Cooper Announces Q1 Per Share Earnings of $0.89 - an 11 Percent Gain
20 April 2000
Cooper Announces First-Quarter Per Share Earnings of $0.89 - an 11 Percent Gain COOPER INDUSTRIES LOGO Cooper Industries' logo. (PRNewsFoto)[DM] HOUSTON, TX USA 05/13/1999
HOUSTON, April 20 Cooper Industries, Inc. (NYSE: CBE)
today reported first-quarter earnings of 89 cents per share (assuming
dilution). This represents an 11 percent increase over first-quarter 1999
earnings of 80 cents per share. Net income for the first quarter 2000 was
$83.9 million, up 11 percent from last year's $75.6 million. First-quarter
1999 net income includes $2.4 million, or $.02 per share, of nonrecurring net
charges primarily related to cost control and asset rationalization programs.
First-quarter 2000 revenues were up 12 percent to $1.04 billion, compared
with $924.7 million for the same period in 1999. Operating earnings for the
first quarter 2000 increased 9 percent to $147.4 million. Operating earnings
for the first quarter 1999 were $135.1 million, excluding nonrecurring items.
"We are very pleased with our performance in the first quarter," said H.
John Riley, chairman, president and chief executive officer. "Quarterly
revenues topped the billion-dollar mark, reflecting solid core growth as we
continued to expand our participation in higher potential markets. Also,
complementary acquisitions added new products and significantly expanded our
worldwide channels to market.
"During the quarter," continued Riley, "we also announced two major
acquisitions, which will add more than $450 million in annual revenues and
markedly broaden our participation in the electrical products marketplace.
"The Company is off to an excellent start for 2000, and we are fully
confident in our ability to meet and manage the challenges ahead.
Consequently, we are optimistic about achieving our objectives for the year."
Electrical Products
First-quarter 2000 revenues from Electrical Products increased 15 percent
to $839.1 million, compared with $728.5 million for the same period last year.
The segment's first-quarter 2000 operating earnings increased nearly
10 percent to $133.2 million. This compares to $121.4 million before
nonrecurring items for the first quarter of 1999. Weakness of international
currencies against the U.S. dollar reduced revenues approximately 1 percent
for the quarter.
All of Cooper's Electrical Products businesses increased revenues during
the quarter. Aggressive penetration into higher growth electronics and
telecommunication markets resulted in double-digit increases in sales of
circuit protection products. Revenues in our lighting business increased
22 percent, primarily as a result of new product offerings and acquisitions.
Additionally, recently completed acquisitions helped to drive a 77 percent
revenue increase in the Company's European lighting and security businesses.
Power equipment and hazardous duty electrical equipment sales modestly
increased during the quarter.
Operating margin for the Electrical Products segment was 15.9 percent for
the quarter, compared to 16.7 percent for the first quarter of 1999. The
difference was almost entirely due to the impact of recent acquisitions.
Excluding this effect, first-quarter 2000 margin for the segment was
16.6 percent.
The acquisition of Eagle Electric was completed on March 17, 2000.
Concurrently, the Company formed Cooper Wiring Devices, a new Electrical
Products division. Comprised of the newly acquired Eagle and the existing
Arrow-Hart and Industrias Royer, S.A. de C. V. businesses, this new division
offers wiring devices and other electrical materials to the residential and
commercial markets.
On March 27, 2000, Cooper announced an agreement to acquire B-Line
Systems, a leading manufacturer of support systems and enclosures for
increasingly sophisticated electrical, mechanical and telecommunications/data
applications. The acquisition, expected to be finalized in the second quarter
of 2000, will broaden our product offerings to both existing and prospective
customers and position Cooper to further participate in the dynamic
electronics and telecommunications markets.
Tools & Hardware
First-quarter 2000 revenues for the Tools & Hardware segment increased to
$199.8 million, compared to $196.2 million for the first quarter 1999. Demand
for hand tools from domestic electronic and retail markets increased 5 percent
over the prior year period. However, some of this improvement was offset by
reduced sales of power tools in North America. Translation further reduced
revenues in the Tools & Hardware segment by 2 percent in the first quarter.
Segment operating earnings for the first quarter were in line with
expectations at $22 million. This compares with $23.3 million, before
nonrecurring items, for the same period last year. The Company continues to
rationalize its tools businesses. Excluding expenses related to the impact of
these actions, the operating margin for the Tools & Hardware segment was
consistent with the prior year. These rationalization expenses are expected
to diminish during the course of the year.
