Oilgear (NASDAQ:OLGR)
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The Oilgear Company (NASDAQ:OLGR) today reported record
sales and increased earnings for the second quarter ended June 30,
2005.
For the second quarter of 2005, Oilgear reported net sales of
$25,512,000, a 9.6% increase from sales of $23,271,000 for the same
period in 2004. The company reported net earnings of $621,000 or $0.31
per diluted share for the second quarter of 2005, compared to net
earnings of $3,000 or $0.00 per share for the comparable prior period.
For the first half of 2005, net sales were a record $51,554,000, a
15.7% increase from sales of $44,563,000 for the first half of 2004.
Net earnings were $1,046,000 or $0.52 per diluted share for the first
six months of 2005, compared to net earnings of $13,000 or $0.01 per
diluted share for the same period in the prior year.
Orders increased 6.2% to a record $26.8 million in the second
quarter of 2005 and 9.9% to a record $56.5 million for the first half,
compared to the same periods in 2004. The growth in orders in the
second quarter was lead by the international segment where orders
exceeded their previous best quarter by over 20%. The backlog
increased 14% from the beginning of 2005 to $39.0 million at June 30,
2005, a record backlog for any quarter in the company's history.
"Our domestic segment was the leading contributor to our record
sales for the second quarter and first half. Shipments increased 25.4%
for the second quarter and 27.1% for the first six months of 2005 over
the same periods in 2004. The increases reflect the strong level of
shipments in the fluid power industry overall, where U.S. shipments of
hydraulic equipment for the first six months of 2005 were up 19.4%
over 2004, according to data provided by the National Fluid Power
Association," said David A. Zuege, president and chief executive
officer.
"We are especially pleased with the increase in net earnings to
$621,000 in the second quarter of 2005, from a virtual break-even in
the second quarter of last year. Gross margin was 27.6% for the second
quarter of 2005, up from 23.5% in the second quarter of 2004. A better
mix of business, coupled with the fact that all of our plants are
operating at near capacity thereby spreading operating costs over a
higher volume, were the principal reasons for the margin improvement.
While we are making good progress, margin enhancement remains our top
priority," 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 Six Months Ended
June 30, June 30,
2005 2004 2005 2004
----------- ----------- ----------- ------------
Net sales $25,512,000 $23,271,000 $51,554,000 $44,563,000
Cost of sales 18,460,000 17,795,000 37,695,000 33,896,000
----------- ----------- ----------- ------------
Gross profit $7,052,000 $5,476,000 $13,859,000 $10,667,000
Selling, general and
administrative
expenses 5,587,000 5,000,000 11,255,000 9,671,000
----------- ----------- ----------- ------------
Operating income $1,465,000 $476,000 $2,604,000 $996,000
----------- ----------- ----------- ------------
Interest expense 603,000 327,000 1,213,000 657,000
Other non-operating
income, net 41,000 37,000 83,000 (9,000)
----------- ----------- ----------- ------------
Earnings before income
taxes 903,000 186,000 1,474,000 330,000
Income tax expense 214,000 149,000 342,000 262,000
------------------------------------------------
Net earnings before
minority interest 689,000 37,000 1,132,000 68,000
Minority Interest 68,000 34,000 86,000 55,000
----------- ----------- ----------- ------------
Net earnings $621,000 $3,000 $1,046,000 $13,000
=========== =========== =========== ============
Basic earnings per
share of common stock $0.31 $0.00 0.53 $0.01
=========== =========== =========== ============
Diluted earnings per
share of common stock $0.31 $0.00 $0.52 $0.01
=========== =========== =========== ============
Basic weighted average
outstanding shares 1,992,000 1,960,000 1,987,000 1,959,000
Diluted weighted
average outstanding
shares 2,021,000 1,979,000 2,018,000 1,980,000
The Oilgear Company
Consolidated Condensed Balance Sheet
(Unaudited)
June 30, December 31,
2005 2004
----------- ------------
ASSETS
Current Assets
Cash and cash equivalents $4,862,000 $4,109,000
Accounts receivable 18,940,000 17,030,000
Inventories 25,362,000 25,529,000
Other current assets 4,909,000 5,861,000
----------- ------------
Total current assets $54,073,000 $52,529,000
----------- ------------
Net property, plant and equipment 16,640,000 18,163,000
Other assets 2,889,000 2,123,000
----------- ------------
$73,602,000 $72,815,000
=========== ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Current debt $16,571,000 $21,334,000
Accounts payable 9,390,000 10,830,000
Other current liabilities 8,719,000 8,508,000
----------- ------------
Total current liabilities $34,680,000 $40,672,000
----------- ------------
Long-term debt 8,364,000 1,302,000
Unfunded employee benefit costs 22,614,000 23,024,000
Other non-current liabilities 716,000 694,000
----------- ------------
Total liabilities $66,374,000 $65,692,000
----------- ------------
Minority interest in consolidated subsidiary 1,035,000 1,037,000
Shareholders' equity 6,193,000 6,086,000
----------- ------------
$73,602,000 $72,815,000
=========== ============
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