Annual meeting

After three years of record profits and revenues, Cummins Inc. expects sales to increase again this year by about 6 percent. Earnings per share are projected to fall to about $6.25, which would be the second-best in company history.

RECORDS:

2006 was the company's best year in its 87-year history.

CONFIDENCE:

"Cummins is in the strongest position we have enjoyed in my 36 years with the company," said CEO Tim Solso.

GROWTH:

If the company continues to grow at its current pace it will generate sales of more than $20 billion by 2010.

ELECTION:

Shareholders elected as company directors Robert J. Darnall, John M. Deutch, Alexis M. Herman, F. Joseph Loughrey, William I. Miller, Georgia R. Nelson, Theodore M. Solso, Carl Ware and J. Lawrence Wilson.

DIVIDEND:

Board of directors declared a quarterly common stock dividend of 18 cents per share, payable June 1 to shareholders of record on May 18.

By Boris Ladwig, The Republic

bladwig@therepublic.com

   Cummins Inc. CEO Tim Solso clearly was having some fun at the company's 87th annual shareholder meeting, the result, no doubt, of three record-breaking years and his optimism about the company's future.
   "2006 was the best year in our history, so today is a nice day to have an annual meeting," he said at Columbus Engine Plant before roughly 75 directors and shareholders.
   After he pointed out that the company's share price had improved 50 percent this year, he said, with a slight grin, "Hopefully, you shareholders are happy with that performance."
   Despite the giant strides the Columbus-based engine maker made in the last few years, which led to record sales of $11.4 billion and record profit of $715 million last year, company leaders are powering on with the dependability of a Cummins-powered Dodge Ram.
   "I am pleased to say that Cummins is in the strongest position we have enjoyed in my 36 years with the company, and we're well-positioned to grow significantly in the next several years," Solso said.
   If the company continues to grow at its current pace, it will generate more than $20 billion in revenues in 2010, he said.
   Three of four business groups are performing within financial targets, and the fourth is projected to get there this year:

  • Opportunities for Cummins Engine include new 11-and 13-liter engines in China and light-duty diesel engines that will be produced in China and at CEP. The company expects that the light-duty projects annually will require roughly 500,000 engines by 2012.
       Traditional products, too, are faring well: The company's share of the North American heavy-duty diesel truck engine market reached 29 percent in the first quarter, up from 26 percent a year earlier. The nearest competitor, Caterpillar Inc., Solso said, was at 22 percent.
          The PG group also projects that sales of the recently introduced portable generator sets for residential customers will reach 50,000 this year. 

      

  • Cummins Distribution, which is selling and servicing Cummins products through 5,000 worldwide distribution points, is producing stable earnings, Solso said.
       By 2011, 90 percent of revenues will go through company-owned stores, up from 20 percent in 2001, he said.

      

  • The Components group is being hampered by disproportionate engineering costs related to the introduction of new products and startup costs related to unexpected high demand, Solso said.
       But, Solso said, demand is high because of great products, including the market's best turbocharger and fuel system.
       Cummins Emission Solutions, which is part of the Components group and generated $36 million in sales in 2002, is projected to contribute $450 million this year.
       "Emissions drives everything we do in our business," Solso said.
       The rate of change is picking up speed.
       As a technology leader, Cummins can take advantage of more stringent emissions requirements, Solso said. As proof, he pointed to market share gains in the heavy-duty segment in the first quarter.
       "I hope you get the idea that I'm pretty excited about the growth opportunities that Cummins has," Solso said.
    One challenge that remains, he said, is being able to recruit the best talent from anywhere.
    "That talent has to feel included and welcome," he said.
    Recent successes were a result of great people working together efficiently, he said.
    "We have to be the best place to work."

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