- Email: [email protected]
Precision Castparts Corp, USA
August 2002
Pump Industry Analyst
Precision Castparts Corp, USA
Graco Inc, USA 28.6.2002
29.6.2001
132.8
130.9
88.2
Net Sales Of Which: Industrial/Automotive
50.8
51.4
458.0
500.3
Cost of Products Sold
65.7
66.6
Operating Income Of Which: Fluid Management Products
79.3
84.9
Gross Profit
7.3
2.4
Net Income
41.3
40.5
30.6.2002
1.7.2001
Net Sales Of Which: Fluid Management Products
589.6
638.8
94.0
Cost of Goods Sold
67.1
64.3
Product Development
4.5
5.7
Operating Earnings Of Which: Industrial/Automotive
31.7
28.5
13.2
12.1
Net Earnings
21.5
18.2
Six months ended
COMMENT In the face of significant downturns in its aerospace and industrial gas turbine markets, Precision Castparts continued to demonstrate positive operating results for the first quarter of fiscal 2003. Sales for Fluid Management Products in the first quarter of fiscal 2003 totaled US$94.0 million, with operating income of US$7.3 million, compared with US$88.2 million and US$4.4 million, respectively, a year ago. Johnston Pump and General Valve demonstrated strong year-over-year improvement in sales and operating income. This strength derived from a combination of factors, including increased power plant installations, aftermarket growth, and the continuing impact of cost takeouts. Other PCC Flow Technologies’ operations are also starting to realize the benefits of the
purchasing cost-reduction initiative in fiscal 2003, as well as improved and expanded distribution and market share gains. Continued manufacturing consolidation in Romania and China will also make a positive impact on segment earnings well into the future. As Fluid Management Products continues to implement its strategy of being the low-cost leader in its various market niches, the company says additional top-line growth, along with stronger operational performance, is expected for the foreseeable future. Outgoing CEO William McCormick said that despite lower sales in fiscal 2003, PCC should be able to deliver strong operating margins and that non-aerospace businesses would contribute to accomplishing this performance objective (see People, page 11). ■
28.6.2002
29.6.2001
Net Sales Of Which: Industrial/Automotive
240.7
240.7
96.9
99.1
Cost of Products Sold
118.3
121.3
Gross Profit
122.3
119.4
Product Development
8.7
12.0
Operating Earnings Of Which: Industrial/Automotive
55.2
49.0
25.0
21.5
Net Earnings
37.1
31.4
COMMENT Graco’s second quarter net earnings of US$21.5 million on net sales of US$132.8 million, were both up on last year’s net earnings of US$18.2 million and net sales of US$130.9 million. Net earnings for the sixmonth period at US$37.1 million on sales of US$240.7 million, compared with net earnings of US$31.4 million and net sales of US$240.7 million last year. Second quarter net sales in the Americas were flat versus last year’s US$97.2 million. In Europe, net sales of US$23.0 million were 10% higher than the second
quarter of 2001 and were 6% up on last year when measured in local currencies. In the Asia Pacific region, net sales of US$12.6 million were 2% lower than 2001 and 1% down on last year, again in local currencies. Year-to-date net sales in the Americas of US$175.8 million were flat on last year. In Europe, year-to-date net sales of US$42.7 million gained 3% and currency exchange rates had no significant impact. In the Asia Pacific region, net sales of US$22.1 million were 4% lower than the first six months of 2001. ■
7
COMPANY WATCH
Key Figures (US$ million) Second quarter ended
Key Figures (US$ million) Three months ended
Pump Industry Analyst
Precision Castparts Corp, USA
Graco Inc, USA 28.6.2002
29.6.2001
132.8
130.9
88.2
Net Sales Of Which: Industrial/Automotive
50.8
51.4
458.0
500.3
Cost of Products Sold
65.7
66.6
Operating Income Of Which: Fluid Management Products
79.3
84.9
Gross Profit
7.3
2.4
Net Income
41.3
40.5
30.6.2002
1.7.2001
Net Sales Of Which: Fluid Management Products
589.6
638.8
94.0
Cost of Goods Sold
67.1
64.3
Product Development
4.5
5.7
Operating Earnings Of Which: Industrial/Automotive
31.7
28.5
13.2
12.1
Net Earnings
21.5
18.2
Six months ended
COMMENT In the face of significant downturns in its aerospace and industrial gas turbine markets, Precision Castparts continued to demonstrate positive operating results for the first quarter of fiscal 2003. Sales for Fluid Management Products in the first quarter of fiscal 2003 totaled US$94.0 million, with operating income of US$7.3 million, compared with US$88.2 million and US$4.4 million, respectively, a year ago. Johnston Pump and General Valve demonstrated strong year-over-year improvement in sales and operating income. This strength derived from a combination of factors, including increased power plant installations, aftermarket growth, and the continuing impact of cost takeouts. Other PCC Flow Technologies’ operations are also starting to realize the benefits of the
purchasing cost-reduction initiative in fiscal 2003, as well as improved and expanded distribution and market share gains. Continued manufacturing consolidation in Romania and China will also make a positive impact on segment earnings well into the future. As Fluid Management Products continues to implement its strategy of being the low-cost leader in its various market niches, the company says additional top-line growth, along with stronger operational performance, is expected for the foreseeable future. Outgoing CEO William McCormick said that despite lower sales in fiscal 2003, PCC should be able to deliver strong operating margins and that non-aerospace businesses would contribute to accomplishing this performance objective (see People, page 11). ■
28.6.2002
29.6.2001
Net Sales Of Which: Industrial/Automotive
240.7
240.7
96.9
99.1
Cost of Products Sold
118.3
121.3
Gross Profit
122.3
119.4
Product Development
8.7
12.0
Operating Earnings Of Which: Industrial/Automotive
55.2
49.0
25.0
21.5
Net Earnings
37.1
31.4
COMMENT Graco’s second quarter net earnings of US$21.5 million on net sales of US$132.8 million, were both up on last year’s net earnings of US$18.2 million and net sales of US$130.9 million. Net earnings for the sixmonth period at US$37.1 million on sales of US$240.7 million, compared with net earnings of US$31.4 million and net sales of US$240.7 million last year. Second quarter net sales in the Americas were flat versus last year’s US$97.2 million. In Europe, net sales of US$23.0 million were 10% higher than the second
quarter of 2001 and were 6% up on last year when measured in local currencies. In the Asia Pacific region, net sales of US$12.6 million were 2% lower than 2001 and 1% down on last year, again in local currencies. Year-to-date net sales in the Americas of US$175.8 million were flat on last year. In Europe, year-to-date net sales of US$42.7 million gained 3% and currency exchange rates had no significant impact. In the Asia Pacific region, net sales of US$22.1 million were 4% lower than the first six months of 2001. ■
7
COMPANY WATCH
Key Figures (US$ million) Second quarter ended
Key Figures (US$ million) Three months ended