Stocks: Pentacon, TransTechnology, Nucor, Textron, ITW, Precision Castparts, Aviall

John Wolz

Pentacon Names Herrmann Vice President
Pentacon Inc. named Michael Herrmann vice president of U.S. industrial group sales.
Herrmann was a regional sales leader for the past two years with responsibility for national agreements, acquiring new business and expanding current customers. He previously was with Fastenal and Coleman Consulting.
Mary McClure, vice president of Industrial group sales and Pentacon board member, will continue to work with specific customers and focus on international sales with specific concentration on Mexico, Canada and Europe.
Pentacon also announced it retained investor relations firm SM Berger & Company to expand investor relations, improve the visibility of its stock in the investment community and broaden its shareholder base.
�Investor relations are as important to a public company as customer relations,� Pentacon CEO Rob Ruck said. �As Pentacon begins to realize the benefits of management initiatives, we want the investing public to know how we are enhancing shareholder value.�
Berger�s average client stocks rose 44% in the first five months of 2001, compared with the S&P 500, which is down 5.1%.
Pentacon distributes fasteners and small parts and provides inventory management from 35 U.S. distribution facilities and sales offices in Europe, Canada, Mexico and Australia. Web: pentacon.com.
TransTechnology Sales Up, Profit Down
TransTechnology Corporation reported a $69.2 million loss for the fiscal year ended March 31, 2001. Net sales increased 9.6% to $328.1 million.
TransTechnology reported a $2.4 million profit in fiscal 2000.
Net sales for the fourth quarter declined 9% to $86.3 million.
The specialty fasteners segment reported fiscal 2001 growth in sales of 8%, primarily due to the first full year of results from the acquisitions of Ellison retaining ring and the Engineered Fasteners division of Eaton Corporation, whereas the prior-year results only included partial-year results for these 1999 acquisitions. Sales and operating income increases were reported in domestic, German and Brazilian retaining ring operations and the German hose clamp business.
CEO Michael Berthelot described fiscal 2001 as �a terrible year for us. The financial effects of the failure of the UK consolidation to be completed as planned were compounded by the rapid decline in automobile and heavy truck production in the second half of our fiscal year. In our efforts to stay ahead of a continually deteriorating situation, during the course of the fiscal year we reduced our companywide headcount by 10% from its midyear peak, while at some units the cutback ran to over 20%, reduced our inventories by $4.4 million, or 7%, and limited our capital expenditures to those that were absolutely necessary. Although we ended the year in technical violation of several financial covenants of our credit facilities, at no time did we miss a payment of interest or principal on our obligations.�
CFO Joseph Spanier said long- and short-term debt at the end of the fiscal year was $272 million, down $5.5 million from the end of the third quarter. For the fiscal year, total debt was reduced $4.9 million.
Berthelot noted that as the auto and truck markets deteriorated �we took a longer, and deeper, look into what their eventual recovery would mean� and �determined that our strategy of growing our fastener business would no longer build shareholder value for a publicly traded small-cap company. As a result, at the end of the fourth quarter we made the decision to completely divest our fastener businesses and to focus our company�s management and financial resources on our highly successful and profitable aerospace businesses.�
TransTechnology plans divestiture by the end of September, and will then be debt free.
�Our two aerospace products businesses reported sales of $70.5 million and an operating income of $18.2 million � a 26% operating margin,� Berthelot noted.

Nucor Sales, Earnings Fall
Nucor Corporation reported first quarter 2001 sales decreased 14% to $1,028,000,000. Earnings fell 57% to $32.7 million.
Cold-finished steel sales totaled 58,000 tons, compared with 69,000 tons a year ago.
Nucor reported its first quarter established new records for steel production, steel shipments and sales to outside customers.
Earnings were hurt by higher-than-expected start-up costs for three steel plants.
According to Robert Guy Matthews of the Wall Street Journal, the steel industry �has been hamstrung by overcapacity, a problem compounded as the slowing economy affects major steel-consuming industries, such as construction, automobile and farm equipment.�
More than a dozen steel makers are operating under Chapter 11 bankruptcy-law protection.

Textron Profits Drop 29%
Falling automotive and industrial components sales hurt Textron Inc. first quarter 2001 profits.
Earnings totaled $143 million, compared with $158 million during the same period of 2000.
First quarter 2001 sales fell to $3.04 billion from $3.29 billion during the same period last year.
Textron lowered expectations for 2001 earnings per share from analysts� $4.74 to $4.65. CEO Lewis Campbell blamed �economic negatives� for the revision.
Textron has announced plans to shift away from its traditional reliance on automotive products.

ITW Revenue Down 1%
Illinois Tool Works Inc. reported revenue for the three months ended April 30, 2001, declined 1%.
Acquisitions increased revenue 8%, but that was offset by a 5% decline in sales from base businesses and a 3% decrease due to currency translation.
According to the company, the revenue decline �was directly attributable to continued slowing in a wide variety of the company�s North American end markets, including automotive, general industrial and construction.�
While sales of international engineered products rose 20%, North American dipped 8%.

Precision Castparts Earnings Up 46.4%
Precision Castparts Corp. reported its fifth straight quarter of sales and earnings growth.
Fiscal year 2001 sales totaled $2,326.3 million, up 39% from the 2000 figures. Earnings totaled $124.9 million.
PCC reported strong aerospace-related sales, including gas turbines, aerospace machining and components.
PCC Specialty Products, which includes fastener tooling companies Reed-Rico and Astro Punch, �is facing some challenges at the moment due to its high content of automotive-oriented products,� CEO William McCormick observed.

Aviall Sales, Profits Rise
Aviation supplier Aviall Inc. reported first quarter 2001 profits rose 19% over the same period last year to $2.7 million. Net sales rose from $114.9 million last year to $130 million this year. \
� 2001 FastenerNews.com