Oilgear Announces Record Sales and Improved Earnings for 2005; Files Restated 10-K for 2004
March 31 2006 - 5:38PM
Business Wire
The Oilgear Company (Nasdaq:OLGR) today announced anticipated
results for the fourth quarter and year ended December 31, 2005.
Sales for 2005 are expected to set a new record, exceeding $100
million for the first time. Net earnings are expected to reach the
highest level since 1997. The company also announced that it filed
today a Form 10-K/A to amend its annual report for 2004 and that
Form 10-Q/A reports amending the first three quarters of 2005 are
in the final review process and are expected to be filed next week.
Due to the time spent on the restatement process, the company's
year-end review process has not been completed and the company has
filed a Form 12b-25 extending the due date for its 2005 Form 10-K
filing until April 17, 2006. Oilgear expects to report record net
sales of $103.3 million for 2005, up 9.4% from sales of $94.4
million in 2004. The growth in sales was led by the domestic
segment, where sales grew 19%, compared to 14% industry growth in
domestic hydraulic shipments, according to data from the National
Fluid Power Association. Net earnings for the year are expected to
be $2.1 million or $1.04 per diluted share, up from $251,000 or
$0.13 per diluted share in 2004. For the fourth quarter of 2005,
the company expects to report net sales of $26.2 million, a 5.6%
increase from sales of $24.8 million in the fourth quarter of 2004.
Net earnings for the fourth quarter of 2005 are expected to be
$402,000 or $0.20 per diluted share, compared to earnings of
$164,000 or $0.09 per diluted share in the fourth quarter of 2004.
Orders entered in the fourth quarter of 2005 were $20 million, down
13% from the fourth quarter of 2004. The backlog declined to $27
million at the end of the fourth quarter of 2005. "We are very
pleased to report that incoming orders have been strong in all
segments in the first quarter of 2006. Orders in the first quarter
of 2006 are expected to be a record at about $32 million, lifting
the backlog to a robust level of about $35 million," said David A.
Zuege, president and chief executive officer of Oilgear. "With this
encouraging start, we are optimistic about the outlook for 2006."
Zuege also announced that the relocation of its facilities in
Leeds, England, has begun. The construction of infrastructure at
the new location is underway, and the company expects the move to
be completed in the second quarter. "We are very excited about this
move, which we believe will improve our operations, allowing us to
better serve our customers," said Zuege. "Upon completion of the
move, the sale of our previous facility for 4.1 million pounds
sterling ($7.1 million) will be closed. The book value of the
property is quite low, so the sale will result in a significant
capital gain. This month, we received an advance payment of 500,000
pounds sterling toward this transaction." The expected cumulative
effect of the restatement on September 30, 2005 shareholders'
equity was a reduction of $153,000. Net earnings for the first
three quarters of 2005 are expected to increase by $118,000. Net
earnings for 2004 were reduced by $172,000. The net loss for 2003
was increased by $196,000. The net losses for 2002 and 2001 were
reduced by $92,000 and $234,000, respectively. The net earnings for
2000 were reduced by $217,000. "Although the overall impact on the
financial statements was not significant, we are very pleased to
have this process behind us and are confident that the quality of
our accounting processes has been enhanced by the reviews," said
Zuege. A leader in the fluid power industry, The Oilgear Company
provides advanced technology in the design and production of unique
fluid power components and electronic controls. The company serves
customers in the primary metals, machine tool, automobile,
petroleum, construction equipment, chemical, plastic, glass,
lumber, rubber and food industries. Its products are sold as
individual components or integrated into high performance
applications. Certain matters discussed in this press release are
"forward-looking statements" intended to qualify for the safe
harbors from liability established by the Private Securities
Litigation Reform Act of 1995. These forward-looking statements can
generally be identified as such because the context of the
statement will include words such as the Company "believes,"
"anticipates," "expects" or words of similar import. Similarly,
statements that describe the Company's future plans, objectives or
goals are also forward-looking statements. Such forward-looking
statements are subject to certain risks and uncertainties which
could cause actual results to differ materially from those
currently anticipated. In addition to the assumptions and other
factors referenced specifically in connection with such statements,
the following could impact the business and financial prospects of
the Company: factors affecting our financial performance or
condition, including restrictions or conditions imposed by our
current and prospective lenders and our ability to obtain new
financing arrangements in a timely manner or on acceptable terms
and the costs of complying with recent accounting, disclosure and
corporate governance requirements; factors affecting the Company's
international operations, including fluctuations in currencies,
changes in laws and political or financial insecurity of foreign
governments; factors affecting the Company's ability to hire and
retain competent employees, including unionization of non-union
employees and strikes or work stoppages; factors affecting
percentage of completion contracts, including the accuracy of
estimates and assumptions regarding the timing and levels of costs
to complete those contracts; factors affecting the economy
generally, including an economic slowdown and other conditions that
could reduce demand for the Company's products; decrease in stock
price as a result of market conditions; changes in the law or
standards applicable to the Company, including environmental laws
and accounting pronouncements; availability of raw materials;
unanticipated technological developments that result in competitive
disadvantages and may impair existing assets; and factors set forth
in the Company's periodic reports filed with the SEC in accordance
with the Securities Exchange Act. Shareholders, potential investors
and other readers are urged to consider these factors and those set
forth in the Company's filings with the SEC carefully in evaluating
the forward-looking statements. The forward-looking statements made
herein are only made as of the date of this press release and the
Company undertakes no obligation to publicly update such
forward-looking statements to reflect subsequent events or
circumstances.
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