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Stewart & Stevenson Services Reports First Quarter 2005 Results.

Article Excerpt
First Quarter Net Earnings Were $0.26 Per Diluted Share

First Quarter Net Earnings From Continuing Operations Were $0.32 Per Diluted Share

HOUSTON, May 26 /PRNewswire-FirstCall/ -- Stewart & Stevenson Services, Inc. announced results for the first quarter of fiscal 2005, which ended on April 30, 2005.

Sales for the first quarter of fiscal 2005 totaled $311.6 million compared to sales of $262.4 million in the same period a year ago. Net earnings in the first quarter of fiscal 2005 were $7.7 million, or $0.26 per diluted share, compared to $5.4 million, or $0.19 per diluted share, in the first quarter of fiscal 2004. Net earnings from continuing operations in the first quarter of fiscal 2005 were $9.3 million, or $0.32 per diluted share, compared to $8.8 million, or $0.30 per diluted share, in the first quarter of fiscal 2004.

On April 8, 2005, the company completed the acquisition of Automotive Technik (Holdings) Limited ("ATHL"), the United Kingdom manufacturer of the light tactical vehicle known as the Pinzgauer, for 25.0 million pounds sterling ($47.2 million). ATHL operations had no material impact on operating income during the first quarter of Fiscal 2005.

Max L. Lukens, the company's President and Chief Executive Officer, stated, "We are pleased that the strategic initiatives we have taken to improve the company's overall performance are producing results. All of our operating segments were profitable for the first quarter, and we continue to work toward our return goals for the corporation. The acquisition of ATHL represents a strategic action aimed at enhancing value for our shareholders by broadening the product offering of the Tactical Vehicle Systems segment."

Segment Data

The Tactical Vehicle Systems segment, which manufactures tactical vehicles for the U.S. Army and others, recorded sales of $165.5 million in the first quarter of fiscal 2005 compared to $138.8 million in the prior year's first quarter. Operating profit for the first quarter of fiscal 2005 decreased to $13.2 million compared to $19.4 million in the first quarter of fiscal 2004. As previously disclosed, operating margins will be lower in fiscal 2005 as a result of the expected lower contract margins associated with the current multi-year contract with the U.S. Army to produce the Family of Medium Tactical Vehicles ("FMTV") which began production in November 2004....

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