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STEWART AND STEVENSON REPORTS SECOND QUARTER EARNINGS

29 Aug 02. Stewart & Stevenson Services, Inc. (Nasdaq: SSSS – News), announced results for the fiscal second quarter ending August 3, 2002 and the sale of a portion of its Petroleum Equipment segment’s discontinued blowout preventer, valve, elastomer, and drilling riser products business.

Sales from continuing operations for the second quarter of 2002 were $278.8M (2001: $373.0m. The decrease in sales resulted from the completion of certain large turnkey power generation projects in the previous year that were not replicated in the current period in the Distributed Energy Solutions segment and generally lower sales across the remaining segments of the company. Net earnings from continuing operations were $4.6m or $0.16 per diluted share, (2001: 12.3m, or $0.42).

Sales from continuing operations for the first six months of 2002 were $576.4m (2001: $693.2m). Net earnings from continuing operations in the first six months
of 2002 were $9.6m or $0.33 per diluted share, (2001: $32.9m, or $1.14).

Net loss from discontinued operations and from disposal of certain discontinued operations in the second quarter of 2002 was $11.0m or $0.38 per diluted share (2001: $701,000 or $0.02). Total net loss in second quarter 2002 after the effect of discontinued operations was $6.4m or $0.22 per diluted share (2001: $13.0m or $0.45).

The Tactical Vehicle Systems segment, which manufactures tactical vehicles for the U.S. Army and others, and is currently bidding for the U.K. FCV requirement, recorded sales of $105.4m in the second quarter of 2002 (2001: $108.8m). Second
quarter sales were in line with expectations and operating profit for the quarter totalled $15.6m, (2001: $16.2m). Operating profit margins were relatively unchanged from the same period of the prior year but were improved from first quarter levels as a result of productivity improvements and lower spending. The company continues its preparation for the next multi-year contract award for the production of the FMTV.

BATTLESPACE is publishing a feature on Stewart & Stevenson in its August issue out next week

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