K-Tron Reports Third Quarter 2009 Results
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STRONG OPERATING CASH FLOW PRODUCES $13.357 MILLION INCREASE IN CASH AND $2.0
MILLION REDUCTION IN DEBT DURING THE QUARTER
PITMAN, N.J., Nov. 9 /PRNewswire-FirstCall/ -- K-Tron International, Inc.
(Nasdaq: KTII) today reported net income of $6.768 million and diluted
earnings per share ("EPS") of $2.34 for its fiscal third quarter ended October
3, 2009, nearly unchanged from the same period in 2008. Revenues were $47.321
million in this year's third quarter, a decline of 20.6 percent from last
year.
For the first nine months of 2009, K-Tron reported net income of $16.473
million, diluted EPS of $5.75 and revenues of $147.044 million, compared to
net income of $19.576 million, diluted EPS of $6.84 and revenues of $177.239
million in the first nine months of 2008. The percentage decreases in 2009
versus the prior year were 15.9 percent for net income, 15.9 percent for EPS
and 17.0 percent for revenues.
The third quarter and first nine months of 2009 results included a $2.972
million pre-tax gain from the September 2009 sale of the Company's 19.9
percent equity investment in a French material handling company (which
investment had been recorded as an "other asset" on the Company's balance
sheet). Also, net income and EPS in both 2009 periods were adversely affected
by higher effective income tax rates this year as compared to 2008 (35.0
percent for the third quarter and 34.7 percent for the first nine months of
2009 versus 27.1 percent and 28.7 percent for the same periods last year).
The Company noted that if the average foreign currency exchange rates for the
third quarter and first nine months of 2008 were applied to the same periods
of 2009, the Company's revenues would have decreased approximately 20.5
percent for the third quarter of 2009 instead of 20.6 percent and 15.3 percent
for the first nine months of 2009 instead of 17.0 percent.
With respect to liquidity and capital resources, the Company highlighted a
significant increase in cash and a reduction in debt during the third quarter,
noting that cash grew by $13.357 million to $63.0 million while debt was paid
down by $2.0 million to $18.0 million. As a result, the Company had cash in
excess of debt of $45.0 million at the end of the third quarter. The Company
also said that it had retired an additional $8.0 million of debt in October
and expects to end the year with debt of only $8.0 million as compared to
$23.662 million at the beginning of the year.
Commenting on the Company's performance, K-Tron Chairman and Chief Executive
Officer Edward B. Cloues, II said, "The third quarter of 2009 was a very
positive one for the Company, despite the challenging global environment. Our
net income and EPS, helped by the sale of our investment in a French material
handling company, matched last year's record third quarter numbers, and our
strong operating cash flow enabled us to pay down debt while increasing our
cash to a record $63.0 million.
"Although our backlog declined by $5.0 million, or 9.1%, in the third quarter
on a constant foreign currency exchange basis, we believe that our bookings
may have bottomed out in the quarter and expect that they will begin to grow
again in the fourth quarter. While we still do not anticipate any significant
recovery before mid-2010 in many of our key markets, we are encouraged by how
relatively well we have performed this year under very difficult circumstances
and look forward to a gradually improving business environment. We also
believe, as we said last quarter, that the cost reduction initiatives
implemented by us earlier in the year will enable the Company to continue to
deliver good earnings and cash flow despite the tough conditions we still
face, and our strong cash balance, good cash flow and low-cost borrowing
availability position us well to take advantage of acquisition and other
growth opportunities that may present themselves as the global economy begins
to recover."
On another matter, the Company noted that for the third straight year it had
been named to Forbes Magazine's list of the 200 Best Small Companies. K-Tron
was ranked number 75 this year, following rankings of 13 and 19 in 2008 and
2007. Candidates must have annual revenue between $5 million and $750
million, be publicly traded for at least a year and have a stock price no
lower than $5. Rankings are based on earnings growth, sales growth and return
on equity in the past 12 months and over five years.
K-Tron International, Inc. and its subsidiaries design, produce, market and
service material handling equipment and systems for a wide variety of
industrial markets. The Company has manufacturing facilities in the United
States, Switzerland and the People's Republic of China, and its equipment is
sold throughout the world.
SAFE HARBOR
Certain statements in this release, including those with respect to (a)
economic conditions and prospects, (b) revenue, profit, cash flow, debt,
bookings and business environment expectations and (c) future growth and
acquisition opportunities, relate to future events and expectations and as
such constitute forward-looking statements involving known and unknown factors
that may cause the actual results of K-Tron International, Inc. to be
different from those expressed or implied in the forward-looking statements.
In this context, words such as "believe," "would," "expect," "should" and
other similar words and phrases often identify forward-looking statements made
on behalf of the Company. It is important to note that actual results of the
Company may differ materially from those described or implied in such
forward-looking statements based on a number of factors and uncertainties,
including, but not limited to, (i) adverse changes in general economic
conditions; (ii) adverse changes in the industries the Company serves,
including plastics compounding, base resin production, food, pharmaceutical,
chemical, power generation, mining, pulp and paper, wood and forest products
and biomass energy generation, and in demand for equipment, spare parts and
services from customers in those industries; (iii) the Company's ability to
manage its costs; (iv) the Company's ability to generate cash from operations
and manage its liquidity needs; (v) material adverse changes in customers'
access to liquidity and capital; (vi) currency exchange or interest rate
changes; (vii) epidemic diseases; (viii) changes in laws, regulations and tax
rates; and (ix) other general economic, business and financing conditions and
risk factors described in more detail in the Company's Form 10-K filed with
the Securities and Exchange Commission on March 13, 2009. We do not undertake
to update our forward-looking statements to reflect events or circumstances
after the date hereof.
(Financial Data Follows)
K-TRON INTERNATIONAL, INC. & SUBSIDIARIES
FINANCIAL SUMMARY
(Unaudited)
(Dollars in thousands, except share data)
Three Months Ended Nine Months Ended
October 3, September 27, October 3, September 27,
2009 2008 2009 2008
---- ---- ---- ----
Revenues $47,321 $59,631 $147,044 $177,239
======= ======= ======== ========
Operating income $7,688 $9,462 $23,097 $28,253
Interest expense, net (252) (179) (846) (804)
Gain on sale of
investment 2,972 -- 2,972 --
----- ----- ----- -----
Income before income
taxes 10,408 9,283 25,223 27,449
Income taxes 3,640 2,516 8,750 7,873
----- ----- ----- -----
Net income $6,768 $6,767 $16,473 $19,576
====== ====== ======= =======
Basic earnings per share $2.39 $2.44 $5.85 $7.14
===== ===== ===== =====
Diluted earnings per
share $2.34 $2.34 $5.75 $6.84
===== ===== ===== =====
Weighted average number
of common shares
outstanding (basic) 2,831,000 2,769,000 2,816,000 2,740,000
========= ========= ========= =========
Weighted average number
of common and common
equivalent shares
outstanding (diluted) 2,887,000 2,891,000 2,865,000 2,860,000
========= ========= ========= =========
SOURCE K-Tron International, Inc.
Robert E. Wisniewski, Senior Vice President and Chief Financial Officer of
K-Tron International, Inc., +1-856-256-3311, rwisniewski@ktron.com
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