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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 21, 1999
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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 (IRS Employer
File Number) 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 October 21, 1999, 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 third quarter of 1999.
Item 7. Financial Statements and Exhibits.
Exhibits
99.1 Company press release dated October 21, 1999 titled
"Cooper Industries' Third Quarter Per Share Earnings
Up 10 Percent"
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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 21, 1999 /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.
99.1 Company press release dated October 21, 1999 titled "Cooper Industries'
Third Quarter Per Share Earnings Up 10 Percent"
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EXHIBIT 99.1
FOR IMMEDIATE RELEASE
October 21, 1999
Contact: John Breed
(713) 209-8835
COOPER INDUSTRIES' THIRD QUARTER
PER SHARE EARNINGS UP 10 PERCENT
Strong top-line growth in Electrical Products drives positive results
HOUSTON, TX, Oct. 21 -- Cooper Industries, Inc. (NYSE:CBE) today reported
third-quarter earnings per share of 89 cents (assuming dilution), a 9.9
percent increase over third-quarter 1998 earnings of 81 cents per share.
Revenues for the third quarter 1999 were up 6.3 percent to $982.2 million
compared to $924.0 million for the same period last year. Net income for the
third quarter 1999 declined to $84.4 million from $93.2 million in the same
period last year due to the absence of $25.9 million of earnings from the
Automotive Products segment, which was sold in October of last year.
"Our third-quarter results clearly underscore the effectiveness of
our strategy to focus on higher growth, less volatile markets and to
relentlessly attack costs throughout all of our operations," said H. John
Riley, Jr., chairman, president and chief executive officer, Cooper
Industries, Inc. "We believe that the actions we are taking to grow our
Electrical Products businesses, refine our Tools & Hardware enterprise and
markedly reduce costs will continue to enhance Cooper's profitability.
"Cooper achieved substantial top-line growth during the quarter in
our Electrical Products segment. Revenues were up in all of the Company's
Electrical Products businesses, led by significant growth in our lighting
operations," continued Riley. "This more than offset anticipated weakness
in our Tools & Hardware segment which is undergoing strategic consolidation
in the face of difficult market conditions."
Diluted earnings for the nine months ended September 30, 1999,
rose by 6.5 percent to $2.61 per share compared to $2.45 per share for the
same period last year. Revenues for the nine-month period were up 3.4
percent to $2,864 million compared to $2,769 million for the first nine
months of 1998. Net income for the nine months this year decreased to
$248.0 million compared to last year's nine-month net income of $291.2
million as a result of the previously mentioned sale of the Automotive
Products segment, which added $84.2 million to net income,
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COOPER INDUSTRIES, INC. PAGE 2
or 71 cents to earnings per share, during the period. The majority of the
earnings per share impact of the 1998 Automotive Products segment sale was
offset by the use of the sale proceeds to realign the Company's capital
structure through share repurchases and debt reduction. For the first nine
months of 1999, interest expense decreased 55 percent to $39.1 million
compared to $87.5 million last year, and diluted shares decreased 20
percent to 95.0 million from 118.8 million last year.
ELECTRICAL PRODUCTS
Third-quarter 1999 revenues from the Electrical Products segment
increased 9 percent to $786.0 million from $724.0 million last year.
Operating earnings for the third quarter rose 8 percent to $133.8 million
from $124.5 million for the same period last year.
During the quarter, base business sales in Electrical Products
increased nearly 6 percent. This growth was bolstered by complementary
acquisitions that provided new markets and distribution channels, enhanced
product selections and increased opportunities for cost savings. Cooper
acquired five electrical products businesses this year. The largest, JSB
Electrical, plc, a European manufacturer of emergency lighting, fire
detection and security systems, was purchased in August.
Cooper's lighting fixture business, with double-digit growth
during the quarter, spearheaded solid results in the Electrical Products
segment. Cooper's circuit protection business also grew nicely during the
quarter through increased penetration into the expanding electronics
marketplace. Revenue from the Company's hazardous area construction
materials business showed signs of stabilizing during the quarter, despite
continued weakness in the unit's core energy and petrochemicals markets.
