3M Reports Record First-Quarter Sales and Earnings; Company Again Raises Guidance for 2004.Business Editors ST. PAUL St. Paul as a missionary he fearlessly confronts the “perils of waters, of robbers, in the city, in the wilderness.” [N.T.: II Cor. 11:26] See : Bravery , Minn.--(BUSINESS WIRE)--April 19, 2004 3M (NYSE NYSE See: New York Stock Exchange :MMM MMM Myeloid metaplasia with myelofibrosis, see there ) today announced its sales and earnings results for first quarter 2004. The company reported net income of $722 million, or $0.90 per share, versus $502 million, or $0.63 per share, in the first quarter of 2003. Excluding special items(a) in the first quarter of 2003, net income increased 29 percent from $560 million last year, and earnings per share increased nearly 27 percent from $0.71 per share in last year's first quarter. "The 3M team again delivered outstanding results in the first quarter," said W. James McNerney Walter James "Jim" McNerney, Jr., is an American businessman. On June 30, 2005 he was named the CEO of The Boeing Company. Prior to that, McNerney was the Chairman and Chief Executive of 3M. He had been a member of the Boeing board of directors since 2001. , Jr., 3M chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "Worldwide sales in local currencies increased in all seven of our businesses, and we generated double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. increases in operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. and earnings per share. We are off to a great start in 2004." Worldwide sales in the first quarter totaled $4.94 billion, 14.4 percent higher than in the year-earlier quarter, driven by an 8.7 percent increase in sales volume. Currency effects increased sales by 6.1 percent while selling prices declined 0.4 percent. Local-currency sales (which excludes the impact of currency translation on sales) increased 20.4 percent in Display and Graphics, 9.2 percent in Safety, Security and Protection Services, 8.5 percent in Industrial, 8.1 percent in Transportation, 7.4 percent in Consumer and Office, 2.5 percent in Electro E`lec´tro n. 1. An electrotype. and Communications and 2.2 percent in Health Care. Sales outside the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. totaled $3.06 billion, an increase of 21.6 percent versus last year's comparable quarter. Volumes increased 11.9 percent, while selling prices declined 0.8 percent. Changes in the value of the U.S. dollar increased international sales by 10.5 percent. Local-currency sales increased 22.4 percent in Asia Pacific, 11.5 percent in the combined Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. , Africa and Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of region and 1.2 percent in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). .In the United States, sales totaled $1.88 billion, up 4.2 percent from the same quarter of 2003. Volumes increased 4.0 percent, while selling prices improved by 0.2 percent. "While the strength of the global economic recovery remains uneven and uncertain," McNerney said, "we continue to work at improving all of our businesses. The combination of a strong and deep leadership team, a broad and diverse business portfolio, continued commitment to sustained operational excellence, and an improving organic growth engine positions us well to deliver sustainable increases in sales, earnings and cash flow." 3M also increased its earnings outlook for 2004. For the year, the company now expects reported earnings will be within a range of $3.60 to $3.70 per share, versus a previous expectation of $3.52 to $3.62 per share. Second-quarter earnings are expected to be in the range of $0.94 to $0.96 per share. Patrick D. Campbell Campbell, city, United States Campbell, city (1990 pop. 36,048), Santa Clara co., W Calif., in the fertile Santa Clara valley; founded 1885, inc. 1952. , senior vice president and chief financial officer, will conduct an investor teleconference at 9 a.m. Eastern Time (8 a.m. Central) today. Investors can access a webcast of this conference, along with related charts and materials, at http://investor.3M.com. (a) In addition to disclosing results that are determined in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with U.S. generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ), the company also discloses non-GAAP results that exclude special items. Special items represent significant charges or credits that are important to an understanding of the company's ongoing operations. The company provides reconciliations of its non-GAAP