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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, 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 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 April 22, 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 first quarter of 1999.
Exhibit 99.1 contains the Company's results of operations by segment, as now
required. To assist in quarter-to-quarter comparisons, the Company has attached
hereto as Exhibit 99.2 financial information by segment as of the end of each of
the quarters in the year ended December 31, 1998.
Item 7. Financial Statements and Exhibits.
Exhibits
--------
99.1 Company press release dated April 22, 1999 titled
"Cooper Announces First-Quarter Earnings Per Share
of $0.80."
99.2 Cooper Industries, Inc. Additional Segment Information
for 1998
-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)
/s/ Diane K. Schumacher
Date: April 22, 1999 ------------------------------------
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 April 22, 1999 titled "Cooper Announces
First-Quarter Earnings Per Share of $0.80."
99.2 Cooper Industries, Inc. Additional Segment Information for 1998
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EXHIBIT 99.1
FOR IMMEDIATE RELEASE
April 22, 1999
Contact: John Breed
713-209-8835
COOPER ANNOUNCES FIRST-QUARTER EARNINGS PER SHARE OF $0.80
HOUSTON, TX, April 22 -- Cooper Industries, Inc. (NYSE:CBE) today reported
first-quarter earnings of 80 cents per share (assuming dilution). This
represents a 5 percent increase over first-quarter 1998 earnings of 76 cents
per share. First-quarter 1999 net income was $75.6 million compared with $92.0
million for the same period in 1998. Last year's first-quarter net income
included $26.7 million, or 22 cents per share, from the Company's discontinued
Automotive Products segment, which was sold in the fourth quarter of 1998 for
$1.9 billion. Net income declined quarter-to-quarter due to the absence of the
Automotive segment's earnings; however, the earnings per share impact was offset
by the use of the proceeds of that sale to realign the Company's capital
structure through share repurchases and debt reduction.
Cooper's first-quarter 1999 revenues were up 3 percent to $924.7
million, compared with $894.1 million for the same period last year. Operating
income for the first-quarter 1999 increased 6 percent to $135.1 million,
excluding nonrecurring items, versus $127.3 million for the first-quarter 1998.
"We are off to a very good start for 1999," said H. John Riley, Jr.,
chairman, president and chief executive officer, Cooper Industries, Inc.
"Despite difficult year-to-year comparisons, we exceeded our plan for the
period. We were able to offset the severe and prolonged impact of last year's
economic collapse in Asia and a general weakening of the global manufacturing
industry, with internal improvements, value-adding acquisitions and growth
initiatives in our operations. All things considered, we are pleased with our
performance in the quarter."
During the quarter, the Company began to implement its cost control and
asset rationalization program announced in December of last year. The
first-quarter results include $3.7 million of net nonrecurring expenses
primarily resulting from the program's early retirement
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plan and recent plant closings. Savings from these programs are expected to have
a positive impact on results going forward.
ELECTRICAL PRODUCTS
First-quarter 1999 revenues from Electrical Products increased 3
percent to $728.5 million from $706.0 million for the same period last year. The
segment's first-quarter 1999 operating earnings increased 4 percent to $121.4
million from $116.6 million for the first quarter of 1998, before nonrecurring
items.
With the exception of demand for electrical construction materials, all
other Electrical Products' operations improved revenues and earnings during the
quarter. Cooper's lighting fixture businesses remained very strong. In addition,
power products sales and operating performance improved during the quarter,
reestablishing their momentum. Improved margins in its European operations also
contributed to the segment's positive performance.
TOOLS & HARDWARE
First-quarter 1999 revenues for the Tools & Hardware segment were up 4
percent to $196.2 million from $188.1 million for the same period last year. The
segment's first-quarter 1999 operating earnings were $23.3 million versus $25.2
million for the first quarter 1998, before nonrecurring items.
Overall results for the segment were in line with expectations. The
earnings decrease was primarily a result of continued sluggish demand for tools
used in aerospace manufacturing and general industrial markets. The effects of
these difficult market conditions were partially offset by income from 1998
acquisitions and successful cost control measures.
"Cooper today has highly focused business platforms in Electrical
Products and Tools & Hardware," said Riley. "In addition, the Company now has
the resources and financial flexibility to profitably expand these businesses
through internal improvements and strategic acquisitions.
"Going forward, we intend to capitalize on our strong brands and
leadership in the markets we serve. We have the advantage of our strong cash
flow and healthy balance sheet. We intend to capitalize on these strengths to
capture strategic and profitable growth opportunities both domestically and
around the world."
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
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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 and other Securities
and Exchange Commission filings.
Comparisons of 1999 and 1998 first-quarter results appear on the
following pages.
