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EXHIBIT 99.1
FOR IMMEDIATE RELEASE
October 24, 2000
Contact: John Breed
713-209-8835
COOPER INDUSTRIES REPORTS THIRD-QUARTER EARNINGS OF 97 CENTS
HOUSTON, TX, Oct. 24 -- Cooper Industries, Inc. (NYSE:CBE) today reported
third-quarter earnings per share of $.97 (diluted), a 9 percent increase over
last year's third-quarter earnings of $.89 per share. Revenues for the third
quarter 2000 grew 17 percent to $1.15 billion, compared with $982.2 million for
the same period last year. Operating earnings for the third quarter 2000
increased over 16 percent to $169.1 million, compared with $145.5 million for
the 1999 third quarter. Net income for the third quarter 2000 increased 8
percent to $91.4 million, compared with $84.4 million for the third quarter last
year.
"During the quarter, revenues continued to grow at an accelerated rate
reflecting particularly strong demand for our electronic, telecommunications and
new lighting product offerings as well as the effects of recent acquisitions,"
said H. John Riley, Jr., chairman, president and chief executive officer.
"Our continuing actions to expand the markets and customers we serve
are paying dividends," continued Riley. "We are confident that our broadened and
more balanced business base and our aggressive actions to reduce costs will
buffer the Company's results even in times of economic uncertainty."
Diluted earnings per share for the nine months ended September 30,
2000, rose by 8 percent to $2.85 compared with $2.63 for the same period last
year, excluding nonrecurring items. Nine-month 1999 earnings include $2.4
million, or $.02 per share, of nonrecurring charges, primarily related to cost
control and asset rationalization programs.
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Net income for the nine months ended September 30, 2000, grew 8 percent
to $268.2 million compared with $248.0 million for the same period in 1999.
Total revenues for the 2000 nine-month period grew 17 percent to $3.35 billion
from $2.86 billion for the same period in 1999. Operating earnings for the
nine-month period in 2000 increased 13 percent to $486.1 million, compared with
$430.2 million for the same period last year, excluding nonrecurring items.
ELECTRICAL PRODUCTS
Third-quarter 2000 revenues from the Electrical Products segment
increased 22 percent to $957.3 million from $786.0 million for the third quarter
1999. Third-quarter 2000 operating earnings for the segment increased 17 percent
to $156.9 million, compared with $133.8 million for the same period last year.
Aggressive cost management, strategic purchasing initiatives and other
productivity improvement programs continued to enhance profitability. Excluding
acquisitions, return on sales for the quarter for the Electrical Products
segment was 17.5 percent, compared with 17.0 percent for last year's third
quarter.
Revenues of Cooper's circuit protection business continued to grow at a
double-digit rate during the quarter spurred by new product offerings and strong
electronic and telecommunication sales. Revenues also grew at a double-digit
rate at Cooper's lighting business, reflecting modest price increases for core
products and the effect of recent acquisitions. Cooper's European lighting and
security operations also showed growth in the quarter as a result of
acquisitions. Revenue growth was more modest in the Company's power systems
business where improved demand for system upgrade equipment was offset somewhat
by lower sales of transformers and related equipment. Additionally, delayed
energy sector spending continued to influence the performance of the Company's
hazardous duty electrical products businesses. The acquisitions of B-Line
Systems and Eagle Electric, completed earlier this year, performed very well
during the quarter. Both businesses have further upside potential through
expanded penetration of higher growth markets and for improved manufacturing and
operating efficiencies.
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For the nine months ended September 30, 2000, revenues from the
Electrical Products segment increased 22 percent to $2.76 billion, compared with
$2.27 billion for the same period in 1999. Operating earnings from the
Electrical Products segment for the 2000 nine-month period rose 15 percent to
$442.6 million, compared with $386.1 million for the same period last year,
excluding nonrecurring items.
TOOLS & HARDWARE
Third-quarter 2000 revenues for the Tools & Hardware segment were
$188.5 million, compared with $196.2 million for the same period last year.
