Ecolab Reports Improved Earnings for First Quarter 2001; Expects full year 2001 earnings per share to rise 8%-10%.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)--April 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 FIRST QUARTER HIGHLIGHTS:
-- Record sales +10% to $581 million
-- Record diluted earnings per share, +6% to $0.34
-- Domestic and wholly-owned international operations lead gains, offset slower
economies and weak currencies
-- Excluding the net $0.01 per share gain from one-time events in first quarter
2000, first quarter 2001 earnings per share rose 10%
First Quarter Ended March 31
---------------------------------
(Millions, except per share) %
2001 2000 Increase
--------- --------- ----------
Net Sales $ 580.9 $ 526.3 10 %
Operating Income $ 77.4 $ 72.7 6 %
Pretax Income $ 70.7 $ 67.3 5 %
Taxes 28.6 27.6 4
Earnings from Henkel-Ecolab 2.3 2.9 (19)
--------- --------- ----------
Net Income $ 44.4 $ 42.6 4 %
========= ========= ==========
Diluted Net Income Per Share $ 0.34 $ 0.32 6 %
Diluted Average Shares Outstanding 130.6 133.3 (2) %
Good results from nearly all of its domestic and wholly-owned international businesses led Ecolab's first quarter and more than offset slowing economic activity 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 6% to $0.34 for the period ended March 31, 2001. Ecolab's consolidated sales increased 10% to a record $581 million in 2001's first quarter. Net income rose 4% to a record $44 million, reflecting the higher sales volume. Results for last year's first quarter included $3.8 million of pretax income pretax income Reported income before the deduction of income taxes. Pretax income is sometimes considered a better measure of a firm's performance than aftertax income because taxes in one period may be influenced by activities in earlier periods. related to favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. settlements on environmental claims, which more than offset $1.7 million of bad debt expense related to a distributor's bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most filing. First quarter 2001 net income rose 7% over last year excluding these unusual items. 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, "We are pleased with the first quarter's results. Despite the increasing effects of the economic 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. on many of our markets and the impact of weakening weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak  en·er n. foreign
currencies, we posted good growth in nearly all of our businesses. This
was accomplished through the very aggressive efforts of our people, who
with the help of new product and services, effective sales promotions,
and a focus on new solutions for customer problems, drove our results.
"While we expect 2001 to represent a challenging year, we have aggressive plans in place to address the issues and maintain superior growth. We expect earnings per share for the year to rise 8%-10% to the $1.62 to $1.65 range, which compares with the $1.50 we earned from ongoing operations in 2000. Though this will be a better performance than that expected for aggregate industrial profits, we will not relent re·lent v. re·lent·ed, re·lent·ing, re·lents v.intr. To become more lenient, compassionate, or forgiving. See Synonyms at yield. v.tr. Obsolete 1. in our efforts to improve on our performance as the year progresses. We continue to develop new opportunities to better serve our customers and expand Ecolab's range of premium service solutions, as well as enhance our growth prospects for 2001 and the future. We are a company that is focused on superior performance, both for our customers and our shareholders, and are working very aggressively to improve our results." First 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 11% over the first quarter of 2000 to $399 million, led by gains in Institutional and Kay KAY Kick Ass Year KAY Kansas Association of Youth operations. Excluding acquisitions, sales rose 9%. 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 13% to $61 million, reflecting the higher sales, new products, aggressive sales efforts and promotions, and close attention to costs. Operating income reflected $1.7 million of bad debt expense related to AmeriServe's January January: see month. 31, 2000 bankruptcy filing. Excluding this unusual item from 2000 results, United States Cleaning & Sanitizing operating income rose 9%. Acquisitions did not have a material effect on United States Cleaning & Sanitizing operating income. United States Other Services sales increased 14% to $62 million in the first quarter. Operating income in the first quarter of 2001 grew 3% to $6 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 last year, sales grew 9% and operating income was up 10%. Sales and profits reflected a good performance by Pest Elimination. Sales of Ecolab's International Cleaning & Sanitizing operations rose 17% in the first quarter when measured at fixed currency rates. Excluding acquisitions, sales rose 8%. 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 showed good growth, as 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 gains. Asia Pacific sales also showed a strong increase, as continued growth in East Asia East Asia A region of Asia coextensive with the Far East. East Asian adj. & n. was 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 gains in Japan and New Zealand New Zealand (zē`lənd), island country (2005 est. pop. 4,035,000), 104,454 sq mi (270,534 sq km), in the S Pacific Ocean, over 1,000 mi (1,600 km) SE of Australia. The capital is Wellington; the largest city and leading port is Auckland. . Fixed currency operating income rose 28% to $12 million. The income improvement was due to pricing, cost controls and the 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. First 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 investments, and improved sales programs. When measured in deutsche marks, Henkel-Ecolab sales increased 4%, while net income fell 8%. Net income reflected the devaluation devaluation, decreasing the value of one nation's currency relative to gold or the currencies of other nations. It is usually undertaken as a means of correcting a deficit in the balance of payments. of the Turkish currency and the write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of a distributor receivable. When translated into U.S. dollars, Henkel-Ecolab sales decreased 5% to $202 million. Ecolab's equity in the earnings of Henkel-Ecolab declined 19% to $2.3 million, as the weaker Euro currency hurt translated results. Ecolab reacquired 252,200 shares of its common stock during the first quarter. Business Outlook The following statements are based on current expectations. These statements are forward-looking, 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 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. (in fixed currencies) to increase in the second quarter 2001 over the second quarter 2000. Gross margins are expected to decline from last year's second quarter to slightly under 54%, and selling, general and administrative expenses are expected to improve from last year's 40.8% of sales. Interest expense is likely to be in the $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 second quarter earnings by approximately $0.01 per share. Earnings per share are expected to be around $0.37-$0.39 in the second quarter. Full year earnings per share are expected to rise 8%-10% to the $1.62-$1.65 range. 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 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 first 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 April 30, 2001. Listening to the webcast requires Internet access See how to access the Internet. , a soundcard and the RealPlayer 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 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 second 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 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
FIRST QUARTER ENDED MARCH 31, 2001
(unaudited)
First Quarter
---------------------- Percent
(thousands, except per share) 2001 2000 Change
--------- --------- ---------
Net Sales $580,907 $526,260 10.4%
Cost of Sales 265,230 236,484 12.2
Selling, General and
Administrative Expenses 238,296 217,095 9.8
--------- --------- ---------
Operating Income 77,381 72,681 6.5
Interest Expense, Net 6,668 5,357 24.5
--------- --------- ---------
Income Before Income Taxes
and Equity in Earnings
of Henkel-Ecolab 70,713 67,324 5.0
Provision for Income Taxes 28,639 27,603 3.8
Equity in Earnings of
Henkel-Ecolab 2,340 2,891 (19.1)
--------- --------- ---------
Net Income $ 44,414 $ 42,612 4.2%
========= ========= ---------
Net Income Per Common Share
Basic $ 0.35 $ 0.33 6.1%
Diluted $ 0.34 $ 0.32 6.3%
Weighted-Average Common
Shares Outstanding
Basic 126,962 128,944 (1.5)%
Diluted 130,629 133,330 (2.0)%
ECOLAB INC.
OPERATING SEGMENT INFORMATION
FIRST QUARTER ENDED MARCH 31, 2001
(unaudited)
First Quarter
------------------------ Percent
(thousands) 2001 2000 Change
----------- ------------ ---------
Net Sales
United States
Cleaning & Sanitizing $ 398,535 $ 360,387 10.6%
Other Services 62,277 54,548 14.2
----------- ------------ ---------
Total 460,812 414,935 11.1
International Cleaning &
Sanitizing 121,067 103,413 17.1
Effect of Foreign
Currency Translation (972) 7,912 --
----------- ------------ ---------
Consolidated $ 580,907 $ 526,260 10.4%
=========== ============ ---------
Operating Income
United States
Cleaning & Sanitizing $ 60,793 $ 53,858 12.9%
Other Services 5,602 5,434 3.1
----------- ------------ ---------
Total 66,395 59,292 12.0
International Cleaning &
Sanitizing 12,332 9,672 27.5
Corporate (1,226) 2,584 --
Effect of Foreign
Currency Translation (120) 1,133 --
----------- ------------ ---------
Consolidated $ 77,381 $ 72,681 6.5%
=========== ============ ---------
ECOLAB INC.
CONSOLIDATED BALANCE SHEET
MARCH 31, 2001
March 31 December 31 March 31
(thousands) 2001 2000 2000
---------- ------------ ------------
(unaudited) (unaudited)
Assets
Current assets
Cash and cash equivalents $ 38,688 $ 43,965 $ 22,764
Accounts receivable, net 358,925 326,937 311,457
Inventories 172,221 168,220 184,175
Deferred income taxes 50,586 50,709 41,897
Other current assets 13,750 10,737 15,728
---------- ---------- ----------
Total current assets 634,170 600,568 576,021
Property, plant and equipment, net 506,965 501,640 451,900
Investment in Henkel-Ecolab 212,004 199,642 211,818
Other assets 408,813 412,161 393,015
---------- ---------- ----------
Total assets $1,761,952 $1,714,011 $1,632,754
========== ========== ==========
Liabilities and Shareholders' Equity
Current liabilities
Short-term debt $ 138,937 $ 136,592 $ 139,990
Accounts payable 123,921 146,428 118,502
Compensation and benefits 77,658 88,330 75,447
Income taxes 6,885 -- 13,394
Other current liabilities 184,455 160,684 148,466
---------- ---------- ----------
Total current liabilities 531,856 532,034 495,799
Long-term debt 237,191 234,377 171,382
Postretirement health care
and pension benefits 114,963 117,790 97,370
Other liabilities 83,572 72,803 79,915
Shareholders' equity 794,370 757,007 788,288
---------- ---------- ----------
Total liabilities and
shareholders' equity $1,761,952 $1,714,011 $1,632,754
========== ========== ==========
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion