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SPX divests valve lines
IN BRIEF/DIVIDENDS/NEWS
Pump Industry Analyst
December 2005
IN BRIEF
DIVIDENDS
• Investment AB Latour has, through its Swedish subsidiary Specma AB, acquired the Packings and Seals Divisions of the AxFlow companies in both Sweden and Norway. This decision is in line with AxFlow’s strategy to concentrate on the positive displacement pump business. • Chinese concrete pump maker Jarlway Holdings plc is looking to tighten its terms of trade in order to reduce debtor days. The move comes after a review of the company’s average debtor days, and in response to investor comments on the ageing of Jarlway’s receivables. Although this will result in lower sales volumes in the short term due to the resultant greater reliance on mortgage finance by customers, Jarlway believes that it should ultimately improve the company’s working capital management. • Tarby Inc has selected Hisco Pump Inc of West Hartford, Connecticut as its top producing distributor for the second consecutive year. Tarby recognized Hisco for the company’s outstanding performance in the fiscal year ended 31 August 2005. Tarby’s top ten performers for 2005 included The Rueck Co of Beaverton, Oregon; Summit Pump of Green Bay, Wisconsin; Canada’s National Process Equipment; Buckeye Pumps of Galion, Ohio; Pierce Pump Co of Dallas, Texas; Electric Pump of Des Moines, Iowa; WE Marshall Co of Lawrenceville, Georgia; Universal Pump Co of Wixom, Michigan; and Flomec Inc of Richmond, Virginia.
• The board of directors of Graco Inc has declared a regular quarterly dividend of US$0.145 per share, an increase of 11.5%, payable on 1 February 2006, to shareholders of record at the close of business on 18 January 2006. The company has approximately 68.4 million shares outstanding. • Hamworthy intends to pay an interim dividend of £0.018 per share. This will be paid on 23 December 2005 to all shareholders on the register at 2 December 2005. There was no payment made in respect of the six months to 30 September 2004 as, following admission to the AIM section of the London Stock Exchange in July 2004, the first dividend was declared as a final dividend in respect of the period from admission to 31 March 2005. • Idex Corp’s board of directors has declared a regular quarterly cash dividend of US$0.12 per common share. This dividend represents the company’s 45th consecutive regular quarterly cash dividend payment. The dividend will be paid on 31 January 2006 to shareholders of record as of 16 January 2006. • Interpump shareholders have approved a special dividend of 0.69. Company chairman Giovanni Cavallini says the special dividend is an additional confirmation of Interpump’s strategy of pursuing the continuous creation of value for its shareholders. “This decision will enable the Group to optimise its financial and balance sheet structure following the sale of IP Cleaning and the acquisition of Hammelmann in the first half of the year, but also to maintain a significant capacity for external growth through targeted acquisitions and to increase its profitability,” said Cavallini.
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GE, EBARA TECH IN GLOBAL REMARKETING AGREEMENT GE Commercial Finance, Global Electronics Solutions (GES) and Ebara Technologies Inc have signed a Global Remarketing Agreement, which will see GES remarket refurbished equipment on behalf of Ebara. The equipment, including the full line of refurbished Ebara dry pumps and ancillary equipment, will have undergone a rigorous process of evaluation and service to earn Ebara Technologies’ assurance of certified refurbishment. As a result, the equipment will qualify for on-going product enhancement services. Under the agreement, customers who purchase preowned systems through GES, that require vacuum subsystems including pumps, interfaces and fittings, will have access to technical and sales support from Ebara Technologies to determine the appropriate configurations needed for proper installation and operation. These systems include Etch, CVD, PVD, LPCVD, EPI, Ion Implant systems, and others. According to Ebara Technologies, customers wishing to upgrade their existing Ebara equipment will now have a wider range of options, such as cash offers, equipment exchanges and service-in-trade, through the combined resources of Ebara Technologies and GES. Ebara Technologies’ maintenance and support services will be available on a full range of vacuum equipment located in the Fab, whether manufactured by Ebara Technologies or another OEM. Ebara Technologies feels that this is a distinct benefit to operations management through singlesourcing for all sub-fab needs.