financial reporting to the most comparable GAAP reporting. The company believes that discussion of results excluding special items provides a useful analysis of ongoing operating trends. Earnings per share and other amounts before special items are not measures recognized under GAAP. The determination of special items may not be comparable to similarly titled measures used by other companies. During the first quarter of 2003, 3M recorded pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern charges of $93 million ($58 million after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. ) related to an adverse court ruling in a lawsuit lawsuit: see procedure; tort. filed against 3M in 1997 by LePage's Inc. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This news release contains forward-looking statements that reflect current views and estimates of 3M's management of future economic circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or , industry conditions, company performance and financial results. The statements are based on many assumptions and factors including: (1) worldwide economic conditions; (2) foreign currency exchange rates and fluctuations in those rates; (3) the timing and acceptance of new product offerings; (4) purchased components and materials, including shortages and increases in the costs of such components and materials; (5) 3M's ability to successfully manage acquisitions, divestitures and strategic alliances; and (6) legal proceedings All actions that are authorized or sanctioned by law and instituted in a court or a tribunal for the acquisition of rights or the enforcement of remedies. . Changes in such assumptions or factors, including without limitation the outcome of and information derived de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. from pending Congressional action concerning asbestos-related litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. , could produce significantly different results. About 3M -- A Global, Diversified diversified (di·verˑ·s Technology Company Every day, 3M people find new ways to make amazing a·maze v. a·mazed, a·maz·ing, a·maz·es v.tr. 1. To affect with great wonder; astonish. See Synonyms at surprise. 2. Obsolete To bewilder; perplex. v.intr. things happen. Wherever they are, whatever they do, the company's customers know they can rely on 3M to help make their lives better. 3M's brands include icons such as Scotch scotch 1 tr.v. scotched, scotch·ing, scotch·es 1. To put an abrupt end to: The prime minister scotched the rumors of her illness with a public appearance. 2. , Post-it, Scotchgard Scotchgard is a 3M brand of products used to protect fabric, furniture, and carpets. Like other fluorochemicals, Scotchgard is mostly inert, so by applying it to fabric, the fabric can be protected from stains and soiling. , Thinsulate Thinsulate is a synthetic fibre used for thermal insulation in clothing. The word is a portmanteau of thin and insulate, and is a trademark of the 3M Corporation. The material was first sold in about 1980. , Scotch-Brite, Filtrete, Command and Dyneon. Serving customers in more than 200 countries around the world, the company's 67,000 people use their expertise, technologies and global strength to lead in major markets including consumer and office; display and graphics; electronics and telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. ; safety, security and protection services; health care; industrial and transportation. For more information, including the latest product and technology news, visit www.3M.com. Scotch, Post-it, Scotchgard, Thinsulate, Scotch-Brite, Filtrete, Command and Dyneon are trademarks of 3M.
3M Company and Subsidiaries
SALES CHANGE ANALYSIS
(Unaudited)
First-Quarter 2004
Sales Change Analysis United Inter-
By Geographic Area Worldwide States national
--------- --------- ---------
Volume -- core 8.4% 3.4% 11.8%
Volume -- acquisitions 0.3 0.6 0.1
--------- --------- ---------
Volume -- total 8.7 4.0 11.9
Price (0.4) 0.2 (0.8)
--------- --------- ---------
Total local-currency sales 8.3 4.2 11.1
Translation 6.1 - 10.5
--------- --------- ---------
Total sales change 14.4% 4.2% 21.6%
========= ========= =========
Local- Total
Sales Change Analysis currency Trans- Sales
By Business Segment Sales lation Change
--------- --------- ---------
Health Care 2.2% 6.8% 9.0%
Industrial 8.5 6.3 14.8
Display and Graphics 20.4 7.0 27.4
Consumer and Office 7.4 4.7 12.1
Safety, Security and
Protection Services 9.2 5.9 15.1
Electro and Communications 2.5 4.6 7.1
Transportation 8.1 6.8 14.9
