ITW Reports Record Net Income For 1999 Second Quarter and First Half
20 July 1999
ITW Reports Record Net Income For 1999 Second Quarter and First Half
GLENVIEW, Ill., July 20 -- Illinois Tool Works Inc.
today reported record net income for the 1999 second quarter and
first half as ongoing acquisition activity, improving base business growth and
strong margins combined to produce double-digit increases in the company's
earnings, operating revenues and operating income.
Net income for the 1999 second quarter grew 14 percent to $199.8 million
from $176 million, representing ITW's 22nd consecutive quarter of double-digit
earnings growth. Diluted earnings per share of 79 cents were 13 percent
higher than a year ago. Second quarter earnings growth was driven by ITW's
boost in operating revenues to $1.62 billion from $1.42 billion, a 14 percent
increase. During this same period, operating income was $323.5 million, 14
percent higher than the year earlier period.
First half 1999 net income was $364.2 million, a 12 percent increase
compared with the 1998 first half period. Diluted earnings per share of $1.44
also increased 12 percent versus a year ago. Operating revenues and operating
income were 12 percent and 13 percent higher, respectively.
"We're pleased that our base business showed improvement for the second
quarter, moving to a one percent growth rate from minus three percent for the
1999 first quarter," said W. James Farrell, chairman and chief executive
officer. "This positive growth trend, along with solid acquisition activity
and strong overall margins, are key elements of our focus on long-term,
quality earnings."
Highlights for the 1999 second quarter versus the prior year period
include:
In the North American Engineered Products segment, 1999 second quarter
revenues increased 24 percent as a result of acquisitions and revenue growth
in the base automotive, construction and packaging businesses. Operating
income grew 27 percent largely due to revenue growth, improved operating
efficiencies and acquisitions.
For the International Engineered Products segment, revenues and operating
income grew 30 percent and one percent, respectively. Acquisitions and strong
performance in the automotive plastics, electronic component packaging and
polymers areas accounted for revenue and income growth, offsetting
nonrecurring costs associated with European construction, declines in other
operations and the impact of negative translation.
In the North American Specialty Systems segment, revenues were up five
percent as the impact of acquisitions offset continuing softness in the base
businesses. Operating income grew eight percent largely as a result of
increased operating efficiencies in both acquisitions and base businesses.
In the International Specialty Systems segment, revenues decreased one
percent as declines in industrial base businesses and negative translation
effects modestly offset positive acquisition gains. Operating income
decreased 12 percent due to base business revenue declines in certain
industrial packaging businesses.
For the Leasing and Investments segment, operating income increased by
$9.7 million compared to the year earlier period primarily due to gains on
sales of certain investment assets outside of the mortgage-related portfolio.
ITW is a $5.6 billion diversified manufacturer of highly engineered
components and industrial systems. The company consists of more than 400
decentralized operations in 36 countries and employs approximately 29,000
people.
ILLINOIS TOOL WORKS INC.
(In thousands except per share data)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
STATEMENT OF INCOME 1999 1998 1999 1998
Operating Revenues $1,624,170 $1,420,461 $3,098,004 $2,761,452
Cost of revenues 1,023,657 910,889 1,965,799 1,784,846
Selling,
administrative,
and R&D expenses 258,404 213,662 511,665 434,740
Amortization of
goodwill & other
intangibles 16,738 10,397 30,805 20,174
Amortization of
retiree health care 1,826 1,826 3,653 3,653
Operating Income 323,545 283,687 586,082 518,039
Interest expense (11,557) (2,293) (19,942) (5,239)
Other income (expense) 2,750 (4,315) 7,444 (1,563)
Income Before Income
Taxes 314,738 277,079 573,584 511,237
Income taxes 114,900 101,100 209,400 186,600
Net Income $199,838 $175,979 $364,184 $324,637
Net Income Per Share :
Basic $0.80 $0.70 $1.45 $1.30
Diluted $0.79 $0.70 $1.44 $1.29
Shares outstanding
during the period :
Average 250,466 249,889 250,349 249,789
Average assuming
dilution 253,247 252,678 253,035 252,526
JUNE 30, MAR 31, DEC 31,
STATEMENT OF FINANCIAL 1999 1999 1998
POSITION
ASSETS
Cash & equivalents $119,542 $250,578 $93,485
Trade receivables 1,087,783 1,031,275 989,086
Inventories 613,678 598,173 581,755
Deferred income taxes 110,811 106,302 102,607
Prepaids and other
current assets 100,469 82,095 67,540
Total current assets 2,032,283 2,068,423 1,834,473
Plant & equipment 2,586,476 2,500,051 2,417,432
Less: accumulated
depreciation (1,502,164) (1,467,629) (1,429,883)
Net plant & equipment 1,084,312 1,032,422 987,549
Investments 1,171,684 1,179,621 1,183,493
Goodwill 1,542,921 1,339,446 1,189,323
Deferred income taxes 413,424 414,210 417,361
Other assets 494,269 427,548 505,963
$6,738,893 $6,461,670 $6,118,162
LIABILITIES and
STOCKHOLDERS' EQUITY
Short-term debt $434,702 $304,996 $406,707
Accounts payable 307,961 282,454 268,869
Accrued expenses 463,253 446,514 457,543
Cash dividends payable 37,584 37,546 37,519
Income taxes payable 88,406 127,555 51,371
Total current liabilities 1,331,906 1,199,065 1,222,009
Long-term debt 1,223,942 1,230,818 947,008
Other liabilities 592,566 597,459 611,110
Total non-current
liabilities 1,816,508 1,828,277 1,558,118
Common stock 2,508 2,505 2,504
Additional paid-in capital 308,421 305,212 302,684
Income reinvested in the
business 3,419,270 3,257,016 3,130,213
Common stock held in
treasury (1,783) (1,783) (1,783)
Cumulative translation
adjustment (137,937) (128,622) (95,583)
Total stockholders' equity 3,590,479 3,434,328 3,338,035
$6,738,893 $6,461,670 $6,118,162