EX-99.1 3 j9397_ex99d1.htm EX-99.1

 

 

 

 

Exhibit 99.1

 

PRESS RELEASE

 

 

 

 

Contact:

John Simmons, V.P., CFO

 

 

Stewart & Stevenson Services, Inc.

 

 

713-868-7700

 

 

 

 

 

Ken Dennard / kdennard@drg-e.com

 

 

Lisa Elliott / lelliott@drg-e.com
713-529-6600

FOR IMMEDIATE RELEASE

 

 

 

 

STEWART & STEVENSON ANNOUNCES FILING DATE FOR FORM 10-K

AND REVISION TO UNAUDITED FOURTH QUARTER AND FISCAL YEAR RESULTS

 

HOUSTON — April 10, 2003 — Stewart & Stevenson Services, Inc. (NYSE: SVC), 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 it expects to file its Form 10-K for the fiscal year ended January 31, 2003 on or about April 14, 2003. In connection with the finalization of its Form 10-K, the company has revised its fiscal fourth quarter and year-end results downward from its March 26, 2003 release, primarily for an impairment of its Airline Products segment assets.

 

                Net loss from continuing operations in the fourth quarter of fiscal 2002 was $3.7 million or $0.13 per diluted share as compared to an operating profit of $2.2 million, or $0.08 per diluted share previously released.  Net earnings from continuing operations for the year were $10.8 million, or $0.38 per diluted share as compared to $16.7 million, or $0.58 per diluted share previously released.  After the effect of discontinued operations and the cumulative effect of a change in accounting, the net loss for fiscal 2002 was $7.2 million, or $0.25 per diluted share compared to a net loss of $1.3 million, or $ 0.05 per diluted share as previously released.

 

                The airline industry encountered multiple challenges in fiscal 2002: economic recession, terrorism, the threat of a war with Iraq, overall decreased consumer demand and sustained high fuel prices.  Through January 2003, the likelihood of war became more imminent, there was a heightened risk of terrorist activities and the airlines’ overall sentiment regarding their current and future operations continued to decline.  This resulted in a significant reduction of airline traffic.  As a result of these continuing challenges, the company believes demand for its products from the major airlines will be at a lower level than previously anticipated. In recognition of the uncertainties in the marketplace, the company revised its outlook and, as required under generally accepted accounting principles, has

 

 

 

recorded an impairment of the long-lived assets in the Airline Products segment of $5.0 million, net of tax, or $0.18 per diluted share as of January 31, 2003.

 

                Michael L. Grimes, President and Chief Executive Officer, stated “We believe this action is a necessary recognition of the overall state of the airline industry and in particular the major airlines. We are expanding our product offerings and diversifying our customer base and we believe these actions will return us to profitability in the future.”

 

                In addition, in connection with the finalization of its Form 10-K, provision was made for losses on certain contracts in its Distributed Energy Services segment of $0.8 million, net of tax, or $0.03 per diluted share.

 

                Stewart & Stevenson has scheduled a conference call to review the revised fourth quarter and year end results, which will be broadcast live over the Internet, on Thursday, April 10, 2003 at 9:00 A.M. Eastern Time. To listen to the call, dial 303-262-2075 at least ten minutes before the conference begins and ask for the Stewart & Stevenson Services conference call.  To listen to the call free over the Internet, sign on to the Stewart & Stevenson web site at www.ssss.com at least fifteen minutes early to register, download, and install any necessary audio software.  The call may be accessed on the home page of Stewart & Stevenson’s website under the heading “In the Spotlight”, or on the Investor Relations web page.

 

                A telephonic replay of the conference call will be available for one week after the call   and may be accessed by dialing 303-590-3000 and using pass code 534999.  An audio archive will also be available on the Stewart & Stevenson website at www.ssss.com (on the home page under the heading “In the Spotlight” or on the Investor Relations page) shortly after the call and will be accessible for approximately twelve months on the Investor Relations page.

 

                Stewart & Stevenson Services, Inc., founded in 1902, is a billion-dollar company that manufactures, distributes and provides service for a wide range of industrial products and diesel-powered equipment to key industries worldwide, including power generation, defense, airline, marine, petroleum and transportation.  For more information on Stewart & Stevenson visit www.ssss.com.

 

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 of oil and gas industry economic conditions, risks of airline industry economic conditions, risks as to terrorist attacks on the U.S. and their impact on the U.S. economy, risks relating to personnel, risks of dependence on government and failure to obtain new government contracts, inherent risks of government contracts,  risks of claims and litigation, risks of product defects, risks as to foreign sales and global trade matters, risks as to cost controls,  risks as to acquisitions, risks as to currency fluctuations, risks as to environmental and safety matters,  risks as to distributorships, risks as to licenses, and credit risks,  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.

 

# # #

 

 

 

STEWART & STEVENSON SERVICES, INC.

CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS

(In thousands, except per share data)

 

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

 

January 31, 2003

 

January 31, 2002

 

January 31, 2003

 

January 31, 2002

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$

294,347

 

$

306,755

 

$

1,175,634

 

$

1,329,510

 

Cost of sales

 

262,522

 

267,939

 

1,015,183

 

1,150,792

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

31,825

 

38,816

 

160,451

 

178,718

 

 

 

 

 

 

 

 

 

 

 

Impairment of assets

 

7,770

 

—

 

7,770

 

—

 

Recovery of costs incurred, net

 

—

 

—

 

—

 

(39,000

)

Selling and administrative expenses

 

31,888

 

42,270

 

136,924

 

148,757

 

Interest expense

 

1,130

 

696

 

4,261

 

5,400

 

Interest and investment income

 

(566

)

(598

)

(1,763

)

(3,415

)

Other income, net

 

(35

)

(2,741

)

(580

)

(3,472

)

 

 

40,187

 

39,627

 

146,612

 

108,270

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) before income taxes

 

(8,362

)

(811

)

13,839

 

70,448

 

Income tax (benefit) expense

 

(4,633

)

(907

)

3,076

 

25,104

 

Net earnings from continuing operations before cumulative effect of change in accounting

 

(3,729

)

96

 

10,763

 

45,344

 

Loss from discontinued operations, net of tax of $(762), $(1,401), $(4,617), and $(1,167)

 

(905

)

(2,901

)

(8,731

)

(2,493

)

Loss from disposal of discontinued operations,  net of tax of $(2,706) and $(372)

 

—

 

—

 

(5,551

)

(628

)

Cumulative effect of change in accounting, net of tax of $(1,798)

 

—

 

—

 

(3,682

)

—

 

Net earnings (loss)

 

$

(4,634

)

$

(2,805

)

$

(7,201

)

$

42,223

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

28,491

 

28,444

 

28,479

 

28,325

 

Diluted

 

28,491

 

28,747

 

28,690

 

28,865

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per share:

 

 

 

 

 

 

 

 

 

Basic

 

 

 

 

 

 

 

 

 

Continuing operations before cumulative effect

 

$

(0.13

)

$

—

 

$

0.38

 

$

1.60

 

Discontinued operations

 

(0.03

)

(0.10

)

(0.50

)

(0.11

)

Cumulative effect of change in accounting

 

—

 

—

 

(0.13

)

—

 

Net earnings (loss) per share

 

$

(0.16

)

$

(0.10

)

$

(0.25

)

$

1.49

 

 

 

 

 

 

 

 

 

 

 

Diluted

 

 

 

 

 

 

 

 

 

Continuing operations before cumulative effect

 

$

(0.13

)

$

—

 

$

0.38

 

$

1.57

 

Discontinued operations

 

(0.03

)

(0.10

)

(0.50

)

(0.11

)

Cumulative effect of change in accounting

 

—

 

—

 

(0.13

)

—

 

Net earnings (loss) per share

 

$

(0.16

)

$

(0.10

)

$

(0.25

)

$

1.46

 

 

 

 

 

 

 

 

 

 

 

Cash dividends per share

 

$

0.085

 

$

0.085

 

$

0.340

 

$

0.340

 

 

 

 

STEWART & STEVENSON SERVICES, INC.

SEGMENT INFORMATION

(In thousands)

 

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

 

January 31, 2003

 

January 31, 2002

 

January 31, 2003

 

January 31, 2002

 

 

 

 

 

 

 

 

 

 

 

Sales

 

 

 

 

 

 

 

 

 

Tactical Vehicle Systems

 

$

116,268

 

$

111,252

 

$

450,849

 

$

432,288

 

Power Products

 

130,314

 

147,135

 

540,704

 

587,034

 

Distributed Energy Solutions

 

9,132

 

6,976

 

57,031

 

115,728

 

Petroleum Equipment

 

25,437

 

20,319

 

59,152

 

90,547

 

Airline Products

 

13,196

 

15,998

 

61,233

 

80,649

 

Other Business Activities

 

—

 

5,075

 

6,665

 

23,264

 

Total

 

$

294,347

 

$

306,755

 

$

1,175,634

 

$

1,329,510

 

 

 

 

 

 

 

 

 

 

 

Operating Profit (Loss)

 

 

 

 

 

 

 

 

 

Tactical Vehicle Systems

 

$

20,394

 

$

16,011

 

$

69,326

 

$

103,493

 

Power Products

 

(9,148

)

1,681

 

(8,968

)

10,278

 

Distributed Energy Solutions

 

(4,842

)

(12,255

)

(8,460

)

(12,449

)

Petroleum Equipment

 

1,657

 

(475

)

(91

)

1,648

 

Airline Products

 

(12,450

)

(3,611

)

(19,821

)

(18,395

)

Other Business Activities

 

232

 

1,097

 

(324

)

4,595

 

Total

 

(4,157

)

2,448

 

31,662

 

89,170

 

 

 

 

 

 

 

 

 

 

 

Non-Operating Income/(Expense)

 

 

 

 

 

 

 

 

 

Corporate expense, net

 

(3,075

)

(2,563

)

(13,562

)

(13,322

)

Interest expense

 

(1,130

)

(696

)

(4,261

)

(5,400

)

 

 

 

 

 

 

 

 

 

 

Earnings before income taxes

 

$

(8,362

)

$

(811

)

$

13,839

 

$

70,448

 

 

 

 

 

 

 

 

 

 

 

Operating Profit (Loss) Percentage

 

 

 

 

 

 

 

 

 

Tactical Vehicle Systems

 

17.5

%

14.4

%

15.4

%

23.9

%

Power Products

 

(7.0

)

1.1

 

(1.7

)

1.8

 

Distributed Energy Solutions

 

(53.0

)

(175.7

)

(14.8

)

(10.8

)

Petroleum Equipment

 

6.5

 

(2.3

)

(0.2

)

1.8

 

Airline Products

 

(94.3

)

(22.6

)

(32.4

)

(22.8

)

Other Business Activities

 

0.0

 

21.6

 

(4.9

)

19.8

 

Total

 

(1.4

)

0.8

 

2.7

 

6.7