EX-99.1 3 a4572071_ex991.txt UNOVA EXHIBIT 99.1 Exhibit 99.1 UNOVA Announces Fourth Quarter and Full Year 2003 Results EVERETT, Wash.--(BUSINESS WIRE)--Feb. 12, 2004--UNOVA Inc. (NYSE:UNA): -- Positive net cash flows result in highest net cash position in Company history -- Intermec fourth quarter product and service operating profits grow 60 percent over prior year -- IAS achieves targeted breakeven segment results in the fourth quarter UNOVA Inc. (NYSE:UNA) today announced financial results for the fourth quarter and fiscal year 2003 that indicate continued growth at its Intermec division, positive cash flow from operations, successful settlements of intellectual property disputes and significant progress restructuring its industrial businesses. UNOVA reported 2003 revenues from continuing operations of $1.12 billion and a net loss of ($19.3) million, or ($0.33) per share, compared to 2002 revenues of $1.27 billion and net earnings of $2.4 million, or $0.04 per share. Segment operating profits from continuing operations were $43.7 million for 2003, compared to a profit of $95.4 million for 2002. The results include operating profit from intellectual property settlements of $12.5 million and $90.2 million of settlements and sales of certain intellectual property in 2003 and 2002, respectively. Segment operating profits from products and service increased $25.9 million in 2003 compared to 2002. "Unova's excellent fourth quarter operating performance completed a year in which we delivered on our commitments. We executed our IAS integration and cost savings goals on schedule and have positioned the Company to grow and succeed as its markets recover," said Larry Brady, Chairman and CEO. "Intermec's business model and operating leverage has enabled the Company to generate attractive operating margins and simultaneously provide resources to invest in future growth." Fiscal year 2003 and 2002 results included special charges of $9.9 million and $34.6 million, respectively. The special charges primarily relate to the consolidation and merger of the Company's Cincinnati Machine and Lamb Technicon industrial automation businesses and the relocation of corporate headquarters to Everett, Wash. For the quarter ended Dec. 31, 2003, the Company reported revenues of $300.9 million and a net loss of ($2.2) million, or ($0.04) per share, compared to revenues of $326.7 million and a net loss of ($16.0) million, or ($0.27) per share for the prior period. The loss from continuing operations during the fourth quarter of 2003 of ($3.4) million includes $7.0 million of special charges and a tax provision of $6.2 million. The loss from continuing operations during the comparable quarter in the prior year of ($15.0) million includes $24.7 million of special charges, which were almost entirely offset by $23.7 million in operating profits from two intellectual property transactions. During the third quarter, the Company sold principally all the assets and existing backlog of its Lamb Body & Assembly Systems division. The Company's revenues, costs and expenses from continuing operations exclude the results of Lamb Body & Assembly for 2003 and 2002. After tax profit from discontinued operations of $1.1 million in the fourth quarter of 2003, is net of a $4.4 million tax benefit related to full year losses. This compares to a loss of ($1.0) million in the comparable prior year quarter. After tax losses from discontinued operations for the year, including a loss on disposal of the assets of ($2.0) million, were ($8.2) million compared to ($5.2) million in the prior year. The Company's net cash (defined as cash and cash equivalents less total debt) improved $76.3 million during fiscal year 2003 through a combination of cash flow from operations, proceeds from intellectual property settlements and asset sales. At year end, the Company's net cash was a positive $29.9 million. The Company's cash and cash equivalent position of $238.4 million as of Dec. 31, 2003 is the highest level in UNOVA's six-year history. Automated Data Systems (ADS) In the fourth quarter of 2003, revenues at the Company's ADS segment, comprising Intermec Technologies, were $185.9 million. ADS revenues for the comparable fourth quarter of 2002 were $207.6 million. The ADS segment recorded a $13.1 million operating profit for the fourth quarter of 2003 compared to an operating profit of $32.7 million for the fourth quarter of 2002. As stated earlier, segment operating profit from IP settlements in the fourth quarter of 2002 were $23.7 million lower than the comparable prior-year period. Segment operating profit in the fourth quarter of 2003 includes $1.3 million of legal expense to further support the Company's IP enforcement activities. Subsequent to year end, the Company settled a patent dispute with Apple regarding patents held by both companies. This will have a material positive impact on the first quarter 2004 operating results. ADS fourth quarter 2003 product and service revenues increased $8.9 million from the prior year comparable quarter and related segment operating profit increased $5.4 million to $14.4 