Click here to close now.

Welcome!

Adobe Flex Authors: Matthew Lobas, PR.com Newswire, Shelly Palmer, Kevin Benedict

News Feed Item

Sauer-Danfoss Inc. Reports Fourth Quarter 2012 Results

- Revenues Down, Reflecting Continued Weak Markets

AMES, Iowa, Feb. 20, 2013 /PRNewswire/ -- Sauer-Danfoss Inc. (NYSE: SHS) today announced its financial results for the fourth quarter ended December 31, 2012.

Fourth Quarter Review
Net sales for the quarter declined 7 percent to $413.0 million, compared to net sales of $446.1 million for the fourth quarter of 2011.  Excluding the impact of changes in currency translation rates, sales in the fourth quarter declined 6 percent over the same quarter last year.  Sales for the fourth quarter increased 1 percent in the Americas and 2 percent in the Asia-Pacific region, but declined 18 percent in Europe, excluding the impact of changes in currency translation rates.  Sales declined 15 percent in the Work Function segment and 10 percent in both the Controls and Hydrostatics (formerly Propel) segments, but increased 16 percent in the Stand-Alone Businesses segment, excluding the impact of changes in currency translation rates.

The Company reported net income of $19.9 million, or $0.41 per share, for the fourth quarter of 2012, compared to net income of $27.4 million, or $0.57 per share, for the fourth quarter of 2011.  Fourth quarter 2012 results were negatively impacted by $1.8 million, or $0.04 per share, related to deferred tax asset valuation allowances.  Fourth quarter 2011 results were favorably impacted by $9.2 million, or $0.19 per share, related to the reversal of deferred tax asset valuation allowances but were negatively impacted by certain product field recall costs of $6.9 million, or $0.10 per share.

Eric Alstrom, President and Chief Executive Officer, commented, "Our fourth quarter sales continue to reflect the weak global markets we serve, as well as the inventory reduction actions being taken by several of our customers.  While our sales declined due to our weak markets, I am very pleased with our increase in operating income.  We have been able to increase our operating margin by two full percentage points in the face of declining markets and sales.  This reflects strong cost control throughout our organization, as well as our ability to flex our production to changing demands."   

Orders and Backlog Decline
The Company received new orders of $378.1 million for the fourth quarter of 2012, a 17 percent decline compared to fourth quarter 2011 new orders of $456.5 million.  Excluding the impact of changes in currency translation rates, new orders declined 16 percent.

Total backlog at December 31, 2012, was $837.0 million, an 11 percent decline compared to the same period last year of $939.8 million

Twelve Month Review
The Company reported net sales for the twelve months ended December 31, 2012, of $1,916.1 million, a decline of 7 percent compared to net sales of $2,057.5 million for the twelve months of 2011.  Net sales for the twelve months of 2012 were down 4 percent compared to the prior year period, excluding the impact of currency translation rate changes.

Net income for full year 2012 was $181.8 million, or $3.75 per share, compared to net income of $229.9 million, or $4.74 per share, for the same period last year.  2011 results were favorably impacted by $22.9 million, or $0.47 per share, relating to the reversal of deferred tax asset valuation allowances.

Strong Cash Flow
Cash flow from operations for full year 2012 was $335.3 million, compared to $374.2 million for 2011.  Capital expenditures for full year 2012 were $48.6 million compared to $51.8 million for the same period last year. 

"We generated $262 million of free cash flow for full year 2012, compared to the $299 million of record free cash flow of last year.  Our strong cash flow and earnings over the past couple of years has provided us a very solid balance sheet, or base, from which to drive our future growth plans," stated Alstrom.

Initial Outlook for 2013
Alstrom concluded, "Many of our customers are forecasting modest sales growth for the coming year.  However, there is considerable uncertainly in the global economy.  In addition, many of our customers are continuing to work down excessive inventory levels, especially in North America and China.  This could be a drag on our sales for at least the first half of the coming year.  We therefore expect 2013 sales and earnings to be level with 2012."

