-----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, CYVYcV3TkIh0MqSwS7mWA6tBDxWoHCX8Wi00KLMeQ7CVub2jU4kTHSSFlRn5p09A vMlLgaPsDtrOzf35BueeUA== 0000912057-01-517457.txt : 20010627 0000912057-01-517457.hdr.sgml : 20010627 ACCESSION NUMBER: 0000912057-01-517457 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20010524 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20010524 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: 1647172 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 a2050528z8-k.txt 8-K ================================================================================ 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): MAY 24, 2001 STEWART & STEVENSON SERVICES, INC. (Exact name of registrant as specified in its charter) TEXAS 0-8493 74-1051605 (State or other jurisdiction (Commission File Number) (I.R.S. Employer of incorporation) Identification No.) 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 May 24, 2001, Stewart & Stevenson Services, Inc. (the "Company") issued the press release attached hereto as Exhibit 99.1 announcing the Company's 2001 First Quarter Revenue Increase. Item 7. EXHIBITS. EXHIBIT 99.1 COMPANY PRESS RELEASE DATED MAY 24, 2001, TITLED STEWART & STEVENSON SERVICES REPORTS 2001 FIRST QUARTER REVENUE INCREASED 31 PERCENT. 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 hereto duly authorized. STEWART & STEVENSON SERVICES, INC. Date: May 24, 2001 By: /s/ JOHN H. DOSTER Name: John H. Doster Title: Senior Vice President and Chief Financial officer EXHIBIT INDEX Company Press Release May 24, 2001, titled Stewart & Stevenson Services Reports 2001 First Quarter Revenue Increased 31 Percent. EX-99.1 2 a2050528zex-99_1.txt EXHIBIT 99.1 EXHIBIT 99.1 NEWS FROM: [STEWART & STEVENSON LOGO] STEWART & STEVENSON CORPORATE HEADQUARTERS P.O. BOX 1637 HOUSTON, TX 77251-1637 Client: Stewart & Stevenson Services, Inc. Contacts: 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 2001 FIRST QUARTER REVENUE INCREASED 31 PERCENT OPERATING PROFIT INCREASED 86 PERCENT AND DILUTED EPS GREW TO $0.42, BOTH BEFORE SPECIAL ADJUSTMENTS HOUSTON - MAY 24, 2001 - STEWART & STEVENSON SERVICES, INC. (NASDAQ:SSSS), a leading manufacturer, distributor, and service provider of industrial and energy related equipment; oilfield and airline ground support equipment; and medium tactical vehicles for the U.S. Army, announced results for the fiscal first quarter ended April 28, 2001. Sales for the fiscal first quarter grew 31 percent to $341.5 million compared to sales of $261.1 million in the same period a year ago. Net earnings from continuing operations in the first quarter of fiscal 2001 were $21.0 million or $0.73 per diluted share versus $7.5 million or $0.27 per share in last year's first quarter. Included in fiscal first quarter 2001 pretax earnings was the effect of significant nonrecurring adjustments that included a $22.0 million resolution of a claim with the U. S. government and nonrecurring charges of $7.8 million for certain one time adjustments. The impact on net income and earnings per diluted share for these nonrecurring items combined was $8.9 million in net income and $0.31 per diluted share, respectively. Net loss from discontinued operations in fiscal first quarter was $0.6 million or $0.02 per share and in the same period for the prior year there was no impact from discontinued operations. Total net earnings in fiscal first quarter 2001 were $20.3 million or $0.71 per diluted share compared with $7.5 million or $0.27 per share for the comparable period at fiscal 2000. Michael L. Grimes, President and Chief Executive Officer, stated, "We are pleased with a solid first quarter performance and continued growth in our overall business during this period of weakening in the U.S. economy. We are also pleased that we reached an agreement with the U.S. government for cost recovery in our Tactical Vehicle Systems business. Net earnings before the impact of special adjustments equaled $0.42 per diluted share in the first quarter and reflected continued improvement at levels that we anticipated. Our commitment to our initiatives to drive sustained earnings growth remains strong." SEGMENT DATA The Tactical Vehicle Systems segment, which manufactures tactical vehicles for the U.S. Army and others, recorded sales of $108.5 million in the fiscal first quarter compared to $78.7 million a year ago. Operating profit for the quarter totaled $38.3 million, compared with $14.6 million in the first quarter of fiscal 2000. In fiscal 1998, the Company filed a claim with the U.S. government seeking recovery of costs incurred resulting from delays from the original production plan in the first multi-year FMTV contract. The U.S. Army and the Company participated in a voluntary dispute resolution process which took place in April 2001 and resulted in a $22.0 million settlement which is included in fiscal first quarter