AlliedSignal's Full-Year 1995 Earnings Rise 15% On 12% Sales Increase; 4th-Quarter Earnings Are Up 14% On 7% Sales Increase; Board Raises Dividend 15%.MORRIS TOWNSHIP There are several places named Morris Township in the United States:
See: New York Stock Exchange : ALD ALD abbr. adrenoleukodystrophy ALD, n.pr See adrenoleukodystrophy. ALD aldolase. ) announced today that 1995 earnings climbed 15% to a record $875 million ($3.09 per share) from $759 million ($2.68 per share) in 1994. Sales grew 12% to a record $14.3 billion from $12.8 billion. Total return to shareowners in 1995, including share price appreciation and reinvested dividends, was 42%. "Double-digit sales growth in all three sectors, as well as continued productivity improvements, led the way to our sixteenth consecutive quarter of double-digit earnings growth and fourth consecutive year of record earnings," said Lawrence A. Bossidy, Chairman and Chief Executive Officer. Outlook for 1996 "Growth and productivity programs, aided by a strong balance sheet, put us in a strong position to deliver another year of 13-to-17% earnings growth in 1996, despite forecasts of slower economic growth in the U.S. and Europe," said Bossidy. At 1995 year end, AlliedSignal's total debt was 33.7% of total capital, the lowest debt ratio in 10 years. Bossidy said his confidence in 1996 was based on favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. developments in all three of the company's business sectors. Aerospace is enjoying rapid growth in the equipment aftermarket Aftermarket See: Secondary market. aftermarket See secondary market. and repair-and-overhaul businesses, as well as very strong order flow in the regional and business aircraft markets. Automotive has taken measures to curtail cur·tail tr.v. cur·tailed, cur·tail·ing, cur·tails To cut short or reduce. See Synonyms at shorten. [Middle English curtailen, to restrict losses on light-vehicle anti-lock braking systems An anti-lock braking system (ABS) (translated from German, Antiblockiersystem) is a system on motor vehicles which prevents the wheels from locking while braking. The purpose of this is to allow the driver to maintain steering control under heavy braking and, in some (ABS (Automatic Backup System) See backup program. ) and to reduce costs across the sector through a reduction in force. Engineered Materials is benefiting from acquisitions, expanded plant capacity, new markets for specialty chemicals A Specialty chemical is a chemical produced for a specialized use. They are produced in lower volume than bulk chemicals, of which petrochemicals, made from oil feedstocks, are the most common. However, both are produced in a chemical plant. , continued growth of the electronics industry and increased demand for CFC CFC See: Controlled foreign corporation substitutes. Fourth Dividend Increase In Four Years Bossidy announced that the Board of Directors voted to increase the quarterly dividend by 15% to $0.225 effective with the first quarter of 1996. This is the fourth double-digit dividend increase in four years. The first dividend at the new rate will be paid March 8 to shareowners of record on February 20, 1996. Bossidy said the Board acted in response to strong 1995 earnings performance and to the expectation of continued earnings growth in 1996. Stock Repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. Program During 1995, the company repurchased 5.5 million of its shares for $239 million under an ongoing repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. program intended to maintain a constant number of shares outstanding. Since January 1992, the company has repurchased 20.4 million shares for approximately $714 million. 1995 Results "New products, acquisitions and globalization globalization Process by which the experience of everyday life, marked by the diffusion of commodities and ideas, is becoming standardized around the world. Factors that have contributed to globalization include increasingly sophisticated communications and transportation initiatives fueled AlliedSignal's sales increases in 1995 and have positioned us for continued growth in 1996," said Bossidy. "Fourteen of our 15 major business units had higher sales in 1995, and units representing nearly two-thirds of our total revenues had double-digit sales increases. In addition, eight major business units, which together account for more than half of our net income, each experienced net income growth of 20% or more." Productivity in 1995 improved 5.2%, driven in part by a successful launch of the company's Operational Excellence campaign to achieve world-class standards in defect-free manufacturing processes. Free cash flow was $322 million, return on equity was 26.7% and return on investment was 17.4%. Aerospace net income for 1995 was up 17% to a record $303 million as sales increased 10% to $5.1 billion, the sector s highest sales since 1991. Operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: improved to 10.8% from 9.9%. Growing demand for innovative new products, the successful integration of acquisitions and expansion of the aftermarket contributed to the gains. Automotive net income was up 1% to a record $217 million on a 13% increase in sales to a record $5.5 billion. Operating margin declined to 7.3% from 8.4%. Strength in safety restraints, turbochargers, truck brakes and the European aftermarket was offset by continued losses in ABS and lower margins in North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. light-vehicle braking systems. Automotive results exclude the after-tax loss of $71 million ($.25 per share) from the previously announced revaluation Revaluation A calculated adjustment to a country's official exchange rate relative to a chosen baseline. The baseline can be anything from wage rates to the price of gold to a foreign currency. In a fixed exchange rate regime, only a decision by a country's government (i.e. of the company's ABS assets to their fair market value. The company also announced previously that it was conducting discussions concerning the future of its profitable light-vehicle braking business and its unprofitable ABS business. Those discussions are continuing. If they do not result in an agreement, the company will carry out plans to exit the light-vehicle ABS business. During the fourth quarter, the company began to implement the sector-wide cost reduction plans announced last October, which included the elimination of 3,100 full-time-equivalent positions; as of year end, 70% of the reduction in force had been completed. Net income for Engineered Materials grew 22% to a record $402 million on a 13% increase in sales to a record $3.7 billion, benefiting from new product introductions, aggressive expansion in Europe, strong demand and improved pricing. Operating margin improved to 13.3% from 12.5%. Engineered Materials results exclude an after-tax gain of $71 million ($0.25 per share) on the previously announced transfer of the high-density polyethylene high-density polyethylene n. Abbr. HDPE A strong, relatively opaque form of polyethylene having a dense structure with few side branches off the main carbon backbone. business to Exxon Chemical Company. Fourth-Quarter Results For the fourth quarter of 1995, AlliedSignal reported record net income of $233 million ($0.83 per share), an increase of 14% over 1994 fourth-quarter earnings of $205 million ($0.73 per share). Sales rose 7% to a record $3.8 billion from $3.5 billion, led by strong increases in Aerospace and Engineered Materials and a modest increase in Automotive. Fourth-quarter operating results for 1995 were as follows: Aerospace: Income grew 12% to a record $94 million from $84 million in the fourth quarter of 1994. Sales grew 9% to $1.4 billion. Operating margin increased to 11.8% from 10.8%. The commercial original equipment (OE) and aftermarket as well as the military OE and aftermarket experienced sales increases for engines, avionics avionics (ā'vēŏn`ĭks), electronic instruments used in air or space flight; also the design and production of such instruments. Early planes had few instruments, but as aviation and aircraft became more complex, so did instrumentation. and equipment systems. Military and commercial aftermarket bookings were strong as well. Sales benefited from increased demand for regional and business aircraft engines and for commercial engine repair and overhaul services. There was also strong demand for commercial avionics products where the company enjoyed a first-to-market advantage, including forward-looking windshear detection systems, traffic alert and collision avoidance systems (1) See adaptive cruise control. (2) A passenger car system that detects objects on the road that the driver may not be able to see. Using radar or infrared sensors, distant objects, such as a deer crossing the road at night or in a fog, are projected onto the (TCAS TCAS Traffic Alert and Collision Avoidance System TCAS Traffic Collision Avoidance System TCAS T-Carrier Administration System TCAS Terminal Control Address Space (MVS/TSO) TCAS Technical Control and Analysis System ) and ground proximity warning systems Ground proximity warning system (GPWS) is a system designed in 1967 by Don Bateman Chief Engineer, Flight Safety Avionics, Honeywell to alert pilots if their aircraft is in immediate danger of flying into the ground. . The company doubled its sales of panel-mounted global positioning systems Global Positioning System: see navigation satellite. Global Positioning System (GPS) Precise satellite-based navigation and location system originally developed for U.S. military use. for piston aircraft, where the AlliedSignal product's exclusive moving-map display feature has gained wide acceptance among pilots. Although bookings were strong and progress was made in resolving operating difficulties, sales of government electronic systems were lower than in the fourth quarter of 1994. Aerospace net income gains resulted from sales growth; an increased percentage of sales from the higher-margin aftermarket; and cost reduction measures. Automotive: Income declined 17% to $45 million from $54 million in the year-earlier fourth quarter. Sales grew 4% to a record $1.4 billion, despite a decline in car and light-truck production of 6% in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and 7% in Europe and a decline of 12% in North American medium and heavy truck production. Operating margin declined to 6.0% from 7.6%. Contributing to revenue growth were European air bag sales, following the successful start-up of a new manufacturing facility in Italy, and foreign exchange, which more than offset sharply lower sales of light-vehicle ABS. Sales were also higher for North American braking systems, filters and spark plugs spark plug: see ignition. spark plug Device that fits into the cylinder head of an internal-combustion engine and carries two electrodes separated by an air gap, across which current from a high-tension ignition system discharges, creating a spark , turbochargers and the North American aftermarket. Sales were flat for truck brake systems, and lower for the European aftermarket and European braking systems which were affected by a national transport strike in France. Net income declined because of lower profits on conventional light-vehicle braking systems and an unfavorable product mix in filters and spark plugs and in the North American aftermarket. These factors were partially offset by higher income for safety restraints. Margins in the European aftermarket improved due to the consolidation of distribution centers, other cost savings and pricing improvements. Engineered Materials: Fourth-quarter income grew 27% to a record $103 million from $81 million in the corresponding year-earlier period. Sales increased 11% to a record $975 million. Operating margin improved to 10.8% from 10.6%, but was constrained con·strain tr.v. con·strained, con·strain·ing, con·strains 1. To compel by physical, moral, or circumstantial force; oblige: felt constrained to object. See Synonyms at force. 2. by production problems -- which have since been resolved -- at the Geismar, Louisiana fluorines plant and by the cost of integrating recently acquired companies. Sales gains were led by double-digit growth in laminates and advanced microelectronic materials. Industrial polyester polyester, synthetic fiber, produced by the polymerization of the product formed when an alcohol and organic acid react. The outstanding characteristic of polyesters is their ability to resist wrinkling and to spring back into shape when creased. , engineering plastics and performance chemicals also had substantial increases, in part due to the consolidation of recent acquisitions. Sales of CFC substitutes were higher, as the company's proprietary refrigerants Chemical refrigerants are assigned an R number(sometimes the label replaces it with the word Freon) which is determined systematically according to molecular structure. The following is a list of refrigerants with their R numbers, IUPAC chemical name, molecular formula, and CAS number. gained acceptance among air conditioning air conditioning, mechanical process for controlling the humidity, temperature, cleanliness, and circulation of air in buildings and rooms. Indoor air is conditioned and regulated to maintain the temperature-humidity ratio that is most comfortable and healthful. systems manufacturers. Net income grew for all major business units except fluorines.. Leading the sector's income increases were polymers (including nylon-based engineering plastics and industrial polyester), laminates, advanced microelectronic materials and the UOP (micro OPeration) The "u" is the substitute letter for the µ symbol. See microinstruction. joint venture in process technology. UOP contributed strong gains with the award of new licensing agreements in India and Saudi Arabia Saudi Arabia (sä  `dē ərā`bēə, sou`–, sô–), officially Kingdom of Saudi Arabia, kingdom (2005 est. pop. .
AlliedSignal is an advanced technology and manufacturing company serving customers worldwide with aerospace and automotive products, chemicals, fibers, plastics and advanced materials Advanced Materials is a leading peer-reviewed materials science journal published every two weeks. Advanced Materials includes Communications, Reviews, and Feature Articles from the cutting edge of materials science, including topics in chemistry, physics, . -0-
AlliedSignal Inc.
Consolidated Statement of Income
(Dollars in millions except per share amounts)
THREE MONTHS TWELVE MONTHS
ENDED DECEMBER 31 ENDED DECEMBER 31
1995 1994 1995 1994
Net sales $3,798 $3,534 $14,346 $12,817
Cost of goods sold 3,090 2,853 11,539 10,299
Selling, general and
administrative expenses 402 381 1,503 1,366
Nonrecurring items (A) 44 - 44 -
Total costs and expenses 3,536 3,234 13,086 11,665
Income from operations 262 300 1,260 1,152
Equity in income of
affiliated companies 68 38 191 129
Other income (expense) (1) (8) (22) (27)
Interest and other
financial charges (38) (34) (168) (143)
Income before taxes on
income 291 296 1,261 1,111
Taxes on income 58 91 386 352
Net income $ 233 $ 205 $ 875 $ 759
Earnings per share of
common stock (B) $ .83 $ .73 $ 3.09 $ 2.68
(A) Consists of a provision of $115 million (after-tax $71 million,
or $.25 per share) from the revaluation of the Anti-Lock Braking
Systems (ABS) assets to fair market value; partly offset by a
gain of $71 million ($71 million after-tax, or $.25 per share)
on the transfer of the Company's High Density Polyethylene business
to Exxon Chemical Company.
(B) Based on weighted average number of shares outstanding during
each period: three months ended December 31, 1995, 282,946,811
shares, and 1994, 283,064,056 shares; and twelve months ended
December 31, 1995, 283,437,773 shares, and 1994, 283,446,399
shares. No dilution results from outstanding common stock
equivalents.
-8-
AlliedSignal Inc.
Segment Data
(Dollars in Millions)
THREE MONTHS ENDED DECEMBER 31
Net Sales Net Income
1995 1994 1995 1994 (A)
Aerospace $ 1,429 $ 1,311 $ 94 $ 84
Automotive 1,394 1,345 (26)(B) 54
Engineered Materials 975 878 174 (C) 81
Total Businesses 3,798 3,534 242 219
Corporate & Unallocated - - (9) (14)
Total $ 3,798 $ 3,534 $233 $205
TWELVE MONTHS ENDED DECEMBER 31
Net Sales Net Income
1995 1994 1995 1994 (A)
Aerospace $ 5,084 $ 4,623 $303 $260
Automotive 5,549 4,922 146 (B) 215
Engineered Materials 3,713 3,272 473 (C) 330
Total Businesses 14,346 12,817 922 805
Corporate & Unallocated - - (47) (46)
Total $14,346 $12,817 $875 $759
(A) Reclassified for comparative purposes.
(B) Includes an after-tax loss of $71 million from the revaluation
of the Anti-Lock Braking Systems (ABS) assets to fair market value.
(C) Includes an after-tax gain of $71 million on the transfer of the
Company's High Density Polyethylene business to Exxon Chemical
Company.
CONTACT: Mark Greenberg, 201/455-5445 |
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