CITATION CORPORATION
2 Office Park Circle, Suite 204
Birmingham, AL 35223
Contact: Stanley B. Atkins
205-871-5731
Fax: 205-871-5772
January 20, 1997
BIRMINGHAM, Alabama - Citation Corporation (Nasdaq: CAST) announced today that its fiscal 1997 first quarter sales increased 53 per cent to $140.5 million from $91.8 million in its fiscal 1996 first quarter. Net income for the quarter was $3.5 million versus $3.1 million in the 1996 first quarter, an increase of 11 per cent. Earnings per share (EPS) for the fiscal 1997 first quarter were $0.20, an 11 per cent increase over the $0.18 for the first quarter of fiscal 1996.
The increase in sales is attributed to four acquisitions which Citation made in the second and third quarters of fiscal 1996 and one in the first quarter of fiscal 1997. Excluding the sales of those acquired divisions and two divisions, one of which was sold and one of which was idled, sales for the same store units for the comparable quarters were flat.
Tonnage shipped increased 25 per cent to approximately 61,000 tons in the first quarter of fiscal 1997 from 48,600 tons in the comparable quarter of fiscal 1996. On a same store basis, tonnage was up about seven per cent in fiscal 1997 from the comparable quarter. In October 1996, Citation Corporation completed the acquisition of Interstate Forging Industries, Inc. of Milwaukee, Wisconsin and Navasota, Texas. Interstate produces steel forgings from 50 to 2,500 lbs. for the construction equipment, aircraft, off-road equipment, material handling, outboard motors, and truck and trailer industries. The acquisition is the largest ever for Citation. The purchase price was approximately $47 million plus the assumption by Citation of approximately $23 million of Interstate Forgings debt. Interstate Forging had annual net sales of $83.4 million for calendar year 1995 and approximately $94 million for calendar year 1996. The company has about 500 employees at its two locations.
T. Morris Hackney, Chairman and CEO, said, We are pleased by the earnings improvement in what is normally for us, and was this time, a slow quarter. It was most gratifying for us to begin to see some strengthening of our Texas Foundries operations in Lufkin, Texas, which is still undergoing ramp up of its expansion. While much more improvement is needed and expected, this is a good start for the employees at that location. We also saw improvement at our Mansfield Foundry operation in Mansfield, Ohio.
Although it is normal for volumes to be somewhat soft in our fiscal first quarter due to holidays and customer shutdowns, we did see some weakness in automotive markets, partially due to the General Motors strikes, and in heavy truck markets. On the other hand, construction equipment markets continue to be strong.
Currently, our outlook for the remainder of the year is a continuation of the slow growth economy. The build rates announced for passenger cars and light trucks in the first quarter look good, although we do not expect heavy truck markets to improve much in the near term. Ordering for parts which go in heavy capital goods and other durable goods markets appear to be reasonably good.
In addition, we are most pleased to have completed the Interstate Forging acquisition. Not only is Interstate a strong company which should contribute to our earnings this year, but this acquisition makes us, as far as I am aware, the only independent supplier which combines foundries, forge shops and machining under one roof. We believe this is an advantage for Citation and our customers.
Citation Corporation is a metal components producer for capital goods and durable goods industries with 16 manufacturing divisions located in eight states. Fiscal 1996 sales were $487.8 million and Citation has approximately 5,600 employees.