Customers purchasing new and refurbished Ebara Technologies equipment will now have access to financing from GE’s Global Electronics Solutions. “Our relationship with Ebara will enable our customers to better manage their capital equipment costs. They’ll have access to quality refurbished equipment along with Ebara’s full range of support services,” explained Mike Mardesich, senior vice president and director of Global Equipment Sales at GE Commercial Finance, Global Electronics Solutions. “This agreement will provide a ready supply of Ebara equipment for our existing customers and help us put our flexible financing, in-depth product expertise and global remarketing capabilities to work for an even broader customer base.”
SPX DIVESTS VALVE LINES SPX has completed the sale of three non-core valve product lines - Mueller Steam, Febco, and Polyjet - to Watts Water Technologies Inc. The product lines were part of the company’s Flow Technology segment and together generated annual revenues of approximately US$57 million. “The Mueller Steam, Febco, and Polyjet product lines are all leading brand names in irrigation, fire protection, and other niche markets,” said Don Canterna, president of SPX’s Flow Technology segment. “While well positioned in their respective areas, these product lines lacked true synergy with the rest of the SPX Process Equipment platform, specifically in terms of channels and end users. As part of the Watts Water Technologies family of products, these product lines will have access to additional infrastructure and expertise,
allowing them to continue to grow.” Canterna said that SPX was committed to grow the Flow Technology segment and that the sale of these niche product lines would allow the group to continue to focus on engineered products, servicing a broad cross-section of markets, including power, oil and gas, food/beverage, pharmaceutical and petrochemical. In the third quarter of 2005, SPX committed to a plan to divest these product lines. Based on the probable sale, the results of operations were reported as discontinued operations beginning in the third quarter.
ITT PLANS STOCK SPLIT ITT Industries’ board of directors has approved a two-for-one split of the company’s shares of common stock. This is the first time that ITT’s stock has split since becoming an independent company ten years ago. The split will be in the form of a stock dividend, providing each stockholder with one additional share for each share owned. The new shares will be distributed on 21 February 2006 to stockholders of record at the close of business on 7 February 2006. ITT also announced that it plans to raise its annual dividend by 22% to US$0.88 per share (pre-split) effective April 2006. “We’re completing what has been by any measure an outstanding year for ITT Industries,” said Steve Loranger, chairman, president and CEO of ITT Industries. “Our strong portfolio and operating improvements are expected to drive 2005 revenue growth of approximately 17%, operating margin improvement, and 19–20% growth in full-year EPS, as adjusted. This performance and our confidence in our growth outlook
Pump Industry Analyst
for 2006 have led us to recommend to our board of directors a 22% increase in our annual dividend as a way to return value to our shareholders.”
SKF LAUNCHES NEW DIVISIONAL STRUCTURE SKF has decided to rationalize its divisional structure and reduce the number of divisions within the Group. From 1 January 2006, the Aero and Steel Division as well as the Electrical Division will be integrated into the Industrial and Automotive divisions. Bearings, seals and airframe components for the aerospace industry, which are now part of the Aero and Steel Division, will be moved to the Industrial Division. The forging operations will be transferred to the Automotive Division. Small ball bearings and bearing seals, that are currently part of the Electrical Division, will be transferred to the Automotive Division. Medium size ball bearings, that are mainly supplied to the industrial market, will be transferred to the Industrial Division. From January 2006, SKF will consist of three divisions: Industrial, Automotive and Service. The Industrial Division, headed by former Johnson Pump managing director and CEO Henrik Lange, will comprise sales to industrial OEM customers and the development and manufacturing of a wide range of bearings, mainly spherical and cylindrical roller bearings, angular contact bearings, medium size ball bearings, bearings designed for aircrafts and railways, linear motion and mechatronics products, couplings and related products and lubrication systems. The Division’s sales will represent 31% of the group’s sales.
