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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
January 20, 1998 (January 20, 1998)
ROCKWELL INTERNATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-12383 25-1797617
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
600 Anton Boulevard, Suite 700, Costa Mesa, California 92626-7147
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (714) 424-4565
(Former name or former address, if changed since last report)
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INFORMATION TO BE INCLUDED IN THE REPORT
Item 5. Other Events.
Registrant's press release dated January 20, 1998 is filed herewith as
Exhibit 20 and is incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
20. Press release of Registrant dated January 20, 1998.
(Page 2 of 4 Pages)
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SIGNATURE
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, thereunto duly authorized.
ROCKWELL INTERNATIONAL CORPORATION
(Registrant)
By /s/ William J. Calise, Jr.
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William J. Calise, Jr.
Senior Vice President, General
Counsel and Secretary
Dated: January 20, 1998
(Page 3 of 4 Pages)
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EXHIBIT INDEX
Sequentially
Exhibit Numbered
Number Description Page
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20. Press release of Registrant dated January 20, 1998.
(Page 4 of 4 Pages)
Exhibit 20
[LETTERHEAD OF ROCKWELL INTERNATIONAL CORPORATION]
Contact: Terry Francisco
(714) 424-4546
[email protected]
Rockwell Reports Higher First Quarter Earnings Per Share
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COSTA MESA, Calif. (Jan. 20, 1998) -- Rockwell International Corporation
(NYSE:ROK) today reported fiscal 1998 first quarter earnings of 74 cents per
share, before a special charge related to its Hughes-Avicom acquisition, an
increase of six percent over comparable 1997 first quarter earnings of 70 cents
per share. Income for the 1998 first quarter before the special charge was $152
million compared to $154 million for 1997. First quarter sales of approximately
$2.0 billion were up seven percent from last year's first quarter. First quarter
1998 earnings per share were higher due to the company's stock repurchase
program.
Don H. Davis, president and chief executive officer, said, "Continued
strong performances by our Automation and Avionics & Communications businesses
in the quarter offset lower Semiconductor Systems earnings. Our Automation
business continued to increase its global market share with higher unit volume
in Europe compared to 1997's first quarter as well as a nine percent sales
increase in North America. Avionics & Communications is capitalizing on the
strong commercial air transport market for both new aircraft production and
existing fleet upgrades."
Davis added, "Notwithstanding the uncertain business outlook in Asian
markets during the coming months, we remain confident that with continued
favorable economic conditions in North America and Europe, we will achieve
higher sales and earnings in 1998 at both Automation and Avionics &
Communications. These leadership electronics businesses continue to capitalize
on strong domestic markets and ongoing productivity improvement initiatives."
Davis continued, "We expect steadily improving performance at Semiconductor
Systems driven by sales growth in our non-modem businesses, particularly the
wireless communication and digital infotainment product lines, and increased
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sales of our K56flex modems resulting from the expected endorsement later this
month by the International Telecommunications Union of the recently proposed
worldwide standard for 56Kbps products."
Following is a discussion of sales and earnings for each of Rockwell's
businesses during the first quarter:
- Automation earnings increased ten percent in the first quarter of
1998 to $144 million from $131 million in 1997's first quarter.
Automation's higher earnings in 1998 are primarily attributable to
increased volume in the United States where sales were up nine
percent over the comparable period in 1997. Automation's first
quarter earnings as a percent of sales increased to 12.6 percent from
12.3 percent in last year's first quarter.
- Avionics & Communications achieved a 25 percent increase in operating
earnings to $74 million from $59 million in 1997's first quarter.
Sales were up 14 percent to $426 million from $374 million in last
year's first quarter primarily due to a sales increase of over 40
percent at our air transport business in the first quarter of 1998.
Earnings as a percent of sales increased to 17.4 percent from 15.8
percent in the first quarter of 1997.
- Semiconductor Systems earnings for the first quarter of 1998 were 47
percent lower than 1997's first quarter on approximately the same
sales. Semiconductor Systems achieved unit volume increases in both
modem and non-modem products and reduced manufacturing costs in the
first quarter of 1998; however, as expected, results were below
1997's first quarter due to lower pricing on the V.34 modem product,
slower ramp-up of the new K56flex modem related to a delay in
reaching a standards agreement, and continuing major investments in
new non-modem product lines. Earnings as a percent of sales for the
1998 first quarter were 10.4 percent compared to 19.4 percent for the
first quarter of 1997 but up from 9.2 percent in the fourth quarter
of 1997.
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The 1998 first quarter after tax special charge of $63 million, or 31
cents per share, relates to the write-off of purchased research and development
in connection with the December 1997 acquisition of the In-Flight Entertainment
(IFE) business of Hughes-Avicom International, Inc., a leading supplier of
airborne interactive IFE systems. Including this charge, net income for the
first quarter of 1998 was $89 million, or 43 cents per share. Net income for the
first quarter of 1997, including discontinued operations, totaled $179 million,
or 82 cents per share.
Following are first quarter highlights:
- Rockwell Automation's sixth annual Automation Fair attracted a record
9,540 customers from 48 states and 23 countries to Nashville, Tenn., in
November. The event, which has become one of the premier trade shows
for automation solutions, drew 97 customer exhibitors, occupying
270,000 square feet of floor space. Automation Fair provides Rockwell
with the opportunity to showcase the solutions it provides its
customers, who represent a wide range of industries and applications.