"Cooper is well positioned to succeed in an increasingly demanding
business environment and we are more and more optimistic about the future of
our Company," continued Riley. "We have strong cash flow, well-known brands,
loyal customers and an expanding global reach. Our recent actions have
created a positive platform of sustainable growth, positioning us to achieve
our long-term growth objectives."
Cooper Industries, with 1999 revenues of $3.9 billion, is a worldwide
manufacturer of electrical products, tools and hardware. Additional
information about Cooper is available on the Company's web site:
http://www.cooperindustries.com.
Comparisons of 2000 and 1999 first-quarter results appear on the following
pages.
Statements in this news release are forward-looking under the Private
Securities Litigation Reform Act of 1995. These statements are subject to
various risks and uncertainties, many of which are outside the control of the
Company, such as the level of market demand for the Company's products,
competitive pressures and future economic conditions. These factors are
discussed in the Company's 1999 Annual Report on Form 10-K and other
Securities and Exchange Commission filings.
Cooper's first-quarter 2000 earnings conference call for analysts and
investors will be broadcast over the Internet through the Company's web site
at noon (Eastern) on Thursday, April 20, 2000. The conference call also will
be available as a taped replay over the Internet through the Company's web
page until May 5, 2000.
CONSOLIDATED RESULTS OF OPERATIONS
Quarter Ended March 31,
2000 1999
(in millions where applicable)
Revenues $1,038.9 $ 924.7
Cost of sales 701.7 622.0
Selling and administrative expenses 176.4 156.3
Goodwill amortization 13.4 11.3
Operating earnings before
nonrecurring items 147.4 135.1
Nonrecurring charges --- 3.7
Interest expense 18.3 13.2
Income Before Income Taxes 129.1 118.2
Income Taxes 45.2 42.6
Net Income $ 83.9 $ 75.6
Net Income Per Common Share:
Basic $ .89 $ .80
Diluted $ .89 $ .80
Shares Utilized in Computation
of Income Per Common Share:
Basic 93.8 million 94.0 million
Diluted 94.4 million 94.7 million
PERCENTAGE OF REVENUES
Quarter Ended March 31,
2000 1999
Revenues 100.0% 100.0%
Cost of sales 67.5% 67.3%
Selling and administrative expenses 17.0% 16.9%
Operating earnings before nonrecurring items 14.2% 14.6%
Income Before Income Taxes 12.4% 12.8%
Net Income 8.1% 8.2%
CONSOLIDATED RESULTS OF OPERATIONS (Continued)
Additional Information for the Quarter Ended March 31
Segment Information
Quarter Ended March 31,
2000 1999
(in millions)
Revenues:
Electrical Products $ 839.1 $ 728.5
Tools & Hardware 199.8 196.2
Total $1,038.9 $ 924.7
Segment Operating Earnings
Without Nonrecurring Items:
Electrical Products $ 133.2 $ 121.4
Tools & Hardware 22.0 23.3
Total 155.2 144.7
Segment Nonrecurring Items:
Electrical Products --- 3.0
Tools & Hardware --- 1.5
Total --- 4.5
Segment Operating Earnings
With Nonrecurring Items:
Electrical Products 133.2 118.4
Tools & Hardware 22.0 21.8
Total segment operating earnings 155.2 140.2
General Corporate nonrecurring items --- (.8)
General Corporate expense 7.8 9.6
Interest expense 18.3 13.2
Income before income taxes $ 129.1 $ 118.2
Quarter Ended March 31,
2000 1999
Return on Sales:(A)
Electrical Products 15.9% 16.7%
Tools & Hardware 11.0% 11.9%
Total Segments 14.9% 15.6%
(A) Before nonrecurring items and after acquisitions. Adjusting for
recent acquisitions, return on sales in 2000 was 16.6% for Electrical
Products and 10.9% for Tools & Hardware. Return on sales in 2000 for
the total of the segments was 15.4%.
CONSOLIDATED RESULTS OF OPERATIONS (Continued)
Additional Information for the Quarter Ended March 31
Net Income Per
Net Income Diluted Common Share
2000 1999 2000 1999
(in millions where applicable)
Income before $ 83.9 $ 78.0 $ .89 $ .82
nonrecurring items
Nonrecurring items --- (2.4) --- (.02)
Net Income $ 83.9 $ 75.6 $ .89 $ .80
Contact: John Breed of Cooper Industries, Inc., 713-209-8835.