SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
1-5482
(Commission File Number)
TYCO INTERNATIONAL LTD.
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 04-2297459
(State of Incorporation) (IRS Employer
Identification Number)
ONE TYCO PARK, EXETER, NEW HAMPSHIRE 03833
(Address of registrant's principal executive office)
603-778-9700
(Registrant's telephone number)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X . No .
The number of shares of common stock outstanding as of April 27, 1996 was
152,551,626.
<PAGE>
TYCO INTERNATIONAL LTD.
INDEX TO FORM 10-Q
PAGE
PART I - FINANCIAL INFORMATION:
Item 1 - Financial Statements -
Consolidated Balance Sheet - March 31, 1996 and
June 30, 1995 1-2
Consolidated Statement of Income for the Third Quarters
and Nine Months ended March 31, 1996 and 1995 3
Consolidated Statement of Changes in Shareholders'
Equity for the Nine Months ended March 31,
1996 and 1995 4
Consolidated Statement of Cash Flows for the Nine
Months ended March 31, 1996 and 1995 5
Notes to Consolidated Financial Statements 6
Item 2 - Management's Discussion and Analysis of
Financial Condition and Operating Results 10-12
PART II - OTHER INFORMATION:
Item 6 - Exhibits and Reports on Form 8-K 13
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEET
ASSETS
<TABLE><CAPTION>
(unaudited)
(in thousands) March 31, 1996 June 30, 1995
- ------------------------------------------------------------------------------------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 61,617 $ 66,021
Receivables, less allowance for doubtful
accounts of $36,142 in fiscal 1996 and
$29,554 in fiscal 1995 655,009 527,946
Contracts in process 123,772 104,526
Inventories 611,023 592,158
Deferred income taxes 109,391 108,118
Prepaid expenses and other 68,463 53,132
------------ ------------
1,629,275 1,451,901
---------- ----------
PROPERTY, PLANT AND EQUIPMENT:
Land 34,627 33,842
Buildings 318,457 286,839
Machinery and equipment 901,321 784,737
Leasehold improvements 20,661 17,881
Construction in progress 59,724 46,178
Accumulated depreciation (623,895) (511,006)
----------- -----------
710,895 658,471
----------- -----------
GOODWILL AND OTHER INTANGIBLE ASSETS 1,168,335 1,004,463
REORGANIZATION VALUE IN EXCESS OF
IDENTIFIABLE ASSETS 104,116 108,801
DEFERRED INCOME TAXES 77,594 101,678
OTHER ASSETS 75,416 56,147
------------ -------------
$3,765,631 $3,381,461
========== ==========
</TABLE>
See notes to consolidated financial statements.
1
<PAGE>
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE><CAPTION>
(unaudited)
(in thousands except share data) March 31, 1996 June 30, 1995
- -------------------------------------------------------------------------------------
<S> <C> <C>
CURRENT LIABILITIES:
Loans payable and current maturities of
long-term debt $ 186,099 $ 84,387
Accounts payable 404,183 417,395
Accrued expenses 450,827 423,387
Contracts in process - billings in excess
of costs 96,523 75,546
Income taxes 77,558 72,370
Deferred income taxes 10,885 11,630
------------- -------------
1,226,075 1,084,715
----------- -----------
DEFERRED INCOME TAXES 9,354 9,599
LONG-TERM DEBT 516,435 506,417
OTHER LIABILITIES 182,194 146,049
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Preferred stock, $1 par value, authorized
2,000,000 shares; none outstanding - -
Common stock, $.50 par value, authorized
180,000,000 shares; outstanding 152,519,854 shares in fiscal 1996 and
76,365,001 shares in fiscal 1995, net of reacquired shares of 16,056,977 in
fiscal 1996
and 7,960,740 in fiscal 1995 76,260 38,183
Capital in excess of par value, net of
deferred compensation of $13,022 in
fiscal 1996 and $21,636 in fiscal 1995 606,323 620,633
Currency translation adjustment (29,335) (9,451)
Retained earnings 1,178,325 985,316
----------- ------------
1,831,573 1,634,681
----------- -----------
$3,765,631 $3,381,461
========== ==========
</TABLE>
See notes to consolidated financial statements.
