EARNINGS: ITT Industries provides positive 2005 financial outlook

ITT reaffirms FY2004 earnings guidance, with growth trend seen continuing in 2005. In other financial news: CUNO reports record sales and earnings; and Layne Christensen revenues were up 27% year to date...

Dec 16th, 2004

Also below see: CUNO shows record 4Q sales and orders, as well as FY sales figures, while Layne Christensen completes acquisition of Beylik Drilling & Pump Services with positive results...

ITT reaffirms previous FY 2004 earnings guidance
WHITE PLAINS, N.Y., Dec. 14, 2004 (PRNewswire-FirstCall) -- ITT Industries Inc. said solid growth in its core businesses and improved operating performance in 2004 set the stage for continued positive momentum within each of its four business segments in the coming year. The company said that it expects to extend its track record of double-digit earnings growth in 2005, forecasting full year 2005 earnings per share between $5.00 and $5.15.

"We're certainly pleased with the double digit organic revenue and earnings growth we've realized so far in 2004, reflecting the strength of our portfolio and the soundness of the ITT management system," said Steve Loranger, ITT chairman, president and CEO. "We expect continued growth in 2005 due to favorable catalysts within our Fluid Technology and Defense segments adding to the benefit of the recently acquired businesses in our Space and Water units, and continued margin expansion from improved performance in Fluid Technology, Motion & Flow Control and Electronic Components."

"Our positive outlook is largely due to the momentum being generated by our ITT Management System, which includes our Value-Based Six Sigma and a number of other improvement tools," Loranger said. "Our projected 11 - 14% earnings growth in 2005 includes an anticipated $0.18 - $0.26 per share headwind from pension and healthcare costs. Our ability to grow earnings in the face of these headwinds is a testament to the strength of our strong management team and our attractive portfolio of businesses."

Loranger reaffirmed ITT's previous full year 2004 earnings guidance at the top end of the $4.45-$4.50 range, on expected revenues of $6.65 - $6.75 billion, with cash performance consistent with prior guidance.

"We will enter 2005 with clear goals and objectives in terms of our key strategies of growth, operational excellence and leadership development. We believe we are positioned to grow revenues 6 - 12% to $7.2 to $7.4 billion, continue growing operating margin and cash flow, and anticipate a 2005 EPS of $5.00 - $5.15."

Select Segments
Fluid Technology: The water/wastewater businesses are expected to lead improvement in Fluid Technology in 2005, with ITT's expanded product offering and market fundamentals enabling revenue growth in this segment of 2-7% to $2.65-2.75 billion for the year. The company expects revenues in the water/wastewater businesses to grow 10%, continuing a recent up-tick in order activity especially in the Advanced Water Treatment unit. Operating margin is expected to grow 70 to 120 basis points as the company progresses with integration of the recently acquired WEDECO Water Technology business, and through continued focus on operational excellence in the rest of the business. Increasing capacity utilization and a favorable dollar exchange rate provides a positive backdrop for the company's industrial products group.

Motion & Flow Control: New product offerings in Leisure Marine, Friction Materials and the tubing business, and gains from operational improvements are expected to continue in the Motion & Flow Control segment in 2005. The company anticipates 2005 revenues of $1.05-1.1 billion, representing zero to 6% growth over 2004 segment revenues. An improved cost position through production in low cost areas and lean manufacturing initiatives are expected to improve the segment's operating margins from 20 to 80 basis points for 2005.

ITT Industries, Inc. (http://www.itt.com/) is a $6 billion global multi- industry company based in White Plains, NY. ITTsupplies advanced technology products and services in key markets including: fluid and water management including water treatment; defense communication, opto-electronics, information technology and services; electronic interconnects and switches; and other specialty products.

CUNO Reports Record Fourth Quarter and Fiscal 2004 Results
MERIDEN, Conn., Dec. 13 /PRNewswire-FirstCall/ -- CUNO Inc. reported record results for the fourth quarter ended Oct. 31, including sales of $103.5 million, up 34% from $77.5 million in the same period in 2003. Net income for the fourth quarter increased by 18% to $9.0 million from $7.6 million reported in 2003.

Commenting on its fourth quarter results, Mark G. Kachur, chairman and CEO, said "Our record fourth quarter results reflect the strength and effectiveness of our business model. We achieved double-digit Sales growth in each of our primary markets, including Potable Water, Healthcare and Fluid Processing. Our sales were up 31% in local currency alone; adjusted for the acquisition of WTC Industries (which was completed Aug. 2), our organic Sales growth was 21%. In addition, our New Products continued to be well received, generating $11.0 million or approximately 11% of total sales and contributing to our strong performance in the quarter."

For the full year, Sales were a record $351.6 million, up 22% (up 17% in local currency), and net income increased by 23% to $33.1 million from $26.8 million in the prior year. Diluted EPS were a record $1.93, up 22% from $1.58 in 2003, and up approximately 14% on a currency-adjusted basis.

Kachur added, "Our business model should enable us to continue to achieve strong financial results. Orders were a record $97.0 million in the fourth quarter and our backlog remains strong. As a result, we are optimistic about our prospects in fiscal 2005 and expect to achieve diluted EPS in the range of $2.12 - $2.22."

CUNO (www.cuno.com) is a world leader in the design, manufacture and marketing of a comprehensive line of filtration products for the separation, clarification and purification of liquids and gases. Its products, which include proprietary depth filters and semi-permeable membrane filters, are used in the potable water, healthcare and fluid processing markets.

Layne Christensen Revenues Jump 30.9% for Quarter, 27.1% YTD
MISSION WOODS, Kan.--(BUSINESS WIRE)--Dec. 7, 2004--Layne Christensen Co. announced net income for the third quarter ended Oct. 31 of $3,458,000 compared to net income of $541,000 in the same period last year. Revenues increased $21,620,000, or 30.9%, to $91,480,000 compared to $69,860,000 the same period last year.

Gross profit as a percentage of revenues was 27.6% and 27.3% for the three and nine months ended Oct. 31, compared to 27.3% and 28.4% for the three and nine months a year earlier. The decrease in gross profit percentage for the nine-month period was primarily attributable to continued pricing pressures in the water resources division along with reduced margins associated with the promotion of certain new water treatment products. The decrease in the water resources division margins was partially offset by increased margins in the mineral exploration division due to increased activity as a result of higher gold and base metal prices.

Water resources revenue increased 18.3% to $51,852,000 for quarter, and 14.0% to $145,058,000 for the nine months period, compared to $43,818,000 and $127,191,000 for the those periods in 2003. The increases were primarily attributable to improvements in municipal spending, results from the Company's water treatment initiatives and increased infrastructure needs in metropolitan areas, primarily in the western United States.

Income from continuing operations for the water resources division was $7,167,000 and $17,497,000 for the three and nine months periods compared to $5,128,000 and $14,642,000 respectively in 2003.

Layne Christensen Company (www.laynechristensen.com) provides sophisticated services and related products for the water, mineral, construction and energy markets.

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