While sales trends in North and Latin American hand tools markets were
encouraging, this was more than offset by lower worldwide shipments of
automotive assembly equipment. The effects of currency translation further
reduced revenues in the segment by 3 percent in the quarter. Third-quarter 2000
operating earnings for the segment were $20.8 million, compared with $20.6
million for the same period in 1999, reflecting the results of the continuing
rationalization of these businesses. Excluding acquisitions, return on sales for
the segment during the third quarter 2000 were 10.9 percent, compared with
third-quarter 1999 return on sales of 10.5 percent.
Revenues in the Tools & Hardware segment for the nine months ended
September 30, 2000, were $594.9 million, compared with $598.8 million for the
same period last year. Operating earnings for the year 2000 nine-month period
were $67.4 million, compared with $73.0 million for the same period last year,
excluding nonrecurring items.
"Cooper's performance during the quarter was another solid step towards
achieving our financial objectives for the year," said Riley. "Moreover, it
makes us even more confident that we have the ability to achieve substantial
long-term revenues and earnings growth for our businesses."
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.
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Comparisons of 2000 and 1999 third-quarter and year-to-date results
appear on the following pages.
Cooper's third-quarter 2000 earnings conference call for analysts and
investors will be broadcast over the Internet through the Company's Web site
(www.cooperindustries.com) at noon (Eastern) on Tuesday, October 24, 2000. The
conference call also will be available as a taped audio replay over the Internet
through the Company's Web site until October 30, 2000.
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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CONSOLIDATED RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended September 30,
--------------------------------
2000 1999
---- ----
(in millions where applicable)
<S> <C> <C>
Revenues $ 1,145.8 $ 982.2
Cost of sales 773.1 664.4
Selling and administrative expenses 188.2 160.8
Goodwill amortization 15.4 11.5
--------- ---------
Operating earnings 169.1 145.5
Interest expense 28.6 13.7
--------- ---------
Income Before Income Taxes 140.5 131.8
Income taxes 49.1 47.4
--------- ---------
Net Income $ 91.4 $ 84.4
========= =========
Net Income Per Common Share:
Basic $ .98 $ .90
========= =========
Diluted $ .97 $ .89
========= =========
Shares Utilized in Computation
of Income Per Common Share:
Basic 93.4 million 94.0 million
Diluted 94.1 million 95.1 million
</TABLE>
PERCENTAGE OF REVENUES
<TABLE>
<CAPTION>
Three Months Ended September 30,
--------------------------------
2000 1999
---- ----
<S> <C> <C>
Revenues 100.0% 100.0%
Cost of sales 67.5% 67.6%
Selling and administrative expenses 16.4% 16.4%
Operating earnings 14.8% 14.8%
Income Before Income Taxes 12.3% 13.4%
Net Income 8.0% 8.6%
</TABLE>
(Additional information on next page)
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CONSOLIDATED RESULTS OF OPERATIONS (CONTINUED)
ADDITIONAL INFORMATION FOR THE THREE MONTHS ENDED SEPTEMBER 30
SEGMENT INFORMATION
<TABLE>
<CAPTION>
Three Months Ended September 30,
--------------------------------
2000 1999
---- ----
(in millions)
<S> <C> <C>
Revenues:
Electrical Products $ 957.3 $ 786.0
Tools & Hardware 188.5 196.2
---------- --------
Total $ 1,145.8 $ 982.2
========== ========
Segment Operating Earnings:
Electrical Products $ 156.9 $ 133.8
Tools & Hardware 20.8 20.6
---------- --------
Total 177.7 154.4
General Corporate expense 8.6 8.9
Interest expense 28.6 13.7
---------- --------
Income before income taxes $ 140.5 $ 131.8
========== ========
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended September 30,
--------------------------------
2000 1999
---- ----
<S> <C> <C>
Return on Sales: (1)
Electrical Products 16.4% 17.0%
Tools & Hardware 11.0% 10.5%
Total Segments 15.5% 15.7%
</TABLE>
(Additional information on next page)
(1) Adjusting for recent acquisitions, return on sales in 2000 was 17.5% for
Electrical Products and 10.9% for Tools & Hardware. Return on sales in 2000
for the total of the segments was 16.2%.
