Ecolab Reports 13% Earnings Per Share Gain, Record Results for Second Quarter 2000.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)--July 26, 2000 Ecolab Ecolab, Inc., is a St. Paul, Minnesota based sanitation supply company founded in 1923. It was named "Economics Laboratory" before its name was changed to Ecolab in 1986. (NYSE NYSE See: New York Stock Exchange :ECL (Emitter-Coupled Logic) A digital circuit composed of bipolar transistors in which the emitter ends are wired together. ECL gates switch faster than TTL gates, but consume more power. See TTL, I2L and bipolar. 1. ): SECOND QUARTER 2000 HIGHLIGHTS:
-- Record earnings per share +13% to $0.36
-- Record earnings +12% to $48 million
-- Record sales +10% to $571 million
-- Twenty-second consecutive quarter of double-digit EPS growth
2000
----
(Millions, except per share) Second % Six %
Quarter Increase Months Increase
------- -------- ------ --------
Net Sales $ 571 10% $ 1,097 9%
Operating Income $ 79 10% $ 151 13%
Pretax Income $ 73 12% $ 141 15%
Taxes 30 12 58 14
Earnings from Henkel-Ecolab 5 7 8 16
------ --- ------- ---
Net Income $ 48 12% $ 91 16%
====== === ======= ===
Diluted Net Income Per Share $ 0.36 13% $ 0.68 17%
Diluted Average Shares
Outstanding 133.0 (1)% 133.3 (1)%
Continued growth from the major domestic businesses and sustained improvement in its Latin Lat·in n. 1. a. The Indo-European language of the ancient Latins and Romans and the most important cultural language of western Europe until the end of the 17th century. b. American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of operations led Ecolab's second quarter ended June June: see month. 30, 2000, as diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of increased 13% to a record $0.36. Ecolab's consolidated sales increased 10% to a record $571 million in the second quarter. Net income rose 12% to a record $48 million, reflecting the sales improvement and cost efficiencies. Commenting on the quarter, Allan L. Schuman Allan L. Schuman, age 71, is the former CEO of Ecolab, Inc. He resigned as chairman of the board in May 2006 and was named chairman emeritus, an honorary position. He worked at Ecolab for 49 years. Mr. , Ecolab's Chairman, President and Chief Executive Officer said, "Our second quarter results reflected the benefits of Ecolab's strong sales and service culture and successful new product and acquisition strategies for growth. We continued to enjoy growth in our core domestic businesses, led by Institutional, Kay KAY Kick Ass Year KAY Kansas Association of Youth and Pest Elimination. International also recorded strong results, benefiting from Latin America's excellent performance. Henkel-Ecolab recorded a very good gain in the quarter in local currencies, but our equity in those earnings was hurt by currency translation. "We are on course to achieve yet another record year in 2000. Our domestic business continues to show steady growth, with favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. market trends bolstered bol·ster n. A long narrow pillow or cushion. tr.v. bol·stered, bol·ster·ing, bol·sters 1. To support or prop up with or as if with a long narrow pillow or cushion. 2. by the rollout of new products, services and our expanded sales and service force. Our International operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. have done well given the economic conditions they face, and we look for further progress in the second half of the year. We are excited by the growth opportunities we see ahead in all of our markets, and are continuing to make the required investments -- including people, products and systems -- to further improve service to our customers and to maintain our above-average growth through the coming years. Ecolab's commitment to growth has never been stronger, and our dedication to achieving it never greater." Second quarter sales for Ecolab's 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. Cleaning & Sanitizing operations rose 8% over the second quarter of 1999 to $388 million. Excluding acquisitions, sales rose 7%. Results were led by double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. gains in Ecolab's Kay operations, solid performances by Institutional and Food & Beverage, and improved performance by Professional Products. United States Cleaning & Sanitizing 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. rose 5% to $61 million, as margins primarily reflected the impact of acquisitions and higher fuel costs. United States Other Services sales increased 16% to $62 million in the second quarter. Excluding acquisitions, sales rose 12%. Operating income also grew 16% to $7 million. Sales and profits benefited from a solid performance by Pest Elimination and good progress by GCS GCS Glasgow Coma Scale GCS Guilford County Schools (North Carolina) GCS Ground Control Station GCS Grand Central Station GCS Ground Control System GCS Ground Combat Systems GCS Group Communication Systems . Sales of Ecolab's International Cleaning & Sanitizing operations rose 10% in the second quarter when measured at fixed currency rates. Excluding acquisitions, International sales increased 5%. 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. sales were very strong as excellent results from Mexico Mexico, city, Mexico Mexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. and Central America Central America, narrow, southernmost region (c.202,200 sq mi/523,698 sq km) of North America, linked to South America at Colombia. It separates the Caribbean from the Pacific. led the increase. Modest growth in Asia Pacific reflected aggressive new account development and new product sales which served to more than offset poor general economic trends. Fixed currency operating income rose 24% to $12 million due to higher sales volumes and cost controls. Earnings of the Henkel-Ecolab joint venture are included in the financial statements using the equity method of accounting. Henkel-Ecolab sales improved in the second quarter, reflecting better economic conditions 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). . When measured in deutsche marks,
Henkel-Ecolab sales increased 9%. When translated into U.S. dollars,
Henkel-Ecolab sales decreased 5% to $223 million compared with $235
million in the second quarter of last year. While Henkel-Ecolab earnings
increased 17% in deutsche marks, the weaker Euro currency resulted in a
gain of only 7% in Ecolab's equity income in dollars at $5.1
million compared with $4.8 million in the second quarter of last year.
Ecolab reacquired 2,037,600 shares of its common stock during the second quarter and 2,260,300 shares of its common stock during the first half of 2000. Ecolab is the leading global developer and marketer of premium cleaning, sanitizing, pest elimination, maintenance and repair products and services for the hospitality, institutional and industrial markets. For the year ended December December: see month. 31, 1999, Ecolab reported sales of $2.1 billion; including the Henkel-Ecolab European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. joint venture sales of $0.9 billion, Ecolab's global sales coverage was $3 billion. Ecolab shares are traded on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. and the Pacific Exchange under the symbol ECL. Ecolab news releases and other investor information are available on the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at http://www.ecolab.com; and by telephone at 1-800-FACT-ECL. This news release contains various "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. " within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These include statements concerning our 2000 financial and business prospects. These statements, which represent Ecolab's expectations or beliefs concerning various future events, are based on current expectations that involve a number of risks and uncertainties that could cause actual results to differ materially from those of such Forward-Looking Statements. These include: restraints on pricing flexibility due to competitive factors and customer consolidations; cost increases due to higher oil prices or the unavailability un·a·vail·a·ble adj. Not available, accessible, or at hand. un  a·vail of adequate and reasonably-priced raw materials; the
effect of acquisitions; the costs and effects of compliance with
environmental and other laws and regulations; changes in tax, fiscal,
governmental and other regulatory policies; economic factors such as the
worldwide economy, interest rates, currency movements, and the
development of markets; the occurrence of (i) 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. or claims, (ii) natural or man-made disasters man-made disaster Technological disaster Public health An event in which a significant number of people are injured or die as a result of human devices or activities, unrelated to conflicts, and attributed to operator error–eg, Exxon Valdez and (iii) severe weather conditions affecting the food service and hospitality industry; and other uncertainties or risks reported from time-to-time in the Company's reports to the Securities and Exchange Commission.
ECOLAB INC.
