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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) May 4, 2000
PRECISION CASTPARTS CORP.
(Exact name of registrant as specified in its charter)
STATE OF OREGON 1-10348 93-0460598
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(State or other jurisdiction of (Commission (IRS Employer
incorporation or organization) File No.) Identification No.)
4650 SW MACADAM, SUITE 440, PORTLAND, OREGON 97201-4254
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(Address of principal executive offices) (Zip Code)
(503) 417-4800
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(Registrant's telephone number, including area code)
NO CHANGE
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(Former name, former address and former fiscal year,
if changed since last report)
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ITEM 5. OTHER EVENTS
On May 4, 2000, Precision Castparts Corp. announced its earnings for the
fiscal year ended April 2, 2000. A copy of the press release issued by Precision
Castparts Corp. in connection with the announcement is filed as Exhibit 99.1 to
this report and incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA INFORMATION AND EXHIBITS.
(c) Exhibits
99.1 Press release dated May 4, 2000.
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SIGNATURE
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 hereunto duly authorized.
Dated: May 4, 2000
PRECISION CASTPARTS CORP.
/s/ WILLIAM D. LARSSON
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William D. Larsson
Vice President and Chief Financial Officer
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INDEX TO EXHIBITS
Exhibits
99.1 Press Release dated May 4, 2000.
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NEWS FROM PCC PRECISION CASTPARTS CORP.
4650 S.W. Macadam Ave. CONTACT: Dwight Weber
Suite 440 (503) 417-4855
Portland, OR 97201
Telephone (503) 417-4800 Web Site: http://www.precast.com
PRECISION CASTPARTS CORP. CLOSES FISCAL YEAR 2000
WITH ENCOURAGING FOURTH-QUARTER RESULTS
PORTLAND, Oregon - May 4, 2000 -- Precision Castparts Corp. (NYSE:PCP) ended its
fiscal year 2000 with improved fourth-quarter results and positive prospects for
profitable growth in fiscal 2001.
Sales in fiscal 2000 totaled $1,673.7 million, a 13.7 percent increase over the
record sales of $1,471.9 million reported in fiscal 1999. Net income was $85.3
million, or $3.47 per share (diluted), 17.4 percent lower than last year's
record earnings of $103.3 million, or $4.22 per share (diluted). The Company
reported a restructuring charge of $11.0 million in the third quarter of this
fiscal year. Before this charge, fiscal 2000 net income was $91.7 million, or
$3.73 per share (diluted).
Financial performance for the fourth quarter yielded record sales of $552.1
million, 46.3 percent better than the record fourth-quarter sales of $377.3
million last year. Net income of $27.0 million, or $1.09 per share (diluted),
was achieved in the quarter, down 3.2 percent from fiscal 1999 record
fourth-quarter earnings of $27.9 million, or $1.14 per share (diluted). The
earnings for the fourth quarter of fiscal 2000 include other income of $4.2
million, or $0.10 per share (diluted), reflecting the benefit realized on the
termination of a portion of an interest rate hedge in connection with the
Company's recent issuance of $200 million of public debt securities, as well as
a full quarter of Wyman-Gordon operations.
In the third quarter of fiscal 2000, Precision Castparts Corp. began to report
financial results in four segments: Investment Cast Products, Forged Products,
Fluid Management Products, and Industrial Products. Investment Cast Products
includes the PCC Structurals, PCC Airfoils, and Wyman-Gordon Castings
businesses. Forged Products comprises all of the forging businesses of
Wyman-Gordon. Fluid Management Products is the Company's PCC Flow Technologies
operation, which includes pumps and valves for a wide spectrum of applications.
The Industrial Products segment encompasses the Company's three remaining
businesses: PCC Specialty Products, J&L Fiber Services, and Advanced Forming
Technology.
