<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) January 27, 2000
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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)
<PAGE> 2
Item 5. Other Events.
On January 27, 2000, 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 fourth quarter and full year of 1999.
Item 7. Financial Statements and Exhibits.
Exhibits
99.1 Company Press Release Dated January 27, 2000 Titled
"Cooper Industries Reports 14% Revenue Growth for Fourth
Quarter 1999."
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<PAGE> 3
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, 2000 /s/ Diane K. Schumacher
------------------------------
Diane K. Schumacher
Senior Vice President, General
Counsel and Secretary
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EXHIBIT INDEX
Exhibit No.
99.1 Company Press Release Dated January 27, 2000 Titled "Cooper
Industries Reports 14% Revenue Growth for Fourth Quarter 1999."
<PAGE> 1
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
January 27, 2000
Contact: John Breed
(713) 209-8835
COOPER INDUSTRIES REPORTS 14% REVENUE GROWTH
FOR FOURTH QUARTER 1999
Electrical Products' performance drives strong year-end results
HOUSTON, TX, Jan. 27, 2000 -- Cooper Industries, Inc. (NYSE:CBE) today reported
fourth-quarter 1999 revenues of $1.0 billion, a 14 percent increase from 1998
fourth-quarter revenues of $882 million. Fourth-quarter operating earnings
before nonrecurring items increased 11 percent to $147.3 million in 1999 versus
$133.0 million for the same period in 1998.
Net income for the fourth quarter 1999 was $83.9 million, compared with
$78.8 million for the same period in 1998 that excludes a $53.0 million net
nonrecurring gain. Comparable quarterly diluted earnings per share increased 16
percent in 1999 to $0.89 from $0.77 in 1998.
Annual 1999 revenues for the Company were $3.87 billion, a 6 percent
increase from 1998 revenues of $3.65 billion. Operating earnings, before
nonrecurring items, for 1999 also increased 6 percent to $577.5 million,
compared with $543.9 million for 1998.
Earnings per diluted share for 1999 were $3.50 versus $3.69 for 1998.
Excluding nonrecurring items, per share earnings increased 9 percent in 1999 to
$3.52 from $3.23 in 1998.
Cooper's net income for 1999 was $331.9 million, compared with $423.0
million for 1998. Net income is not comparable year-to-year due to the absence
of $87.1 million of earnings from the Automotive Products segment which was sold
in October of 1998.
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<PAGE> 2
COOPER INDUSTRIES, INC. PAGE 2
"1999 represented Cooper's first full year of performance as a company
comprised of two key businesses: Electrical Products and Tools & Hardware," said
H. John Riley, Jr., chairman, president and chief executive officer. "We made
excellent progress refining and growing these businesses and positioning the
Company for long-term profitability.
"We added ten complementary acquisitions with annualized revenues of more
than $300 million, extending our product offerings in 1999 with several
well-known brand names. Significantly, many of these acquisitions are located
outside of the U.S., aggressively expanding our penetration into European and
Latin American markets. For the first time, revenues from international
activities exceeded $1 billion," continued Riley.
"We also invested nearly $165 million in capital equipment, lower-cost
facilities and state-of-the-art technology. We are confident that we have the
right processes in place to enhance our competitive position and grow our
businesses for many years to come."
ELECTRICAL PRODUCTS
Electrical Products' fourth-quarter 1999 revenues grew 19 percent. Four
of Cooper's five Electrical Products businesses achieved double-digit revenue
growth during the quarter.
Cooper's lighting business was bolstered by acquisitions and a significant
array of new product introductions. Cooper's European lighting and security
business also grew as a result of strategic acquisitions. Increased growth in
the electronic technologies marketplace contributed to the strong performance of
Cooper's circuit protection businesses. Cooper Power Systems continued to
recover during the quarter as new business systems were refined and Asian
markets continued to strengthen. Revenue from the hazardous-duty construction
materials business was flat during the quarter due to continued weakness in
energy and petrochemicals; however, the recent positive commodity pricing trends
in these markets are encouraging.
Fourth quarter operating earnings, excluding nonrecurring items in 1998,
increased 14 percent to $130.6 million from $115.0 million in the fourth quarter
of 1998.
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COOPER INDUSTRIES, INC. PAGE 3
Annual revenues from the Electrical Products segment increased 8 percent in
1999 to $3.06 billion from $2.82 billion in 1998. Annual 1999 operating earnings
for the segment, excluding nonrecurring items, were $516.7 million, compared
with $479.0 million in 1998.
"Cooper achieved solid growth in its Electrical Products segment during
1999," continued Riley. We continue to develop higher technology products and
increase our global reach, while implementing focused initiatives to control
costs and increase profitability."
TOOLS & HARDWARE
Fourth-quarter revenues for the Tools & Hardware segment declined 1
percent, due to currency translation and continued weakness in industrial tool
demand. Increased sales of assembly equipment during the quarter offset some of
that weakness.
Operating earnings, excluding nonrecurring items, declined 9 percent to
$24.9 million in the fourth quarter of 1999, compared with $27.4 million in the
fourth quarter of 1998. Translation of international results into U.S. dollars
reduced both revenues and earnings by approximately 4 percent in the fourth
quarter.
Annual 1999 revenues for the Tools & Hardware segment were $808.0 million,
compared with $826.8 million for 1998. Operating earnings, excluding
nonrecurring items, were $97.9 million, compared with $112.4 million for 1998.
"Market conditions in the Tools & Hardware segment remained difficult in
1999," continued Riley. "In response, in the third quarter Cooper announced a
significant reorganization of its Tools businesses designed to leverage
operational strengths and further reduce costs.
"The absence of meaningful growth is expected to continue to affect the
industry in the near term. However, as tools and hardware markets strengthen, we
anticipate that our aggressive cost-reduction programs and selected acquisitions
will position the segment for improved performance in the future.
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<PAGE> 4
COOPER INDUSTRIES, INC. PAGE 4
"Cooper began 1999 with several inherent strengths: two strong business
platforms, a healthy balance sheet and market leadership positions," continued
Riley. "During the year we grew our core business platform, adding new products
and capabilities. We continued to refine our operations, streamlining costs and
increasing efficiencies. We penetrated new markets and strengthened our
international activities. On a broader scale, we instituted new company-wide
initiatives such as Strategic Sourcing that we expect will produce significant
cost savings beginning this year.
"Going forward, I believe our strategy is sound. Our products are market
leaders, and I am confident that our concerted efforts are positioning Cooper to
succeed in an era of increasing competitiveness characterized by relentless cost
cutting, greater use of technology and instantaneous customer service. We enter
2000 fully expecting to enhance the positive trends that characterized our 1999
performance."
Cooper Industries, with 1999 revenues of $3.9 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 fourth-quarter and year-to-date results appear
on the following pages.
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<PAGE> 5
CONSOLIDATED RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
Quarter Ended December 31,
--------------------------
1999 1998
---- ----
(in millions where applicable)
<S> <C> <C>
Revenues $1,004.5 $ 881.9
-------- ---------
Cost of sales 677.2 583.6
Selling and administrative expenses 167.2 153.9
Goodwill amortization 12.8 11.4
-------- ---------
Operating earnings before nonrecurring items 147.3 133.0
Marketable securities gains -- (135.2)
Nonrecurring charges -- 53.6
Interest expense 16.1 14.4
-------- ---------
Continuing Income Before Income Taxes 131.2 200.2
Income taxes 47.3 71.3
-------- ---------
Continuing Income 83.9 128.9
Discontinued operations, net of tax -- 2.9
-------- ---------
Net Income (1) $ 83.9 $ 131.8
======== =========
Net Income Per Common Share:
Basic
Continuing Operations $ .89 $ 1.27
Discontinued Operations -- .03
-------- ---------
Net Income $ .89 $ 1.30
======== =========
Diluted
Continuing Operations $ .89 $ 1.26
Discontinued Operations -- .03
-------- ---------
Net Income $ .89 $ 1.29
======== =========
</TABLE>
<TABLE>
<S> <C> <C>
Shares Utilized in Computation
of Income Per Common Share:
Basic 94.0 MILLION 101.5 million
Diluted 94.7 MILLION 102.5 million
</TABLE>
PERCENTAGE OF REVENUES
<TABLE>
<CAPTION>
Quarter Ended December 31,
--------------------------
1999 1998
---- ----
<S> <C> <C>
Revenues 100.0% 100.0%
Cost of sales 67.4% 66.2%
Selling and administrative expenses 16.6% 17.5%
Operating earnings before nonrecurring items 14.7% 15.1%
Continuing Income Before Income Taxes 13.1% 22.7%
Continuing Income 8.4% 14.6%
</TABLE>
(Additional information on next page)
(1) Results are not comparable quarter-to-quarter due to the impact of the sale
of the Automotive Products business and the use of the proceeds to reduce
debt and buy back shares.
