<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
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 No. 1-9328
ECOLAB INC.
(Exact name of registrant as specified in its charter)
Delaware 41-0231510
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Ecolab Center, St. Paul, Minnesota 55102
(Address of principal executive offices)(Zip code)
612-293-2233
(Registrant's telephone number, including area code)
(Not Applicable)
(Former name, former address and former fiscal year, if changed
since last report)
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
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of April 30, 1995.
67,891,450 shares of common stock, par value $1.00 per share.<PAGE>
PART I - FINANCIAL INFORMATION
<TABLE>
ECOLAB INC.
CONSOLIDATED STATEMENT OF INCOME
<CAPTION>
First Quarter Ended Year Ended
March 31 December 31
(thousands, except per share) 1995 1994 1994
(unaudited)
<S> <C> <C> <C>
Net Sales $309,560 $274,913 $1,207,614
Cost of Sales 138,619 121,053 533,143
Selling, General
and Administrative Expenses 139,870 125,838 529,507
Merger Costs and Expenses 8,000
Operating Income 31,071 28,022 136,964
Interest Expense, Net 2,573 4,039 12,909
Income Before Income Taxes
and Equity in Earnings of
Joint Venture 28,498 23,983 124,055
Provision for Income Taxes 11,458 9,245 50,444
Equity in Earnings of
Henkel-Ecolab Joint Venture 1,355 1,880 10,951
Net Income $ 18,395 $ 16,618 $ 84,562
Net Income Per Common Share $ 0.27 $ 0.25 $ 1.25
Dividends Per Common Share $ 0.125 $ 0.11 $ 0.455
Average Common Shares
Outstanding 67,742 67,563 67,550
<FN>
The first quarter ended March 31, 1994 has been restated. See notes to
consolidated financial statements.
</FN>
</TABLE>
-2-<PAGE>
<TABLE>
ECOLAB INC.
CONSOLIDATED BALANCE SHEET
<CAPTION>
March 31 March 31 December 31
(thousands) 1995 1994 1994
(unaudited)
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents $ 91,492 $ 46,467 $ 98,255
Accounts receivable, net 174,593 150,119 168,807
Inventories 102,015 92,134 100,015
Deferred income taxes 22,232 22,084 22,349
Other current assets 14,802 12,709 11,753
Current Assets 405,134 323,513 401,179
Property, Plant and Equipment,
Net 251,196 224,942 246,191
Investment in Henkel-Ecolab
Joint Venture 301,651 259,177 284,570
Other Assets 91,862 109,422 88,416
Total Assets $1,049,843 $917,054 $1,020,356
<FN>
March 31, 1994 has been restated. See notes to consolidated financial
statements.
</FN>
</TABLE>
(Continued)
-3-<PAGE>
<TABLE>
ECOLAB INC.
CONSOLIDATED BALANCE SHEET, Continued
<CAPTION>
March 31 March 31 December 31
(thousands, except per share) 1995 1994 1994
(unaudited)
<S> <C> <C> <C>
LIABILITIES AND SHAREHOLDERS'
EQUITY
Short-term debt $ 42,444 $ 22,544 $ 41,820
Accounts payable 78,474 72,146 76,905
Compensation and benefits 41,441 34,933 56,445
Income taxes 19,982 16,747 13,113
Other current liabilities 75,516 66,153 65,382
Current Liabilities 257,857 212,523 253,665
Long-Term Debt 105,185 128,534 105,393
Postretirement Health Care
and Pension Benefits 75,608 77,830 70,882
Other Liabilities 129,500 93,682 128,608
Shareholders' equity (common
stock, par value $1.00 per
share; shares outstanding:
March 31, 1995 -67,881;
March 31, 1994 - 67,563;
December 31, 1994 - 67,671) 481,693 404,485 461,808
Total Liabilities and
Shareholders' Equity $1,049,843 $917,054 $1,020,356
<FN>
March 31, 1994 has been restated. See notes to consolidated financial
statements.
