First Quarter Stock Report: Nucor, Park-Ohio, Ivaco, Pentacon, ITW, Black & Decker, Lawson, SPS, Textron, Questron, Alleghany, TransTechnology, Precision Castparts

John Wolz

Nucor Rebounds in 1st Quarter � Nucor Corporation reported first quarter 2000 sales increased 34% to a record $1.2 billion. Net earnings jumped from $28.2 million a year ago to $81.5 million this year.
Nucor reported record steel production, shipments and sales for the quarter. Steel production in the first quarter totaled 2,999,000 tons, compared with 2,386,000 tons during the first quarter of 1999.
Cold finished steel sales were 69,000 tons, compared with 65,000 tons in the first quarter a year ago.
Charlotte, NC-based Nucor manufactures steel products in eight states, including fasteners in Indiana and Arkansas.

Park-Ohio Sales Up 20% � Park-Ohio Holdings Corp. announced 2000 first quarter net income increased 5% over the same period last year to $4.56 million, and sales jumped 20% to $206,360,000.
Cleveland-based Park-Ohio provides business-to-business logistics services for fasteners and related industrial components and manufactures highly engineered products for OEMs. Park-Ohio has 4,100 employees, 23 manufacturing plants and 66 logistics warehouses.
Park-Ohio named Richard Elliott as CFO, succeeding James Walker.
Park-Ohio provides B2B supply chain logistics for fasteners and related industrial components and manufactures engineered products for OEMs. Park-Ohio has 4,100 employees, 23 manufacturing sites and 66 warehouse locations.

Ivaco Shows Broad Improvement � Ivaco announced the best results in its 31-year history.
At Ivaco�s annual meeting May 23 CEO Paul Ivanier said proceeds from the sale of IPEX reduced long-term debt, and investing in core operations resulted in earnings of $128.2 million in 1999, compared with a loss of $18 million for 1998.
�We promised last year to complete the sale of our prime real estate in Atlanta and to sell IPEX and substantially reduce our long-term debt,� Ivanier reflected. �We executed all of them. Promises made, promises kept. That, in essence, is the Ivaco story of the last 12 months.�
Upcoming sales of property and noncore businesses should yield $70 million. That plus the $55 million from the sale of Atlantic Steel property will be used to repurchase second preferred shares and thus improve Ivaco�s net earnings.
Ivaco turned last year�s first quarter loss into a profit this year, the Montreal-based company announced.
Ivanier emphasized that steelmakers �are out of favor with investors,� but noted that Ivaco facilities are �high-tech of the highest level and in the avant-garde of productivity of the 21st Century.�
�The financial community and our shareholders should think of Ivaco not only as steel, but steel made with the highest steelmaking technology combined with the most sophisticated computerization,� Ivanier pointed out. �Maybe it should be Ivaco Steel dot-com.�
Ivanier predicted 2000 will be �another good year� for Ivaco. Notwithstanding a challenging business environment � in which wire rod selling prices are $25 per ton below their level two years ago, while scrap prices have risen in the past year � Ivanier told shareholders earnings will continue to improve, especially in the second half. �For the longer term the outlook is even more promising as the full impact of our initiatives of the past several years will be felt on a fully annualized basis.�
Ivaco earlier announced net first quarter 2000 earnings were $6,088,000, compared with a net loss of more than $3 million in the opening quarter of 1999. Sales were up 8% to $244.6 million in the first quarter this year.
Ivanier said that earnings and sales were up in all Ivaco segments. Overall operating income was up 44% to nearly $31 million.
Ivanier added that a price increase of $20 to $30 per ton for wire rod effective April 1 �is holding,� and another $20 per ton price increase is planned for July.
In addition to steel, Ivaco is a major manufacturer of wire rod and fasteners. Ifastgroupe�s fastener facilities include boltmaking in Marieville, Quebec, and Vermont Fasteners.

Pentacon Edges Up � Pentacon Inc. reported first quarter 2000 net income of $400,000, up from $300,000 in the same period last year.
Revenue was up 12% to $74.4 million.
Pentacon�s industrial group reported quarterly revenue up 37% and operating income up 31%, compared with a year ago.
Pentacon attributed the slightly lower income margins to implementation of new business with a major industrial customer.
Aerospace revenue slipped 11%, and operating income dropped 34%.
�During the first quarter we saw evidence that our plans to improve results are beginning to take hold,� CEO Mark Baldwin said. �Revenues, margins, inventory turnover, days sales in receivables all showed improvement sequentially from the fourth quarter of 1999.�
Pentacon booked $6 million in annualized contracts during the quarter, Baldwin added.
�While these signs are encouraging, ultimately a recovery in the aerospace market will be required to return us to the levels of profitability we previously experienced.�

ITW Reports Double-Digit Increases � Illinois Tool Works Inc. reported record first quarter 2000 net income. Net income increased 16% over the first quarter of 1999 to $219.1 million. Revenue rose 12% to $2.4 billion, and operating income grew 18% to $358.3 million.
�We�re pleased with our strong first quarter performance, which was aided by contributions from both our base businesses and acquisitions,� CEO James Farrell summarized.
The North American engineered components revenue increased 16% due to �strong base business growth in the automotive, construction and industrial plastics units.� Operating income grew 18%.
International engineered products revenue grew 21% and operating income 40%, due to automotive, industrial plastics and European-based construction..
ITW is a $9.3 billion manufacturer of engineered components and industrial systems. ITW has more than 500 operations in 40 countries and 52,800 employees.

