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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 1999.
DENISON INTERNATIONAL plc
(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 REPORTS RESULTS FOR THE SECOND
QUARTER AND SIX MONTHS
MARYSVILLE, Ohio - July 30, 1999 - Denison International plc (NASDAQ: DENHY)
today reported results for the second quarter and six month period ended June
30, 1999.
For the current three months ended June 30, 1999, the Company's net sales
decreased 2.1% to $34.6 million, from $35.3 million in the second quarter of
1998. Restated, net sales (at 1998 second quarter exchange rates) for the
current second quarter were $35.0 million, a 1% decrease over the comparable
1998 period. Net Income was $2.9 million, or $.26 per diluted share, for the
second quarter of 1999, compared to net income of $4.8 million and diluted
earnings per share of $.43 for the comparable 1998 period.
Year-to-date 1999 net sales of $71.1 million declined by $1.6 million, or 2.2%
versus the same period in 1998. Restated, net sales (at 1998 year-to-date
exchange rates) were $70.9 million for the six months ended June 30, 1999, a
decline of $1.8 million or 2.5% versus 1998. Net income year-to-date 1999 was
$5.8 million, or $.52 per diluted share, as compared with $8.7 million, or $.78
per diluted share for 1998.
Commenting on the results, President and CEO David Weir stated, "Despite strong
performance in Europe throughout the quarter with sales increasing in volume by
11% due to the acquisition of Denison Lokomec, and sales to Asia increasing by
6.7%, the results for the quarter were negatively impacted by the continuing
weak demand from North American OEM's associated with drilling, mining, and
processing of basic commodities such as oil, gas, gold, steel and copper. In
addition, reduced production as part of a planned inventory reduction campaign
and the strike by hourly employees at the Marysville, Ohio plant, also adversely
impacted sales and profits for the quarter. With the continuation of weak demand
in North America and the on-going strike at Marysville, profits for the full
year are now expected to be less than those reported in 1998 ".
Weir also stated that, "On a positive note the Company's inventory reduction
plans are progressing well with a decrease of $4.1 million achieved in the first
half year, and the company expects to continue generating cash from operations
and increase its positive cash position to finance the continuing program of
expansion through acquisitions".
Segment Information
- -------------------
On a segment basis versus second quarter 1999 results, sales in Europe for the
quarter ended June 30, 1999 increased 7.1% or $1.3 million, resulting from the
addition of Lokomec Oy, acquired late in 1998, while sales in the Asia-Pacific
region increased by $.5 million or 14.5%. Sales in North America declined by
$2.6 million or 19.6%. European net income for the quarter of $2.6 million was
$1.0 million or 27.8% unfavorable to 1998, reflecting the production
curtailments mentioned to reduce inventory. North American net income declined
by 56.9% to $.5 million, as compared to net income of $1.3 million for the
second quarter of 1998. Net income in the Asia-Pacific region was constant with
1998 levels.
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Year-to-date 1999 European net sales were $40.3 million, 9.5% favorable to 1998,
again reflecting the impact of the Lokomec acquisition. Net sales in the
Asia-Pacific region of $8.2 million were equal to 1998 sales recorded. North
American year-to-date net sales of $22.5 million were 18.4% or $5.2 million
unfavorable to 1998. Year-to-date net income in Europe of $5.6 million was
unfavorable to 1998 by $.5 million or 8.2%, while net income in the North
American region of $.6 million was $2.1 million or 77.8% unfavorable to 1998.
Asia-pacific region year-to-date net loss of $.3 million, compared to a loss for
year-to-date 1998 of $.1 million.
Denison International plc designs, manufactures, distributes and services highly
engineered fluid power systems and components. Denison distributes its products
and services globally to a diverse group of original equipment manufacturers and
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.
CONTACT: Bruce A. Smith, Chief Financial Officer, Denison International at
937-644-4437; or Carolyn Snider at National Editorial Services at 248-548-7444
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DENISON INTERNATIONAL, plc
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
USD - (000's) 1999 1998 1999 1998
---------- ----------- ----------- -----------
Net Sales $ 34,593 $ 35,343 $71,062 $72,714
Cost of Sales 22,182 21,263 46,090 44,772
---------- ----------- ----------- -----------
Gross Profit 12,411 14,080 24,972 27,942
% 35.9% 39.8% 35.1% 38.4%
SG&A 8,221 7,788 16,846 16,328
---------- ----------- ----------- -----------
Operating Income 4,190 6,292 8,126 11,614
% 12.1% 17.8% 11.4% 16.0%
Other (Income)/Expense 181 - 181 -
Net Interest Income 64 334 135 492
---------- ----------- ----------- -----------
Income Before Taxes 4,073 6,626 8,080 12,106
Tax Provision 1,200 1,796 2,321 3,399
---------- ----------- ----------- -----------
Net Income $2,873 $4,830 $5,759 $8,707
========== =========== =========== ===========
Basic Earnings
per Share $0.26 $0.44 $0.52 $0.79
Diluted Earnings
per Share $0.26 $0.43 $0.52 $0.78
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DENISON INTERNATIONAL plc
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
USD-(000's) June 30, December 31,
1999 1998
------------- ------------
Current assets:
Cash & cash equivalents $ 27,076 $ 35,799
Accounts receivable, net 28,609 29,716
Inventories 34,162 38,236
Other current assets 3,982 4,513
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Total current assets 93,829 108,264
Property, plant & equipment, net 25,536 24,726
Other assets 8,752 10,467
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Total assets $ 128,117 $ 143,457
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Current liabilities:
Notes payable to bank $ 5,486 $ 12,532
Accounts payable and other
accrued liabilities 23,795 29,300
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Total current liabilities
29,281 41,832
Noncurrent liabilities
20,142 23,098
Shareholders equity:
Retained earnings
80,164 74,405
Other shareholders equity
(1,740) 6,697
------------ -----------
Total shareholders equity
78,424 78,527
Total liabilities and
shareholders equity $ 128,117 $ 143,457
============ ===========
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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
-----------------------
Bruce A. Smith
Chief Financial Officer
Date: August 5, 1999
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