Cooper Industries Achieves Earnings Objectives
HOUSTON, Jan. 23 Cooper Industries, Inc.
reported 2000 fourth-quarter earnings per share of $.95 (diluted), up
7 percent from 1999 fourth-quarter earnings per share of $.89. Revenues for
the fourth quarter 2000 grew 10 percent to $1.1 billion, representing the
fifth consecutive quarter that revenues topped the billion-dollar mark.
Operating earnings for the fourth quarter 2000 were $164.1 million, an
11 percent increase from fourth- quarter 1999 operating earnings of
$147.3 million. Net income for the fourth quarter 2000 was $89.2 million, a
6 percent increase from 1999 fourth-quarter net income of $83.9 million.
Diluted earnings per share for the year 2000 rose 8 percent to $3.80,
compared with $3.52 for 1999, excluding nonrecurring items. Annual 1999
earnings include $2.4 million, or $.02 per share, of nonrecurring charges
primarily related to cost control and rationalization programs. Revenues for
2000 increased 15 percent to $4.46 billion from $3.87 billion in 1999.
Operating earnings in 2000 rose 13 percent to $650.2 million, compared with
$577.5 million for 1999, excluding nonrecurring items. Net income for 2000
was $357.4 million, compared with $331.9 million for 1999.
"Cooper achieved an eight percent increase in earnings per share while
implementing major operational improvement projects throughout 2000," said H.
John Riley, Jr., chairman, president and chief executive officer. "Although
markets decelerated somewhat during the second half of the year, our growth
initiatives and cost containment programs enabled us to achieve our earnings
goals for both the fourth quarter and the full year 2000.
"As a result of our strategic acquisitions and new product introductions,
we are now able to deliver value to our customers through a breadth of line
that is unmatched by almost any other company in our industry. Concurrently,
our directives towards cost control have enhanced our competitive edge,"
continued Riley. "Cooper today is a world-class manufacturer of electrical
products and tools and hardware with significant upside potential."
Electrical Products
Fourth-quarter 2000 revenues in the Electrical Products segment grew
13 percent to $901.2 million from $795.3 million in the fourth quarter 1999.
Excluding the impact of currency translation, revenues rose 15 percent in the
fourth quarter 2000 from the same period last year. Operating earnings for
the segment in the fourth quarter 2000 were $142.4 million, a 9 percent
increase from $130.6 million in the fourth quarter 1999. After adjusting for
acquisitions, return on sales for the quarter was 16.2 percent, compared with
16.4 percent in the same period last year.
Annual 2000 Electrical Products segment revenues increased 20 percent to
$3.66 billion from $3.06 billion in 1999. Revenues in 2000 grew 21 percent
over the prior year, excluding the impact of translation.
Revenue growth in the segment was primarily driven by the continued
expansion of electronics markets and the acquisitions of B-Line Systems and
Eagle Electric that were completed in the first half of 2000. These two
businesses added more than $350 million in revenues for the year, broadened
the Company's electrical products offerings and presented increased
opportunities to effect significant manufacturing and operating efficiencies.
Annual operating earnings for the segment in 2000 were $585.0 million, a
13 percent increase from 1999 operating earnings of $516.7 million, excluding
nonrecurring items. Excluding acquisitions, return on sales for the
Electrical Products segment for 2000 was 17.0 percent, compared with
16.9 percent for 1999, reflecting the Company's continued focus on cost
reduction and efficiency improvements.
Tools & Hardware
Fourth-quarter 2000 revenues for the Tools & Hardware segment were
$205.8 million, compared with $209.2 million for the same period in 1999.
Excluding the impact of translation, revenues increased 2 percent for the
quarter, compared with the same period last year, reflecting the positive
impact of strong shipments of automated assembly equipment and increased
demand for power tools. Operating earnings for the fourth quarter 2000 were
$30.3 million, compared with $24.9 million for the fourth quarter in 1999.
Return on sales for the 2000 fourth quarter, excluding acquisitions, was
14.7 percent.
