FMC Technologies Reports 20 Percent Increase in Third Quarter 2003 Earnings To $0.30 Per Share
October 27 2003 - 7:10PM
PR Newswire (US)
FMC Technologies Reports 20 Percent Increase in Third Quarter 2003
Earnings To $0.30 Per Share Highlights: - Earnings per diluted
share of $0.30, up 20 percent from third quarter 2002 results -
Energy Systems' sales and operating earnings up 11 percent and 24
percent, respectively - Strong cash flow from operations partially
offset the increase in net debt arising from the acquisition of CDS
Engineering - Earnings guidance maintained for full-year 2003 at
the upper end of the range of $1.05 - $1.15 HOUSTON and CHICAGO,
Oct. 27 /PRNewswire-FirstCall/ -- FMC Technologies, Inc. today
reported third quarter 2003 sales of $560.1 million and earnings
per diluted share of $0.30. Third quarter 2003 earnings per diluted
share are up 20 percent from $0.25 in the third quarter of 2002.
"We had a strong third quarter, reflecting the continuing strength
of our Energy Systems businesses," said Joseph H. Netherland,
Chairman, President and Chief Executive Officer. "Our third quarter
results were driven by our subsea systems business as well as our
surface and fluid control businesses, which benefited from
increased drilling activity. Earnings from our Energy Systems
businesses in the third quarter improved 24 percent over the prior
year. We remain on target to achieve our full-year 2003 earnings
forecast at the upper end of the range of $1.05 to $1.15 per
diluted share." Review of Operations - Third Quarter 2003 Sales for
Energy Systems, comprising Energy Production Systems and Energy
Processing Systems were $375.6 million in the third quarter of
2003, up 11 percent from $339.9 million in the third quarter of
2002. Earnings for the third quarter were $22.1 million, up from
$17.8 million in the same period last year. Energy Production
Systems' third quarter sales and profits increased 12 percent and
11 percent, respectively, over last year. Energy Production
Systems' sales increased due to higher sales in the subsea and
surface systems businesses. Segment operating profit improvements
were driven by the surface and subsea businesses where gains were
more than sufficient to offset lower margins from the floating
production systems business due in part to the Sonatrach contract.
Energy Processing Systems' third quarter sales and profits
increased 8 percent and 56 percent, respectively, over the
prior-year third quarter. The sales improvement was the result of
strength in the fluid control and measurement businesses.
Improvements in both the fluid control and loading systems
businesses contributed positively to the quarter's profits.
Strength in U.S. land drilling activity positively affected sales
and profits of WECO(R)/Chiksan(R) equipment. Energy Systems'
inbound orders were $316.4 million for the third quarter, down 2
percent from $321.7 million in the third quarter of 2002.
Sequentially, inbound orders were up 7 percent from $296.9 million
in the second quarter of 2003. Energy Systems' total backlog at the
end of the third quarter was $788.0 million, up 3 percent from
$762.9 million at the end of the third quarter of 2002, but down 7
percent from $847.2 million at the end of the second quarter of
2003. Energy Production Systems' inbound orders for the quarter
were down 4 percent from the year-ago period due primarily to
delays in subsea project award decisions partially offset by
increases in floating production systems. Inbound orders were up 13
percent sequentially as higher floating production systems orders
more than offset the effect of subsea project award delays. Energy
Processing Systems' inbound orders for the quarter increased 4
percent over the prior year on strong fluid control and loading
systems orders, but decreased 4 percent sequentially, due primarily
to large inbound orders in the second quarter for fluid control
equipment. FoodTech's third quarter sales of $127.2 million were up
6 percent from $120.4 million in the third quarter of 2002, and
earnings of $9.9 million increased 29 percent compared to $7.7
million in the year-ago period. Segment operating profit benefited
from higher sales volumes and lower costs including an adjustment
made for a foreign sales tax. Airport Systems' third quarter sales
of $58.7 million were down 11 percent from $66.3 million in the
third quarter of 2002, while earnings of $5.3 million were down 10
percent from $5.9 million in the prior-year period. The earnings
decline is the result of lower sales of Halvorsen loaders partially
offset by improvements in sales of ground support equipment outside
of the United States and, to a lesser extent, improvements in the
Jetway(R) passenger boarding bridge business. Corporate expense in
the third quarter of 2003 of $5.9 million compared with the
prior-year period expense of $5.6 million. Other expense, net, of
$0.6 million in the third quarter of 2003 compared with other
income, net, of $0.9 million in the prior-year period, which
included a gain on sale of a corporate aircraft. Net interest
expense in the third quarter of 2003 was $2.2 million, down from
$3.1 million in the third quarter of 2002. During the quarter the
company invested $50 million to acquire a controlling interest in
CDS Engineering and made a $15 million contribution to its pension
fund. However, net debt increased only $26 million to $218 million
from $192 million at the end of the second quarter. Depreciation
and amortization for the third quarter of 2003 was $14.5 million.