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5
<PAGE> 6
CONSOLIDATED RESULTS OF OPERATIONS (CONTINUED)
ADDITIONAL INFORMATION FOR THE QUARTER ENDED DECEMBER 31
SEGMENT INFORMATION
<TABLE>
<CAPTION>
Quarter Ended December 31,
--------------------------------
1999 1998
-------- ---------
(in millions)
<S> <C> <C>
Revenues:
Electrical Products $ 795.3 $ 670.5
Tools & Hardware 209.2 211.4
-------- ---------
Total $1,004.5 $ 881.9
======== =========
Segment Operating Earnings
Without Nonrecurring Items:
Electrical Products $ 130.6 $ 115.0
Tools & Hardware 24.9 27.4
-------- ---------
Total 155.5 142.4
Segment Nonrecurring Items:
Electrical Products -- 42.6
Tools & Hardware -- 8.7
-------- ---------
Total -- 51.3
-------- ---------
Segment Operating Earnings
With Nonrecurring Items:
Electrical Products 130.6 72.4
Tools & Hardware 24.9 18.7
-------- ---------
Total segment operating earnings 155.5 91.1
General Corporate nonrecurring items -- 2.3
Marketable securities gains -- (135.2)
General Corporate expense 8.2 9.4
Interest expense 16.1 14.4
-------- ---------
Consolidated income from continuing operations
before income taxes $ 131.2 $ 200.2
======== =========
</TABLE>
<TABLE>
<CAPTION>
Quarter Ended December 31,
-------------------------
1999 1998
---- ----
<S> <C> <C>
Return on Sales: (1)
Electrical Products 16.4% 17.2%
Tools & Hardware 11.9% 13.0%
Total Segments 15.5% 16.1%
</TABLE>
(Additional information on next page)
(1) Before Nonrecurring Items.
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<PAGE> 7
CONSOLIDATED RESULTS OF OPERATIONS (CONTINUED)
ADDITIONAL INFORMATION FOR THE QUARTER ENDED DECEMBER 31
<TABLE>
<CAPTION>
Net Income Per
Net Income Diluted Common Share
------------------- --------------------
1999 1998 1999 1998
------ ------ ------- -------
<S> <C> <C> <C> <C>
(in millions where applicable)
Continuing operations before $ 83.9 $ 75.9 $ .89 $ .74
nonrecurring items
Discontinued operations -- 2.9 -- .03
------ ------ ------ ------
83.9 78.8 .89 .77
Nonrecurring items -- 53.0 -- .52
------ ------ ------ ------
Net Income $ 83.9 $131.8 $ .89 $ 1.29
====== ====== ====== ======
</TABLE>
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<PAGE> 8
CONSOLIDATED RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
Twelve Months Ended December 31,
--------------------------------
1999 1998
-------- --------
(in millions where applicable)
<S> <C> <C>
Revenues $3,868.9 $3,651.2
Cost of sales 2,603.4 2,447.1
Selling and administrative expenses 640.9 616.4
Goodwill amortization 47.1 43.8
-------- --------
Operating earnings before nonrecurring items 577.5 543.9
Marketable securities gains -- (135.2)
Nonrecurring charges 3.7 53.6
Interest expense 55.2 101.9
-------- --------
Continuing Income Before Income Taxes 518.6 523.6
Income taxes 186.7 187.7
-------- --------
Continuing Income 331.9 335.9
Discontinued operations, net of tax -- 87.1
-------- --------
Net Income (1) $ 331.9 $ 423.0
======== ========
Net Income Per Common Share:
Basic
Continuing Operations $ 3.53 $ 2.97
Discontinued Operations -- .77
-------- --------
Net Income $ 3.53 $ 3.74
======== ========
Diluted
Continuing Operations $ 3.50 $ 2.93
Discontinued Operations -- .76
-------- --------