Revenues from the Company's power systems business approached more normal
levels as the operation continued to absorb the implementation of new
business systems technology.
Cooper continues to aggressively expand its Electrical Products
businesses. Recently, the Company announced that it had agreed to buy
Regent Lighting, a U.S. manufacturer of security lighting fixtures for the
home market. Earlier this week, Cooper announced the purchase of the
electrical enclosures business of Weidmuller UK Group Limited. Both
businesses are expected to have a favorable impact on results in 2000.
Continued actions to reduce costs, a disciplined approach to
growth in key markets and a broad range of high quality product offerings
characterize Cooper's Electrical Products segment, which currently accounts
for 80 percent of the Company's revenue stream.
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COOPER INDUSTRIES, INC. PAGE 3
TOOLS & HARDWARE
Third-quarter 1999 revenues in the Tools & Hardware segment were
$196.2 million compared to $200.0 million for the same period last year.
Operating earnings for the third quarter 1999 were $20.6 million compared
to $25.3 million for last year's third quarter.
As anticipated, weakness in the industrial hand tool, energy and
aerospace markets impacted Cooper's third quarter performance in the
segment. During the third quarter, the Company embarked on a significant
restructuring effort within its Tools business to leverage operational
strengths and further reduce costs. These actions, coupled with selective
acquisitions, will position Cooper's Tools & Hardware businesses for
increased profitability over the next six to twelve months.
"Cooper's performance in the third quarter remained on track and
in line with our expectations for the year," continued Riley. "We are
beginning to realize the benefits of our concerted efforts to streamline
operations and lower manufacturing costs. At the same time, we are taking
actions to leverage the Company's inherent strengths, which are
considerable. We have strong cash flow, well-recognized brand name products
and a disciplined approach to acquisitions through which we continue to
grow our worldwide customer base in our chosen markets.
"The momentum we attained in earlier quarters, combined with our
solid third-quarter results, positions us to achieve further earnings
improvements over the balance of the year," continued Riley. "Longer term,
I am confident that our current strategies will produce significant
earnings gains and increased shareholder value."
Cooper Industries, with 1998 revenues of $3.7 billion, is a
worldwide manufacturer of electrical products, tools and hardware.
Additional information about Cooper is available on the Company's Internet
site: www.cooperindustries.com.
Statements in this news release are forward-looking 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 1998 Annual Report on Form
10-K.
Comparisons of 1999 and 1998 third-quarter and year-to-date
results appear on the following pages.
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CONSOLIDATED RESULTS OF OPERATIONS
Quarter Ended September 30,
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1999 1998
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(in millions where applicable)
Revenues $ 982.2 $ 924.0
Cost of sales 664.4 621.8
Selling and administrative expenses 160.8 151.0
Goodwill amortization 11.5 11.2
Interest expense 13.7 34.8
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Continuing Income Before Income Taxes 131.8 105.2
Income taxes 47.4 37.9
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Continuing Income 84.4 67.3
Discontinued operations, net of tax - 25.9
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Net Income (1) $ 84.4 $ 93.2
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Net Income Per Common Share:
Basic
Continuing Operations $ .90 $ .59
Discontinued Operations - .23
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Net Income $ .90 $ .82
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Diluted
Continuing Operations $ .89 $ .59
Discontinued Operations - .22
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Net Income $ .89 $ .81
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Shares Utilized in Computation
of Income Per Common Share:
Basic 94.0 MILLION 113.5 million
Diluted 95.1 MILLION 114.7 million
PERCENTAGE OF REVENUES
Quarter Ended September 30,
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1999 1998
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Revenues 100.0% 100.0%
Cost of sales 67.6% 67.3%
Selling and administrative expenses 16.4% 16.3%
Continuing Income Before Income Taxes 13.4% 11.4%
Continuing Income 8.6% 7.3%
(Additional information on next page)
(1) Net income is not comparable quarter-to-quarter due to the impact of
the sale of the Automotive Products business and the resulting use of
the proceeds to reduce debt and buy back shares.
