HEERBRUGG, Switzerland, Feb. 6, 2002 (PRIMEZONE) -- Leica Geosystems (SWX:LGSN) today announced its third quarter results for its Fiscal Year 2002. The Company reported that its results were squarely on target, with sales at CHF 196.6 million, representing a year-on-year growth of 19.2%. EBITDA for the quarter was also in line with the Company's guidance at CHF 25.8 million, slightly above prior year levels. The Company generated CHF 16.2 million in operating cash flow in quarter three and was able to further reduce its net borrowings down to CHF 239 million.
Sales growth in Leica Geosystems' organic business (i.e. before acquisitions) was 3.3%, fueled largely by the 7.6% growth in the high-end Surveying sector of its Surveying & Engineering division. The Company stated that the market for its lower-end construction products remained weak, impacting sales in its Construction business. The Company's GIS & Mapping business, on the other hand, performed well, with sales climbing by 18.6% over the second quarter. The Company mentioned that sales of its DISTO(tm) products also improved by 18.5% over second quarter levels, particularly in it's non-OEM business. Leica Geosystems' IMS business felt the impact of the difficult state of the aerospace industry, with sales dipping slightly below the prior year, but above second quarter levels. The Company mentioned that it had begun receiving orders related to the Airbus A380 project, signaling that plans are progressing there as expected. Sales in the Company's Cyra business retreated below second quarter levels, impacted by the slower pace of capital investment, particularly in the United States. Leica Geosystems' Special Products division, which includes the Company's Defense and third-party component manufacturing businesses, grew by 4.2% when restated for the 75% divestiture of SwissOptics in July 2001.
Leica Geosystems' earnings before interest and taxes (Ebit) were CHF 6.3 million in the third quarter, significantly impacted by non-cash goodwill amortization. Removing the impact of non-cash charges (i.e. depreciation and intangible asset amortization), the Company's EBITDA was CHF 25.8 million. The Company's EBITDA margin of 13.1% was improved over the second quarter. Leica Geosystems' organic EBITDA in the third quarter was CHF 27.2 million, or 10% above the prior year, with margins on an organic basis rising to 16.3% versus 15.3% in the prior year. Leica Geosystems recorded a net loss of CHF 4.2 million for the quarter. The Company generated a net loss per share of CHF (1.87), but recorded positive, "goodwill-adjusted earnings per share" of CHF 1.12.
Leica Geosystems' ratio of Net Working Capital to annualized sales improved to 18.2% in the third quarter. The Company generated CHF 16.2 million in Operating Cash Flow in the quarter and further reduced its Net Debt to CHF 238.9 million. Leica Geosystems currently has an equity-to-assets ratio of 45%.
Concerning its outlook for the balance of this fiscal year, the Company reiterated its previously issued guidance, stating that it expected sales growth of around 25%, with EBITDA for the full year, in absolute terms, to be at around last year's level of CHF 97.5 million. Regarding the upcoming Fiscal Year 2003, Hans Hess, CEO of Leica Geosystems said, "As we stated in our Second Quarter Shareholders Report, the fundamental strength of our business and its mid-term growth potential is unchanged. We do, however, anticipate that the difficult economic climate will continue into the upcoming fiscal year. The consequences of this are that we are now expecting to see consolidated sales growth in the single digits for the at least the first two quarters of next year, with a clear acceleration towards the latter half of the year. In this context, we proactively initiated a project to achieve significant reductions in cost and capital employed, whereby we should be able to generate EBITDA growth in excess of our planned sales growth. We are committed to lowering our fixed cost base and in so doing, making us an even stronger Company in time for the global economic recovery."
In a related statement, the Company stated that as part of its on-going assessment of its historical and near-term growth rates, the expected business performance of its recently acquired businesses are routinely revisited. One of the conclusions from its recent analysis is that the Company might need to accelerate the amortization of its acquisition-related goodwill. The Company further stated that it had not yet completed any formal determination of goodwill impairment, however, it felt it only prudent to inform its shareholders about the possible need to write off additional goodwill in the fourth quarter. The write-off will likely be in Leica Geosystems' Cyra business. The Company stated that additional details would be disclosed at the latest by the time of its full year earnings release planned for June 6, 2002.
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The Third Quarter Expectations, including financial tables, is available on the following link: http://reports.huginonline.com/847609/99057.pdf