Net Income $ 3.50 $ 3.69
======== ========
</TABLE>
<TABLE>
Shares Utilized in Computation
of Income Per Common Share:
<S> <C> <C>
Basic 94.0 million 113.2 million
Diluted 94.9 million 114.7 million
</TABLE>
PERCENTAGE OF REVENUES
<TABLE>
<CAPTION>
Twelve Months Ended December 31,
--------------------------------
1999 1998
----- -----
<S> <C> <C>
Revenues 100.0% 100.0%
Cost of sales 67.3% 67.0%
Selling and administrative expenses 16.6% 16.9%
Operating earnings before nonrecurring items 14.9% 14.9%
Continuing Income Before Income Taxes 13.4% 14.3%
Continuing Income 8.6% 9.2%
</TABLE>
(Additional information on next page)
(1) Results are not comparable period-to-period due to the impact of the sale
of the Automotive Products business and the use of the proceeds to reduce
debt and buy back shares.
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8
<PAGE> 9
CONSOLIDATED RESULTS OF OPERATIONS (CONTINUED)
ADDITIONAL INFORMATION FOR THE TWELVE MONTHS ENDED DECEMBER 31
SEGMENT INFORMATION
<TABLE>
<CAPTION>
Twelve Months Ended December 31,
--------------------------------
1999 1998
-------- --------
(in millions)
<S> <C> <C>
Revenues:
Electrical Products $3,060.9 $2,824.4
Tools & Hardware 808.0 826.8
-------- --------
Total $3,868.9 $3,651.2
======== ========
Segment Operating Earnings
Without Nonrecurring Items:
Electrical Products $ 516.7 $ 479.0
Tools & Hardware 97.9 112.4
-------- --------
Total 614.6 591.4
Segment Nonrecurring Items:
Electrical Products 3.0 42.6
Tools & Hardware 1.5 8.7
-------- --------
Total 4.5 51.3
-------- --------
Segment Operating Earnings
With Nonrecurring Items:
Electrical Products 513.7 436.4
Tools & Hardware 96.4 103.7
-------- --------
Total segment operating earnings 610.1 540.1
General Corporate nonrecurring items (0.8) 2.3
Marketable securities gains -- (135.2)
General Corporate expense 37.1 47.5
Interest expense 55.2 101.9
-------- --------
Consolidated income from continuing operations
before income taxes $ 518.6 $ 523.6
======== ========
</TABLE>
<TABLE>
<CAPTION>
Twelve Months Ended December 31,
-----------------------------------------
1999 1998
---- ----
<S> <C> <C>
Return on Sales: (1)
Electrical Products 16.9% 17.0%
Tools & Hardware 12.1% 13.6%
Total Segments 15.9% 16.2%
</TABLE>
(Additional information on next page)
(1) Before Nonrecurring Items.
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<PAGE> 10
CONSOLIDATED RESULTS OF OPERATIONS (CONTINUED)
ADDITIONAL INFORMATION FOR THE TWELVE MONTHS ENDED DECEMBER 31
<TABLE>
<CAPTION>
Net Income Per
Net Income Diluted Common Share
---------------- --------------------
1999 1998 1999 1998
------ ------ ----- -----
(in millions where applicable)
<S> <C> <C> <C> <C>
Continuing operations before
nonrecurring items $334.3 $282.9 $3.52 $2.47
Discontinued operations -- 87.1 -- .76
------ ------ ----- -----
334.3 370.0 3.52 3.23
Nonrecurring items (2.4) 53.0 (.02) .46
------ ------ ----- -----
Net Income (1) $331.9 $423.0 $3.50 $3.69
====== ====== ===== =====
</TABLE>
(1) Results are not comparable period-to-period due to the impact of the sale
of the Automotive Products business and the use of the proceeds to reduce
debt and buy back shares.
# # #
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