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Sequa Posts Improved Results for the First Quarter of 2004 NEW YORK --(Business Wire)-- May 10, 2004 -- Paced by strong advances at its largest operating units and with increases at all major operations, Sequa Corporation (NYSE; SQAA) generated sharply higher sales and operating income for the first quarter of 2004.Sales for the three months ended March 31, 2004 rose 15 percent to $446.1 million from $388.9 million, and operating income tripled, reaching $18.1 million, up from $6.0 million in the same period of 2003. The advance in operating results, which was augmented by the translation of foreign currency amounts to US dollars, led to a turnaround in after-tax results for the 2004 period. Income from continuing operations was $0.3 million and net income totaled $1.3 million in the first quarter of 2004; in the same period of 2003, the company recorded a $4.0 million loss from continuing operations and a net loss of $3.1 million. On a per share basis, results from continuing operations equated to a loss of two cents per share in the first quarter of 2004 and a loss of 43 cents per share in the same period of 2003; net income was seven cents per share in the current year's first quarter and a net loss of 35 cents per share in the first quarter of 2003. First quarter results from continuing operations for both years exclude contributions from divested operations - ARC Propulsion (sold in October 2003) and TurboCombustor Technology (sold on April 1, 2004) - that are now classified as discontinued. Summary of Results by Segment Aerospace: For Chromalloy Gas Turbine - the sole business in the segment and a leading supplier to the commercial airline industry - the first quarter was marked by renewed strength. Sales rose nine percent and operating income advanced $5.7 million, as the pace of activity in the jet engine component aftermarket quickened. The improved results reflect the inception of several new long-term agreements with airlines for aftermarket repair work. Chromalloy added $9 million in repair sales from a new materials-by-the-hour contract with a major network carrier and generated an eight percent increase in commercial aviation aftermarket sales associated with several other new agreements. Military repair sales advanced five percent, and overall sales were bolstered by the effect of translating the results of international operations into US dollars. With the airline industry on the upswing and new customer agreements in place, Chromalloy is expected to show improvement for the second quarter of 2004 compared with the same period last year. Automotive: Both operations in the automotive segment - ARC Automotive and Casco Products - recorded higher sales and achieved a turnaround in profits during the first quarter. Strong operational gains derived from Six Sigma programs and, in the case of Casco, the effect of restructuring actions in earlier periods added to the improvement. The automotive operations also benefited from the translation of foreign currency results into US dollars. Metal Coating: Sales of Precoat Metals - a leading supplier of metal coil coating services to the building products industry, the container industry, and diverse manufactured products markets - advanced 35 percent, and operating profit increased 59 percent for the first quarter of 2004. The improvement in profitability is attributable to the sharp increase in sales, particularly to the construction market, and to operating efficiencies derived from ongoing Six Sigma initiatives. Specialty Chemicals: Britain-based Warwick International, which manufactures detergent additives and operates a network of specialty chemicals distribution units, posted a 17 percent increase in sales and a 22 percent increase in operating profit. The improved profitability reflects a higher level of sales at the chemicals distribution units, the strengthening of the Euro, and the effect of Six Sigma programs. Overall results also benefitted from the translation of local currency results into US dollars. Other Products: Of the three businesses that make up the other products segment, two (Sequa Can Machinery and After Six) recorded lower results, and one staged a strong recovery. MEGTEC Systems, the largest operation in the segment, posted a 44 percent increase in sales and moved from a loss to a profitable position in the quarter. The recovery at MEGTEC reflects an upturn in the global graphic arts market, coupled with benefits derived from earlier restructuring actions and ongoing operational excellence programs. Note: This press release includes forward-looking statements that are subject to risks and uncertainties. A number of factors, including political, currency, regulatory and competitive and technological developments, could result in material differences between actual results and those outlined in any forward-looking statements. For additional information, see the comments included in Sequa's filings with the Securities and Exchange Commission. -0- *T Sequa Corporation and Subsidiaries Consolidated Statement of Operations Report for the Three Months Ended March 31, (Amounts in thousands, except per share) (Unaudited) First Quarter 2004 2003(*) --------- --------- Sales $446,066 $388,912 Costs and expenses 427,953 382,960 --------- --------- Operating income 18,113 5,952 Other income (expense) Interest expense (18,066) (15,836) Interest income 858 738 Other, net (421) 2,124 --------- --------- Income (loss) from continuing operations before income taxes 484 (7,022) Income tax (provision) benefit (200) 3,000 --------- --------- Income (loss) from continuing operations 284 (4,022) Income from discontinued operations, net of income taxes 969 885 --------- --------- Net income (loss) 1,253 (3,137) Preferred dividends (516) (516) --------- --------- Net income (loss) available to common stock $ 737 $ (3,653) ========= ========= Basic and diluted income (loss) per share Loss from continuing operations $ (0.02) $ (0.43) Income from discontinued operations 0.09 0.08 --------- --------- Net income (loss) $0.07 $(0.35) ========= ========= Results by Business Segment --------------------------- (Amounts in thousands) First Quarter 2004 2003(*) --------- --------- Sales ----- Aerospace $178,401 $163,976 Automotive 81,644 67,020 Metal Coating 67,934 50,283 Specialty Chemicals 55,731 47,455 Other Products 62,356 60,178 --------- --------- Total $446,066 $388,912 ========= ========= Operating Income (Loss) ----------------------- Aerospace $ 8,635 $ 2,974 Automotive 3,788 (1,345) Metal Coating 5,965 3,757 Specialty Chemicals 6,705 5,496 Other Products 1,528 1,937 Corporate (8,508) (6,867) --------- --------- Total $ 18,113 $ 5,952 ========= ========= (*) Restated to classify ARC propulsion business and TurboCombustor Technologies as discontinued operations. *T |
