ITW Reports Record Revenues for 1999 Fourth Quarter and Full Year
1 February 2000
ITW Reports Record Revenues for 1999 Fourth Quarter and Full Year; Net Income Grows 11% Before 4th Quarter Merger Related Costs
GLENVIEW, Ill., Feb. 1 -- Illinois Tool Works Inc.
today reported record revenues for the 1999 fourth quarter and
full year as a result of improving base business growth and ongoing
acquisition activity. Net income for the 1999 fourth quarter increased
11 percent before nonrecurring transaction and compensation costs associated
with the November 23, 1999 merger with Premark International, Inc.
For the 1999 fourth quarter, net income before the one time charge was
82 cents per share versus 74 cents on a restated basis for prior year period.
As a result of merger related costs, 1999 fourth quarter net income was
reduced to 59 cents per share. For full year 1999, net income before the
nonrecurring charge was $2.99 per share, a 12 percent increase compared to a
restated $2.66 in the prior year. Including the one-time charge, full-year
net income was a record $841 million, or $2.76 per share, a four percent
increase.
Operating revenues increased 10 percent to $2.5 billion in the fourth
quarter and 11 percent to $9.3 billion for the full year. While operating
income increased 7 percent to $1.4 billion for the full year, operating income
grew 14 percent before merger related costs.
"We are pleased with both our operating performance and our acquisition
program during 1999," said W. James Farrell, ITW's chairman and chief
executive officer. "Our base business growth rate was 4 percent in the fourth
quarter and 3 percent for the full year. As to acquisitions, we completed
28 smaller transactions representing nearly $900 million in revenues for the
full year. As important, the process by which we will improve the newly
acquired food equipment and Wilsonart businesses is underway. This ongoing
process further validates our belief that these operations will be strong
additions to our more than 500 worldwide units."
Segment highlights for the 1999 fourth quarter include:
North American Engineered Products revenues increased 16 percent due to
acquisition activity and strong base business growth in the automotive,
construction and consumer packaging businesses. Operating income grew
14 percent largely as a result of revenue growth in the above businesses. For
the full year, revenues and operating income increased 16 percent and
18 percent, respectively.
International Engineered Products revenues grew 28 percent and operating
income increased 14 percent primarily due to acquisitions as well as
contributions from base automotive and polymers businesses. Margins were
negatively impacted by restructuring costs in a number of European businesses.
Revenues were up 28 percent and operating income increased 4 percent for
full-year 1999.
North American Specialty Systems revenues increased 11 percent due to
contributions from base businesses and acquisitions. The base business grew
at its fastest rate in nearly two years, with welding, industrial packaging,
finishing and food equipment businesses all contributing to growth. Operating
income increased 15 percent thanks to improved operating efficiencies in a
variety of businesses. This translated into a 70 basis point improvement in
margins. For the full year, revenues and operating income grew 9 percent and
15 percent, respectively.
While International Specialty Systems revenues declined 3 percent,
operating income increased 18 percent. The 210 basis point improvement in
margins was primarily attributable to better productivity in the consumer and
industrial packaging businesses as well as finishing operations. Revenues and
operating income were essentially flat for the full year.
Consumer products revenues were down 4 percent and operating income
declined significantly as a result of accounting adjustments at Florida Tile.
For the full year, revenues increased 3 percent and operating income grew
19 percent.
Leasing and investments operating income was down 19 percent, largely as a
result of strong gains on sales of assets from the prior year period. For the
full year, operating income grew 26 percent.
ITW is a $9.3 billion diversified manufacturer of highly engineered
components and industrial systems. The company consists of more than
500 decentralized operations in 40 countries and employs approximately
52,800 people.
ILLINOIS TOOL WORKS INC.
(In thousands except per share data)
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
STATEMENT OF INCOME 1999 1998 1999 1998
Operating Revenues $2,487,329 $2,258,106 $9,333,185 $8,386,971
Cost of revenues 1,601,127 1,458,757 6,042,548 5,485,533
Selling,
administrative, and
R&D expenses 461,062 415,393 1,730,031 1,542,684
Amortization of
goodwill & other
intangibles 19,432 16,926 74,222 50,008
Premark merger-related
costs 81,020 -- 81,020 --
Operating Income 324,688 367,030 1,405,364 1,308,746
Interest expense (17,420) (10,487) (67,510) (29,216)
Other income 3,631 612 14,858 1,017
Income Before Income
Taxes 310,899 357,155 1,352,712 1,280,547
Income taxes 130,857 131,423 511,600 470,800
Net Income $180,042 $225,732 $841,112 $809,747
Net Income Per Share:
Basic $0.60 $0.75 $2.80 $2.70
Diluted $0.59 $0.74 $2.76 $2.66
Net Income Per Share
(excluding merger-related
costs):
Basic $0.83 $0.75 $3.04 $2.70
Diluted $0.82 $0.74 $2.99 $2.66
Shares outstanding during
the period:
Average 300,497 299,960 300,158 299,912
Average assuming
dilution 304,433 304,411 304,649 304,641
DEC 31, SEPT 30, DEC 31,
STATEMENT OF FINANCIAL POSITION 1999 1999 1998
ASSETS
Cash & equivalents $232,953 $150,172 $109,526
Trade receivables 1,630,937 1,570,728 1,465,899
Inventories 1,084,212 1,063,775 1,036,817
Deferred income taxes 188,729 189,242 180,787
Prepaids and other current assets 136,100 306,595 235,570
Total current assets 3,272,931 3,280,512 3,028,599
Plant & equipment 3,912,298 3,829,994 3,592,491
Less: accumulated depreciation (2,278,367) (2,233,707) (2,100,221)
Net plant & equipment 1,633,931 1,596,287 1,492,270
Investments 1,188,120 1,185,202 1,183,493
Goodwill & other intangibles 2,029,959 1,986,622 1,556,774
Deferred income taxes 433,792 506,918 509,486
Other assets 501,526 423,798 441,866
$9,060,259 $8,979,339 $8,212,488
LIABILITIES and
STOCKHOLDERS' EQUITY
Short-term debt $553,655 $553,459 $428,019
Accounts payable 470,200 426,481 421,043
Accrued expenses 906,215 859,812 853,122
Cash dividends payable 54,102 51,867 43,709
Income taxes payable 61,189 154,962 106,543
Total current liabilities 2,045,361 2,046,581 1,852,436
Long-term debt 1,360,746 1,369,759 1,208,046
Other liabilities 838,729 867,584 908,634
Total non-current liabilities 2,199,475 2,237,343 2,116,680
Common stock & additional
paid-in capital 520,218 751,114 733,884
Income reinvested in the business 4,485,515 4,362,873 3,864,024
Common stock held in treasury (1,783) (252,087) (238,502)
Unearned restricted stock -- (2,258) (3,400)
Cumulative translation adjustment (188,527) (164,227) (112,634)
Total stockholders' equity 4,815,423 4,695,415 4,243,372
$9,060,259 $8,979,339 $8,212,488