Ecolab Reports Improved EPS For Second Quarter 2001; Expects Full Year 2001 Earnings Per Share to Rise 7%-9% to $1.61-$1.63.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 19, 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. ): 2001 SECOND QUARTER HIGHLIGHTS:
-- Record sales +4% to $596 million
-- Record diluted earnings per share +3% to $0.37
-- Pest Elimination, GCS and wholly-owned international operations lead gains,
offset slower economies and weak foreign currencies
2001
-----------------------------------
(Millions, except per share) Second % Six %
Quarter Increase Months Increase
------- -------- ------ --------
Net Sales $ 596 4% $1,177 7%
Operating Income $ 80 2% $ 158 4%
Pretax Income $ 73 --% $ 144 2%
Taxes 30 (1) 58 1
Earnings from Henkel-Ecolab 5 (12) 7 (14)
------- -------- ------ --------
Net Income $ 48 --% $ 93 2%
======= ======== ====== ========
Diluted Net Income Per Share $ 0.37 3% $ 0.71 4%
Diluted Average Shares Outstanding 130.1 (2)% 130.2 (2)%
Good results from its Pest Elimination, 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 and its wholly-owned international businesses offset the effects of slow economies and weak foreign currencies to lead Ecolab's second quarter ended June June: see month. 30, 2001, 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 3% to $0.37. Ecolab's consolidated sales increased 4% to a record $596 million in 2001's second quarter. Net income was virtually unchanged at $48 million. Earnings per share increased 3%, benefiting from a lower number of shares outstanding. The impact of currency translation was a negative $0.01 per share. 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 and Chief Executive Officer said, "The second quarter represented a good performance in view of the very challenging world economies and currency trends, and these results were in line with our previous guidance. We made progress in all of our businesses, but it was the outstanding double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. gains by our Pest Elimination, GCS and our wholly-owned 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. that led the quarter's results. "We remain aggressive in the marketplace, introducing new products, services and value-creating programs for our customers, and we continue to set the standard for our industry's performance. We also retain our uncompromising financial goals, but realize their achievement will not be an easy task this year as general economic conditions have deteriorated over the last few months and offer few prospects for improvement soon. However, Ecolab's people are aggressive, committed and focused on providing the best results for our customers and our shareholders, no matter what it takes. While 2001 will represent a challenging year, we expect earnings per share for the year to rise 7%-9% to the $1.61 to $1.63 range, which compares with the $1.50 we earned from ongoing operations in 2000. We have always been determined in our efforts to build on and improve the levels of performance that made us the global leader, and you can be assured this commitment will continue in 2001 -- and beyond." 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 4% over the second quarter of 2000 to $402 million, led by gains in the Institutional operations, and reflecting new products, aggressive sales efforts and increased promotions. Ecolab's 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 2% to $62 million. United States Other Services sales increased 12% to $69 million in the second quarter. Operating income in the second quarter of 2001 grew 15% to $8 million. Excluding business acquisitions and the 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 sold in the fourth quarter of 2000, sales grew 9% and operating income was up 23%. Sales and profits reflected a good performance by both Pest Elimination and GCS, our kitchen equipment repair business. Sales of Ecolab's International Cleaning & Sanitizing operations rose 14% in the second quarter when measured at fixed currency rates. Excluding acquisitions, sales rose 8%. Fixed currency operating income rose 9% to $12 million. Asia Pacific, 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. and Africa/Export operations all showed good sales and profit growth. The income improvement was due to pricing, cost controls and higher sales volumes. Acquisitions did not have a material effect on International operating income. Earnings of the Henkel-Ecolab joint venture are included in the financial statements using the equity method of accounting. Second quarter Henkel-Ecolab sales reflected continued growth in new European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. products and systems, sales and service headcount head count or head·count n. 1. The act of counting people in a particular group. 2. The number of people counted in this way. Noun 1. investments, and improved sales programs. When measured in euros, Henkel-Ecolab sales increased 5%, while net income fell 6%. When translated into U.S. dollars, Henkel-Ecolab sales decreased 1% to $221 million and net income fell 11%. Ecolab's equity in the earnings of Henkel-Ecolab declined 12% to $4.5 million, as the weaker euro currency hurt translated results. Ecolab reacquired 101,500 shares of its common stock during the second quarter of 2001 under its authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: 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. program. Approximately 4.6 million shares remain available for 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. under that program. 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 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. " at the end of this release. Ecolab expects sales to modestly increase in fixed currencies for both domestic and international operations in the third quarter 2001 over the third quarter 2000. Gross margins are expected to decline from last year's third quarter to slightly under 55%, and selling, general and administrative expenses are expected to improve from last year's 39.0% of sales. Interest expense is likely to be in the $6.5 million to $7 million area. The effective tax rate should be around 40.5%. Henkel-Ecolab equity income will likely be hurt by weak European economies and by the soft euro currency. Overall, currency translation is expected to reduce third quarter earnings by approximately $0.01 per share. Diluted earnings per share are expected to be around $0.46-$0.48 in the third quarter. Full year diluted earnings per share from ongoing operations is expected to rise 7%-9% from $1.50 in 2000 to the $1.61-$1.63 range. The previous expected range was $1.62-$1.65. 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, 2000, Ecolab reported sales of $2.3 billion; including European joint venture sales, Ecolab's global sales coverage was $3.1 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. Ecolab will host a live webcast to review the second quarter earnings announcement today at 1:00 p.m. Eastern Daylight Time. The webcast will be available to the public on Ecolab's website at http://www.ecolab.com/financial_investor/. A replay of the webcast will be available at that site through July July: see month. 30, 2001. Listening to the webcast requires Internet access See how to access the Internet. , a soundcard soundcard Noun a printed circuit board inserted into a computer, enabling the output and manipulation of sound and the RealPlayer A multimedia player from RealNetworks that plays RealAudio and RealVideo transmissions. Included is the technology (see RealJukebox) for organizing music files and creating MP3 files from audio CDs. or other compatible streaming media player See digital media hub. . If you do not have the RealPlayer client installed on your PC, you may download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. a free version, RealPlayer 8 Basic, at http://www.real.com. This news release contains various "Forward-Looking Statements" 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 third 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 relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc 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 its Forward-Looking Statements.
