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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
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) October 22, 1996
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COOPER INDUSTRIES, INC.
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(Exact Name of Registrant as Specified in its Charter)
Ohio
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(State or Other Jurisdiction of Incorporation)
1-1175 31-4156620
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(Commission File Number) (IRS Employer Identification No.)
600 Travis, Suite 5800, Houston, Texas 77002
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(Address of Principal Executive Offices) (Zip Code)
713/209-8400
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(Registrant's Telephone Number, Including Area Code)
1001 Fannin, Suite 4000, Houston, Texas 77002
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(Former Name or Former Address, if Changed Since Last Report)
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Item 5 Other Events
Third Quarter 1996 Results of Operations
On October 22, 1996, the Company issued the press release attached hereto as
Exhibit 99.1 setting forth the Company's results of operations for the calendar
quarter ended September 30, 1996.
Business Outlook for 1996
The following two paragraphs update Cooper's general business outlook for 1996
that was made earlier in the Company's Form 8-K filed on April 23, 1996. The
statements are forward looking and actual results may differ materially.
Overall, the Company continues to expect a "double-digit" increase in share
earnings. The Company expects revenues, operating income and return on sales
for its Electrical Products segment to exceed modestly its earlier projections.
Revenue growth for the Tools & Hardware segment is expected to be weaker than
earlier projected and operating income and return on sales increases may not be
realized. For the Automotive Products segment, revenue increases are expected
to be in the range of our earlier projections. Operating income and return on
sales are expected to exceed last year's levels, but not by as much as
projected earlier.
The above estimates are forward looking statements and involve a number of
assumptions, risks and uncertainties. Important factors that could cause
actual results to differ include, without limitation, (i) the growth rate of
the domestic economy; (ii) the economic situation in Mexico; (iii) the growth
rate of European markets; and (iv) the demand levels in the domestic market for
automotive aftermarket products. The estimates also assume, without
limitation, no significant change in competitive conditions, integration of
recent acquisitions, progress toward eliminating negative operating variances
experienced by the Company's Crouse-Hinds business and Tools & Hardware segment
and such other risk factors as are discussed from time to time in the Company's
SEC filings.
Item 7 Financial Statements and Exhibits
Exhibits
99.1 Company Press Release Dated October 22, 1996 Titled "Cooper
Industries Reports Net Income Up 12%. Third Quarter Share
Earnings Up 10%."
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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.
COOPER INDUSTRIES, INC.
(Registrant)
Date: October 22, 1996 /s/ D. Bradley McWilliams
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D. Bradley McWilliams
Senior Vice President, Finance
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EXHIBIT INDEX
Exhibit No.
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99.1 Company Press Release Dated October 22, 1996 Titled "Cooper
Industries Reports Net Income Up 12%. Third Quarter Share
Earnings Up 10%."
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Cooper Industries
P. O. Box 4446
Houston, Texas 77210 EXHIBIT 99.1
NEWS [COOPER LOGO]
RELEASE
FOR IMMEDIATE RELEASE
October 22, 1996
Contacts: Sharon Newquist Phyllis Piano
(713) 209-8578 (713) 209-8415
COOPER INDUSTRIES REPORTS NET INCOME UP 12%
THIRD-QUARTER SHARE EARNINGS UP 10%
HOUSTON, October 22 -- Third-quarter net income of Cooper Industries, Inc.
(NYSE-CBE) rose 12% to $77.3 million from $69.3 million in the comparable 1995
period. Revenues increased 10% to $1.32 billion from $1.19 billion in the same
quarter of last year. Fully diluted share earnings rose 10% to 68 cents from
62 cents in 1995. Excluding a 4-cent gain from the sale of securities during
the third quarter of 1995, share earnings were up 17%.
During the third quarter, Cooper realized an after-tax gain of $66
million from the sale of marketable securities. The gain was offset entirely
by a nonrecurring charge in the automotive segment and had no impact on the
third-quarter's share earnings.
For the first nine months of 1996, Cooper's income from continuing
operations rose 10% to $227.7 million from $207.4 million in 1995. Revenues
increased 11% to $3.98 billion, up from $3.57 billion in the comparable 1995
period. Fully diluted share earnings from continuing operations were $2.00, up
14% from $1.76 in the same period of 1995.
"This is our eighth consecutive quarter of solid revenues and earnings
increases," reported Chairman, President and Chief Executive Officer H. John
Riley, Jr. "All of our segments recorded revenue increases, despite a weak
European economy and a slowing domestic economy.
"We're especially pleased with the performance of our electrical
products business, which posted outstanding results during the quarter," Riley
added.
