28,005 27,986 28,013 27,989 Diluted 28,175 28,010 28,299 28,086 Earnings per share: Basic $ 0.55 $ 0.18 $ 0.28 $ 0.11 Diluted $ 0.54 $ 0.18 $ 0.27 $ 0.11 Cash dividends per share $ 0.170 $ 0.170 $ 0.085 $ 0.085
STEWART & STEVENSON SERVICES, INC. SEGMENT INFORMATION (In thousands) SIX MONTHS ENDED THREE MONTHS ENDED ------------------------------------ --------------------------------- JULY 29, 2000 JULY 31, 1999 JULY 29, 2000 JULY 31, 1999 ---------------- --------------- ------------- ------------- (Unaudited) (Unaudited) SALES Power Products $ 281,231 $ 266,197 $ 154,140 $ 144,909 Tactical Vehicle Systems 134,325 12,033 55,652 5,818 Petroleum Equipment 33,058 52,112 18,131 23,648 Airline Products 56,523 45,837 28,252 23,585 Other Business Activities 19,135 13,372 8,890 2,680 ------------- ------------- ------------- ------------- Total $ 524,272 $ 389,551 $ 265,065 $ 200,640 ============= ============= ============= ============= OPERATING PROFIT (LOSS) Power Products $ 2,417 $ 10,791 $ 3,233 $ 7,701 Tactical Vehicle Systems 28,957 3,143 14,321 2,037 Petroleum Equipment (269) 3,649 404 1,691 Airline Products (4,337) (761) (4,341) (765) Other Business Activities 2,632 400 3,266 (432) ------------- ------------- ------------- ------------- Total 29,400 17,222 16,883 10,232 Corporate expense, net (5,345) (2,936) (2,869) (2,484) Non-operating interest income 4,592 29 400 2 Interest expense (4,356) (6,710) (2,047) (3,259) ------------- ------------- ------------- ------------- Earnings from continuing operations before income taxes $ 24,291 $ 7,605 $ 12,367 $ 4,491 ============= ============= ============= =============
STEWART & STEVENSON SERVICES, INC. CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL POSITION (In thousands) JULY 29, 2000 JANUARY 31, 2000 ASSETS (Unaudited) CURRENT ASSETS Cash and cash equivalents $ 61,901 $ 11,715 Accounts and notes receivable, net 217,977 242,625 Recoverable costs and accrued profits not yet billed 12,887 8,151 Income tax receivable 14,823 26,255 Deferred Tax Asset 10,469 9,076 Inventories: Power Products 138,035 150,844 Petroleum Equipment 26,096 30,151 Airline Products 28,636 26,029 Other Business Activities 8,696 33,762 Excess of current cost over LIFO values (49,746) (49,839) ------------- ------------- 151,717 190,947 ------------- ------------- TOTAL CURRENT ASSETS 469,776 488,769 PROPERTY, PLANT AND EQUIPMENT 280,585 290,355 Allowances for depreciation and amortization (168,431) (160,821) ------------- ------------- 112,154 129,534 DEFERRED INCOME TAX ASSET 128 166 INVESTMENTS AND OTHER ASSETS 23,097 23,881 ------------- ------------- $ 605,155 $ 642,350 ============= ============= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Notes payable $ 14,545 $ 25,269 Accounts payable 52,331 90,163 Accrued payrolls and incentives 14,369 18,701 Current income taxes 3,345 3,257 Current portion of long-term debt 29,014 8,955 Other current liabilities 72,221 65,903 ------------- ------------- TOTAL CURRENT LIABILITIES 185,825 212,248 ------------- ------------- COMMITMENTS AND CONTINGENCIES LONG-TERM DEBT 58,043 78,281 DEFERRED INCOME TAXES 166 958 ACCRUED POSTRETIREMENT BENEFITS 13,366 12,748 DEFERRED COMPENSATION 2,154 2,436 OTHER LONG-TERM LIABILITIES - 600 ------------- ------------- TOTAL LIABILITIES 259,554 307,271 ------------- ------------- SHAREHOLDERS' EQUITY Common Stock, without par value, 100,000,000 shares authorized; 27,992,203 and 28,026,440 shares issued at July 29, 2000 and January 31, 2000, respectively 47,727 47,722 Retained earnings 297,874 287,357 ------------- ------------- TOTAL SHAREHOLDERS' EQUITY 345,601 335,079 ------------- ------------- $ 605,155 $ 642,350 ============= =============
STEWART & & STEVENSON SERVICES, INC. CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (In thousands) ------------------------------------------------------------------------------- SIX MONTHS ENDED THREE MONTHS ENDED ------------------------------------------------------------------------------- JULY 29, 2000 JULY 31, 1999 JULY 29, 2000 JULY 31, 1999 ------------- ------------- ------------- ------------- (UNAUDITED) (UNAUDITED) OPERATING ACTIVITIES Net earnings from continuing operations $ 15,277 $ 5,123 $ 7,779 $ 3,003 Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: Accrued postretirement benefits 618 716 370 207 Depreciation and amortization 11,025 10,826 5,493 5,623 Deferred income taxes, net (754) (171) (790) (134) Gain on sale of business assets (5,649) - (5,649) - Change in operating assets and liabilities net of the effect of acquisition, divestiture and discontinued operations: Accounts and notes receivable, net 36,946 (20,548) (8,018) (7,066) Recoverable costs and accrued profits not yet billed (4,736) 64,250 1,247 34,241 Inventories 15,958 9,711 28,272 16,525 Accounts payable (37,832) (26,152) (27,803) 11,257 Accrued payrolls and incentive (4,332) (3,305) 89 4,539 Current income taxes, net 10,127 13,932 5,836 12,938 Other current liabilities 7,219 (3,530) 10,058 (2,701) Other--principally long-term assets and liabilities (4,374) (5,851) (2,905) (5,032) ------------- ------------- ------------- ------------- NET CASH PROVIDED BY OPERATING ACTIVITIES 39,493 45,001 13,979 73,400 ------------- ------------- ------------- ------------- INVESTING ACTIVITIES Expenditures for property, plant and equipment (20,558) (16,685) (10,279) (8,864) Proceeds from sale of business assets 44,622 - 44,622 - Disposal of property, plant and equipment, net 2,288 7,953 2,165 6,286 ------------- ------------- ------------- ------------- NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES 26,352 (8,732) 36,508 (2,578) ------------- ------------- ------------- ------------- FINANCING ACTIVITIES Additions to long-term borrowings 20,047 16,234 - - Payments on long-term borrowings (20,226) (66,601) (197) (66,268) Net short-term borrowings (payments) (10,724) 8,078 (1,234) (1,646) Dividends paid (4,761) (4,758) (2,382) (2,379) Repurchase of common stock - - - - Exercise of stock options 5 - (217 - ------------- ------------- ------------- ------------- NET CASH USED IN FINANCING ACTIVITIES (15,659) (47,047) (4,030) (70,293) ------------- ------------- ------------- ------------- (Decrease) increase in cash and cash equivalents 50,186 (10,778) 46,457 529 Cash and cash equivalents, beginning of period 11,715 12,959 15,444 1,652 ------------- ------------- ------------- ------------- Cash and cash equivalents, end of period $ 61,901 $ 2,181 $ 61,901 $ 2,181 ============= ============= ============= =============
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