Capital expenditures during the third quarter of 2003 totaled $15.2
million. Summary and Outlook FMC Technologies reported strong third
quarter results, primarily due to the strength of its Energy
Systems businesses. Subsea systems sales and profits were strong
while increased drilling activity positively affected the Company's
surface completion and WECO(R)/Chiksan(R) businesses. FoodTech
sales and earnings improved on higher food processing and citrus
volumes. Airport Systems showed some profit improvement in the
ground support equipment and Jetway(R) businesses; however, overall
profit declined due to lower volumes of Halvorsen loaders.
Management maintains full-year 2003 earnings guidance at the upper
end of the range of its $1.05 to $1.15 per diluted share estimate.
After two years of rapid subsea growth, the Company expects to see
subsea revenues decline in 2004. This, combined with uncertainty
over the profitability of the Sonatrach contract, will slow the
growth of the Energy Production Systems business in 2004. Energy
Processing Systems is expected to benefit from higher levels of
oilfield activity while FoodTech and Airport Systems are expected
to benefit from improved general economic conditions. Overall, the
Company expects full-year 2004 earnings per share to increase in
the vicinity of 10 percent over 2003. FMC Technologies, Inc.
(http://www.fmctechnologies.com/ ) is a global leader providing
mission-critical technology solutions for the energy, food
processing and air transportation industries. The Company designs,
manufactures and services technologically sophisticated systems and
products for its customers through its Energy Systems (comprising
Energy Production and Energy Processing), FoodTech and Airport
Systems businesses. FMC Technologies employs approximately 8,500
people and operates 32 manufacturing facilities in 15 countries.
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995: Statements in this news release that are
forward-looking statements are subject to various risks and
uncertainties concerning specific factors described in FMC
Technologies' 2002 Form 10-K and other filings with the U.S.
Securities and Exchange Commission. Such information contained
herein represents management's best judgment as of the date hereof
based on information currently available. FMC Technologies does not
intend to update this information and disclaims any legal
obligation to the contrary. Historical information is not
necessarily indicative of future performance. FMC Technologies,
Inc. will conduct its third quarter 2003 conference call at 10:00
a.m. (Eastern Standard Time) on Tuesday, October 28, 2003. The
event will be available at http://www.fmctechnologies.com/ . It
also will be available for replay after the event at the same
website address. FMC TECHNOLOGIES, INC. AND CONSOLIDATED
SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited
and in millions, except per share amounts) Three Months Ended Nine
Months Ended September 30 September 30 2003 2002 2003 2002 Revenue
$560.1 $525.4 $1,669.7 $1,491.3 Costs and expenses 529.2 498.0
1,588.4 1,424.1 30.9 27.4 81.3 67.2 Minority interests 0.1 0.7 0.5
1.7 Net interest expense 2.2 3.1 6.9 9.8 Income before income taxes
28.6 23.6 73.9 55.7 Provision for income taxes 8.3 6.8 21.5 16.1
Income before the cumulative effect of a change in accounting
principle 20.3 16.8 52.4 39.6 Cumulative effect of a change in
accounting principle, net of income taxes (A) --- --- --- (193.8)
Net income (loss) $20.3 $16.8 $52.4 $(154.2) Basic earnings (loss)
per share: (B) Income before the cumulative effect of a change in
accounting principle $0.31 $0.26 $0.79 $0.61 Cumulative effect of a
change in accounting principle (A) --- --- --- (2.97) Basic
earnings (loss) per share $0.31 $0.26 $0.79 $(2.36) Basic weighted
average shares outstanding 66.2 65.4 66.0 65.3 Diluted earnings
(loss) per share: (B) Income before the cumulative effect of a
change in accounting principle $0.30 $0.25 $0.79 $0.59 Cumulative
effect of a change in accounting principle (A) --- --- --- (2.91)
Diluted earnings (loss) per share $0.30 $0.25 $0.79 $(2.32) Diluted
weighted average shares outstanding 67.1 66.8 66.8 66.8 (A) The
cumulative effect of a change in accounting principle, net of
income taxes, resulted from the adoption of Statement of Financial
Accounting Standards No. 142 in 2002. (B) In certain instances,
earnings per share do not recalculate using the data presented due
to rounding. FMC TECHNOLOGIES, INC. AND CONSOLIDATED SUBSIDIARIES
BUSINESS SEGMENT DATA (Unaudited and in millions) Three Months
Ended Nine Months Ended September 30 September 30 2003 2002 2003
2002 Revenue Energy Production Systems $271.2 $241.4 $826.8 $666.8
Energy Processing Systems 106.1 98.6 304.1 285.9 Intercompany
eliminations (1.7) (0.1) (2.0) (1.4) Subtotal Energy Systems 375.6
