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DURACELL REPORTS BIG JUMP IN THIRD QUARTER INCOME

 DURACELL REPORTS BIG JUMP IN THIRD QUARTER INCOME
 BETHEL, Conn., April 30 /PRNewswire/ -- Duracell International Inc.


(NYSE: DUR) today reported a significant increase in net income in its seasonally slow third quarter ended March 28, 1992. Net earnings totaled $4 million, or $.04 per share, versus a net loss of $24 million, or $.33 per share, in the year-earlier quarter.
 "This marks the first time we have achieved a net profit in our seasonally slow third quarter," reported C. Robert Kidder, Duracell chairman and chief executive officer. "We anticipate a strong fourth quarter performance that will enable us to deliver results for the year in line with expectations," he went on to say. "We base our assessment on a strengthening U.S. market compared with last quarter and the prior year, an improving sales picture in Europe due to restocking of battery inventories, and continued double-digit sales gains in our Latin America and Pacific Rim markets."
 A sharp reduction in interest expense was the major factor behind the improved earnings, partially offset by lower operating income stemming from lower sales. Although worldwide sales declined 6 percent in the wake of a 3 percent drop in alkaline volume, gross margins improved in the period.
 Comparison with a strong year-ago quarter accounted for about two- thirds of the 7 percent decline in North American sales; revenues in last year's third quarter soared 31 percent as customers overstocked inventories in advance of a price increase. Also contributing to the drop were continuing soft retail conditions in the U.S., absence of short-term promotional programs and non-repeat of sales connected with the Persian Gulf war. The company said it maintained its alkaline market share in North America despite soft sales.
 In Europe, sluggish economies, a temporary volume overhang from the prior quarter and a $6 million negative foreign exchange translation combined to produce a 10 percent drop in sales. A 9 percent sales gain in Latin America and Pacific Rim markets helped offset weakness in North America and Europe.
 For the nine months ended March 28, 1992, Duracell reported a 181 percent increase in net income to $104 million, or $.90 per share, from $37 million, or $.49 per share, the prior year. Earnings per share before extraordinary items were $1.23 versus $.56 the prior year. The $.33 impact of extraordinary items this year reflects costs associated with the repurchase of subordinated debt while $.07 in the prior year related to a refinancing.
 Despite a negative foreign exchange impact of $31 million, sales in the nine months increased 4 percent to $1.3 billion on a 6 percent improvement in unit volume and operating income rose to $239 million. Weighted average shares outstanding increased to 116 million from 75 million last year.
 G. Wade Lewis, Duracell's chief financial officer, noted that the company is nearing a total debt-to-capital ratio of 40 percent. He emphasized that, after fully funding attractive investments within the battery business, Duracell intends to maintain an investment grade credit rating. Lewis said he believes this can be achieved in the current environment by maintaining a total debt-to-capital ratio generally in the range of 30 percent to 40 percent. The company intends to return excess cash to shareholders by paying a cash dividend with a payout ratio in line with comparable consumer products companies, Lewis stated. He said this payment currently is expected to commence at some point
in fiscal 1993. Lewis also said that, consistent with these objectives, the board of directors will consider making share repurchases in the future, depending on market conditions and the company's financial condition.
 Duracell International Inc., headquartered in Bethel, is the world's leading manufacturer and marketer of high-performance alkaline batteries. Duracell's batteries are sold throughout the world, primarily under the DURACELL trademark.
 DURACELL INTERNATIONAL INC.
 Statements of Consolidated Operations
 (Unaudited)
 (Units/$ in millions, except per share amounts)
 Quarter Ended Nine Months Ended
 3/28/92 3/30/91 Pct. 3/28/92 3/30/91 Pct.
 Change Change
 Alkaline unit volume 336.8 345.5 (3) 1,540.1 1,447.9 6
 Sales $273.8 $290.9 (6) $1,261.0 $1,212.8 4
 Cost of sales 111.6 122.6 9 461.3 472.6 2
 Gross profit 162.2 168.3 (4) 799.7 740.2 8
 Gross margin (pct.) 59.2 57.9 1.3pp 63.4 61.0 2.4pp
 Selling, general &
 administrative exps. 143.3 146.1 2 561.1 524.2 (7)
