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): April 18, 1996
Imo Industries Inc.
(Exact name of registrant as specified in its charter)
Delaware 1-9294 21-0733751
(State or other jurisdiction (Commission (I.R.S.Employer
of incorporation) File Number) Identification No.)
1009 Lenox Drive, Building Four West
Lawrenceville, New Jersey 08648
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 609-896-7600
Not Applicable
(Former name or address if changed since last report)
IMO INDUSTRIES INC.
Form 8-K Current Report
Item 5. Other Events.
In a press release dated April 18, 1996, the Registrant
reported results of operations for the first quarter ended
March 31, 1996.
The information set forth in this Item 5 is qualified in its
entirety by reference to the Registrant's press release
announcing such information, which is filed herewith as an
exhibit.
Item 7. Exhibits.
The following exhibit is being filed with this report:
Exhibit No. Exhibit
____________ ___________________
99 Press release dated
April 18, 1996 by
Imo Industries Inc.
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 hereto duly
authorized.
Imo Industries Inc.
(Registrant)
Date: April 22, 1996 By: /s/ WILLIAM M. BROWN
William M. Brown
Executive Vice President
and Chief Financial
Officer and Corporate
Controller
For additional information contact:
R. A. Derr II
Vice President & Treasurer
Director, Investor Relations
609-896-7632
FOR IMMEDIATE RELEASE
IMO INDUSTRIES REPORTS FIRST QUARTER RESULTS
LAWRENCEVILLE, NJ, April 18, 1996 - Imo Industries Inc. (NYSE-
IMD) today reported net income from continuing operations of
$2.7 million or $.16 per share for the first quarter ended
March 31, 1996, compared with $2.6 million or $.15 per share
for the first quarter of 1995.
Net income for the first quarter of 1996 was $2.7 million, or
$.16 per share, compared with approximately $40 million or
$2.29 per share reported for the first quarter of last year.
Net income for the first quarter of 1995 included an estimated
gain of $39.6 million from the sale of the Company's
Turbomachinery business, $1 million in income from discontinued
operations, and an extraordinary charge of $4.1 million.
Segment operating income was $11.1 million, 8% higher than last
year's first quarter. Sales in the first quarter totaled $99.4
million, up 4% from the first quarter of 1995. Bookings of
$104 million in the first quarter were 3% ahead of last year.
"The four core businesses that constitute the 'new Imo' --
Power Transmission, Pumps, Instrumentation and Morse Controls
- -- all turned in strong performances for the quarter, with
earnings showing significant improvement over fourth quarter
1995 results. Operating income was particularly strong at the
Pumps and Instrumentation segments, compared to both last
year's first and fourth quarters," said Donald K. Farrar,
chairman and chief executive officer.
"Previously announced plans to refinance the Company's domestic
senior debt and all $220 million remaining subordinated
debentures are currently proceeding on schedule, with
completion expected before the end of the second quarter,"
Farrar reported. Citicorp Securities, Inc. and CS First Boston
have been engaged to assist in this effort.
A number of prospective buyers have been identified for the
Roltra-Morse business, which the Company previously announced
it intends to sell this year. Roltra-Morse, with headquarters
in Turin, Italy, is a supplier of door, window and gearshift
components to the European automotive industry, with annual
sales of approximately $100 million. Also as previously
announced, Imo continues to market the remaining portion of its
Electro-Optical Systems business. Net proceeds from these sales
will be used to further reduce debt. The Roltra-Morse and
remaining Electro-Optical Systems businesses are accounted for
as discontinued operations.
"These actions represent the final steps in a program to focus
the company on its core operations, strengthen its balance
sheet and position the Company for profitable future growth,"
Farrar said.
Power Transmission: Although the segments sales and operating
income improved significantly from the 1995 fourth quarter,
results were down as compared with the exceptionally strong
first quarter of 1995. Sales of $23.7 million for the segment
were down 9% compared to the first quarter of 1995. Operating
income was $2.8 million, compared to $3.6 million in the first
quarter of 1995.
Pumps: Sales of $26.3 million were up 19% over last year's
first quarter. Operating income of $3.5 million was 43% higher
than last year. The segment is experiencing continued growth in
its U.S. industrial markets and strong export demand, driven by
projects in crude oil transfer, chemical processing, and power
generation. The global marine market also has gained strength.
Bookings for the quarter were 23% higher than last year's first
quarter, increasing the backlog to $36 million, $5.6 million
ahead of the comparable period of 1995.
On March 31, 1996, Imo acquired the assets of its French
licensee. The acquisition will increase pump sales in Europe by
approximately $6 million annually.
Instrumentation: Sales of $19.4 million were up 5% in the
first quarter and operating income of $2.1 million was 25%
ahead of last year, largely as a result of improvements at the
segment's factory in Basingstoke, England. The turnaround
continues to progress at the U.K. facility, which has now
absorbed all the product lines previously manufactured at a
German plant that was closed last year. First quarter 1996
bookings at the U.S. operation were 20% ahead of last year's
first quarter, breaking records for both dollar volume and unit
volume. Total bookings for the segment as a whole were $23.0
million, up 7% from last year's comparable quarter.
