AAI parent reports 31% gain to $2.3 million for 1st quarter Earnings up despite sales decline after divestitures

Manufacturing

May 14, 1998|By Greg Schneider | Greg Schneider,SUN STAFF

The parent company of Hunt Valley's AAI Corp. continued its solid recent financial performance during the first quarter, logging net income of $2.3 million, or 18 cents per diluted share, for the three months ended March 31.

That was up almost 32 percent over the $1.7 million in net income, or 14 cents per diluted share, for the same period a year ago. What's more, the year-ago quarter included $498,000 of net income, equivalent to 4 cents a share, derived from United Industrial Corp.'s weather systems and plastics businesses that it has since shed.

Net sales were down for the first quarter of 1998, mostly because of the divestitures. The company reported revenue of $47.2 million compared with $58.4 million in the same portion of 1997. Without the weather systems and plastics businesses, the year-ago sales amounted to $48.8 million.

"With new bookings of $73.6 million during the quarter and a backlog of $214 million at quarter-end, we expect the company's strong performance to continue," said Richard R. Erkeneff, president and chief executive officer of both AAI and UIC.

Earnings rose despite the drop in sales because of "greater operating efficiencies and lower interest expense," Erkeneff said.

Based in New York, UIC consists almost entirely of its AAI subsidiary, a longtime defense contractor that more recently has branched into transportation, energy and firefighter-training businesses.

After weathering layoffs and tight times as post-Cold War military spending shrank, AAI has spent the past two years shedding subsidiaries and focusing on its most profitable markets.

Erkeneff pointed out this week at UIC's annual shareholders meeting that the company has doubled its quarterly dividend from a year ago, to 10 cents per share.

United Industrial's share price has nearly doubled over the past year, closing at $13 yesterday, up 18.75 cents.

Pub Date: 5/14/98

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