PPG Industries Reports First Quarter Results
20 April 2000
PPG Industries Reports First Quarter Results
PITTSBURGH--April 20, 2000--Excluding a one-time charge, PPG Industries' (NYSE:PPG) first-quarter net income was $174 million, or 99 cents a share -- a 22 percent per-share increase from a year ago -- on record sales of $2.1 billion. The earnings gain was driven by record coatings results and improved glass and chemicals segment performance.Including a previously announced after-tax charge of $35 million, or 20 cents a share, for the write-off of an equity investment, net income for the quarter was $139 million, or 79 cents a share.
Excluding an 11-cents-a-share after-tax packaging coatings restructuring charge, PPG's net income in the first quarter of 1999 was $143 million, or 81 cents a share, on sales of $1.8 billion. Including the charge, net income a year ago was $123 million, or 70 cents a share.
"Our improved earnings reflect economic recovery in Asia, strengthening North American and European industrial conditions, and continued overall strength of the North American economy," said PPG Chairman and Chief Executive Raymond W. LeBoeuf. "Progress in integrating acquisitions and continuing benefits of aggressive cost reduction programs also contributed."
He noted that coatings segment operating earnings improved, year-to-year, more than 27 percent for the second consecutive quarter. "Manufacturing efficiencies in PPG's glass and chemical segments, and record production rates for fiber glass reinforcements and major commodity chemicals, also contributed to improved earnings."
PPG's coatings segment posted record sales and operating earnings for a first quarter. Volume gains accelerated for the fourth consecutive quarter, and were responsible for sales growth of nine percent, excluding acquisitions. Volume growth rates for automotive original (OEM), industrial, refinish and packaging coatings were strong.
Glass segment sales and operating earnings increased from those of first-quarter 1999, driven by volume improvements for automotive OEM glass, fiber glass and flat glass, as well as recovering fiber glass prices.
Chemicals segment sales and operating earnings also improved from a year ago. Significant commodity price improvement, as well as improved volumes, contributed to stronger operating earnings.
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
March 31
2000 1999
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Net sales $2,087 $1,803
Cost of sales 1,254 1,103
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GROSS PROFIT 833 700
Other expenses:
Selling & other 397 353
Depreciation 93 91
Interest 43 26
Amortization 19 9
Business divestitures
and realignments 1 24
Other charges (earnings)
- net 24 (11)
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INCOME BEFORE INCOME TAXES &
MINORITY INTEREST 256 208
Income taxes 109 79
Minority interest 8 6
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NET INCOME $ 139 $ 123
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Earnings per common share $ 0.80 $ 0.71
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Earnings per common share -
assuming dilution $ 0.79 $ 0.70
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Average shares outstanding 174.1 174.2
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Average shares outstanding -
assuming dilution 175.7 175.8
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CONDENSED BALANCE SHEET (unaudited)
March 31 Dec. 31
2000 1999
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(millions)
Current assets:
Cash & cash equivalents $ 145 $ 158
Receivables - net 1,713 1,594
Inventories 1,067 1,016
Other 252 294
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Total current assets 3,177 3,062
Investments 227 261
Property less accumulated depreciation 2,918 2,933
Goodwill and identifiable intangible
assets less accumulated amortization 1,722 1,662
Other assets 1,028 996
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TOTAL $9,072 $8,914
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Current liabilities:
Short-term debt & current portion of
long-term debt $1,105 $ 954
Accounts payable & accrued liabilities 1,403 1,430
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Total current liabilities 2,508 2,384
Long-term debt 1,825 1,836
Deferred income taxes 490 520
Accumulated provisions 1,010 970
Minority interest 102 98
Shareholders' equity 3,137 3,106
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TOTAL $9,072 $8,914
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BUSINESS SEGMENT INFORMATION (unaudited)
3 Months Ended
March 31
2000 1999
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(millions)
Net sales
Coatings $1,127 $ 911
Glass 571 557
Chemicals 389 335
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TOTAL $2,087 $1,803
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Operating income
Coatings (1) $ 160 $ 101
Glass 105 97
Chemicals 74 36
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TOTAL 339 234
Interest - net (40) (25)
Other unallocated corporate
expense - net (2) (43) (1)
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INCOME BEFORE INCOME TAXES &
MINORITY INTEREST $ 256 $ 208
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(1) Includes for the three months ended March 31, 2000, pretax
charges of $2 million representing the fair-market-value
adjustment of acquired inventories that have been sold and $1
million related to cost reduction initiatives associated with the
integration of the global automotive refinish, automotive and
industrial coatings businesses of Imperial Chemical Industries
PLC acquired in 1999.
Includes for the three months ended March 31, 1999, a pretax
restructuring charge of $24 million for disposal of a redundant
European packaging coatings facility and workforce reductions.
(2) Includes for the three months ended March 31, 2000, a pretax
charge of $39 million representing the write-off of an equity
affiliate investment in Pittsburgh Corning Corp. which has filed
for reorganization under the federal bankruptcy code.