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 CHICAGO, Oct. 18 /PRNewswire/ -- Morton International today reported a 15 percent increase in sales in the first quarter of fiscal 1994 versus first quarter last year, and a 23 percent increase in income from operations for the same period. Net sales were $619.6 million and net income was $42.9 million for the quarter ending Sept. 30, 1993.
 Net earnings per share were 86 cents compared to per share income from operations of 71 cents last year. (In fiscal 1993, Morton recorded an after tax charge of $94.4 million, or $1.91 per share, for the cumulative effect of change in accounting for postretirement and postemployment benefits, causing the company to show a net loss of $1.20 per share in the first quarter fiscal 1993.)
 "Morton's businesses had a very strong first quarter, and except for a one-time, 9 cent per share net charge from the recently enacted tax changes, we would have reported 95 cents per share," said Charles S. Locke, Morton's chairman and chief executive officer.
 "Morton Automotive Safety Products continues its record breaking performance and the salt group remains a solid contributor to earnings. I am also extremely pleased with the results of our specialty chemicals businesses in the quarter."
 In the quarter, the company accrued a one-time, pretax charge of $9.3 million (12 cents a share) as a result of the tax changes in the Omnibus Budget Reconciliation Act of 1993. This charge to corporate expenses is attributable to incremental tax obligations related to some of its outstanding stock options. In addition, the company recorded an income tax benefit of $1.2 million, or 3 cents a share, for the impact the tax rate change had on net deferred tax assets outstanding at June 30, 1993, as well as the net benefit resulting from the reinstatement of the R&D credit, more than offsetting the corporate tax rate increase retroactive to Jan. 1, 1993. The net charge of the tax rate changes was 9 cents per share.
 Specialty chemical sales in the first quarter of fiscal 1994 increased 4 percent to $333.6 million and earnings increased 17 percent to $51.8 million over the same period last year. Several product lines showed improved quarterly sales and earnings results over the prior year, including the extrudable specialties part of packaging adhesives, dyes, plastic additives, industrial coatings, powder coatings, automotive coatings and traffic markings. Also contributing to the earnings gain were electronic materials, waterbased polymers and polymer systems.
 Partially offsetting the improvements of the specialty chemical segment were changes in foreign exchange rates from a year ago. In the current quarter, sales comparisons were negatively impacted by $15.4 million and earnings comparisons by $2.0 million due to currency changes.
 In the first quarter of fiscal 1994, the salt group's sales were $104.9 million, down slightly from sales of $106.8 million in the prior year's first quarter, mainly due to a change in the seasonality effect of a new promotional program. Earnings, however, grew 12 percent to $22.0 million. Despite the decreased sales, earnings increased as a result of tight cost control measures and efficiencies realized from higher production volumes.
 Morton Automotive Safety Products first quarter sales of $181.1 million increased 63 percent and earnings of $26.9 million increased 97 percent over the same period last year. Although sales of driver- and passenger-side inflators and modules continue to increase, the growth in passenger programs outpaced the increase in driver programs this quarter as consumers expressed strong preferences for cars with dual airbags. Profit margins reflect the benefit of an ongoing quality management program and its continued emphasis on efficiencies in production. In addition, the business had fewer preproduction expenses as compared to first quarter last year when the company was investing for this year's growth in demand for airbags, especially on the passenger side.
 Morton International is a Chicago-based manufacturer and marketer of specialty chemicals, automotive inflatable restraint systems and salt.
 Comparative results through Sept. 30:
 (in millions, except per share data)
 Three Months Ended Sept. 30,
 1993 1992
 Net sales $ 619.6 $ 538.1
 Interest, royalties and sundry income 4.6 4.3
 Total 624.2 542.4
 Deductions from income:
 Cost of products sold 426.3 369.7
 Selling, administrative and
 general expense 105.2 90.3
 Research and development expense 16.7 16.2
 Interest expense 7.2 8.5
 Amortization of goodwill 2.7 2.7
 Income taxes 23.2 20.1
 Total 581.3 507.5
 Income from operations 42.9 34.9
 Cumulative effect of change in accounting
 for postemployment and postretirement
 benefits other than pensions, net of taxes - (94.4)
 Net income (loss) $ 42.9 $ (59.5)
 Per Share Data:
 Income from operations $ .86 $ .71
 Cumulative effect of change in
 accounting for postemployment and
 postretirement benefits other than
 pensions -- (1.91)
 Net income (loss) $ .86 $ (1.20)
 Average shares outstanding (in thousands) 49,891 49,126
 Business Segment Information Three Months Ended Sept. 30,
 1993 1992
 Sales --------- ---------
 Specialty Chemicals $ 333.6 $ 320.4
 Salt 104.9 106.8
 Automotive Safety Products 181.1 110.9
 Total $ 619.6 $ 538.1
 Specialty Chemicals $ 51.8 $ 44.3
 Salt 22.0 19.6
 Automotive Safety Products 26.9 13.7
 Total $ 100.7 $ 77.6
 (a) Business segment profit is before income taxes, interest income, interest expense and allocation of corporate administrative expenses. Fiscal 1993 has been restated to include the incremental expense of the change in accounting for postretirement benefits.
 -0- 10/18/93
 /CONTACT: Nancy A. Hobor of Morton International, 312-807-2424/

CO: Morton International ST: Illinois IN: CHM SU: ERN

LG -- NY042 -- 3307 10/18/93 10:49 EDT
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Publication:PR Newswire
Date:Oct 18, 1993

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