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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
For the month of July 1998.
DENISON INTERNATIONAL plc
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(Translation of registrant's name into English)
Masters House
107 Hammersmith Road
London W14 0QH
England
(Address of principal executive offices)
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DENISON INTERNATIONAL PLC NAMES NEW CFO
MARYSVILLE, OHIO, July 29 - Mr. David Weir, President and CEO of Denison
International plc (NASDAQ: DENHY) announced today the appointment of Mr. Bruce
A. Smith as Chief Financial Officer of Denison International plc.
Mr. Smith comes to Denison from the sealed lead battery industry where he spent
the last 17 years working for Exide Corporation (NYSE: EX), and most recently
Yuasa, Inc. While at Yuasa, Inc. Mr. Smith held the positions of treasurer,
Chief Financial Officer, and, in his most recent position, Vice President of
Administration.
"We look forward to the addition of Bruce to the Denison team and to utilizing
his expertise in helping Denison to achieve its future growth and strategic
plans."
Mr. Smith replaces Tony Mustacchio, who has left Denison for medical reasons.
"Over the years, Tony has done a terrific job at Denison, " said David Weir.
"While we are sad to see him leave, we greatly appreciate his contributions and
wish him the best of luck in future endeavors."
Mr. Smith currently resides in the central Pennsylvania region and will shortly
be relocating to the central Ohio area.
Denison International plc designs, manufacturers, distributes and services
highly engineered hydraulic fluid power systems and components. Denison
distributes its products and services globally to a diverse group of end users
in a broad array of industrial applications, including machine tools and
material handling equipment, mobile construction, agricultural and utility
equipment, and marine applications, including military equipment.
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DENISON INTERNATIONAL PLC REPORTS RESULTS FOR
SECOND QUARTER AND SIX MONTHS
MARYSVILLE, Ohio, July 29 - Denison International plc (NASDAQ: DENHY) announced
today its financial results for the second quarter and six months ended June 30,
1998.
For the current three months ended June 30, 1998, the Company's net sales
decreased 7.4% to $35.3 million, from $38.2 million in the second quarter of
1997. Restated, net sales (at 1997 second quarter exchange rates) for the
current second quarter were $36.6 million, a 4.2% decrease over the comparable
1997 period. The decrease in net sales is attributed to the impact of the
current economic conditions in the Asian market, and, in turn, slower sales to
North American customers who have substantial exports to the Asian markets.
Net income was $4.8 million, or $.43 per diluted share, for the second quarter
of 1998, compared to net income of $4.8 million and diluted earnings per share
of $.45 for the comparable period in 1997. Despite the lower revenues realized,
profits were strong resulting from the effects of continued favorable product
mix shift towards the company's higher margin vane pump product line, combined
with manufacturing and operating cost efficiencies consistent with the company's
overall business strategy as well as favorable interest income. Also favorably
impacting profitability in the second quarter were adjustments made to certain
reserves and accruals, reflecting current business conditions. These adjustments
had no impact on results for the six months ended June 30, 1998. Net income was
impacted by a higher effective tax rate for the second quarter 1998 of 27.1%
versus 21.1% for second quarter 1997, as a result of the full utilization of net
operating losses in 1997, unavailable for 1998.
Operating income in the second quarter 1998 increased by 3.3% versus 1997
reflecting cost controls in operating expenses. Operating margin of 17.8% for
the second quarter 1998 was favorable to the same period 1997 margin of 16.0%.
For the quarter ended June 30, 1998, gross profit decreased by less than 1% to
$14.1 million, from $14.2 million in the same period 1997. Gross margin for the
second quarter 1998 of 39.8% was strong versus a gross margin of 37.3% for the
same period 1997.
Year-to-date 1998 net sales of $72.7 million declined by $2.4 million or 3.2%
versus the same period 1997. Restated, net sales (at year to date 1997 exchange
rates) for the first six months of 1998 were $75.9 million, $.8 million or 1%
higher than in 1997.
