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EXHIBIT 99.1
FOR IMMEDIATE RELEASE
July 25, 2000
Contact: John Breed
713-209-8835
COOPER INDUSTRIES REPORTS CONTINUED STRONG REVENUE AND
EARNINGS GROWTH IN THE SECOND QUARTER
HOUSTON, TX, July 25 -- Cooper Industries, Inc. (NYSE:CBE) today reported
second-quarter net income of $92.9 million or $.99 per share (assuming
dilution), compared with second-quarter 1999 earnings of $88.0 million or $.92
per share. Revenues for the second quarter 2000 were $1.17 billion, compared
with second-quarter 1999 revenues of $957.5 million. Operating earnings for the
second quarter 2000 increased over 13 percent to $169.6 million, compared with
$149.6 million for the same period last year.
"We are pleased with our performance in the second quarter," said H.
John Riley, chairman, president and chief executive officer. "Our substantial
revenue increase of 22 percent was propelled by our two most recent electrical
products acquisitions, which contributed nearly $110 million of new revenues in
the quarter, complementing solid growth in our already strong base businesses.
"Our second-quarter results continue to demonstrate the success of our
ongoing strategy to create a world class electrical products and tools company,"
continued Riley. "Internal growth and highly focused acquisitions are broadening
channels to market, enhancing our strong core businesses, expanding already
extensive product offerings and presenting significant new opportunities for
cost efficiencies and growth."
Earnings per share for the first half of 2000 increased to $1.88,
compared with $1.74, excluding nonrecurring items, for the same period last
year. Net income rose to $176.8 million for the first six months of 2000, an 8
percent increase over 1999 first-half net income of $163.6 million. First-half
1999 net income includes $2.4 million, or $.02 per share, of nonrecurring net
charges primarily related to cost control and asset rationalization programs.
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COOPER INDUSTRIES, INC. PAGE 2
Total revenues for the first half of 2000 grew 17 percent to $2.21 billion,
compared with $1.88 billion for the same period last year. Operating earnings
for the first half of 2000 were $317.0 million, an increase of over 11 percent
from 1999 first-half operating earnings of $284.7 million, excluding
nonrecurring items.
ELECTRICAL PRODUCTS
Second-quarter 2000 revenues from the Electrical Products segment
increased to $961.6 million, compared with $751.1 million for the same period
last year. Core growth for the segment exceeded 6.5 percent, despite the impact
of the delayed recovery in energy sector capital spending affecting the
Company's hazardous duty electrical products operations. However, higher oil and
gas prices and the resulting increased cash flows bode well for the future of
this business.
Second-quarter operating earnings rose over 16 percent to $152.5
million from $130.9 million for the second quarter 2000. After adjusting for
recent acquisitions, second-quarter 2000 operating margins were 17.5 percent,
compared with 17.4 percent for the same period last year.
Year-to-date 2000 segment revenues increased almost 22 percent to $1.80
billion, compared with $1.48 billion for the same period last year. Segment
operating earnings for the first half of 2000 were $285.7 million, compared with
$252.3 million, excluding nonrecurring items, for the first half of 1999.
Cooper's lighting business continued its very strong growth trend
during the quarter with a 26 percent increase in revenues driven by a
strengthening price environment for our core products and by recent
acquisitions. Cooper's circuit protection business grew at a similar rate as a
result of continuing penetration into higher growth telecommunications and
electronics markets as well as additional sales from recently introduced
products. On the international front, the Company's European lighting and
security operations grew revenues 37 percent during the quarter as businesses
acquired last year have significantly expanded product offerings and markets
served. Power equipment revenues also grew during the quarter but at a more
modest rate.
During the second quarter of 2000, the Company finalized the
acquisition of B-Line Systems, a leading manufacturer of support systems and
enclosures for electrical, mechanical and telecommunications/data applications.
That acquisition, along with the acquisition of Eagle Electric completed late in
the first quarter of 2000, is on track to meet or exceed earnings projections
for the year.
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COOPER INDUSTRIES, INC. PAGE 3
TOOLS & HARDWARE
Second-quarter revenues for the Tools & Hardware segment were $206.6
million, compared with $206.4 million for the second quarter of 1999. An
improvement in demand for hand tools in North and Latin America was essentially
offset by the timing of shipments of assembly equipment orders to international
customers. Second-quarter operating earnings for the segment were $24.6 million,
compared with $29.1 million for the same period last year.
