EX-99.1 3 a03-5978_1ex99d1.htm EX-99.1

EXHIBIT 99.1

 

PRESS RELEASE

 

 

 

 

Contact:

John Simmons, VP & CFO
Stewart & Stevenson Services, Inc.
713-868-7700

 

 

 

 

FOR IMMEDIATE RELEASE

 

 

STEWART & STEVENSON SERVICES REPORTS

FISCAL 2003 THIRD QUARTER RESULTS

GAAP EPS from Continuing Operations was a Loss of $0.54

Net EPS from Continuing Operations before Special Charges was a Loss of $0.25

 

HOUSTON – DECEMBER 3, 2003 – Stewart & Stevenson Services, Inc. (NYSE: SVC) today announced results for the fiscal third quarter ended November 1, 2003.  Sales for the third quarter of fiscal 2003 were $290.0 million compared to sales of $296.6 million in the same period a year ago.  The company reported a net loss from continuing operations in the third quarter of fiscal 2003 of $15.5 million, or $0.54 per diluted share, compared to net earnings from continuing operations of $5.0 million, or $0.17 per diluted share, in the prior year’s third quarter.  Excluding the special charges described below, the net loss from continuing operations for the third quarter of fiscal 2003 totaled $7.2 million, or $0.25 per diluted share.

 

Special charges for the third quarter of fiscal 2003 totaled $13.3 million before taxes, and included costs associated with the planned exit of the turnkey engineering, procurement and construction activities within the Distributed Energy Solutions business, the write-down of inventory levels in the Airline Products segment, employee separation costs at the corporate level, and continued costs related to the consolidation of manufacturing operations in the Engineered Products Division.  These expenses reduced earnings by $8.3 million after tax, or $0.29 per diluted share.

 

Max L. Lukens, Chairman and Interim Chief Executive Officer, stated, “The results for the third quarter were heavily impacted by issues involving the Distributed Energy Solutions business.  In addition to the costs related to the exit of turnkey activities mentioned above, we experienced significant operating losses related to additional costs to complete certain existing turnkey projects.  The Distributed Energy Solutions business reported pre-tax losses during the quarter of $20.9 million, or $0.45 per diluted share.  We are taking appropriate actions to address the ongoing losses in this business

 

 

by exiting the turnkey portion of that business.  Through the transition process, we will continue to service existing customers and fulfill our contractual obligations.”

 

Segment Data

The Tactical Vehicle Systems segment, which manufactures tactical vehicles for the U.S. Army and others, recorded sales of $110.0 million in the third quarter of fiscal 2003 compared to $113.7 million a year ago.  Operating profit for the quarter totaled $16.8 million, compared with $18.4 million in the third quarter of 2002.  The decreased operating profit was primarily driven by product mix, with a higher proportion of lower-priced option trucks in the third quarter of fiscal 2003 as compared to the same period of fiscal 2002.

 

The Power Products segment, which is responsible for marketing and aftermarket support of a wide range of industrial equipment, recorded third quarter 2003 sales of $127.7 million, compared to $127.9 million in the same period of 2002.  Lower equipment sales were largely offset by increases in parts and service sales.  Operating loss for the third quarter of fiscal 2003 totaled $6.0 million compared to a $5.0 million operating loss in the third quarter of fiscal 2002.  The higher operating loss in the third quarter of fiscal 2003 compared to the same period of fiscal 2002 was primarily driven by higher operating costs.

 

The Engineered Products Division is comprised of the Petroleum Equipment, Distributed Energy Solutions and Utilities Equipment businesses.   Sales for Engineered Products totaled $36.7 million in the third quarter of fiscal 2003, compared to $38.5 million in the same period of the prior year.  Increased sales of petroleum equipment and utilities equipment were offset by substantially lower revenues in the Distributed Energy Solutions business.  The Engineered Products Division incurred a $22.2 million operating loss of which $20.9 million was comprised of the loss in the Distributed Energy Solutions business in the third quarter of fiscal 2003.  This compares to an operating profit of $0.3 million in the third quarter of fiscal 2002.

 

The Airline Products segment, which manufactures airline ground support products, recorded sales of $14.4 million in the third quarter of 2003, compared with $14.7 million in the same quarter of fiscal 2002.  The operating loss in this segment for the third quarter of fiscal 2003 totaled $6.6 million, including a $3.1 million non-cash charge to write down   inventory to expected realizable value in connection with management’s decision to liquidate certain inventory in the current market environment, as compared to an operating loss of $2.0 million in the third quarter of fiscal 2002.  In

 

 

addition to the lower volume, operating expenses were higher in the third quarter of fiscal 2003 compared to the prior year.

 

Other

The balance in cash and cash equivalents was $ 54.3 million at quarter end, a decrease of $26.1 million during the third quarter.  The net cash usage in the quarter was primarily related to lower earnings, the scheduled payment to fund the company defined benefit pension plan,   ongoing capital expenditures and the payment of the quarterly dividend.  Total debt at the end of the third quarter was $28.9 million.

 

Strategic Review Update

“We recognize our consolidated corporate returns are not at appropriate levels, and we are not waiting for a recovery in our markets to take appropriate actions,” Mr. Lukens stated.  “Our strategic focus is return on capital.  Our first step in executing this strategy is to move each business segment to a level of profitability that exceeds its cost of capital, first by addressing the quality of its revenue stream and second by reducing costs.  If we do not believe that a business activity can achieve the intended results in a reasonable time frame, then we will consider exiting such business activity.

 

“In the third quarter, we made such a determination in the Distributed Energy Solutions business and took action to exit the turnkey portion of the business, where the majority of our historical losses in that business have occurred,” continued Mr. Lukens.  “Additionally, in the fourth quarter we have realigned the organizational structure of our Power Products business by consolidating eleven geographic areas into five.  We believe that this new structure will help to improve customer focus, increase quality and efficiency, and achieve significant cost savings.  In addition, we are nearing completion of our assessment of our product offerings and facilities to determine any further actions that may be taken.  Some of these actions will likely impact results of operations in the fourth quarter of fiscal 2003.  We believe the actions we are taking across the company over the next few quarters will result in improved operating results going forward.”

 

Conference Call

Stewart & Stevenson Services has scheduled a conference call today at 11:00 a.m. Eastern Time to review third quarter results.  Please dial 303-262-2075 and ask for the Stewart & Stevenson call at

 


 

least 10 minutes prior to the start time or log onto the company’s home page at http://www.ssss.com under the heading “In the Spotlight”, or on the Investor Relations web page.

 

A telephonic replay of the conference call will be available through December 10, 2003, and may be accessed by dialing 303-590-3000 and using pass code 560677. 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 12 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 and energy-related equipment; oilfield and airline ground support equipment; and medium tactical vehicles 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 information technology,  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. AND SUBSIDIARIES 

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

November 1, 2003

 

November 2, 2002

 

November 1, 2003

 

November 2, 2002

 

 

 

(Unaudited)

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$

290,039

 

$

296,582

 

$

892,662

 

$

881,287

 

Cost of sales

 

272,951

 

253,585

 

794,033

 

752,661

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

17,088

 

42,997

 

98,629

 

128,626

 

 

 

 

 

 

 

 

 

 

 

Selling and administrative expenses

 

41,606

 

34,549

 

113,430

 

105,036

 

Pension curtailment expense

 

—

 

—

 

2,400

 

—

 

Interest expense

 

640

 

1,161

 

2,576

 

3,131

 

Interest and investment income

 

(142

)

(485

)

(1,201

)

(1,197

)

Other income, net

 

(50

)

(31

)

(526

)

(545

)

 

 

42,054

 

35,194

 

116,679

 

106,425

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) from continuing operations before income taxes

 

(24,966

)

7,803

 

(18,050

)

22,201

 

Income tax provision (benefit)

 

(9,468

)

2,814

 

(7,439

)

7,709

 

Net earnings (loss) from continuing operations before cumulative effect of change in accounting principle

 

(15,498

)

4,989

 

(10,611

)

14,492

 

Income (loss) from discontinued operations, net of tax of $(451), $(583), $(1,162) and $(3,831)

 

57

 

(1,223

)

(925

)

(7,826

)

Loss from disposal of discontinued operations, net of tax of $(2,705)

 

—

 

—

 

—

 

(5,551

)

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

 

—

 

