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THE SINGER COMPANY
NEW YORK, NY , Thu Oct 24 3:00:00 EDT 1996
THE SINGER COMPANY
Stock Symbol: SEW Exchange Code: N
SINGER REPORTS CONTINUED IMPROVEMENT IN MEXICO IN THIRD QUARTER RESULTS
NEW YORK, NY - October 24, 1996 - The Singer Company (SEW:NYSE)
today announced that earnings for the third quarter of 1996 were
$20.1 million or $.39 per share, versus $11.8 million or $.23 per
share last year after a $12.8 million special charge. The 1996
third quarter results include a previously-announced $1.5 million
charge for the remaining reorganization costs at the company's
largest manufacturing facility in Brazil.
Revenues in the third quarter were $333.5 million, versus $289.4
million a year ago. Excluding the sales of Italy and Singer
Furniture, acquired in the fourth quarter of 1995, sales rose 6.1
percent in the period.
The company's Mexican operation, suffering from a severe economic
recession, continued its turnaround by posting its second
consecutive quarter of improved results. Mexico experienced a $2.4
million net loss, compared to a net loss of $4.5 million in the
same period a year ago. Revenues were above the 1995 period in
peso terms and the company remained profitable on the operating
line. Results benefited from lower interest rates in Mexico. "Our
performance in Mexico is encouraging and we remain cautiously
optimistic about continued improvement there," said Mr. James H.
Ting, Chairman and Chief Executive Officer.
The results are in line with a previous announcement by the
company that earnings would be lower than a year ago in the third
quarter, primarily as a result of difficult economic conditions in
Europe. A shift in consumer buying habits to lower-priced, lower-
margin products produced lower earnings in Europe. Although sewing
units rose in the quarter, the shift in mix produced sales below
the same period last year.
"Our results in Europe reflect a weak economic environment and low
consumer confidence, particularly at the retail level," said Mr.
Ting. "Our business is particularly slow in Germany and Spain,
where unsatisfactory conditions are exacerbated by high
unemployment." Mr. Ting said that Singer continued its
refranchising program in Europe to improve its market position and
that results to date had been positive.
Rebounding from a two-week strike that penalized sales and
earnings in the second quarter, Brazil's performance improved.
Manufacturing facilities returned to normal operations and the
company's retail and wholesale network experienced results above a
year ago.
Thailand and most other Asian countries achieved improved sales
and earnings above the same quarter of 1995 as demand for both
sewing machines and consumer durables for the home remained
healthy. The Middle East experienced growth despite considerable
political turmoil in the region.
Singer's new products that were first launched a year ago
continued to exceed expectations. Sales of water filters, power
tools and furniture were ahead of plan for the quarter. Year to
date, new product sales exceeded the company's plan and are
expected to easily surpass the goal for 1996.
For the first nine months of 1996 Singer reported sales of $981.3
million versus $835.3 million last year. Excluding sales of
companies acquired in the fourth quarter of 1995, sales for the
first nine months in 1996 rose 7.8 percent. Earnings for the first
nine months were $49 million or $.95 per share, compared to $50.1
million or $.97 per share a year ago, after a $12.8 million special
charge.
"While most of our operations around the world are growing on
expectations, we remain concerned about the unfavorable market
conditions in Europe and their impact on approaching Christmas
sales," said Mr. Ting. "In spite of these uncertainties, Singer
expects to meet earnings expectations for 1996," he said.
With operations in more than 140 countries, Singer is one of the
most widely recognized and respected brands in the world. The
company is the largest manufacturer and seller of sewing machines
and a leading marketer of consumer durable products for the home.
Sales in 1995 were $1.2 billion.
###
THE SINGER COMPANY N.V.
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(in millions of US dollars, except per share data)
Three Months Nine Months
Ended September 30, Ended September 30,
1996 1995 1996 1995
------------------- -------------------
Revenues $ 333.5 $ 289.4 $ 981.3 $ 835.3
Cost of sales 225.6 197.2 683.3 564.5
------------------- -------------------
Gross profit 107.9 92.2 298.0 270.8
Selling and administrative expenses 75.0 72.2 217.1 195.8
------------------- -------------------
Operating income 32.9 20.0 80.9 75.0
------------------- -------------------
Other income (expenses):
Interest, net of related foreign
exchange adjustments (18.7) (15.3) (57.0) (43.8)
Equity in earnings from operating
affiliates 2.2 1.6 9.5 8.8
Royalties and license income 4.2 4.1 12.1 13.0
Miscellaneous, net 1.6 4.4 9.8 8.3
-------------------- -------------------
(10.7) (5.2) (25.6) (13.7)
-------------------- -------------------
Income before income taxes 22.2 14.8 55.3 61.3
Income taxes 2.1 3.0 6.3 11.2
-------------------- -------------------
Net income $ 20.1 $ 11.8 $ 9.0 $ 50.1
==================== ===================
Net income per share $ 0.39 $ 0.23 $ 0.95 $ 0.97
==================== ===================
Average shares outstanding
(in millions) 51.3 51.4 51.5 51.4
==================== ===================
THE SINGER COMPANY N.V.
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(in millions of US dollars)
September 30, December 31,
1996 1995
----------------- -----------------
ASSETS
Current assets:
Cash and cash equivalents $ 222.4 $ 235.8
Accounts receivable, net 524.6 507.7
Inventories 331.4 317.3
Other current assets 20.3 9.3
----------------- -----------------
Total current assets 1,098.7 1,070.1
Property, plant and equipment, net 350.4 310.0
Investment in equity of operating
affiliates 79.7 73.5
Other assets 148.3 143.4
----------------- -----------------
$ 1,677.1 $ 1,597.0
================= =================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes and loans payable $ 489.7 $ 439.4
Accounts payable and accrued
liabilities 241.8 288.1
----------------- ----------------
Total current liabilities 731.5 727.5
Long-term debt 213.9 172.2
Other non-current liabilities 104.7 110.0
Shareholders' equity 627.0 587.3
----------------- ----------------
Total liabilities and equity $ 1,677.1 $ 1,597.0
================= ================