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Aqua Care Systems Inc, USA
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Filtration Industry Analyst
August 2002
AAF-McQuay Inc, USA
Aqua Care Systems Inc, USA
Key Figures (US$ million) Third quarter ended 31.3 2002
2001
2002
2001
Net Sales 182.9 Of Which Filtration Products 77.0
211.0 86.3
Revenues
1.9
3.4
Cost of Revenues
1.0
2.0
Cost of Sales
137.2
156.1
Gross Profit
0.9
1.4
45.7
54.9
Loss from Operations
(0.4)
(0.6)
Income from Operations Of Which Filtration Products
3.1 3.4
6.5 5.3
Net Loss
(0.5)
(0.4)
Net Income
0.6
0.9
Capital Expenditures Of Which Filtration Products
2.0 1.0
3.6 1.0
Gross Profit
COMPANY WATCH
Key Figures (US$ million) First quarter ended 31.3
Nine months ended 31.3 2002
2001
Net Sales 586.8 Of Which Filtration Products 242.1
637.9 250.9
Cost of Sales
437.1
471.9
Gross Profit
149.7
166.0
16.6 8.8
18.0 13.8
Income from Operations Of Which Filtration Products Net Income
3.7
4.1
Capital Expenditures Of Which Filtration Products
5.4 2.2
10.6 2.8
COMMENT Sales in AFF-McQuay’s Filtration Products segment for the three months ended 31 March 2002 have been affected by the sale of some of its subsidiaries, and also by unfavourable European exchange rates. Net sales in the segment fell by US$9.3 million, or 11%, compared with the same period of 2001. The decrease is partly attributed to the sale of AAFMcQuay’s Singapore subsidiary in September 2001 and Korean joint venture in January 2002. Domestic sales dropped by 17% partly because of a downturn in cleanroom market demand. An unusually
6
mild winter also impacted the replacement filter business. International sales, however, rose by 11% because of strong machinery filtration and acoustical systems market activity in Europe driven by the gas turbine market. This was partially offset by a decrease in air pollution control system projects in Latin America this quarter compared with the third quarter of the previous year. Year-to-date sales in the Filtration Products segment declined by US$8.8 million, or 4%, to US$242.1 million. Around US$2.6 million of the fall was blamed on unfavourable European exchange rates. ■
COMMENT Aqua Care Systems, the Nasdaq-listed water filtration and purification company, reported a 44% fall in revenues in the first quarter ended 31 March 2002 compared with the previous year. Revenues for the quarter were US$1.9 million, significantly down on the previous year’s first quarter total of US$3.4 million. Despite the shrinking revenues, operating loss for the first quarter improved by US$0.2 million, or 28%, to a net loss of US$0.4 million. Aqua Care’s Industrial Group reported decreased project volume attributed to the general economic slowdown. In the Residential/Commercial Group, sales of water filtration and purification equipment were reduced, as were related financing fees. This resulted from a drop in dealers’ sales to end users related mainly to financing programme changes.
Aqua Care completed niche-application product and process developments in solid/liquid separations during the first quarter. The company’s management say that they expect these new offerings to be in demand even during an industrial down cycle, and to provide additional bookings and improved sales for the third and fourth quarters. Aqua Care has undergone some major changes lately including the resignation of its president and CEO, Martin Jessen, in May (see Filtration Industry Analyst, July 2002). The new management, comprising Scott Heffner as president and Peter Rossi as the new chairman of the board, must hope that their cost-reduction initiatives and new products are successful if the company is to improve its year-end results from the disappointing US$4.4 million net loss of last year. ■
7/22/02
3:08 PM
Page 6
Filtration Industry Analyst
August 2002
AAF-McQuay Inc, USA
Aqua Care Systems Inc, USA
Key Figures (US$ million) Third quarter ended 31.3 2002
2001
2002
2001
Net Sales 182.9 Of Which Filtration Products 77.0
211.0 86.3
Revenues
1.9
3.4
Cost of Revenues
1.0
2.0
Cost of Sales
137.2
156.1
Gross Profit
0.9
1.4
45.7
54.9
Loss from Operations
(0.4)
(0.6)
Income from Operations Of Which Filtration Products
3.1 3.4
6.5 5.3
Net Loss
(0.5)
(0.4)
Net Income
0.6
0.9
Capital Expenditures Of Which Filtration Products
2.0 1.0
3.6 1.0
Gross Profit
COMPANY WATCH
Key Figures (US$ million) First quarter ended 31.3
Nine months ended 31.3 2002
2001
Net Sales 586.8 Of Which Filtration Products 242.1
637.9 250.9
Cost of Sales
437.1
471.9
Gross Profit
149.7
166.0
16.6 8.8
18.0 13.8
Income from Operations Of Which Filtration Products Net Income
3.7
4.1
Capital Expenditures Of Which Filtration Products
5.4 2.2
10.6 2.8
COMMENT Sales in AFF-McQuay’s Filtration Products segment for the three months ended 31 March 2002 have been affected by the sale of some of its subsidiaries, and also by unfavourable European exchange rates. Net sales in the segment fell by US$9.3 million, or 11%, compared with the same period of 2001. The decrease is partly attributed to the sale of AAFMcQuay’s Singapore subsidiary in September 2001 and Korean joint venture in January 2002. Domestic sales dropped by 17% partly because of a downturn in cleanroom market demand. An unusually
6
mild winter also impacted the replacement filter business. International sales, however, rose by 11% because of strong machinery filtration and acoustical systems market activity in Europe driven by the gas turbine market. This was partially offset by a decrease in air pollution control system projects in Latin America this quarter compared with the third quarter of the previous year. Year-to-date sales in the Filtration Products segment declined by US$8.8 million, or 4%, to US$242.1 million. Around US$2.6 million of the fall was blamed on unfavourable European exchange rates. ■
COMMENT Aqua Care Systems, the Nasdaq-listed water filtration and purification company, reported a 44% fall in revenues in the first quarter ended 31 March 2002 compared with the previous year. Revenues for the quarter were US$1.9 million, significantly down on the previous year’s first quarter total of US$3.4 million. Despite the shrinking revenues, operating loss for the first quarter improved by US$0.2 million, or 28%, to a net loss of US$0.4 million. Aqua Care’s Industrial Group reported decreased project volume attributed to the general economic slowdown. In the Residential/Commercial Group, sales of water filtration and purification equipment were reduced, as were related financing fees. This resulted from a drop in dealers’ sales to end users related mainly to financing programme changes.
Aqua Care completed niche-application product and process developments in solid/liquid separations during the first quarter. The company’s management say that they expect these new offerings to be in demand even during an industrial down cycle, and to provide additional bookings and improved sales for the third and fourth quarters. Aqua Care has undergone some major changes lately including the resignation of its president and CEO, Martin Jessen, in May (see Filtration Industry Analyst, July 2002). The new management, comprising Scott Heffner as president and Peter Rossi as the new chairman of the board, must hope that their cost-reduction initiatives and new products are successful if the company is to improve its year-end results from the disappointing US$4.4 million net loss of last year. ■