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CONSOLIDATED RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
Nine Months Ended September 30,
-------------------------------
2000 1999
---- ----
(in millions where applicable)
<S> <C> <C>
Revenues $ 3,352.9 $ 2,864.4
Cost of sales 2,269.3 1,926.2
Selling and administrative expenses 554.0 473.7
Goodwill amortization 43.5 34.3
--------- ---------
Operating earnings before nonrecurring items 486.1 430.2
Nonrecurring charges -- 3.7
Interest expense 73.5 39.1
--------- ---------
Income Before Income Taxes 412.6 387.4
Income taxes 144.4 139.4
--------- ---------
Net Income $ 268.2 $ 248.0
========= =========
Net Income Per Common Share:
Basic $ 2.87 $ 2.64
========= =========
Diluted $ 2.85 $ 2.61
========= =========
Shares Utilized in Computation
of Income Per Common Share:
Basic 93.5 MILLION 94.1 million
Diluted 94.1 MILLION 95.0 million
</TABLE>
PERCENTAGE OF REVENUES
<TABLE>
<CAPTION>
Nine Months Ended September 30,
-------------------------------
2000 1999
---- ----
<S> <C> <C>
Revenues 100.0% 100.0%
Cost of sales 67.7% 67.2%
Selling and administrative expenses 16.5% 16.5%
Operating earnings before nonrecurring items 14.5% 15.0%
Income Before Income Taxes 12.3% 13.5%
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 NINE MONTHS ENDED SEPTEMBER 30
SEGMENT INFORMATION
<TABLE>
<CAPTION>
Nine Months Ended September 30,
-------------------------------
2000 1999
-------- --------
(in millions)
<S> <C> <C>
Revenues:
Electrical Products $2,758.0 $2,265.6
Tools & Hardware 594.9 598.8
-------- --------
Total $3,352.9 $2,864.4
======== ========
Segment Operating Earnings
Without Nonrecurring Items:
Electrical Products $ 442.6 $ 386.1
Tools & Hardware 67.4 73.0
-------- --------
Total 510.0 459.1
Segment Nonrecurring Items:
Electrical Products -- 3.0
Tools & Hardware -- 1.5
-------- --------
Total -- 4.5
-------- --------
Segment Operating Earnings
With Nonrecurring Items:
Electrical Products 442.6 383.1
Tools & Hardware 67.4 71.5
-------- --------
Total segment operating earnings 510.0 454.6
General Corporate nonrecurring items -- (.8)
General Corporate expense 23.9 28.9
Interest expense 73.5 39.1
-------- --------
Income before income taxes $ 412.6 $ 387.4
======== ========
</TABLE>
<TABLE>
<CAPTION>
Nine Months Ended September 30,
-------------------------------
2000 1999
----- ----
<S> <C> <C>
Return on Sales: (1)
Electrical Products 16.0% 17.0%
Tools & Hardware 11.3% 12.2%
Total Segments 15.2% 16.0%
</TABLE>
(Additional information on next page)
(1) Before nonrecurring items and after acquisitions. Adjusting for recent
acquisitions, return on sales in 2000 was 17.2% for Electrical Products and
11.2% for Tools & Hardware. Return on sales in 2000 for the total of the
segments was 16.0%.
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CONSOLIDATED RESULTS OF OPERATIONS (CONTINUED)
ADDITIONAL INFORMATION FOR THE NINE MONTHS ENDED SEPTEMBER 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 $268.2 $250.4 $ 2.85 $ 2.63
nonrecurring items
Nonrecurring items -- (2.4) -- (.02)
------ ------ ------ ------
Net Income $268.2 $248.0 $ 2.85 $ 2.61
====== ====== ====== ======
</TABLE>
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