For the third quarter of 2008, the company reported net earnings from continuing operations of $13.5 million, or $0.53 per share diluted, compared to net earnings from continuing operations of $9.4 million, or $0.38 per share diluted, in the third quarter of 2007. The company’s results for the third quarter of 2008 include a pre-tax loss of $1.6 million related to the cancellation of an ineffective currency-hedging contract at the company’s Aerostructures Brookhouse Holdings, Limited subsidiary (this charge is not included in the segment’s operating results). The results for the third quarter of 2007 included pretax charges of $0.8 million related to the company’s Australia helicopter program. Net sales from continuing operations for the third quarter of 2008 were $335.1 million, an increase of 21.9% over the $274.9 million reported in the third quarter of 2007.
For the first three quarters of 2008, net earnings from continuing operations increased slightly to $28.5 million, or $1.12 per share diluted, compared to net earnings from continuing operations of $27.5 million, or $1.11 per share diluted in the year ago period. Year-to-date results include a goodwill impairment charge of $7.8 million taken in the second quarter, which is not deductible for tax purposes, and the $1.6 million loss on the hedging contract. Results for the 2007 first three quarters include pretax charges of $5.6 million related to the company’s Australia helicopter program. Net sales from continuing operations for the 2008 nine-month period were $937.2 million, an increase of 15.2% over the $813.8 million reported in the first three quarters of last year.
On October 29, 2008, the Company executed a new $50 million four-year Term Loan Credit Agreement with several banks. The Term Loan Agreement is in addition to our current $200 million Revolving Credit Agreement. The company may increase the term loan, up to an aggregate of $50 million, with approval of the banks. Most of the proceeds of the loan will be used to pay down borrowings under the company’s Revolving Credit Agreement.
Neal J. Keating, Chairman, President and Chief Executive Officer, said, “During the third quarter we continued to build on the progress we made in the first half of the year. Specialty Bearings had another outstanding quarter, both our Helicopters and Precision Products businesses delivered improved profitability and Aerostructures made progress toward resolving the issues in Wichita. Our Industrial Distribution segment performed extremely well in the quarter despite an at times challenging and uncertain economic environment. The integration of Brookhouse and ISC, both acquired during our second quarter, is progressing well and we successfully completed the acquisition of INRUMEC, early in the fourth quarter.
Within Aerostructures, we continued our steady performance on the BLACKHAWK cockpit program, received additional C-17 orders that will extend that program through 2010 and are now in the early stages of the new A-10 program. As mentioned earlier, the integration of Brookhouse is progressing and was slightly accretive to EPS for the quarter. While our Wichita facility negatively impacted our results for the quarter, we continue to make progress as demonstrated by achieving AS9100 recertification in September.
Precision Products delivered improved results primarily due to good performance from legacy missile programs. In addition, JPF production exceeded our goal for the second consecutive quarter and some foreign sales of the fuze were recorded during the period. Helicopters turned in a strong profit performance despite the wind down of the Australian Service Center program. And finally, the Specialty Bearings team continued their outstanding performance.”