ECOLAB INC.
CONSOLIDATED STATEMENT OF INCOME
SECOND QUARTER AND SIX MONTHS ENDED JUNE 30
(unaudited)
Second Quarter Six Months
------------------ -----------------------
(thousands, except 2001 2000 2001 2000
per share) -------- -------- ---------- -----------
Net Sales $595,808 $570,711 $1,176,715 $1,096,971
Cost of Sales 274,816 259,382 540,046 495,866
Selling, General and
Administrative Expenses 240,940 232,689 479,236 449,784
Restructuring Expenses
-Other (192) -- (192) --
-------- -------- ---------- ----------
Operating Income 80,244 78,640 157,625 151,321
Interest Expense, Net 6,816 5,245 13,484 10,602
-------- -------- ---------- ----------
Income Before Income Taxes
and Equity in Earning
of Henkel-Ecolab 73,428 73,395 144,141 140,719
Provision for Income Taxes 29,737 30,092 58,376 57,695
Equity in Earnings of
Henkel-Ecolab 4,502 5,106 6,842 7,997
-------- -------- ---------- ----------
Net Income $48,193 $48,409 $92,607 $91,021
======== ======== ========== ==========
Net Income Per
Common Share
Basic $0.38 $0.38 $0.73 $0.71
Diluted $0.37 $0.36 $0.71 $0.68
Weighted Average Common
Shares Outstanding
Basic 127,333 128,346 127,147 128,645
Diluted 130,068 132,990 130,199 133,275
ECOLAB INC.
OPERATING SEGMENT INFORMATION
SECOND QUARTER AND SIX MONTH ENDED JUNE 30
(unaudited)
Second Quarter Six Months
------------------ ----------------------
(thousands) 2001 2000 2001 2000
-------- -------- ---------- ----------
Net Sales
United States
Cleaning & Sanitizing $402,447 $388,443 $800,982 $748,830
Other Services 69,284 61,774 131,561 116,322
-------- -------- ---------- ----------
Total 471,731 450,217 932,543 865,152
International Cleaning
& Sanitizing 130,452 114,631 251,519 218,044
Effect of Foreign
Currency Translation (6,375) 5,863 (7,347) 13,775
-------- -------- ---------- ----------
Consolidated $595,808 $570,711 $1,176,715 $1,096,971
======== ======== ========== ==========
Operating Income
United States
Cleaning & Sanitizing $61,788 $60,702 $122,581 $114,560
Other Services 8,205 7,147 13,807 12,581
-------- -------- ---------- ----------
Total 69,993 67,849 136,388 127,141
International Cleaning
& Sanitizing 12,127 11,095 24,459 20,767
Corporate Income (Expense) (908) (1,173) (2,134) 1,411
Effect of Foreign
Currency Translation (968) 869 (1,088) 2,002
-------- -------- ---------- ----------
Consolidated $80,244 $78,640 $157,625 $151,321
======== ======== ========== ==========
ECOLAB INC.
CONSOLIDATED BALANCE SHEET
June 30 Dec. 31 June 30
(thousands) 2001 2000 2000
----------- ---------- -----------
(unaudited) (unaudited)
Assets
Current assets
Cash and cash equivalents $53,145 $43,965 $30,132
Accounts receivable, net 364,246 326,937 325,545
Inventories 172,956 168,220 172,811
Deferred income taxes 49,558 50,709 41,260
Other current assets 14,890 10,737 16,494
---------- ---------- ----------
Total current assets 654,795 600,568 586,242
Property, plant and equipment, net 518,870 501,640 470,765
Investment in Henkel-Ecolab 187,044 199,642 201,998
Other assets 417,061 412,161 387,468
---------- ---------- ----------
Total assets $1,777,770 $1,714,011 $1,646,473
========== ========== ==========
Liabilities and Shareholders' Equity
Current liabilities
Short-term debt $134,971 $136,592 $189,179
Accounts payable 129,359 146,428 127,931
Compensation and benefits 83,621 88,330 86,218
Other current liabilities 178,767 160,684 158,604
---------- ---------- ----------
Total current liabilities 526,718 532,034 561,932
Long-term debt 245,888 234,377 161,802
Postretirement health care
and pension benefits 120,374 117,790 100,183
Other liabilities 68,104 72,803 71,893
Shareholders' equity 816,686 757,007 750,663
---------- ---------- ----------
Total liabilities and
shareholders' equity $1,777,770 $1,714,011 $1,646,473
========== ========== ==========
|
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion