Printer Friendly

ADT REPORTS SALES AND OPERATING INCOME INCREASES FOR 1992 COMPANY ADOPTS US ACCOUNTING PRINCIPLES

 BOCA RATON, Fla., March 11 /PRNewswire/ -- ADT Limited (NYSE: ADT) the leading electronic security services and vehicle auctions company, announced today, that net sales and operating income (before goodwill amortization) for the twelve months ended Dec. 31, 1992, amounted to $1,345.3 million and $209.8 million respectively, compared with $1,250.7 million and $197.7 million respectively for 1991.
 Net income, in accordance with US GAAP, for the twelve months ended Dec. 31, 1992 was $109.1 million (1991: $514.3 million loss) resulting in primary earnings per common share of $0.80 (1991: $5.17 loss).
 With the company's shareholder base now predominantly North American and with a significant amount of its revenues generated in North America, the company has decided to prepare its consolidated financial statements in accordance with US GAAP. Previously, the company reported under UK GAAP. The principal effect of this change, at the operating income level, is that goodwill is now amortized through the income statement rather than being written off directly to shareholders' equity in the year in which it arises. The impact of this change was to reduce primary earnings per common share for 1992 by 26 cents.
 Commenting on the company's results, Mr. Michael A. Ashcroft, chairman and chief executive officer, said, "ADT's electronic security services and vehicle auctions businesses performed well, achieving their operating objectives in a challenging economic environment in 1992. The Security Services division exceeded its target for its residential security systems sales program, selling 115,000 new centrally monitored security systems during the year. ADT Auctions reinforced its market position in the United States and the United Kingdom by further developing its customer base through strong marketing programs to dealers."
 "Management's priorities remain to concentrate resources on growth opportunities in the core businesses and to implement a refinancing plan to address the company's syndicated bank debt maturities and preference share redemption obligations which arise in 1994 and 1995."
 "Trading has started satisfactorily in 1993 and the prospects for continued growth in both electronic security services and vehicle auctions are favorable."
 Electronic Security Services
 Net sales and operating income before amortization of goodwill from the Security Services division for the twelve months ended Dec. 31, 1992 amounted to $901.1 million and $141.0 million respectively, compared with $880.9 million and $127.7 million in 1991. The full year results reflect the continuing success of the residential security systems sales program in North America where new system sales exceeded the company's target by 15 percent. Sales of commercial systems in North America have recently shown signs of improvement, especially in the Southeast and Midwest of the United States. During the year ADT Security Systems' National Accounts Organization signed security services agreements with the US Marshals Service, Dillard Department Stores, Xerox and Barnett Bank, among others. In the United Kingdom, significant operational and administrative improvements were made during the year and new installations and system upgrades were completed for many customers including British Rail, Barclays Bank and Reebok.
 The consolidation of monitoring centers is substantially complete: 22 monitoring centers were closed during 1992 and after the closing of a further three monitoring centers during the early part of 1993, there will be 30 monitoring centers in North America and Europe, enabling the company to service new and existing customers more cost effectively.
 During the fourth quarter of 1992 operating income before amortization of goodwill amounted to $38.9 million, a decrease of $2.2 million compared with the fourth quarter of 1991. The decrease was principally attributable to a reduced contribution from the Canadian and continental European operations as a result of continuing recessionary pressures.
 Vehicle Auctions
 ADT's Auctions division traded up to expectations with economic conditions remaining difficult in both the United States and United Kingdom. Net sales and operating income before amortization of goodwill totalled $342.8 million and $68.2 million respectively in 1992, compared with $330.9 million and $71.8 million in 1991. In the United States, the volume of dealer consignment vehicles increased by 21 percent, while the volume from manufacturers declined by 4 percent due to a decrease in the repurchase programs offered by manufacturers to daily rental companies. Although volume from domestic manufacturers is expected to remain static this year, ADT expects that the gradually recovering economy and innovative programs will lead to a continued increase in business from consignment and fleet/lease customers.
 In the United Kingdom, 1992 was a challenging year with the number of vehicles sold down by approximately 6 percent. Increases in fleet and daily rental business were offset by declines in business from dealers, finance houses and contract hire companies. However, with interest rates down in the United Kingdom and the removal of a special car tax reducing new car prices by about 10 percent, there have been recent signs of a slight recovery in both new and used car sales.
 During the fourth quarter of 1992 operating income before amortization of goodwill amounted to $13.6 million, an increase of $1.9 million compared with the fourth quarter of 1991. The increase was principally attributable to a 9 percent increase in vehicles sold during the fourth quarter of 1992 compared with 1991 levels.
 Refinancing
 The majority of ADT's syndicated bank debt falls due in the second half of 1994 and it is also expected that the company's convertible redeemable preference shares will be presented for redemption during that time. Discussions with the company's financial advisors with a view to finalizing the refinancing plan are progressing. In the company's third quarter earnings statement for 1992 it was stated that it was expected that the implementation of the refinancing would take place after the 1992 year end results were released. It is currently expected that announcements regarding the refinancing will be made during the second quarter of this year.
 Background
 ADT is a leading provider of electronic security services and vehicle auction services with operations in North America, the United Kingdom and continental Europe. ADT is the largest single provider of electronic security services in North America and the second largest provider of electronic security services in the United Kingdom. ADT Security Systems provides continuous monitoring of commercial and residential security systems to over 740,000 customers of which over 350,000 are residential customers.
 ADT is the largest provider of vehicle auction services in the United Kingdom and the second largest provider of vehicle auction services in the United States operating a network of 52 vehicle auction centers in the United States, the United Kingdom and continental Europe, providing a comprehensive range of vehicle remarketing services to vehicle dealers and owners and operators of vehicle fleets.
 ADT LIMITED
 Consolidated Statements of Income
 (in accordance with US GAAP)
 1992 1992 1992 1992
 First Second Third Fourth 1992 1991
 Quarter Quarter Quarter Quarter Year Year
 $m $m $m $m $m $m
 Net sales:
 Electronic security
 services 219.4 224.5 225.3 231.9 901.1 880.9
 Auction services 89.8 88.2 80.2 84.6 342.8 330.9
 Non-core businesses 9.7 45.7 33.0 13.0 101.4 38.9
 Total 318.9 358.4 338.5 329.5 1,345.3 1,250.7
 Operating income:
 Electronic security
 services 29.8 35.4 36.9 38.9 141.0 127.7
 Auction services 20.4 18.4 15.8 13.6 68.2 71.8
 Non-core businesses (2.3) 0.5 3.3 (0.9) 0.6 (1.8)
 Goodwill
 amortization (6.4) (6.5) (6.5) (8.5) (27.9) (45.2)
 Operating income 41.5 47.8 49.5 43.1 181.9 152.5
 Other expenses
 less income (0.3) (5.1) (6.0) (11.5) (22.9) 16.0
 Interest income 2.9 5.9 5.5 4.4 18.7 30.7
 Interest expense (18.5) (15.4) (16.5) (11.0) (61.4) (101.2)
 Associates 1.0 0.3 (0.3) (0.2) 0.8 5.0
 Unusual items 16.4 (0.9) 1.2 (17.9) (1.2) (564.4)
 Income (loss) before
 income taxes 43.0 32.6 33.4 6.9 115.9 (461.4)
 Income taxes (0.6) (1.7) (2.5) (2.0) (6.8) (15.3)
 Income(loss) before
 cumulative effect
 of accounting
 change 42.4 30.9 30.9 4.9 109.1 (476.7)
 Cumulative effect
 of accounting
 change - - - - - (37.6)
 Net income (loss) 42.4 30.9 30.9 4.9 109.1 (514.3)
 Dividends on
 preference
 shares (6.0) (5.6) (5.5) (5.1) (22.2) (29.2)
 Net income (loss)
 available to
 common
 shareholders 36.4 25.3 25.4 (0.2) 86.9 (543.5)
 Primary earnings
 (loss) per common
 share $0.34 $0.23 $0.24 $(0.01) $0.80 $(5.17)
 ADT LIMITED
 Summarized Consolidated Balance Sheets
 (in accordance with US GAAP)
 at Dec. 31 1992 1991
 $m $m
 Assets
 Current assets:
 Cash and cash equivalents 161.8 162.3
 Loan notes - 107.8
 Short-term investments 16.5 2.6
 Accounts receivable - net 126.2 148.9
 Inventories 40.3 48.1
 Prepaid expenses
 and other current assets 71.1 67.1
 Total current assets 415.9 536.8
 Investment in associates 45.0 100.6
 Other long-term investments 29.9 79.5
 Property, plant and
 equipment - net 1,187.4 1,175.6
 Goodwill - net 898.2 922.2
 Other long-term assets 105.0 128.4
 Total assets 2,681.4 2,943.1
 Liabilities and
 shareholders' equity
 Current liabilities:
 Short-term debt 79.2 158.8
 Accounts payable 84.8 84.5
 Other current liabilities 208.1 260.5
 Total current liabilities 372.1 503.8
 Long-term debt 844.4 881.3
 Other long-term liabilities 272.7 311.2
 Convertible redeemable
 preference shares 434.6 485.9
 Exchangeable redeemable
 preference shares 21.0 60.9
 Non-voting exchangeable shares 15.1 15.6
 Shareholders' equity 721.5 684.4
 Total liabilities and
 shareholders' equity 2,681.4 2,943.1
 Notes to financial statements
 (A) Other expenses less income
 Year ended 1992 1991
 Dec. 31 $m $m
 Gains and losses arising
 from the ownership
 of equity investments 6.1 23.6
 Dividend income on investments 1.1 4.7
 Gains and losses on currency translation (0.8) 20.0
 Administrative, legal and general
 corporate expenses (24.3) (24.4)
 Corporate promotional and marketing costs (5.0) (7.9)
 Total (22.9) 16.0
 (B) Unusual items
 During 1991 and 1992 the company underwent significant changes as a result of the strategic decision to focus the company's resources on electronic security services and vehicle auctions. This decision resulted in the company disposing of a number of non-core businesses and investments. The withdrawal from non-core businesses and disposal of investments, together with the write-off of the goodwill associated with the acquisition of Britannia Security Group PLC ("Britannia"), have resulted in material non-recurring gains, losses and costs. The net losses arising from these items have been included in the consolidated statements of income as unusual items.
 Unusual items in 1992 included the recognition of a $50.9 million deferred gain with respect to the disposition of ADT's interest in Quoteplan PLC which was completed on March 27, 1992. This gain was reduced by a $33.7 million write-down of the US GAAP carrying value of the company's investment in Nu-Swift plc. In 1992, the company also incurred costs of $18.4 million relating principally to idle properties and other non-recurring charges.
 Unusual items in 1991 included a loss of $125.3 million on the disposal of the company's investment in Christies International plc, a loss of $277.0 million due to the permanent impairment of the goodwill arising on the acquisition of Britannia and a loss of $121.1 million relating to the write-off of the company's investment in LEP Group plc.
 (C) Fourth quarter 1992
 The fourth quarter results included the following items:
 Goodwill amortization included a $2.1 million additional charge due to the disposal of a non-core business during the fourth quarter.
 Other expenses less income included a $4.0 million charge due to the disposal of investments during the fourth quarter.
 Unusual items in the fourth quarter amounted to $17.9 million and were principally due to costs relating to idle properties and other non- recurring charges.
 -0- 03/11/93
 /CONTACT: ADT Limited corporate communications, 407-997-8406, or Broadgate Consultants, 212-229-2222, for ADT Limited/
 (ADT)


CO: ADT Limited ST: Florida IN: SU: ERN

2112 03-10-93 16:51 EST TS-AH -- NY001 -- 4981 03/11/93 09:03 EST
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Mar 11, 1993
Words:2103
Previous Article:RAYTHEON AWARDED $44 MILLION COUNTERMEASURE SYSTEMS CONTRACT
Next Article:TELMEX BOARD TO RECOMMEND N$0.15 DIVIDEND
Topics:


Related Articles
ADT LIMITED PRE TAX INCOME FROM ELECTRONIC SECURITY SERVICES AND VEHICLE AUCTIONS BUSINESSES AT $203 MILLION, UP 3 PERCENT
ADT ANNOUNCES FIRST QUARTER 1992 RESULTS
ADT ISSUES SECOND QUARTER REPORT FOR 1992; CORE OPERATIONS MAINTAIN RECESSION RESISTANT QUALITIES
ADT LIMITED REPORTS INCOME FROM CORE BUSINESSES UP 22 PERCENT IN THIRD QUARTER; FINANCIAL RESTRUCTURING - MANAGEMENT PRIORITY
DIEBOLD ANNOUNCES IMPROVED 1992 FOURTH-QUARTER AND YEAR-END RESULTS
PITTWAY'S FIRST QUARTER INCOME FROM CONTINUING OPERATIONS UP 313 PERCENT ON 14 PERCENT SALES INCREASE
ADT REPORTS SALES AND OPERATING INCOME INCREASES FOR FIRST QUARTER
ADT REPORTS OPERATING INCOME INCREASES FOR SECOND QUARTER
ADT REPORTS THIRD QUARTER RESULTS; RESIDENTIAL SECURITY SYSTEM SALES REMAIN STRONG
ADT ANNOUNCES SECOND QUARTER EARNINGS PER SHARE OF $0.20

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters