Ecolab Reports 15% EPS Gain, Record Results for Full Year 2000; Fourth quarter also sets record as earnings per share rise 13%.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)--Feb. 14, 2001 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. Inc. (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. ): FOURTH QUARTER 2000 HIGHLIGHTS:
-- Record diluted earnings per share +13% to $0.36, excluding the
net $0.06 per share gain from unusual items
-- Record net sales +10% to $567 million
-- 24th consecutive quarter of double-digit EPS growth
FULL YEAR 2000 HIGHLIGHTS:
-- Record diluted earnings per share +15% to $1.50, excluding
unusual fourth quarter items
-- Record net sales +9% to $2.3 billion
-- Record cash flow from operations +7% to $315 million
-- Eighth consecutive year of double-digit EPS growth
December 31, 2000
----------------------------------------
(Millions, except per share) Fourth % Full %
Quarter Increase Year Increase
-------- -------- -------- --------
Net Sales $ 567 10% $2,264 9%
Operating Income $ 94 38% $ 343 18%
Pretax Income $ 87 39% $ 319 19%
Taxes (36) 38 (130) 18
Earnings from Henkel-Ecolab 6 5 19 7
Change in accounting - Revenue
Recognition (2) - (2) -
-------- -------- -------- --------
Net Income $ 55 29% $ 206 17%
======== ======== ======== ========
Diluted Net Income Per Share $ 0.42 31% $ 1.56 19%
Income Per Share Excluding
Unusual Items $ 0.36 13% $ 1.50 15%
Diluted Average Shares
Outstanding 130.3 (3)% 131.9 (2)%
Strong growth from its domestic and 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. led Ecolab results for the fourth quarter ended December December: see month. 31, 2000, completing the eighth consecutive year of double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. earnings per share growth for the company. Ecolab's fourth quarter sales grew 10% to a $567 million. Earnings rose 29% to $55 million, or $0.42 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share. Fourth quarter earnings included several unusual items that had the net effect of increasing earnings by $8.2 million net of tax, or $0.06 per share. Excluding these unusual items, earnings grew 10% to $47 million and 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 $0.36 per share. Sales for the full year 2000 rose 9% to nearly $2.3 billion, with earnings up 17% to $206 million. Earnings per share rose 19% to $1.56 per diluted share. Excluding the fourth quarter's unusual items, earnings per share increased 15% to $1.50. 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 and Chief Executive Officer, stated, "Earnings per share for 2000 were actually slightly better than our original forecast. Continued good results from our domestic Institutional, Kay KAY Kick Ass Year KAY Kansas Association of Youth and Pest Elimination businesses, along with strong profit gains from International, drove our results. Henkel-Ecolab also enjoyed good gains in local currencies, though the stronger dollar diluted their reported contribution. "Most of our key businesses performed well in 2000 and we made important progress in many areas of our operations. We continued to lead the industry in growth, new accounts, new products and new services. Further, we made major progress in the development of our global businesses, including expansion of the 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 commercial kitchen equipment parts and repair business, strategic investments in new opportunities such as FreshLoc wireless remote monitoring (protocol) remote monitoring - (RMON) A network management protocol that allows network information to be gathered at a single computer. Whereas SNMP gathers network data from a single type of Management Information Base (MIB), RMON 1 defines nine additional MIBs that provide a and the Facilitec grease grease, mixture of lubricant and thickener. It is used to reduce friction between surfaces from which oils would leak away or cause damage by dripping, or where lubrication must be assured for extended periods. Many greases are mixtures of mineral oil and soap. management business, and, most significantly, our agreement to purchase the remaining 50% of the Henkel-Ecolab joint venture. We are proud of our performance in 2000, as our associates worked hard to achieve the excellent results reported today. "As we outlined in our recent press release discussing the 2001 earnings outlook, we are well-positioned for continued growth and expansion of our business. We believe we have the tools and people in place to achieve our goals in 2001, and expect another year of record performance. Many investors have concerns regarding the economy this year, and while there are signs of a slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. in certain customer markets and unfavorable exchange rates, we are confident that the stable nature of our markets and their ongoing and fundamental needs for premium sanitation sanitation: see plumbing; sanitary science. products and services will enable us to outperform Outperform An analyst recommendation meaning a stock is expected to do slightly better than the market return. Notes: Exact definitions vary by brokerage, but in general this rating is better than neutral and worse than buy or strong buy. our industry and produce attractive results for our shareholders once again in 2001. Because of this, we continue to project diluted earnings per share for 2001 in a $1.67-$1.71 range." The company's fourth quarter results included several unusual items. The company previously announced the fourth quarter $26 million pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern gain on the sale of the non-core Jackson Jackson. 1 City (1990 pop. 37,446), seat of Jackson co., S Mich., on the Grand River; inc. 1857. It is an industrial and commercial center in a farm region. business, which was partially offset by a $7 million pretax restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. related to office closures, terminations and other management actions focused on improving Ecolab's long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. efficiency and competitiveness. These two items are included in corporate 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. in both the fourth quarter and full year 2000 results. Ecolab also recorded a $2.4 million aftertax charge to recognize the cumulative effect of the change in accounting relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the implementation of Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements." Fourth 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 9% over the fourth quarter of 1999 to $376 million, led by the Institutional and Kay operations. Excluding acquisitions, United States Cleaning & Sanitizing sales rose 7%. Ecolab's United States Cleaning & Sanitizing operating income increased 13% to $59 million reflecting sales gains and cost controls. United States Other Services sales increased 18% to $64 million in the fourth quarter. Excluding acquisitions and divestitures, sales rose 9%. Operating income declined 26% to $5 million. United States Other Services operating income excluding the results of the divested Jackson business fell 15% due to costs related to GCS. Fourth quarter sales of Ecolab's International Cleaning & Sanitizing operations rose 13% to $135 million when measured at fixed currency exchange rates. Excluding acquisitions, sale rose 4%. In Asia Pacific, aggressive new account development and new product sales served to more than offset poor general economic conditions. Northern 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 sales drove results in that region. International operating income measured in fixed currencies rose 21% to $14 million. The income improvement came from all regions as higher sales volumes and cost controls benefited margins. Earnings of the Henkel-Ecolab joint venture are included in the financial statements using the equity method of accounting. Henkel-Ecolab sales showed good results across the board in the fourth quarter. When measured in fixed currencies, Henkel-Ecolab sales increased 6%. When translated into U.S. dollars, Henkel-Ecolab sales decreased 12% to $214 million compared with $245 million in the fourth quarter of last year. Ecolab's equity in the earnings of Henkel-Ecolab rose 5% to $6.1 million compared with $5.8 million in the fourth quarter of last year. Ecolab reacquired 1,050,000 shares of its common stock during the fourth quarter and 4,781,500 shares of its common stock during 2000. In December 2000, the company announced authorization The right or permission to use a system resource; the process of granting access. See access control. to 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. up to 5 million additional shares of Ecolab stock. Business Outlook The following statements are based on current expectations. These statements are forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. , and actual results may differ materially. These statements do not include the potential impact of business acquisitions or other material corporate transactions, which may be completed after the date of this release. This Business Outlook section should be read in conjunction with the information on "Forward Looking Statements" at the end of this release. Ecolab expects sales for both domestic and international operations to increase in the first quarter 2001 over the first quarter 2000. Gross margins are expected to be slightly below last year's 55.1%, and selling, general and administrative expenses are expected to be within the range of last year's 41.3% of sales. Net interest expense is likely to be approximately $7.5 million, reflecting the use of debt in association with share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. activity. The effective tax rate should be lower than last year's first quarter due to improved international profitability, and should be approximately 40.5%. Overall, currency exchange is expected to cost approximately one cent per share in the first quarter. The company expects diluted earnings per share for the first quarter to be approximately $0.34-$0.35 compared with $0.32 per share earned in last year's first quarter, which included a net $0.01 per share one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. gain. As previously stated, the company expects earnings per share for the full year 2001 to be in a $1.67-$1.71 range. 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 2001 first quarter and full year 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 risks and uncertainties include: restraints on pricing flexibility due to competitive factors and customer consolidations; cost increases due to higher oil prices or unavailability un·a·vail·a·ble adj. Not available, accessible, or at hand. un  a·vail of adequate and
reasonably priced raw materials; the occurrence of capacity constraints CONSTRAINTS - A language for solving constraints using value inference.["CONSTRAINTS: A Language for Expressing Almost-Hierarchical Descriptions", G.J. Sussman et al, Artif Intell 14(1):1-39 (Aug 1980)]. , or the loss of a key supplier, which in either case limit the production of certain products; the effect of future acquisitions or divestitures or other corporate transactions, as well as our ability to achieve plans for past acquisitions, including difficulties in rationalizing acquired businesses and in realizing related cost savings and other benefits; market or regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. factors which could affect the Company's ability to reacquire shares; the costs and effects of complying with: (i) the significant environmental laws and regulations which apply to the Company's operations and facilities, (ii) government regulations relating to the manufacture, storage, distribution and labeling of the Company's products and (iii) changes in tax, fiscal, governmental and other regulatory policies; economic factors such as the worldwide economy, interest rates, currency movements, euro conversion 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) the loss or insolvency insolvency Condition in which liabilities exceed assets so that creditors cannot be paid. It is a financial condition that often precedes bankruptcy. In the context of equity, insolvency is the inability to pay debts as they become due; insolvency under the balance-sheet of a major customer or distributor, (iii) natural or manmade disasters and (iv) severe weather conditions affecting the food service and the hospitality industry; loss of, or changes in, executive management; the Company's ability to continue product introductions and technological innovations; and other uncertainties or risks reported from time to time in the Company's reports to the Securities and Exchange Commission. Ecolab undertakes no duty to update the Forward-Looking Statements.
ECOLAB INC.
CONSOLIDATED STATEMENT OF INCOME
FOURTH QUARTER AND YEAR ENDED DECEMBER 31, 2000
Fourth Quarter Year
------------------ ----------------------
(thousands, except 2000 1999 2000 1999
per share) -------- -------- ---------- ----------
(unaudited)
Net Sales $566,676 $515,781 $2,264,313 $2,080,012
Cost of Sales (Including
$1,948 of Restructuring
in 2000) 263,089 234,843 1,025,906 937,612
Selling, General and
Administrative Expenses 230,233 212,847 916,004 852,449
Gain on Sale of Jackson
Business (25,925) -- (25,925) --
Restructuring
Expenses - Other 5,189 -- 5,189 --
-------- -------- ---------- ----------
Operating Income 94,090 68,091 343,139 289,951
Interest Expense, Net 7,475 5,894 24,605 22,713
-------- -------- ---------- ----------
Income Before Income
Taxes and Equity in
Earnings of Henkel-Ecolab 86,615 62,197 318,534 267,238
Provision for Income Taxes 35,568 25,687 129,495 109,769
Equity in Earnings of
Henkel-Ecolab 6,149 5,833 19,516 18,317
-------- -------- ---------- ----------
Income Before Cumulative
Effect of Change in
Accounting 57,196 42,343 208,555 175,786
Cumulative Effect of Change
in Accounting for Revenue
Recognition 2,428 -- 2,428 --
-------- -------- ---------- ----------
Net Income $54,768 $42,343 $206,127 $175,786
======== ======== ========== ==========
Diluted Net Income Per
Common Share $0.42 $0.32 $1.56 $1.31
Diluted Weighted-Average
Common Share Outstanding 130,331 133,981 131,946 134,419
ECOLAB INC.
OPERATING SEGMENT INFORMATION
FOURTH QUARTER AND YEAR ENDED DECEMBER 31, 2000
Fourth Quarter Year
------------------ -----------------------
(thousands) 2000 1999 2000 1999
-------- -------- ---------- ----------
(unaudited)
Net Sales
United States
Cleaning & Sanitizing $375,682 $343,435 $1,532,033 $1,424,037
Other Services 64,399 54,454 248,317 211,562
-------- -------- ---------- ----------
Total 440,081 397,889 1,780,350 1,635,599
International Cleaning &
Sanitizing 135,298 119,327 500,322 452,892
Effect of Foreign
Currency Translation (8,703) (1,435) (16,359) (8,479)
-------- -------- ---------- ----------
Consolidated $566,676 $515,781 $2,264,313 $2,080,012
======== ======== ========== ==========
Operating Income
United States
Cleaning & Sanitizing $58,531 $51,620 $249,182 $230,520
Other Services 4,617 6,207 25,515 25,114
-------- -------- ---------- ----------
Total 63,148 57,827 274,697 255,634
International Cleaning &
Sanitizing 14,139 11,661 51,978 40,422
Corporate 17,866 (1,126) 18,491 (4,570)
Effect of Foreign
Currency Translation (1,063) (271) (2,027) (1,535)
-------- -------- ---------- ----------
Consolidated $94,090 $68,091 $343,139 $289,951
======== ======== ========== ==========
ECOLAB INC.
CONSOLIDATED BALANCE SHEET
December 31, 2000
December 31 December 31
(thousands) 2000 1999
----------- -----------
Assets
Current assets
Cash and cash equivalents $43,965 $47,748
Accounts receivable, net 326,937 299,751
Inventories 168,220 176,369
Deferred income taxes 50,709 41,701
Other current assets 10,737 11,752
---------- ----------
Total current assets 600,568 577,321
Property, plant and equipment, net 501,640 448,116
Investment in Henkel-Ecolab 199,642 219,003
Other assets 412,161 341,506
---------- ----------
Total assets $1,714,011 $1,585,946
========== ==========
Liabilities and Shareholders' Equity
Current liabilities
Short-term debt $136,592 $112,060
Accounts payable 146,428 122,701
Compensation and benefits 88,330 90,618
Income taxes -- 5,743
Other current liabilities 160,684 139,552
---------- ----------
Total current liabilities 532,034 470,674
Long-term debt 234,377 169,014
Postretirement health care
and pension benefits 117,790 97,527
Other liabilities 72,803 86,715
Shareholders' equity 757,007 762,016
---------- ----------
Total liabilities and
shareholders' equity $1,714,011 $1,585,946
========== ==========
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