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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) January 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.
Fourth Quarter and Year-End 1996 Results of Operations
On January 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 fourth quarter and year ended December 31, 1996.
Set forth below is certain additional financial information by industry segment
for the Company's year ended December 31, 1996:
Year Ended December 31, 1996
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Operating
Revenues Earnings
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Electrical Products $2,407.5 $405.3
Tools & Hardware 973.0 111.4
Automotive Products 1,935.1 87.3
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$5,315.6 $604.0
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Other income, net 173.4
General corporate (77.3)
Interest expense (142.1)
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Income before income taxes $558.0
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Business Outlook for 1997
The following sets forth the Company's general business outlook for 1997, based
on current expectations. The statements are forward looking and actual results
may differ materially. The comparative figures for 1997 include the effects of
acquisitions and divestitures made during 1996.
The Company expects revenues to increase by approximately five percent or more
for each business segment.
The Company expects operating income for the Electrical Products segment to
increase by approximately five to 10 percent. Operating income for the Tools &
Hardware segment is expected to increase by approximately 10 percent or more.
Operating income for the Automotive Products segment is expected to increase by
approximately 15 percent or more.
The above estimates are forward looking statements and involve a number of
assumptions, risks and uncertainties. The primary economic assumptions include,
without limitation, (i) modest growth in the domestic economy; (ii) no further
weakening in European markets;(iii) a modest increase in construction spending
worldwide, (iv) no significant change in raw material costs, and (v) no major
customer consolidation in the automotive aftermarket. The estimates also assume,
without limitation, no significant change in competitive conditions and such
other risk factors as are discussed from time to time in the Company's periodic
filings with the Securities and Exchange Commission.
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Item 7. Financial Statements and Exhibits.
Exhibits
99.1 Company Press Release Dated January 23, 1997 Titled
"Cooper Industries Reports 15% Increase In Share Earnings
for 1996. Net income up 20% in the fourth quarter."
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: January 27, 1997 /s/ D. Bradley McWilliams
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D. Bradley McWilliams
Senior Vice President, Finance
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EXHIBIT INDEX
Exhibit No.
99.1 Company Press Release Dated January 23, 1997
Titled "Cooper Industries Reports 15% Increase
In Share Earnings for 1996. Net Income up 20%
in the fourth quarter."
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Cooper Industries
P. O. Box 4446
Houston, Texas 77210 EXHIBIT 99.1
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NEWS [COOPER LOGO]
RELEASE
FOR IMMEDIATE RELEASE
January 23, 1997
Contacts: Sharon Newquist Phyllis Piano
(713) 209-8578 (713) 209-8415
COOPER INDUSTRIES REPORTS 15% INCREASE IN SHARE EARNINGS FOR 1996 Net income up
20% in the fourth quarter
HOUSTON, TX, Jan. 23 -- Fully diluted share earnings from continuing operations
of Cooper Industries, Inc. (NYSE-CBE) for 1996 rose 15% to $2.77 from $2.41 in
1995. Revenues increased 10% to $5.3 billion from $4.8 billion the previous
year. Income from continuing operations rose 12% to $315.4 million from $280.6
million in 1995.
For the three months ended December 31, 1996, fully diluted share
earnings were 76 cents, up 17% from 65 cents in the same quarter of 1995.
Fourth-quarter revenues were up 5% to $1.34 billion from $1.28 billion in the
comparable 1995 period. Net income rose 20% to $87.7 million, compared with
$73.2 million in 1995.
Cooper's 1996 and 1995 share earnings each include a 5-cent net
contribution from the sale of securities. The company's fourth-quarter share
earnings include a 4-cent net contribution in 1996 and a 1-cent contribution in
1995.
"We had a strong performance in 1996, ending the year with excellent
cash flow and our ninth consecutive quarter of earnings increases,"
reported H. John Riley, Jr., Cooper's Chairman, President and Chief
Executive Officer.
"The company's double-digit increases in revenues and earnings were
driven by our Electrical Products segment, which posted record results in 1996,"
Riley said.
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Cooper Industries, Inc. Page 2
The Tools & Hardware and Automotive Products segments also had
increased sales during the year, despite difficult market conditions.
"In addition to our strong financial performance, we achieved every
major goal we set for the year," said Riley. "We made significant progress
improving our manufacturing and distribution methods across all of our
businesses. These investments will result in improved productivity, better
customer service and reduced costs.
"We also increased our international sales by more than 20% over 1995.
We benefited from acquisitions in Europe and Latin America and several joint
ventures in the Far East," Riley reported.
"Equally important, our actions to generate additional cash to finance
future growth are paying off. By year-end, we reduced our debt-to- total capital
ratio to 50.3% from 54.5% in 1995," Riley added.
Strong cash flow was generated by increased earnings and internal
programs to improve operating working capital turnover. Additional gains
resulted from the sale of marketable securities. Cooper also announced yesterday
a call for partial redemption of the company's 7.05% Convertible Subordinated
Debentures, which will add to future cash flow.
"By any measure, we had a very good year," said Riley. "We developed
new products, found new markets and customers, expanded globally and improved
our financial flexibility. Our formula for growth is working. With premier
positions in our markets and a commitment to build on our strengths, we are
focused on our goal of delivering double-digit earnings per share growth in
1997," he concluded.
Comparisons of 1996 and 1995 fourth-quarter and full-year results
appear on the following pages.
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Cooper Industries 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
Three Months Ended December 31,
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1996 1995(1)
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(in millions where applicable)
Revenues:
Electrical Products $ 608.5 $ 550.9
Tools & Hardware 254.4 257.3
Automotive Products 475.4 469.5
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1,338.3 1,277.7
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Cost of sales 883.8 849.4
Depreciation and amortization 56.4 57.6
Selling and administrative 244.1 218.6
Other income, net (27.6) (10.5)
Interest expense 32.3 36.2
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Income Before Income Taxes 149.3 126.4
Income Taxes 61.6 53.2
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Net Income $ 87.7 $ 73.2
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Net Income Per Common Share:
Primary $ .81 $ .68
Fully Diluted(2) $ .76 $ .65
Shares Utilized in Computation of
Income Per Common Share:
Primary 107,800,000 107,600,000
Fully Diluted 124,500,000 124,400,000
(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
Twelve Months Ended December 31,
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1996 1995(1)
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(in millions where applicable)
Revenues:
Electrical Products $ 2,407.5 $ 2,089.7
Tools & Hardware 973.0 962.4
Automotive Products 1,935.1 1,796.6
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5,315.6 4,848.7
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Cost of sales 3,536.9 3,232.9
Depreciation and amortization 233.8 218.8
Selling and administrative 932.9 805.2
Automotive asset write-down 85.3 --
Other income, net (173.4) (37.2)
Interest expense 142.1 151.0
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Income Before Income Taxes 558.0 478.0
Income Taxes 242.6 197.4
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Income from Continuing Operations 315.4 280.6
Charge for Discontinued Operations -- (186.6)
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Net Income $ 315.4 $ 94.0
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Income Per Common Share:
Primary -
Continuing Operations $ 2.93 $ 2.51
Net Income $ 2.93 $ .84
Fully Diluted(2) -
Continuing Operations $ 2.77 $ 2.41
Net Income $ 2.77 $ .84
Shares Utilized in Computation of
Income Per Common Share:
Primary 107,600,000 112,000,000
Fully Diluted 124,500,000 128,700,000
(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 ($29.2
million, net of tax) was added back to net income in the computation of
fully diluted earnings per share.
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