Rockwell Automation Reports Second Quarter Results.Business Editors MILWAUKEE--(BUSINESS WIRE)--April 22, 2003 Rockwell Automation Rockwell Automation NYSE: ROK is an industrial automation company. Its products include Allen-Bradley controls and engineered services and Rockwell Software factory management software. The company headquarters are located in Milwaukee, Wisconsin. , Inc. (NYSE NYSE See: New York Stock Exchange :ROK), a leading global provider of industrial automation power, control and information solutions, today reported fiscal 2003 second quarter net income of $49 million (26 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. ). This result includes a charge of $3 million after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. (1 cent per share) related to the sale of a majority of the company's ownership interest in Reliance Electric Limited Japan. Last year's second quarter net income of $61 million (33 cents per share) included a tax benefit of $18 million (10 cents per share). Also included in 2002 results was a net benefit of $3 million (2 cents per share) related to discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . Sales for the second quarter were $1,029 million compared to $958 million in the second quarter of 2002. Don H. Davis, Chairman and Chief Executive Officer, commented, "Our businesses continue to produce very solid results in a prolonged pro·long tr.v. pro·longed, pro·long·ing, pro·longs 1. To lengthen in duration; protract. 2. To lengthen in extent. soft market environment. Steady and meaningful improvements in our market position validate To prove something to be sound or logical. Also to certify conformance to a standard. Contrast with "verify," which means to prove something to be correct. For example, data entry validity checking determines whether the data make sense (numbers fall within a range, numeric data the strength of our product and service offerings. Our strong cash flow and financial profile allow us to invest in our businesses while providing attractive current returns to our shareowners." Davis added, "We remain focused on executing our strategy in order to deliver on our commitment of profitable growth. We are continuing to invest in key growth areas such as our Logix(TM), Process Solutions and Global Manufacturing Solutions businesses. At the same time we remain diligent dil·i·gent adj. Marked by persevering, painstaking effort. See Synonyms at busy. [Middle English, from Old French, from Latin d in maintaining a lean cost structure." Davis concluded, "The timing and pace of improvement in the global economy remain difficult to predict. Our markets have remained generally stable for the past two quarters and we anticipate that this trend will continue for the balance of our fiscal year. Accordingly, we remain confident in our ability to deliver full year 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 of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $1.10." Following is a discussion of results for each Rockwell Automation business for the second quarter. Control Systems Control Systems second quarter sales were $830 million, an increase of 11 percent compared to sales of $749 million in the second quarter of 2002. Approximately 4 percent of the sales growth was due to the favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impact of currency translation. From a regional perspective, sales outside of the U.S. increased 22 percent (12 percent excluding currency translation) and U.S. sales were up 4 percent. Our Logix(TM) and Process Solutions businesses each increased approximately 40 percent from last year's second quarter and the Global Manufacturing Solutions business grew 12 percent compared to 2002. Segment operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before were $93 million compared to $81 million in 2002's second quarter. The increase in operating earnings is due to increased volume, particularly in the Logix(TM) business. Control Systems' return on sales Return on sales A measurement of operational efficiency equalingnet pre-tax profits divided by net sales expressed as a percentage. return on sales The portion of each dollar of sales that a firm is able to turn into income. was 11.2 percent compared to 10.8 percent in 2002's second quarter. Power Systems Power Systems second quarter sales were $175 million compared to $176 million in the second quarter of 2002. A 6 percent increase in mechanical sales was offset by a similar decrease in electrical sales. Segment operating earnings were $16 million compared to $12 million in last year's second quarter. The increase in operating earnings was the result of continued cost reduction efforts and favorable product mix. Power Systems return on sales was 9.1 percent compared to 6.8 percent in last year's second quarter. Rockwell Rock·well , Norman 1894-1978. American illustrator whose works, many of which appeared on the cover of the Saturday Evening Post, offer a nostalgic, idealized view of everyday American life. Noun 1. FirstPoint Contact Rockwell FirstPoint Contact sales in the second quarter were $24 million