2
<PAGE>
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
For the Periods ended March 31, Fiscal Third Quarter Fiscal Nine Months
1996 and 1995 (in thousands ----------------------------- ----------------------------
except per share data) 1996 1995 1996 1995
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SALES $1,257,619 $1,135,100 $3,717,706 $3,286,995
---------- ---------- ---------- ----------
COSTS AND EXPENSES:
Cost of sales 910,078 830,840 2,715,724 2,403,466
Selling, general and administrative 195,378 177,566 586,260 531,677
Merger and transaction related costs - - - 37,170
Interest 16,309 15,583 46,646 47,286
------------- ------------- ------------- -------------
1,121,765 1,023,989 3,348,630 3,019,599
----------- ----------- ----------- -----------
Income before income taxes and
extraordinary item 135,854 111,111 369,076 267,396
Income taxes (56,380) (46,156) (153,167) (122,432)
------------- ------------- ------------ ------------
Net income before extraordinary item 79,474 64,955 215,909 144,964
Extraordinary item, net of tax benefit - - - (2,600)
----------------- ----------------- ----------------- -------------
NET INCOME $ 79,474 $ 64,955 $ 215,909 $ 142,364
============ ============ =========== ===========
NET INCOME PER SHARE:
Before extraordinary item $ .52 $ .43 $1.41 $ .96
Extraordinary Item - - - $(.02)
Net income $ .52 $ .43 $1.41 $ .95
CASH DIVIDENDS PER COMMON SHARE $ .05 $ .05 $ .15 $ .15
===== ===== ====== =====
COMMON EQUIVALENT SHARES 152,791 152,250 152,809 150,396
======= ======= ======= =======
</TABLE>
See notes to consolidated financial statements.
3
<PAGE>
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED)
For the Nine Months ended March 31, 1996 and 1995
<TABLE><CAPTION>
Capital in Currency
Common Stock Excess of Translation Retained
(in thousands) $.50 Par Value Par Value Adjustment Earnings
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
BALANCE AT JUNE 30, 1994 $35,542 $567,476 $(40,874) $ 804,882
Net income 142,364
Dividends (19,825)
Restricted stock grants,
cancellations, tax
benefits and other 151 945
Warrants, options exercised 1,962 47,320
Currency translation adjustment 40,678
Amortization of deferred
compensation 3,478
------- -------- ---------- -----------
BALANCE AT MARCH 31, 1995 $37,655 $619,219 $ (196) $ 927,421
======= ======== ========== ===========
BALANCE AT JUNE 30, 1995 $38,183 $620,633 $ (9,451) $ 985,316
Net income 215,909
Dividends (22,900)
Restricted stock grants,
cancellations, tax
benefits and other (27) 22,921
Warrants, options exercised 10 190
Currency translation adjustment (19,884)
Amortization of deferred
compensation 7,543
Common stock reacquired (101) (6,769)
Two-for-one stock split effected in the
form of a 100% stock dividend 38,195 (38,195)
------- -------- ---------- -----------
BALANCE AT MARCH 31, 1996 $76,260 $606,323 $ (29,335) $ 1,178,325
======= ======== ========== ===========
</TABLE>
See notes to consolidated financial statements.
