John McFarland, chairman and chief executive officer, commented on the company’s results, We are pleased to announce record sales for 2008 of $1.95 billion, net earnings of $99.4 million, and diluted earnings per share of $2.15. Cash flows from operations of $103.2 million allowed us to reduce our debt balance by $49.4 million during the year. Sales for the fourth quarter of $474.0 million resulted in net earnings of $18.6 million and $0.40 diluted earnings per share.”
On December 15, 2008, our sales were up 10% for the quarter; however, they fell dramatically during the final three weeks of the month. We believe this was due, in part, to longer than normal plant shutdowns over the holidays and customers reducing inventories. As a result, we did not achieve our sales goal for the quarter. Earnings during the quarter continued to be negatively impacted by increases in raw material costs. For the entire year, we paid nearly $100 million more for roughly the same amount of materials than we did during the prior year. We believe these costs will improve in 2009.
We expect 2009 to be a challenging year. However, we have faced challenging years before. We believe we came out of those years stronger and in a better position to gain new customers and market share than anyone in our industry. Today, we think we are taking the necessary steps to keep Baldor healthy in the short term while strengthening our growth opportunities for the long term.