compared to $33 million in 2002's second quarter. Operating earnings were break even for the quarter, compared to $1 million in the second quarter of 2002. Reduced spending and savings from cost reduction actions substantially offset the effect of the lower sales volume. General Corporate - Net Second quarter 2003 general corporate expenses were $14 million compared to $16 million in the second quarter of 2002, driven primarily by lower corporate staff costs. The effective tax rate for the quarter was 25 percent. The full year effective tax rate is estimated to be 30 percent, excluding the impact of the REJ REJ Reject REJ Rapid Economic Justification transaction. Last year's second quarter tax rate includes a tax benefit of $18 million from the resolution of certain tax matters. Cash Flow Free cash flow from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the for the first six months of 2003 was $159 million, compared to $102 million in the first half of 2002. Free cash flow for the second quarter was $70 million compared to $34 million in the second quarter of 2002. The company defines free cash flow as cash flows provided by operating activities reduced by capital expenditures. On April 15, 2003, the company retired its $150 million 6.80 % debt obligation using a combination of cash on hand and commercial paper borrowings. Following are additional business developments: -- Rockwell Automation opened a manufacturing operation in Shanghai Shanghai (shăng`hī`, shäng`hī`), city (1994 est. pop. 12,980,000), in, but independent of, Jiangsu prov., E China, on the Huangpu (Whangpoo) River where it flows into the Chang (Yangtze) estuary. , China. The new facility will focus on the manufacture of electro-mechanical products including push buttons, rotary Rotary can refer to:
indigenous Indigenous may refer to:
manufacture the next generation IEC (International Electrotechnical Commission, Geneva, Switzerland, www.iec.ch) An organization that sets international electrical and electronics standards founded in 1906. It is made up of national committees from over 60 countries. IEC - International Electrotechnical Commission pushbutton push·but·ton n. also push button A small button that activates an electric circuit when pushed. adj. also push-but·ton Equipped with or operated by a pushbutton. product line and plans are in place to migrate production of other products. Rockwell Automation expects the facility to grow to several hundred people over the next two to four years as the manufacture of additional products is moved to Shanghai. -- Rockwell Automation acquired Interwave Technology, Inc., expanding its Manufacturing Information Solutions (MIS (1) (Management Information System) An information system that integrates data from all the departments it serves and provides operations and management with the information they require. ) capability and accelerating its ability to integrate real-time 1. real-time - Describes an application which requires a program to respond to stimuli within some small upper limit of response time (typically milli- or microseconds). Process control at a chemical plant is the classic example. information between customers' manufacturing plant floor and business systems. Interwave is one of the country's leading independent consulting integrators. -- Rockwell Automation formed a strategic alliance with Weidmuller Holding AG that will enhance Rockwell Automation's position as a leader in providing IEC connection products. The multi-dimensional alliance consists of: a master brand label agreement; a technology/design exchange; joint product development; and, the acquisition of Weidmuller's North 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 assets. -- Rockwell Automation Global Manufacturing Solutions signed a $4.5 million five-year contract with Air Liquide
provide condition-based monitoring equipment and services which will help reduce maintenance costs and improve uptime The time during which a system is working without failure. Contrast with downtime. See availability. at its gas production facilities in the 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. . In addition, the company signed multi-year asset management service agreements with six major manufacturers to manage the maintenance, repair and operations Maintenance management or Maintenance, (MRO'), is fixing any sort of mechanical or electrical device should it become out of order or broken (repair) as well as performing the routine actions which keep the device in working order (maintenance) or prevent trouble assets for these global customers. -- Rockwell Automation was one of only 13 companies to earn Intel's prestigious 2002 Supplier Continuous Quality Improvement award, which recognizes "outstanding commitment to quality and performance by suppliers that provide products and services deemed essential to Intel's success." Rockwell Automation was awarded for its efforts in supplying Intel with programmable logic controllers See PLC. (hardware) Programmable Logic Controller - (PLC) A device used to automate monitoring and control of industrial plant. Can be