18 Pages Complete
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[x] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 For the period ended June
30, 1997
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the transition period from
to
Commission file number 1-5684
I.R.S. Employer Identification Number 36-1150280
W.W. Grainger, Inc.
(An Illinois Corporation)
455 Knightsbridge Parkway
Lincolnshire, Illinois 60069-3620
Telephone: (847)793-9030
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuers classes of
common stock, as of the latest practicable date: 49,724,924 shares of the
Company's Common Stock were outstanding as of July 31, 1997.
(1)
<PAGE>
Part I - FINANCIAL INFORMATION
W.W. Grainger, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands of dollars except for per share amounts)
(Unaudited)
Three Months Six Months
Ended June 30, Ended June 30,
----------------------- --------------------------
1997 1996 1997 1996
----------- ----------- ------------ ------------
Net sales ................... $ 1,051,206 $ 888,624 $ 2,036,762 $ 1,731,271
Cost of merchandise sold .... 680,177 579,017 1,312,453 1,121,166
----------- ----------- ------------ ------------
Gross profit .............. 371,029 309,607 724,309 610,105
Warehousing, marketing, and
administrative expenses ... 273,044 227,180 534,349 443,651
----------- ----------- ------------ ------------
Operating earnings ........ 97,985 82,427 189,960 166,454
Other income or (deductions)
Interest income ........... 512 743 1,902 1,000
Interest expense .......... (1,428) (303) (2,576) (574)
Unclassified-net .......... (332) (12) (769) (206)
----------- ----------- ------------ ------------
(1,248) 428 (1,443) 220
----------- ----------- ------------ ------------
Earnings before income taxes 96,737 82,855 188,517 166,674
Income taxes ................ 39,178 33,308 76,349 67,003
----------- ----------- ------------ ------------
Net earnings ................ $ 57,559 $ 49,547 $ 112,168 $ 99,671
=========== =========== ============ ============
Net earnings per common and
common equivalent share ... $ 1.13 $ 0.96 $ 2.16 $ 1.94
=========== =========== ============ ============
Average number of common
and common equivalent
shares outstanding ........ 51,143,669 51,418,428 52,041,041 51,399,562
=========== =========== ============ ============
Cash dividends paid per share $ 0.27 $ 0.25 $ 0.52 $ 0.48
============ =========== ============ ============
The accompanying notes are an integral part of these financial statements.
(2)
<PAGE>
W.W. Grainger, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(In thousands of dollars)
(Unaudited)
June 30, Dec. 31,
ASSETS 1997 1996
- ------------------------------------------------ ----------- ---------
CURRENT ASSETS
Cash and cash equivalents ..............................$ 31,692 $ 126,935
Accounts receivable, less allowance for doubtful
accounts of $17,003 in 1997 and $15,302 in 1996 ....... 497,820 433,575
Inventories ............................................ 587,422 686,925
Prepaid expenses ....................................... 17,820 11,971
Deferred income tax benefits ........................... 61,185 60,837
---------- ----------
Total current assets ................................. 1,195,939 1,320,243
PROPERTY, BUILDINGS, AND EQUIPMENT ....................... 1,026,525 985,712
Less accumulated depreciation and amortization ......... 465,015 434,728
---------- ----------
Property, buildings, and equipment-net ................. 561,510 550,984
OTHER ASSETS ............................................. 236,292 247,794
---------- ----------
TOTAL ASSETS .............................................$1,993,741 $2,119,021
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term debt ........................................$ 209,128 $ 135,275
Current maturities of long-term debt ................... 24,804 24,753
Trade accounts payable ................................. 243,116 240,779
Accrued liabilities .................................... 164,119 187,457
Income taxes ........................................... 27,362 27,804
---------- ----------
Total current liabilities ............................ 668,529 616,068
LONG-TERM DEBT (less current maturities) ................. 5,119 6,152
DEFERRED INCOME TAXES .................................... 3,254 2,207
ACCRUED EMPLOYMENT RELATED BENEFITS COSTS ................ 34,375 31,932
SHAREHOLDERS' EQUITY
Cumulative Preferred Stock - $5 par value - authorized,
6,000,000 shares, issued and outstanding, none ........ -- --
Common Stock - $0.50 par value - authorized,
150,000,000 shares; issued, 53,432,924 shares, 1997,
and 53,338,026 shares, 1996 .......................... 26,716 26,669
Additional contributed capital ......................... 264,224 262,318
Treasury stock, at cost - 3,740,186 shares, 1997, and
409,600 shares, 1996 ................................ (297,824) (32,090)
Unearned restricted stock compensation ................. (17,464) (17,597)
Cumulative translation adjustments ..................... (3,819) (2,262)
Retained earnings ...................................... 1,310,631 1,225,624
---------- ----------
Total shareholders' equity ............................. 1,282,464 1,462,662
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY .............$1,993,741 $2,119,021
========== ==========
The accompanying notes are an integral part of these financial statements.
(3)
<PAGE>
W.W. Grainger, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of dollars)
(Unaudited)
Six Months Ended June 30,
-------------------------
1997 1996
--------- ---------
Cash flows from operating activities:
Net earnings ........................................ $ 112,168 $ 99,671
Provision for losses on accounts receivable ......... 6,033 5,734
Depreciation and amortization:
Property, buildings, and equipment ................ 32,608 31,650
Intangibles and goodwill .......................... 8,259 6,521
Change in operating assets and liabilities:
(Increase) in accounts receivable ................. (70,278) (68,325)
Decrease in inventories ........................... 99,503 56,792
(Increase) in prepaid expenses .................... (5,849) (5,973)
Decrease (increase) in deferred income taxes ...... 699 (1,379)
Increase in trade accounts payable ................ 2,337 54,478
(Decrease) in other current liabilities ........... (23,338) (34,128)
(Decrease) increase in current income taxes payable (442) 754
Increase in accrued employment related
benefits costs .................................. 2,443 1,890
Other - net ......................................... 1,273 2,240
--------- ---------
Net cash provided by operating activities ............. 165,416 149,925
--------- ---------
Cash flows from investing activities:
Additions to property, buildings, and
equipment - net of dispositions ................... (42,907) (23,819)
Other - net ......................................... 1,117 (587)
--------- ---------
Net cash (used in) investing activities ............... (41,790) (24,406)
--------- ---------
Cash flows from financing activities:
Net increase (decrease) in short-term debt .......... 73,853 (20,312)
Proceeds from long-term debt ........................ -- 1,500
Long-term debt payments ............................. (982) (1,541)
Stock incentive plan ................................ 1,169 2,235
Purchase/issuance of treasury stock - net ........... (265,748) --
Cash dividends paid ................................. (27,161) (24,462)
--------- ---------
Net cash (used in) financing activities ............... (218,869) (42,580)
--------- ---------
Net (decrease) increase in cash and cash equivalents .. (95,243) 82,939
Cash and cash equivalents at beginning of year ........ 126,935 11,460
--------- ---------
Cash and cash equivalents at end of period ............ $ 31,692 $ 94,399
========= =========
The accompanying notes are an integral part of these financial statements.
(4)
<PAGE>
W.W. Grainger, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF STATEMENT PRESENTATION
The financial statements and the related notes are condensed and should be read
in conjunction with the consolidated financial statements and related notes for
the year ended December 31, 1996, included in the Company's Annual Report on
Form 10-K filed with the Securities and Exchange Commission.
The consolidated financial statements include the accounts of the Company and
its subsidiaries. All significant intercompany transactions are eliminated.
Inventories are valued at the lower of cost or market. Cost is determined
primarily by the last-in, first-out (LIFO) method.
The unaudited financial information reflects all adjustments which are, in the
opinion of management, necessary for a fair presentation of the statements
contained herein.
Checks outstanding of $33,357,000 and $35,366,000 were included in trade
accounts payable at June 30, 1997 and December 31, 1996, respectively.
2. DIVIDEND
On July 30, 1997, the Board of Directors declared a quarterly dividend of 27
cents per share, payable September 1, 1997 to shareholders of record on August
11, 1997.
3. SHARE REPURCHASE AUTHORIZATION
On April 30, 1997, the Company's Board of Directors restored an existing share
repurchase authorization to its original level of five million shares. The
authorization continues to be adjustable to reflect stock splits and stock
dividends.
Repurchases are expected to be made from time to time in open market and
privately negotiated transactions. The repurchased shares will be retained in
the Company's treasury and be available for general corporate purposes (see the
Liquidity and Capital Resources section).
(5)
<PAGE>
W.W. Grainger, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
4. EARNINGS PER SHARE (SFAS No. 128)
The Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings per
Share," is effective for 1997 year end financial statements, and replaces
Accounting Principles Board Opinion No. 15, "Earnings per Share," for
calculating earnings per share . SFAS No. 128 eliminates the presentation of
primary and fully diluted earnings per share and requires the dual presentation
of earnings per share and earnings per share - assuming dilution. The
calculation of earnings per share excludes any contingently returnable and any
potential common shares (options, warrants, convertible securities, and
contingent stock agreements). The calculation of earnings per share - assuming
dilution includes common shares outstanding and the dilutive effect of potential
common shares.
