-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AwtnrokLDNX/knw2aWcXFmNkcpgVwnfdckLtAQolrAI4yMm2aTeLe2BjacOF39LX qmNVl91ViY0MHYffVEt9aw== 0000950129-02-002214.txt : 20020501 0000950129-02-002214.hdr.sgml : 20020501 ACCESSION NUMBER: 0000950129-02-002214 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20020429 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20020501 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NATCO GROUP INC CENTRAL INDEX KEY: 0001057693 STANDARD INDUSTRIAL CLASSIFICATION: FABRICATED PLATE WORK (BOILER SHOPS) [3443] IRS NUMBER: 222906892 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-15603 FILM NUMBER: 02629902 BUSINESS ADDRESS: STREET 1: BROOKHOLLOW CENTRAL III STREET 2: 2950 NORTH LOOP WEST STE 750 CITY: HOUSTON STATE: TX ZIP: 77092 BUSINESS PHONE: 7136839292 MAIL ADDRESS: STREET 1: BROOKHOLLOW CENTERL III STREET 2: 2950 NORTH LOOP WEST STE 750 CITY: HOUSTON STATE: TX ZIP: 77092 8-K 1 h96475e8-k.txt NATCO GROUP INC - APRIL 29, 2002 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of Earliest Event Reported): April 29, 2002 NATCO Group Inc. (Exact Name of Registrant as Specified in its Charter) DELAWARE ___________ 22-2906892 (State of (Commission (IRS Employer Incorporation) File Number) Identification No.) 2950 North Loop West, 7th Floor 77092 Houston, Texas (Zip Code) (Address of Principal Executive Offices) Registrant's Telephone Number, Including Area Code: (713) 683-9292 ITEM 5. OTHER EVENTS On April 29, 2002, NATCO Group Inc. issued a press release announcing the Company's earnings for the first quarter of 2002. This press release is filed as Exhibit 99.1 to this Current Report on Form 8-K, and the contents of such Exhibit are incorporated herein by reference. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits 99.1 Press Release, dated April 29, 2002 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: May 1, 2002 NATCO Group Inc. By: /s/ J. MICHAEL MAYER ------------------------------------ J. Michael Mayer Senior Vice President and Chief Financial Officer EX-99.1 3 h96475ex99-1.txt PRESS RELEASE - REPORTS FIRST QUARTER RESULTS EXHIBIT 99.1 2950 North Loop West, Suite 700 Houston, TX 77092 PHONE: (713) 685-8062 FAX: (713) 683-7841 NATCO GROUP REPORTS FIRST QUARTER RESULTS HOUSTON, APRIL 29, 2002 - -------------------------------------------------------------------------------- NATCO Group Inc. (NYSE: NTG - "the Company") today announced first quarter 2002 revenue and net income of $73.6 million and $1.8 million ($0.11 per diluted share) compared to $62.9 million and $1.4 million ($0.09 per diluted share) of revenue and net income in the first quarter of 2001. Revenue for the current quarter increased 17% over the prior year due to strong results in North American Operations and a full quarter of contribution from NATCO's Axsia subsidiary, which was acquired in March 2001. The Company's EBITDA for the current quarter (defined as gross profit less selling, general and administrative expense) was $4.7 million, compared to $5.0 million in the first quarter of 2001. Chairman and CEO Nat Gregory said, "NATCO delivered solid financial results for the quarter. We are especially pleased with the strength of our core North American Operations, in spite of a very difficult environment for oil service and equipment suppliers." In North American Operations, revenue increased 14% over the prior year's quarter. Gross margins in the segment were 26%, compared to 24%. Operating expenses also increased due, in part, to higher insurance costs, relocation expenses for two branches, and lower absorption of field service personnel. Contribution to EBITDA from North American Operations was 32% higher than prior year and 16% higher than the fourth quarter of 2001. Revenue and margin from traditional equipment, parts and service in the U.S. were modestly higher in spite of a year-over-year drop of 36% in domestic rig count. Results were also positively affected by completion of a number of retrofit projects in the Akal field for Pemex in Mexico. Revenue from Pemex represented 4% of the Company's revenue for the quarter. "These were record results for our North American Operations," commented Gregory. "With the dramatic drop in rig count we did see an erosion in results for traditional business during the quarter, and we expect that to continue over the next several months, which is expected to have a negative impact on results for the segment next quarter. But the outlook for the second half of the year and for 2003 is encouraging." Further highlighting results in North American Operations were solid earning's in CO2 operations, led by a large replacement membrane order. Growth in the Company's flagship Sacroc facility was limited somewhat by delays in startup of capacity expansions to the facility made in 2001. The Company expects to see higher throughput at Sacroc by mid-summer. The Company also expects to increase capacity further at the Sacroc facility over the next two years, in conjunction with Kinder Morgan's recently announced expansion of CO2 flooding in the Sacroc field. Automation and Control Systems revenue declined 7% compared to prior year, with gross margins of 18.2% down modestly from prior year, reflecting market conditions. Results in March were better than the first two months of the quarter, and modest further improvement is expected in the coming months. The pace of improvement in this segment will depend primarily on growth in activity in the Gulf of Mexico later in 2002 and in 2003. Engineered Systems revenue increased 40% compared to prior year due to the March 2001 acquisition of Axsia, although year-over-year reduction in revenue from the Company's Southeast Asian CTOC project more than offset the impact of Axsia. Margins for the quarter were 23% compared to 29% in the prior year, reflecting the near-completion of CTOC, and a shift toward a more typical margin profile on the mix of current projects. Operating expenses in the segment increased primarily as a result of the Axsia acquisition. Engineered Systems' bookings for the quarter were $10.2 million, higher than prior year but down significantly from recent quarters. Backlog in Engineered Systems fell to $56 million, contributing to an overall drop in Company backlog to $77 million, 13% lower than prior year and 24% lower than year-end 2001. "Not surprisingly, because of the market environment we have been in, bookings for large projects have not only been sluggish but they also continue to be very irregular from quarter to quarter. We expect several important jobs to move forward in the next few months, so we should recover most of our reduced backlog by the end of the second quarter," noted Gregory. "Our outlook remains very positive as and when international markets gain some momentum." The Company benefited during the quarter from currency gains at Axsia, which are classified as non-operating income. The Company also benefited relative to prior periods from adoption of SFAS No. 142 "Goodwill and Other Intangible Assets" effective January 1, 2002, which eliminated goodwill amortization expense. For comparison, net income for the quarter ended March 31, 2001, before goodwill amortization would have been $1.9 million ($0.12 per diluted share). The Company's effective tax rate for the quarter was 38.3%, which also reflects the impact of no longer recording goodwill amortization expense. Working capital as of March 31, 2002 was $45.2 million, compared to $37.1 million at December 31, 2001. Debt increased to $66.0 million at quarter end compared to $58.6 million at year-end 2001. The Company's debt to capitalization ratio as of March 31, 2002 was 42%. The primary changes in working capital were an increase in receivables due to higher revenues in the quarter and a decrease in trade payables and project related accrued liabilities. The weighted average interest rate on outstanding debt as of March 31, 2002 was 4.7%. NATCO Group Inc. is a leading provider of wellhead process equipment, systems and services used in the production of oil and gas. NATCO has designed, manufactured and marketed production equipment and services for more than 75 years. NATCO production equipment is used onshore and offshore in most major oil and gas producing regions of the world. Statements made in this press release that are forward-looking in nature are intended to be "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934 and may involve risk and uncertainties. These statements may differ materially from actual future events or results. Readers are referred to documents filed by NATCO Group Inc. with the Securities and Exchange Commission, including its Form S-1 and the Annual Report on Form 10-K, which identifies significant risk factors which could cause actual results to differ from those contained in the forward-looking statements. NATCO GROUP INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT SHARE DATA)
MARCH 31, DECEMBER 31, 2002 2001 ---------- ------------ ASSETS Current assets: Cash and cash equivalents.................................. $ 1,856 $ 3,093 Trade accounts receivable, net............................. 75,798 67,922 Inventories................................................ 36,451 37,517 Prepaid expenses and other current assets.................. 5,706 6,725 ---------- --------- Total current assets................................. 119,811 115,257 Property, plant and equipment, net........................... 31,211 31,003 Goodwill, net................................................ 80,126 79,907 Deferred income tax assets, net.............................. 5,751 4,378 Other assets, net............................................ 2,078 2,206 ---------- --------- Total assets......................................... $ 238,977 $ 232,751 ========== ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current installments of long-term debt..................... $ 7,097 $ 7,000 Accounts payable........................................... 