Investment Cast Products reported sales of $970.8 million for fiscal 2000 and
$279.6 million for the fourth quarter, with operating income of $161.5 million
and $48.3 million, respectively. Fiscal 2000 sales and earnings included the
addition of Wyman-Gordon's casting business for five weeks of the third quarter
and all of the fourth quarter. The industrial gas turbine (IGT) business
experienced healthy growth during the quarter, aided by a new contract with GE
Power Systems, which began for both PCC Structurals and PCC Airfoils in January
2000, and strong machining revenues. In addition, PCC's aircraft engine
customers have increased component orders to support current Boeing and Airbus
Industrie build rates, and more airframe orders for both commercial and
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May 4, 2000
Page 2 of 3
military applications began to come onstream. Both trends are expected to
continue into fiscal 2001.
Forged Products sales amounted to $192.1 million for the year, with operating
income of $24.4 million, while the segment achieved sales of $144.0 million and
operating income of $18.9 million for the quarter. The fiscal 2000 sales and
earnings reflect five weeks of the third quarter and all of the fourth quarter.
This segment is also benefiting from increased orders for aircraft components
and stronger IGT sales. Orders for airframe parts are growing as well, partially
due to a new Boeing contract signed earlier in calendar 2000. Top-line
opportunities in these and other markets are promising for fiscal 2001, and
significant cost savings from synergies and productivity will lead to better
operating margins than originally anticipated.
Fiscal 2000 sales for Fluid Management Products were $291.6 million, with
operating income of $13.5 million. Operating income for the fourth quarter was
$0.1 million on sales of $73.5 million. Margins continued to be negatively
affected by weak market conditions and consolidation costs, as the PCC Flow
Technologies' businesses competed to maintain market share in a weak pricing
environment and organized the European acquisitions into a more profitable
structure. New and redesigned products, broader distribution, higher
productivity, and improving market conditions in certain areas should contribute
to stronger results for PCC Flow Technologies in fiscal 2001.
Industrial Products' fiscal 2000 sales totaled $219.2 million, with operating
income of $9.7 million, and quarterly sales and operating income were $55.0
million and $1.0 million, respectively. The Reed-Rico/Astro Punch, Eldorado, and
PCC Olofsson businesses of PCC Specialty Products improved sales and operating
income from the third to the fourth quarter. This general performance trend is
expected to continue in fiscal 2001 because of new products, aftermarket
penetration, enhanced machine tool distribution, expanded offshore sourcing, and
restructuring.
"I am very encouraged by the fourth-quarter results," said William C. McCormick,
chairman and chief executive officer. "I believe that we have built a strong
foundation for continued improvement of revenue and operating margin in fiscal
2001. The Wyman-Gordon acquisition is proving to be better than originally
anticipated and has many upside opportunities. Wyman-Gordon was accretive in the
fourth quarter, something we did not look for until later in fiscal 2001."
Precision Castparts Corp. is a worldwide manufacturer of complex metal
components and products. PCC is the market leader in manufacturing both large,
complex structural investment castings, airfoil castings, and forged components
used in jet aircraft engines. In addition, PCC has expanded into the industrial
gas turbine, fluid management, industrial metalworking tools and machines, pulp
and paper, advanced metalforming technologies, tungsten carbide, airframe
components, and other metal products markets.
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May 4, 2000
Page 3 of 3
Information in this press release describing the projected growth and future
results and events constitutes forward-looking statements, within the meaning of
the Private Securities Litigation Reform Act of 1995. Actual results in future
periods may differ materially from the forward-looking statements because of a
number of risks and uncertainties, including but not limited to fluctuations in
the aerospace and general industrial cycles; the relative success of the
Company's entry into new markets, including the rapid ramp-up of production for
industrial gas turbine and airframe components; competitive pricing; the
availability and cost of materials and supplies; relations with the Company's
employees; the Company's ability to manage its operating costs and to integrate
acquired businesses in an effective manner; governmental regulations and
environmental matters; risks associated with international operations and world
economies; the relative stability of certain foreign currencies; and
implementation of new technologies. Any forward-looking statements should be
considered in light of these factors. The Company undertakes no obligation to
publicly release any forward-looking information to reflect anticipated or
unanticipated events or circumstances after the date of this press release.