Operating margins for the Tools & Hardware segment during the second
quarter 2000 were 11.9 percent, compared with 14.1 percent for the same period
last year. The Company continues to rationalize its Tools & Hardware operations.
Consistent with this activity, Cooper recently announced that it is constructing
a new facility in Mexico to manufacture selected consumer product lines. The new
plant also will reduce costs and serve growing markets in Latin America.
Revenues during the first half of 2000 for the Tools & Hardware segment
were $406.4 million, compared with $402.6 million for the same period last year.
Segment operating earnings for the six months ending June 30, 2000, were $46.6
million, compared with $52.4 million, excluding nonrecurring items, for the same
period in 1999.
"Cooper exhibited very solid results for the second quarter, the most
notable being considerable top line growth," continued Riley. "Additionally,
during the first half of the year, we successfully strengthened our already
solid business platform with numerous opportunities for growth and enhanced
profitability. Consequently, we are confident that we will achieve our
objectives for the year and we expect to enter 2001 an even stronger, more
balanced company."
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.
Comparisons of 2000 and 1999 second-quarter and year-to-date results
appear on the following pages.
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 1999 Annual Report on Form 10-K and other Securities
and Exchange Commission filings.
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Cooper Industries, Inc. Page 4
Cooper's second-quarter 2000 earnings conference call for analysts and
investors will be broadcast over the Internet through the Company's web site at
noon (Eastern) on Tuesday, July 25, 2000. The conference call also will be
available as a taped audio replay over the Internet through the Company's web
page until August 1, 2000.
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CONSOLIDATED RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
Quarter Ended June 30,
------------------------------
2000 1999
----------- ---------
(in millions where applicable)
<S> <C> <C>
Revenues $ 1,168.2 $ 957.5
Cost of sales 794.5 639.8
Selling and administrative expenses 189.4 156.6
Goodwill amortization 14.7 11.5
----------- ---------
Operating earnings 169.6 149.6
Interest expense 26.6 12.2
----------- ---------
Income Before Income Taxes 143.0 137.4
Income taxes 50.1 49.4
----------- ---------
Net Income $ 92.9 $ 88.0
=========== =========
Net Income Per Common Share:
Basic $ 1.00 $ .93
=========== =========
Diluted $ .99 $ .92
=========== =========
Shares Utilized in Computation
of Income Per Common Share:
Basic 93.3 MILLION 94.2 million
Diluted 93.9 MILLION 95.3 million
</TABLE>
PERCENTAGE OF REVENUES
<TABLE>
<CAPTION>
Quarter Ended June 30,
----------------------------
2000 1999
------ ------
<S> <C> <C>
Revenues 100.0% 100.0%
Cost of sales 68.0% 66.8%
Selling and administrative expenses 16.2% 16.4%
Operating earnings 14.5% 15.6%
Income Before Income Taxes 12.2% 14.3%
Net Income 8.0% 9.2%
</TABLE>
(Additional information on next page)
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CONSOLIDATED RESULTS OF OPERATIONS (CONTINUED)
ADDITIONAL INFORMATION FOR THE QUARTER ENDED JUNE 30
SEGMENT INFORMATION
<TABLE>
<CAPTION>
Quarter Ended June 30,
------------------------------
2000 1999
---------- --------
(in millions)
<S> <C> <C>
Revenues:
Electrical Products $ 961.6 $ 751.1
Tools & Hardware 206.6 206.4
---------- --------
Total $ 1,168.2 $ 957.5
========== ========
Segment Operating Earnings:
Electrical Products $ 152.5 $ 130.9
Tools & Hardware 24.6 29.1
---------- --------
Total 177.1 160.0
General Corporate expense 7.5 10.4
Interest expense 26.6 12.2
---------- --------
Income before income taxes $ 143.0 $ 137.4
========== ========
</TABLE>
<TABLE>
<CAPTION>
Quarter Ended June 30,
--------------------------
2000 1999
---- ----
<S> <C> <C>
Return on Sales: (1)
Electrical Products 15.9% 17.4%
Tools & Hardware 11.9% 14.1%
Total Segments 15.2% 16.7%
</TABLE>
(Additional information on next page)
(1) Adjusting for recent acquisitions, return on sales in 2000 was 17.5% for
Electrical Products and 11.8% for Tools & Hardware. Return on sales in 2000
for the total of the segments was 16.3%.