The outlook for 2013 is as follows:

  • Annual sales down 3 percent to up 7 percent from 2012 levels
  • Expected earnings in the range of $3.25 to $4.25 per share
  • Capital expenditures of approximately $65.0 to $75.0 million

Status of Proposed Tender Offer
As previously disclosed, on November 28, 2012, Danfoss A/S, the Company's parent company, informed the Company's Board of Directors and publicly announced that Danfoss proposed to acquire all the shares of the Company's common stock that it does not already own for a price of $49 per share in cash, and on the following day the Company announced that its Board of Directors had established a special committee of independent directors to consider Danfoss' proposal.  From late December 2012 through late January 2013, the Special Committee and its advisors undertook efforts to enable the Special Committee to respond to Danfoss' proposal, and since late January 2013 the Special Committee, through its advisors, has been in discussions with Danfoss' advisors regarding the proposal.  These discussions are continuing.  There is no assurance that the Special Committee and Danfoss will reach any agreement or, if an agreement is reached, as to the terms and conditions of that agreement or whether it will be successfully completed.

Webcast Information
Members of Sauer-Danfoss' management team will host a webcast on February 21 at 10 AM Eastern Time to discuss 2012 fourth quarter results.  The call is open to all interested parties on listen-only mode via an audio webcast and can be accessed through the Investor Relations page of the Company's website at http://ir.sauer-danfoss.com.  A replay of the call will be available at that site through March 7, 2013.

About Sauer-Danfoss
Sauer-Danfoss Inc. is a worldwide leader in the design, manufacture, and sale of engineered hydraulic and electronic systems and components for use primarily in applications of mobile equipment.  Sauer-Danfoss, with 2012 revenues of approximately $1.9 billion, has sales, manufacturing, and engineering capabilities in Europe, the Americas, and the Asia-Pacific region.      

More details online at www.sauer-danfoss.com.

This press release contains certain statements that constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. All statements regarding future performance, growth, sales and earnings projections, conditions or developments are forward-looking statements. Words such as "anticipates," "in the opinion," "believes," "intends," "expects," "may," "will," "should," "could," "plans," "forecasts," "estimates," "predicts," "projects," "potential," "continue," and similar expressions may be intended to identify forward-looking statements.

Actual future results may differ materially from those described in the forward-looking statements due to a variety of factors. Readers should bear in mind that past experience is never a perfect guide to anticipating actual future results. Risk factors affecting the Company's forward-looking statements include, but are not limited to, the following: general, worldwide economic conditions, the level of interest rates, crude oil prices, commercial and consumer confidence, and currency exchange rates; specific economic conditions in the agriculture, construction, road building, turf care, material handling and specialty vehicle markets and the impact of such conditions on the Company's customers in such markets; the cyclical nature of some of the Company's businesses; the ability of the Company to win new programs and maintain existing programs with its original equipment manufacturer (OEM) customers; the highly competitive nature of the markets for the Company's products as well as pricing pressures that may result from such competitive conditions; the continued operation and viability of the Company's significant customers; the Company's execution of internal performance plans; difficulties or delays in manufacturing; the effectiveness of the Company's cost-management and productivity improvement efforts; the Company's ability to manage its business effectively in a period of slowing growth in sales and its capacity to make necessary adjustments to changes in demand for its products; competing technologies and difficulties entering and growing in new and expanding markets, both domestic and foreign; changes in the Company's product mix; future levels of indebtedness and capital spending; the availability of sufficient levels of cash flow from operations and credit on favorable terms, whether from Danfoss A/S, the Company's majority stockholder, or from the capital markets or traditional credit sources to enable the Company to meet its capital needs; claims, including, without limitation, warranty claims, field recall claims, product liability claims, charges or dispute resolutions; the ability of suppliers to provide materials as needed and the Company's ability to recover any price increases for materials in product pricing; the Company's ability to attract and retain key technical and other personnel; labor relations; the failure of customers to make timely payment, especially in light of the persistence of tight credit markets; any inadequacy of the Company's intellectual property protection or the potential for third-party claims of infringement; credit market disruptions and significant changes in capital market liquidity and funding costs affecting the Company and its customers and suppliers; sovereign debt crises, in Europe and elsewhere, and the reaction of other nations to such crises; energy prices; the impact of new or changed tax and other legislation and regulations in jurisdictions in which the Company and its affiliates operate, including regulations affecting retirement and health care benefits provided to Company employees; actions by the U.S. Federal Reserve Board and the central banks of other nations, including heightened capital requirements imposed on Chinese banks; actions by other regulatory agencies, including those taken in response to the global credit crisis; actions by credit rating agencies; changes in accounting standards; worldwide political stability, including developments in the Middle East; the effects of terrorist activities and resulting political or economic instability; natural catastrophes; U.S. and NATO military action overseas; and the effect of acquisitions, divestitures, restructurings, product withdrawals, and other unusual events.