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CONSOLIDATED RESULTS OF OPERATIONS (CONTINUED)
ADDITIONAL INFORMATION FOR THE QUARTER ENDED SEPTEMBER 30
SEGMENT INFORMATION
Quarter Ended September 30,
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1999 1998
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(in millions)
Revenues:
Electrical Products $ 786.0 $ 724.0
Tools & Hardware 196.2 200.0
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Total $ 982.2 $ 924.0
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Segment Operating Earnings:
Electrical Products $ 133.8 $ 124.5
Tools & Hardware 20.6 25.3
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Total 154.4 149.8
General Corporate expense 8.9 9.8
Interest expense 13.7 34.8
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Consolidated income from continuing
operations before income taxes $ 131.8 $ 105.2
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Quarter Ended September 30,
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1999 1998
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Return on Sales:
Electrical Products 17.0% 17.2%
Tools & Hardware 10.5% 12.7%
Total Segments 15.7% 16.2%
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CONSOLIDATED RESULTS OF OPERATIONS
Nine Months Ended September 30,
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1999 1998
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(in millions where applicable)
Revenues $2,864.4 $2,769.3
Cost of sales 1,926.2 1,863.5
Selling and administrative expenses 473.7 462.5
Goodwill amortization 34.3 32.4
Nonrecurring charges 3.7 -
Interest expense 39.1 87.5
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Continuing Income Before Income Taxes 387.4 323.4
Income taxes 139.4 116.4
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Continuing Income 248.0 207.0
Discontinued operations, net of tax - 84.2
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Net Income (1) $ 248.0 $ 291.2
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Net Income Per Common Share:
Basic
Continuing Operations $ 2.64 $ 1.76
Discontinued Operations - .72
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Net Income $ 2.64 $ 2.48
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Diluted
Continuing Operations $ 2.61 $ 1.74
Discontinued Operations - .71
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Net Income $ 2.61 $ 2.45
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Shares Utilized in Computation
of Income Per Common Share:
Basic 94.1 MILLION 117.2 million
Diluted 95.0 MILLION 118.8 million
PERCENTAGE OF REVENUES
Nine Months Ended September 30,
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1999 1998
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Revenues 100.0% 100.0%
Cost of sales 67.2% 67.3%
Selling and administrative expenses 16.5% 16.7%
Continuing Income Before Income Taxes 13.5% 11.7%
Continuing Income 8.7% 7.5%
(Additional information on next page)
(1) Net income is not comparable period-to-period due to the impact of the
sale of the Automotive Products business and the resulting use of the
proceeds to reduce debt and buy back shares.
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CONSOLIDATED RESULTS OF OPERATIONS (CONTINUED)
ADDITIONAL INFORMATION FOR THE NINE MONTHS ENDED SEPTEMBER 30
SEGMENT INFORMATION
Nine Months Ended September 30,
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1999 1998
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(in millions)
Revenues:
Electrical Products $2,265.6 $2,153.9
Tools & Hardware 598.8 615.4
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Total $2,864.4 $2,769.3
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Segment Operating Earnings
Without Nonrecurring Items:
Electrical Products $ 386.1 $ 364.0
Tools & Hardware 73.0 85.0
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Total 459.1 449.0
Segment Nonrecurring Items:
Electrical Products 3.0 -
Tools & Hardware 1.5 -
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Total 4.5 -
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Segment Operating Earnings
With Nonrecurring Items:
Electrical Products 383.1 364.0
Tools & Hardware 71.5 85.0
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Total segment operating earnings 454.6 449.0
General Corporate nonrecurring items (0.8) -
General Corporate expense 28.9 38.1
Interest expense 39.1 87.5
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Consolidated income from continuing
operations before income taxes $ 387.4 $ 323.4
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Nine Months Ended September 30,
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1999 1998
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Return on Sales: (1)
Electrical Products 17.0% 16.9%
Tools & Hardware 12.2% 13.8%
Total Segments 16.0% 16.2%
(1) Before Nonrecurring Items.
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