Newspaper article THE JOURNAL RECORD

CMI Profits Drop 33 Percent

Newspaper article THE JOURNAL RECORD

CMI Profits Drop 33 Percent

Article excerpt

Oklahoma City-based CMI Corp. posted a 33 percent decline in earnings for the first quarter as new efforts to improve quality took their toll on profitability.

Product modifications and development for special orders also put pressure on margins, the company said.

Net earnings for the quarter were $1.4 million, or 7 cents per share, down from $2.1 million, or 10 cents per share in the first quarter of 1996. However, revenues for the quarter climbed to $41.7 million, a 14 percent increase over last year's $36.5 million. Jim Holland, senior vice president and CFO of the construction and paving equipment manufacturer, said efforts to improve quality while increasing efficiency are expected to pay dividends over time. However, "putting the program in place and working with new manufacturing processes increased our labor costs during the quarter." "As we move forward with our focused manufacturing, we hope to see the cost of goods sold come back down," he added. "We are working closely with suppliers to reduce material costs." However, product quality remains the company's primary goal. Regarding special orders, Holland said much of the asphalt equipment the firm sold during the quarter was customized to meet special needs. "Although we can charge more to help cover the cost of additional work required for modifications, this type of production is less efficient and drags down margins," he said. As the peak construction season draws closer, the company plans to concentrate on increasing its machines' initial productivity immediately following delivery. "Most heavy road building equipment, including our competitors' products, requires some time in the field to get the machines up to top productivity," Holland said. By making start-up easier and faster, CMI's equipment "once again will set the new industry standards for quality and efficiency," he said. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.