Oilgear (NASDAQ:OLGR)
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The Oilgear Company (NASDAQ:OLGR) today reported record
orders and increased backlog for the first quarter ended March 31,
2006.
Net sales were $25,073,000 for the first quarter of 2006, a 3.7%
decrease from sales of $26,026,000 for the same period in 2005. Net
earnings were $514,000 or $0.25 per diluted share for the first
quarter of 2006, compared to net earnings of $562,000 or $0.28 per
diluted share for the first quarter of 2005.
Orders in the first quarter of 2006 were a record $35.1 million,
an 18% increase from the first quarter of 2005 and a 74% increase from
orders in the fourth quarter of 2005. The backlog grew to $36.9
million at the end of the first quarter of 2006, a 37% increase from
the backlog at the end of 2005.
"Orders were particularly strong in the first quarter of 2006.
Orders in both the domestic and European segments increased 15% over
last year's record quarter, and the international segment was up 43%,"
said David A. Zuege, president and chief executive officer of Oilgear.
"Particularly gratifying is the fact that orders increased in all
major product categories and were especially strong in the domestic
aftermarket. April orders were in excess of $10 million, pushing the
backlog up over $39 million, however, we do not expect orders to
continue at this pace."
"Our gross profit margin improved to 27.3% in the first quarter of
2006, from 26.6% in the first quarter of 2005. Margin improvement
remains our number-one priority," said Zuege.
Zuege noted that the decline in first quarter 2006 sales was
attributable to the European segment, with 70% of the decline due to
currency impacts. Domestic shipments were flat, as increases in
shipments to the company's core markets were sufficient to offset a
decline of $1.2 million in meter sales to the government.
"In April 2006, we completed the restatement of our 2004 annual
report on Form 10-K and the quarterly reports on Form 10-Q for the
first three quarters of 2005. The total expenses for this process
amounted to $31,000 in legal fees and $248,000 in auditing fees. Of
this total, $189,000 was incurred in the first quarter of 2006. In
total, selling, general and administrative expenses declined by 1% for
the quarter, partially due to changes in currency rates. The
relocation of our operation in Leeds, England, is nearing completion,
with most of our employees now working at the new facility. We expect
to complete the sale of our former location in Leeds in the second
quarter, which will result in a significant gain," said Zuege.
At the company's annual meeting of shareholders held today, the
shareholders re-elected Hubert Bursch, Roger H. Schroeder and David A.
Zuege as directors to serve until the 2009 annual meeting.
Shareholders also approved the 2006 Equity Incentive Plan.
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 complete the move from its Leeds, England, facility; 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 March 31,
2006 2005
-------------- --------------
Net sales $25,073,000 $26,026,000
Cost of sales 18,221,000 19,095,000
-------------- --------------
Gross profit 6,852,000 6,931,000
Selling, general and administrative
expenses 5,595,000 5,680,000
-------------- --------------
Operating income 1,257,000 1,251,000
Interest expense 635,000 610,000
Other non-operating income, net 80,000 67,000
-------------- --------------
Earnings before income taxes 702,000 708,000
Income tax expense 165,000 129,000
-------------- --------------
Net earnings before minority interest 537,000 579,000
Minority Interest 23,000 17,000
-------------- --------------
Net earnings $514,000 $562,000
============== ==============
Basic earnings per share of common stock $0.26 $0.28
============== ==============
Diluted earnings per share of common
stock $0.25 $0.28
============== ==============
Basic weighted average outstanding shares 2,012,000 1,982,000
Diluted weighted average outstanding
shares 2,035,000 2,018,000
The Oilgear Company
Consolidated Condensed Balance Sheet
(Unaudited)
March 31, December 31,
2006 2005
-------------- --------------
ASSETS
Current Assets
Cash and cash equivalents $5,371,000 $4,370,000
Accounts receivable 19,450,000 18,849,000
Inventories 25,316,000 25,365,000
Other current assets 4,429,000 3,785,000
-------------- --------------
Total current assets $54,566,000 $52,369,000
-------------- --------------
Net property plant and equipment 15,540,000 15,881,000
Other assets 2,801,000 2,893,000
-------------- --------------
$72,907,000 $71,143,000
============== ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Current debt $17,256,000 $16,612,000
Accounts payable 9,033,000 9,215,000
Other current liabilities 10,561,000 9,820,000
-------------- --------------
Total current liabilities $36,850,000 $35,647,000
-------------- --------------
Long-term debt 7,428,000 7,724,000
Unfunded employee benefit costs 18,796,000 18,764,000
Other non-current liabilities 864,000 650,000
-------------- --------------
Total liabilities $63,938,000 $62,985,000
-------------- --------------
Minority interest in consolidated
subsidiary 1,109,000 1,091,000
Shareholders' equity 7,860,000 7,067,000
-------------- --------------
$72,907,000 $71,143,000
============== ==============
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