 Operating income 18.9 22.2 (15) 238.6 216.0 10
 Operating margin (pct.) 6.9 7.6 (.7pp) 18.9 17.8 1.1pp
 Interest expense 16.0 48.2 67 63.0 149.3 58
 Other income (expense) (1.4) .6 NM (.3) (3.3) 91
 Inc. (loss) bef. extraord.
 items & inc. taxes 1.5 (25.4) NM 175.3 63.4 176
 Effective tax rate (pct.) NM 5.1 NM 18.2 32.7 14.5pp
 Provision (benefit) for
 income taxes (2.7) (1.3) 108 31.9 20.7 (54)
 Income (loss) before
 extraordinary items 4.2 (24.1) NM 143.4 42.7 236
 Extraordinary items -- -- -- (39.0) (5.5) NM
 Net income (loss) 4.2 (24.1) NM 104.4 37.2 181
 Per share amounts:
 Income (loss) before
 extraordinary items $.04 $(.33) $1.23 $.56
 Extraordinary items -- -- (.33) (.07)
 Net income (loss) $.04 $(.33) $ .90 $.49
 Weighted avg. shrs. &
 shr. equiva. outstndg. 118.7 72.8 116.4 75.2
 Geographic segments:
 Sales:
 North America $121.1 $130.8 (7) $ 649.3 $ 614.2 6
 Europe 107.5 118.8 (10) 461.0 469.4 (2)
 Other intl. markets 45.2 41.3 9 150.7 129.2 17
 273.8 290.9 (6) 1,261.0 1,212.8 4
 Operating income:
 North America $ 19.0 $ 21.3 (11) $ 177.5 $ 154.2 15
 Europe 14.0 16.1 (13) 91.7 91.3 --
 Other intl. markets 3.1 3.8 (18) 18.1 15.9 14
 36.1 41.2 (12) 287.3 261.4 10
 Corporate (17.2) (19.0) 9 (48.7) (45.4)(7)
 18.9 22.2 (15) 238.6 216.0 10
 NOTE: The effective tax rate decreased for the first nine months because an increased percentage of the earnings were generated from domestic operations which continue to benefit from the utilization of net operating loss carryforwards. The increase in domestic earnings was driven by higher operating income and lower interest.
 DURACELL INTERNATIONAL INC.
 Consolidated Balance Sheets
 (In millions, except per share amounts)
 3/28/92 6/30/91
 (Unaudited)
 ASSETS
 Current assets:
 Cash & cash equivalents $ 6.8 $ 5.5
 Accounts receivable, less allowance
 of $19.3 and $15.6 240.9 227.2
 Inventories 202.1 179.8
 Prepaid and other current assets 24.9 23.8
 Total current assets 474.7 436.3
 Property, plant & equipment, net of
 accumulated depreciation of $119.2
 and $99.0 323.6 312.0
 Intangibles, net of accumulated
 amortization of $181.7 and $142.3 1,270.1 1,285.9
 Deferred financing costs 7.4 18.3
 Other assets 3.4 1.6
 Total assets 2,079.2 2,054.1
 LIABILITIES AND EQUITY
 Current liabilities:
 Accounts payable $ 86.2 $ 101.6
 Short-term borrowings and current
 portion of long-term debt 40.0 26.2
 Accrued liabilities 172.1 160.1
 Total current liabilities 298.3 287.9
 Long-term debt 659.6 897.1
 Deferred income taxes 70.3 64.2
 Other non-current liabilities 80.4 88.8
 Total liabilities 1,108.6 1,338.0
 Commitments and contingencies
 Equity:
 Common stock & capital surplus 989.1 846.3
 Accumulated deficit (29.9) (134.3)
 Accumulated translation adjustment 11.4 4.1
 Total equity 970.6 716.1
 Total liabilities & equity 2,079.2 2,054.1
 Book value per share $8.66 $6.76
 Shares of common stock outstanding 112.1 106.0
 Total debt to capital ratio (percent) 42 56
 DURACELL INTERNATIONAL INC.
 Statements of Consolidated Cash Flows
 (Unaudited -- In millions)
 For the Nine
 Fiscal Months Ended
 3/28/92 3/30/91
 Operating activities:
 Income before extraordinary items $ 143.4 $ 42.7
 Adjustments to reconcile inc. bef.
 extraordinary items to cash provided
 by operating activities:
 Depreciation 26.7 26.7
 Amortization 36.2 36.4
 Non-cash interest 6.7 51.0
 Other non-cash items 1.9 8.2
 (Increase) decrease in:
 Accounts receivable (7.2) (16.8)
 Inventories (15.9) 18.3
 Other working capital (12.4) (11.0)
 Cash provided by operating activities 179.4 155.5
 Investing activities:
 Purchase of property, plant & equipment (40.5) (19.5)
 Proceeds from sales of assets 4.3 .6
 Acquisition of business -- (10.3)
 Other (.5) 1.6
 Cash used by investing activities (36.7) (27.6)
 Financing activities:
 Issuance of common stock 137.4 --
 Repurchase of subordinated debt (370.2) --
 Issuance of revolving credit
 borrowings, net 262.0 16.6
 Issuance (repayment) of commercial
 paper, net (150.9) (149.4)
 Premium on purchase of subordinated
 debt (32.0) --
 Net change in other borrowings and
 other 13.3 5.4
 Cash used by financing activities (140.4) (127.4)
 Effect of exchange rate changes on cash (1.0) (2.6)
 Increase in cash and cash equivalents 1.3 (2.1)
 Cash and cash equivalents, beginning of
 period 5.5 8.9
 Cash and cash equivalents, end of period 6.8 6.8
 Cash paid during the period for:
 Interest $66.5 $112.2
 Taxes $13.1 $ 7.4
 -0- 4/30/92
 /CONTACT: Walter Rogers of Duracell, 203-796-4364/ CO: Duracell International Inc. ST: Connecticut IN: HOU SU: ERN


TS-PS -- NY009 -- 4727 04/30/92 08:02 EDT
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