used stand-alone or in conjunction with a SCADA or other system. , industrial networks, software and system integration services while meeting stringent assessment criteria criteria (krītēr´ē  ),n. . A conference call to discuss Rockwell Automation's financial results will take place at 10 A.M. Eastern Time on April 22. The call will be webcast and accessible via the Rockwell Automation website (www.rockwellautomation.com). This news release contains statements (including certain projections and business trends) accompanied ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. by such phrases as "believes," "estimates," "expect(s)," "anticipates," "will," "intends" and other similar expressions, that are "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. " as defined in 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. Actual results may differ materially from those projected as a result of certain risks and uncertainties, including but not limited to economic and political changes in international markets where the company competes, such as currency exchange rates, inflation rates, recession, foreign ownership restrictions and other external factors over which the company has no control; demand for and market acceptance of new and existing products, including levels of capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. in industrial markets; successful development of advanced technologies; competitive product and pricing pressures; future terrorist attacks; epidemics This article is a list of major epidemics. Worldwide Pandemics
When a person begins a civil lawsuit, the person enters into a process called litigation. , as well as other risks and uncertainties, including but not limited to those detailed from time to time in the company's Securities and Exchange Commission filings. These forward-looking statements are made only as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" , and the company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise. Rockwell Automation, Inc. (NYSE:ROK), is a leading global provider of industrial automation power, control and information solutions that help customers meet their manufacturing productivity objectives. The company brings together leading brands in industrial automation for Complete Automation solutions, including Allen-Bradley “A-B” redirects here. For other uses, see AB. Allen-Bradley is the brand-name of a line of Factory Automation Equipment manufactured by Rockwell Automation (NYSE ROK). The company, with revenues of approximately $4. (R) controls and services, Dodge(R) mechanical power transmission products, Reliance Electric(TM) motors and drives, and Rockwell Software(R) factory management software. The company also is a provider of contact management technologies and applications that help companies more efficiently manage interaction with their own customers. Headquartered in Milwaukee, Wisconsin For other places with the same name, see Milwaukee (disambiguation). Milwaukee is the largest city within the state of Wisconsin and 25th largest (by population) in the United States. , the company employs about 22,000 people serving customers in more than 80 countries.
ROCKWELL AUTOMATION, INC.
SALES AND EARNINGS INFORMATION
(in millions, except per share amounts)
Quarter Ended Six Months Ended
March 31, March 31,
--------------- ----------------
2003 2002 2003 2002
-------- ------ -------- -------
Sales
Control Systems $830 $749 $1,617 $1,472
Power Systems 175 176 346 354
FirstPoint Contact 24 33 50 71
-------- ------ -------- -------
Total Sales $1,029 $958 $2,013 $1,897
======== ====== ======== =======
Segment Operating Earnings
Control Systems $93 $81 $179 $148
Power Systems 16 12 24 23
FirstPoint Contact - 1 - 3
-------- ------ -------- -------
Total Segment Operating Earnings 109 94 203 174
Purchase Accounting Amortization (7) (7) (14) (13)
General Corporate - Net (14) (16) (26) (34)
Loss on Disposition of a Business (see
Note 1) (8) - (8) -
Interest Expense (15) (17) (30) (33)
Income Tax (Provision) Benefit (16) 4 (34) (7)
-------- ------ -------- -------
Income from Continuing Operations Before
Accounting Change 49 58 91 87
Income from Discontinued Operations - 3 - 3
Cumulative Effect of Accounting Change
(see Note 2) - - - (108)
-------- ------ -------- -------
Net Income (Loss) $49 $61 $91 $(18)
======== ====== ======== =======
Diluted Earnings (Loss) Per Share:
Continuing Operations Before
Accounting Change $0.26 $0.31 $0.48 $0.46
Discontinued Operations - 0.02 - 0.02
Cumulative Effect of Accounting
Change - - - (0.58)
-------- ------ -------- -------
Net Income (Loss) $0.26 $0.33 $0.48 $(0.10)
======== ====== ======== =======
Average Diluted Shares 190.4 188.9 189.9 187.8
======== ====== ======== =======
---
(1) The loss on disposition of a business relates to the sale of a
majority of the company's ownership interest in Reliance Electric
Limited Japan.
(2) The cumulative effect of accounting change relates to impairment
charges resulting from the adoption of Statement of Financial
Accounting Standards No. 142, Goodwill and Other Intangible
Assets.
ROCKWELL AUTOMATION, INC.
CONDENSED BALANCE SHEET
(in millions)
March 31, September 30,
2003 2002
------------- ---------------
ASSETS
Cash $296 $289
Receivables 636 645
Inventories 555 557
Deferred income taxes 181 175
Other current assets 119 109
------------- ---------------
Total current assets 1,787 1,775
Property 941 988
Goodwill 787 778
Other intangible assets 345 346
Other assets 149 137
------------- ---------------
Total $4,009 $4,024
============= ===============
LIABILITIES AND SHAREOWNERS' EQUITY
Short-term debt $152 $162
Accounts payable 305 325
Compensation and benefits 160 161
Income taxes payable 23 44
Other current liabilities 286 274
------------- ---------------
Total current liabilities 926 966
Long-term debt 770 767
Retirement benefits 405 381
Deferred income taxes 150 158
Other liabilities 125 143
Shareowners' equity 1,633 1,609
------------- ---------------
Total $4,009 $4,024
============= ===============
ROCKWELL AUTOMATION, INC.
CONDENSED CASH FLOW INFORMATION
(in millions)
Six Months Ended
March 31,
---------------------------
2003 2002
------------- ---------------
CONTINUING OPERATIONS:
OPERATING ACTIVITIES:
Income from continuing operations before
accounting change $91 $87
Adjustments to arrive at cash provided
by operating activities:
Depreciation 86 96
Amortization of intangible assets 11 11
Loss on disposition of a business 8 -
Receivables 19 71
Inventories 1 9
Accounts payable (7) (31)
Compensation and benefits (2) (38)
Changes in other assets and liabilities (6) (56)
------------- ---------------
Cash provided by operating activities 201 149
------------- ---------------
INVESTING ACTIVITIES:
Capital expenditures (42) (47)
Acquisitions of businesses, net of cash
acquired (25) (55)
Other investing activities (7) -
------------- ---------------
Cash used for investing activities (74) (102)
------------- ---------------
FINANCING ACTIVITIES:
Net (decrease) increase in debt (3) 90
Cash dividends (61) (61)
Purchases of treasury stock (66) -
Proceeds from the exercise of stock options 33 15
Other financing activities (2) -
------------- ---------------
Cash (used for) provided by financing
activities (99) 44
------------- ---------------
Effect of exchange rate changes on cash (21) 11
------------- ---------------
Cash provided by continuing operations 7 102
Cash used for discontinued operations - (36)
------------- ---------------
Increase in cash $7 $66
============= ===============
FREE CASH FLOW:
Cash provided by operating activities $201 $149
Capital expenditures (42) (47)
------------- ---------------
Free cash flow (see Note 1) $159 $102
============= ===============
---
(1) The company's definition of free cash flow, which is an internal
performance measurement, may be different from definitions used by
other companies.
ROCKWELL AUTOMATION, INC.
SUPPLEMENTAL INFORMATION
(in millions)
The company's press release contains information regarding free cash
flow, which is a non-GAAP financial measure. The company's definition
of free cash flow takes into consideration capital investment required
to maintain the operations of the company and execute its strategy.
Management believes that free cash flow provides useful information to
investors regarding the company's ability to generate cash from
business operations that is available for acquisitions and other
investments, debt service, dividends and share repurchases. Management
uses free cash flow as one measure to monitor and evaluate the
performance of the company and compensate its employees.
The following table summarizes free cash flow by quarter for the
company:
Quarter Ended
--------------------------------------------------------
Dec. 31, March 31, June 30, Sept. 30, Dec. 31, March 31,
2001 2002 2002 2002 2002 2003
-------- --------- -------- --------- -------- ---------
Cash provided
by operating
activities $87 $62 $146 $181 $104 $97
Capital
expenditures (19) (28) (24) (33) (15) (27)
-------- --------- -------- --------- -------- ---------
Free cash flow $68 $34 $122 $148 $89 $70
======== ========= ======== ========= ======== =========
In addition, the company's press release contains information
regarding regional sales excluding currency translation which is a
non-GAAP financial measure. Management believes this provides useful
information to investors since it reflects regional performance from
the company's core operational activities without the effect of
changes in currency rates, which is outside the control of management.
Management uses sales excluding translation to monitor and evaluate
the company's regional core operational performance. The following is
a reconciliation for the Control Systems segment of reported sales to
sales excluding translation for the quarter ended March 31, 2003:
Sales Excluding
Currency Currency
Sales Translation Translation
----- ----------- -----------
US $480 $- $480
Canada 67 (4) 63
Latin America 28 12 40
Europe 175 (30) 145
Asia-Pacific 80 (6) 74
Currency Translation - 28 28
----- ----------- -----------
Total Control Systems
Sales $830 $- $830
===== =========== ===========
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion