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DURACELL REPORTS IMPROVED FIRST QUARTER RESULTS; UNVEILS PLAN TO GRANT STOCK OPTIONS TO ALL EMPLOYEES

 DURACELL REPORTS IMPROVED FIRST QUARTER RESULTS;
 UNVEILS PLAN TO GRANT STOCK OPTIONS TO ALL EMPLOYEES
 BETHEL, Conn., Oct. 22 /PRNewswire/ -- For its fiscal first quarter ended Sept. 26, 1992, Duracell International Inc. (NYSE: DUR) today reported increased alkaline battery volume, sales, operating income and earnings before extraordinary items.
 The world's leading manufacturer and marketer of high-performance alkaline batteries said earnings before extraordinary items rose to $42 million, or $.36 per share, from income of $40 million, or $.35 per share, in the prior-year quarter. Net income was also $42 million, or $.36 per share, versus net income of $1.1 million, or $.01 per share, in the year-earlier period. An extraordinary charge of $39 million, or $.34 per share, in last year's first quarter stemmed from the repurchase of subordinated debt. Weighted shares outstanding increased 5 percent in the quarter to 118.5 million shares as a result of the public sale of five million shares in October 1991.
 According to C. Robert Kidder, chairman and CEO of Duracell International, improved first quarter operating income and lower interest expense from deleveraging were offset by sharply higher taxes and losses from foreign exchange transactions reflected in other income.
 Sales grew 8 percent in the quarter due to alkaline volume growth in the United States, Asia and Latin America along with higher lithium battery sales and the positive impact of foreign currency translation. Higher sales and gross margins produced a 6 percent improvement in operating income. The gain was achieved despite elimination of short- term promotional programs in the United States and incremental spending behind the company's new high-power rechargeable battery system, Mr. Kidder said.
 Bullish on Fiscal 1993 Earnings
 "We continue to be bullish about fiscal 1993 earnings at Duracell International," Mr. Kidder emphasized. "We are particularly encouraged by unit growth in the domestic alkaline battery market which helped Duracell achieve first quarter results in the United States that exceeded expectations. Additionally, our Asian and Latin American businesses continue to expand and our European business remains stable despite uncertain monetary and economic conditions."
 Option Plan Unveiled Tying Vesting to Stock Performance
 Mr. Kidder also unveiled a proposed stock option plan for all Duracell employees linking accelerated vesting with superior performance of the company's common stock. He said the innovative plan -- designed to focus every Duracell employee on increasing profits and controlling costs -- will be voted on at the Oct. 27 Annual Shareholders' Meeting in New York.
 "Among our primary objectives is to reward Duracell shareholders by consistently increasing their total annual return," Mr. Kidder stated. "We believe this can be accomplished most effectively by creating a global organization operated by employee/shareholders; a company where the people responsible for producing growth can also share meaningfully in the value they help to create."
 Mr. Kidder said options covering up to eight million shares will eventually be issued to employees in connection with the new option plan called "Duracell Shares." He stated further that no significant earnings dilution is expected to result from the plan.
 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/Dollars in millions except per share amounts)
 QUARTER ENDED Percent
 Sept. 26, Sept. 28, Change
 1992 1991
 Alkaline unit volume 519.3 490.3 6
 Sales $430.5 $398.7 8
 Cost of sales 157.3 150.3 (5)
 Gross profit 273.2 248.4 10
 Gross margin 63.5 pct 62.3 pct 1.2 pp
 S, G & A expenses:
 Advertising and promotion 87.8 80.6 (9)
 Other 106.9 93.5 (14)
 Total 194.7 174.1 (12)
 Operating income 78.5 74.3 6
 Operating margin 18.2 pct 18.6 pct (.4pp)
 Interest expense 14.0 26.6 47
 Other income (expense) (3.6) .1 N/M
 Income before extraord.
 item and income taxes 60.9 47.8 27
 Effective tax rate 30.9 pct 16.1 pct (14.8pp)
 Provision for income taxes 18.8 7.7 N/M
 Income before extraord. item 42.1 40.1 5
 Extraord. item, net of
 income tax benefit -- (39.0) N/M
 Net income $42.1 $1.1 N/M
 Per share amounts:
 Income before extraord. item $.36 $.35
 Extraord. item -- (.34)
 Net income $.36 $.01
 Weighted average shares and
 share equivalents outstanding 118.5 113.2
 Geographic Analysis:
 Alkaline Volume:
 North America 259.1 250.7 3
 Europe 139.1 139.5 --
 Other International Markets 121.1 100.1 21
 Total 519.3 490.3 6
 Sales:
 North America 231.5 226.0 2
 Europe 142.7 127.1 12
 Other International Markets 56.3 45.6 23
 Total 430.5 398.7 8
 Operating income:
 North America 65.7 63.4 4
 Europe 24.4 21.1 16
 Other International Markets 6.6 5.1 29
 Total 96.7 89.6 8
 Corporate research
 and development (18.2) (15.3) (19)
 Total 78.5 74.3 6
 DURACELL INTERNATIONAL INC.
 Consolidated Balance Sheets
 (unaudited)
 (in millions except per share amounts)
 Sept. 26, June 30,
 1992 1992
 ASSETS
 Current assets:
 Cash and cash equivalents $ 15.6 $ 7.9
 Accounts receivable, less allowance of
 $21.3 and $21.7 340.4 270.5
 Inventories 213.9 222.0
 Prepaid and other current assets 31.5 27.7
 Total current assets 601.4 528.1
 Property, plant and equipment, net of
 accumulated depreciation of $139.8
 and $130.8 328.5 330.9
 Intangibles, net of accumulated
 amortization of $198.8 and $195.7 1,258.0 1,288.0
 Other assets 9.4 9.6
 Total assets $ 2,197.3 $ 2,156.6
 LIABILITIES AND EQUITY
 Current liabilities:
 Accounts payable $ 85.6 $ 92.5
 Short-term borrowings and current portion of
 long-term debt 21.4 37.6
 Accrued liabilities 205.9 182.2
 Total current liabilities 312.9 312.3
 Long-term debt 702.3 696.5
 Deferred income taxes 79.9 77.9
 Other non-current liabilities 59.6 61.9
 Total liabilities 1,154.7 1,148.6
 Equity:
 Common stock and capital surplus 998.9 992.0
 Retained earnings (accumulated deficit) 26.6 (6.5)
 Accumulated translation adjustment 17.1 22.5
 Total equity 1,042.6 1,008.0
 Total liabilities and equity $ 2,197.3 $ 2,156.6
 Book value per share $9.24 $8.98
 Shares of common stock outstanding 112.8 112.3
 Total debt to capital ratio 41.0 pct 42.1 pct
 DURACELL INTERNATIONAL INC.
 Statements of Consolidated Cash Flows
 (unaudited)
 (in millions)
 QUARTER ENDED
 Sept. 26, Sept. 28,
 1992 1991
 Operating activities:
 Income before extraordinary items $42.1 $40.1
 Adjustments to reconcile income before extra-
 ordinary items to net cash provided by
 operating activities:
 Depreciation 10.1 8.7
 Amortization 12.3 12.0
 Other noncash items 10.6 2.3
 (Increase) decrease in:
 Accounts receivable (74.9) (75.3)
 Inventories 6.7 (6.4)
 Other working capital 19.9 21.3
 Cash provided by operating activities 26.8 2.7
 Investing activities:
 Purchase of property, plant and equipment and
 other (10.7) (10.8)
 Cash used by investing activities (10.7) (10.8)
 Financing activities:
 Repurchase of subordinated debt -- (370.2)
 Issuance (repayment) of revolving credit
 borrowings, net (57.9) 403.1
 Issuance of commercial paper, net 61.4 13.6
 Premium on purchase of subordinated debt -- (32.0)
 Dividends paid (9.0) --
 Net change in other borrowings and other (4.4) (4.3)
 Cash provided (used) by financing activities (9.9) 10.2
 Effect of exchange rate changes on cash 1.5 1.7
 Increase in cash and cash equivalents 7.7 3.8
 Cash and cash equivalents, beginning of period 7.9 5.5
 Cash and cash equivalents, end of period $15.6 $ 9.3
 Cash paid during the period for:
 Interest $12.3 $28.2
 Taxes $ 3.8 $ .4
 -0- 10/22/92
 /CONTACT: Walter B. Rogers of Duracell, 203-796-4364/
 (DUR) CO: Duracell International Inc. ST: Connecticut IN: SU: ERN


GK-KD -- NY005 -- 3258 10/22/92 07:31 EDT
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