Sauer-Danfoss Inc.
Sauer-Danfoss reports its best performance since the company went public
Corporate-news announcement sent by DGAP.
The sender is solely responsible for the contents of this announcement.
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Sauer-Danfoss reports its best performance since the company went public:
Increased earnings expectation for 2004
– Record sales, earnings and cash flow
– Orders received and backlog levels reflect market strength
– Increased sales into all major geographic regions and end-user markets
– Increased earnings expectation for the full year to $0.70 to $0.80 per share
Chicago/Neumünster, August 5, 2004 – In the second quarter 2004 Sauer-Danfoss
Inc., listed on the NYSE and Frankfurt’s prime standard, generated record sales,
earnings and cash flow. Net sales of the specialist for mobile hydraulic and
electronic systems and components for the second quarter increased 23 percent to
$379.1 million, compared to sales of $308.5 million for the same period last
year. Excluding the impact of currency translation rate changes, sales increased
by 18 percent over the prior year period. Comparison to prior year’s quarter
was not impacted by acquisitions. Net income for the second quarter of 2004 was
$21.6 million, or $0.46 per share, compared to second quarter 2003 net income of
$11.3 million, or $0.24 per share. Second quarter 2003 results were impacted by
a pre-tax charge of $0.7 million, or $0.01 per share, related to the relocating
of production from a North American facility into an existing Eastern European
plant. On a comparable basis, the earnings improvement amounted to $0.21 per
share, or 84 percent.
All operating segments contributed to the sales increase year over year.
Excluding the impact of currency, Propel sales increased 25 percent, followed by
Work Function with a 14 percent increase, and Controls with a 12 percent
improvement over the same quarter in 2003. David Anderson, President and Chief
Executive Officer, commented, “We are very pleased to report record sales,
earnings, and cash flow results for the quarter, all of which reflect our best
performance since the Company went public in 1998.” These record results were
driven principally by the strong markets Sauer-Danfoss serves together with
reduced costs resulting from restructuring activities over the past year.
Orders received for the second quarter of 2004 were $381.3 million, up 29
percent from the same period last year. Excluding currency translation rate
changes, orders were up 25 percent. Total backlog at the end of the second
quarter of 2004 was $415.4 million, up 15 percent from the second quarter of
2003. Excluding currency impact, backlog was up 11 percent compared with the
second quarter of 2003. Both the orders and backlog levels reflect the continued
strength Sauer-Danfoss is seeing in the markets. Sales into all major
geographic regions and end-user markets were up over last year.
Six-Month-Review:
Net sales for the six months ended June 30, 2004, were $740.2 million, an
increase of 22 percent over sales of $608.9 million for the first six months of
2003. On a comparable basis, excluding acquisitions and the impact of currency
fluctuations, net sales were up 14 percent over last year.
Net income for the first six months of 2004 was up 52 percent to $32.6 million,
or $0.69 per share, compared to net income for the same period last year of
$21.4 million, or $0.45 per share.
Cash flow from operations for the first six months of 2004 was a record $69.7
million, an increase of 16 percent over the same period last year ($60.3
million). Capital expenditures for the six-month period were $29.5 million, up
from $25.2 million for the comparable period in 2003. As anticipated, capital
expenditures increased slightly over last year, with the expenditures directed
toward new processes and additional capacity for select products in response to
the strong U.S. market. At the same time Sauer-Danfoss is continuing the
emphasis on reducing its asset base and improving asset management. The strong
cash flow has allowed Sauer-Danfoss to reduce its debt levels. The debt to total
capital ratio, or leverage ratio, improved to 41 percent at the end of the
second quarter from 46 percent at the end of the first quarter 2004.
Traditionally, the second half of the year is very challenging, since the
markets Sauer-Danfoss serves are seasonal. But the strong backlog position,
coupled with the benefits of restructuring and operational improvements, gives
Sauer-Danfoss confidence that it will be profitable in the second half.
Therefore Sauer-Danfoss is increasing its earnings expectation for the full year
to $0.70 to $0.80 per share. The most recent earnings expectation, from May
3rd, 2004, was $0.60 to $0.75 per share.
A conference call on the second quarter results 2004 will be held in English on
August 5, 2004 at 4:00 PM Frankfurt time. Please find further information on the
quarter results at http://www.sauer-danfoss-ir.com.
All statements regarding future performance, growth, sales and earnings
projections, conditions or developments are forward-looking statements. These
statements are based on current financial and economic conditions and rely
heavily on the Company’s interpretations of what it considers key economic
assumptions.
Further Information: Sauer-Danfoss Inc. – Investor Relations
John N. Langrick, Director of Finance Europe, Sauer-Danfoss Inc.,
Tel.: +49 4321-871-190, Fax: +49 4321-871-121, Krokamp 35, D-24539 Neumünster,
jlangrick@sauer-danfoss.com
Linda Völpel, Investor Relations Specialist, Sauer-Danfoss Inc.,
Tel.: +49 4321-871-560, Fax: +49 4321-990-581, Krokamp 35, D-24539 Neumünster,
lvoelpel@sauer-danfoss.com
Grit Muschelknautz, Public Relations, HOSCHKE & CONSORTEN,
Tel.: +49 40-369050-41, Fax: +49 40-369050-10, Deichstr. 29, D-20459 Hamburg,
g.muschelknautz@hoschke.de
end of message, (c)DGAP 05.08.2004
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WKN: 880208; ISIN: US8041371076; Index:
Listed: Amtlicher Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin-
Bremen, München und Stuttgart
050731 Aug 04
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