results. Operations in fiscal first quarter 2001 also included special non-recurring items of $1.7 million, principally related to the cost recovery. The Power Products segment, which is responsible for marketing and aftermarket support of a wide range of industrial equipment, recorded first quarter sales of $167.7 million, a 31 percent increase over sales of $128.3 million in the same period of fiscal 2000. The sales growth was paced by a surge in equipment sales, principally for power generation equipment. Operating profit totaled $1.8 million versus a $0.8 million loss in the comparable period of last year. Operating profit in fiscal first quarter 2001 included the impact of special non-recurring charges of $3.0 million, principally in connection with increased reserves for accounts and notes receivable and inventory. Margin rates were adversely impacted by the mix of products sold and the ramp up of the power generation equipment business. Order backlog for this segment increased $39 million during the first quarter, largely on the strength of power generation orders. The increase in sales and profits was primarily attributable to increased volume. The Petroleum Equipment segment manufactures equipment for the oil and gas exploration, production, and well stimulation industries. Sales in this segment totaled $34.7 million for the first quarter compared to $15.4 million in the same period of Fiscal 2000. Operating profit for the first quarter was $1.4 million versus an operating loss of $0.7 million in the previous year. The order backlog at the end of the fiscal first quarter 2001 totaled $47 million, compared with $55 million at the end of Fiscal 2000. However, demand for this segment's products remains strong and the Company anticipates improvements in profit margin through volume leverage and better cost management. The Airline Products segment, which manufactures airline ground support products and mobile railcar movers, recorded sales of $24.1 million in the first quarter of fiscal 2001, compared with $28.3 million in the same quarter last year. Operating loss for the first quarter totaled $4.4 million compared to a modest profit in the previous year. Operations in fiscal first quarter 2001 included the impact of special non-recurring items of $3.1 million related to higher costs for extended warranties and reserves for inventory realization. The performance improvement team, established earlier this year, continues to make progress and improved margins are expected during the second half of Fiscal 2001. Other business activities not identified in a specific segment include predominantly gas compression equipment sales. Fiscal first quarter sales were $6.5 million, compared to $10.4 million for the comparable period last year. The decline in sales year over year was due to the sale of the gas compression leasing business during the second quarter of fiscal 2000. First quarter operating profit was $0.2 million compared to a $0.6 million loss in last year's first quarter. The loss from discontinued operations in the fiscal first quarter of $0.6 million or $0.02 per share was related to provision for additional expense related to previously discontinued operations. Operating activities consumed $2.3 million in cash reflecting higher receivables associated with increased sales. The balance in cash and equivalents was $95.8 million at quarter-end, a decrease of $14.1 million for the quarter. Total debt decreased $1.0 million during the period. CONFERENCE CALL Stewart & Stevenson Services, Inc. has scheduled a conference call for Thursday, May 24, 2001 at 11:00 a.m. Eastern Time to review fiscal first quarter 2001 results. To listen to the call, dial (913) 981-4900 at least ten minutes before the conference call begins and ask for the Stewart & Stevenson Services conference call. A replay of the call will be available approximately two hours after the call ends and will be accessible until May 31, 2001. To access the replay, dial (719) 457-0820 and enter the pass code 678428. Investors, analysts, and the general public will also have the opportunity to listen to the conference call free over the Internet by visiting the Company's web site at WWW.SSSS.COM. To listen to the live call on the Internet, please visit the Company's web site at least fifteen minutes before the conference call begins to register, download, and install any necessary audio software. For those who cannot listen to the live web cast, an archive will be available shortly after the call ends. Stewart & Stevenson Services, Inc., founded in 1902, is a billion-dollar company that manufactures, distributes, and provides services for 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. Specific important factors that could cause actual results, performance, or achievements to differ materially from such forward-looking statements include risk of competition, risks relating to technology, risks of general economic conditions, risks relating to personnel, risks of dependence on government, inherent risks of government contracts, risks of claims and litigation, risks as to global trade matters, risks as to cost controls, risks as to acquisitions, risks as to currency fluctuations, risks as to environmental and safety matters, and risks as to distributorships, all as more specifically outlined in the Company's latest annual report on Form 10-K. 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)