4
<PAGE>
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
For the Nine Months ended March 31,
(in thousands) 1996 1995
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $215,909 $ 142,364
Adjustments to reconcile net income to net
cash provided by operating activities:
Extraordinary item - 2,600
Depreciation 69,647 66,447
Amortization of intangibles 37,048 31,058
Deferred income taxes 38,330 17,708
Provision for losses on accounts receivable
and inventory writedowns 20,647 12,147
Changes in assets and liabilities net of
effects from acquisitions and divestitures:
Increase in accounts receivable
and contracts in process (62,017) (38,147)
Increase in inventory (27,101) (54,322)
Decrease in accounts payable and
accrued expenses (77,938) (16,028)
Increase in income taxes payable 7,540 994
Other 4,195 942
----------- ----------
Net cash provided by operating activities 226,260 165,763
----------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (90,215) (88,196)
Purchase of businesses, net of cash acquired (245,318) (58,031)
Net proceeds from sale of acquired assets 49,768 -
----------- ----------
Net cash used in investing activities (285,765) (146,227)
----------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long term debt - 144,889
Proceeds from (payments on) long-term
debt and lines of credit 84,671 (227,483)
Dividends paid (22,900) (16,664)
Exercise of stock options and warrants 200 49,282
Common stock reacquired (6,870) -
----------- ----------
Net cash provided by (used in) financing activities 55,101 (49,976)
----------- ----------
Decrease in cash and cash equivalents (4,404) (30,440)
Cash and cash equivalents at beginning of year 66,021 75,843
----------- ----------
Cash and cash equivalents at end of period $ 61,617 $ 45,403
=========== ==========
</TABLE>
See notes to consolidated financial statements.
5
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. The unaudited financial statements presented herein have been
prepared in accordance with the instructions to Form 10-Q and do not
include all of the information and note disclosures required by
generally accepted accounting principles. These statements should be
read in conjunction with the financial statements and notes thereto
for the year ended June 30, 1995 included in the Company's Form 10-K
for the year ended June 30, 1995. The accompanying financial
statements have not been audited by independent accountants in
accordance with generally accepted auditing standards, but in the
opinion of management such financial statements include all
adjustments, consisting only of normal recurring adjustments,
necessary to summarize fairly the Company's financial position and
results of operations.
2. On October 11, 1995, the Company's Board of Directors authorized a
two-for-one stock split to be effected in the form of a stock
dividend. One additional share of common stock was distributed on
November 14, 1995 for each share of common stock of the Company held
by shareholders of record on October 30, 1995. The Company
transferred $38.2 million from the capital in excess of par value
account to the common stock account on the effective date of the
split. Earnings per share, common equivalent shares and cash
dividends per share have been restated to reflect the stock split.
3. On December 29, 1995, the Company sold certain assets, including
trademarks and patents, of the Curad and Futuro consumer healthcare
products business owned by its Kendall subsidiary. Under the
agreements, Kendall will continue to manufacture certain Curad and
Futuro products for the buyer under long-term supply agreements. The
Company received net cash proceeds of $49.8 million for the sale of
the brand names and certain domestic assets. The Company will
continue to receive other payments, including non-compete payments,
through fiscal 2001. The Company has also granted to the buyer
options to acquire certain additional trademarks, patents and other
international assets. The gain on the sale was not material to the
Company's results of operations.
4. On January 19, 1996, the Company acquired The Earth Technology
Corporation ("Earth Tech"), an environmental engineering and
water/waste water management company. On February 1, 1996, the
Company acquired Professional Medical Products, Inc. ("ProMed"), a
manufacturer of disposable medical products. These purchases were
made utilizing cash on hand as well as borrowings under the
Company's uncommitted lines of credit. The acquisitions, which have
a combined purchase price of approximately $206 million, have been
accounted for as purchases, with their results of operations
consolidated with the Company's from their respective acquisition
dates.
6
<PAGE>
5. Long-term debt is as follows:
- -------------------------------------------------------------------------------
March 31, June 30,
(in thousands) 1996 1995
- -------------------------------------------------------------------------------
Credit agreement $ - $ -
Uncommitted lines of credit 87,800 -
Insurance company note 55,000 55,000
8.125% public notes due 1999 144,918 144,901
6.375% public notes due 2004 104,364 104,301
9.5% public debentures due 2022 199,588 199,575
8.0% public debentures due 2023 49,960 49,959
Other 60,904 37,068
---------- ----------
702,534 590,804
Less current portion and loans payable 186,099 84,387
--------- ----------
$516,435 $506,417
======== ========
Under the Company's credit agreement with a group of commercial
banks, the Company has the right to borrow $300 million or a portion
thereof until October 1999 for its general corporate purposes. The
principal amount then outstanding will be due and payable at that
time. Interest payable on borrowings is variable based upon the
Company's option of selecting a Eurodollar rate plus 0.325%, a
certificate of deposit rate plus 0.45% or a base rate, as defined.
The Company's uncommitted lines of credit are arrangements which
allow the Company to borrow from commercial banks on an "as offered"
basis. The borrowings and repayments occur daily and contain no
specific terms other than due dates and interest rates. The due
dates generally range from overnight to 90 days and interest rates
approximate those available under the credit agreement.
In connection with the refinancing of certain of its Kendall
subsidiary's notes, the Company recorded a charge of $4.3 million
($2.6 million after tax), representing unamortized debt issuance
fees and a call premium, as an extraordinary loss for the Company's
quarter ended December 31, 1994.
Under its various loan agreements, the Company is required to meet
certain covenants, none of which is considered restrictive to the
operations of the Company.
6. The Company has an agreement under which it sells participating
interests in a defined pool of trade accounts receivable. The
maximum permitted under the agreement was $225 million in fiscal
1996 and $150 million in fiscal 1995. The proceeds of sale are less
than the face amount of accounts receivable sold by an amount which
approximates the purchaser's financing cost of issuing its own
commercial paper backed by these accounts receivable. The discount
from the face amount was $2.8 million and $2.2 million during the
third quarter of fiscal 1996 and 1995, respectively, and $9.5
million and $5.8 million for the first nine months of fiscal 1996
and 1995, respectively, and has been included in selling, general
and administrative expense in the Company's Consolidated Statement
of Income.
7
<PAGE>
7. Selected information for the Company's four industry segments
follows (in thousands):
<TABLE><CAPTION>
Third Quarter Ended Nine Months Ended
March 31, March 31,
1996 1995 1996 1995
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
SALES:
Disposable and Specialty
Products $ 357,734 $ 358,266 $1,060,600 $1,021,605
Fire Protection 497,151 419,389 1,452,043 1,221,333
Flow Control Products 276,193 250,132 840,364 731,106
Electrical and Electronic
Components 126,541 107,313 364,699 312,951
---------- ---------- ---------- ----------
$1,257,619 $1,135,100 $3,717,706 $3,286,995
========== ========== ========== ==========
INCOME BEFORE INCOME TAXES
AND EXTRAORDINARY ITEM:
Disposable and Specialty
Products $ 75,397 $ 69,402 $ 205,615 $ 190,802
Fire Protection 33,235 21,774 90,563 60,972
Flow Control Products 28,441 22,588 80,152 62,099
Electrical and Electric
Components 24,314 19,246 67,113 55,841
--------- --------- --------- ---------
Total operations 161,387 133,010 443,443 369,714
Interest expense (16,309) (15,583) (46,646) (47,286)
Corporate and other
amounts (1) (9,224) (6,316) (27,721) (55,032)
--------- --------- --------- ---------
$ 135,854 $ 111,111 $ 369,076 $ 267,396
========= ========= ========= =========
</TABLE>
(1) The nine months ended March 31, 1995 include charges of $37.2 million
for merger and transaction related costs.
8
<PAGE>
8. Inventories are classified as follows (in thousands):
March 31, 1996 June 30, 1995
-------------- -------------
Purchased materials and
manufactured parts $162,048 $161,243
Work in process 115,838 98,193
Finished goods 333,137 332,722
-------- --------
$611,023 $592,158
======== ========
9 In the normal course of business, the Company is liable for contract
completion and product performance. In addition, the Company is in
receipt of notifications from various environmental agencies that
conditions at a number of sites where hazardous wastes of the
Company and other persons were disposed of may require cleanup and
other possible remedial action. In the opinion of management, these
obligations will not materially affect the Company's financial
position or results of operations.
9
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND OPERATING RESULTS
OVERVIEW
For the first nine months of fiscal 1996, net income before extraordinary item
was $215.9 million, or $1.41 per share, compared with $145.0 million, or $.96
per share, for the first nine months of fiscal 1995. Excluding the $31.2
million, or $.21 per share, after tax charge for merger and transaction related
costs related to the Kendall transaction in fiscal 1995, net income before
extraordinary item rose 23%. The increase was attributable to strong earnings
improvements in each of the Company's business segments.
RESULTS OF OPERATIONS
THIRD QUARTER OF FISCAL 1996 COMPARED TO THIRD QUARTER OF FISCAL 1995:
Sales increased 11% during the third quarter of fiscal 1996 to $1.26 billion
from $1.14 billion in the third quarter of fiscal 1995. Sales of the Disposable
and Specialty Products group were flat due principally to decreased sales as a
result of Kendall's sale of Futuro in the second quarter of fiscal 1996 as well
as decreased sales at Armin resulting from lower resin prices. These decreases
were somewhat offset by inclusion of the sales of ProMed, which was acquired by
Kendall during the third quarter of fiscal 1996. Sales of the Fire Protection
group increased $77.8 million to $497.2 million, or 19%, due to increased sales
in the Company's contracting businesses in each geographic region, as well as
sales resulting from the Company's acquisition of Earth Tech in the third
quarter of fiscal 1996. Sales of the Flow Control group increased $26.1 million
to $276.2 million, or 10%, principally reflecting increased volume at Grinnell's
distribution operations and at Allied's pipe and tube business, including
businesses acquired in the second half of fiscal 1995. Sales of the Electrical
and Electronic Components group increased $19.2 million to $126.5 million, or
18%, resulting from increased sales of underwater communications cable systems
at Simplex as well as higher sales at the printed circuit businesses and at
Allied's electrical conduit operations.
For the third quarter of fiscal 1996 as compared to the third quarter of fiscal
1995, operating profits of the Disposable and Specialty Products group increased
$6.0 million to $75.4 million, or 9%, due primarily to higher earnings at
Kendall partially offset by decreased earnings at Armin where profits continue
to be adversely affected by changes in raw material costs. Operating profits of
the Fire Protection group increased $11.5 million to $33.2 million, or 53%, due
to higher margins in North America and Europe contracting, as well as the
inclusion of earnings from Earth Tech, which was acquired during the third
quarter of fiscal 1996. Operating profits of the Flow Control group increased
$5.8 million to $28.4 million, or 26%, due to increased earnings at Allied's
pipe and tube business, including the results of businesses acquired in the
second half of fiscal 1995, as well as at Mueller and at Grinnell's distribution
operations in both the U.S. and Europe. Operating profits of the Electrical and
Electronic Components group increased $5.1 million to $24.3 million, or 26%, due
principally to higher earnings at Simplex, at the printed circuit businesses and
at Allied's electrical conduit operations.
The impact on the consolidated sales and results of operations from changes in
foreign exchange rates relative to the value of the U.S. dollar for the third
quarter of fiscal 1996 as compared to the same period of fiscal 1995 was not
material.
Interest expense increased slightly during the third quarter of fiscal 1996 from
the third quarter of fiscal 1995 due principally to higher average debt
balances, offset partially by slightly lower interest rates.
10
<PAGE>
FIRST NINE MONTHS OF FISCAL 1996 COMPARED WITH FIRST NINE MONTHS OF FISCAL 1995:
Sales increased 13% during the first nine months of fiscal 1996 to $3.72 billion
from $3.29 billion during the first nine months of fiscal 1995. Sales of the
Disposable and Specialty Products group increased $39.0 million to $1.06
billion, or 4%. Increased sales principally at Kendall and, to a lesser extent,
at Ludlow were partially offset by decreased sales at Armin and by Kendall's
sale of Futuro in the second quarter of fiscal 1996. Kendall's sales include the
sales of ProMed, which was acquired during the third quarter of fiscal 1996.
Sales of the Fire Protection group increased $230.7 million to $1.45 billion, or
19%, due to increased sales in the contracting business in each geographic
region, as well as sales resulting from the acquisition of Earth Tech in the
third quarter of fiscal 1996. Sales of the Flow Control group increased $109.3
million to $840.4 million, or 15%, reflecting higher volume at Allied, including
businesses acquired in the second half of fiscal 1995, as well as from
Grinnell's distribution operations. Sales of the Electrical and Electronic
Components group increased $51.7 million to $364.7 million, or 17%, resulting
principally from higher sales of underwater communications cable systems at
Simplex as well as at the printed circuit businesses and at Allied's electrical
conduit operations.
