Slide 32 of 42
Notes:
· ONE OF OUR MOST DRAMATIC IMPROVEMENTS IS IN THE AREA OF FREE CASH FLOW. FIVE YEARS AGO, WE WEREN’T GENERATING CASH – WE WERE BORROWING IT, REFLECTIVE OF A PATTERN IN PLACE FOR SEVERAL YEARS. FOR THE LAST FOUR YEARS, WE HAVE PRODUCED POSITIVE FREE CASH FLOW RESULTS, INCLUDING $33.6 MILLION IN 2002.
· OUR CASH FLOW HAS ENABLED US TO REDUCE TOTAL DEBT BY NEARLY 50 PERCENT SINCE 1998. AT THE END OF 2002, OUR TOTAL DEBT WAS ONLY $183 MILLION.
· AS A RESULT, WE EXPERIENCED A SIGNIFICANT REDUCTION OF INTEREST EXPENSE AND A REDUCED DEBT CAPITALIZATION RATIO OF 29 PERCENT IN 2002, COMPARED TO 1998’S 52 PERCENT.
· GIVEN THE PRECEDING IMPROVEMENTS, IN 2002 WE WERE ABLE TO INCREASE OUR RETURN ON SALES TO 3.8 PERCENT, AS I NOTED EARLIER IN MY REMARKS – UP FROM A COMPARABLE 2.7 PERCENT IN 1998. THIS IMPROVEMENT IS MORE IMPRESSIVE WHEN YOU CONSIDER THAT IN 2002 WE INCURRED A REDUCED NET PENSION AND POST-RETIREMENT BENEFIT OF $12 MILLION. DESPITE THIS IMPACT, OUR NET RETURN ON SALES OF 3.8 PERCENT WAS ONLY SLIGHTLY BELOW THE HIGHEST LEVEL OF 4.1 PERCENT WE ACHIEVED IN ’99.