CONSOLIDATED STATEMENT OF INCOME
SECOND QUARTER AND SIX MONTHS ENDED JUNE 30, 2000
(unaudited)
Second Quarter Six Months
-------------------- ----------------------
(thousands, except
per share) 2000 1999 2000 1999
--------- ---------- ---------- -----------
Net Sales $ 570,711 $ 520,416 $1,096,971 $ 1,009,720
Cost of Sales 259,382 234,725 495,866 455,150
Selling, General and
Administrative Expenses 232,689 213,949 449,784 420,565
--------- ---------- ---------- -----------
Operating Income 78,640 71,742 151,321 134,005
Interest Expense, Net 5,245 6,209 10,602 11,959
--------- ---------- ---------- -----------
Income Before Income Taxes
and Equity in Earnings
of Henkel-Ecolab 73,395 65,533 140,719 122,046
Provision for Income Taxes 30,092 26,905 57,695 50,527
Equity in Earnings of
Henkel-Ecolab 5,106 4,756 7,997 6,903
--------- ---------- ---------- -----------
Net Income $ 48,409 $ 43,384 $ 91,021 $ 78,422
========= ========== ========== ===========
Net Income Per
Common Share
Basic $ 0.38 $ 0.33 $ 0.71 $ 0.61
Diluted $ 0.36 $ 0.32 $ 0.68 $ 0.58
Weighted-Average Common
Share Outstanding
Basic 128,346 129,596 128,645 129,567
Diluted 132,990 134,666 133,275 134,653
ECOLAB INC.
OPERATING SEGMENT INFORMATION
SECOND QUARTER AND SIX MONTHS ENDED JUNE 30, 2000
(unaudited)
Second Quarter Six Months
-------------------- ----------------------
(thousands) 2000 1999 2000 1999
--------- ---------- ---------- -----------
Net Sales
United States
Cleaning & Sanitizing $ 388,443 $ 358,272 $ 748,830 $ 695,094
Other Services 61,774 53,313 116,322 100,641
--------- ---------- ---------- -----------
Total 450,217 411,585 865,152 795,735
International Cleaning &
Sanitizing 123,199 112,035 234,907 218,102
Effect of Foreign
Currency Translation (2705) (3,204) (3,088) (4,117)
--------- ---------- ---------- ----------
Consolidated $ 570,711 $ 520,416 $1,096,971 $ 1,009,720
========= ========== ========== ===========
Operating Income
United States
Cleaning & Sanitizing $ 60,702 $ 57,558 $ 114,560 $ 108,421
Other Services 7,147 6,149 12,581 10,700
--------- ---------- ---------- -----------
Total 67,849 63,707 127,141 119,121
International Cleaning &
Sanitizing 12,177 9,844 23,035 17,995
Corporate (1,173) (1,234) 1,411 (2,333)
Effect of Foreign
Currency Translation (213) (575) (266) (778)
--------- ---------- ---------- -----------
Consolidated $ 78,640 $ 71,742 $ 151,321 $ 134,005
========= ========== ========== ===========
ECOLAB INC.
CONSOLIDATED BALANCE SHEET
June 30, 2000
June 30 December 31 June 30
(thousands) 2000 1999 1999
---------- ----------- ---------
(unaudited) (unaudited)
Assets
Current assets
Cash and cash equivalents $ 30,132 $ 47,748 $ 29,915
Accounts receivable, net 325,545 299,751 300,717
Inventories 172,811 176,369 170,983
Deferred income taxes 41,260 41,701 35,710
Other current assets 16,494 11,752 17,474
---------- ----------- ---------
Total current assets 586,242 577,321 554,799
Property, plant and equipment, net 470,765 448,116 431,532
Investment in Henkel-Ecolab 201,998 219,003 218,984
Other assets 387,468 341,506 329,406
---------- ----------- ---------
Total assets $1,646,473 $ 1,585,946 $1,534,721
========== =========== =========
Liabilities and Shareholders'
Equity
Current liabilities
Short-term debt $ 189,179 $ 112,060 $ 91,669
Accounts payable 127,931 122,701 128,689
Compensation and benefits 86,218 90,618 69,757
Income taxes - 5,743 -
Other current liabilities 158,604 139,552 136,758
---------- ----------- ---------
Total current liabilities 561,932 470,674 426,873
Long-term debt 161,802 169,014 237,573
Postretirement health care
and pension benefits 100,183 97,527 100,848
Other Liabilities 71,893 86,715 60,751
Shareholders' equity 750,663 762,016 708,676
---------- ----------- ---------
Total liabilities and
shareholders' equity $1,646,473 $ 1,585,946 $1,534,721
========== =========== ==========
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