The effect on the Company's earnings per share of adopting SFAS No. 128 is not
expected to be material.
5. REPORTING COMPREHENSIVE INCOME (SFAS No. 130)
SFAS No. 130, "Reporting Comprehensive Income," is effective for fiscal years
beginning after December 15, 1997. The Company plans to adopt SFAS No. 130 in
1998.
SFAS No. 130 requires disclosure of the components of and total comprehensive
income in the period in which they are recognized in the financial statements.
Comprehensive income is defined as the change in equity (net assets) of a
business enterprise arising from transactions and other events and circumstances
from nonowner sources. It includes all changes in equity during the reporting
period except those resulting from investments by owners and distributions to
owners.
Adoption of SFAS No. 130 will require additional disclosures in the Company's
financial statements.
6. DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION (SFAS
No. 131)
SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information," is effective for fiscal years beginning after December 15, 1997.
The Company plans to adopt SFAS No. 131 in 1998.
SFAS No. 131 requires disclosure of certain information about operating segments
in complete sets of financial statements of the enterprise and in condensed
financial statements of interim periods issued to shareholders. It also requires
disclosure of certain information about products and services, the geographic
areas in which the enterprise operates, and major customers.
The Company has not yet determined the effect that adoption of SFAS No. 131 will
have on its financial reporting requirements.
(6)
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND THE RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1997 COMPARED WITH THE THREE MONTHS ENDED JUNE 30,
1996:
Net Sales
Net sales of $1,051,206,000 in the 1997 second quarter increased 18.3% from net
sales of $888,624,000 for the comparable 1996 period. There were 64 sales days
both in the 1997 and 1996 second quarters. The year 1997 will have one less
sales day than did the year 1996 (255 versus 256).
The sales increase of 18.3% for the 1997 second quarter, as compared with the
1996 second quarter, was principally volume related. Excluding the incremental
sales of Acklands - Grainger, Inc. (AGI), the Canadian industrial distribution
business acquired on December 2, 1996, sales increased 7.6%. This 7.6% increase
primarily represented the effects of the Company's marketing initiatives, which
included new product additions, the expansion of branch facilities, and the
National Accounts, Integrated Supply, and Direct Marketing programs.
Sales in the 1997 second quarter were negatively affected by the cooler weather
experienced by much of the United States versus the comparable 1996 period.
Sales of seasonal products for the Company, excluding AGI, declined
approximately 9% in the 1997 second quarter as compared with the same 1996
period. Sales of non-seasonal products for the Company, excluding AGI, increased
approximately 11% in the 1997 second quarter as compared with the same 1996
period.
The Company's Grainger branch-based business experienced selling price increases
of about 0.9% when comparing the second quarters of 1997 and 1996. Daily sales
to National Account customers within the branch-based business increased an
estimated 17%, on a comparable basis, over the 1996 second quarter.
(7)
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND THE RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Net Earnings
Net earnings of $57,559,000 in the 1997 second quarter increased 16.2% when
compared to net earnings of $49,547,000 for the comparable 1996 period. The net
earnings increase was lower than the net sales increase primarily due to
operating expenses increasing at a faster rate than net sales, higher interest
expense, and lower interest income, partially offset by higher gross profit
margins.
The Company's gross profit margin increased by 0.46 percentage point when
comparing the second quarters of 1997 and 1996. The overall increase was reduced
by the incremental effect of Acklands - Grainger Inc. (AGI) which has lower
average gross profit margins as compared with the average of all other business
units. Excluding AGI, the Company's gross profit margin increased 0.82
percentage point when comparing the second quarters of 1997 and 1996. Of note
are the following favorable factors affecting the Company's gross profit margin,
excluding AGI:
1. Selling price increases exceeded product cost increases.
2. The change in product mix was favorable as seasonal product sales
(generally lower than average gross profit margins) declined and Lab
Safety Supply sales (generally higher than average gross profit margins)
increased as a percent of total sales.
Operating expenses (warehousing, marketing, and administrative) for the Company
increased 20.2% for the 1997 second quarter as compared with the same 1996
period. This rate of increase was greater than the rate of increase in net
sales. Factors contributing to this rate of increase were the following:
1. Payroll and other operating expenses, excluding AGI, were higher as a
result of the following initiatives:
a) Continued expansion of the Company's integrated supply business;
b) Continued development of the Company's marketing presence on the
Internet;
c) Continued refocus and realignment of the Direct Sales force;
d) Expansion of the Company's telesales capability;
e) Continued enhancement of the Company's information systems,
including Year 2000 compliance; and
f) Continuation of business process improvement efforts.
2. The operating expenses of AGI were incremental and contributed to the
increase.
(8)
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND THE RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Interest income decreased $231,000 for the second quarter as compared with the
same period in 1996. This decrease resulted from lower average daily invested
balances. The Company liquidated its marketable securities and used the proceeds
to partially fund the purchase of 2,039,886 shares of its common stock from
Acklands Limited. The decrease in interest income was partially offset by higher
average interest rates earned.
Interest expense increased $1,125,000 for the second quarter of 1997 as compared
with the same period in 1996. This increase resulted from higher average
borrowings, partially offset by lower average interest rates paid on all
outstanding debt and higher capitalized interest. Much of the increase in
interest expense was related to approximately $135,000,000 in short-term debt
added to finance the acquisition of AGI in December 1996, and to the short-term
debt added to partially fund the repurchase of 2,039,886 shares of the Company's
common stock from Acklands Limited in May 1997.
The Company's effective income tax rate for the second quarter of 1997 was 40.5%
versus 40.2% for the comparable 1996 period. The increase in the effective
income tax rate is attributable to proportionally higher income generated in
Canada (AGI) which is taxed at a higher rate than domestic income.
(9)
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND THE RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1997 COMPARED WITH THE SIX MONTHS ENDED JUNE 30, 1996:
Net Sales:
Net sales of $2,036,762,000 in the first six months of 1997 increased 17.6% from
net sales of $1,731,271,000 for the comparable 1996 period. There were 127 sales
days in the 1997 six month period and 128 sales days in the comparable 1996
period. The year 1997 will have one less sales day than did the year 1996 (255
versus 256).
The sales increase of 17.6% for the first six months of 1997 as compared with
the same 1996 period was principally volume related. Excluding the incremental
sales of Acklands - Grainger Inc. (AGI), sales increased 7.3%. This 7.3%
increase can be explained primarily by the same factors discussed for the second
quarter of 1997. (See the Second Quarter Net Sales discussion.)
Sales of seasonal products for the Company, excluding AGI, declined
approximately 8% in the first six months of 1997 as compared with the same 1996
period. Many regions of the United States experienced milder weather during the
first half of 1997 versus the comparable 1996 period. Sales of non-seasonal
products for the Company, excluding AGI, increased approximately 10% in the
first six months of 1997 as compared with the same 1996 period.
The Company's Grainger branch-based business experienced selling price increases
of about 1.1% when comparing the first six months of 1997 and 1996. Daily sales
to National Account customers increased approximately 19%, on a comparable
basis, over the same 1996 period.
(10)
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND THE RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Net Earnings
Net earnings of $112,168,000 in the first six months of 1997 increased 12.5%
when compared to net earnings of $99,671,000 for the comparable 1996 period. The
net earnings increase was lower than the sales increase primarily due to
operating expenses increasing at a faster rate than net sales and higher
interest expense, partially offset by higher gross profit margins and higher
interest income.
Operating expenses for the Company increased 20.4% for the first six months of
1997 as compared with the same 1996 period. This rate of increase was higher
than the rate of increase in net sales and was primarily related to the same
factors discussed for the second quarter of 1997. (See the Second Quarter Net
Earnings discussion.)
The Company's gross profit margin increased by 0.32 percentage point when
comparing the first six months of 1997 and 1996. Excluding Acklands - Grainger
Inc. (AGI), the Company's gross profit margin increased 0.72 percentage point
when comparing the first six months of 1997 and 1996. This increase can be
explained primarily by the same factors discussed for the second quarter of
1997. (See the Second Quarter Net Earnings discussion.)
Interest income increased $902,000 for the first six months of 1997 as compared
with the same period in 1996. This increase resulted from higher average daily
invested balances and higher average interest rates earned. During 1997,
interest income was affected by the purchase of approximately 3,300,000 shares
of the Company's common stock, which was partially funded by the liquidation of
marketable securities.
Interest expense increased $2,002,000 for the first six months of 1997 as
compared with the same period in 1996. This increase was primarily related to
the same factors discussed for the second quarter of 1997. (See the Second
Quarter Net Earnings discussion.)
