York International Corporation, a heating, ventilating, air- conditioning, and refrigeration solutions company, announced fourth quarter 2003 net income of U.S. $21.7 million, or $0.55 per share.
Working capital decreased $36.2 million from December 2001, and inventory turns and days sales outstanding both continued to improve. The company exceeded its cash expectations and has reduced debt by $130 million since December 2001.
YORK reported sales for the fourth quarter of $1.01 billion, up 5.2% from prior year fourth quarter sales of $961 million. Service growth, increased revenue from Bristol and a positive foreign exchange translation impact were partially offset by reduced equipment shipments. Earnings before interest and taxes (EBIT) in the fourth quarter of 2002 were $38.8 million, and included $2.8 million of income on the restructuring line related to the sale of Sparta fixed assets and the resolution of restructuring actions, $0.4 million related to a previous divestiture and SG&A expenses of $2.3 million relating to executive retirement.
For the fourth quarter of 2001, EBIT of $20.6 million included charges and operating expenses of $19.9 million related to cost reduction initiatives and a discontinued product line; and a $5.8 million write-off of a long-term receivable. Excluding these items, EBIT for the fourth quarter of 2001 was $46.3 million. Interest expense improved from $12.7 million in 2001 to $11.6 million in 2002 due to lower average debt levels, partially offset by a small increase in rates. YORK also improved its tax rate from the prior year due to a favorable geographic mix of earnings and the impact of the adoption of FAS 142.
Fourth quarter net income was $21.7 million, or $0.55 per share. In the fourth quarter of 2001, net income was $5.5 million, or $0.14 per share. Excluding the special items mentioned above, net income in the fourth quarter of 2002 was $21.0 million or $0.53 per share versus $24.7 million or $0.63 per share in 2001.
Given the current economic and political environments, the Company expects weak markets to continue to affect results in 2003. This is expected to result in continued weak equipment markets with pricing and margin levels remaining consistent with 2002. The company expects its service businesses to continue to grow and to realize further benefits from cost reduction actions implemented in 2002. Externally driven cost increases in pension expense, insurance and medical costs and escalating steel prices will substantially offset the realized benefits during the year.
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