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GenCorp Restates Fiscal Statements After Review

March 07, 2002

GenCorp Inc. said Wednesday that it restated financial results for the last three fiscal years after the maker of car sealants and aerospace supplies and chemicals completed a review of accounting at its auto parts plant.

Merrill Lynch & Co. analyst Farukh Farooqi said the restatement is fairly minor and ended uncertainty about the accounting review, which had been holding back the company's stock.

GenCorp shares surged $2.65, or 24%, to $13.60 on the New York Stock Exchange.

Net income for the first three quarters of fiscal 2001 was reduced $3 million, decreasing earnings to 52 cents a share from 59 cents, the Sacramento-based company said. Revenue was unchanged in all periods.

Income from continuing operations was reduced 5.4% to $52 million, or $1.23 share, for fiscal 2000 and was reduced 2.2% to $45 million, or $1.07, for 1999.

The revisions correct errors in accounting for customer-owned tooling, inventory and the recognition of liabilities at a plant operated by its GDX Automotive unit.

The unit had reported a $2-million profit for the first nine months of fiscal 2001, which included a $2-million loss in the third quarter ended in August, GenCorp said

GenCorp had restructuring costs of about $40 million in 2001 to cut 1,300 jobs and close three plants at GDX Automotive.

The company also cut about 113 employees, or 40%, of its Aerojet Fine Chemicals unit in the fourth quarter. About 9,000 of the company's 12,000 employees work in the GDX unit.

Net income for the fourth quarter ended Nov. 30 jumped to $106 million, or $2.47 a share, from $7 million, or 14 cents, a year ago, as sales rose 32% to $367 million.

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