The Company's effective income tax rate for the first six months of 1997 was
40.5% versus 40.2% for the comparable 1996 period. The increase in the effective
income tax rate is attributable to the same factor discussed for the second
quarter 1997. (See the Second Quarter Net Earnings discussion.)
SUBSEQUENT EVENTS
UPS Work Stoppage
The work stoppage affecting United Parcel Service (UPS), which began on August
4, 1997, is continuing as of August 11, 1997. The impact of this work stoppage
on the Company will depend on various factors, the principal one being its
duration.
(11)
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND THE RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
For the six months ended June 30, 1997, working capital decreased by
$176,765,000. The ratio of current assets to current liabilities was 1.8 at June
30, 1997 and 2.1 at December 31, 1996. The Consolidated Statements of Cash
Flows, included in this report, detail the sources and uses of cash and cash
equivalents.
The Company continues to maintain a low debt ratio and strong liquidity
position, which provides flexibility in funding working capital needs and
long-term cash requirements. In addition to internally generated funds, the
Company has various sources of financing available, including commercial paper
sales and bank borrowings under lines of credit and otherwise. Total debt as a
percent of Shareholders' Equity was 18.6% at June 30, 1997 and 11.4% at December
31, 1996. For the first six months of 1997, $29,429,000 was expended for land,
buildings, and facilities improvements, including the construction of a new
office facility in Lake Forest, Illinois, and $14,422,000 for data processing,
office, and other equipment, for a total of $43,851,000.
For the first six months of 1997, the Company repurchased approximately 3.3
million shares of its common stock. The Company used internally generated funds
and short-term debt to fund 1997 share repurchases. As of June 30, 1997,
approximately 2.9 million shares of common stock remain available under the
repurchase authorization. (See Note 3 of the Notes to Consolidated Financial
Statements.)
(12)
<PAGE>
W.W. Grainger, Inc. and Subsidiaries
PART II - OTHER INFORMATION
Items 1, 2, 3, and 4 not applicable.
Item 5 On August 8, 1997, the Company announced that effective September 1,
1997, (i) Richard L. Keyser, currently President and Chief Executive
Officer, will serve as Chairman of the Board and Chief Executive
Officer, (ii) David W. Grainger, currently Chairman of the Board, will
serve as Senior Chairman of the Board, and (iii) certain other
organizational changes will take place. Copies of related news releases
issued by the Company are filed as exhibits to this report.
Item 6 Exhibits (numbered in accordance with Item 601 of regulation S-K) and
Reports on Form 8-K.
EXHIBIT INDEX
-------------
a) Exhibits
(11) Computation of Earnings per Common and
Common Equivalent Share 15
(27) Financial Data Schedule 16
(99) Copies of news releases issued by the Company 17-18
on August 8, 1997
b) Reports on Form 8-K - None.
(13)
<PAGE>
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 thereunto duly authorized.
W.W. Grainger, Inc.
-------------------------------------------------
(Registrant)
Date: August 11, 1997 By: /s/ J.D. Fluno
- ----------------------- -------------------------------------------------
J.D. Fluno, Vice Chairman
Date: August 11, 1997 By: /s/ P.O. Loux
- ----------------------- -------------------------------------------------
P.O. Loux, Senior Vice President, Finance and
Chief Financial Officer
Date: August 11, 1997 By: /s/ R.D. Pappano
- ----------------------- -------------------------------------------------
R.D. Pappano, Vice President, Financial
Reporting and Investor Relations
(14)
<PAGE>
Exhibit 11
W.W. Grainger, Inc. and Subsidiaries
COMPUTATION OF EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE
Six Months Ended June 30,
--------------------------
1997 1996
----------- -----------
Average number of shares outstanding during
the period ...................................... 51,566,836 50,960,103
Common equivalent shares:
Shares issuable under outstanding options
which are dilutive ............................ 1,595,119 1,507,567
Shares which could have been purchased based
upon the average market value for the period .. 1,133,798 1,087,814
------------ ------------
461,321 419,753
Dilutive effect of exercised options prior to being
exercised ....................................... 12,884 19,706
------------ ------------
474,205 439,459
------------ ------------
Weighted average number of common and
common equivalent shares outstanding ............ 52,041,041 51,399,562
============ ============
Net earnings ...................................... $112,168,000 $ 99,671,000
============ ============
Net earnings per common and common
equivalent share ................................ $ 2.16 $ 1.94
============ ============
Three months ended June 30:
Six months ended June 30, from above .............. $ 2.16 $ 1.94
Three months ended March 31, as previously
reported .......................................... 1.03 0.98
------------ ------------
Net earnings per common and common equivalent
share for the three months ended June 30 .......... $ 1.13 $ 0.96
============ ============
Note: The computation of earnings per share assuming full dilution is the same
as set forth above.
