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Stocks Y / York International Corp.

URL:  http://boards.fool.com/as-of-830-q3-earnings-expected-to-be-below-13236525.aspx

Subject:  Re: anyone out there? Date:  9/2/2000  3:49 PM
Author:  kishpj01 Number:  20 of 26

As of 8/30 Q3 earnings expected to be below .67/share (due to Unitary unit 40% of the company) based on sales slump in geographies where there has been cooler than normal temps. Also, mfg housing market sales of unitary products (ac units, etc )down 30%. Also distributors are holding back on buying new units to keep inventory in line. New CEO Mike Young to initiate cost reductions in SGA expenses and start product and plant rationalization efforts to lower costs.

At the current price, projected pre-tax annual compounded rate of return is about 26% ... not bad compared to utx(carrier)and asd (trane).

Sales growth year over year from 98 to 99 was 17% ... cost of goods sold however was 19%, not good. Net income after taxes over same period declined 44%.

Cash and equivalents grew 74% from 98 to 99, but so did long term debt ... 135%.

Profitability from 98 to 99 in terms of net margin growth increased 79%, even though gross margin decreased 4%. In 1999, net profit margin was about 20%, SIGNIFICANTLY better than lennox, trane, carrier, and aaon.

Cash position reflects a 9% growth in chash flow rato from 98 to 99, however cash to debt ratio and cash margin both decreased. 1999 cash flow ratio is 1.61 .. a little high for my standards. Also, cash to debt ratio is only .02 and net cash is a negative $917 million.

I like the growth prospect with yrk but am very concerned about debt level and cash positions.

Now might be a good time to buy with the stock at such a low level .. you would really be betting on the new CEO's ability to carry cost cutting measures forward plus a favorable interet rate environment. If those two together works out posiitive, this issue will likely beat the S&P 500 over the next 3 years.












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