Global Fastener News

Grigg: SPS in Strong Position to ‘Weather’ this Recession

John Wolz

“The events of September 11 have dramatically changed our business environment and operating strategy,” SPS Technologies Inc. CEO Charles Grigg told shareholders.
Grigg is optimistic that SPS is “in a very strong position to �weather� this recession.”
SPS is planning for 20% to 30% reduction in aerospace sales in 2002.
“Aerospace fasteners, components and alloys combined are our largest and most important business,” Grigg wrote in a letter. “Reductions in commercial airplane deliveries and flight schedules will result in future decreases in demand for our aerospace products.”
Expected increases in military business will “somewhat offset” the commercial aerospace losses.
Automotive, heavy truck, industrial and electronics markets are down, he noted.
SPS is focusing on cost reduction and cash flow, Grigg said. “We are fortunate that we have a relatively conservative capital structure and have a good track record for generating cash. We have excellent market positions in our core businesses, our plant and equipment is in good condition after many years of heavy capital expenditures and we have a long established culture of cost reduction and lean manufacturing. We believe we are in a very strong position to �weather� this recession.”
Net sales for the first nine months of 2001 rose 8.1% to $710.4 million and but net earnings fell 19.3% to $25.8 million.
SPS started plant shutdowns and consolidations and moving certain operations to Asia six months ago. “When our markets return, we plan to be prepared,” Grigg concluded. Web: spstech.com �2002 FastenerNews.com