Sauer-Danfoss Inc.
Sauer-Danfoss’ Fourth Quarter Revenues Confirm Strong Sales Growth in 2003
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Sauer-Danfoss’ Fourth Quarter Revenues Confirm Strong Sales Growth in 2003
Earnings impacted by restructuring costs
Increasing Optimism for 2004
Chicago/Neumünster, February 19, 2004. In the fiscal year 2003 Sauer-Danfoss
Inc. generated net sales of $1.13 billion, an increase of 19 percent compared
with sales for 2002 of $952,3 million. On a comparable basis, excluding
acquisitions and the impact of currency fluctuations, net sales were up 6
percent over last year. Net income for full year 2003 was $11.2 million, or
$0.24 per share (same period last year: $13.7 million, or $0.28 per share).
Excluding restructuring and field recall costs of $0.20 per share, earnings
would have come in at the previously projected earnings range of $0.40 to $0.50
per share. The operating cash flow of the mobile hydraulics manufacturer remains
strong: For 2003, the cash flow from operations was $95.6 million, down only 3
percent from last year’s record ($98.3 million). The restructuring completed in
2003 will yield annual savings of over $4 million, or $0.05 per share, in 2004.
In the fourth quarter 2004 Sauer-Danfoss generated net sales of $262.5 million.
This is an increase of 19 percent compared to the same period of 2002 ($221.2
million). Excluding acquisitions and the impact of currency fluctuations, sales
increased 7 percent over the prior year period. Excluding the impact of
acquisitions and currency fluctuations sales advanced 12 percent in the
Americas, were flat in Europe and up 23 percent in Asia-Pacific.
All operating segments contributed to the sales increase year over year.
Excluding the impact of acquisitions and currency, Propel sales increased 10
percent, followed by Work Function sales, which increased 6 percent, and sales
of Control products which increased 1 percent over the same quarter in 2002.
For the fourth quarter 2003 the company reported a net loss of $8.0 million, or
$0.17 per share (same period last year: minus $1.7 million, or minus $0.04 per
share). “As we previously announced, our fourth quarter earnings were negatively
impacted by a significant level of extraordinary costs,” said David Anderson,
President and CEO of Sauer-Danfoss. Such charges related to restructuring and
one-time write-offs from plant closures. In addition, the results were
negatively impacted by margin loss from the weaker US dollar, field recall
costs, investing in new common business systems and costs related to the
Sarbanes-Oxley Act.
Orders received ($305.5 million) for the fourth quarter 2003 were up 22 percent
from the same period last year. Total backlog ($408.6 million) at the end of the
year 2003 was up 7 percent from the end of 2002. The increase in orders over
the prior year is beginning to reflect a growing strength in the markets Sauer-
Danfoss serves.
Prior Period Adjustments:
The Company will be restating its 2000, 2001 and 2002 annual financial statement
results due to accounting errors identified during the closing of its West
Branch, Iowa operations. The errors, relating to an unreconciled account and
unrecognized depreciation associated with the purchase accounting write-up of
fixed assets, occurred in 2000 in connection with the closing of its Racine,
Wisconsin facility and relocation of its operations to the West Branch plant.
The total impact of the restatement is $1.7 million after tax, or $0.04 per
share, accumulated over the three-year period, and is not considered material to
any one year. The restatement will not have any impact on the 2003 earnings as
reported.
Outlook:
“While we expect to see only mild economic growth in Europe, we are beginning to
see real signs of strong economic growth in the Americas while growth in Asia-
Pacific remains at a high level,” said Anderson. The increasing trend in orders
and backlog supports the company’s optimism. Sauer-Danfoss will continue to grow
sales and win market share through the strategic efforts to win new
applications and increase its product content per vehicle. Anderson: “We have
the capacity and are in a good position to capitalize on the emerging upturn in
the markets we serve.”
2004 Expectations for the Full Year Are:
– Sales up 5 to 7 percent
– Earnings per share of $0.55 to $0.70
– Capital Expenditures less than 6 percent of sales
A conference call on the results will be held in English on February 19, 2003 at
4:00 PM Frankfurt time. Please find further information on the fourth 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 19.02.2004
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WKN: 880208; ISIN: US8041371076; Index:
Listed: Amtlicher Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin-
Bremen, München und Stuttgart
190740 Feb 04
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