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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) April 22, 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.
First Quarter 1998 Results of Operations.
On April 22, 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 first quarter of 1998.
Item 7. Financial Statements and Exhibits.
Exhibits
99.1 Company Press Release Dated April 22, 1998 Titled "Cooper
Industries Reports Net Income Up 18%. First-quarter share
earnings up 13%."
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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: April 22, 1998 /s/ Diane K. Schumacher
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Diane K. Schumacher
Senior Vice President,
General Counsel and Secretary
-3-
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EXHIBIT INDEX
Exhibit No.
99.1 Company Press Release Dated April 22, 1998 Titled "Cooper
Industries Reports Net Income Up 18%. First-quarter share
earnings up 13%."
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Cooper Industries
P. O. Box 4446
Houston, Texas 77210 EXHIBIT 99.1
[ Cooper Logo]
NEWS
RELEASE
FOR IMMEDIATE RELEASE
April 22, 1998
Contact: John Breed
(713) 209-8835
COOPER INDUSTRIES REPORTS NET INCOME UP 18%
FIRST-QUARTER SHARE EARNINGS UP 13%
HOUSTON, April 22 -- Cooper Industries, Inc. (CBE-NYSE) today reported that net
income increased 18% to $92.0 million in the first quarter of 1998 from $77.7
million in the comparable period of 1997. Diluted share earnings for the first
quarter of 1998 rose 13% to 76 cents from 67 cents in 1997. Revenues in the
first quarter increased to $1.34 billion in 1998 from $1.32 billion in the
first quarter of 1997.
Revenues for the quarter, excluding recent divestitures and currency
translations, increased 8%. Revenues for the first quarter of 1997 include
sales from Kirsch, the window treatments business that the company sold in May
1997. In addition, foreign currency changes in relation to the U.S. dollar
reduced reported revenues by approximately 2%.
"Cooper is off to a very good start in 1998, posting our fourteenth
consecutive quarter of year-to-year earnings per share increases," said H. J.
Riley, Jr., Chairman, President and Chief Executive Officer. "During the
quarter, we saw overall growth in both North American and Latin American
markets, an increase in demand in Europe across all our businesses and closure
on a number of value-adding strategic programs in our automotive business.
"In addition, we acquired four businesses, one in our electrical
products segment and three in our tools and hardware segment. Combined, these
businesses are expected to add more than $130 million to annual revenues. We
are also pleased to see significantly improved operating margins during the
quarter, indicating that the profit improvement programs we have in place are
producing the intended results," Riley added.
The ELECTRICAL PRODUCTS segment continued to report record revenues,
with an increase of 15% over 1997. All of the electrical businesses had solid
revenue gains in North America and Europe. Segment revenues in Europe were
also enhanced by the late-1997 addition of Menvier,
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a U.K.-based manufacturer of emergency lighting, alarms and safety systems.
Absent acquisitions and currency effects, electrical products revenues were up
6%.
TOOLS & HARDWARE revenues grew 4% during the quarter. Increased
domestic and international demand for power tools was partially offset by lower
demand for industrial hand tools in North America. Foreign currency
translation reduced the segment's revenues for the quarter by approximately 3%.
Included in the segment's growth in the quarter were three recent acquisitions
of power tool businesses: Recoules of France, Geta-Werk of Germany, and
INTOOL, a U.S.- based business. Absent acquisitions and currency effects,
Tools & Hardware revenues increased 2%.
AUTOMOTIVE PRODUCTS revenues declined 5% in the first quarter. During
the quarter, Cooper sold its unprofitable remanufactured CV joint business and
completed an exchange of businesses with Standard Motor Products, Inc. Absent
the effect of market disruptions related to these actions, currency movements
and a small contribution from recent acquisitions, segment revenues would have
been down less than 2% during the quarter.
Cooper also announced that it is reviewing alternatives for exiting
the automotive business, including an initial public offering or sale of the
business. The company anticipates that a separation would make it easier for
the investment community to analyze and evaluate Cooper's remaining operations.
"Going forward, our strong first quarter results set the stage for
1998 to be a very good year for Cooper," said Riley. "The plans we have in
place should accelerate Cooper's profitable growth and allow our company to
produce greater shareholder value."
Comparisons of 1998 and 1997 first-quarter results appear on the
following page.
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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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CONSOLIDATED RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
Quarter Ended March 31, % Change
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1998 1997
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(in millions where applicable)
<S> <C> <C> <C>
Revenues:
Electrical Products $ 706.0 $ 612.7 15.2%
Tools & Hardware 188.1 180.1 4.4%
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Subtotal 894.1 792.8 12.8%
Automotive Products 449.0 470.5 -4.6%
Kirsch (1) - 55.6 N.M.
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Total revenues 1,343.1 1,318.9 1.8%
Cost of sales 912.0 905.7
Selling and administrative expenses 242.0 240.8
Goodwill amortization 18.3 16.0
Other (income) expense, net (0.5) 1.5
Interest expense 25.3 29.6
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Income Before Income Taxes 146.0 125.3
Income Taxes 54.0 47.6
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Net Income $ 92.0 $ 77.7 18.4%
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Net Income Per Common Share:
Basic $ .77 $ .71 8.5%
Diluted $ .76 $ .67(2) 13.4%
Shares Utilized in Computation
of Income Per Common Share:
Basic 119.7 million 109.5 million
Diluted 121.2 million 124.8 million
</TABLE>
PERCENTAGE OF REVENUES
<TABLE>
<CAPTION>
Quarter Ended March 31,
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1998 1997
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<S> <C> <C>
Revenues 100.0% 100.0%
Cost of sales 67.9% 68.7%
Selling and administrative expenses 18.0% 18.3%
Income Before Income Taxes 10.9% 9.5%
Net Income 6.8% 5.9%
</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 $5.7 million, net of tax, was
added back to net income in the computation of 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 "Earnings Outlook" in Management's Discussion and Analysis of
Financial Condition and Results of Operations set forth in Appendix A to the
Company's Proxy Statement for the 1998 Annual Meeting of Shareholders.
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