—

 

—

 

(3,682

)

Net earnings (loss)

 

$

(15,441

)

$

3,766

 

$

(11,536

)

$

(2,567

)

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

28,600

 

28,490

 

28,538

 

28,475

 

Diluted

 

28,600

 

28,585

 

28,538

 

28,701

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per share:

 

 

 

 

 

 

 

 

 

Basic:

 

 

 

 

 

 

 

 

 

Continuing operations before cumulative effect

 

$

(0.54

)

$

0.18

 

$

(0.37

)

$

0.51

 

Income (loss) from discontinued operations, net

 

—

 

(0.04

)

(0.03

)

(0.47

)

Cumulative effect of change in accounting principle

 

—

 

—

 

—

 

(0.13

)

Net earnings (loss) per share

 

$

(0.54

)

$

0.13

 

$

(0.40

)

$

(0.09

)

 

 

 

 

 

 

 

 

 

 

Diluted:

 

 

 

 

 

 

 

 

 

Continuing operations before cumulative effect

 

$

(0.54

)

$

0.17

 

$

(0.37

)

$

0.50

 

Income (loss) from discontinued operations, net

 

—

 

(0.04

)

(0.03

)

(0.47

)

Cumulative effect of change in accounting principle

 

—

 

—

 

—

 

(0.13

)

Net earnings (loss) per share

 

$

(0.54

)

$

0.13

 

$

(0.40

)

$

(0.09

)

 

 

 

 

 

 

 

 

 

 

Cash dividends per share

 

$

0.085

 

$

0.085

 

$

0.255

 

$

0.255

 

 

 

STEWART & STEVENSON SERVICES, INC. AND SUBSIDIARIES

SEGMENT INFORMATION

(In thousands)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

November 1, 2003

 

November 2, 2002

 

November 1, 2003

 

November 2, 2002

 

 

 

(Unaudited)

 

(Unaudited)

 

Sales

 

 

 

 

 

 

 

 

 

Tactical Vehicle Systems

 

$

110,036

 

$

113,715

 

$

329,378

 

$

334,581

 

Power Products

 

127,712

 

127,858

 

378,887

 

410,656

 

(1)  Engineered Products

 

36,723

 

38,533

 

133,688

 

86,845

 

Airline Products

 

14,379

 

14,737

 

46,975

 

42,807

 

Other Business Activities

 

1,189

 

1,739

 

3,734

 

6,398

 

Total Sales

 

$

290,039

 

$

296,582

 

$

892,662

 

$

881,287

 

 

 

 

 

 

 

 

 

 

 

Operating Profit (Loss)

 

 

 

 

 

 

 

 

 

Tactical Vehicle Systems

 

$

16,786

 

$

18,442

 

$

51,852

 

$

48,933

 

Power Products

 

(5,971

)

(4,958

)

(14,018

)

(1,351

)

(1)  Engineered Products

 

(22,236

)

287

 

(28,790

)

(7,545

)

Airline Products

 

(6,639

)

(1,987

)

(9,343

)

(5,194

)

Other Business Activities

 

(565

)

(395

)

(1,613

)

(221

)

Total Operating Profit (Loss)

 

(18,625

)

11,389

 

(1,912

)

34,622

 

 

 

 

 

 

 

 

 

 

 

Corporate expenses, net

 

(5,843

)

(2,910

)

(12,363

)

(10,487

)

Pension curtailment expense

 

—

 

—

 

(2,400

)

—

 

Interest and investment income

 

142

 

485

 

1,201

 

1,197

 

Interest expense

 

(640

)

(1,161

)

(2,576

)

(3,131

)

 

 

 

 

 

 

 

 

 

 

Earnings (loss) from continuing operations before income taxes

 

$

(24,966

)

$

7,803

 

$

(18,050

)

$

22,201

 

 

 

 

 

 

 

 

 

 

 

Operating Profit (Loss) Percentage

 

 

 

 

 

 

 

 

 

Tactical Vehicle Systems

 

15.3

%

16.2

%

15.7

%

14.6

%

Power Products

 

(4.7

)

(3.9

)

(3.7

)

(0.3

)

Engineered Products

 

(60.6

)

0.7

 

(21.5

)

(8.7

)