million. Systems & Solutions product revenues grew five percent, service revenues grew eleven percent, and Printer/Media product revenues increased three percent. Geographically, the Europe, Middle East and Africa (EMEA) region continued to show strong results. Revenues in EMEA grew 17 percent over the comparable prior-year period. North America revenues increased three percent. Revenues in the rest of the world declined 8 percent versus an unusually strong prior-year quarter. Fluctuations in foreign currency exchange rates provided a favorable impact of nearly $9 million. Operating margin on ADS product and service revenues of 7.7 percent in the fourth quarter 2003 resulted in a 2.6 point increase over the comparable prior-year quarter. ADS achieved this performance while increasing its research and development investments by $3.5 million on a comparable prior year quarterly basis. Industrial Automation Systems (IAS) The IAS segment reported fourth quarter 2003 revenues of $114.9 million and an operating profit of $0.7 million. These results compare to fourth quarter 2002 revenues of $119.2 million and an operating loss of ($12.3) million. IAS fourth quarter segment results were benefited by increased shipments and strong operating performance within its Grinding businesses. For fiscal year 2003, IAS reported revenues of $416.0 million and an operating loss of ($22.1) million, compared to revenues of $521.6 million and an operating loss of ($14.8) million for the prior year. IAS segment operating results for 2003 do not include special charges of $8.2 million, including $6.1 million in the fourth quarter related to the IAS restructuring. 2002 segment operating results do not include special charges of $28.2 million, comprising $23.5 million in the fourth quarter related to IAS segment restructuring and $4.7 in the first quarter related to a loss on the sale of a non-core business. During the fourth quarter of 2003, Cincinnati Lamb completed its move of its aerospace and service parts businesses to its new facility in Hebron, Kentucky. The Company has enjoyed immediate improved results from its more streamlined and cost efficient facility. Backlog for all IAS businesses was $266.3 million at Dec. 31, 2003, up from $214.0 million at the end of 2002. IAS backlog in both periods is adjusted to reflect the discontinued operations of Lamb Body and Assembly. About UNOVA UNOVA is a leading supplier of mobile computing and wireless network products for non-office applications and of manufacturing systems technologies primarily for the automotive and aerospace industries. www.unova.com UNA-222 (Forward-looking Statement) Certain forward-looking statements in this release (as defined by Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934) relate to matters that are not historical facts. They include, but are not limited to, statements about the Company's ability to continue to reduce its costs and generate cash flow from its industrial businesses, the Company's ability to achieve its growth plan, the Company's ability to realize its intentions with respect to the future performance of its ADS operations including its new product launches, its ability to successfully manage and complete large-scale industrial systems contracts for new customers, its ability to be successful in its international partnerships for industrial products, its ability to successfully obtain critical components for its products, and its ability to compete for large-scale mobile computing installations. Such forward-looking statements involve and are dependent upon certain risks and uncertainties. These include, but are not limited to, the following which are beyond the Company's control: the presence of competitors with greater financial resources, complexities of managing large-scale systems contracts, favorable relationships with its suppliers, renewed capital spending among automotive and aerospace companies, successful management of large-scale mobile computing roll outs, continued spending on information technology equipment by ADS customers, and other risks and uncertainties described more fully in the Company's filings on Form 10-K and 10-Q with the Securities and Exchange Commission. UNOVA, INC. FOURTH QUARTER AND FISCAL YEAR 2003 - EARNINGS CONFERENCE CALL UNOVA, Inc. will hold a conference call on Friday, February 13 at 10:00 am Eastern, 7:00 am Pacific Standard time to review financial results from the fourth quarter and fiscal year 2003, hosted by UNOVA Chairman and CEO Larry D. Brady and UNOVA CFO Michael E. Keane. A dial-in number for participants is 888-398-1687 (Passcode is "UNOVA"). The call also will be broadcast live on the Internet under the investor information section of the UNOVA web site at www.unova.com. UNOVA, INC. (amounts in thousands, except per share amounts) Three Three Months Months Year Year Ended Ended Ended Ended December December December December 31, 31, 31, 31, 2003 2002 2003 2002 ----------------- --------------------- CONSOLIDATED STATEMENTS OF OPERATIONS (Preliminary) Sales and Service Revenues $300,879 $326,742 $1,122,613 $1,266,008 ----------------- --------------------- Costs and Expenses Cost of sales and service 202,697 216,246 767,114 853,111 Selling, general and administrative 80,297 86,644 306,330 309,232 Depreciation and amortization 5,193 8,077 24,844 32,890 Special charges 6,976 24,699 9,909 34,587 ----------------- --------------------- Total Costs and Expenses 295,163 335,666 1,108,197 1,229,820 ----------------- --------------------- Operating Profit (Loss) From Continuing Operations 5,716 (8,924) 14,416 36,188 Interest, net (2,913) (3,953) (13,085) (20,589) ----------------- --------------------- Earnings (Loss) From Continuing Operations Before Taxes 2,803 (12,877) 1,331 15,599 Provision for income taxes 6,200 2,130 12,400 7,996 ----------------- --------------------- Earnings (Loss) From Continuing Operations (3,397) (15,007) (11,069) 7,603 Profit (Loss) from discontinued operations, net of tax 1,148 (969) (8,198) (5,176) ----------------- --------------------- Net Earnings (Loss) $ (2,249)$(15,976) $ (19,267)$ 2,427 ================= ===================== Basic Earnings (Loss) per Share Continuing Operations $ (0.06)$ (0.26) $ (0.19)$ 0.13 Discontinued Operations 0.02 (0.01) (0.14) (0.09) ----------------- --------------------- Net earnings (loss) per share $ (0.04)$ (0.27) $ (0.33)$ 0.04 ================= ===================== Diluted Earnings (Loss) per Share Continuing Operations $ (0.06)$ (0.26) $ (0.19)$ 0.13 Discontinued Operations 0.02 (0.01) (0.14) (0.09) ----------------- --------------------- Net earnings (loss) per share $ (0.04)$ (0.27) $ (0.33)$ 0.04 ================= ===================== Shares Used in Computing Earnings (Loss) per Share Basic 59,454 58,141 58,828 57,821 Diluted 59,454 58,141 58,828 58,614 SELECTED SEGMENT INFORMATION (Preliminary) Sales and Service Revenues Automated Data Systems $185,940 $207,581 $ 706,583 $ 744,378 Industrial Automation Systems 114,939 119,161 416,030 521,630 ----------------- --------------------- Total Sales and Service Revenues $300,879 $326,742 $1,122,613 $1,266,008 ================= ===================== Operating Profit (Loss) From Continuing Operations Segment Operating Profit (Loss) Automated Data Systems $ 13,107 $ 32,665 $ 65,781 $ 110,173 Industrial Automation Systems 732 (12,312) (22,118) (14,760) ----------------- --------------------- Total Segment Operating Profit 13,839 20,353 43,663 95,413 Corporate and Other (1,147) (4,578) (19,338) (24,638) Special Charges (6,976) (24,699) (9,909) (34,587) ----------------- --------------------- Operating Profit (Loss) From Continuing Operations $ 5,716 $ (8,924) $ 14,416 $ 36,188 ================= ===================== UNOVA, INC. CONSOLIDATED BALANCE SHEETS (Preliminary) (amounts in thousands) December December 31, 31, 2003 2002 ---------- ---------- Assets Current Assets Cash and cash equivalents $ 238,447 $ 178,269 Accounts receivable, net 275,594 341,171 Inventories, net of progress billings 132,324 138,468 Deferred tax assets 71,229 78,612 Assets held for sale 23,840 - Other current assets 19,513 9,247 ---------- ---------- Total Current Assets 760,947 745,767 Property, Plant and Equipment, Net 77,292 126,936 Goodwill and Other Intangibles, Net 75,639 75,345 Deferred Tax Assets 111,820 103,559 Other Assets 65,119 73,174 ---------- ---------- Total Assets $1,090,817 $1,124,781 ========== ========== Liabilities and Shareholders' Investment Current Liabilities Accounts payable and accrued expenses $ 265,626 $ 286,715 Payroll and related expenses 54,893 72,211 ---------- ---------- Total Current Liabilities 320,519 358,926 Long-term Obligations 208,500 224,700 Other Long-term Liabilities 130,970 123,257 Shareholders' Investment Common stock 605 586 Additional paid-in capital 690,745 674,715 Retained deficit (257,566) (238,299) Accumulated other comprehensive loss (2,956) (19,104) ---------- ---------- Total Shareholders' Investment 430,828 417,898 ---------- ---------- Total Liabilities and Shareholders' Investment $1,090,817 $1,124,781 ========== ========== UNOVA, INC. CONSOLIDATED STATEMENT OF CASH FLOWS (Preliminary) Year Ended December 31, 2003 (amounts in thousands) Cash and Cash Equivalents at Beginning of Period $ 178,269 ----------- Cash Flows from Operating Activities: Net loss (19,267) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 25,811 Changes in working capital and other operating activities 63,665 ----------- Net Cash Provided by Operating Activities 70,209 ----------- Cash Flows from Investing Activities: Capital expenditures (20,099) Other investing activities 15,698 ----------- Net Cash Used in Investing Activities (4,401) ----------- Cash Flows from Financing Activities: Repayment of long-term obligations (16,200) Other financing activities 10,570 ----------- Net Cash Used in Financing Activities (5,630) ----------- Resulting Increase in Cash and Cash Equivalents 60,178 ----------- Cash and Cash Equivalents at End of Period $ 238,447 =========== CONTACT: UNOVA Inc. Michael E. Keane, 425-265-2402 mkeane@unova.com or Kevin P. McCarty, 425-265-2472 kmccarty@unova.com or Intermec Technologies Corp. Kathie Jackson Anderson, 425-348-2799 kathie.anderson@intermec.com