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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 February 2000.
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 REPORTS RESULTS FOR THE FOURTH
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QUARTER AND TWELVE MONTHS
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MARYSVILLE, Ohio - February 14, 2000 - Denison International plc (NASDAQ:
DENHY) today reported results for the fourth quarter and twelve month period
ended December 31, 1999.
For the current three months ended December 31, 1999, the Company's net
sales decreased 11.0% to $34.3 million, from $38.5 million in the fourth quarter
of 1998. Restated, net sales (at 1998 fourth quarter exchange rates) for the
current fourth quarter were $36.2 million, a 6.1% decrease over the comparable
1998 period. Net Income was $1.6 million, or $.15 per diluted share, for the
fourth quarter of 1999, compared to net income of $3.4 million and diluted
earnings per share of $.30 for the comparable 1998 period. On a normalized basis
(assuming a 30% effective tax rate) earnings per share for the fourth quarter
1999 were $.20 versus $.28 for the same period in 1998.
1999 net sales of $135.5 million declined by $9.7 million, or 6.7% versus
1998. Restated, net sales (at 1998 exchange rates) were $137.6 million for the
twelve months ended December 31, 1999, a decline of $7.6 million or 5.2% versus
1998. Net income for 1999 was $8.3 million, or $.74 per diluted share, as
compared with $16.3 million, or $.1.46 per diluted share for 1998. On a
normalized basis (assuming a 30% effective tax rate) earnings per share for the
1999 were $.81 versus $1.40 for the same period in 1998.
Commenting on the results, President and CEO David Weir stated, "Fourth
quarter operating profit increased 91% from third quarter levels. Nevertheless
the results for the period were impacted by a disruption to business caused by
the implementation of a new computer software system in Germany, which resulted
in the loss of production and sales during
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the quarter. In addition there were non-recurring charges in the quarter for
unrealized losses on inter-company loans and foreign exchange contracts, and
some minor severance costs." "The Company's inventory reduction plans were
successfully completed with a decrease of $5.2 million achieved for 1999 (before
the impact of foreign currency movements). During the year the Company generated
$9.3 million of cash from operations after capital expenditures of $6.3 million
and before payments in 1999 relating to last years acquisition of Lokomec Oy.
Exchange rate movements reduced the value of foreign held currency by $4.4
million."
Weir also stated that, " We are continuing to review and are aggressively
pursuing acquisition opportunities, with several possible opportunities in
various stages, in keeping with our long-term growth strategy. Finally, the
increases in basic commodity prices, coupled with strengthened sales efforts,
are resulting in increased customer demand. Order receipts were up 9.5% in the
fourth quarter versus last year which equates to a nearly 15% increase after
adjusting for currency movements. US domestic orders were up 19%. This increased
demand, combined with the cost reductions implemented during the year should
produce improved results for 2000."
Segment Information
-------------------
On a segment basis versus fourth quarter 1998 results, sales in Europe for
the quarter ended December 31, 1999 decreased 8.2% or $1.7 million, while sales
in the Asia-Pacific region increased by $.1 million or 2.0%. Sales in North
America declined by $2.6 million or 20.0%. Restated, net sales (at 1998 fourth
quarter exchange rates) for the current fourth quarter were $21.6 in Europe, a
2.4% increase versus 1998, while sales in the Asia-Pacific region were $4.3
million, a $.2 million or 4.5% decrease versus fourth quarter 1998. European net
income for the quarter of $1.0 million was $1.7 million or 63.4% unfavorable to
1998. North American reported net income for the quarter ended December 31, 1999
of $.1 million, as compared to net
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income of $.5 million for the fourth quarter of 1998. A net loss in the
Asia-Pacific region of $.1 million was favorable to the loss of $.4 million
recorded in the fourth quarter of 1998.
Full year 1999 European net sales were 77.1 million, 1.7% favorable to
1998, reflecting the impact of the Lokomec acquisition made late in 1998. Net
sales in the Asia-Pacific region of $17.5 million were $1.3 million or 7.9%
favorable to 1998. North American 1999 net sales of $40.9 million were 23.1% or
$12.3 million unfavorable to 1998. Restated, net sales (at 1998 exchange rates)
for 1999 were $80.4 million in Europe, a 6.1% increase versus 1998, while sales
in the Asia-Pacific region were $16.2 million, equal to 1998 recorded revenues.
1999 net income in Europe of $7.8 million was unfavorable to 1998 by $3.9
million or 33.5%, while a net loss in the North American region of $.2 million
was $4.4 million unfavorable to 1998. Asia-pacific region in 1999 recorded a net
loss of $.5 million, slightly unfavorable to results for 1998.
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
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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
(Tables Follows)
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DENISON INTERNATIONAL, plc
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Year Ended
December 31, December 31,
USD - (000's) 1999 1998 1999 1998
-------------- -------------------- ------------ ---------------
<S> <C> <C> <C> <C>
Net Sales $ 34,288 $ 38,523 $135,542 $145,254
Cost of Sales 23,317 25,049 90,428 90,919
Gross Profit 10,971 13,474 45,114 54,335
% 32.0% 35.0% 33.3% 37.4%
SG&A 7,675 9,065 31,967 33,026
Operating Income 3,296 4,409 13,147 21,309
% 9.6% 11.4% 9.7% 14.7%
Other Income 251 --- 693 (2)
Net Interest Income 155 36 354 938
Income Before Taxes 3,200 4,445 12,808 22,245
Tax Provision 1,558 1,074 4,522 5,955
Net Income $1,642 $3,371 $8,286 $16,290
Basic earnings per share $0.15 $0.30 $0.75 $1.47
Diluted earnings per share $0.15 $0.30 $0.74 $1.46
</TABLE>
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DENISON INTERNATIONAL, plc
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
December 31
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1999 1998
------------------ ------------------
<S> <C> <C>
USD - (000's) Current Assets:
Cash & Cash Equivalents $ 31,174 $35,799
Accounts receivable, net 28,267 29,716
Inventories 31,453 38,236
Other current assets 3,566 4,513
Total current assets 94,460 108,264
Property, plant and Equipment, net 24,519 24,726
Other assets 9,841 10,467
Total assets $128,820 $143,457
Current liabilities:
Notes payable to bank $5,586 $12,532
Accounts payable and other accrued
liabilities 22,341 29,300
Total current liabilities 27,927 41,832
Noncurrent liabilities 19,833 23,098
Shareholders equity:
Retained earnings 82,691 74,405
Other shareholders equity (1,631) 4,122
Total shareholders equity 81,060 78,527
Total liabilities and
shareholders equity $128,820 $143,457
</TABLE>
###
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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: February 22, 2000
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