Year-to-date 1998 net income increased by $.3 million, or 3.5% to $8.7 million,
or $.78 per diluted share, versus 1997 net income of $8.4 million, or $.79 per
diluted share. Strength in the company's higher margin vane pump product line,
combined with manufacturing and operational cost improvements were the primary
reasons for the
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increased profits realized. The increase in net income was impacted by a higher
effective tax rate for 1998 of 28.1% versus 22.5% for 1997.
Operating earnings year-to-date 1998 were $11.6 million representing a $.8
million or 7.4% increase versus the first six months of 1997. Operating margin
of 16% for year-to-date 1998 was 1.7 points higher than the comparable period
last year. Gross profit in the current year to date period rose by $.8 million
or 3%, to $27.9 million. Year-to-date 1998 gross margin of 38.4% was 2.3 points
higher than 1997's gross margin of 36.1%.
Commenting on the results, David Weir, President and CEO, stated, " We are
pleased with Denison's overall profit performance for the second quarter and
year-to-date 1998, despite the adverse effect on net sales from the current
economic conditions in Asia, the strengthening US dollar and, in turn, soft
sales in the North American market. Continued gains in operational efficiencies
helped to offset the profit impact of the decline in net sales. We look to
return to the previous years sales volume in the third quarter, and will
continue to seek out and implement new ways to improve costs and operating
efficiencies to achieve our current year and long term profit and growth goals."
Denison International plc designs, manufacturers, distributes and services
highly engineered hydraulic fluid power systems and components. Denison
distributes its products and services globally to a diverse group of end users
in a broad array of industrial applications, including machine tools and
material handling equipment, mobile construction, agricultural and utility
equipment, and marine applications, including military equipment.
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 Act of 1995. Such forward-looking statements are
subject to certain risks and uncertainties which could cause actual results to
differ materially from those currently anticipated. Shareholder, potential
investors and other readers are urged to consider these factors 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.
(Tables Follows)
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DENISON INTERNATIONAL, plc
STATEMENT OF OPERATIONS
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
USD - (000's) 1998 1997 1998 1997
------- ------- ------- -------
Net Sales $ 35,343 $38,169 $72,714 $75,081
Cost of Sales 21,263 23,923 44,772 47,942
Gross Profit 14,080 14,246 27,942 27,139
SG&A 7,788 8,154 16,328 16,374
Operating Income 6,292 6,092 11,614 10,765
Other Income 0 0 0 24
Net Interest Income 334 49 492 50
Income Before Taxes 6,626 6,141 12,106 10,839
Tax Provision 1,796 1,293 3,399 2,435
Net Income $ 4,830 $ 4,848 $ 8,707 $ 8,404
Basic earnings per share $ 0.44 $ 0.46 $ 0.79 $ 0.80
Diluted earnings per share $ 0.43 $ 0.45 $ 0.78 $ 0.79
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DENISON INTERNATIONAL, plc
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30, 1998 December 31, 1997
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USD - (000's)
Current Assets:
Cash & Cash Equivalents $ 30,857 $ 30,337
Accounts receivable, net 30,189 29,212
Inventories 33,838 28,182
Other current assets 3,212 3,327
Total current assets 98,096 91,058
Property, plant and Equipment, net 16,742 14,948
Other assets 1,841 1,487
Total assets $116,679 $107,493
Current liabilities:
Notes payable to bank $ 1,042 $ 1,472
Accounts payable and other accrued 27,892 25,752
liabilities
Total current liabilities 28,934 27,224
Noncurrent liabilities 20,194 20,717
Shareholders equity:
Retained earnings 66,822 58,115
Other shareholders equity 729 1,437
Total shareholders equity 67,551 59,552
Total liabilities and shareholders $116,679 $107,493
equity
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
DENISON INTERNATIONAL plc
By: /s/ Bruce A. Smith
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Bruce A. Smith
Chief Financial Officer
Date: August 4, 1998