</FN>
</TABLE>
-4-<PAGE>
<TABLE>
ECOLAB INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
<CAPTION>
First Quarter Ended Year Ended
March 31 December 31
(thousands) 1995 1994 1994
(unaudited)
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income $18,395 $16,618 $ 84,562
Adjustments to reconcile net
income to cash provided by
operating activities:
Depreciation 15,892 14,127 56,867
Amortization 2,819 2,507 10,002
Deferred income taxes (274) 17 2,352
Equity in earnings of
joint venture, net of
royalties received 29 137 (5,273)
Other, net 58 (380) 415
Changes in operating assets
and liabilities:
Accounts receivable (6,944) (4,075) (18,952)
Inventories (2,590) (8,570) (14,285)
Other assets (2,483) (7,567) (7,222)
Accounts payable 1,538 229 1,587
Other liabilities 1,296 12,474 44,293
Cash provided by continuing
operations 27,736 25,517 154,346
Cash provided by discontinued
operations 15,000
Cash provided by operating
activities $27,736 $25,517 $169,346
<FN>
Bracketed amounts indicate a use of cash.
The first quarter ended March 31, 1994 has been restated. See notes to
consolidated financial statements.
</FN>
</TABLE>
(Continued)
-5-<PAGE>
<TABLE>
ECOLAB INC.
CONSOLIDATED STATEMENT OF CASH FLOWS, Continued
<CAPTION>
First Quarter Ended Year Ended
March 31 December 31
(thousands) 1995 1994 1994
(unaudited)
<S> <C> <C> <C>
INVESTING ACTIVITIES
Capital expenditures $(22,221) $(19,850) $(88,457)
Property disposals 292 617 4,836
Sale of investments in
securities 5 5,022
Other, net (6,110) 91 459
Cash used for investing
activities (28,039) (19,137) (78,140)
FINANCING ACTIVITIES
Notes payable 456 2,873 8,512
Long-term debt, net (143) (2,908) (14,621)
Reacquired shares (14) (1,077) (7,889)
Dividends (8,457) (7,070) (27,851)
Kay shareholder distributions (2,288)
Other, net 1,747 698 3,301
Cash used for financing
activities (6,411) (7,484) (40,836)
Effect of exchange rate
changes on cash (49) (1,061) (757)
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (6,763) (2,165) 49,613
Cash and Cash Equivalents,
at beginning of period 98,255 48,632 48,642
Cash and Cash Equivalents,
at end of period $ 91,492 $ 46,467 $ 98,255
<FN>
Bracketed amounts indicate a use of cash.
The first quarter ended March 31, 1994 has been restated. See notes to
consolidated financial statements.
</FN>
</TABLE>
-6-<PAGE>
ECOLAB INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Financial Statements
The unaudited consolidated statements of income for the first
quarter ended March 31, 1995 and 1994, reflect, in the opinion of
management, all adjustments necessary for a fair statement of the
results of operations for the interim periods. The results of
operations for any interim period are not necessarily indicative of
results for the full year. All financial data as of March 31, 1994
and for the three-month period then ended have been restated for
the pooling of interests treatment of the Company's December 1994
merger with Kay Chemical Company and affiliates. The consolidated
balance sheet data as of December 31, 1994 and the related
consolidated statements of income and cash flows data for the year
then ended were derived from audited consolidated financial
statements, but do not include all disclosures required by
generally accepted accounting principles. The unaudited
consolidated financial statements should be read in conjunction
with the financial statements and notes thereto incorporated in the
Company's Annual Report on Form 10-K for the year ended December
31, 1994. Coopers & Lybrand L.L.P., the Company's independent
accountants, have performed a limited review of the interim
financial information included herein. Their report on such review
accompanies this filing.
