Sauer-Danfoss Inc.
Sauer-Danfoss Inc. english
Sauer-Danfoss increases sales and earnings for the fifth consecutive quarter
Corporate-news announcement sent by DGAP.
The sender is solely responsible for the contents of this announcement.
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Sauer-Danfoss increases sales and earnings for the fifth consecutive quarter:
Success despite weak markets
Chicago/Neumünster, July 31, 2003. In the second quarter 2003 Sauer-Danfoss
Inc., listed on the SDAX and NYSE, generated net sales of $308.5 million. This
represents an increase of 17 percent compared to the same period last year
($264.1 million). Excluding sales from acquisitions completed in 2003 and the
impact of currency translation rate changes, sales increased by 4 percent over
the prior year period. Net Income of the specialist for mobile hydraulic and
electronic systems and components was $11.3 million, or $0.24 per share for the
second quarter 2003, an increase of 20 percent compared to second quarter 2002
($9.4 million, or $0.20 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 relocation
of production from a North American facility into an existing Eastern European
plant. On a comparable basis the earnings improvement amounted to $0.05 per
share (25 percent).
All operating segments contributed to the sales increase year over year.
Excluding sales from acquisitions and the impact of currency, Propel sales
increased 6 percent, followed by Controls with a 4 percent increase, and Work
Function with a 3 percent increase over the same quarter in 2002. It was the
fifth consecutive quarter in which Sauer-Danfoss reported year-over-year
increase in sales and earnings. David Anderson, President and Chief Executive
Officer commented: “We were able to achieve a comparable increase in sales of 4
percent compared to an estimated drop of 3 to 5 percent in the markets we
serve”. Despite plant restructuring costs in the second quarter 2003 Sauer-
Danfoss was also able to report an increase in earnings. The plant closing in
North America and relocation of its operations reflects the continued progress
in reducing fixed costs and streamlining operations.
Orders received during the second quarter 2003 were $296.1 million, up 15
percent from the same period last year. Excluding acquisitions and currency
translation rate changes, orders were up 2 percent. Total backlog at the end of
the second quarter 2003 was $360.9 million, up 7 percent from the second quarter
of 2002. Excluding acquisitions and currency impact, backlog was unchanged from
the second quarter 2002. The level of orders and backlog continues to reflect
the uncertain outlook of the markets and do not give any indication of a
recovery. “However, as our results over the last year have demonstrated, we are
not waiting for our markets to allow us improved performance”, Anderson stated.
“While historically the second half of the year is seasonally weaker than the
first half, we remain confident in meeting the expectations we set for the
year.” The debt to total capital ratio, or leverage ratio, improved to 42
percent at the end of the second quarter (first quarter 2003: 44 percent).
Sauer-Danfoss expects to see further improvement in the leverage ratio as the
company continues its focus on reduction in working capital and improved cash
flow.
Six months review:
Net sales were $608.9 million, an increase of 20 percent over sales of $507.2
million for the first six months of 2002. On a comparable basis, excluding
companies acquired in 2003 and the impact of currency fluctuations, net sales
were up 6 percent over last year. Net income for the first two quarters of 2003
was $21.4 million, or $0.45 per share (same period last year: $16.1 million, or
$0.34 per share). The operating cash flow was again excellent in the first six
months 2003: Cash flow from operations was $60.3 million, an increase of $7.2
million over the same period last year ($53.0 million). Sauer-Danfoss invested
$25.2 million for the six-months period (comparable period 2002: $14.1 million).
In particular this anticipated increase in capital expenditures over last year
is due to the initial phase of standardizing business processes and systems
throughout the operations. This long-term investment will allow Sauer-Danfoss to
continue to reduce working capital and improve service to customers.
A conference call on the second quarter 2003 results will be held in English on
July 31, 2003 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 31.07.2003
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WKN: 880208; ISIN: US8041371076; Index: SDAX
Listed: Amtlicher Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin-
Bremen, München und Stuttgart
310741 Jul 03
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