Financial Calendar January 2006 KSB Preliminary Report on 2005 Gevelot 2005 Update 11 January 2006 Robbins & Myers Annual Shareholders’ Meeting 24 January 2006 Sulzer Order Intake 2005 26 January 2006 Textron Q4 2005 Results January/February 2006 GUD Holdings Half Year Results 7 February 2006 Cardo Report on Operations 2005 8 February 2006 Metso 2005 Results 9 February 2006 Alfa Laval Year-end Report 2005 10 February 2006 Bjørge Q4 2005 Results 15 February 2006 Johnson Pump Year-end Report 2005 28 February 2006 Sulzer Annual Result 2005 March 2006 Cardo Annual Report 2005 7–8 March 2006 Citigroup Global Industrial Manufacturing Conference, New York 21 March 2006 Weir Preliminary Results 2005 6 April 2006 Cardo Annual General Meeting Weir Circulation of Annual Report 12 April 2006 Sulzer Order Intake January–March 2006 General Assembly Meeting 20 April 2006 KSB Financial Press Conference 26 April 2006 Johnson Pump Annual General Meeting 27 April 2006 Alfa Laval Q1 Report Annual General Meeting May 2006 Weir Annual General Meeting
IN BRIEF • Cryostar USA’s east coast facility has moved to new premises from 1 December 2005. The new offices have a total operating space of 6400 sq ft; this more than doubles the previous facility and allows for a shop area of almost three times the previous one. The new shop will include a complete nitrogen test facility with a 3000 litres nitrogen tank. Cryostar USA East Coast can be contacted at 5897 Colony Drive, Bethlehem, PA 18017, USA. Tel: +1 484 281 3401 Fax: +1 484 281 3402. • Marflex, a manufacturer of custom electric driven pump systems for ships and off-shore platforms, has selected Glovia Inc’s extended enterprise resource planning (ERP) solution, glovia.com, to replace its multiple legacy systems and to standardize the company onto a single information system. Glovia’s ETO/MTO (engineer/make-to-order) functionality is especially attractive to Marflex as the company’s products are manufactured in-house to specific customer requirements. Marflex plans to implement the solution in two phases. The first phase is scheduled to go live this spring with the second phase going live in the fall of 2006. The company also has additional locations in Singapore and Russia that are planned to eventually go live as well. • Crane Co management expects fourth quarter 2005 earnings to be US$0.53– US$0.58 per share, compared with US$0.52 in the fourth quarter 2004 which excludes a US$0.11 gain on the Victaulic divestiture and a US$0.15 gain from the reduction in asbestos liability.
13
NEWS/CALENDAR/IN BRIEF
December 2005
Pump Industry Analyst
December 2005
IN BRIEF
DIVIDENDS
• Investment AB Latour has, through its Swedish subsidiary Specma AB, acquired the Packings and Seals Divisions of the AxFlow companies in both Sweden and Norway. This decision is in line with AxFlow’s strategy to concentrate on the positive displacement pump business. • Chinese concrete pump maker Jarlway Holdings plc is looking to tighten its terms of trade in order to reduce debtor days. The move comes after a review of the company’s average debtor days, and in response to investor comments on the ageing of Jarlway’s receivables. Although this will result in lower sales volumes in the short term due to the resultant greater reliance on mortgage finance by customers, Jarlway believes that it should ultimately improve the company’s working capital management. • Tarby Inc has selected Hisco Pump Inc of West Hartford, Connecticut as its top producing distributor for the second consecutive year. Tarby recognized Hisco for the company’s outstanding performance in the fiscal year ended 31 August 2005. Tarby’s top ten performers for 2005 included The Rueck Co of Beaverton, Oregon; Summit Pump of Green Bay, Wisconsin; Canada’s National Process Equipment; Buckeye Pumps of Galion, Ohio; Pierce Pump Co of Dallas, Texas; Electric Pump of Des Moines, Iowa; WE Marshall Co of Lawrenceville, Georgia; Universal Pump Co of Wixom, Michigan; and Flomec Inc of Richmond, Virginia.