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CONSOLIDATED RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
Six Months Ended June 30,
------------------------------
2000 1999
----------- -----------
(in millions where applicable)
<S> <C> <C>
Revenues $ 2,207.1 $ 1,882.2
Cost of sales 1,496.2 1,261.8
Selling and administrative expenses 365.8 312.9
Goodwill amortization 28.1 22.8
----------- -----------
Operating earnings before nonrecurring items 317.0 284.7
Nonrecurring charges -- 3.7
Interest expense 44.9 25.4
----------- -----------
Income Before Income Taxes 272.1 255.6
Income taxes 95.3 92.0
----------- -----------
Net Income $ 176.8 $ 163.6
=========== ===========
Net Income Per Common Share:
Basic $ 1.89 $ 1.74
=========== ===========
Diluted $ 1.88 $ 1.72
=========== ===========
Shares Utilized in Computation
of Income Per Common Share:
Basic 93.5 MILLION 94.1 million
Diluted 94.2 MILLION 95.0 million
</TABLE>
PERCENTAGE OF REVENUES
<TABLE>
<CAPTION>
Six Months Ended June 30,
--------------------------
2000 1999
------ ------
<S> <C> <C>
Revenues 100.0% 100.0%
Cost of sales 67.8% 67.0%
Selling and administrative expenses 16.6% 16.6%
Operating earnings before nonrecurring items 14.4% 15.1%
Income Before Income Taxes 12.3% 13.6%
Net Income 8.0% 8.7%
</TABLE>
(Additional information on next page)
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CONSOLIDATED RESULTS OF OPERATIONS (CONTINUED)
ADDITIONAL INFORMATION FOR THE SIX MONTHS ENDED JUNE 30
SEGMENT INFORMATION
<TABLE>
<CAPTION>
Six Months Ended June 30,
----------------------------
2000 1999
---------- ----------
(in millions)
<S> <C> <C>
Revenues:
Electrical Products $ 1,800.7 $ 1,479.6
Tools & Hardware 406.4 402.6
---------- ----------
Total $ 2,207.1 $ 1,882.2
========== ==========
Segment Operating Earnings
Without Nonrecurring Items:
Electrical Products $ 285.7 $ 252.3
Tools & Hardware 46.6 52.4
---------- ----------
Total 332.3 304.7
Segment Nonrecurring Items:
Electrical Products -- 3.0
Tools & Hardware -- 1.5
---------- ----------
Total -- 4.5
---------- ----------
Segment Operating Earnings
With Nonrecurring Items:
Electrical Products 285.7 249.3
Tools & Hardware 46.6 50.9
---------- ----------
Total segment operating earnings 332.3 300.2
General Corporate nonrecurring items -- (.8)
General Corporate expense 15.3 20.0
Interest expense 44.9 25.4
---------- ----------
Income before income taxes $ 272.1 $ 255.6
========== ==========
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended June 30,
-------------------------
2000 1999
---- ----
<S> <C> <C>
Return on Sales: (1)
Electrical Products 15.9% 17.1%
Tools & Hardware 11.5% 13.0%
Total Segments 15.1% 16.2%
</TABLE>
(Additional information on next page)
(1) Before nonrecurring items and after acquisitions. Adjusting for recent
acquisitions, return on sales in 2000 was 17.0% for Electrical Products and
11.3% for Tools & Hardware. Return on sales in 2000 for the total of the
segments was 15.9%.
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CONSOLIDATED RESULTS OF OPERATIONS (CONTINUED)
ADDITIONAL INFORMATION FOR THE SIX MONTHS ENDED JUNE 30
<TABLE>
<CAPTION>
Net Income Per
Net Income Diluted Common Share
------------------------ -----------------------
2000 1999 2000 1999
-------- -------- -------- --------
(in millions where applicable)
<S> <C> <C> <C> <C>
Income before nonrecurring
items $ 176.8 $ 166.0 $ 1.88 $ 1.74
Nonrecurring items -- (2.4) -- (.02)
-------- -------- -------- --------
Net Income $ 176.8 $ 163.6 $ 1.88 $ 1.72
======== ======== ======== ========
</TABLE>
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