Oilgear (NASDAQ:OLGR)
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The Oilgear Company (NASDAQ/NMS:OLGR) today reported
sales and earnings for the third quarter ended September 30, 2005.
For the third quarter of 2005, Oilgear reported net sales of
$25,516,000, a 2.0% increase from sales of $25,031,000 for the same
period in 2004. The company reported net earnings of $533,000 or $0.26
per diluted share for the third quarter of 2005, compared to net
earnings of $202,000 or $0.10 per diluted share for the third quarter
of 2004.
Net sales for the first three quarters of 2005 were $77,039,000, a
10.7% increase from sales of $69,593,000 for the same period in 2004.
Net earnings for the first three quarters of 2005 were $1,579,000 or
$0.78 per diluted share, compared to net earnings of $214,000 or $0.11
per diluted share for the same period in 2004.
Orders for the third quarter of 2005 were $21.3 million, a 14%
decrease from orders of $24.8 million for the same period in 2004.
Orders for the first three quarters of 2005 were $77.8 million, a 2%
increase from orders of $76.2 million for the same period in 2004. The
backlog at September 30, 2005 was $34.8 million, a 2% increase from
the beginning of the year.
"As has been the case all year, the domestic segment generated the
increased sales in the third quarter. Domestic shipments increased 18%
in the third quarter and 24% for the first three quarters of 2005,"
said David A. Zuege, president and chief executive officer.
"Orders declined in the third quarter by 14% when compared to the
same period in 2004 and were down 21% from the record level of the
2005 second quarter. The decrease was due to a reduction in large
contracts for customized systems. Because of their size, these large
contracts create significant fluctuations in the level of reported
orders. Recently, sales activity for large customized systems has
picked up and is reasonably strong at this time. The backlog declined
by $4.2 million in the third quarter. We are currently negotiating the
cancellation of a $2.3 million order, due to the fact that the
government halted funding of our customer's program. This cancellation
will reduce the backlog by $1.9 million, but will have no significant
impact on reported sales or earnings," said Zuege.
"As previously reported, in 2003 we entered into an agreement for
the sale of our facility in Leeds, England, and were in negotiations
to lease a smaller and more efficient facility. Since then, we have
had some false starts in locating a new site, but now believe that we
are close to finalizing an arrangement. The Barclays loan of 3.2
million pounds related to the financing of our facility in England has
been extended until August 15, 2006, and we believe that our move to
the new facility will be completed prior to that date. As previously
noted, the consummation of the sale upon completion of our move will
result in a significant capital gain," said Zuege.
"Economists presenting their forecasts at the National Fluid Power
Association economic conference held in August 2005 projected that
domestic shipments of fluid power equipment would be up 6 - 9% for
2005 vs. 2004 and that the industry will experience growth in the 5%
range in 2006. Based on these industry projections, we remain
cautiously optimistic about our near-term prospects," said Zuege.
A leader in the fluid power industry, The Oilgear Company provides
advanced technology in the design and production of unique fluid power
components and electronic controls. The company serves customers in
the primary metals, machine tool, automobile, petroleum, construction
equipment, chemical, plastic, glass, lumber, rubber and food
industries. Its products are sold as individual components or
integrated into high performance applications.
Certain matters discussed in this press release are
"forward-looking statements" intended to qualify for the safe harbors
from liability established by the Private Securities Litigation Reform
Act of 1995. These forward-looking statements can generally be
identified as such because the context of the statement will include
words such as the Company "believes," "anticipates," "expects" or
words of similar import. Similarly, statements that describe the
Company's future plans, objectives or goals are also forward-looking
statements. Such forward-looking statements are subject to certain
risks and uncertainties which could cause actual results to differ
materially from those currently anticipated. In addition to the
assumptions and other factors referenced specifically in connection
with such statements, the following could impact the business and
financial prospects of the Company: factors affecting the economy
generally, including the financial and business conditions of the
Company's customers, the demand for customers' products and services
that utilize the Company's products, and national and international
events; factors affecting the Company's financial performance or
condition, including restrictions or conditions imposed by current or
prospective lenders, tax legislation, and changes in accounting
principles; factors affecting percentage of completion contracts,
including the accuracy of estimates and assumptions regarding the
timing and levels of costs to complete those contracts; factors
affecting the Company's international operations, including
fluctuations in currencies, changes in laws and political or financial
insecurity of foreign governments; factors affecting the Company's
ability to hire and retain competent employees, including unionization
of non-union employees and strikes or work stoppages; any further
decrease in stock price as a result of market conditions; changes in
the law or standards applicable to the Company, including
environmental laws and accounting pronouncements; availability of raw
materials; unanticipated technological developments that result in
competitive disadvantages and may impair existing assets; and factors
set forth in the Company's periodic reports filed with the SEC in
accordance with the Securities Exchange Act. Shareholders, potential
investors and other readers are urged to consider these factors and
those set forth in the Company's filings with the SEC carefully in
evaluating the forward-looking statements. The forward-looking
statements made herein are only made as of the date of this press
release and the Company undertakes no obligation to publicly update
such forward-looking statements to reflect subsequent events or
circumstances.
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The Oilgear Company
Consolidated Condensed Operating Statement
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2005 2004 2005 2004
------------ ------------ ------------ ------------
Net sales $25,516,000 $25,031,000 $77,039,000 $69,593,000
Cost of sales 18,405,000 19,437,000 56,164,000 53,318,000
------------ ------------ ------------ ------------
Gross profit 7,111,000 5,594,000 20,875,000 16,275,000
Selling, general
and administrative
expenses 5,671,000 4,862,000 16,881,000 14,531,000
------------ ------------ ------------ ------------
Operating income $ 1,440,000 $ 732,000 $ 3,994,000 $ 1,744,000
------------ ------------ ------------ ------------
Interest expense 647,000 346,000 1,859,000 1,003,000
Other non-operating
income (loss), net (51,000) 40,000 81,000 15,000
------------ ------------ ------------ ------------
Earnings before
income taxes 742,000 426,000 2,216.000 756,000
Income tax expense 170,000 223,000 512,000 486,000
------------ ------------ ------------ ------------
Net earnings
before minority
interest 572,000 203,000 1,704,000 270,000
Minority interest 39,000 1,000 125,000 56,000
------------ ------------ ------------ ------------
Net earnings $ 533,000 $ 202,000 $ 1,579,000 $ 214,000
============ ============ ============ ============
Basic earnings per
share of common
stock $ 0.27 $ 0.10 $ 0.79 $ 0.11
============ ============ ============ ============
Diluted earnings
per share of
common stock $ 0.26 $ 0.10 $ 0.78 $ 0.11
============ ============ ============ ============
Basic weighted
average
outstanding
shares 2,001,000 1,961,000 1,994,000 1,960,000
Diluted weighted
average
outstanding
shares 2,038,000 1,979,000 2,028,000 1,979,000
The Oilgear Company
Consolidated Condensed Balance Sheet
(Unaudited)
September 30, December 31,
2005 2004
------------- -------------
ASSETS
Current Assets
Cash and cash equivalents $ 4,644,000 $ 4,109,000
Accounts receivable 17,859,000 17,030,000
Inventories 25,672,000 25,529,000
Other current assets 4,465,000 5,861,000
------------- -------------
Total current assets $52,640,000 $52,529,000
------------- -------------
Net property, plant and equipment 16,053,000 18,163,000
Other assets 2,727,000 2,123,000
------------- -------------
$71,420,000 $72,815,000
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Current debt $16,055,000 $21,334,000
Accounts payable 8,884,000 10,830,000
Other current liabilities 7,752,000 8,508,000
------------- -------------
Total current liabilities $32,691,000 $40,672,000
------------- -------------
Long-term debt 8,062,000 1,302,000
Unfunded employee benefit costs 22,482,000 23,024,000
Other non-current liabilities 706,000 694,000
------------- -------------
Total liabilities $63,941,000 $65,692,000
------------- -------------
Minority interest in consolidated
subsidiary 1,116,000 1,037,000
Shareholders' equity 6,363,000 6,086,000
------------- -------------
$71,420,000 $72,815,000
============= =============
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