CITATION CORPORATION
2 Office Park Circle, Suite 204
Birmingham, AL 35223
Contact: Stanley B. Atkins
205-871-5731
Fax: 205-871-5772
January 20, 1998
BIRMINGHAM, Alabama - Citation Corporation (Nasdaq: CAST) today reported that its fiscal 1998 first quarter sales, earnings and earnings per share (EPS) set records for any first quarter in the Company's history.
Sales for the first quarter of fiscal 1998 were $170.2 million, a 21 percent increase over 1997 fiscal first quarter sales of $140.5 million. Net income for the 1998 fiscal first quarter was $5.1 million, a 47 percent increase over last year's first quarter net income of $3.5 million.
The sales increase resulted largely from acquisitions including Interstate Forging Industries of Milwaukee, Wisconsin and Navasota, Texas, which was purchased in the first quarter of fiscal 1997. In addition, Bohn Aluminum, Hi-Tech Corporation and full-quarter results of Southern Aluminum Castings contributed to the sales increase. The three were acquired during the second and third quarters of fiscal 1996.
Citation recorded basic EPS for the first quarter of $0.29, a 47 per cent improvement over fiscal 1997 first quarter of $0.20.
Citation had a number of other highlights for the quarter.
Sales, excluding the impact of acquisitions, increased 12 percent in the 1998 first quarter compared to the first quarter of 1997. This was the best improvement for any quarter of the past year. All four operating groups increased sales revenues in the quarter versus the comparable quarter of last year.
GM/Delphi Chassis awarded Citation orders for nine ductile iron knuckle programs used on GM and Saturn passenger car and light truck platforms. In fiscal 1999, sales of the GM/Saturn knuckles are anticipated to be approximately $17.4 million. Production of these parts begins in the period from June through August 1998.
Three out of four Citation operating groups improved operating margins. The Interstate Forging group, acquired in October 1996, doubled its operating margin in the first quarter of fiscal 1998 as compared to the first quarter of fiscal 1997.
During the first fiscal quarter of 1998, Citation completed the purchase of the Camden Castings Center of Camden, Tennessee from LucasVarity, more than doubling Citation's annual sales to LucasVarity. The Camden Castings Center currently produces approximately $20 million of ductile iron parts for disc brakes annually.
Citation also reached agreement with LucasVarity on a long-term supply contract to produce castings and forgings used in braking systems. LucasVarity is the world's largest supplier of anti-lock braking systems.
Because of reduced long-term debt and the impact of Citation's new credit agreement reached in June 1997, interest charges declined from $3.5 million in the 1997 first quarter to $3.2 million in the 1998 first quarter. This is despite a continued high level of capital spending.
"Sales were up about across the board," said T. Morris Hackney, Citation Chairman and CEO. "Further, the bulk of our divisions performed very well in a quarter that is traditionally weaker due to holiday downtime in November and December.
"Our Medium Volume Group, which primarily serves industrial customers, increased sales revenues by 18 per cent compared to the first quarter of last year. They supply cast parts to industrial valves, light, medium and heavy trucks, diesel engines, machine tools and similar markets.
"We see a number of very positive opportunities in the marketplace both for acquisitions and joint ventures, and we are aggressively pursuing both. Our recent acquisition of Dycast, Inc. gives us a very strong management team, which will expand the growth potential in a new technology for us.
"We believe cast aluminum will see stronger than overall casting demand as Detroit continues to reduce vehicle weight to meet MPG targets and Citation will constantly look to increase our capacity in this area.
"Overall, we look for another good year. While automotive demand may be down a bit, we expect outsourcing of cast products produced by the automotive manufacturers will allow us to maintain or possibly exceed our fiscal 1997 automotive casting shipments. Most of our industrial markets such as construction equipment, farm implement, diesel engines and others are expected to continue to grow in 1998, assuming the economy stays on its current slow growth track," Mr. Hackney said.
Citation Corporation is a metal components producer for capital goods and durable goods industries with 18 divisions located in nine states. Fiscal 1997 sales were $649 million and Citation has approximately 6,200 employees.
Note: The statements in this news release that are not historical fact are forward-looking statements that involve risks and uncertainties including, but not limited to, changes in the economy, demand for durable goods, pricing by competitors, entry of new competitors, and other risks detailed in the Company's Form 10-K for the fiscal year ended September 28, 1997, and other filings with the Securities and Exchange Commission.
|
|
December 28, 1997* |
December 29, 1996* |
| Sales |
$170,223 |
$140,486 |
| Gross Profit |
26,998> |
22,126 |
|
|
| S, G & A Expenses |
15,538 |
12,805< |
| Operating income |
11,460 |
9,321 |
| Interest Expense |
3,225 |
3,517 |
| Other Income (Expense): |
157 |
(109) |
| Income before Taxes |
8,392 |
5,695 |
| Taxes |
3,273 |
2,221 |
| Net income |
$5,119 |
$3,474 |
| Earnings per Share - basic> |
$0.29 |
$0.20 |
| Weighted Avg. Number of Shares Outstanding - basic |
17,781,325 |
17,718,491 |
| Earnings per Share - diluted |
$0.28 |
$0.19 |
| Weighted Avg. Number of Shares Outstanding - diluted |
18,013,716 |
17,835,835 |