(15)
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-mos
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 31,692
<SECURITIES> 0
<RECEIVABLES> 514,823
<ALLOWANCES> 17,003
<INVENTORY> 587,422
<CURRENT-ASSETS> 1,195,939
<PP&E> 1,026,525
<DEPRECIATION> 465,015
<TOTAL-ASSETS> 1,993,741
<CURRENT-LIABILITIES> 668,529
<BONDS> 27,697
0
0
<COMMON> 26,716
<OTHER-SE> 1,255,748
<TOTAL-LIABILITY-AND-EQUITY> 1,993,741
<SALES> 2,036,762
<TOTAL-REVENUES> 2,036,762
<CGS> 1,312,453
<TOTAL-COSTS> 1,312,453
<OTHER-EXPENSES> 527,183
<LOSS-PROVISION> 6,033
<INTEREST-EXPENSE> 2,576
<INCOME-PRETAX> 188,517
<INCOME-TAX> 76,349
<INCOME-CONTINUING> 112,168
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 112,168
<EPS-PRIMARY> 2.16
<EPS-DILUTED> 0
</TABLE>
Exhibit 99
W.W. GRAINGER, INC.
BOARD OF DIRECTORS
ELECTS RICHARD L. KEYSER
CHAIRMAN OF THE BOARD
CHICAGO (August 8, 1997) -- The Board of Directors of W.W. Grainger, Inc.
elected Richard L. Keyser, 54, Chairman of the Board, effective September 1,
1997. As such, he succeeds David W. Grainger, 69, who was elected Senior
Chairman of the Board.
Mr. Keyser will continue as the Company's chief executive, serving as
Chairman of the Board and Chief Executive Officer. He was elected President and
Chief Executive Officer in 1995, after serving as President and Chief Operating
Officer. He joined the Company in 1986 and was first elected a Director in 1992.
Mr. Grainger, who will remain a Director, served as the Company's chief
executive from 1968 to 1995. He joined the Company in 1952 and was first elected
a Director in 1953.
The Office of the Chairman, the Company's senior executive group, will
continue to be composed of Mr. Keyser, Jere D. Fluno, Vice Chairman, and Mr.
Grainger.
W.W. Grainger, Inc. (GWW), with 1996 sales of $3.5 billion, is a leader in
the distribution of maintenance, repair, and operating (MRO) supplies and
related information to the commercial, industrial, contractor, and institutional
markets in North America. GWW shares are traded on the New York and Chicago
stock exchanges.
# # # # #
(17)
<PAGE>
Exhibit 99
W.W. GRAINGER, INC. BOARD OF DIRECTORS
ELECTS DONALD E. BIELINSKI AND WESLEY M. CLARK
GROUP PRESIDENTS OF THE COMPANY;
JOHN A. SCHWEIG ELECTED SENIOR VICE PRESIDENT
CHICAGO (August 8, 1997) -- The Board of Directors of W.W. Grainger, Inc.
elected Donald E. Bielinski, 48, and Wesley M. Clark, 45, Group Presidents of
the Company, effective September 1, 1997.
Mr. Bielinski will be responsible for the Company's emerging businesses,
including Grainger Consulting Services, Grainger Integrated Supply Operations,
Grainger SA de CV (Mexico), and Lab Safety Supply, Inc. Mr. Bielinski is
currently Senior Vice President, Marketing and Sales.
Mr. Clark will be responsible for the Grainger branch-based business,
Acklands - Grainger Inc. (Canada), and Parts Company of America. Mr. Clark is
currently Senior Vice President, Operations and Quality.
The Board also elected John A. Schweig, 39, to the office of Senior Vice
President, Business Development and International, effective September 1, 1997.
Mr. Schweig is currently Vice President, Business Development and General
Manager, International.
W.W. Grainger, Inc. (GWW), with 1996 sales of $3.5 billion, is a leader in
the distribution of maintenance, repair, and operating (MRO) supplies and
related information to the commercial, industrial, contractor, and institutional
markets in North America. GWW shares are traded on the New York and Chicago
stock exchanges.
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