The Company cautions the reader that this list of cautionary statements and risk factors is not exhaustive. The Company's outlook is based upon assumptions and projections arising in connection with the foregoing factors, the evaluation of which is often based on estimates and data prepared by government and other third-party sources.  Those estimates and data are frequently revised.  The Company expressly disclaims any obligation or undertaking to release publicly any updates or changes to these forward-looking statements to reflect future events or circumstances.  The foregoing risks and uncertainties are further described in Item 1A (Risk Factors) in the Company's latest annual report on Form 10-K filed with the SEC, which should be reviewed in considering the forward-looking statements contained in this press release. 

 


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 



Three Months Ended


Year Ended


(Dollars and shares in thousands

December 31,


December 31,


December 31,


December 30,


except per share data)

2012


2011


2012


2011


Net sales

413,007


446,131


1,916,094


2,057,487


Cost of sales

291,084


323,631


1,299,207


1,400,330


Gross profit

121,923


122,500


616,887


657,157


Selling, general and administrative

59,292


61,259


235,069


227,968


Research and development

16,229


18,170


64,072


63,996


Other

(191)


939


(70)


590


Total operating expenses

75,330


80,368


299,071


292,554


Income from operations

46,593


42,132


317,816


364,603


Nonoperating income (expense):









   Interest expense, net

(3,025)


(3,796)


(15,035)


(21,150)


   Loss on early retirement of debt

--


--


(1,254)


(1,176)


   Other, net

(72)


(227)


2,825


(3,094)


Income before income taxes

43,496


38,109


304,352


339,183


Income tax expense

(19,011)


(8,301)


(92,274)


(79,380)


Net income

24,485


29,808


212,078


259,803


Net income attributable to noncontrolling interest, net of tax

 

(4,561)


 

(2,364)


 

(30,319)


 

(29,933)


Net income attributable to Sauer-Danfoss Inc.

19,924


27,444


181,759


229,870


Net income per share:









   Basic net income per common share

0.41


0.57


3.75


4.75


   Diluted net income per common share

0.41


0.57


3.75


4.74


Weighted average shares outstanding:









   Basic

48,417


48,406


48,413


48,402


   Diluted

48,486


48,478


48,482


48,479


 


BUSINESS SEGMENT INFORMATION

 



Three Months Ended


Year Ended



December 31,


December 31,


December 31,


December 31,

(Dollars in thousands)


2012


2011


2012


2011

Net sales









   Hydrostatics


189,225


212,839


883,683


948,153

   Work Function


68,919


82,709


311,588


377,519

   Controls


64,477


71,784


303,612


322,489

   Stand-Alone Businesses


90,386


78,799


417,211


409,326

Total


413,007


446,131


1,916,094


2,057,487

Segment Income (Loss)









   Hydrostatics


25,926


32,368


173,549


210,532

   Work Function


8,270


9,117


48,288


59,235

   Controls


11,093


6,830


74,224


78,459

   Stand-Alone Businesses


11,981


6,889


68,361


58,624

   Global Services and Other Expenses, net


(10,749)


(13,299)


(43,781)


(45,341)

Total


46,521


41,905


320,641


361,509

   Interest expense, net


(3,025)


(3,796)


(15,035)


(21,150)

   Loss on early retirement of debt


--


--


(1,254)


(1,176)

   Income before income taxes


43,496


38,109


304,352


339,183

 






CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


Year Ended


December 31,



December 31,

(Dollars in thousands)

2012



2011

Cash Flows from Operating Activities:





Net income

212,078



259,803

Depreciation and amortization

80,503



88,094

Net change in receivables, inventories, and payables

27,533



(19,432)

Other, net


15,181



45,697

Net cash provided by operating activities


335,295



374,162

Cash Flows from Investing Activities:






Purchases of property, plant and equipment


(48,632)



(51,765)

Proceeds from sale of property, plant and equipment


507



6,317

Advances to related persons


(180,579)



(182,538)

Net cash used in investing activities


(228,704)



(227,986)

Cash Flows from Financing Activities:






Net repayments on notes payable and debt facilities


(21,921)



(82,580)

Payment of prepayment penalty


(803)



--

Cash dividends


(50,871)



--

Dividend resulting from tax sharing agreement


--



(12,928)

Distributions to noncontrolling interest partners


(24,409)



(17,076)

Net cash used in financing activities


(98,004)



(112,584)

Effect of exchange rate changes


1,105



(5,071)

Cash and Cash Equivalents:






Net increase in cash and cash equivalents


9,692



28,521

Cash and cash equivalents at beginning of year


72,560



44,039

Cash and cash equivalents at end of year


82,252



72,560

Non-cash Investing and Financing Activities:






Purchases of property, plant and equipment financed by capital leases


(382)



--

Free cash flow (1)


261,958



298,710







(1) Free cash flow is calculated by summing net cash provided by operating activities, net cash used in investing activities, excluding advances to related persons, and net cash used in financing activities, excluding net repayments on notes payable and debt facilities and cash dividends.

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 



  December 31,



December 31,

(Dollars in thousands)                                


2012



2011

ASSETS






Current Assets:






Cash and cash equivalents (1)


441,242



251,287

Accounts receivable, net


217,611



215,978

Inventories


178,226



217,710

Other current assets


73,224



75,868

Total current assets


910,303



760,843

Property, plant and equipment, net


342,246



367,844

Other assets


146,410



149,569

Total Assets


1,398,959



1,278,256







LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:






Long-term debt due within one year


479



955

Accounts payable


168,486



177,996

Other accrued liabilities


171,360



149,240

Total current liabilities


340,325



328,191

Long-term debt


178,378



199,502

Long-term pension liability


88,779



79,717

Deferred income taxes


33,536



35,184

Other liabilities


61,023



57,836

Noncontrolling interest

94,275



90,408

Stockholders' equity of Sauer-Danfoss Inc.


602,643



487,418

Total Liabilities and Stockholders' Equity


1,398,959



1,278,256







Debt to Total Capital Ratio (2)


20%



26%







(1) Includes cash deposited with related persons of $358,990 at December 31, 2012 and $178,727 at December 31, 2011.

(2) The debt to total capital ratio is calculated by dividing total interest bearing debt by total capital. Total interest bearing debt is the sum of long-term debt due within one year and long-term debt. Total capital is the sum of total interest bearing debt, noncontrolling interest, and stockholders' equity.