<TABLE>
Balance Sheet Information
<CAPTION>
March 31 March 31 December 31
(thousands) 1995 1994 1994
(unaudited)
<S> <C> <C> <C>
Accounts Receivable, Net
Accounts receivable $ 183,460 $ 158,130 $177,510
Allowance for doubtful
accounts (8,867) (8,011) (8,703)
Total $ 174,593 $ 150,119 $168,807
Inventories
Finished goods $ 44,293 $ 42,750 $ 42,955
Raw materials and parts 61,163 51,968 60,251
Excess of fifo cost over
lifo cost (3,441) (2,584) (3,191)
Total $ 102,015 $ 92,134 $100,015
Property, Plant and Equipment, Net
Land $ 6,400 $ 6,572 $ 6,348
Buildings and leaseholds 109,057 106,085 107,259
Machinery and equipment 174,977 164,077 174,203
Merchandising equipment 265,114 226,077 257,766
Construction in progress 5,915 4,238 6,236
561,463 507,049 551,812
Accumulated depreciation
and amortization (310,267) (282,107) (305,621)
Total $ 251,196 $ 224,942 $246,191
</TABLE>
-7-<PAGE>
ECOLAB INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
<TABLE>
Balance Sheet Information (Continued)
<CAPTION>
March 31 March 31 December 31
(thousands) 1995 1994 1994
(unaudited)
<S> <C> <C> <C>
Other Assets
Intangible assets, net $ 42,923 $ 40,683 $ 37,549
Investments in securities 5,000 9,007 5,000
Deferred income taxes 26,371 28,382 26,212
Other 17,568 31,350 19,655
Total $ 91,862 $109,422 $ 88,416
Short-Term Debt
Notes payable $ 25,844 $ 19,162 $ 25,302
Long-term debt, current
maturities 16,600 3,382 16,518
Total $ 42,444 $ 22,544 $ 41,820
Shareholders' Equity
Common stock $ 69,834 $ 69,402 $ 69,659
Additional paid-in capital 166,407 160,573 164,858
Retained earnings 267,821 212,768 257,462
Deferred compensation (4,560) (1,963) (4,192)
Cumulative translation 14,488 (8,166) 6,756
Treasury stock (32,297) (28,129) (32,735)
Total $481,693 $404,485 $461,808
</TABLE>
Interest expense related to all debt was $3,932,000 and $4,668,000
for the first quarter ended March 31, 1995 and 1994, respectively,
and $16,213,000 for the year ended December 31, 1994.
Other noncurrent liabilities included income taxes payable of $94
million at March 31, 1995 and December 31, 1994 and $61 million at
March 31, 1994.
-8-<PAGE>
ECOLAB INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Kay Merger
In connection with the Company's December 1994 merger with Kay
Chemical Company, $8.0 million of merger costs and expenses ($6.9
million after-tax) were incurred and charged to expense in the
fourth quarter of 1994. Also, Kay was a Subchapter S Corporation
for income tax purposes and, accordingly, did not pay U.S. federal
income taxes. Kay will be included in the Company's U.S. federal
income tax return effective December 7, 1994, and, therefore, a net
deferred tax liability and corresponding charge to income tax
expense of $1.3 million was recorded in the fourth quarter of 1994.
The table below includes unaudited pro forma net income and net
income per share amounts which reflect the elimination of the
nonrecurring merger costs and expenses in 1994 and pro forma
adjustments to present income taxes on the basis on which they are
being reported subsequent to the merger.
<TABLE>
<CAPTION>
First Quarter Year Ended
Ended March December 31
(thousands, except per share) 1994 1994
<S> <C> <C>
Net income
As reported $ 16,618 $ 84,562
Merger costs and expenses 6,900
Kay net deferred tax liability 1,300
Kay Subchapter S status (324) (2,298)
Pro forma $ 16,294 $ 90,464
Net income per common share
As reported $ 0.25 $ 1.25
Pro forma $ 0.24 $ 1.34
</TABLE>
-9-<PAGE>
ECOLAB INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Net Income Per Common Share
Net income per common share amounts are computed by dividing net
income by the weighted average number of common shares outstanding.
Stock options did not have a significant dilutive effect.
Geographic Segments
The Company is a global developer of premium cleaning, sanitizing
and maintenance products and services for the hospitality,
institutional and industrial markets. Customers include hotels,
restaurants, foodservice, healthcare and educational facilities,
quick-service (fast food) restaurants, dairy plants and farms, and
food and beverage processors around the world. International
consists of Canadian, Asia Pacific, Latin American and Kay's
international operations. In addition the Company and Henkel KGaA
of Dusseldorf, Germany, each have a 50% economic interest in the
Henkel-Ecolab joint venture which operates institutional and
industrial cleaning and sanitizing businesses in Europe.
Information concerning the Company's equity in earnings of the
Henkel-Ecolab joint venture is provided in a separate note to the
consolidated financial statements below.
