PPG Reports On 4th Quarter
20 January 2000
PPG Reports On 4th Quarter
PITTSBURGH--Jan. 20, 2000--PPG Industries' fourth-quarter net income was $162 million, or 92 cents a share, including $2 million, or one cent a share, from an after-tax acquisition-related charge. Excluding the one-time charge, net income was $164 million, or 93 cents a share. Sales were $2.05 billion, a record for any quarter.Fourth-quarter 1998 net income was $162 million, or 91 cents a share, including $8 million, or four cents a share, in after-tax restructuring charges in the coatings and glass segments. Excluding those charges, net income was $170 million, or 95 cents a share. Sales in 1998's fourth quarter were $1.79 billion.
For all of 1999, PPG's net income was $568 million, or $3.23 a share, including $79 million, or 45 cents a share, in after-tax acquisition-related costs and restructuring charges associated with cost-reduction initiatives. Sales were a record $7.76 billion. Excluding the charges, net income was $647 million, or $3.68 a share.
This compares with 1998 net income of $801 million, or $4.48 a share, including a gain from the sale of European flat and automotive glass operations and effects of restructuring charges related to disposition of equity interests in Chinese glass operations and cost-reduction initiatives. Sales were $7.51 billion. Without the gain and charges, 1998 net income would have been $738 million, or $4.13 a share.
In 1999's final quarter, a $4 million, pre-tax, acquisition-related charge represented the fair-market-value adjustment of acquired inventories that have been sold.
"Integration of PPG's two largest acquisitions, which were completed last summer with an investment of $1.2 billion, is progressing well, and they will add to our performance this year," said Raymond W. LeBoeuf, PPG chairman and chief executive.
"We are confident that our disciplined efforts to enhance our business portfolio through acquisitions, along with continued operating efficiencies, will enable us to achieve our global strategic vision for faster and more predictable earnings growth. The strengthening global economic environment provides further encouragement for PPG's prospects in 2000."
Fourth-quarter 1999 coatings segment sales were a record for any quarter, driven by sales from recent acquisitions and volume gains for automotive, industrial and architectural coatings. Excluding the acquisition-related costs and restructuring charges, operating earnings were a record for any quarter as they increased 28 percent from a year ago.
Glass segment sales and operating earnings improved slightly on volume gains for certain fiber glass products, as well as automotive original and flat glass products. Overall, manufacturing efficiencies more than offset weaker prices across all product lines. Results also included a net reversal of $3 million, pretax, in previous restructuring reserves no longer required.
In PPG's chemicals segment, sales increased on higher volumes for certain chlor-alkali derivatives and optical products, including Transitions plastic lenses. Lower operating earnings resulted from higher energy costs, offset partially by improved volumes and certain chlor-alkali derivative pricing. Electrochemical unit (combined chlorine and caustic soda) pricing, although lower than a year ago, has been rising since September.
Internet: www.ppg.com
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
1999 1998 1999 1998
---- ---- ---- ----
Net sales $2,053 $1,789 $7,757 $7,510
Cost of sales:
Recurring 1,241 1,063 4,696 4,476
Non-recurring 4 - 23 -
----- ----- ----- -----
Total cost of sales 1,245 1,063 4,719 4,476
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GROSS PROFIT 808 726 3,038 3,034
Other expenses:
Selling & other 400 364 1,514 1,404
Depreciation 96 89 366 354
Amortization 17 8 49 27
Interest 43 25 133 110
Purchased in-process
research and
development - - 40 -
Business divestitures
and realignments (1) 13 42 31
Other earnings - net (24) (26) (79) (186)
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INCOME BEFORE INCOME TAXES
& MINORITY INTEREST 277 253 973 1,294
Income taxes 105 86 377 466
Minority interest 10 5 28 27
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NET INCOME $ 162 $ 162 $ 568 $ 801
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Earnings per common
share $ 0.93 $ 0.91 $ 3.27 $ 4.52
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Earnings per common
share - assuming