For the first nine months of fiscal 1996 as compared to the first nine months of
fiscal 1995, operating profits of the Disposable and Specialty Products group
increased $14.8 million to $205.6 million, or 8%, reflecting higher earnings at
Kendall and Ludlow partially offset by decreased earnings at Armin where profits
were adversely affected by changes in raw material costs. Operating profits of
the Fire Protection group rose $29.6 million to $90.6 million, or 49%, due
principally to higher margins at fire protection operations in each geographic
region, as well as inclusion of earnings from Earth Tech, which was acquired
during the third quarter of fiscal 1996. The operating profits of the Flow
Control group increased $18.1 million to $80.2 million, or 29%, resulting
principally from increased earnings at Allied and Mueller as well as at
Grinnell's European distribution operations. Operating profits of the Electrical
and Electronic Components group increased $11.3 million to $67.1 million, or
20%, due to increased earnings at Simplex, the printed circuit businesses and at
Allied's electrical conduit operations.
The impact on the consolidated sales and results of operations from changes in
foreign exchange rates relative to the value of the U.S. dollar for the first
nine months of fiscal 1996 as compared to the same period of fiscal 1995 was not
material.
Interest expense decreased slightly to $46.6 million during the first nine
months of fiscal 1996 as compared to the first nine months of fiscal 1995 due
principally to lower interest rates offset by higher average debt balances.
LIQUIDITY AND CAPITAL RESOURCES
As presented in the Consolidated Statement of Cash Flows, net cash provided by
operating activities was $226.3 million during the first nine months of fiscal
1996. The significant changes in working capital accounts were an increase of
$62.0 million in accounts receivable and contracts in process, an increase of
$27.1 million in inventory and a $77.9 million decrease in accounts payable and
accrued expenses. Net changes in other working capital accounts were not
significant during the period.
11
<PAGE>
During the first nine months of fiscal 1996, the Company used cash to (i)
acquire a U.S. and a German disposable and specialty products company, a U.S.
fire protection company, two European flow control companies, two U.S. flow
control companies and an environmental engineering and water/waste water
management company for an aggregate of $245.3 million; (ii) purchase $90.2
million of property and equipment; (iii) pay dividends of $22.9 million and (iv)
reacquire shares for $6.9 million. The Company received cash of $49.8 million
from the sale of certain brand names and domestic assets of the Curad and Futuro
consumer healthcare products business.
At March 31, 1996 the Company's total debt was $702.5 million as compared to
$590.8 million at June 30, 1995. The Company utilized borrowings under its
uncommitted lines of credit to partially finance its acquisitions of Earth Tech
and ProMed.
Shareholders' equity was $1.83 billion or $12.01 per share at March 31, 1996
compared to $1.63 billion or $10.70 per share (after giving effect to the stock
split) at June 30, 1995. The increase is due primarily to fiscal 1996 net
income. Total debt as a percent of total capitalization (total debt and
shareholders' equity) was 28% at March 31, 1996 and 27% at June 30, 1995.
Working capital requirements for the remainder of fiscal 1996 are not expected
to significantly exceed fiscal 1995 levels. The level of capital expenditures
may increase slightly in fiscal 1996 as compared to fiscal 1995 and the source
of funds for such expenditures is expected to be cash from operations.
The Company believes that its funding sources are adequate for its anticipated
capital and operating requirements through expected cash flows from operations
and established financing arrangements.
BACKLOG
The backlog of unfilled orders was approximately $1.19 billion at March 31, 1996
and $1.05 billion at June 30, 1995. Backlog increases in the Fire Protection,
Flow Control and Disposable and Specialty Products segments were partially
offset by decreased backlog at Simplex, where backlog is affected by timing of
deliveries on contracts for underwater communication cable systems.
12
<PAGE>
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
11 - Earnings Per Share Computation
27 - Financial Data Schedule
(b) Reports on Form 8-K
None
13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TYCO INTERNATIONAL LTD.