Airline Products

 

(46.2

)

(13.5

)

(19.9

)

(12.1

)

Other Business Activities

 

(47.5

)

(22.7

)

(43.2

)

(3.5

)

Consolidated

 

(6.4

)%

3.8

%

(0.2

)%

3.9

%

 

 

 

 

 

 

 

 

 

 

 

(1)  Components within Engineered Products Group:

 

 

 

 

 

 

 

 

 

 

Sales

 

 

 

 

 

 

 

 

 

Petroleum Equipment

 

$

23,507

 

$

18,405

 

$

81,346

 

$

33,715

 

Distributed Energy Solutions

 

7,616

 

18,285

 

40,718

 

47,900

 

Utilities Equipment

 

5,600

 

1,843

 

11,624

 

5,230

 

 

 

$

36,723

 

$

38,533

 

$

133,688

 

$

86,845

 

 

 

 

 

 

 

 

 

 

 

Operating Profit (Loss)

 

 

 

 

 

 

 

 

 

Petroleum Equipment

 

$

(688

)

$

350

 

$

1,545

 

$

(1,741

)

Distributed Energy Solutions

 

(20,923

)

635

 

(27,895

)

(3,618

)

Utilities Equipment

 

(625

)

(698

)

(2,440

)

(2,186

)

 

 

$

(22,236

)

$

287

 

$

(28,790

)

$

(7,545

)

 

 

STEWART & STEVENSON SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS

(In thousands, except share data)

 

 

 

November 1, 2003

 

January 31, 2003

 

 

 

(Unaudited)

 

(Audited)

 

 

 

 

 

 

 

Assets

 

 

 

 

 

Current Assets:

 

 

 

 

 

Cash and cash equivalents

 

$

54,299

 

$

107,994

 

Accounts and notes receivable, net

 

144,990

 

151,839

 

Recoverable costs and accrued profits not yet billed

 

48,623

 

11,668

 

Inventories

 

225,343

 

244,416

 

Excess of current cost over LIFO values

 

(43,971

)

(42,785

)

Deferred income tax asset

 

20,567

 

16,126

 

Other current assets

 

13,428

 

3,967

 

Total assets of discontinued operations

 

9,566

 

14,404

 

Total Current Assets

 

472,845

 

507,629

 

 

 

 

 

 

 

Property, Plant and Equipment, net

 

122,223

 

118,964

 

Deferred Income Tax Asset

 

11,565

 

11,754

 

Intangibles and Other Assets, net

 

15,288

 

14,288

 

Total Assets

 

$

621,921

 

$

652,635

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

Notes payable

 

$

2,320

 

$

1,454

 

Current portion of long-term debt

 

250

 

30,250

 

Accounts payable

 

63,792

 

60,159

 

Accrued payrolls and incentives

 

19,669

 

17,408

 

Billings in excess of incurred costs

 

68,206

 

62,568

 

Other current liabilities

 

41,056

 

29,537

 

Total liabilities of discontinued operations

 

3,865

 

4,092

 

Total Current Liabilities

 

199,158

 

205,468

 

 

 

 

 

 

 

Long-Term Debt, net

 

26,330

 

26,531

 

Accrued Postretirement Benefits and Pension

 

47,550

 

54,681

 

Other Long-Term Liabilities

 

4,058

 

3,947

 

Total Liabilities

 

277,096

 

290,627

 

Shareholders’ Equity:

 

 

 

 

 

Common stock, without par value, 100,000,000 shares authorized; 28,610,914 and 28,490,849 shares issued, respectively

 

56,707

 

54,843

 

Accumulated other comprehensive loss

 

(21,942

)

(21,703

)

Retained earnings

 

310,060

 

328,868

 

Total Shareholders’ Equity

 

344,825

 

362,008

 

Total Liabilities and Shareholders’ Equity

 

$

621,921

 

$

652,635

 

 

 

STEWART & STEVENSON SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(In thousands)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

November 1, 2003

 

November 2, 2002

 

November 1, 2003

 

November 2, 2002

 

 

 

(Unaudited)

 

(Unaudited)

 

Operating Activities

 

 

 

 

 

 

 

 

 

Net earnings (loss)

 

$

(15,441

)

$

3,766

 

