Jacuzzi Brands Reports Fiscal 2003 Results
The net loss for fiscal 2003 was $31.1 million vs. net income of $40.9 million last year. The net loss for fiscal 2003 included a loss from discontinued operations of $41.2 million vs. income from discontinued operations of $9 million last year. The Salem, Ohio cast iron manufacturing plant was closed in fiscal 2004. The company said it plans to continue to be a provider of cast iron products, which will be manufactured to its specification and design by third parties. Also, the Plant City, Fla., plant was closed in November 2003.
Bath ProductsAnnual sales for the bath products segment were $813.9 million, up 14.3% from $711.9 million in fiscal 2002. However, operating income for the segment declined in 2003 to $7.4 million vs. $26.7 million in fiscal 2002. Operating income for fiscal 2003 included $14.6 million of restructuring and other charges primarily related to the closure of the two plants, while operating income for fiscal 2002 included $2.5 million of restructuring and other charges related to the elimination of an executive layer of management.
Excluding these charges, operating income still decreased as favorable sales volume was offset by labor inefficiencies and start-up costs related to the move to a new whirlpool bath manufacturing facility in Chino, Calif.; the costs of process improvements to enhance quality and future operating efficiencies at the Chino plant; costs related to the Lowe's roll-out; higher workers' compensation insurance costs at the southern California spa and whirlpool bath manufacturing facilities; increased marketing expenses; and escalating costs associated with the cast iron and sanitary ware businesses. Favorable currency exchange rates improved earnings by $5 million for the year. The costs associated with the move to the new whirlpool bath plant in Chino, Calif., process improvements at the new plant and the Lowe's roll-out are not expected to continue into 2004.
Plumbing ProductsThe plumbing products segment had annual sales of $276.6 million, up 7.3% from $257.8 million in fiscal 2002. The segment's higher sales were due primarily to the $8.6 million sale of a license for technology subject to patent litigation and benefits realized from enhanced product offerings and the implementation of programs designed to increase market share. The sales increase occurred despite a 6% decrease in domestic commercial construction spending in fiscal 2003.
Outlook For Fiscal 2004Jacuzzi Brands expects to incur costs of about 7 cents per diluted share in fiscal 2004, associated with plant closures and other initiatives announced in fiscal 2003, according to David H. Clarke, chairman/CEO.
“We are reviewing additional possibilities to further improve our Eljer sanitary ware division and depending on the outcome of this review, we may incur additional non-operating charges in fiscal 2004,” Clarke said in a statement. “While our fall quarter is our smallest in terms of sales and profits, we appear to be off to a good start in October and November. Excluding the non-operating charges, we can confirm that we are comfortable with achieving our previous guidance of 50 cents per share earnings for fiscal 2004.”