dilution $ 0.92 $ 0.91 $ 3.23 $ 4.48
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Avg. shares outstanding 173.9 176.4 173.8 177.0
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Avg. shares outstanding
- assuming dilution 175.6 178.0 175.5 178.7
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CONDENSED BALANCE SHEET (unaudited)
Dec. 31 Dec. 31
1999 1998
(millions)
Current assets:
Cash & cash equivalents $ 158 $ 128
Receivables - net 1,594 1,366
Inventories 1,016 917
Other 273 249
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Total current assets 3,041 2,660
Investments 261 263
Property less accumulated depreciation 2,933 2,905
Goodwill & identifiable intangible assets
less accumulated amortization 1,662 724
Other assets 996 835
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TOTAL $8,893 $7,387
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Current liabilities:
Short-term debt & current portion of
long-term debt $ 954 $ 637
Accounts payable & accrued liabilities 1,404 1,264
Income taxes 9 11
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Total current liabilities 2,367 1,912
Long-term debt 1,836 1,081
Deferred income taxes 516 440
Accumulated provisions 970 987
Minority interest 98 87
Shareholders' equity 3,106 2,880
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TOTAL $8,893 $7,387
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BUSINESS SEGMENT INFORMATION (unaudited)
3 Months Ended 12 Months Ended
Dec. 31 Dec. 31
1999 1998 1999 1998
---- ---- ---- ----
(millions)
Net sales
Coatings $1,136 $ 914 $4,079 $3,459
Glass 547 533 2,255 2,527
Chemicals 370 342 1,423 1,524
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TOTAL $2,053 $1,789 $7,757 $7,510
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Operating income
Coatings (1) $ 178 $ 135 $ 522 $ 546
Glass (2) 83 75 386 478
Chemicals (3) 56 61 177 354
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TOTAL 317 271 1,085 1,378
Interest - net (39) (21) (124) (98)
Other unallocated
corporate (expense)
income - net (1) 3 12 14
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INCOME BEFORE INCOME
TAXES & MINORITY
INTEREST $ 277 $ 253 $ 973 $1,294
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(1) Includes for the 3 months ended Dec. 31, 1999, pre-tax charges of
$4 million representing the fair-market-value adjustment of
acquired inventories that have been sold, $3 million related to
cost reduction initiatives and a $1 million reversal of
restructuring reserves.
Includes for the 12 months ended Dec. 31, 1999, pre-tax charges
of $42 million for disposal of a redundant European packaging
coatings facility, work force reductions and the closure of a
facility, $40 million for purchased in-process research and
development, $23 million representing the fair-market-value
adjustment of acquired inventories that have been sold and $6
million related to the bankruptcy of a home-center chain. Also
includes a $1 million reversal of previously established
restructuring reserves.
Includes for each 1998 period presented, a pre-tax restructuring
charge of $9 million related to cost reduction initiatives.
(2) Includes for the 3 months ended Dec. 31, 1999, a pre-tax
restructuring charge of $1 million and a $4 million reversal of
restructuring reserves.
Includes for the 12 months ended Dec. 31, 1999, pre-tax
restructuring charges of $4 million related to cost reduction
initiatives and a $4 million reversal of restructuring reserves.
Includes for the 3 months ended Dec. 31, 1998, a pre-tax
restructuring charge of $6 million principally related to cost
reduction initiatives and a $3 million reversal of restructuring
reserves.
Includes for the 12 months ended Dec. 31, 1998, a pre-tax gain of
$85 million related to the sale of the European flat and
automotive glass businesses, a pre-tax restructuring charge of
$15 million related to the disposition of equity interests in two
Asian float glass plants and two Asian downstream fabrication
facilities, $9 million of cost reduction initiatives and a $3
million reversal of restructuring reserves.
(3) Includes for the 12 months ended Dec. 31, 1999, a pre-tax
restructuring charge of $1 million related to cost reduction
initiatives.
--30---mjb/clv*
CONTACT: PPG Industries
John S. Ruch, 1-412-434-2445 (office)
1-724-452-8834 (home)
ruch@ppg.com
KEYWORD: PENNSYLVANIA
INDUSTRY KEYWORD: AEROSPACE/DEFENSE AUTOMOTIVE
BUILDING/CONSTRUCTION CHEMICALS/PLASTICS MANUFACTURING EARNINGS