32,204 30,440 Accrued expenses and other................................. 34,556 34,781 Customer advances.......................................... 740 5,925 ---------- --------- Total current liabilities............................ 74,597 78,146 Long-term debt, excluding current installments............... 58,866 51,568 Postretirement benefit and other long-term liabilities....... 14,952 14,107 ---------- --------- Total liabilities.................................... 148,415 143,821 ---------- --------- Stockholders' equity: Preferred stock $.01 par value. Authorized 5,000,000 shares; no shares issued and outstanding................. -- -- Class A Common stock, $.01 par value. Authorized 45,000,000 shares; issued and outstanding 15,803,797 and 15,469,078 shares as of March 31, 2002 and December 31, 2001, respectively....................................... 158 155 Class B Common stock, $.01 par value. Authorized 5,000,000 shares; issued and outstanding 334,719 shares as of December 31, 2001........................................ -- 3 Additional paid-in capital................................. 97,223 97,223 Accumulated earnings....................................... 6,630 4,857 Treasury stock, 795,692 shares at cost as of March 31, 2002 and December 31, 2001............................... (7,182) (7,182) Accumulated other comprehensive loss....................... (2,943) (2,858) Note receivable from officer and stockholder............... (3,324) (3,268) ---------- --------- Total stockholders' equity........................... 90,562 88,930 ---------- --------- Commitments and contingencies Total liabilities and stockholders' equity........... $ 238,977 $ 232,751 ========== =========
NATCO GROUP INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED MARCH 31, ------------------ 2002 2001 ------- ------- Revenues........................................... $73,578 $62,910 Cost of goods sold................................. 55,315 46,917 ------- ------- Gross profit............................. 18,263 15,993 Selling, general and administrative expense........ 13,545 11,011 Depreciation and amortization expense.............. 1,159 1,603 Interest expense................................... 1,017 706 Interest cost on postretirement benefit liability.. 122 322 Interest income.................................... (56) (34) Other expense, net................................. (397) 41 ------- ------- Income before income taxes............... 2,873 2,344 Income tax provision............................... 1,100 968 ------- ------- Net income............................... $ 1,773 $ 1,376 ======= ======= EARNINGS PER SHARE: Basic............................................ $ 0.11 $ 0.09 Diluted.......................................... $ 0.11 $ 0.09 WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING: Basic............................................ 15,804 15,702 Diluted.......................................... 15,936 15,997
NATCO GROUP INC. AND SUBSIDIARIES UNAUDITED SEGMENT INFORMATION (IN THOUSANDS)
THREE MONTHS ENDED MARCH 31, --------------------- 2002 2001 --------------------- Revenue: North American Operations 39,375 34,601 Engineered Systems 25,109 17,965 Automation & Control Systems 11,865 12,807 Eliminations (2,771) (2,463) ------------------------- Total Revenue 73,578 62,910 ========================= Gross Profit: North American Operations 10,250 8,406 Engineered Systems 5,852 5,186 Automation & Control Systems 2,161 2,401 Eliminations -- -- ------------------------- Total Gross Profit 18,263 15,993 ========================= Gross Profit % of Revenue: North American Operations 26.0% 24.3% Engineered Systems 23.3% 28.9% Automation & Control Systems 18.2% 18.7% Total Gross Profit % of Revenue 24.8% 25.4% Operating Expenses: North American Operations 6,005 5,199 Engineered Systems 4,027 2,657 Automation & Control Systems 1,249 1,101 Technology & Product Development 819 776 Corporate and Other 1,445 1,278 ------------------------ Total Operating Expenses 13,545 11,011 ========================= EBITDA: North American Operations 4,245 3,207 Engineered Systems 1,825 2,529 Automation & Control Systems 912 1,300 Technology & Product Development (819) (776) Corporate and Other (1,445) (1,278) ------------------------- Total EBITDA 4,718 4,982 ========================= Bookings: North American Operations 30,042 34,559 Engineered Systems 10,211 6,116 Automation & Control Systems 9,073 11,539 ------------------------- Total Bookings 49,326 52,214 ------------------------- As of March 31, ------------------------- 2002 2001 ------------------------- Backlog: 16,159 19,131 North American Operations 56,003 66,001 Engineered Systems 4,849 3,626 ------------------------- Automation & Control Systems 77,011 88,758 ========================= Total Backlog
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