PRESS RELEASE
Johnson Controls Earnings Up 20% In 1996, Sales Reach $10 Billion
MILWAUKEE, Nov. 7, -- Johnson Controls, Inc.
today reported record sales and net income for fiscal 1996.
Sales for the year ended September 30, 1996, rose 20% to $10,009.4
million from $8,330.3 million for 1995. Operating income increased to
$500.0 million, 11% higher than 1995's $448.8 million. Net income
rose to $234.7 million, up 20% from $195.8 million for 1995. Fully
diluted earnings per share were $5.10 versus $4.27 for 1995.
James H. Keyes, chairman and chief executive officer of Johnson
Controls, said, "Thanks to our employees, we were able to make 1996
the 50th consecutive year of sales increases, reaching $10 billion.
1996 is also the 6th straight year of earnings increases. Our
annualized total return to shareholders was 21% for both the one and
five years ended September 30, 1996, exceeding the return produced by
the Standard & Poor's Industrials over both periods."
Sales by the company's automotive business increased 35% to $5,308
million for 1996 compared with $3,945 million for 1995. Two-thirds of
the increase was internal growth while one-third reflected the 1996
acquisition of Roth Freres, a French seating and interior systems
company. The company stated that the internal growth stemmed from the
company's new seating programs for vehicles such as the Ford F-Series
light truck in North America and the Ford Fiesta car in Europe. The
sales increase came despite relatively flat vehicle production levels
in North America and Europe. Operating income increased 28% to $298.9
million from $232.8 million for 1995. The increase reflects the
higher volumes and improved profitability in North America and Europe
which was partially offset by investments in new markets such as
Argentina, Brazil and the Asia/Pacific region.
Mr. Keyes said, "An additional highlight of the year was the
acquisition of Prince Automotive. We are very enthusiastic about the
opportunities that Prince provides us in becoming the market leader in
automotive interior systems. Together with our strengthening position
in automotive seating worldwide, we foresee ample growth opportunities
for our automotive group in the near-term and beyond the year 2000."
The acquisition of Prince was effective October 1, 1996, and therefore
is not reflected in the company's results for fiscal 1996.
Controls sales for 1996 increased 13% to $2,960 million, up from
1995's $2,630 million, while operating income totaled $118.6 million,
a 12% increase over $105.8 million. Sales of systems and services
worldwide rose approximately 10% reflecting strength in the existing
buildings market in North America and Europe, while a high level of
new construction boosted results from the Asia/Pacific region. The
company said that orders for systems and services worldwide also rose
by about 10%. Integrated facilities management sales increased by
approximately 20% due to a high level of growth in the North American
and European commercial buildings market. "We expect double-digit
growth to continue for our controls business as non-residential
building owners continue to look for ways to improve the quality of
their building environments and reduce energy and operating costs,"
said Mr. Keyes.
Plastics sales decreased 11% in 1996 to $968 million from $1,083
million for 1995. The company said the revenue decline primarily
stemmed from the pass-through of lower resin prices to customers
worldwide and cooler than average summer temperatures in North America
and Europe. Unit shipments were slightly higher than a year ago as
higher unit demand for water and single- serve bottles offset lower
shipments of 2-liter bottles. Operating income decreased 62% to $24.0
million from $63.6 million a year ago due to competitive pressures,
declining resin prices and unabsorbed manufacturing capacity resulting
from the weaker than anticipated market demand.
Battery sales increased 15% to $774 million from $672 million for
the prior year. Unit shipments of automotive batteries to the
replacement and original equipment markets were more than 10% higher.
The company said that its existing battery retail and distributor
customers experienced substantial growth during 1996. The revenue
increase was also aided by the addition of several new aftermarket
accounts. Operating income for 1996 was $58.5 million, up 26% from
$46.6 million for 1995 and 7% higher than its 1994 record operating
income level of $54.7 million. The improvement was due to continuing
efforts to increase productivity and reduce total costs while
increasing quality.
For the three months ended September 30, 1996, sales were $2,677.1
million, 19% higher than $2,241.3 million for the same period of 1995.
Operating income rose 9% to $164.9 million for 1996 from $151.8
million. Net income totaled $82.0 million, 22% higher than the $67.0
million for 1995. Fully diluted earnings per share increased to $1.79
from $1.46.