$

(11,536

)

$

(2,567

)

Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

 

 

Net loss (income) from discontinued operations

 

(57

)

1,223

 

925

 

13,377

 

Cumulative effect of change in accounting principle

 

—

 

—

 

—

 

3,682

 

Depreciation and amortization

 

5,867

 

5,512

 

17,088

 

15,936

 

Provision for excess and obsolete inventory

 

7,800

 

—

 

7,800

 

—

 

Change in operating assets and liabilities net of the effect of acquisitions and discontinued operations:

 

 

 

 

 

 

 

 

 

Accounts and notes receivable, net

 

5,820

 

(1,319

)

6,517

 

20,060

 

Recoverable costs and accrued profits not yet billed

 

(4,134

)

(7,440

)

(36,955

)

(12,208

)

Inventories

 

5,981

 

1,409

 

13,354

 

(11,289

)

Other current and noncurrent assets

 

(7,468

)

4,978

 

(14,346

)

13,677

 

Accounts payable

 

(10,328

)

(8,699

)

3,633

 

(31,714

)

Accrued payrolls and incentives

 

4,896

 

6,134

 

2,607

 

1,905

 

Billings in excess of incurred costs

 

(3,405

)

10,890

 

5,638

 

39,003

 

Other current liabilities

 

6,719

 

3,508

 

11,663

 

11,900

 

Accrued postretirement benefits and pension

 

(10,422

)

1,673

 

(7,138

)

3,692

 

Other long-term liabilities

 

(23

)

(2,884

)

(263

)

(3,632

)

Net Cash Provided By (Used In) Continuing Operations

 

(14,195

)

18,751

 

(1,013

)

61,822

 

Net Cash Provided By Discontinued Operations

 

194

 

8,288

 

3,684

 

3,803

 

Net Cash Provided By (Used In) Operating Activities

 

(14,001

)

27,039

 

2,671

 

65,625

 

 

 

 

 

 

 

 

 

 

 

Investing Activities

 

 

 

 

 

 

 

 

 

Expenditures for property, plant and equipment

 

(9,052

)

(5,942

)

(20,602

)

(22,744

)

Acquisition of businesses

 

(965

)

—

 

(1,374

)

—

 

Disposal of property, plant and equipment, net

 

157

 

1,100

 

749

 

2,452

 

Net Cash Used In Investing Activities

 

(9,860

)

(4,842

)

(21,227

)

(20,292

)

 

 

 

 

 

 

 

 

 

 

Financing Activities

 

 

 

 

 

 

 

 

 

Change in short-term notes payable

 

(226

)

(448

)

866

 

(1,481

)

Payments on long-term borrowings

 

(250

)

(250

)

(30,250

)

(250

)

Dividends paid

 

(2,428

)

(2,422

)

(7,273

)

(7,257

)

Proceeds from exercise of stock options

 

622

 

9

 

1,518

 

644

 

Net Cash Used In Financing Activities

 

(2,282

)

(3,111

)

(35,139

)

(8,344

)

 

 

 

 

 

 

 

 

 

 

Increase (decrease) in cash and cash equivalents

 

(26,143

)

19,086

 

(53,695

)

36,989

 

Cash and cash equivalents, beginning of period

 

80,442

 

99,341

 

107,994

 

81,438

 

Cash and cash equivalents, end of period

 

$

54,299

 

$

118,427

 

$

54,299

 

$

118,427

 

 

 

 

 

 

 

 

 

 

 

Cash Paid For:

 

 

 

 

 

 

 

 

 

Interest

 

$

83

 

$

172

 

$

2,508

 

$

2,706

 

Income taxes (excluding refunds)

 

517

 

1,083

 

3,528

 

3,617

 

 

 

STEWART & STEVENSON SERVICES, INC. AND SUBSIDIARIES

SELECTED OTHER INFORMATION

Continuing Operations

 

 

 

ORDER BACKLOG

 

($ Millions)

 

August 3,
2002

 

November 2,
2002

 

January 31,
2003

 

May 3,
2003

 

August 2,
2003

 

November 1,
2003

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tactical Vehicle Systems

 

$

496.9

 

$

388.9

 

$

659.5

 

$

650.1

 

$

627.1

 

