The company posted a net loss per share of 17 cents, and was notified by the New York Stock Exchange in late July that it is subject to de-listing from the NYSE since its stock has traded below the $1 average minimum requirement for more than 30 consecutive days. Encompass responded to the NYSE commission and intends to meet the listing requirements within six months.
"With the exception of these two projects our second quarter results were substantially in line with our internal expectations," said Joe Ivey, Encompass' president and chief executive officer. "I believe that our revenue and backlog performance this quarter compares favorably to the 20 percent decline from year-ago levels in non-residential construction spending recently reported by the U.S. Department of Commerce."
Encompass looks to the future, and predicts full-year revenues to range from $3.4 to $3.6 billion.
Earlier this year, Comfort Systems sold 19 of its operations to Emcor Group Inc.
"The Emcor transaction greatly strengthened the company's financial position and operating flexibility at a time of continuing general economic uncertainty," said Bill Murdy, Comfort Systems' chairman and CEO. "We decreased selling, general and administrative expenses noticeably as compared to both periods. We resumed a very healthy level of free cash flow during the quarter and have reduced our debt to its lowest level since shortly after we went public five years ago. Backlog increased for the second straight quarter."
Income from continuing operations for the third quarter of 2002 was $7 million (9 cents per diluted share) compared to a loss of $115.0 million ($1.57 per diluted share) in the prior year. Included in the third quarter of 2002 are restructuring charges of $6.4 million (9 per diluted share) within the Bath & Plumbing segment. The third quarter of 2001 included impairment charges of $119.3 million ($1.63 per diluted share).
For year to date 2002, the company reported income from continuing operations of $3 million (4 cents per diluted share) compared to a loss of $119.7 million ($1.61 per diluted share) for the prior year.
Excluding the restructuring and impairment charges mentioned above, the income from continuing operations in year to date 2002 was $9.4 million (13 cents per diluted share), compared to a loss in year to date 2001 of $0.4 million.
U.S. Industries owns several major businesses selling branded bath and plumbing products. The Company's principal brands include Jacuzzi, Zurn, Sundance Spas and Eljer.
Sales for the third quarter and year to date periods of 2002 were $319 million and $849.7 million, respectively. This compares to sales of $308.1 million for the third quarter and $826.4 million for year to date periods of 2001. The increases in the third quarter and year to date 2002 periods are attributable to the acquisition of Rexair Inc., which was partially offset by a decrease in sales in the Bath & Plumbing segment. Rexair contributed sales of $23.5 million and $76.5 million for the third quarter and year to date periods of 2002, respectively.
The decrease in sales for the Bath & Plumbing segment for the year to date period was affected by the disposal of the segment's European HVAC businesses and the discontinued product lines in the segment's U.S. Brass operations, which contributed $14.4 million to year to date sales in fiscal 2001.
The remaining decreases for both the year to date and third quarter periods are largely related to decreased sales in the non-premium spa, whirlpool bath and above-ground pools businesses partially offset by sales increases in the U.K. bath and sink and the domestic premium spa businesses. The non-premium spa and whirlpool bath businesses were affected by reduced sales of certain product lines for which the Company declined requests for price and service concessions. The premium spa business has been successful in adding a number of new products and dealers for its premium spa brands.