339.9 1,128.9 951.3 FoodTech 127.2 120.4 387.8 364.7 Airport
Systems 58.7 66.3 158.1 179.4 Intercompany eliminations (1.4) (1.2)
(5.1) (4.1) $560.1 $525.4 $1,669.7 $1,491.3 Income before income
taxes Energy Production Systems $14.0 $12.6 $50.1 $34.2 Energy
Processing Systems 8.1 5.2 17.6 15.7 Subtotal Energy Systems 22.1
17.8 67.7 49.9 FoodTech 9.9 7.7 31.4 28.9 Airport Systems 5.3 5.9
8.0 10.2 Segment operating profit 37.3 31.4 107.1 89.0 Corporate
expense (5.9) (5.6) (18.3) (17.6) Other income (expense), net (A)
(0.6) 0.9 (8.0) (5.9) Income before net interest expense and income
taxes 30.8 26.7 80.8 65.5 Net interest expense (2.2) (3.1) (6.9)
(9.8) Income before income taxes and the cumulative effect of a
change in accounting principle $28.6 $23.6 $73.9 $55.7 (A) Other
income (expense), net, is primarily comprised of LIFO inventory
adjustments, expenses related to employee pension and other
postretirement employee benefits, expenses related to the
transition to a new payroll and benefit administration service
center, foreign currency-related gains and losses and amortization
expense for restricted stock. FMC TECHNOLOGIES, INC. AND
CONSOLIDATED SUBSIDIARIES BUSINESS SEGMENT DATA (Unaudited and in
millions) Three Months Ended Nine Months Ended September 30
September 30 2003 2002 2003 2002 Inbound orders Energy Production
Systems $206.8 $216.3 $667.8 $747.1 Energy Processing Systems 109.6
105.4 316.7 291.3 Subtotal Energy Systems 316.4 321.7 984.5 1,038.4
FoodTech 126.9 92.2 401.2 349.5 Airport Systems 46.7 47.8 158.9
122.3 Total inbound orders $490.0 $461.7 $1,544.6 $1,510.2
September 30 2003 2002 Order backlog Energy Production Systems
$663.8 $651.6 Energy Processing Systems 124.2 111.3 Subtotal Energy
Systems 788.0 762.9 FoodTech 120.6 106.2 Airport Systems 112.7
106.3 Total order backlog $1,021.3 $975.4 FMC TECHNOLOGIES, INC.
AND CONSOLIDATED SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions) September 30, 2003 December 31, (Unaudited) 2002 Cash
and cash equivalents $50.4 $32.4 Trade receivables, net 466.8 419.2
Inventories 294.2 273.1 Other current assets 74.8 87.9 Total
current assets 886.2 812.6 Property, plant and equipment, net 317.7
306.1 Goodwill 111.9 83.6 Intangible assets, net 69.8 36.3 Other
assets 112.3 124.1 Total assets $1,497.9 $1,362.7 Short-term debt
and current portion of long-term debt $33.2 $59.5 Accounts payable,
trade and other 468.1 421.2 Other current liabilities 269.3 247.5
Total current liabilities 770.6 728.2 Long-term debt, less current
portion 235.1 175.4 Other liabilities 129.0 155.3 Common stock 0.7
0.7 Other stockholders' equity 362.5 303.1 Total liabilities and
stockholders' equity $1,497.9 $1,362.7 FMC TECHNOLOGIES, INC. AND
CONSOLIDATED SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOW (Unaudited and in millions) Nine Months Ended September 30
2003 2002 Cash provided (required) by operating activities of
continuing operations: Income before the cumulative effect of a
change in accounting principle $52.4 $39.6 Depreciation and
amortization 41.2 35.5 Other 12.0 (7.3) Net cash provided by
operating activities of continuing operations 105.6 67.8 Net cash
required by discontinued operations (4.9) (4.4) Cash provided
(required) by investing activities: Retirement of sale leaseback
obligations (35.9) --- Capital expenditures (42.9) (48.3) Business
acquisition, net of cash acquired (A) (43.9) --- Other 4.0 3.1 Net
cash required by investing activities (118.7) (45.2) Cash provided
(required) by financing activities: Net increase (decrease) in
short-term debt (26.2) 4.6 Net increase (decrease) in long- term
debt 52.7 (8.7) Payments to FMC Corporation --- (4.4) Issuance of
capital stock, net of stock acquired for employee benefit plans 9.0
1.0 Net cash provided (required) by financing activities 35.5 (7.5)
Effect of changes in foreign exchange rates on cash and cash
equivalents 0.5 (0.1) Increase in cash and cash equivalents 18.0
10.6 Cash and cash equivalents, beginning of period 32.4 28.0 Cash
and cash equivalents, end of period $50.4 $38.6 (A) Business
acquisition, net of cash acquired, is related to the acquisition of
55% of CDS Engineering ("CDS") in the third quarter of 2003. Cash
outflow due to the acquisition is made up of $47.9 million paid to
the seller plus $0.4 million of acquisition costs, net of $4.4
million of acquired cash. The net cash outflow of $43.9 million,
plus assumed debt of $6.9 million, includes $1.1 million of CDS'
minority interest in its net debt.
http://www.newscom.com/cgi-bin/prnh/20010611/FMCLOGO
http://photoarchive.ap.org/ DATASOURCE: FMC Technologies, Inc.
CONTACT: media, Marvin Brown, +1-281-591-4212, or Bruce Bullock,
+1-281-591-4429, or investors, Maryann Seaman, +1-312-861-6414, all
of FMC Technologies, Inc. Web site: http://www.fmctechnologies.com/
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