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Author has a degree in Engineering and is an avid investor in the market. Experience in industrial materials and structures. In college studied atomic & nuclear physics as well as material engineering. Eastern European
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  • CSL got the steal of the Decade 2000-2010 with M&A of HWK 0 comments
    Dec 16, 2010 2:56 PM | about stocks: CSL, DE, CAT, WBC, TITN, BA

     

    December 16, 2010 RELATED TICKERS: CSL , DE , CAT

    On Nov. 9th Hawk reported net income increased 268.8% in first 9 months of 2010.

    CLEVELAND, OH -- (MARKET WIRE) -- 11/09/10 -- Hawk Corporation (NYSE Amex: HWK) announced today that sales for the third quarter ended September 30, 2010 were $70.1 million, an increase of $26.6 million, or 61.1%, from $43.5 million in the comparable prior year quarter. Net sales for the nine months ended September 30, 2010 were $185.2 million, an increase of 46.1%, from $126.8 million in the comparable prior year period. The economic recovery, market share gains and new product introductions have been the principal drivers of the revenue increases. Sales in all of the Company's end markets, with the exception of defense, showed growth during the quarter. Sales to the defense market were down during the third quarter of 2010 compared to 2009, as the Company's largest defense customer continued to realign its inventory levels during the period.

    Income from operations for the third quarter ended September 30, 2010 was $12.5 million, an increase of $6.4 million, or 104.9%, from $6.1 million in the prior year period. Income from operations was favorably impacted by the sales volume increase and the absorption of manufacturing costs as a result of higher production volumes in all of Hawk's manufacturing facilities. This increase was partially offset by the effect of foreign currency exchange rates and product mix during the quarter. For the nine month period ended September 30, 2010, the Company reported income from operations of $31.9 million, an increase of $20.1 million, or 170.3%, from $11.8 million in the comparable prior year period.

    For the third quarter 2010, the Company reported net income of $8.4 million, or $1.03 per diluted share, an increase of $4.6 million compared to $3.8 million, or $0.45 per diluted share, in the third quarter of 2009. For the nine months ended September 30, 2010, the Company reported net income of $17.7 million, or $2.16 per diluted share, an increase of $12.9 million, or 268.8%, compared to $4.8 million, or $0.55 per diluted share, during the comparable prior year period.

    Working Capital and Liquidity

    Cash and short-term investments decreased $9.8 million to $73.3 million as of September 30, 2010, compared to $83.1 million as of December 31, 2009. The decrease in cash and short-term investments was due primarily to the repurchase of $20.0 million of the Company's senior notes and $7.2 million of the Company's common stock during the nine months ended September 30, 2010. There were no repurchases of senior notes or of the Company's common stock during the three months ended September 30, 2010. As a result of the significant sales and production volume increases during the period, the Company experienced an increase in its accounts receivable, accounts payable and inventory levels at September 30, 2010. The Company believes that the quality of its accounts receivable and inventory remains strong. During the nine months ended September 30, 2010, the Company spent $3.8 million on capital expenditures compared to $6.9 million during the comparable period of 2009. Depreciation was $5.5 million for the nine months ended September 30, 2010 compared to $5.3 million for the nine months ended September 30, 2009.

    Business Outlook

    The Company continues to experience strength in demand coming from the majority of its end markets, especially construction and mining, and as a result is now expecting its 2010 full year net sales to be $251.3 million, representing an approximately 45.6% increase over 2009 net sales of $172.4 million. Previous guidance provided by the Company called for net sales to be in a range of between $241.0 million and $246.0 million.

    Based on this increased net sales expectation, the Company is also increasing its guidance for 2010 full year operating income to $40.4 million, representing an approximately 139.5% increase over 2009 operating income of $16.7 million. Previous guidance for operating income provided by the Company was a range of between $36.0 million and $39.0 million.

    Stocks: CSL, DE, CAT, WBC, TITN, BA
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