THREE MONTHS ENDED ------------------------------------- APRIL 28, 2001 APRIL 29, 2000 ----------------- ---------------- (UNAUDITED) Sales $ 341,521 $ 261,113 Cost of sales 292,632 212,527 --------- --------- Gross profit 48,889 48,586 Recovery of costs incurred, net (20,800) -- Selling and administrative expenses 35,481 38,787 Interest income (1,215) (4,192) Interest expense 2,065 2,309 Other (income)/expense, net (20) (242) --------- --------- Net operating expenses 15,511 36,662 --------- --------- Earnings before income taxes 33,378 11,924 Income tax expense 12,417 4,426 --------- --------- Net earnings from continuing operations 20,961 7,498 Loss on disposal of discontinued operations, net (628) -- --------- --------- Net earnings $ 20,333 $ 7,498 ========= ========= Weighted average shares outstanding: Basic 28,085 27,996 Diluted 28,704 28,075 Earnings per share: Basic Continuing operations $ 0.75 $ 0.27 Loss on disposal of discontinued operations (0.02) -- --------- --------- NET EARNINGS PER SHARE $ 0.72 $ 0.27 ========= ========= Diluted Continuing operations $ 0.73 $ 0.27 Loss on disposal of discontinued operations (0.02) -- --------- --------- NET EARNINGS PER SHARE $ 0.71 $ 0.27 ========= ========= Cash dividends per share $ 0.085 $ 0.085
STEWART & STEVENSON SERVICES, INC. ANALYSIS OF EARNINGS FROM CONTINUING OPERATIONS (In thousands, except per share data)
THREE MONTHS ENDED APRIL 28, 2001 ----------------------------------------------------------- Selling and Recovery of Cost of Administrative Costs Goods Sold Expenses Incurred Total ------------- ---------------- -------------- --------- (Unaudited) PRE-TAX PRESENTATION Net earnings from continuing operations before income taxes, as reported 33,378 -------- Less adjustments for special non-recurring (income) expense items: Cost recovery from U.S. government in the TVS segment (22,000) (22,000) Less: costs associated with recovery/other litigation 500 1,200 1,700 Costs associated with collectibility of certain accounts receivable and inventory realization in the Power Products segment 2,000 1,026 3,026 Costs associated with inventory realization and higher warranty costs in the Airline Products segment 3,079 3,079 ---------- --------- -------- -------- Total special non-recurring items 5,079 1,526 (20,800) (14,195) ---------- --------- -------- -------- Net earnings before income taxes excluding special non-recurring items 19,183 ======== Net earnings after income taxes excluding special non-recurring items* 12,047 ======== NET EARNINGS PER SHARE: Earnings per diluted share from continuing operations as reported 0.73 Total special non-recurring adjustments (0.31) -------- Earnings per diluted share from continuing operations excluding special, non-recurring adjustments 0.42 ========
* Effective tax rate of 37.2% assumed for purposes of this presentation STEWART & STEVENSON SERVICES, INC. SEGMENT INFORMATION (In thousands)
THREE MONTHS ENDED ------------------------------------- APRIL 28, 2001 APRIL 29, 2000 ---------------- ---------------- (UNAUDITED) SALES Power Products $ 167,672 $ 128,316 Tactical Vehicle Systems 108,494 78,673 Petroleum Equipment 34,738 15,448 Airline Products 24,109 28,310 Other Business Activities 6,508 10,366 --------- --------- Total $ 341,521 $ 261,113 ========= ========= OPERATING PROFIT (LOSS) Power Products $ 1,826 $ (816) Tactical Vehicle Systems 38,346 14,636 Petroleum Equipment 1,387 (673) Airline Products (4,352) 4 Other Business Activities 228 (634) --------- --------- Total 37,435 12,517 NON-OPERATING INCOME/(EXPENSE) Corporate expense, net (3,206) (2,476) Interest income 1,214 4,192 Interest expense (2,065) (2,309) --------- --------- EARNINGS BEFORE INCOME TAXES $ 33,378 $ 11,924 ========= ========= OPERATING PROFIT (LOSS) PERCENTAGE Power Products 1.1% (0.6)% Tactical Vehicle Systems 35.3 18.6 Petroleum Equipment 4.0 (4.4) Airline Products (18.1) 0.0 Other Business Activities 3.5 (6.1)
STEWART & STEVENSON SERVICES, INC. SELECTED OTHER INFORMATION (Unaudited)
