EX-99.2 3 a4687420ex992.txt EARNINGS RELEASE EXHIBIT 99.2 UNOVA Announces Second Quarter 2004 Results EVERETT, Wash.--(BUSINESS WIRE)--July 26, 2004--UNOVA, Inc. (NYSE:UNA): -- UNOVA reports EPS of $0.09, including increased R&D activities -- Intermec product and service revenues increase 8.6% over prior-year quarter -- IAS segment achieves profitability UNOVA, Inc. (NYSE:UNA) today announced financial results for its second fiscal quarter which ended June 30, 2004. UNOVA reported second quarter revenues of $ 304.2 million and net earnings of $5.6 million, or $0.09 per share, compared to 2003 second quarter revenues of $279.7 million and a net loss of ($0.8) million, or ($0.01) per share. The prior year revenues included $7.2 million from Intellectual Property (IP) settlements. Segment operating profit from continuing operations was $18.6 million for the second quarter of 2004, compared to an operating profit of $13.3 million for the same prior year period. The prior year performance included a $5.3 million positive impact on segment operating profit from IP settlements. Segment operating profit from product and service revenues increased $10.7 million, or 135 percent, in the second quarter of 2004 compared to same prior-year period. "We posted a quarter of continued operational improvement and year-over-year growth," said Larry Brady, Chairman and CEO. "The AIT III and Hallmark contract wins are early evidence that we can leverage our substantial increase in R&D investment to drive significant future revenue. The business and technology strategies we put in place several quarters ago are showing tangible momentum." The Company's cash and cash equivalent position as of June 30, 2004 was $191.1 million, a decrease of $36.4 million during the second quarter of 2004. The decrease in net cash primarily reflects IAS segment working capital requirements to support certain long-term contracts. Total debt remained unchanged at $208.5 million. Automated Data Systems (ADS) In the second quarter of 2004, revenues at the Company's ADS segment, comprising Intermec Technologies, were $186.6 million. ADS revenues for the comparable second quarter of 2003 were $179.0 million, including $7.2 million related to IP settlements. Fluctuations in foreign currency exchange rates provided a favorable impact on revenue of approximately $5 million compared to the prior-year quarter. The ADS segment recorded a $15.6 million operating profit for the second quarter of 2004 compared to an operating profit of $21.5 million, including $5.3 million related to the IP settlements, for the second quarter of 2003. The second quarter of 2004 includes more than $5 million of incremental research and development expenses compared to the prior-year quarter. Operating margins for ADS product and service revenues were 8.4 percent in the second quarter of 2004, including the incremental research and development expenses, compared to 9.4 percent for the prior-year quarter. ADS product and service revenues increased 8.6 percent over the comparable quarter of 2003. Systems & Solutions product revenues increased 15 percent, service revenues increased 2 percent, and Printer/Media product revenues increased 1 percent, over the prior-year quarter. Geographically, North America revenues achieved an increase of 9 percent over the comparable prior-year period. Revenues in EMEA increased 5 percent, revenues in Asia Pacific increased 31 percent and Latin America revenues increased 10 percent. Industrial Automation Systems (IAS) The IAS segment reported second quarter 2004 revenues of $117.6 million and an operating profit of $3.0 million. IAS revenues increased 16.9 percent over the comparable quarter of 2003. These results compare to second quarter 2003 revenues of $100.7 million and an operating loss of ($8.2) million. During the quarter, the IAS segment expanded its global reach by securing two separate diesel block machining contracts in China utilizing our new "Mega" product line. IAS received orders relating to its composite technology which will support applications for the Boeing 7E7 and Airbus A-380 programs. IAS also received several automotive contract awards for engine retooling expansion programs. Improving trends in our aftermarket parts and service bookings reflect increased customer activity in the manufacturing sector. Backlog for all IAS businesses was $268.2 million as of June 30, 2004, compared to $266.4 million at December 31, 2003. 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 (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 improve profit in both its business segments, reduce expenses, and improve efficiency, leverage its research and development investment to drive significant future revenue, and the ability to continue operational improvement and year over year growth. Such forward-looking statements involve and are dependent upon certain risks and uncertainties. These include, but are not limited to, 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. SECOND QUARTER 2004 - EARNINGS CONFERENCE CALL UNOVA, Inc. will hold a conference call on Monday, July 26 at 10:00 am Eastern, 7:00 am Pacific Daylight Time to review financial results from the second quarter of fiscal year 2004, hosted by UNOVA Chief Executive Officer, Larry D. Brady; Chief Financial Officer, Michael E. Keane; Intermec President, Thomas O. Miller and Industrial Automation Systems President, Robert T. Smith. The dial-in number for participants