Oilgear (NASDAQ:OLGR)
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From Jun 2019 to Jun 2024
The Oilgear Company (NASDAQ:OLGR) today reported record
sales and earnings for the second quarter ended June 30, 2006. The
record earnings were buoyed by the gain on the previously announced
sale of the company's property in Leeds, England.
Net sales were a record $28,338,000 for the second quarter of
2006, an 11.1% increase from sales of $25,497,000 for the same period
in 2005. Net earnings were $5,803,000 or $2.84 per diluted share for
the second quarter of 2006, compared to net earnings of $664,000 or
$0.33 per diluted share for the comparable prior period. During the
quarter, the company completed the sale of its Leeds, UK, facility,
relocated its operations and made the strategic decision to
discontinue certain product lines previously manufactured in Leeds
that will be replaced with more efficient products produced at other
facilities. The combined impact of these events and decisions, net of
all taxes and costs, was approximately $5.1 million or $2.49 per
diluted share, comprised of: net gain on sale $7.2 million, expenses
related to the move $1.0 million, an inventory impairment charge of
approximately $0.8 million for the discontinued products, and taxes of
$0.3 million. A significant portion of the proceeds, $5.8 million, was
used to pay down debt.
For the first half of 2006, net sales were a record $53,411,000, a
3.7% increase from sales of $51,523,000 for the first half of 2005.
Net earnings were $6,317,000 or $3.10 per diluted
share for the first six months of 2006 including the gain on the
sale of the Leeds property, compared to net earnings of $1,225,000 or
$0.61 per diluted share for the same period in the prior year.
Orders increased 3.0% to a record $27.5 million in the second
quarter of 2006 and 10.8% to a record $62.6 million for the first
half, compared to the same periods in 2005. The backlog increased 34%
from the beginning of 2006 to $36.1 million at June 30, 2006. For the
first six months, domestic and European segment orders were up 11.7%
and 19.9% respectively, when compared to the first half of last year.
The international segment was down 8.2% when compared to a very strong
first half in 2005.
"Business conditions in the fluid power industry remain strong and
our orders in July continued to surpass the prior year," said David A.
Zuege, president and chief executive officer. "The rate of growth in
orders in our industry, however, has slowed from the very rapid pace
of the past 12 months."
"The successful completion of the Leeds relocation is a major
achievement for Oilgear. Not only has it significantly reduced our
debt and increased our book value, but the relocation, combined with
the capital expenditures and the streamlining of the product
portfolio, will also improve our operational efficiency and allow us
to better serve our European customer base. The team in Leeds did an
excellent job in executing this important project," 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 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 Six Months Ended
June 30, June 30,
2006 2005 2006 2005
------------ ------------ ------------ ------------
Net sales $28,338,000 $25,497,000 $53,411,000 $51,523,000
Cost of sales 21,897,000 18,484,000 40,118,000 37,579,000
------------ ------------ ------------ ------------
Gross profit 6,441,000 7,013,000 13,293,000 13,944,000
Selling, general
and
administrative
expenses 5,772,000 5,530,000 11,367,000 11,209,000
Expenses related
to Leeds, UK move 979,000 - 979,000 -
Gain on sale of
Leeds, UK
facility 7,216,000 - 7,216,000 -
------------ ------------ ------------ ------------
Operating
income $6,906,000 $1,483,000 $8,163,000 $2,735,000
------------ ------------ ------------ ------------
Interest expense 631,000 603,000 1,266,000 1,213,000
Other non-
operating income
(loss), net (5,000) 66,000 75,000 132,000
------------ ------------ ------------ ------------
Earnings before
income taxes 6,270,000 946,000 6,972,000 1,654,000
Income tax expense 454,000 214,000 619,000 343,000
------------ ------------ ------------ ------------
Net earnings
before minority
interest 5,816,000 732,000 6,353,000 1,311,000
Minority interest 13,000 68,000 36,000 86,000
------------ ------------ ------------ ------------
Net earnings $5,803,000 $664,000 $6,317,000 $1,225,000
============ ============ ============ ============
Basic earnings per
share of common
stock $2.88 $0.33 $3.14 $0.62
============ ============ ============ ============
Diluted earnings
per share of
common stock $2.84 $0.33 $3.10 $0.61
============ ============ ============ ============
Basic weighted
average
outstanding
shares 2,016,000 1,992,000 2,014,000 1,987,000
Diluted weighted
average
outstanding
shares 2,041,000 2,022,000 2,038,000 2,018,000
The Oilgear Company
Consolidated Condensed Balance Sheet
(Unaudited)
June 30, 2006 December 31, 2005
----------------- -----------------
ASSETS
Current Assets
Cash and cash equivalents $5,832,000 $4,370,000
Accounts receivable 17,556,000 18,849,000
Inventories 24,302,000 25,365,000
Other current assets 6,432,000 3,785,000
----------------- -----------------
Total current assets $54,122,000 $52,369,000
----------------- -----------------
Net property plant and equipment 16,365,000 15,881,000
Other assets 2,735,000 2,893,000
----------------- -----------------
$73,222,000 $71,143,000
================= =================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Current debt $10,578,000 $16,612,000
Accounts payable 10,356,000 9,215,000
Other current liabilities 10,296,000 9,820,000
----------------- -----------------
Total current
liabilities $31,230,000 $35,647,000
----------------- -----------------
Long-term debt 7,133,000 7,724,000
Unfunded employee benefit costs 18,950,000 18,764,000
Other non-current liabilities 843,000 850,000
----------------- -----------------
Total liabilities $58,156,000 $62,985,000
----------------- -----------------
Minority interest in consolidated
subsidiary 1,122,000 1,091,000
Shareholders' equity 13,944,000 7,067,000
----------------- -----------------
$73,222,000 $71,143,000
================= =================
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