25 Aug 05. Stewart & Stevenson Services, Inc. (NYSE: SVC) announced results for the second quarter of fiscal 2005, which ended on July 30, 2005. Sales for the second quarter of fiscal 2005 totalled $369.0m, (2004: $272.4 m), earnings in the second quarter of fiscal 2005 were $9.3m, or $0.31 per diluted share, (2004: $5.9m, or $0.20). Net earnings from continuing operations in the second quarter of fiscal 2005 were $16.5m, or $0.56 per diluted share, (2004: $11.6m, or $0.40.
The Tactical Vehicle Systems segment recorded sales of $204.2m in the second quarter of fiscal 2005, (2004: $140.7m). Operating profit for the second quarter of fiscal 2005 increased to $19.1m or 9.4% of sales, (2004: $18.7m or 13.3%). Operating margins in this segment were expected to be lower in fiscal 2005 as a result of the lower unit prices in the current multi-year contract with the U.S. Army to produce the FMTV which began production in November 2004. The lower margins on this contract were partially offset by sales under other U.S. Army contracts to produce Low Signature Armored Cabs (“LSAC”) for use on the FMTV. The second quarter of 2005 included the sale of 852 LSAC units. During the second quarter, the TVS segment received additional orders from the U.S. Army for FMTV trucks and trailers valued at approximately $483m. These contract modifications, which are funded by the 2005 U.S. Congress Supplemental Spending Bill, provide for an additional 3,016 additional vehicles to the third program year of the current production contract with deliveries scheduled from June 2006 through September 2008. At the end of the second quarter, TVS had total backlog of approximately $1.2bn. The company is evaluating the requirements under the contract modifications and will increase its production capacity for 2006 in order to meet the required delivery schedule. This will require capital expenditures of approximately $25m for additional equipment and facilities to be committed during the second half of 2005. The contract modification is not expected to have a significant impact on the company’s fiscal 2005 operating results.
26 Aug 05. Precision Castparts Corp. said Friday it is buying Special Metals Corp. for about $540m in cash, including repayment of debt. Huntington, W.Va.-based Special Metals, which is privately held, produces nickel-based and super alloys. Portland-based Precision Castparts (NYSE: PCP – News), a maker of metal components and products for the aerospace, power and automotive markets, did not disclose the amount of debt it would repay, but said Special Metals had total debt of $245.4 million as of June 30. The company had revenues of $474.2 million for the first half of the year. Precision Castparts said the purchase will immediately boost earnings, excluding the impact the cost savings obtained by merging the companies. The company said it expects cost savings of $10 million to $15 million in the first year to 15 months, with annual cost savings of $30 million to $40 million. Precision Castparts said it will finance the deal with cash on hand and its credit facilities. The deal, which is subject to regulatory approval, has been approved by both companies’ boards and by shareholders of more than 90 percent of Special Metals’ stock. The transaction is expected to close in the third quarter of fiscal 2006, the company said. (Source: The Business Journal)
24 Aug 05. In an effort to increase the adoption of open technology standards and improve its relations with venture capitalists, International Business Machines Corp. has created an advisory council composed of leading investors from some top venture-capital firms. Called the Venture Capital Advisory Council, the new board will help guide IBM’s efforts in shaping the growth of technology in emerging markets, according to Drew Clark, a director with IBM’s venture-capital group. The computer and consulting services company has seen growth of more than 25% in the emerging markets of