/s/ Mark H. Swartz
Mark H. Swartz
Vice President - Chief Financial Officer
(Principal Accounting and Financial Officer)
14
Date: May 15, 1996
<PAGE>
TYCO INTERNATIONAL LTD.
INDEX TO EXHIBITS
Exhibit No.
11 Earnings Per Share Computation
27 Financial Data Schedule
EXHIBIT 11
TYCO INTERNATIONAL LTD.
Earnings Per Share Computation
(In thousands, except per share amounts)
<TABLE><CAPTION>
Three Months Ended Nine Months Ended
March 31, March 31,
1996 1995 1996 1995
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Calculation of earnings per share:
PRIMARY:
Weighted average common shares
outstanding during the period 152,530 150,242 152,700 146,442
Dilutive effect of the restricted stock
plan, stock options and warrants
using the treasury stock method 261 2,008 109 3,954
--------- --------- --------- ---------
Total common equivalent shares 152,791 152,250 152,809 150,396
========= ========= ========= =========
Net Income before extraordinary item $ 79,474 $ 64,955 $ 215,909 $ 144,964
Extraordinary item -- -- -- (2,600)
--------- --------- --------- ---------
Net income $ 79,474 $ 64,955 $ 215,909 $ 142,364
========= ========= ========= =========
Earnings per share:
Before extraordinary item $ 0.52 $ 0.43 $ 1.41 $ 0.96
Extraordinary item -- -- -- (0.02)
-------- -------- -------- --------
Net income $ 0.52 $ 0.43 $ 1.41 $ 0.95
======== ======== ======== ========
FULLY DILUTED:(1)
Weighted average common shares
outstanding during the period 152,530 150,242 152,700 146,442
Dilutive effect of the restricted stock
plan, stock options and warrants
using the treasury stock method 261 2,068 204 4,057
--------- --------- --------- ---------
Total common equivalent shares 152,791 152,310 152,904 150,499
========= ========= ========= =========
Net Income before extraordinary item $ 79,474 $ 64,955 $ 215,909 $ 144,964
Extraordinary item -- -- -- (2,600)
--------- --------- --------- ---------
Net income $ 79,474 $ 64,955 $ 215,909 $ 142,364
========= ========= ========= =========
Earnings per share:
Before extraordinary item $ 0.52 $ 0.43 $ 1.41 $ 0.96
Extraordinary item -- -- -- (0.02)
-------- -------- -------- --------
Net income $ 0.52 $ 0.43 $ 1.41 $ 0.95
======== ======== ======== ========
</TABLE>
(1)This calculation is submitted in accordance with Regulation S-K item
601(b)(11) although not required by Footnote 2 to Paragraph 14 of APB
Opinion No. 15 because it results in dilution of less than 3%.
16
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
TYCO INTERNATIONAL LTD.
FINANCIAL DATA SCHEDULE
(In thousands except per share data)
THIS SCHEDULE CONTAINS SUMMARY FNANCIAL INFORMATION EXTRACTED FROM HE BALANCE
SHEET AND INCOME STATEMENTS OF TYCO INTERNATIONAL LTD. AS OF AN FOR THE NINE
MONTHS ENDED MARCH 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 61,617
<SECURITIES> 667,066
<RECEIVABLES> 0
<ALLOWANCES> 36,142
<INVENTORY> 611,023
<CURRENT-ASSETS> 1,629,275
<PP&E> 1,334,790
<DEPRECIATION> (623,895)
<TOTAL-ASSETS> 3,765,631
<CURRENT-LIABILITIES> 1,226,075
<BONDS> 516,435
0
0
<COMMON> 76,260
<OTHER-SE> 1,755,313
<TOTAL-LIABILITY-AND-EQUITY> 3,765,631
<SALES> 3,717,706
<TOTAL-REVENUES> 3,717,706
<CGS> 2,715,724
<TOTAL-COSTS> 2,715,724
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 6,851
<INTEREST-EXPENSE> 46,646
<INCOME-PRETAX> 369,076
<INCOME-TAX> 153,167
<INCOME-CONTINUING> 215,909
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 215,909
<EPS-PRIMARY> 1.41
<EPS-DILUTED> 1.41
</TABLE>