• The board of directors of Graco Inc has declared a regular quarterly dividend of US$0.145 per share, an increase of 11.5%, payable on 1 February 2006, to shareholders of record at the close of business on 18 January 2006. The company has approximately 68.4 million shares outstanding. • Hamworthy intends to pay an interim dividend of £0.018 per share. This will be paid on 23 December 2005 to all shareholders on the register at 2 December 2005. There was no payment made in respect of the six months to 30 September 2004 as, following admission to the AIM section of the London Stock Exchange in July 2004, the first dividend was declared as a final dividend in respect of the period from admission to 31 March 2005. • Idex Corp’s board of directors has declared a regular quarterly cash dividend of US$0.12 per common share. This dividend represents the company’s 45th consecutive regular quarterly cash dividend payment. The dividend will be paid on 31 January 2006 to shareholders of record as of 16 January 2006. • Interpump shareholders have approved a special dividend of 0.69. Company chairman Giovanni Cavallini says the special dividend is an additional confirmation of Interpump’s strategy of pursuing the continuous creation of value for its shareholders. “This decision will enable the Group to optimise its financial and balance sheet structure following the sale of IP Cleaning and the acquisition of Hammelmann in the first half of the year, but also to maintain a significant capacity for external growth through targeted acquisitions and to increase its profitability,” said Cavallini.
12
GE, EBARA TECH IN GLOBAL REMARKETING AGREEMENT GE Commercial Finance, Global Electronics Solutions (GES) and Ebara Technologies Inc have signed a Global Remarketing Agreement, which will see GES remarket refurbished equipment on behalf of Ebara. The equipment, including the full line of refurbished Ebara dry pumps and ancillary equipment, will have undergone a rigorous process of evaluation and service to earn Ebara Technologies’ assurance of certified refurbishment. As a result, the equipment will qualify for on-going product enhancement services. Under the agreement, customers who purchase preowned systems through GES, that require vacuum subsystems including pumps, interfaces and fittings, will have access to technical and sales support from Ebara Technologies to determine the appropriate configurations needed for proper installation and operation. These systems include Etch, CVD, PVD, LPCVD, EPI, Ion Implant systems, and others. According to Ebara Technologies, customers wishing to upgrade their existing Ebara equipment will now have a wider range of options, such as cash offers, equipment exchanges and service-in-trade, through the combined resources of Ebara Technologies and GES. Ebara Technologies’ maintenance and support services will be available on a full range of vacuum equipment located in the Fab, whether manufactured by Ebara Technologies or another OEM. Ebara Technologies feels that this is a distinct benefit to operations management through singlesourcing for all sub-fab needs.
Customers purchasing new and refurbished Ebara Technologies equipment will now have access to financing from GE’s Global Electronics Solutions. “Our relationship with Ebara will enable our customers to better manage their capital equipment costs. They’ll have access to quality refurbished equipment along with Ebara’s full range of support services,” explained Mike Mardesich, senior vice president and director of Global Equipment Sales at GE Commercial Finance, Global Electronics Solutions. “This agreement will provide a ready supply of Ebara equipment for our existing customers and help us put our flexible financing, in-depth product expertise and global remarketing capabilities to work for an even broader customer base.”
SPX DIVESTS VALVE LINES SPX has completed the sale of three non-core valve product lines - Mueller Steam, Febco, and Polyjet - to Watts Water Technologies Inc. The product lines were part of the company’s Flow Technology segment and together generated annual revenues of approximately US$57 million. “The Mueller Steam, Febco, and Polyjet product lines are all leading brand names in irrigation, fire protection, and other niche markets,” said Don Canterna, president of SPX’s Flow Technology segment. “While well positioned in their respective areas, these product lines lacked true synergy with the rest of the SPX Process Equipment platform, specifically in terms of channels and end users. As part of the Watts Water Technologies family of products, these product lines will have access to additional infrastructure and expertise,
allowing them to continue to grow.” Canterna said that SPX was committed to grow the Flow Technology segment and that the sale of these niche product lines would allow the group to continue to focus on engineered products, servicing a broad cross-section of markets, including power, oil and gas, food/beverage, pharmaceutical and petrochemical. In the third quarter of 2005, SPX committed to a plan to divest these product lines. Based on the probable sale, the results of operations were reported as discontinued operations beginning in the third quarter.
ITT PLANS STOCK SPLIT ITT Industries’ board of directors has approved a two-for-one split of the company’s shares of common stock. This is the first time that ITT’s stock has split since becoming an independent company ten years ago. The split will be in the form of a stock dividend, providing each stockholder with one additional share for each share owned. The new shares will be distributed on 21 February 2006 to stockholders of record at the close of business on 7 February 2006. ITT also announced that it plans to raise its annual dividend by 22% to US$0.88 per share (pre-split) effective April 2006. “We’re completing what has been by any measure an outstanding year for ITT Industries,” said Steve Loranger, chairman, president and CEO of ITT Industries. “Our strong portfolio and operating improvements are expected to drive 2005 revenue growth of approximately 17%, operating margin improvement, and 19–20% growth in full-year EPS, as adjusted. This performance and our confidence in our growth outlook
Pump Industry Analyst
for 2006 have led us to recommend to our board of directors a 22% increase in our annual dividend as a way to return value to our shareholders.”
