G&B News-PPG Reports On Fourth Quarter
PITTSBURGH--Jan. 17, 2002--PPG Industries reported today fourth-quarter net income was $83 million, or 49 cents a share, on sales of $1.91 billion.This compares with fourth-quarter 2000 net income of $126 million, or 75 cents a share, on sales of $2.1 billion.
For all of 2001, PPG's net income was $387 million, or $2.29 a share, including a $101 million pretax restructuring charge in the first quarter. Excluding the charge, equaling 42 cents a share aftertax, income was $458 million, or $2.71 a share. Sales were $8.2 billion.
Net income for all of 2000 was $620 million, or $3.57 a share, including aftertax charges totaling $38 million, or 22 cents a share, to write-off an equity investment and rationalize an automotive replacement glass distribution venture. Excluding the charges, net income was $658 million, or $3.79 a share. Sales were a record $8.6 billion.
"We anticipated a difficult year by accelerating actions to cut costs and conserve capital. Our financial discipline and continuous drive to improve efficiency have not reduced our commitment to technology and service," said Chairman and Chief Executive Officer Raymond W. LeBoeuf. "Despite a decrease in net earnings of $233 million, we increased cash flow from operations by about $200 million and reduced capital spending by $375 million, enabling us to reduce debt by about 20 percent. This strengthening of our balance sheet amid the recession improves our ability to generate earnings growth when economic expansion resumes.
"One of PPG's fundamental strengths is the continuous improvement of business processes, which is particularly important in times such as these, when market conditions are weak and the timing of the recovery is uncertain. Following the restructuring and work force reductions begun last year, we're developing plans to take additional restructuring actions in the first quarter of 2002, in the range of $60 to $90 million before taxes. These actions will include work force reductions and the closing of facilities or portions of facilities no longer needed as a result of improved business processes."
Fourth quarter 2001 sales were down $39 million, or 4 percent, in the coatings segment, driven by volume declines in all businesses except architectural coatings. The impact of these declines was partially offset by manufacturing efficiencies and lower overhead.
In the glass segment, sales were down 14 percent mostly on lower volumes, especially in fiber glass. Despite the positive impact of pricing and manufacturing efficiencies, earnings also fell.
In the chemicals segment, increased earnings because of higher specialty chemicals volumes and reductions in overhead throughout the segment were substantially offset by lower volumes and pricing in commodity chemicals.
Additional Information
Recorded comments by William H. Hernandez, senior vice president and chief financial officer, regarding fourth quarter and full-year 2001 results may be heard by telephone at 412-434-2816 between about 8:30 a.m. EST on Thursday, Jan. 17, and 5 p.m. EST on Friday, Jan. 25. The commentary will also be available online at Financial, Financial Commentary, on PPG's Web site (www.ppg.com). The commentary may include forward-looking statements or other material information. Additional information, including historical performance, is also available at Financial on PPG's Web site.
Forward-Looking Statement
Statements in this news release relating to matters that are not historical facts are forward-looking statements reflecting the company's current view with respect to future events and financial performance. These matters involve risks and uncertainties that affect the company's operations, as discussed in PPG Industries' Annual Report on Form 10-K filed with the Securities and Exchange Commission. Accordingly, many factors could cause actual results to differ materially from the company's forward-looking statements.
Among these factors are increasing price and product competition by foreign and domestic competitors, fluctuations in cost and availability of raw materials, the ability to maintain favorable supplier relationships and arrangements, economic and political conditions in international markets, the ability to penetrate existing, developing and emerging foreign and domestic markets, which also depends on economic and political conditions, and foreign exchange rates and fluctuations in those rates. Further, it is not possible to predict or identify all such factors. Consequently, while the list of factors presented here is considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements.
Consequences of material differences in results as compared with those anticipated in the forward-looking statements could include, among other things, business disruption, operational problems, financial loss, legal liability to third parties and similar risks, any of which could have a material adverse effect on the company's consolidated financial condition, operations or liquidity.