Annual 2000 Tools & Hardware segment revenues were $800.7 million,
compared with $808.0 million in 1999. Excluding the impact of currency
translation, revenues in the segment grew 2 percent during 2000. Annual
operating earnings in 2000 for the segment were $97.7 million, compared with
$97.9 million for 1999, excluding nonrecurring items.
Excluding acquisitions, return on sales in 2000 for the segment was
12.1 percent as the Company continued to rationalize its Tools & Hardware
operations.
2001 Outlook
Cooper will continue to implement important initiatives to fulfill its
long-range plan to expand revenues and increase profitability. As a result,
during 2001 and beyond we expect to achieve:
-- Enhanced performance and growth from the Eagle Electric and B-Line
Systems acquisitions. These businesses broadened the Company's
electrical products profile with new wiring device products; and
support systems and enclosures for electrical, mechanical and
telecommunications/data applications. The transfer of a large part of
Eagle's manufacturing operations to Mexico is well along, and the
benefits of significantly lower production costs will be realized in
2001.
-- Accelerated savings through our Strategic Sourcing program, which is
consolidating the Company's supply base and creating added efficiency
in the design and production of product offerings.
-- Greater interdivisional sales collaboration that will generate
improved core growth through the implementation of the Cooper
Connection, a customized distributor relationship program designed to
further elevate Cooper's electrical products brands.
-- Significantly reduced manufacturing costs for our lighting fixture
businesses through the realignment of domestic manufacturing
facilities and the completion of a new factory in Mexico to serve U.S.
and Latin American markets.
-- Similarly reduced manufacturing costs through the consolidation of our
U.S. tool manufacturing facilities and the startup of a new plant in
Mexico targeting growing markets in Latin and South America.
-- The performance benefits of the recently completed integration of our
European lighting and security businesses through improved brand
recognition and superior service to our European customers.
"During 2000, the Company attained a scale that offers an exciting
platform for additional value generation," continued Riley. "Our larger size
and broadened product scope positions us to realize stronger core growth,
enhanced profitability and improved financial flexibility.
"Like other manufacturers, we anticipate that certain economic challenges
will impact revenues in the early part of 2001. However, at Cooper, we expect
a gradual quarter-over-quarter improvement throughout the year, with a
resulting aggregate earnings increase similar to what we achieved in 2000. We
are confident that the growth initiatives and cost reduction programs we have
in place will help us to continue to deliver solid results for our
shareholders."
Comparisons of 2000 and 1999 fourth quarter and year-to-date results
appear on the following pages.
Cooper's fourth-quarter and full-year 2000 earnings conference call for
analysts and investors will be broadcast over the Internet through the
Company's web site (http://www.cooperindustries.com) at 12:00 noon (Eastern) on
Tuesday, January 23, 2001. The conference call also will be available as a
taped audio replay over the Internet through the Company's web site until
February 5, 2001.
CONSOLIDATED RESULTS OF OPERATIONS
Quarter Ended December 31,
2000 1999
(in millions where applicable)
Revenues $1,107.0 $1,004.5
Cost of sales 749.0 677.2
Selling and administrative expenses 178.9 167.2
Goodwill amortization 15.0 12.8
Operating earnings 164.1 147.3
Interest expense 26.8 16.1
Income Before Income Taxes 137.3 131.2
Income Taxes 48.1 47.3
Net Income $ 89.2 $ 83.9
Net Income Per Common Share:
Basic $ .95 $ .89
Diluted $ .95 $ .89
Shares Utilized in Computation
of Income Per Common Share:
Basic 93.6 million 94.0 million
Diluted 94.2 million 94.7 million
PERCENTAGE OF REVENUES
Quarter Ended December 31,
2000 1999
Revenues 100.0% 100.0%
Cost of sales 67.7% 67.4%
Selling and administrative expenses 16.2% 16.6%
Operating earnings 14.8% 14.7%
Income Before Income Taxes 12.4% 13.1%
Net Income 8.1% 8.4%
CONSOLIDATED RESULTS OF OPERATIONS (Continued)
Additional Information for the Quarter Ended December 31
Segment Information
Quarter Ended December 31,
2000 1999
(in millions)
Revenues:
Electrical Products $ 901.2 $ 795.3
Tools & Hardware 205.8 209.2
Total $1,107.0 $1,004.5
Segment Operating Earnings:
Electrical Products $ 142.4 $ 130.6
Tools & Hardware 30.3 24.9
Total 172.7 155.5
General Corporate expense 8.6 8.2
Interest expense 26.8 16.1
Income before income taxes $ 137.3 $ 131.2
Quarter Ended December 31,
2000 1999
Return on Sales: (A)
Electrical Products 15.8% 16.4%
Tools & Hardware 14.7% 11.9%
Total Segments 15.6% 15.5%
(A) Adjusting for recent acquisitions, return on sales in 2000
was 16.2% for Electrical Products and 14.7% for Tools & Hardware.
Return on sales in 2000 for the total of the segments was 15.9%.
CONSOLIDATED RESULTS OF OPERATIONS
Twelve Months Ended December 31,
2000 1999
(in millions where applicable)
Revenues $4,459.9 $3,868.9
Cost of sales 3,018.3 2,603.4
Selling and administrative expenses 732.9 640.9
Goodwill amortization 58.5 47.1
Operating earnings before
nonrecurring items $ 650.2 577.5
Nonrecurring charges --- 3.7
Interest expense 100.3 55.2
Income Before Income Taxes 549.9 518.6
Income Taxes 192.5 186.7
Net Income $ 357.4 $ 331.9
Net Income Per Common Share:
Basic $3.82 $3.53
Diluted $3.80 $3.50
Shares Utilized in Computation
of Income Per Common Share:
Basic 93.5 million 94.0 million
Diluted 94.1 million 94.9 million
PERCENTAGE OF REVENUES
Twelve Months Ended December 31,
2000 1999
Revenues 100.0% 100.0%
Cost of sales 67.7% 67.3%
Selling and administrative expenses 16.4% 16.6%
Operating earnings before nonrecurring items 14.6% 14.9%
Income Before Income Taxes 12.3% 13.4%
Net Income 8.0% 8.6%
CONSOLIDATED RESULTS OF OPERATIONS (Continued)
Additional Information for the Twelve Months Ended December 31
Segment Information
Twelve Months Ended December 31,
2000 1999
(in millions where applicable)
Revenues:
Electrical Products $3,659.2 $3,060.9
Tools & Hardware 800.7 808.0
Total $4,459.9 $3,868.9
Segment Operating Earnings
Without Nonrecurring Items:
Electrical Products $ 585.0 $ 516.7
Tools & Hardware 97.7 97.9
Total 682.7 614.6
Segment Nonrecurring Items:
Electrical Products --- 3.0
Tools & Hardware --- 1.5
Total --- 4.5
Segment Operating Earnings
With Nonrecurring Items:
Electrical Products 585.0 513.7
Tools & Hardware 97.7 96.4
Total segment operating earnings 682.7 610.1
General Corporate nonrecurring items --- (.8)
General Corporate expense 32.5 37.1
Interest expense 100.3 55.2
Income before income taxes $ 549.9 $ 518.6
Twelve Months Ended December 31,
2000 1999
Return on Sales: (A)
Electrical Products 16.0% 16.9%
Tools & Hardware 12.2% 12.1%
Total Segments 15.3% 15.9%
(A) Before nonrecurring items and after acquisitions. Adjusting
for recent acquisitions, return on sales in 2000 was 17.0% for
Electrical Products and 12.1% for Tools & Hardware. Return on
sales in 2000 for the total of the segments was 16.0%.
CONSOLIDATED RESULTS OF OPERATIONS (Continued)
Additional Information for the Nine Months Ended September 30
Net Income Per
Net Income Diluted Common Share
2000 1999 2000 1999
(in millions where applicable)
Income before $357.4 $334.3 $3.80 $3.52
nonrecurring items
Nonrecurring items --- (2.4) --- (.02)
Net Income $357.4 $331.9 $3.80 $3.50