Certain matters discussed in this news release are "forward
looking statements" as defined in the Private Securities Litigation
Reform Act (PSLRA) of 1995, which involve risks and uncertainties, and
are subject to change based on various important factors. Johnson
Controls wishes to take advantage of the "safe harbor" provisions of
the PSLRA by cautioning that numerous important factors as outlined in
the Company's Form 8-K (filed with the SEC on 9/27/96), among others,
in some cases have affected, and in the future could affect, the
Company's actual results and could cause its actual consolidated
results to differ materially from those expressed in this release.
CHART:
CONSOLIDATED STATEMENT OF INCOME
(In millions, except per share)
For the Three Months For the Year
Ended September 30, Ended September 30,
1996 1995 1996 1995
(Unaudited)
Net sales $2,677.1 $2,241.3 $10,009.4 $8,330.3
Cost of sales 2,285.4 1,868.4 8,621.0 7,072.6
Gross profit 391.7 372.9 1,388.4 1,257.7
Selling, general and
administrative expenses 226.8 221.1 888.4 808.9
Operating income 164.9 151.8 500.0 448.8
Interest income 2.4 1.2 8.0 6.2
Interest expense (20.5) (13.7) (77.1) (57.4)
Miscellaneous - net 3.4 (5.3) 11.9 (9.7)
Other income (expense) (14.7) (17.8) (57.2) (60.9)
Income before income taxes
and minority interests 150.2 134.0 442.8 387.9
Provision for income taxes 61.7 56.3 181.6 162.9
Minority interests in net
earnings of subsidiaries 6.5 10.7 26.5 29.2
Net income $82.0 $67.0 $234.7 $195.8
Earnings available for
common shareholders $79.6 $64.7 $225.2 $186.4
Earnings per share (a)
Primary $1.90 $1.57 $5.39 $4.53
Fully diluted $1.79 $1.46 $5.10 $4.27
For the Three Months Ended For the Year Ended
September 30, September 30,
1996 1995 1996 1995
Weighted Average Shares
Primary 41.9 41.4 41.8 41.2
Fully diluted 45.0 44.6 44.9 44.5
(a) Primary earnings per share are computed by dividing net
income, after deducting dividend requirements on the Series D
Convertible Preferred Stock, by the weighted average number of common
shares and common stock equivalents which would arise from the
exercise of stock options. Fully diluted earnings are computed by
deducting from net income the after-tax compensation expense which
would arise from the assumed conversion of the Series D Convertible
Preferred Stock, which was $1.4 million and $1.5 million for the three
months ended September 30, 1996 and 1995, respectively and $5.6
million and $5.8 million for the year ended September 30, 1996 and
1995, respectively. Fully diluted weighted average shares assume the
conversion of the company's Series D Convertible Preferred Stock, if
dilutive, plus the dilutive effect of the stock options.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(In millions)
September 30, September 30,
1996 1995
ASSETS
Cash and cash equivalents $164.1 $103.8
Accounts receivable - net 1,676.5 1,287.5
Inventories 421.1 355.5
Other current assets 331.8 317.1
Current assets 2,593.5 2,063.9
Property, plant and equipment - net 1,679.1 1,518.8
Goodwill - net 602.7 519.1
Investments in partially-owned affiliates 128.4 90.8
Other noncurrent assets 118.9 128.3
Total assets $5,122.6 $4,320.9
LIABILITIES AND EQUITY
Short-term debt $250.0 $130.2
Current portion of long-term debt 35.5 67.7
Accounts payable 1,272.9 983.5
Accrued compensation and benefits 248.3 258.5
Accrued income taxes 42.9 35.5
Billings in excess of costs and earnings
on uncompleted contracts 83.6 87.8
Other current liabilities 369.0 346.3
Current liabilities 2,302.2 1,909.5
Long-term debt 756.5 630.0
Postretirement health and other benefits 169.3 168.8
Other noncurrent liabilities 386.8 272.4
Shareholders' equity 1,507.8 1,340.2
Total liabilities and equity $5,122.6 $4,320.9
CONTACT: Glen L. Ponczak of Johnson Controls, 414-228-2375
