PPG Plans Restructuring Charges, Weaker Economy Pressures 4Q Results
14 December 2000
PPG Plans Restructuring Charges, Weaker Economy Pressures 4Q Results
PITTSBURGH--Dec. 14, 2000--PPG Industries is pursuing a number of restructuring actions that could result in a charge of $50 million to $100 million in the first quarter of 2001.The initiatives will be directed toward "reducing costs, increasing efficiencies and accelerating performance improvement throughout the company," according to Raymond W. LeBoeuf, board chairman and chief executive.
"We have been investigating all areas of the company, globally, since late summer," he said. "Our ultimate actions will involve facility and job consolidations, primarily in the coatings segment. The additional earnings generated by these actions will fully offset the charges in about a year.
"As we have been noting since September, weakening economic conditions that emerged in late summer are not abating," LeBoeuf said. "We see continued declines in a number of our end markets, particularly vehicle production, while natural gas prices continue to rise. It is prudent that PPG respond aggressively, and we have been preparing to implement effective actions for several months.
"On the positive side, we have seen volume growth in automotive aftermarket segments as well as in fiber glass," he said. "We raised prices on a number of products and initiated fuel-cost surcharges. More price increases are coming."
LeBoeuf added that PPG, utilizing its strong cash flow, "has repurchased about seven million shares of stock since July, at what we consider attractive prices."
He said that, "given the current state of the economy, PPG's fourth quarter earnings will likely be 65 cents to 75 cents a share" -- within First Call's forecast range. On a comparable basis, the company earned 93 cents a share in 1999's final quarter.
PPG, founded in 1883, is the world's leading maker of transportation coatings, and a major global supplier of packaging and industrial coatings, flat and fabricated glass, continuous-strand fiber glass, and industrial and specialty chemicals. It has about 120 manufacturing locations in 23 countries, and had sales in 1999 of US$7.8 billion.
Internet: www.ppg.com
Forward-Looking Statement
The statements in this news release relating to matters that are not historical facts are forward-looking statements that reflect the Company's current view with respect to future events and financial performance. These matters involve risks and uncertainties that affect the Company's operations, as discussed in PPG Industries' Annual Report on Form 10K filed with the Securities and Exchange Commission. Accordingly, many factors could cause actual results to differ materially from the Company's forward-looking statements and there is no assurance the Company's expectations will be realized.