$

550.9

*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Power Products

 

56.9

 

50.3

 

38.7

 

39.9

 

45.8

 

51.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distributed Energy Solutions

 

33.8

 

24.2

 

42.5

 

34.6

 

30.0

 

23.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Utilities Equipment

 

0.7

 

0.9

 

0.7

 

4.2

 

5.1

 

1.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Petroleum Equipment

 

45.0

 

44.3

 

64.6

 

62.8

 

35.2

 

20.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Airline Products

 

3.1

 

3.3

 

1.0

 

4.9

 

2.5

 

4.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

636.4

 

$

511.9

 

$

807.0

 

$

796.5

 

$

745.7

 

$

652.5

 

 

TACTICAL VEHICLE SYSTEMS UNIT DELIVERIES

 

 

 

Fiscal 2002

 

 

 

1Q

 

2Q

 

3Q

 

4Q

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

Trucks

 

612

 

565

 

571

 

618

 

2,366

 

 

 

 

 

 

 

 

 

 

 

 

 

Trailers

 

135

 

127

 

145

 

137

 

544

 

 

 

747

 

692

 

716

 

755

 

2,910

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales (millions)

 

$

116

 

$

105

 

$

114

 

$

116

 

$

451

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fiscal 2003

 

Estimated Unit Deliveries

 

1Q

 

2Q

 

3Q

 

4Q*

 

Total*

 

 

 

 

 

 

 

 

 

 

 

 

 

Trucks

 

631

 

644

 

585

 

619

 

2,479

 

 

 

 

 

 

 

 

 

 

 

 

 

Trailers

 

132

 

126

 

121

 

130

 

509

 

 

 

763

 

770

 

706

 

749

 

2,988

 

 

 

 

 

 

 

 

 

 

 

 

 

Estimated Sales (millions)

 

$

111

 

$

108

 

$

110

 

$

111

 

$

440

 

 

*Based on current US Army forecast and other data.

See cautionary statements above for important information regarding forward-looking statements.

 

 

STEWART & STEVENSON SERVICES, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (a)

For the Three-Month Period Ended November 1, 2003

(In thousands, except per share data)

 

 

 

Segment

 

Cost of sales

 

Selling and
administrative
expenses

 

Earnings before
income taxes

 

Net earnings

 

Diluted EPS
from continuing
operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations, in accordance with GAAP

 

 

 

$

272,951

 

$

41,606

 

$

(24,966

)

$

(15,498

)

$

(0.54

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments to exclude certain special charges from GAAP measures:

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs associated with exit of turnkey engineering, procurement and construction activities

 

Distributed Energy

 

4,700

 

1,411

 

6,111

 

3,811

 

 

 

Provision for excess and obsolete inventory

 

Airline Products

 

3,100

 

—

 

3,100

 

1,933

 

 

 

Costs associated with restructuring activities

 

Corporate

(b)

—

 

2,865

 

2,865

 

1,787

 

 

 

 

 

Power Products

(b)

—

 

236

 

236

 

147

 

 

 

 

 

Petroleum Equipment

(c)

—

 

285

 

285

 

178

 

 

 

 

 

Utilities Equipment

(c)

—

 

229

 

229

 

143

 

 

 

 

 

Distributed Energy

(c)

—

 

508

 

508

 

317

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total adjustments for special charges

 

 

 

7,800

 

5,534

 

13,334

 

8,316

 

0.29

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations, excluding special charges

 

 

 

$

265,151

 

$

36,072

 

$

(11,632

)

$

(7,182

)

$

(0.25

)

 

(a)  To supplement our consolidated condensed financial statements presented on a GAAP basis, the company uses non-GAAP additional measures of earnings from continuing operations, net earnings, and earnings per share adjusted to exclude certain costs it believes appropriate to enhance an overall understanding of the company’s past performance and its prospects for the future.  These adjustments to our GAAP results are made with the intent of providing a more complete understanding of the underlying operational results and trends.  The presentation of this additional information is not intended to be considered in isolation or as a substitute for net earnings or diluted earnings per share prepared in accordance with GAAP.

 

(b)  Employee separation costs.

 

(c)  Costs related to the consolidation of manufacturing operations in the Engineered Products Division.