NATIONAL PRESTO INDUSTRIES, INC. ANNOUNCES INCREASED 2003 EARNINGS AND 2004 DIVIDEND
Eau Claire, Wisconsin (February 13, 2004) -- National Presto Industries, Inc. (NYSE: NPK) announced today 2003 sales and earnings, as shown in the table below. Net earnings per share have been computed on the basis of the weighted average number of common shares outstanding for the respective periods.
In commenting on 2003 results, Maryjo Cohen, President, stated "Total sales were strikingly similar in 2002 and 2003, with revenue increases in 2003 from newly acquired businesses more than offsetting declines in the housewares/small appliance division. In largest part, the improved 2003 earnings were attributable to cost reductions stemming from the closing of the company's small appliance and housewares manufacturing plants and the sourcing of products from abroad. These cost reductions enhanced by earnings from the recently acquired absorbent products businesses, more than offset the effect of reduced comparative yields on financial instruments, which once again served to be an earnings depressant.?
When looking ahead to 2004, Ms. Cohen stated, "Candor demands recognition that the new year will not include sizable contributions such as those enjoyed in both 2002 and 2003 arising from the reversal of LIFO reserves (resulting from the shutdown of the domestic appliance/housewares plants), and that it will be burdened by the final installment of the cost of terminating a defined benefit pension plan and converting to a defined contribution plan currently estimated at $2,200,000 after tax. Nevertheless, assuming internal planning can unfold with only a few and minor surprises, in keeping with those experienced in 2003, the new year may be the second in a series of 'rewarding' periods."
The Board of Directors of National Presto Industries, Inc. announced today a regular dividend of $ .92 per share plus an extra of $.25. The 2004 dividend is the most recent in an unbroken history of sixty years. The record date for the dividend will be February 24, 2004. The regular dividend and extra will be paid in full on March 11, 2004. The Board also advised that the Company's 2004 annual meeting of stockholders has been re-scheduled for October 19, 2004 from May 18, to provide additional time to complete the process of complying with the New York Stock Exchange corporate governance provisions issued in November of 2003.
I'm upset about the special dividend only being 25 cents, especially in light of the (apparently good) 4th quarter earnings. Value Line (my only source for projections on NPK) had estimated 63 cents EPS for the 4th quarter, which would have resulted in $ 1.40 EPS for the year. Since the annual EPS was $ 2.27, and EPS at 9/30 was 88 cents, it appears the 4th quarter EPS was $ 1.39. It's ridiculous that a shareholder has to figure out 4th quarter EPS in this way, but the company didn't see fit to mention the number. 17 cents of the EPS was from the LIFO reserve reversal (again, I had to calculate this for the quarter). There seems not to have been any 4th quarter charge for the pension conversion. The plant closing charge of 17 cents seems to have hit in the 4th quarter, which would offset the LIFO reversal income. Finally, 4th quarter sales were up slightly from last year, after dropping for the first 3 quarters. In all, the 4th quarter was much better than I expected, but the dividend announcement was depressing. I guess I'll hold on until the ex-date, but not for much longer.
BTW, in addition to the earnings release being terrible for not disclosing 4th quarter info, I had to laugh about the 5 month delay in holding the shareholder meeting so the company would have more time to implement the NY Stock Exchange corporate goverance rules. How many other NYSE companies have made similar announcements? I haven't noticed any, but I guess it's early yet.