SKF LAUNCHES NEW DIVISIONAL STRUCTURE SKF has decided to rationalize its divisional structure and reduce the number of divisions within the Group. From 1 January 2006, the Aero and Steel Division as well as the Electrical Division will be integrated into the Industrial and Automotive divisions. Bearings, seals and airframe components for the aerospace industry, which are now part of the Aero and Steel Division, will be moved to the Industrial Division. The forging operations will be transferred to the Automotive Division. Small ball bearings and bearing seals, that are currently part of the Electrical Division, will be transferred to the Automotive Division. Medium size ball bearings, that are mainly supplied to the industrial market, will be transferred to the Industrial Division. From January 2006, SKF will consist of three divisions: Industrial, Automotive and Service. The Industrial Division, headed by former Johnson Pump managing director and CEO Henrik Lange, will comprise sales to industrial OEM customers and the development and manufacturing of a wide range of bearings, mainly spherical and cylindrical roller bearings, angular contact bearings, medium size ball bearings, bearings designed for aircrafts and railways, linear motion and mechatronics products, couplings and related products and lubrication systems. The Division’s sales will represent 31% of the group’s sales.
Financial Calendar January 2006 KSB Preliminary Report on 2005 Gevelot 2005 Update 11 January 2006 Robbins & Myers Annual Shareholders’ Meeting 24 January 2006 Sulzer Order Intake 2005 26 January 2006 Textron Q4 2005 Results January/February 2006 GUD Holdings Half Year Results 7 February 2006 Cardo Report on Operations 2005 8 February 2006 Metso 2005 Results 9 February 2006 Alfa Laval Year-end Report 2005 10 February 2006 Bjørge Q4 2005 Results 15 February 2006 Johnson Pump Year-end Report 2005 28 February 2006 Sulzer Annual Result 2005 March 2006 Cardo Annual Report 2005 7–8 March 2006 Citigroup Global Industrial Manufacturing Conference, New York 21 March 2006 Weir Preliminary Results 2005 6 April 2006 Cardo Annual General Meeting Weir Circulation of Annual Report 12 April 2006 Sulzer Order Intake January–March 2006 General Assembly Meeting 20 April 2006 KSB Financial Press Conference 26 April 2006 Johnson Pump Annual General Meeting 27 April 2006 Alfa Laval Q1 Report Annual General Meeting May 2006 Weir Annual General Meeting
IN BRIEF • Cryostar USA’s east coast facility has moved to new premises from 1 December 2005. The new offices have a total operating space of 6400 sq ft; this more than doubles the previous facility and allows for a shop area of almost three times the previous one. The new shop will include a complete nitrogen test facility with a 3000 litres nitrogen tank. Cryostar USA East Coast can be contacted at 5897 Colony Drive, Bethlehem, PA 18017, USA. Tel: +1 484 281 3401 Fax: +1 484 281 3402. • Marflex, a manufacturer of custom electric driven pump systems for ships and off-shore platforms, has selected Glovia Inc’s extended enterprise resource planning (ERP) solution, glovia.com, to replace its multiple legacy systems and to standardize the company onto a single information system. Glovia’s ETO/MTO (engineer/make-to-order) functionality is especially attractive to Marflex as the company’s products are manufactured in-house to specific customer requirements. Marflex plans to implement the solution in two phases. The first phase is scheduled to go live this spring with the second phase going live in the fall of 2006. The company also has additional locations in Singapore and Russia that are planned to eventually go live as well. • Crane Co management expects fourth quarter 2005 earnings to be US$0.53– US$0.58 per share, compared with US$0.52 in the fourth quarter 2004 which excludes a US$0.11 gain on the Victaulic divestiture and a US$0.15 gain from the reduction in asbestos liability.
13
NEWS/CALENDAR/IN BRIEF
December 2005