<PAGE> 1
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) July 23, 1998
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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.
On July 23, 1998, Cooper Industries, Inc. (the "Company") issued the press
release attached hereto as Exhibit 99.1 setting forth the Company's results of
operations for the second quarter of 1998.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
EXHIBITS
99.1 Company Press Release Dated July 23, 1998 Titled
"Cooper Industries Reports Second-Quarter Share
Earnings of $0.88.
-2-
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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: July 23, 1998 /s/Diane K. Schumacher
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Diane K. Schumacher
Senior Vice President, General
Counsel and Secretary
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EXHIBIT INDEX
Exhibit No.
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99.1 Company Press Release Dated July 23, 1998
Titled "Cooper Industries Reports
Second-Quarter Share Earnings of $0.88.
-4-
<PAGE> 1
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
July 23, 1998
Contact: John Breed
(713) 209-8835
COOPER INDUSTRIES REPORTS SECOND-QUARTER SHARE EARNINGS OF $0.88
HOUSTON, July 23 -- Cooper Industries, Inc. (NYSE-CBE) today reported that its
diluted share earnings for the second quarter of 1998 rose to 88 cents from 86
cents in 1997. Revenues in the second quarter increased to $1.43 billion in 1998
from $1.38 billion in the second quarter of 1997. Cooper's net income increased
to $106 million in the second quarter of 1998 from $105.5 million in the
comparable period of 1997.
Revenues for the quarter, excluding currency translations and the May
1997 divestiture of Kirsch, increased 7%. Foreign currency changes in relation
to the U.S. dollar reduced reported revenues by approximately 1%.
For the six months ended June 30, 1998, Cooper's diluted share earnings
increased 8% to $1.64 from $1.52 in the comparable period of 1997. The company's
revenues for the first half of 1998 rose 3% to $2.77 billion from $2.70 billion
in the same period of 1997. Excluding Kirsch and currency translations, revenues
for the first six months of 1998 rose 8%. Net income for the first half of 1998
increased 8% to $198 million from $183 million during the comparable period of
1997.
"The second quarter was our fifteenth consecutive quarter of
year-to-year earnings per share increases," said H. John Riley, Jr., Chairman,
President and Chief Executive Officer. "This reflects the contributions from
recent complementary acquisitions and profit improvement programs that have been
put in place throughout the company over the past few years. These actions
helped offset the adverse impact of changing economic conditions and lower
overall demand for utility and hazardous duty electrical products. Additionally,
work stoppages at General Motors had a moderate impact on our results during the
quarter."
<PAGE> 2
Revenues for Cooper's ELECTRICAL PRODUCTS segment increased by 10%
during the quarter. The segment experienced strong domestic demand for circuit
protection and lighting products, as well as improving European demand for
circuit protection products during the quarter. Recent acquisitions, including
the December 1997 acquisition of Menvier, a U.K.-based maker of emergency
lighting and security products, contributed to the segment's revenue growth.
These increases offset a reduction in shipments of power equipment and hazardous
duty electrical construction materials to Asia and more competitive domestic
conditions for these products.
TOOLS & HARDWARE revenues were up 16% in the second quarter. The
segment benefited from the first-quarter 1998 additions of INTOOL, a
manufacturer of industrial and commercial power tools, and Recoules and
Geta-Werk, two small power tool companies based in Europe. In addition, domestic
demand for consumer and construction-related hand tools improved during the
quarter. Acquisitions and domestic sales increases more than offset the
continuing effects of currency translations and reduced demand from vehicle
manufacturers for automated assembly equipment.
AUTOMOTIVE PRODUCTS revenues declined about 2% in the quarter. Domestic
original equipment (OE) sales continued to grow, despite the impact of the
recent General Motors strike, while the domestic aftermarket remained soft.
European demand for both OE and aftermarket parts improved modestly. Absent the
effects of recent acquisitions and divestitures and currency translations,
revenues would have been unchanged from the prior year.
On April 3, 1998, Cooper announced it was considering options for
exiting its automotive products business. At this point, the company is
continuing its review of those options, including evaluating proposals from
potential purchasers. Cooper expects to announce a definitive course of action
regarding this matter in the next several weeks.
"Setting that potential event aside, we remain focused on positioning
the company for future growth and on extending our current record of
earnings-per-share increases," Riley said.
Comparisons of 1998 and 1997 second-quarter and year-to-date results
appear on the following pages.