is 877-915-2769 (Pass code 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. (Unaudited, amounts in thousands, except per share amounts) Three Three Six Six Months Months Months Months Ended Ended Ended Ended June 30, June 30, June 30, June 30, 2004 2003 2004 2003 -------- -------- -------- -------- CONSOLIDATED STATEMENTS OF OPERATIONS (Preliminary) Sales and Service Revenues $304,213 $279,702 $601,883 $543,710 Costs and Expenses Cost of sales and service 207,289 192,217 402,245 379,381 Selling, general and administrative 79,404 73,274 158,055 149,554 Depreciation and amortization 4,610 6,618 9,394 13,402 Special charges 259 947 642 1,945 -------- -------- -------- -------- Total Costs and Expenses 291,562 273,056 570,336 544,282 -------- -------- -------- -------- Operating Profit (Loss) From Continuing Operations 12,651 6,646 31,547 (572) Interest, net (3,186) (3,177) (6,254) (7,039) -------- -------- -------- -------- Earnings (Loss) From Continuing Operations Before Taxes 9,465 3,469 25,293 (7,611) Provision for income taxes 3,768 2,600 9,084 4,200 -------- -------- -------- -------- Earnings (Loss) From Continuing Operations 5,697 869 16,209 (11,811) Loss from discontinued operations, net of tax (85) (1,669) (115) (3,872) -------- -------- -------- -------- Net Earnings (Loss) $ 5,612 $ (800) $ 16,094 $(15,683) ======== ======== ======== ======== Basic Earnings (Loss) per Share Continuing Operations $ 0.09 $ 0.02 $ 0.27 $ (0.20) Discontinued Operations (0.00) (0.03) (0.00) (0.07) -------- -------- -------- -------- Net earnings (loss) per share $ 0.09 $ (0.01) $ 0.27 $ (0.27) ======== ======== ======== ======== Diluted Earnings (Loss) per Share Continuing Operations $ 0.09 $ 0.02 $ 0.26 $ (0.20) Discontinued Operations (0.00) (0.03) (0.00) (0.07) -------- -------- -------- -------- Net earnings (loss) per share $ 0.09 $ (0.01) $ 0.26 $ (0.27) ======== ======== ======== ======== Shares Used in Computing Earnings (Loss) per Share Basic 60,403 58,474 60,296 58,444 Diluted 62,011 59,661 62,069 58,444 SELECTED SEGMENT INFORMATION (Preliminary) Sales and Service Revenues Automated Data Systems $186,579 $179,040 $379,584 $341,922 Industrial Automation Systems 117,634 100,662 222,299 201,788 -------- -------- -------- -------- Total Sales and Service Revenues $304,213 $279,702 $601,883 $543,710 ======== ======== ======== ======== Operating Profit (Loss) From Continuing Operations Segment Operating Profit (Loss) Automated Data Systems $ 15,599 $ 21,495 $ 43,645 $ 30,497 Industrial Automation Systems 3,011 (8,235) (2,242) (16,431) -------- -------- -------- -------- Total Segment Operating Profit 18,610 13,260 41,403 14,066 Corporate and Other (5,700) (5,667) (9,214) (12,693) Special Charges (259) (947) (642) (1,945) -------- -------- -------- -------- Operating Profit (Loss) From Continuing Operations $ 12,651 $ 6,646 $ 31,547 $ (572) ======== ======== ======== ======== UNOVA, INC. CONSOLIDATED BALANCE SHEETS (Preliminary) (Unaudited, amounts in thousands) June 30, Dec. 31, 2004 2003 ---------- ---------- Assets Current Assets Cash and cash equivalents $ 191,070 $ 238,447 Accounts receivable, net 320,659 275,594 Inventories, net of progress billings 157,874 132,324 Deferred tax assets 65,424 71,229 Assets held for sale 19,681 23,840 Other current assets 17,071 19,513 ---------- ---------- Total Current Assets 771,779 760,947 Property, Plant and Equipment, Net 74,558 77,292 Goodwill and Other Intangibles, Net 75,015 75,639 Deferred Tax Assets 116,113 111,820 Other Assets 57,108 65,119 ---------- ---------- Total Assets $1,094,573 $1,090,817 ========== ========== Liabilities and Shareholders' Investment Current Liabilities Accounts payable and accrued expenses $ 257,895 $ 265,626 Payroll and related expenses 40,456 54,893 Current portion of long-term obligations 100,000 ---------- ----------- Total Current Liabilities 398,351 320,519 Long-term Obligations 108,500 208,500 Other Long-term Liabilities 134,930 130,970 Shareholders' Investment Common stock 610 605 Additional paid-in capital 698,132 690,745 Retained deficit (241,472) (257,566) Accumulated other comprehensive loss (4,478) (2,956) ---------- ---------- Total Shareholders' Investment 452,792 430,828 ---------- ---------- Total Liabilities and Shareholders' Investment $1,094,573 $1,090,817 ========== ========== UNOVA, INC. CONSOLIDATED STATEMENT OF CASH FLOWS (Preliminary) Six Months Ended June 30, 2004 (Unaudited, amounts in thousands) Cash and Cash Equivalents at Beginning of Period $238,447 Cash Flows from Operating Activities: Net earnings 16,094 Adjustments to reconcile net earnings to net cash used in operating activities: Depreciation and amortization 9,394 Changes in working capital and other operating activities (74,960) -------- Net Cash Used in Operating Activities (49,472) -------- Cash Flows from Investing Activities: Capital expenditures (6,417) Other investing activities 4,346 -------- Net Cash Used in Investing Activities (2,071) -------- Cash Flows from Financing Activities: Stock options exercised 2,774 Other financing activities 1,392 -------- Net Cash Provided by Financing Activities 4,166 -------- Resulting Decrease in Cash and Cash Equivalents (47,377) -------- Cash and Cash Equivalents at End of Period $191,070 ======== CONTACT: UNOVA, Inc. Chief Financial Officer Michael E. Keane, 425-265-2402 mkeane@unova.com or UNOVA, Inc. Director of Investor Relations Kevin P. McCarty, 425-265-2472 kmccarty@unova.com