The Robbins & Myers 19 percent increase in sales for the August ending quarter over the previous year and 16 percent growth at ITT in the latest quarter is encouraging. In fact, we expect to revise some of our valve forecasts upward in the coming weeks. Power looks considerably better due to expansions in China and even some new coal-fired plants in the U.S.
Lots of pages keep being updated in the 4,000 page online Vales World Markets. We even have monthly business news. Here are some excerpts from the October Update. For more information on the report, click on http://www.mcilvainecompany.com/water.html#N028 .
Valve October Update
Industry News
Robbins & Myers' Sales Up 19 Percent for Fourth Quarter
Sales for the fourth quarter ended August 31, 2003 were $156.9 million, an increase of $24.7 million or 19 percent over the same period of the prior fiscal year. Sales for the fiscal year ended August 31, 2003 were $560.8 million, an increase of $34.4 million or 7 percent over the prior fiscal year.
During fiscal 2003, the Energy segment's notable accomplishments included:
· Development of the Venezuela market where sales increased from $0.9 million in fiscal 2002, the year we established a presence in the country, to $4.7 million in fiscal 2003;
· Initiation of plans to continue the future globalization of the business including establishing a presence in Eastern Europe and Central Asia (using the Venezuela model);
· New product development, in particular the even-wall stator, Sentry™ pipeline closure, high-flow down hole drivehead, and new rod guide designs.
Sales of the Energy segment, which represent 17 percent of the Company's total sales, were $26.6 million for the quarter and $95.5 million for the year, 15.8 percent and 4.5 percent higher than the respective periods of the prior year.
While the Industrial segment's business has clearly been depressed for sometime, Robbins & Myers saw an improvement in fiscal 2003, particularly the second half of the year. Accomplishments during fiscal 2003 include:
· New product development activities such as mixers, vertical pumps and pumps capable of handling liquids with high solids content;
· Lower cost product designs and cost effective outsourcing;
· Technology license that strategically expands the market range for coating applications;
· Teflon coated ductwork for effluent control.
The Industrial segment had sales of $31.1 million in the fourth quarter of fiscal 2003, increasing $5.5 million from the same period of the prior year. A third of this increase is attributable to the Tarby acquisition closed at the end of the first quarter of fiscal 2003, with the remaining two-thirds reflecting the general improving industrial economic environment in North America. For the year, sales in this segment were $122.9 million, $7.3 million higher than the prior year.
Flowserve's EPS Rose $.02 in Third Quarter
Flowserve Corp reported net income of $10.6 million, or 19 cents a share, in the third quarter of 2003, compared with $9.3 million, or 17 cents a share, in the year-ago quarter. Third quarter 2003 sales declined 4 percent to $565.1 million compared with $586.7 million in the prior year period. The decline primarily reflects the ongoing weakness in the company's quick-turnaround business, mainly in the chemical and general industrial sectors. Additionally, the power business was down year over year.
In the Flow Control Division (FCD), third quarter 2003 bookings improved 3 percent to $216.5 million and sales were unchanged at $218.0 million compared with the year-ago period. Operating margin, before special items, was 6.9 percent in the third quarter of 2003, down 30 basis points compared with last year's third quarter. "FCD's results reflect an unfavorable product mix and lower unit volume, despite the IFC synergy benefits," Flowserve Chairman, President and Chief Executive Officer C. Scott Greer said.
ITT Industries Reported Third Quarter Results
ITT Industries, Inc. announced third quarter 2003 diluted earnings per share of $1.16, which includes a net positive of $0.20 per share impact from special items. Third quarter 2003 revenues rose 11 percent to $1.38 billion, due mainly to growth in Defense and Fluid Technology and the positive impact of foreign currency translation. Organic revenue growth was 5 percent for the corporation.
Third quarter 2003 Fluid Technology Division revenues rose 16 percent or $79.4 million to $564.1 million, driven by organic growth in water/wastewater, acquisitions and the positive impact of foreign currency translation. The water/wastewater business continues its growth trend with revenues up 20 percent and orders up 17 percent, following a strategy of taking products into new markets. Excluding acquisitions and currency translation, the revenue growth for water and wastewater was 10 percent for the quarter. The business secured three $1 million orders for wastewater pumps and services, two in China and one in France. Improved orders for custom industrial pumps in the Middle East and Asia-Pacific contributed to a 10 percent increase in revenue in this business, more than offsetting continued softness in the chemical and pulp/paper markets.
Circor's Revenues Increase 7.3 Percent for Third Quarter
Net income for the third quarter of 2003 was $4.4 million, or $0.28 per diluted share, compared to $3.8 million, or $0.24 per diluted share, for the 2002 third quarter, an increase of 16.7% in earnings per share. Revenues for the 2003 third quarter were $86.7 million, an increase of 4.3% from $83.1 million for the third quarter of 2002.
Net income for the nine months ended September 30, 2002, totaled $11.3 million, or $0.73 per diluted share, which included special charges of $0.7 million pre-tax, or $0.03 per diluted share. Revenues for the nine months ended September 30, 2003, were $263.0 million, an increase of 7.3% from $245.1 million for the first nine months of 2002.