Cooper Industries, with 1997 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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Statements in this news release are forward-looking statements under
the Private Securities Litigation Reform Act of 1995. These statements are
subject to various risks and uncertainties, many of which are outside the
control of the Company, such as the level of market demand for the Company's
products, competitive pressures and future economic conditions. These factors
are discussed in the Company's 1997 Annual Report on Form 10-K and Form 8-K,
dated June 19, 1998, and other Securities and Exchange Commission filings.
# # #
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CONSOLIDATED RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
Quarter Ended June 30, % Change
------------------------------ --------
1998 1997
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(in millions where applicable)
<S> <C> <C> <C>
Revenues:
Electrical Products $ 723.9 $ 660.7 9.6%
Tools & Hardware 227.3 195.7 16.1%
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Subtotal 951.2 856.4 11.1%
Automotive Products 478.1 486.7 -1.8%
Kirsch(1) -- 41.8 N.M.
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Total revenues 1,429.3 1,384.9 3.2%
Cost of sales 970.5 938.4
Selling and administrative expenses 245.7 238.8
Goodwill amortization 19.2 16.1
Nonrecurring gains -- (69.8)
Nonrecurring charges -- 70.5
Other (income) expense, net (1.8) (0.6)
Interest expense 27.4 21.3
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Income Before Income Taxes 168.3 170.2
Income Taxes 62.3 64.7
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Net Income $ 106.0 $ 105.5 0.5%
======== =========
Net Income Per Common Share:
Basic $ .89 $ .89 0.0%
Diluted $ .88 $ .86(2) 2.3%
Shares Utilized in Computation
of Income Per Common Share:
Basic 118.6 million 119.3 million
Diluted 120.5 million 123.5 million
</TABLE>
PERCENTAGE OF REVENUES
<TABLE>
<CAPTION>
Quarter Ended June 30,
----------------------
1998 1997
------ ------
<S> <C> <C>
Revenues 100.0% 100.0%
Cost of sales 67.9% 67.8%
Selling and administrative expenses 17.2% 17.2%
Income Before Income Taxes 11.8% 12.3%
Net Income 7.4% 7.6%
</TABLE>
(1) Kirsch was sold to Newell Co. on May 30, 1997.
(2) The 1997 calculation assumes conversion of the remaining 7.05% Convertible
Subordinated Debentures to Common stock. As a result, interest on the
debentures of $0.1 million for the quarter, net of tax, was added back to
net income in the computation of diluted earnings per share.
.
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CONSOLIDATED RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
Six Months Ended June 30, % Change
------------------------- --------
1998 1997
-------- --------
(in millions where applicable)
<S> <C> <C> <C>
Revenues:
Electrical Products $1,429.9 $1,273.4 12.3%
Tools & Hardware 415.4 375.8 10.5%
-------- --------
Subtotal 1,845.3 1,649.2 11.9%
Automotive Products 927.1 957.2 -3.1%
Kirsch(1) -- 97.4 N.M.
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Total revenues 2,772.4 2,703.8 2.5%
Cost of sales 1,882.5 1,844.1
Selling and administrative expenses 487.7 479.6
Goodwill amortization 37.5 32.1
Nonrecurring gains -- (69.8)
Nonrecurring charges -- 70.5
Other (income) expense, net (2.3) 0.9
Interest expense 52.7 50.9
-------- --------
Income Before Income Taxes 314.3 295.5
Income Taxes 116.3 112.3
-------- --------
Net Income $ 198.0 $ 183.2 8.1%
======== ========
Net Income Per Common Share:
Basic $ 1.66 $ 1.60 3.8%
Diluted $ 1.64 $ 1.52(2) 7.9%
Shares Utilized in Computation
of Income Per Common Share:
Basic 119.1 million 114.4 million
Diluted 120.9 million 124.2 million
</TABLE>
PERCENTAGE OF REVENUES
<TABLE>
<CAPTION>
Six Months Ended June 30,
-------------------------
1998 1997
------ ------
<S> <C> <C>
Revenues 100.0% 100.0%
Cost of sales 67.9% 68.2%
Selling and administrative expenses 17.6% 17.7%
Income Before Income Taxes 11.3% 10.9%
Net Income 7.1% 6.8%
</TABLE>
(1) Kirsch was sold to Newell Co. on May 30, 1997.
(2) The 1997 calculation assumes conversion of the remaining 7.05% Convertible
Subordinated Debentures to Common stock. As a result, interest on the
debentures of $5.8 million, net of tax, was added back to net income in
the computation of diluted earnings per share.
