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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 23, 1997
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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)
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(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events.
Third Quarter 1997 Results of Operations
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On October 23, 1997, Cooper Industries ("the Company") issued the press release
attached hereto as Exhibit 99.1 setting forth the Company's results of
operations for the quarter ended September 30, 1997.
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Item 7. Financial Statements and Exhibits.
Exhibits
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99.1 Company Press Release Dated October 23, 1997 Titled
"Cooper Industries Reports Net Income Up 33%.
Third-quarter share earnings up 24%."
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 23, 1997 /s/D. Bradley McWilliams
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D. Bradley McWilliams
Senior Vice President and
Chief Financial Officer
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EXHIBIT INDEX
Exhibit No.
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99.1 Company Press Release Dated October 23, 1997 Titled
"Cooper Industries Reports Net Income Up 33%.
Third-quarter share earnings up 24%."
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Cooper Industries
P. O. Box 4446
Houston, Texas 77210 EXHIBIT 99.1
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[COOPER INDUSTRIES, INC. LOGO]
NEWS
RELEASE
FOR IMMEDIATE RELEASE
October 23, 1997
Contacts: John Breed Phyllis Piano
713-209-8835 713-209-8415
COOPER INDUSTRIES REPORTS NET INCOME UP 33%
Third-quarter share earnings up 24%
HOUSTON, TX, October 23 -- Third-quarter fully diluted share earnings of Cooper
Industries, Inc. (NYSE-CBE) rose 24% to 84 cents from 68 cents a share in the
same quarter of 1996. Net income increased 33% to $102.5 million from $77.3
million in the comparable period of 1996. Excluding divestitures, revenues
increased 4% to $1.30 billion from $1.25 billion.
In the third quarter of 1997, Cooper recorded a $23 million pre-tax
gain from the exchange of securities that was partially offset by nonrecurring
pre-tax charges of $13 million for plant consolidations and the implementation
of new information systems. Exclusive of these nonrecurring items, net income
rose 25% to $96.4 million from $77.3 million, and share earnings increased 16%
to 79 cents from 68 cents.
"Excluding nonrecurring items, revenues, operating profits and margins
improved in all three of our business segments, despite the impact of a
strengthening U.S. dollar on European sales and slower business activities in
certain international markets," said H. John Riley, Jr., Chairman, President and
Chief Executive Officer. "Additionally, our strong cash flow allowed us to make
further value-adding, complementary acquisitions and to continue share
repurchases during the quarter."
For the nine months ended September 30, 1997, Cooper's revenues,
excluding divestitures, rose 4% to $3.90 billion, up from $3.76 billion in the
same period of 1996. Net income increased 25% to $285.7 million from $227.7
million in 1996. Fully diluted share earnings increased 18% to $2.36, compared
with $2.00 during the first nine months of 1996.
In the first nine months of 1997, Cooper Industries recorded $93.0
million in pre-tax gains from divestitures and the sale and exchange of
securities that were partially offset by nonrecurring pre-tax charges of $83.9
million. Exclusive of nonrecurring items in 1996 and 1997, net income rose 23%
to $280.1 million from $227.0 million and share earnings increased 16% to $2.31
from $1.99.
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COOPER INDUSTRIES, INC. PAGE 2
Revenues for the ELECTRICAL PRODUCTS segment were up 5% over the third
quarter of 1996, driven by double digit sales gains in the power systems and
circuit protection businesses. Sales of lighting fixtures were up modestly,
while, as expected, revenues for electrical construction materials were down due
to one-time major project shipments last year. TOOLS & HARDWARE revenues,
excluding the Kirsch window covering operation that was sold by Cooper in May,
increased 4% during the quarter. This increase was primarily driven by
continuing demand for aircraft and automotive assembly equipment and the
introduction of new hand tool products. Slowing demand for hand tools in the
U.S. and European industrial markets partially offset the increase. Revenues for
the AUTOMOTIVE PRODUCTS segment were up 2% in the quarter, due to moderately
improved sales in the domestic automotive aftermarket and stronger worldwide
original equipment demand. These increases helped counter generally weak demand
in the European aftermarket.
The company's acquisitions during the quarter included Thepitt, a
manufacturer of electrical outlet boxes and covers, and Coiltronics, a maker of
inductors and transformers used in computers and other consumer electronics.
These operations are expected to add to the performance potential of Cooper's
Electrical Products segment.
During the quarter, the company purchased approximately 1.8 million of
its shares for a total of $96 million as part of a $275 million common stock
repurchase program announced in June. At the end of the third quarter, the
company's debt-to-total capital ratio was 33.9%.
"Cooper continues to deliver strong earnings increases from revenue
growth and improving margins," said Riley. "While we have some concerns about
the domestic and European economies, we are focused on meeting our 1997
objectives and extending our record of consistent earnings per share growth. As
a result, Cooper is headed for a record earnings year in 1997," Riley added.
Comparisons of 1997 and 1996 third-quarter results appear on the
following pages.
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Cooper Industries, with 1996 revenues of $5.3 billion, is a
diversified, worldwide manufacturer of electrical products, tools and hardware,
and automotive products. Additional information about Cooper is available on the
company's World Wide Web site:
www.cooperindustries.com.
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COOPER INDUSTRIES, INC. PAGE 3
CONSOLIDATED RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
Quarter Ended September 30, % Change
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1997 1996(1)
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(in millions where applicable)
<S> <C> <C> <C>
Revenues:
Electrical Products $ 646.4 $ 613.2 5.4%
Tools & Hardware 183.9 176.5 4.2%
Automotive Products 466.6 457.7 1.9%
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Subtotal 1,296.9 1,247.4 4.0%
Kirsch(2) - 60.7 N.M.
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Total segment revenues 1,296.9 1,308.1 -0.9%
Cost of sales 883.1 889.8
Selling and administrative expenses 222.5 235.5
Goodwill amortization 16.3 16.4
Nonrecurring gains (23.2) (107.2)
Nonrecurring charges 13.4 85.3
Other (income) expense, net - (0.5)
Interest expense 19.4 35.4
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Income Before Income Taxes 165.4 153.4(3)
Income Taxes 62.9 76.1(3)
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Net Income $ 102.5 $ 77.3 32.6%
========= ==========
Net Income Per Common Share:
Primary $ .84 $ .72 16.7%
Fully Diluted $ .84 $ .68(4) 23.5%
Shares Utilized in Computation
of Income Per Common Share:
Primary 122.1 million 107.6 million
Fully Diluted 122.1 million 124.6 million
</TABLE>
PERCENTAGE OF REVENUES
<TABLE>
<CAPTION>
Quarter Ended September 30,
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1997 1996
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<S> <C> <C>
Revenues 100.0% 100.0%
Cost of sales 68.1% 68.0%
Selling and administrative expenses 17.2% 18.0%
Income Before Income Taxes 12.8% 11.7%
Net Income 7.9% 5.9%
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</TABLE>
(1) Certain amounts have been reclassified to conform to the 1997 presentation.
(2) Kirsch was sold to Newell Co. on May 30, 1997.
(3) Income before income taxes includes $21.9 million of nonrecurring gains net
of nonrecurring charges. Income taxes include $21.9 million related to
nondeductible nonrecurring charges.
(4) The calculation assumes conversion of the 7.05% Convertible Subordinated
Debentures to Common stock. As a result, interest on the debentures ($7.3
million in 1996, 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, % Change
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1997 1996(1)
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(in millions where applicable)
<S> <C> <C> <C>
Revenues:
Electrical Products $1,919.8 $1,799.0 6.7%
Tools & Hardware 559.7 532.0 5.2%
Automotive Products 1,423.8 1,433.6 -0.7%
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Subtotal 3,903.3 3,764.6 3.7%
Kirsch(2) 97.4 186.6 N.M.
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Total segment revenues 4,000.7 3,951.2 1.3%
Cost of sales 2,727.2 2,706.2
Selling and administrative expenses 702.1 701.9
Goodwill amortization 48.4 49.0
Nonrecurring gains (93.0) (127.6)
Nonrecurring charges 83.9 104.5
Other (income) expense, net 0.9 (1.3)
Interest expense 70.3 109.8
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Income Before Income Taxes 460.9 408.7(3)
Income Taxes 175.2 181.0(3)
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Net Income $ 285.7 $ 227.7 25.5%
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Net Income Per Common Share:
Primary $ 2.43 $ 2.12 14.6%
Fully Diluted(4) $ 2.36 $ 2.00 18.0%
Shares Utilized in Computation
of Income Per Common Share:
Primary 117.4 million 107.5 million
Fully Diluted 123.3 million 124.5 million
</TABLE>
PERCENTAGE OF REVENUES
<TABLE>
<CAPTION>
Nine Months Ended September 30,
1997 1996
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<S> <C> <C>
Revenues 100.0% 100.0%
Cost of sales 68.2% 68.5%
Selling and administrative expenses 17.5% 17.8%
Income Before Income Taxes 11.5% 10.3%
Net Income 7.1% 5.8%
======== ========
</TABLE>
(1) Certain amounts have been reclassified to conform to the 1997 presentation.
(2) Kirsch revenues represent the revenues prior to the sale to Newell Co. on
May 30, 1997.
(3) Income before income taxes includes $21.9 million of nonrecurring gains net
of nonrecurring charges. Income taxes include $21.9 million related to
nondeductible nonrecurring charges.
(4) The calculation assumes conversion of the 7.05% Convertible Subordinated
Debentures to Common stock. As a result, interest on the debentures ($5.8
million in 1997 and $21.9 million in 1996, net of tax) was added back to
net income in the computation of fully diluted earnings per share.
This press release contains forward-looking statements made in reliance upon the
safe harbor of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements involve a number of assumptions, risks and
uncertainties that could cause actual results of the company to differ
materially from those matters expressed in or implied by such forward-looking
statements. See "Business Outlook for 1997" set forth in the Company's Current
Report on Form 8-K dated July 24, 1997.
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