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Cooper Industries, Inc. Page 2
The significant revenue increase in the ELECTRICAL PRODUCTS segment
was led by strong worldwide demand for hazardous-duty electrical construction
materials. The CEAG electrical products business, acquired at the end of 1995,
continued to exceed sales expectations. Sales also rose for lighting fixtures,
electrical transformers and switchgear as a result of reasonably healthy
construction markets. However, fuse sales were off somewhat, primarily due to
slow European demand.
Third-quarter revenues for TOOLS & HARDWARE were up slightly,
attributable to higher sales of assembly equipment to customers in the
automotive industry, an improving aerospace market and contributions from a
recent small acquisition in Mexico. These gains were tempered by a softening
in demand for hand tools and window treatments in Europe.
Solid revenue gains in the AUTOMOTIVE PRODUCTS segment were a result
of increased North American aftermarket sales of automotive lighting
components, ignition products and wiper blades, and growth in worldwide
original equipment sales. These increases were offset somewhat by sluggish
orders for heavy-duty brake components and temperature control products.
European aftermarket demand for automotive products also was down during the
quarter.
"We feel good about what we've accomplished to date and look forward
to a solid finish to the year," Riley said. "We remain confident that we will
achieve a double-digit earnings per share increase in 1996.
"We continue to make important progress building on the company's
strong foundation. The investments we are making to win new customers,
introduce new products and develop new markets around the world will add to the
company's growth in 1997 and beyond," Riley concluded.
Comparisons of 1996 and 1995 third-quarter and nine-month results
appear on the following pages.
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Cooper Industries, with 1995 revenues of $4.9 billion, is a
diversified, worldwide manufacturer of electrical products, tools and hardware,
and automotive products.
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Cooper Industries, Inc. Page 3
CONSOLIDATED RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended September 30,
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1996 1995(1)
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(in millions where applicable)
<S> <C> <C>
Revenues:
Electrical Products $ 613.2 $ 522.7
Tools & Hardware 237.2 233.1
Automotive Products 465.1 435.5
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1,315.5 1,191.3
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Cost of sales 870.0 800.5
Depreciation and amortization 59.4 55.1
Selling and administrative 225.4 196.8
Automotive asset write-down 85.3 --
Other income, net (113.4) (15.1)
Interest expense 35.4 37.0
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Income Before Income Taxes 153.4 117.0
Income Taxes 76.1 47.7
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Net Income $ 77.3 $ 69.3
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Net Income Per Common Share:
Primary $ .72 $ .65
Fully Diluted(2) $ .68 $ .62
Shares Utilized in Computation of
Income Per Common Share:
Primary 107,632,000 107,370,000
Fully Diluted 124,571,000 124,103,000
</TABLE>
(1) Other income, included in revenues as previously reported, was
reclassified to be consistent with the current presentation.
(2) The calculations assume conversion of the 7.05% Convertible
Subordinated Debentures to Common stock. As a result, interest on the
debentures ($7.3 million, net of tax) was added back to net income in
the computation of fully diluted earnings per share.
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Cooper Industries, Inc. Page 4
CONSOLIDATED RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
Nine Months Ended September 30,
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1996 1995(1)
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(in millions where applicable)
<S> <C> <C>
Revenues:
Electrical Products $ 1,799.0 $1,538.8
Tools & Hardware 718.6 705.1
Automotive Products 1,459.7 1,327.1
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3,977.3 3,571.0
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Cost of sales 2,653.1 2,383.5
Depreciation and amortization 177.4 161.2
Selling and administrative 688.8 586.6
Automotive asset write-down 85.3 --
Other income, net (145.8) (26.7)
Interest expense 109.8 114.8
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Income Before Income Taxes 408.7 351.6
Income Taxes 181.0 144.2
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Income from Continuing Operations 227.7 207.4
Charge for Discontinued Operations -- (186.6)
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Net Income $ 227.7 $ 20.8
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Income Per Common Share:
Primary -
Continuing Operations $ 2.12 $ 1.83
Net Income $ 2.12 $ .18
Fully Diluted(2) -
Continuing Operations $ 2.00 $ 1.76
Net Income $ 2.00 $ .18
Shares Utilized in Computation of
Income Per Common Share:
Primary 107,523,000 113,402,000
Fully Diluted 124,502,000 130,149,000
</TABLE>
(1) Other income, included in revenues as previously reported, was
reclassified to be consistent with the current presentation.
(2) The calculations assume conversion of the 7.05% Convertible
Subordinated Debentures to Common stock. As a result, interest on the
debentures ($21.9 million, net of tax) was added back to net income in
the computation of fully diluted earnings per share.
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