SOURCE Sauer-Danfoss Inc.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
One of the biggest impacts of the Internet of Things is and will continue to be on data; specifically data volume, management and usage. Companies are scrambling to adapt to this new and unpredictable data reality with legacy infrastructure that cannot handle the speed and volume of data. In his session at @ThingsExpo, Don DeLoach, CEO and president of Infobright, will discuss how companies need to rethink their data infrastructure to participate in the IoT, including: Data storage: Understanding the kinds of data: structured, unstructured, big/small? Analytics: What kinds and how responsiv...
Cloudian, Inc., the leading provider of hybrid cloud storage solutions, today announced availability of Cloudian HyperStore 5.1 software. HyperStore 5.1 is an enhanced Amazon S3-compliant, plug-and-play hybrid cloud software solution that now features full Apache Hadoop integration. Enterprises can now transform big data into smart data by running Hadoop analytics on HyperStore software and appliances. This in-place analytics, with no need to offload data to other systems for Hadoop analyses, enables customers to derive meaningful business intelligence from their data quickly, efficiently and ...
Since 2008 and for the first time in history, more than half of humans live in urban areas, urging cities to become “smart.” Today, cities can leverage the wide availability of smartphones combined with new technologies such as Beacons or NFC to connect their urban furniture and environment to create citizen-first services that improve transportation, way-finding and information delivery. In her session at @ThingsExpo, Laetitia Gazel-Anthoine, CEO of Connecthings, will focus on successful use cases.
Sensor-enabled things are becoming more commonplace, precursors to a larger and more complex framework that most consider the ultimate promise of the IoT: things connecting, interacting, sharing, storing, and over time perhaps learning and predicting based on habits, behaviors, location, preferences, purchases and more. In his session at @ThingsExpo, Tom Wesselman, Director of Communications Ecosystem Architecture at Plantronics, will examine the still nascent IoT as it is coalescing, including what it is today, what it might ultimately be, the role of wearable tech, and technology gaps stil...
The true value of the Internet of Things (IoT) lies not just in the data, but through the services that protect the data, perform the analysis and present findings in a usable way. With many IoT elements rooted in traditional IT components, Big Data and IoT isn’t just a play for enterprise. In fact, the IoT presents SMBs with the prospect of launching entirely new activities and exploring innovative areas. CompTIA research identifies several areas where IoT is expected to have the greatest impact.
Wearable devices have come of age. The primary applications of wearables so far have been "the Quantified Self" or the tracking of one's fitness and health status. We propose the evolution of wearables into social and emotional communication devices. Our BE(tm) sensor uses light to visualize the skin conductance response. Our sensors are very inexpensive and can be massively distributed to audiences or groups of any size, in order to gauge reactions to performances, video, or any kind of presentation. In her session at @ThingsExpo, Jocelyn Scheirer, CEO & Founder of Bionolux, will discuss ho...
Roberto Medrano, Executive Vice President at SOA Software, had reached 30,000 page views on his home page - http://RobertoMedrano.SYS-CON.com/ - on the SYS-CON family of online magazines, which includes Cloud Computing Journal, Internet of Things Journal, Big Data Journal, and SOA World Magazine. He is a recognized executive in the information technology fields of SOA, internet security, governance, and compliance. He has extensive experience with both start-ups and large companies, having been involved at the beginning of four IT industries: EDA, Open Systems, Computer Security and now SOA.
When it comes to the Internet of Things, hooking up will get you only so far. If you want customers to commit, you need to go beyond simply connecting products. You need to use the devices themselves to transform how you engage with every customer and how you manage the entire product lifecycle. In his session at @ThingsExpo, Sean Lorenz, Technical Product Manager for Xively at LogMeIn, will show how “product relationship management” can help you leverage your connected devices and the data they generate about customer usage and product performance to deliver extremely compelling and reliabl...
SYS-CON Events announced today that GENBAND, a leading developer of real time communications software solutions, has been named “Silver Sponsor” of SYS-CON's WebRTC Summit, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. The GENBAND team will be on hand to demonstrate their newest product, Kandy. Kandy is a communications Platform-as-a-Service (PaaS) that enables companies to seamlessly integrate more human communications into their Web and mobile applications - creating more engaging experiences for their customers and boosting collaboration and productiv...