- Rockwell completed its acquisition of the In-Flight Entertainment (IFE)
business of Hughes-Avicom International, Inc. in December. The
acquisition is a major market expansion for Rockwell and represents a
logical extension of its core avionics business into a related area
with significant potential for growth. It is also an example of
Rockwell's continuing efforts to broaden the capabilities of its
avionics business to better address the growing market for aviation
electronics systems beyond the flight deck.
- Rockwell supports the declaration of consensus achieved in December by
the International Telecommunications Union (ITU) committee for 56Kbps
modem technology. After more than a year, the modem industry has
resolved key technical issues that should lead to the availability of
industry-standard 56Kbps modems during 1998. While a few minor issues
still must be resolved at the next ITU committee meeting in Geneva
later this month, the majority of the task has been completed.
Third-party research shows that K56flex is supported by more than 1,700
Internet Service Providers (ISPs) at 6,000 points of presence
worldwide, and new K56flex ISP modem ports are being shipped to ISP
equipment makers each day at a rate twice that of the competitor's x2
port shipments.
- American Airlines selected Rockwell Collins as the primary avionics
supplier for its fleet of new Boeing aircraft in a $200 million
agreement for maintenance and logistics support over a 10-year period.
- Delta Air Lines will equip its newest Boeing 737, 767 and 777 airliners
with Collins advanced communication, navigation and surveillance
systems. Delta will install the Collins equipment on a total of 106
aircraft, with first deliveries from Boeing scheduled to begin this
year and continue through 2006.
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- Rockwell Automation's Reliance Electric new IQ PreAlert product has
been recognized as a technology leader by several top industry
publications, including Industry Week, Design News and Plant
Engineering, in year-end product and technology overviews. The IQ
PreAlert uses micro-electro-mechanical sensors to continually monitor
motor operation and protect customers' capital investments.
- Northern Telecom (Nortel) and Rockwell Semiconductor Systems announced
an agreement in which they will work together to enable modems using
Rockwell's Consumer Digital Subscriber Line (CDSL) chipset to interwork
with Nortel's 1-Meg Modem network equipment, resulting in a high-speed
Internet access solution for the mass market in 1998. The
Nortel/Rockwell low-cost solution is 17 times faster than the fastest
analog modem and is easy to deploy in today's telephone network.
- Rockwell Semiconductor Systems announced the first in a planned family
of cable modem chipsets that will enable Internet connections and other
data services up to 700 times faster than conventional analog modems.
With its entry into the cable modem market, Rockwell has now
established leadership positions across all of the industry's top
next-generation modem initiatives including 56Kbps analog modems,
Digital Subscriber Line (DSL) modems and high-speed cable modems.
Rockwell is a global electronic controls and communications company
with leadership positions in industrial automation, avionics and communications,
and semiconductor systems with fiscal 1997 sales of approximately $8 billion and
45,000 employees. Rockwell's world headquarters is located in Costa Mesa in
Orange County, Calif.
# # #
This news release contains statements relating to future results that are
"forward-looking statements" as defined in the Private Securities Litigation
Reform Act of 1995. Actual results may differ materially from those projected as
a result of certain risks and uncertainties, including but not limited to those
detailed from time to time in the Company's Securities and Exchange Commission
filings.
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ROCKWELL INTERNATIONAL CORPORATION
SALES AND EARNINGS INFORMATION
(in millions, except per share amounts)
Quarter Ended
December 31
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1997 1996
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Sales
Automation $ 1,139 $ 1,061
Avionics & Communications 426 374
Semiconductor Systems 414 418
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Sales $ 1,979 $ 1,853
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Operating Earnings
Automation $ 144 $ 131
Avionics & Communications 74 59
Semiconductor Systems 43 81
Purchased Research & Development (1) (103) -
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Operating Earnings 158 271
General Corporate - Net 15 21
Interest Expense 4 4
Provision for Income Taxes 50 92
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Income from Continuing Operations 89 154
Income from Discontinued
Operations - Automotive - 25
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Net Income $ 89 $ 179
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Basic Earnings per Share:
Continuing Operations Before
Purchased Research & Development $ .74 $ .70
Purchased Research & Development (.31) -
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Continuing Operations .43 .70
Discontinued Operations - Automotive - .12
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Net Income $ .43 $ .82
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Diluted Earnings Per Share:
Continuing Operations $ .43 $ .69
Discontinued Operations - Automotive - .12
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Net Income $ .43 $ .81
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Average Outstanding Shares
Basic 204.8 218.7
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Diluted 207.8 221.8
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(1) Purchased research and development relates to the
acquisition of an Avionics & Communications business in the
first quarter of 1998.
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ROCKWELL INTERNATIONAL CORPORATION
COMPOSITION OF SALES
(in millions)
Three Months Ended
December 31
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1997 1996
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U.S. Commercial $ 1,125 $ 1,059
International 717 678
U. S. Government 137 116
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Total $ 1,979 $ 1,853
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SUMMARY BALANCE SHEET
(in millions)
December 31 September 31
1997 1997
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ASSETS
Cash $ 183 $ 283
Other Current Assets 3,432 3,401
Net Property 2,246 2,245
Other Assets 2,043 2,042
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Total $ 7,904 $ 7,971
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LIABILITIES AND SHAREOWNERS' EQUITY
Short-term Debt $ 342 $ 66
Other Current Liabilities 1,788 1,904
Long-term Debt 157 156
Other Liabilities 1,017 1,034
Shareowners' Equity 4,600 4,811
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Total $ 7,904 $ 7,971
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END
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