Sauer-Danfoss Inc.
Sauer-Danfoss continues its record performance into the third quarter
Corporate-news announcement sent by DGAP.
The sender is solely responsible for the contents of this announcement.
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Sauer-Danfoss continues its record performance into the third quarter
– Record sales and cash flow
– Strong sales growth and performance improvements continuing
Chicago/Neumünster, November 4, 2004 – In the third quarter 2004 Sauer-Danfoss
Inc., listed on the NYSE and Frankfurt’s prime standard (NYSE: SHS; FSE: SAR) ,
generated net sales of $324.7 million, up 27 percent from the third quarter
2003 ($255.4 million). Excluding the impact of currency translation rate
changes, sales increased by 21 percent. The specialist for mobile hydraulic and
electronic systems as well as components reported a net income of $7.7 million
for the third quarter 2004, or $0.16 per share, compared to a third quarter 2003
net loss of $2.2 million, or $0.05 per share. Third quarter 2003 results were
impacted by pre-tax charges of $2.5 million, or $0.03 per share, related to
restructuring costs.
“We continued our record performance, again led by the strong U.S. market”,
David Anderson, President and Chief Executive Officer of Sauer-Danfoss Inc.,
stated. “Europe also continued to strengthen, with sales increasing 13 percent
in the quarter, compared to the year over year increase of 9 percent we reported
last quarter.” In contrast, sales were basically level in the Asia-Pacific
region, after year over year increases of 39 percent and 12 percent for the
first and second quarters of 2004, respectively. This slowing in the Asia-
Pacific sales growth is resulting from the Chinese government restricting
economic growth.
All operating segments contributed to the sales increase in the third quarter
2004. Excluding the impact from currency, Propel sales increased 29 percent,
followed by Controls with a 19 percent increase, and Work Function with a 12
percent improvement over the same quarter in 2003.
Orders received for the third quarter 2004 were $322.5 million, up 31 percent
from the same period last year. Excluding currency rate changes, orders
increased 25 percent. Total backlog at the end of the third quarter 2004
amounted to $414.1 million, up 17 percent from the third quarter of 2003 or 13
percent excluding currency impact.
Nine Month Review:
Net sales for the nine months 2004 were $1.1 billion, an increase of 23 percent
over sales of $864.3 million for the first nine months of 2003. On a comparable
basis, excluding the impact of currency fluctuations, net sales were up 16
percent. Sauer-Danfoss was able to more than double the net income for the first
nine months over prior year: Net income was $40.4 million, or $0.85 per share,
an increase of 110 percent compared to net income for the same period last year
of $19.2 million, or $0.40 per share.
Cash flow from operations for the first nine months of 2004 was a record $115.3
million, an increase of 41 percent compared with $82.0 million generated in the
same period last year. Capital expenditures for the nine-month period were $46.9
million (comparable period in 2003: $36.0 million), which included $9.5 million
invested in building the Company’s new business system platform. The Company’s
debt to total capital ratio, or leverage ratio, dropped to 39 percent at the end
of the third quarter 2004, an improvement from 41 percent at the end of the
second quarter 2004.
The restructuring of the European sales and distribution organization will be
concluded in the fourth quarter. There will also be heavy emphasis on ensuring
Sarbanes-Oxley compliance. Excluding the costs related to these special
activities, the fourth quarter operating results are expected to be at break-
even. This is a considerable improvement in fourth quarter results compared with
the past three years. Sauer-Danfoss expects earnings for the full year in the
range of $0.75 and $0.80 per share, which puts them at the upper end of the
previously stated expectation of $0.70 and $0.80 per share.
A conference call on the third quarter results 2004 will be held in English on
November 4, 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 04.11.2004
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WKN: 880208; ISIN: US8041371076; Index:
Listed: Amtlicher Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin-
Bremen, München und Stuttgart
040723 Nov 04
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