PPG INDUSTRIES AND CONSOLIDATED SUBSIDIARIES
CONDENSED STATEMENT OF OPERATIONS (unaudited)
(All amounts in millions except per-share data)
3 Months Ended 12 Months Ended
Dec. 31 Dec. 31
2001 2000 2001 2000
------- ------- ------- -------
Net sales $ 1,907 $ 2,058 $ 8,169 $ 8,629
Cost of sales 1,210 1,286 5,137 5,334
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GROSS PROFIT 697 772 3,032 3,295
Other expenses (earnings):
Selling & other 420 435 1,661 1,646
Depreciation 94 93 375 374
Interest 32 47 169 177
Amortization 18 18 72 73
Business realignments -- (1) 103 5
Other - net (5) 11 (14) 3
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INCOME BEFORE INCOME TAXES
& MINORITY INTEREST 138 169 666 1,017
Income taxes 50 36 247 369
Minority interest 5 7 32 28
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NET INCOME $ 83 $ 126 $ 387 $ 620
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Earnings per common share $ 0.49 $ 0.75 $ 2.30 $ 3.60
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Earnings per common share
- assuming dilution $ 0.49 $ 0.75 $ 2.29 $ 3.57
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Avg. shares outstanding 168.4 169.0 168.3 172.3
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Avg. shares outstanding
- assuming dilution 169.1 169.6 169.2 173.6
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CONDENSED BALANCE SHEET (unaudited)
Dec. 31 Dec. 31
2001 2000
------- -------
(millions)
Current assets:
Cash & cash equivalents $ 108 $ 111
Receivables - net 1,416 1,563
Inventories 904 1,121
Other 275 298
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Total current assets 2,703 3,093
Investments 305 320
Property less accumulated depreciation 2,752 2,941
Goodwill & identifiable intangible assets
less accumulated amortization 1,542 1,648
Other assets 1,150 1,123
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TOTAL $8,452 $9,125
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Current liabilities:
Short-term debt & current portion of
long-term debt $ 696 $1,161
Accounts payable & accrued liabilities 1,259 1,382
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Total current liabilities 1,955 2,543
Long-term debt 1,699 1,810
Deferred income taxes 552 543
Accumulated provisions 1,044 1,004
Minority interest 122 128
Shareholders' equity 3,080 3,097
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TOTAL $8,452 $9,125
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BUSINESS SEGMENT INFORMATION (unaudited)
3 Months Ended 12 Months Ended
Dec. 31 Dec. 31
2001 2000 2001 2000
------- ------- ------- -------
(millions)
Net sales
Coatings $ 1,072 $ 1,111 $ 4,410 $ 4,658
Glass 491 574 2,236 2,350
Chemicals 344 373 1,523 1,621
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TOTAL $ 1,907 $ 2,058 $ 8,169 $ 8,629
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Operating income
Coatings $ 136 $ 149 $ 495 $ 685
Glass (2) 22 73 255 377
Chemicals 17 13 91 174
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TOTAL 175 235 841 1,236
Interest - net (30) (43) (154) (165)
Other unallocated
corporate expense
- net (3) (7) (23) (21) (54)
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INCOME BEFORE INCOME
TAXES & MINORITY
INTEREST (1) $ 138 $ 169 $ 666 $ 1,017
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(1) Income before income taxes and minority interest for the twelve
months ended December 31, 2001, includes a first quarter charge
for $101 million for restructuring and other related activities,
including severance and other costs of $67 million and asset
write-offs of $34 million. The amounts by business segment were as
follows:
Coatings $ 83
Glass 10
Chemicals 7
Corporate 1
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$ 101
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(2) Includes for the twelve months ended December 31, 2000, pretax
charges of $7 million for restructuring and one-time integration
costs related to PPG Auto Glass L.L.C.
(3) Includes for the three months ended December 31, 2000, a pretax
charge of $14 million representing an other than temporary decline
in the market value of an investment in marketable equity
securities.
Includes for the twelve months ended December 31, 2000, pretax
charges of $39 million representing the write-off of an equity
investment in Pittsburgh Corning Corporation which filed for
reorganization under the federal bankruptcy code and $14 million
representing an other than temporary decline in the market value
of an investment in marketable equity securities.