Precision Castparts' press releases are available at no charge through PR
Newswire's Company On-Call fax service. For a menu of PCC's press releases or to
retrieve a specific release, call (800) 758-5804, extension 714025. Information
is also available on the Internet at the PRN Web site --
http://www.prnewswire.com or PCC's home page at http://www.precast.com.
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PRECISION CASTPARTS CORP.
SUMMARY OF RESULTS
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Year Ended
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April 2, March 28, April 2, March 28,
2000 1999 2000 1999
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<S> <C> <C> <C> <C>
Net Sales $ 552,100 $ 377,300 $ 1,673,700 $ 1,471,900
Cost of Goods Sold 432,700 295,100 1,305,000 1,134,000
Provision for Restructuring and Other(1) -- 13,100 11,000 13,100
Selling and Administrative Expenses 57,100 34,000 176,200 146,400
Other Income(2) 4,200 -- 4,200 --
Interest Expense, net 22,300 6,900 47,100 27,600
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Income before Provision for Income Taxes 44,200 28,200 138,600 150,800
Provision for Income Taxes(3) 17,200 300 53,300 47,500
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Net Income $ 27,000 $ 27,900 $ 85,300 $ 103,300
============ ============= ============ ===========
Net Income per Common Share - Basic $ 1.10 $ 1.14 $ 3.48 $ 4.23
============ ============= ============ ===========
Average Common Shares Outstanding 24,600 24,500 24,500 24,400
Net Income per Common Share - Diluted $ 1.09 $ 1.14 $ 3.47 $ 4.22
============ ============= ============ ===========
Average Common Shares Outstanding 24,700 24,500 24,600 24,500
</TABLE>
<TABLE>
Three Months Ended Year Ended
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April 2, March 28, April 2, March 28,
2000 1999 2000 1999
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<S> <C> <C> <C> <C>
NET SALES BY SEGMENT
Investment Cast Products $ 279,600 $ 242,000 $ 970,800 $ 942,100
Forged Products 144,000 -- 192,100 --
Fluid Management Products 73,500 75,100 291,600 306,400
Industrial Products 55,000 60,200 219,200 223,400
------------ ------------- ------------ -----------
TOTAL $ 552,100 $ 377,300 $ 1,673,700 $ 1,471,900
============ ============= ============ ===========
OPERATING INCOME BY SEGMENT(4)
Investment Cast Products $ 48,300 $ 39,600 $ 161,500 $ 148,700
Forged Products 18,900 -- 24,400 --
Fluid Management Products 100 5,200 13,500 33,800
Industrial Products 1,000 5,200 9,700 19,400
Corporate expense (6,000) (1,800) (16,600) (10,400)
------------ ------------- ------------ -----------
TOTAL $ 62,300 $ 48,200 $ 192,500 $ 191,500
============ ============= ============ ===========
</TABLE>
1 During the fourth quarter of fiscal 1999, the Company recorded charges
related to restructuring and other non-recurring items. The restructuring
charge was principally established to provide for costs associated with the
consolidation of operations within PCC Flow Technologies. The non-recurring
charge related principally to the write-off of inventory, establishment of
a provision for loss contracts and a product warranty dispute. The tax
effected impact of these charges totaled $7.8 million, or $0.32 per share.
During the third quarter of fiscal 2000, the Company recorded charges
related to restructuring and other non-recurring items. These charges
principally provided for severance costs, lease terminations, and asset
write-offs, partially offset by favorable disposition of issues previously
charged to the provision for restructuring and other non-recurring charges.
The tax effected impact of these charges totaled $6.4 million, or $0.26 per
share.
2 Other income reflects the benefit realized upon the termination of a
portion of an interest rate hedge in connection with the Company's recent
issuance of $200 million of public debt securities.
3 The reduction in the Company's effective tax rate in the fourth quarter of
1999 was principally due to a favorable settlement of a tax issue, reversal
of excess state tax accruals and higher than anticipated foreign sales. The
impact of the reduction in the effective tax rate increased earnings by
$0.35 per share.
4 Operating income represents earnings before restructuring and other, other
income, interest and income taxes.