Morse Controls: Sales of $30 million and operating income of
$2.7 million were respectively 3% and 7% ahead of the same
period last year. These increases resulted from the
acquisition of RMH Controls, a Swedish manufacturer of
specialized electronic controls, which was completed in
December of 1995. Marine sales in the U.S. were slowed due to
the late arrival of the spring pleasure boating season.
"Looking ahead, we are confident that the four core businesses
that form the 'new Imo' will continue to meet their operating
objectives," said Farrar. "We are off to a strong start in
1996 as evidenced by the 10% increase in revenues and more than
doubling of our segment operating income as compared with the
last quarter of 1995."
Imo Industries Inc. is a diversified manufacturer of pumps,
fluid sensors, motion control products, and remote control
systems, with operations worldwide.
IMO INDUSTRIES INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Amounts in thousands, except per share data)
Three Months Ended March 31
(Unaudited)
1996 1995 (a)
________ _________
Net Sales (a) $ 99,412 $ 95,884
Gross Profit 31,882 30,894
Segment Operating Income (a) 11,110 10,300
Income From Continuing
Operations Before Income
Taxes and Extraordinary
Item (a) 3,331 3,467
Income Taxes 627 881
Income From Continuing
Operations Before
Extraordinary Item 2,704 2,586
Discontinued Operations, Net
of Taxes: (a)(b)
Income from Operations --- 964
Estimated Gain on Disposal --- 39,613
--- 40,577
Extraordinary Item (c) --- (4,140)
Net Income $ 2,704 $ 39,023
Earnings Per Share:
Continuing Operations
Before Extraordinary
Item $ 0.16 $ 0.15
Discontinued Operations $ --- $ 2.38
Extraordinary Item $ --- $ (0.24)
Net Income $ 0.16 $ 2.29
Average Shares Outstanding 17,085 17,015
Bookings: (a)
Power Transmission $ 24,668 $ 26,559
Pumps 28,377 23,139
Instrumentation 22,968 21,517
Morse Controls 28,373 30,168
_________ _________
$ 104,386 $ 101,383
========= =========
Backlog $ 87,414 $ 85,978
========= =========
See attached notes.
IMO INDUSTRIES INC. AND SUBSIDIARIES
Segment Information and Financial Highlights
Excludes Discontinued Operations
(Dollars in thousands)
Three Months Ended March 31
(Unaudited)
1996 1995 (a)
--------- ----------
Net Sales: (a)
Power Transmission $ 23,697 $ 26,115
Pumps 26,346 22,062
Instrumentation 19,350 18,479
Morse Controls 30,019 29,228
_________ _________
Total Net Sales 99,412 95,884
_________ _________
Segment Operating Income : (a)
Power Transmission 2,766 3,608
Pumps 3,466 2,424
Instrumentation 2,145 1,718
Morse Controls 2,733 2,550
________ ________
Total Segment Operating Income 11,110 10,300
Equity in Income of
Unconsolidated Companies 25 25
Corporate Expense (1,231) (1,092)
Net Interest Expense (b) (6,573) (5,766)
_________ _________
Income From Continuing
Operations Before Income
Taxes and Extraordinary
Item (a)(b) $ 3,331 $ 3,467
========== ===========
Memo:
Income Before Interest,
Taxes, Depreciation
and Amortization (EBITDA):
Income From Continuing
Operations Before Income
Taxes and Extraordinary
Item $ 3,331 $ 3,467
Add Back: Interest Expense (b) 6,970 6,571
Depreciation and
Amortization 3,517 3,731
___________ __________
EBITDA $ 13,818 $ 13,769
=========== ==========
See attached notes.
IMO INDUSTRIES INC. AND SUBSIDIARIES
(a) As shown on the Segment Information and Financial
Highlights, the Company's Continuing Operations are
comprised of the Power Transmission, Pumps,
Instrumentation and Morse Controls business segments.
The Company sold substantially all of its Electro-Optical
Systems business segment and its Turbomachinery business
segment in 1995. These business segments have been
accounted for as discontinued operations and,
accordingly, their operations are shown in the Condensed
Consolidated Statements of Income as Discontinued
Operations.
On February 7, 1996, the Company announced a plan to sell
its Roltra-Morse business. The sale of this business is
expected to be completed in 1996. The sale of this
business is being accounted for as a discontinued
operation. Accordingly, its operations have been shown
as Discontinued Operations. The 1995 amounts have been
reclassified to conform to this presentation.
(b) Total interest expense (before allocations to
discontinued operations) of $8.7 million in the first
quarter of 1996 decreased $1.5 million, or 15%, compared
with the first quarter of 1995. Interest amounts
included in income from continuing operations exclude
interest allocated to the Discontinued Operations of $1.7
million and $3.7 million for the three months ended March
31, 1996 and 1995, respectively. The amounts allocated
are included in income from operations of discontinued
operations, net of taxes.
Amounts indicated as net are net of interest income of
$.4 million and $.8 million for the three months ended
March 31, 1996 and 1995.
(c) The three months ended March 31, 1995 include an
extraordinary charge of $4.1 million after tax ($.24 per
share), representing the non-cash write-off of
previously deferred loan costs in connection with the
early extinguishment of debt.
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