3M Company and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME
(Millions, except per-share amounts)
(Unaudited)
Three-months ended
March 31
------------------------
2004 2003
------- -------
Net sales $4,939 $4,318
------- -------
Operating expenses
Cost of sales 2,436 2,211
Selling, general and administrative
expenses 1,104 963
Research, development and related
expenses 282 270
Other expense - 93
------- -------
Total 3,822 3,537
------- -------
Operating income 1,117 781
------- -------
Interest expense and income
Interest expense 19 23
Interest income (10) (6)
------- -------
Total 9 17
------- -------
Income before income taxes and minority
interest 1,108 764
Provision for income taxes 366 248
Minority interest 20 14
------- -------
Net income $ 722 $ 502
======= =======
Weighted average common shares
outstanding -- basic 782.9 780.1
Earnings per share -- basic $ 0.92 $ 0.64
======= =======
Weighted average common shares
outstanding -- diluted 799.5 790.6
Earnings per share -- diluted $ 0.90 $ 0.63
======= =======
Cash dividends paid per common share $ 0.36 $ 0.33
======= =======
3M Company and Subsidiaries
SUPPLEMENTAL CONSOLIDATED STATEMENT OF INCOME INFORMATION
(Millions, except per-share amounts)
(Unaudited)
Three-months ended Three-months ended
March 31, 2004 March 31, 2003
-------------------------- --------------------------
Excluding Excluding
special Special Reported special Special Reported
items items total items items total
--------- ------- -------- --------- ------- --------
Net sales $ 4,939 $ -- $4,939 $ 4,318 $ -- $4,318
--------- ------- -------- --------- ------- --------
Operating
expenses
Cost of sales 2,436 -- 2,436 2,211 -- 2,211
Selling,
general and
administrative
expenses 1,104 -- 1,104 963 -- 963
Research,
development
and related
expenses 282 -- 282 270 -- 270
Other expense -- -- -- -- 93 93
--------- ------- -------- --------- ------- --------
Total 3,822 -- 3,822 3,444 93 3,537
--------- ------- -------- --------- ------- --------
Operating
income (loss) 1,117 -- 1,117 874 (93) 781
Interest expense
and (income),
net 9 -- 9 17 -- 17
--------- ------- -------- --------- ------- --------
Income (loss)
before income
taxes and
minority
interest 1,108 -- 1,108 857 (93) 764
Provision
(benefit) for
income taxes 366 -- 366 283 (35) 248
Effective tax
rate 33.0% -- 33.0% 33.1% -- 32.5%
Minority interest 20 -- 20 14 -- 14
--------- ------- -------- --------- ------- --------
Net income (loss)$ 722 $ -- $ 722 $ 560 $ (58) $ 502
========= ======= ======== ========= ======= ========
Weighted average
diluted shares 799.5 -- 799.5 790.6 790.6 790.6
Net income per
diluted share $ .90 $ -- $ .90 $ 0.71 $(0.08) $ 0.63
========= ======= ======== ========= ======= ========
3M Company and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEET
(Dollars in millions)
(Unaudited)
Mar. 31, Mar. 31, Dec. 31,
ASSETS 2004 2003 2003
Current assets -------- -------- --------
Cash and cash equivalents $ 1,818 $ 561 $ 1,836
Accounts receivable -- net 2,904 2,643 2,714
Inventories 1,880 1,957 1,816
Other current assets 1,461 1,303 1,354
-------- -------- --------
Total current assets 8,063 6,464 7,720
Investments 211 221 218
Property, plant and equipment -- net 5,512 5,550 5,609
Goodwill, intangible assets and other
assets 4,192 3,610 4,053
-------- -------- --------
Total assets $17,978 $15,845 $17,600
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Short-term borrowings and
current portion of long-term debt $ 1,106 $ 1,200 $ 1,202
Accounts payable 1,066 963 1,087
Accrued payroll 471 409 436
Accrued income taxes 986 652 880
Other current liabilities 1,534 1,468 1,477
-------- -------- --------
Total current liabilities 5,163 4,692 5,082
Long-term debt 1,718 2,119 1,735
Other liabilities 2,996 2,718 2,898
-------- -------- --------
Total liabilities 9,877 9,529 9,715
-------- -------- --------
Total stockholders' equity -- net 8,101 6,316 7,885
Shares outstanding
March 31, 2004: 782,114,154 shares
March 31, 2003: 781,667,702 shares
December 31, 2003: 784,117,360 shares
-------- -------- --------
Total liabilities and stockholders'
equity $17,978 $15,845 $17,600
======== ======== ========
3M Company and Subsidiaries
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in millions)
(Unaudited)
Three-months ended
March 31
2004 2003
------- -------
SUMMARY OF CASH FLOW:
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 942 $ 764
------- -------
Cash flows from investing activities:
Purchases of property, plant and equipment (158) (120)
Acquisitions, net of cash acquired (80) (416)
Other investing activities 19 71
------- -------
NET CASH USED IN
INVESTING ACTIVITIES (219) (465)
------- -------
Cash flows from financing activities:
Change in debt (133) (38)
Purchases of treasury stock (438) (173)
Reissuances of treasury stock 134 160
Dividends paid to stockholders (282) (257)
Other financing activities (12) (14)
------- -------
NET CASH USED IN
FINANCING ACTIVITIES (731) (322)
------- -------
Effect of exchange rate
changes on cash (10) (34)
------- -------
Net increase (decrease) in cash and
cash equivalents (18) (57)
Cash and cash equivalents at
beginning of period 1,836 618
------- -------
Cash and cash equivalents at
end of period $1,818 $ 561
======= =======
FREE CASH FLOW (Non-GAAP measure):
Net cash provided by
operating activities $ 942 $ 764
Purchases of property, plant
and equipment (158) (120)
------- -------
Free Cash Flow(a) $ 784 $ 644
======= =======
NET WORKING CAPITAL TURNS (Non-GAAP measure):
Net Working Capital Turns(b) 5.3 4.7
======= =======
(a) Free cash flow is not defined under GAAP. Therefore, it is
considered a non-GAAP measure. Non-GAAP measures should not be
considered a substitute for income or cash flow data prepared in
accordance with U.S. GAAP and may not be comparable to similarly
titled measures used by other companies. The company defines free cash
flow as net cash provided by operating activities less purchases of
property, plant and equipment. It should not be inferred that the
entire free cash flow amount is available for discretionary
expenditures. The company believes free cash flow is a useful measure
of performance and uses this measure as an indication of the strength
of the company and its ability to generate cash.
(b) The company also uses non-GAAP measures that place emphasis and
focus on certain working capital assets and liabilities. 3M's net
working capital index is defined as quarterly net sales, fourth
quarter at year-end, multiplied by four, divided by ending net
accounts receivable plus inventory less accounts payable. This measure
is not recognized under U.S. generally accepted accounting principles
and may not be comparable to similarly titled measures used by other
companies.
3M Company and Subsidiaries
BUSINESS SEGMENTS
(Dollars in millions)
(Unaudited)
BUSINESS
SEGMENT Three-months ended
INFORMATION March 31
(Millions) 2004 2003
-------- --------
NET SALES
Health Care $ 1,031 $ 946
Industrial 943 821
Display and Graphics 842 661
Consumer and Office 686 612
Safety, Security and Protection Services 527 458
Electro and Communications 465 434
Transportation 438 381
Corporate and Unallocated 7 5
-------- --------
Total Company $ 4,939 $ 4,318
-------- --------
OPERATING INCOME
Health Care $ 262 $ 238
Industrial 166 132
Display and Graphics 294 182
Consumer and Office 122 110
Safety, Security and Protection Services 125 105
Electro and Communications 65 47
Transportation 119 100
Corporate and Unallocated (36) (133)
-------- --------
Total Company $ 1,117 $ 781
-------- --------
The following 2004 and 2003 charges were recorded in Corporate and Unallocated. First quarter 2004 includes $16 million in expense related to a reduction in breast implant breast implant, saline- or silicone-filled prosthesis used after mastectomy as a part of the breast reconstruction process or used cosmetically to augment small breasts. receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed following an arbitration panel arbitration panel A group of individuals charged with resolving a dispute between individuals and/or organizations. Arbitration panels to resolve investment disputes are sponsored by self-regulatory organizations such as NASD. ruling in the first quarter that rejected re·ject tr.v. re·ject·ed, re·ject·ing, re·jects 1. To refuse to accept, submit to, believe, or make use of. 2. To refuse to consider or grant; deny. 3. the company's claims for recovery under certain of its claims-made policies claims-made policy Malpractice A type of medical malpractice or professional liability insurance policy for a physician or other health care professional in which coverage is provided for any claim that occurs only while the policy is in force . During the first quarter of 2003, 3M recorded pretax charges of $93 million related to an adverse court ruling in a lawsuit filed against 3M in 1997 by LePage's Inc. First quarter 2003 also includes certain acquisition-related costs and respirator respirator /res·pi·ra·tor/ (res´pi-ra?ter) ventilator (2). cuirass respirator see under ventilator. mask/asbestos litigation expenses. |
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