From telemedicine to smart cars, digital homes and industrial monitoring, the explosive growth of IoT has created exciting new business opportunities for real time calls and messaging. In his session at @ThingsExpo, Ivelin Ivanov, CEO and Co-Founder of Telestax, shared some of the new revenue sources that IoT created for Restcomm – the open source telephony platform from Telestax. Ivelin Ivanov is a technology entrepreneur who founded Mobicents, an Open Source VoIP Platform, to help create, deploy, and manage applications integrating voice, video and data. He is the co-founder of TeleStax, a...
The industrial software market has treated data with the mentality of “collect everything now, worry about how to use it later.” We now find ourselves buried in data, with the pervasive connectivity of the (Industrial) Internet of Things only piling on more numbers. There’s too much data and not enough information. In his session at @ThingsExpo, Bob Gates, Global Marketing Director, GE’s Intelligent Platforms business, to discuss how realizing the power of IoT, software developers are now focused on understanding how industrial data can create intelligence for industrial operations. Imagine ...
The 3rd International @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - is now accepting submissions to demo smart cars on the Expo Floor. Smart car sponsorship benefits include general brand exposure and increasing engagement with the developer ecosystem.
Operational Hadoop and the Lambda Architecture for Streaming Data Apache Hadoop is emerging as a distributed platform for handling large and fast incoming streams of data. Predictive maintenance, supply chain optimization, and Internet-of-Things analysis are examples where Hadoop provides the scalable storage, processing, and analytics platform to gain meaningful insights from granular data that is typically only valuable from a large-scale, aggregate view. One architecture useful for capturing and analyzing streaming data is the Lambda Architecture, representing a model of how to analyze rea...
SYS-CON Events announced today that Vitria Technology, Inc. will exhibit at SYS-CON’s @ThingsExpo, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Vitria will showcase the company’s new IoT Analytics Platform through live demonstrations at booth #330. Vitria’s IoT Analytics Platform, fully integrated and powered by an operational intelligence engine, enables customers to rapidly build and operationalize advanced analytics to deliver timely business outcomes for use cases across the industrial, enterprise, and consumer segments.
When it comes to the Internet of Things, hooking up will get you only so far. If you want customers to commit, you need to go beyond simply connecting products. You need to use the devices themselves to transform how you engage with every customer and how you manage the entire product lifecycle. In his session at @ThingsExpo, Sean Lorenz, Technical Product Manager for Xively at LogMeIn, will show how “product relationship management” can help you leverage your connected devices and the data they generate about customer usage and product performance to deliver extremely compelling and reliabl...
SYS-CON Events announced today that SoftLayer, an IBM company, has been named “Gold Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place June 9-11, 2015 at the Javits Center in New York City, NY, and the 17th International Cloud Expo®, which will take place November 3–5, 2015 at the Santa Clara Convention Center in Santa Clara, CA. SoftLayer operates a global cloud infrastructure platform built for Internet scale. With a global footprint of data centers and network points of presence, SoftLayer provides infrastructure as a service to leading-edge customers ranging from ...
The explosion of connected devices / sensors is creating an ever-expanding set of new and valuable data. In parallel the emerging capability of Big Data technologies to store, access, analyze, and react to this data is producing changes in business models under the umbrella of the Internet of Things (IoT). In particular within the Insurance industry, IoT appears positioned to enable deep changes by altering relationships between insurers, distributors, and the insured. In his session at @ThingsExpo, Michael Sick, a Senior Manager and Big Data Architect within Ernst and Young's Financial Servi...
SYS-CON Events announced today that Open Data Centers (ODC), a carrier-neutral colocation provider, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place June 9-11, 2015, at the Javits Center in New York City, NY. Open Data Centers is a carrier-neutral data center operator in New Jersey and New York City offering alternative connectivity options for carriers, service providers and enterprise customers.
The IoT market is projected to be $1.9 trillion tidal wave that’s bigger than the combined market for smartphones, tablets and PCs. While IoT is widely discussed, what not being talked about are the monetization opportunities that are created from ubiquitous connectivity and the ensuing avalanche of data. While we cannot foresee every service that the IoT will enable, we should future-proof operations by preparing to monetize them with extremely agile systems.
There’s Big Data, then there’s really Big Data from the Internet of Things. IoT is evolving to include many data possibilities like new types of event, log and network data. The volumes are enormous, generating tens of billions of logs per day, which raise data challenges. Early IoT deployments are relying heavily on both the cloud and managed service providers to navigate these challenges. Learn about IoT, Big Data and deployments processing massive data volumes from wearables, utilities and other machines.