Harmon Industries, Inc.
NASDAQ: HRMN
For Immediate Release
Charles M. Foudree
(816) 229-3345
[email protected]
Harmon Announces Record Sales and Orders for Third Quarter
BLUE SPRINGS, Mo. (Tuesday, Oct. 28, 1997) -- Harmon Industries, Inc. continues to demonstrate financial strength in 1997 as the company announced all-time record sales and orders in the third quarter, which ended September 30, 1997.
Third quarter sales were $56.1 million, an increase of 34 percent from $42.0 million in the third quarter of 1996. Year-to-date sales were $139.7 million, a 17 percent increase from last year's $119.5 million.
Net earnings were $2.6 million for the third quarter, compared with $2.5 million a year ago, an increase of six percent. Quarterly earnings per share were $0.38, up from $0.36 for the third quarter of 1996. Year-to-date earnings were $7.1 million, $1.03 per share, compared to $7.2 million, $1.06 per share, last year.
For the quarter ended September 30, orders increased to an all-time high of $69.6 million, a 22 percent increase from the third quarter of 1996. Year-to-date orders were $173.6 million, an increase of 36 percent above last year. At September 30, 1997, the company's backlog of orders was $88.9 million, up 75 percent from the same time last year, and 50 percent from year-end 1996.
Harmon's record order pace continues to be driven primarily by the North American freight railroad market. Railroad mergers have increased market demand for services and products as the railroads' operating systems are consolidated.
Much of Harmon's sales gains reflect the railroads' increasing trend toward purchasing entire systems and assigning turnkey responsibilities to a single vendor. Under a turnkey contract, the company's services extend beyond supplying a product or system and include design, build and installation functions, as well. These additional services require Harmon to purchase significant amounts of materials and services from other vendors. Harmon typically passes on these costs to its customers with little or no markup. As a consequence, profit margins for the company are less on turnkey installations than on purely Harmon-supplied products and systems, but the net effect is positive, as the increased volume from such work adds to profit from operations, increasing Harmon's bottom-line results.
"We are pleased with the industry's demand for Harmon products and services," said Björn E. Olsson, president and chief executive officer. "We believe it reflects our customers' recognition of Harmon's long-term strategy to provide exceptional services and technological excellence. In light of this quarter's order rate and backlog, we believe that the fourth quarter will be very strong, yielding results in accordance with expectations for the year."
Harmon Industries, Inc., a leading supplier of signal and train control products to railroads and rail transit systems throughout North America and the world, is traded on the Nasdaq Stock Market under the symbol "HRMN" For further information, please contact Charles M. Foudree, executive vice president-finance and chief financial officer, Harmon Industries, Inc., 1300 Jefferson Court, Blue Springs, MO 64015. The telephone number is (816) 229-3345.
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