Addison, IL, Mar. 2--Minuteman International, Inc. the floor-care equipment and chemical manufacturer, today reported that the improvement in the general economy during the final quarter of 2003 was reflected in the Company's operating results for that same period and the year as a whole.
For the year ended December 31, 2003 net sales reached $74,348,000, a 3.3 percent increase over the $71,951,000 of net sales reported for 2002. Higher sales in international markets offset a slight decline in domestic commercial equipment sales for 2003. Excluding foreign currency exchange effects, international sales were up 15.1 percent. Industrial equipment sales in the domestic market were 1.5 percent higher for 2003 compared with 2002 and chemical product sales for 2003 increased 9.1 percent over 2002.
For 2003, net income rose to $2,013,000, or $.56 per share, up 13 percent from $1,781,000, or $.50 per share, for 2002. Compared with 2002, net income in 2003 benefited from a $382,000 after tax reduction in interest expense related to the change in fair market value of Minuteman's derivative financial instrument.
Gregory J. Rau, President and CEO of Minuteman, explained that the continuing weakness in the domestic commercial business is a reflection of a historical pattern in which purchases of sanitary equipment typically lag trends in the general economy. Consequently, he felt that results for the fourth quarter, where income from operations was up 114.2 percent over the final three months of 2002, was encouraging for the 2004 outlook.
Net sales for the 2003 fourth quarter totaled $18,228,000, an increase of 18.2 percent from $15,416,000 in the 2002 fourth quarter. Favorable foreign currency exchange effects added about 7.9 percent to net sales in the 2003 fourth quarter.
For the fourth quarter of 2003, net income totaled $499,000, or $.14 per share, an increase of 37.1 percent compared with $364,000, or $.10 per share, from the 2002 fourth quarter. Compared with the fourth quarter of 2002, fourth quarter 2003 net income benefited from a $64,000 after tax reduction in interest expense related to the change in fair market value of Minuteman's derivative financial instrument.
Selling expenses rose 4.5 percent for the full year 2003 compared with 2002 and 12.8 percent for the 2003 fourth quarter compared with the 2002 fourth quarter. This is largely accounted for by higher health insurance, auto lease and sales promotion costs, as well as expenses related to the relocation of the Company's Netherlands warehouse in an effort to better centralize distribution operations throughout Europe.
General and administrative expenses also were up for both periods in 2003 compared with 2002, primarily due to increased payroll, insurance and professional fees.
Looking to the new year, Rau believes that further improvement in the general economy, and the host of new products introduced in 2003 to aid the recovery of commercial sales in the U.S., should combine to benefit Minuteman's operations going forward.
"Minuteman has sufficient capital resources and is in a strong financial position to meet business and liquidity needs as they arise," Rau said. As of December 31, 2003, working capital was $35.6 million, representing a current ratio of 5.7 times.
Shareholders' equity of $41 million, representing a book value of $11.45 per share, was 2.2 percent higher than the $40.1 million at the end of 2002.
The Board of Directors approved the 62nd consecutive quarterly dividend in the amount of $.09 per share, payable March 25, 2004 to shareholders of record as of March 11, 2004.