CIRCOR’s Chairman and Chief Executive Officer, David A. Bloss, Sr., commented on the Company’s financial results and market trends stating, “General market conditions improved slightly during the third quarter. Although end-user demand from most markets we serve remains weak, we are beginning to see some encouraging signs of improved economic conditions for many of our businesses. While orders were sequentially lower by 9.8 percent during the historically slow third quarter for steam-related applications and large international oil and gas project awards, we posted modest year-over-year increases in most business units. Our petrochemical, aerospace, military, medical/pharmaceutical and industrial valve businesses contributed to overall orders being up 9.4 percent, while total backlog increased 16.6 percent compared to the third quarter of last year, excluding the effect of acquisitions although assisted by the effect of year-over-year foreign exchange rate changes.”
Velan S.r.l., Joint Venture in Pipeline Valves Established
Velan announced the establishment of Velan S.r.l., a joint venture company to manufacture API 6A & 6D Trunnion-Mounted Ball Valves for pipelines and offshore platforms. The new company is headquartered in a 40,000 sq. ft. (3,700 m2) office and plant in Mezzago, Italy, just outside of Milan. Velan S.r.l.'s president, Roberto Bartolena, is a valve industry veteran with extensive experience in designing and manufacturing trunnion-mounted pipeline ball valves.
Velan S.r.l.'s product line includes bolted body, welded body and top entry API 6D Trunnion-Mounted Ball Valves in sizes 1-64" (25-1600 mm) and ASME Pressure Classes 150-2500 for a variety of standard and severe services, including cryogenic, offshore, sub sea and underground. Furthermore, bolted body and top entry API 6A Ball Valves are available from API 2000-15000 psi. As with the entire range of Velan valves, these valves take advantage of many advanced design features that ensure long, trouble-free service life. Feel free to request a catalog today to learn more.
After less than half a year in operation, we have already booked US $2.5 million of orders and shipped over 100 valves for a project in South America. Velan S.r.l. is currently building such noteworthy valves as 56" 600 class and 20" 2500 class bolted body ball valves.
People
Joseph Napoleon of Curtiss-Wright Dies
Curtiss-Wright Corporation announced the death on October 16 of Mr. Joseph Napoleon, 56, Executive Vice President of Curtiss-Wright Corporation and President of its Flow Control business segment, headquartered in Long Island. He had served with Curtiss-Wright for 34 years. He originally joined the company in 1969 as a Quality Control engineer at the Target Rock division and then accepted various positions of increasing responsibility. He was elected President of Curtiss-Wright Flow Control in 1999 and Executive Vice President of Curtiss-Wright Corporation in 2001. Mr. Napoleon was instrumental in the profitable expansion of the Flow Control segment as well as the corporation as a whole. The Company is in the process of establishing an interim President who will be publicly disclosed in the near future.
Projects
Curtiss-Wright Awarded Contract to Upgrade Valves in Navy
Curtiss-Wright Corporation announced that the Navy Surface Warfare Center awarded it a $61.8 million contract to supply next-generation JP-5 fuel valve systems for use on Nimitz class nuclear aircraft carriers. The leading-edge JP-5 valve incorporates leakless valve technology and smart valve features and forms; most important, it provides a foundation for the use of advanced valve technologies in future smart carrier initiatives. Curtiss-Wright received the contract after two years of exhaustive testing by the Navy.
The JP-5 valves will be manufactured by Target Rock, a division of Curtiss-Wright's Flow Control business segment that produces severe service duty valves for the Navy and commercial nuclear and processing industries. This is the only valve design that has been certified as leakless by the California Air Resource Board. Other benefits of the valve include improved safety and environmental conditions, increased operational reliability, and a reduction in maintenance cost and manpower requirements
Parker Valves Used in Caspian Sea Drilling Platform
Parker Instrumentation's high-integrity tube fittings and valves are employed exclusively on a new drilling platform currently being commissioned in the Caspian Sea. Constructed by KeppelFELS and the Caspian Shipyard Company, the new semi-submersible has been delivered substantially ahead of project schedule to Maersk Contractors.
Parker Instrumentation's global supply chain has helped to keep the project on track, starting with supplies to KeppelFELS in Singapore where key platform components were constructed, and followed by supplies from Parker's support facilities in Baku for the assembly and finishing operations.
Parker is one of the first instrumentation suppliers to have a comprehensive supply chain in place in Baku, and it was this resource, combined with the technical merits of the instrumentation components themselves, that helped to secure the contract.
“This semi-submersible will be the biggest and most powerful drilling platform in the Caspian Sea," says Steve Mullen of Parker Instrumentation. "Large-scale fabrication projects like this often run late, so early completion is a major tribute to the organizational skills of the constructors KeppelFELS and Caspian Shipyard Company. The strict delivery schedules they imposed put a lot of pressure on Parker to have an efficient stock and technical support operation in the Baku region, and we're now well-positioned to support the rapidly growing oil and gas business in this region."
Parker products supplied as part of this project include A-LOK instrument tube fittings, discrete valves, and manifolds. Total project value for Parker's products is estimated to be in excess of a quarter of a million dollars, including all the items supplied to equipment OEMs.
Bob McIlvaine
847-784-0012