Black & Decker Tops $1 Billion � Black & Decker Corporation announced first quarter 2000 sales rose 6% to $1.04 billion. Earnings jumped more than $20 million to $60.2 million.
CEO Nolan Archibald reported fastening and assembly systems sales were up 8%, �reflecting continued strength in the North American market and strong sales growth in Asia.� Operating profit was up 12%. It was the 21st consecutive quarter of year-over-year improvement in operating profit.
�This very strong first quarter establishes a solid base for achieving our sales and earnings objectives for 2000,� Archibald summarized. �We are encouraged by the continued success of our power tools and accessories and our fastening and assembly systems businesses, and by the progress being made at Price Pfister.�

Lawson Sales, Earnings Up � Lawson Products Inc. reported first quarter net income rose 22% over the same period of 1999 to $6,445,000, and net sales increased 13% to $83.7 million.
The company said its newest subsidiary, ACS/Simco, contributed to the net sales increase. ACS/Simco acquired SunSource�s Inventory Management Company and its Hillman Industrial Division last year. The divisions comprise Lawson�s OEM fastener business.
Lawson attributed the increase in income to sales gains and monitoring operating costs.
Des Plaines, IL-based Lawson distributes 82,000 MRO fasteners, parts, chemical specialties, welding rod and supplies, specialized components, hydraulic and other flexible hose fittings and electrical shop supplies. Lawson manufactures 12,000 production and screw machine parts for automotive, appliance, aerospace, construction and transportation OEMs.

Aerospace Cuts SPS Earnings � SPS Technologies Inc. reported first quarter 2000 net earnings of $10.4 million, compared with net earnings of $13.3 million for the first quarter of 1999.
SPS officials said the decline in net earnings is primarily due to lower earnings of the aerospace fastener businesses.
The aerospace downturn was partially offset by the operating results of businesses acquired in 1999. SPS also experienced increased interest expense compared with the first quarter of 1999 due to debt incurred related to recent acquisitions.
SPS experienced several nonrecurring events in the first quarter, including selling its Coventry, UK, facility for $2.5 million. The SPS automotive fastener operations located in that building will lease a portion of the facility.
SPS also recorded costs of $1.4 million due to workforce reductions and consolidation of operations in the Precision Fasteners & Components segment. There also were costs recorded due to stepped up inventory and accounting adjustments with the acquisition of Avibank Mfg. Inc.
Net sales for the first quarter of 2000 were $216.7 million compared with $202.5 million last year, an increase of 7%. Incoming Orders for the first quarter were $223.2 million, an increase of 25% over the fourth quarter of 1999 and an increase of 9% over the same quarter a year ago. Orders increased in all segments compared with the fourth quarter of 1999.
Excluding the impact of businesses acquired in the first quarter of 2000, Precision Fasteners & Components orders increased 23%, while orders for the Specialty Materials and Alloys and Magnetic Products segments increased 20%. Backlog at March 31, 2000, was $287.3 million, up 12% from the end of 1999. The backlog increase was attributed primarily to businesses acquired in the first quarter of 2000.

Textron Reports 18.5% Sales Growth � Textron Inc. recorded double-digit earnings and revenue growth for the first quarter of 2000. Revenues increased 18.5% to $3.2 billion, and earnings per share from continuing operations were up 14% year-over-year.
�Our strategy of investing for growth combined with delivering strong operating improvements through our companywide Textron Quality management and e-business initiatives has positioned us to deliver another year of strong results and further enhance shareholder value,� said CEO Lewis B. Campbell.
Textron�s industrial segment � including Textron Fastening Systems and Textron Industrial Products � reported revenues and income increased 22% and 11%, respectively.
Fastening revenues increased, reflecting the contribution from the Flexalloy and InteSys acquisitions and higher organic sales in commercial solutions.
The increase was partially offset by lower sales at automotive solutions, reflecting the unfavorable impact of foreign exchange in its European operations and customer pricing pressures. Income decreased as the benefit of higher sales was more than offset by unfavorable operating performance at certain plants in North America and the foreign exchange impact.
The reorganization of Textron Fastening Systems into four customer center groups and the implementation of Textron Quality Management initiatives have been put into place to drive organic growth, improve operating efficiencies and generate cost reductions to offset the impact of pricing pressures and unfavorable performance.
Textron Industrial Products revenues increased as a result of the contribution from acquisitions, primarily OmniQuip, KSB Annecy, Benzlers, Energy & Williams, Progressive Electronics and Rifocs, and higher organic sales at Golf, Turf Care and Specialty Products, Greenlee, and Motion Control Products,
Textron�s aircraft segment grew revenues and operating income in the first quarter of 2000 by 9% and 16%, respectively. Much of the strength came from Cessna, which had higher sales of business jets and single-engine piston aircraft, and increased spares and service revenues. Cessna�s backlog rose to $5.5 billion, up 3.8% from the end of December. Bell Helicopter�s revenues in the quarter were flat.