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CONSOLIDATED RESULTS OF OPERATIONS
Quarter Ended March 31,
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1999 1998(1)
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(in millions where applicable)
Revenues $ 924.7 $ 894.1
Cost of sales 622.0 601.9
Selling and administrative expenses 156.3 154.8
Goodwill amortization 11.3 10.1
Nonrecurring charges 3.7 -
Interest expense 13.2 25.3
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Continuing Income Before Income Taxes 118.2 102.0
Income taxes 42.6 36.7
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Continuing income 75.6 65.3
Discontinued operations, net of tax - 26.7
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Net Income (2) $ 75.6 $ 92.0
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Net Income Per Common Share:
Basic
Continuing Operations $ .80 $ .55
Discontinued Operations - .22
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Net Income $ .80 $ .77
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Diluted
Continuing Operations $ .80 $ .54
Discontinued Operations - .22
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Net Income $ .80 $ .76
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Shares Utilized in Computation
of Income Per Common Share:
Basic 94.0 million 119.7 million
Diluted 94.7 million 121.2 million
PERCENTAGE OF REVENUES
Quarter Ended March 31,
-----------------------
1999 1998
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Revenues 100.0% 100.0%
Cost of sales 67.3% 67.3%
Selling and administrative expenses 16.9% 17.3%
Continuing Income Before Income Taxes 12.8% 11.4%
Continuing Income 8.2% 7.3%
(Additional information on next page)
(1) The 1998 amounts have been restated to reflect the reclassification of the
Company's Automotive Products segment as a discontinued operation.
(2) Net income is not comparable quarter-to-quarter due to the impact of the
sale of the Automotive 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 March 31
Net Income Per
Net Income Diluted Common Share
---------------- --------------------
1999 1998 1999 1998
---- ---- ---- ----
(in millions)
From Continuing Operations:
Before nonrecurring items $ 78.0 $ 65.3 $ .82 $ .54
Nonrecurring items (2.4) - (.02) -
------- ------- ------- -------
75.6 65.3 .80 .54
Discontinued Operations - 26.7 - .22
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Net Income $ 75.6 $ 92.0 $ .80 $ .76
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Segment Information
Quarter Ended March 31,
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1999 1998
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(in millions)
Revenues:
Electrical Products $ 728.5 $ 706.0
Tools & Hardware 196.2 188.1
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Total $ 924.7 $ 894.1
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Segment Operating Earnings
Without Nonrecurring Items:
Electrical Products $ 121.4 $ 116.6
Tools & Hardware 23.3 25.2
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Total 144.7 141.8
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 118.4 116.6
Tools & Hardware 21.8 25.2
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Total segment operating earnings 140.2 141.8
General Corporate nonrecurring items (0.8) -
General Corporate expense 9.6 14.5
Interest expense 13.2 25.3
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Consolidated income from continuing
operations before income taxes $ 118.2 $ 102.0
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EXHIBIT 99.2
COOPER INDUSTRIES, INC.
ADDITIONAL SEGMENT INFORMATION
1998
<TABLE>
<CAPTION>
Quarter Ended
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March 31, June 30, Sept 30, Dec 31,
1998 1998 1998 1998
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(in millions)
<S> <C> <C> <C> <C>
REVENUES:
Electrical Products $706.0 $723.9 $724.0 $670.5
Tools & Hardware 188.1 227.3 200.0 211.4
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Total Revenues $894.1 $951.2 $924.0 $881.9
================ ============= ============ ============
SEGMENT OPERATING EARNINGS:
WITHOUT NONRECURRING ITEMS
Electrical Products $116.6 $122.9 $124.5 $115.0
Tools & Hardware 25.2 34.5 25.3 27.4
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Total Earnings 141.8 157.4 149.8 142.4
NONRECURRING ITEMS:
Electrical Products 42.6
Tools & Hardware 8.7
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Total Nonrecurring Items 0.0 0.0 0.0 51.3
SEGMENT OPERATING EARNINGS:
WITH NONRECURRING ITEMS
Electrical Products 116.6 122.9 124.5 72.4
Tools & Hardware 25.2 34.5 25.3 18.7
---------------- ------------- ------------ ------------
Total Earnings 141.8 157.4 149.8 91.1
Nonrecurring gains 135.2
Corporate nonrecurring items 2.3
General Corporate expense 14.5 13.8 9.8 9.4
Interest expense 25.3 27.4 34.8 14.4
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Consolidated income from continuing operations
before income taxes $102.0 $116.2 $105.2 $200.2
================ ============= ============ ============
RETURN ON REVENUES:
WITHOUT NONRECURRING ITEMS
Electrical Products 16.5% 17.0% 17.2% 17.2%
Tools & Hardware 13.4% 15.2% 12.6% 13.0%
Total 15.9% 16.5% 16.2% 16.1%
</TABLE>