Order Backlog ------------------------------------------------------------------------------------------ January 31, April 29, July 29, October 28, January 31, April 28, (Millions) 2000 2000 2000 2000 2001 2001 ------------------------------------------------------------------------------------------ Tactical Vehicle Systems $ 914.5 $ 839.5 $ 795.7 $ 742.8 $ 658.2 $ 596.3 Power Products 77.6 89.9 116.7 119.2 137.8 177.2 Petroleum Equipment 17.2 26.5 55.6 65.6 55.3 47.4 Airline Products 23.5 18.6 17.2 19.5 16.2 17.2 Other Business Activities 24.0 14.7 10.1 16.5 11.3 7.1 ------------------------------------------------------------------------------------------ $1,056.8 $ 989.2 $ 995.3 $ 963.6 $ 878.8 $ 845.2 ==========================================================================================
Fiscal Year 2001 ------------------------------------------ Unit Shipments 1Q 2Q* Total Year* ------------------------------------------ MTV 469 452 1690 LMTV 75 68 503 Trailers 163 212 690 ------------------------------------------ 707 732 2883 ========================================== Estimated Sales (millions) $ 108 $ 102 $ 400
*Based on current US Army forecast and other data. See "Cautionary Statements" above for information regarding forward-looking statements. STEWART & STEVENSON SERVICES, INC. CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (In thousands)
THREE MONTHS ENDED ----------------------------------- APRIL 28, 2001 APRIL 29, 2000 ---------------- ---------------- (Unaudited) OPERATING ACTIVITIES Net earnings from continuing operations $ 20,961 $ 7,498 Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: Accrued postretirement benefits 1,096 248 Depreciation and amortization 5,463 5,532 Deferred income taxes, net (4,484) 36 Change in operating assets and liabilities net of the effect of acquisition, divestiture and discontinued operations: Accounts and notes receivable, net (51,411) 44,964 Recoverable costs and accrued profits not yet billed 11,540 (5,983) Inventories (7,721) (12,314) Accounts payable (6,137) (10,029) Accrued payrolls and incentive (6,789) (4,421) Current income taxes 16,131 4,291 Other accrued liabilities 21,478 (2,839) Other--principally long-term assets and liabilities (2,402) (1,469) --------- --------- NET CASH PROVIDED BY (USED IN ) OPERATING ACTIVITIES (2,275) 25,514 --------- --------- INVESTING ACTIVITIES Expenditures for property, plant and equipment (12,162) (10,279) Proceeds from sale of business assets 2,323 -- Disposal of property, plant and equipment, net 847 123 --------- --------- NET CASH USED IN INVESTING ACTIVITIES (8,992) (10,156) --------- --------- FINANCING ACTIVITIES Additions to long-term borrowings -- 20,047 Payments on long-term borrowings (64) (20,029) Net short-term payments (888) (9,490) Dividends paid (2,385) (2,379) Exercise of stock options 470 222 --------- --------- NET CASH USED IN FINANCING ACTIVITIES (2,867) (11,629) --------- --------- Increase (decrease) in cash and cash equivalents (14,134) 3,729 Cash and cash equivalents, beginning of period 109,955 11,715 --------- --------- Cash and cash equivalents, end of period $ 95,821 $ 15,444 ========= =========
STEWART & STEVENSON SERVICES, INC. CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL POSITION (In thousands)
APRIL 28, 2001 JANUARY 31, 2001 ---------------- ----------------- (UNAUDITED) (AUDITED) ASSETS CURRENT ASSETS Cash and cash equivalents $ 95,821 $ 109,955 Accounts and notes receivable, net 221,529 172,441 Recoverable costs and accrued profits not yet billed 10,875 22,415 Income tax receivable 2,045 8,518 Deferred tax asset 10,799 6,562 Inventories: Power Products 168,207 170,176 Petroleum Equipment 38,153 26,809 Airline Products 25,660 29,007 Tactical Vehicle Systems 6,640 3,861 Other Business Activities 745 1,863 Excess of current cost over LIFO values (51,277) (51,309) --------- --------- Total Inventories 188,128 180,407 --------- --------- TOTAL CURRENT ASSETS 529,197 500,298 PROPERTY, PLANT AND EQUIPMENT, NET 120,617 114,765 DEFERRED INCOME TAX ASSET 1,531 1,131 INVESTMENTS AND OTHER ASSETS 24,804 22,668 --------- --------- $ 676,149 $ 638,862 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Notes payable $ 11,723 $ 12,611 Accounts payable 60,300 66,437 Accrued payrolls and incentives 14,605 21,395 Current income taxes payable 11,620 1,962 Current portion of long-term debt 20,437 20,437 Billings in excess of incurred costs 39,883 30,638 Other current liabilities 47,585 34,723 --------- --------- TOTAL CURRENT LIABILITIES 206,153 188,203 --------- --------- COMMITMENTS AND CONTINGENCIES LONG-TERM DEBT 66,504 66,568 ACCRUED POSTRETIREMENT BENEFITS & PENSION 19,975 18,879 DEFERRED COMPENSATION 1,944 2,145 OTHER LONG-TERM LIABILITIES 2,635 2,483 --------- --------- TOTAL LIABILITIES 297,211 278,278 --------- --------- SHAREHOLDERS' EQUITY Common Stock, without par value, 100,000,000 shares authorized; 28,067,566 and 28,115,662 shares issued at January 31, 2001 and April 28, 2001, respectively 48,795 48,325 Currency Translation Adjustment (993) (929) Retained earnings 331,136 313,188 --------- --------- TOTAL SHAREHOLDERS' EQUITY 378,938 360,584 --------- --------- $ 676,149 $ 638,862 ========= =========
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