Questron Shatters Records � Questron Technology Inc. reported sales leaped 89% to nearly $36.5 million in the first quarter of 2000. Earnings soared 201% to $5.6 million.
First quarter sales were up 20% over the fourth quarter of 1999.
�We are pleased with the continuing ramp-up of sales to new and existing ILM customers that began in the fourth quarter of 1999 and accelerated in the first quarter,� CEO Dominic Polimeni said.
The recent acquisition of R.S.D. Sales Company Inc. and adding logistics programs �should have a positive impact on its results for the balance of the year.�
The Questron Aerospace Logistics division moved into a single new facility at 2153 Eagle Pkwy., Fort Worth, TX 76117 in the Alliance Airport complex. The Tyler branch has relocated to a larger facility at 520 E. Oakwood, Tyler, TX 75701 and �will become the main staging area servicing a new nationwide ILM program for Trinity Industries Inc.�

Alleghany Profits Tumble � Alleghany Corp. said on Friday its first quarter profits tumbled 97 percent, mostly due to a slack business and losses at its underwriters reinsurance arm, which it plans to sell.
Alleghany is the parent company of Heads & Threads International.
Alleghany earned $482,000 in the quarter, down from $16.0 million in last year�s first quarter. Alleghany also said it expects to take a $12-a-share gain on the pending sale of its Underwriters Group to Swiss American Holding Corp. for $725 million in cash. This deal is expected to close within the next month, it said.
Alleghany�s Underwriters Group recorded a pretax loss of $20.1 million in the first quarter, compared with pretax earnings of $11.1 million in the first quarter of 1999. A slowdown in business, plus losses stemming from storms in Europe late last year, hurt results, it said.

Alcoa Completes Cordant/Huck Acquisition � Alcoa completed its acquisition of Cordant Technologies Inc. at $57 per share.
An Alcoa spokesperson said, �It is too early in the process to respond or determine� if there will be any changes in the Huck Fasteners segment of Cordant.�
Alcoa will own approximately 93.5% of the shares of Cordant common stock.

TransTechnology Sales Up, Income Down � TransTechnology reported lower net income for the fiscal year ended March 31, 2000. After-tax income was $10.6 million, compared with $12.3 million for fiscal 1999.
Net sales increased 31% to $299.3 million.
The specialty fasteners segment reported fiscal 2000 sales and income growth, excluding plant consolidation charges. �Most of the sales growth was attributable to the acquisitions of the Ellison retaining ring business in July 1999 and the Engineered Fasteners Division of Eaton Corporation in September 1999.
Sales increases were reported in assembly fasteners and cold-headed parts and domestic hose clamp sales. Declines were posted in aerospace fasteners, retaining rings and European hose clamps.
CEO Michael Berthelot acknowledged that �fiscal 2000 was disappointing to us, and was the first time in eight years that we missed our internal financial targets.�
Berthelot said the year�s pluses included increases in sales and profits at aerospace products units, and the Engineered Fasteners and Ellison acquisitions.
�These pluses, however, were not sufficient to offset� Aerospace Rivet troubles and �the long-expected decline in profit contribution from our German hose clamp operation,� Berthelot noted.
The strong Pound Sterling and weak German and British economies combined �to result in negative comparisons at our German and UK retaining ring businesses.�
Berthelot observed that �we are beginning to see improvements in our most troubled business units,� and �our historically strong performers, such as the aerospace products group, assembly fasteners and cold-headed products are all expected to report solid gains in fiscal 2001.�
TransTechnology�s goal is double-digit improvement in earnings for fiscal 2001 and sales totaling $350 million.
Liberty Corner, NJ-based TransTechnology manufactures specialty fasteners and aerospace products. TransTechnology has 2,500 employees at its 15 manufacturing facilities in North America, Europe and Brazil.

Precision Castparts Sets Sales Record � Precision Castparts Corp. announced its fiscal 2000 sales totaled $1.7 billion, a 13.7% increase over the record set in fiscal 1999.
However, at $85.3 million net income was 17.4% lower than the fiscal 1999 record.
The industrial products segment�s fiscal 2000 sales totaled $219.2 million, with operating income of $9.7 million.
The industrial products segment, including Reed-Rico/Astro Punch, Eldorado and PCC Olofsson businesses, sales and income improved from the third to the fourth quarter and are �expected to continue in fiscal 2001 because of new products, aftermarket penetration, enhanced machine tool distribution, expanded offshore sourcing and restructuring.�

Editor�s Note: For a summary of publicly held corporations with significant fastener business, see the February 22, 2000, FIN Review of Fastener Stocks in 1999.