<TABLE>
<CAPTION>
First Quarter Ended Year Ended
March 31 December 31
(thousands) 1995 1994 1994
(unaudited)
<S> <C> <C> <C>
Net Sales
United States $242,226 $216,855 $ 942,070
International 67,334 58,058 265,544
Total $309,560 $274,913 $1,207,614
Operating Income
United States $ 29,525 $ 25,935 $ 134,510
International 2,695 3,080 14,838
Corporate (1,149) (993) (12,384)
Total $ 31,071 $ 28,022 $ 136,964
</TABLE>
-10-<PAGE>
ECOLAB INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Equity in Earnings of Henkel-Ecolab Joint Venture
The Company's equity in earnings of the Henkel-Ecolab joint
venture for the first quarter ended March 31, 1995 and 1994 and
for the year ended December 31, 1994 was:
<TABLE>
<CAPTION>
First Quarter Ended Year Ended
March 31 December 31
(thousands) 1995 1994 1994
(unaudited)
<S> <C> <C> <C>
Joint venture
Net sales $200,482 $175,068 $776,647
Gross profit 111,534 97,162 440,993
Income before income
taxes 8,583 9,050 48,389
Net income $ 4,291 $ 4,399 $ 26,109
Ecolab equity in earnings
Ecolab equity in income $ 2,146 $ 2,320 $ 13,605
Ecolab royalty
income from joint
venture, net of
income taxes 1,410 1,546 5,745
Amortization expense
for the excess of
cost over the
underlying net
assets of the joint
venture (2,201) (1,986) (8,399)
Equity in earnings of
Henkel-Ecolab
joint venture $ 1,355 $ 1,880 $ 10,951
</TABLE>
At March 31, 1995, the Company's investment in the Henkel-Ecolab
joint venture included approximately $195 million for the
unamortized excess of the Company's investment over its equity in
the joint venture's net assets. This excess is being amortized on
a straight-line basis over estimated economic useful lives of up
to 30 years.
-11-<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors
Ecolab Inc.
We have reviewed the accompanying consolidated balance sheet
of Ecolab Inc. as of March 31, 1995 and 1994, and the related
consolidated statements of income and cash flows for the three-
month periods then ended. These financial statements are the
responsibility of the Company's management.
We conducted our reviews in accordance with standards
established by the American Institute of Certified Public
Accountants. A review of interim financial information consists
principally of applying analytical procedures to financial data
and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an
audit conducted in accordance with generally accepted auditing
standards, the objective of which is the expression of an opinion
regarding the financial statements taken as a whole. Accordingly,
we do not express such an opinion.
Based on our reviews, we are not aware of any material
modifications that should be made to the accompanying consolidated
financial statements for them to be in conformity with generally
accepted accounting principles.
We have previously audited, in accordance with generally
accepted auditing standards, the consolidated balance sheet as of
December 31, 1994, and the related consolidated statements of
income, shareholders' equity and cash flows for the year then
ended (not presented herein); and in our report dated February 27,
1995, we expressed an unqualified opinion on those consolidated
financial statements. In our opinion, the information set forth
in the accompanying consolidated balance sheet as of December 31,
1994 and the related consolidated statements of income and cash
flows for the year then ended is fairly presented, in all material
respects, in relation to the consolidated balance sheet and
statements of income and cash flows from which it has been derived.
/s/Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Saint Paul, Minnesota
April 18, 1995
-12-<PAGE>
ECOLAB INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations - First Quarter Ended March 31, 1995
Net sales for the first quarter ended March 31, 1995 were $310
million, an increase of 13 percent over net sales of $275 million
in the first quarter of last year. Both the Company's United
States and International operations contributed to the sales
increase over the last year.
The gross margin for the first quarter of 1995 totaled $171
million, or 55.2 percent of net sales, an increase of 11 percent
over the gross margin of $154 million or 56.0 percent of net sales
in the first quarter of last year. The decrease in the gross
margin ratio reflects increased raw material costs and limited
selling price increases due to competitive pressure in several of
the markets in which the Company does business. The Company is
continually focusing on managing the impact of future raw material
cost increases and the effects of competition in the marketplace
to minimize the unfavorable impact on overall operating results.
Selling, general and administrative expenses were $140 million, or
45.2 percent of net sales, an increase of 11 percent from selling,
general and administrative expenses of $126 million, or 45.8
percent of net sales in the first quarter of last year. The
decrease in the ratio of these expenses to net sales was
principally due to strong sales during the first quarter of 1995.
Net income for the first quarter of 1995 was $18 million, or $0.27
per share, compared to net income of $17 million or $0.25 per
share reported for the first quarter of last year. The comparison
of net income was unfavorably affected by the loss of Kay's
Subchapter S income tax status for 1995. Prior to its merger with
Ecolab in December 1994, Kay was a Subchapter S Corporation for
federal income tax purposes and, therefore, did not pay U.S.
income taxes. Effective with the merger, Kay will be included in
the Company's U.S. federal income tax return and, therefore,
income tax expense no longer reflects the Subchapter S related
tax benefit. On a pro forma basis, after adjustment to increase
income tax expense in the first quarter of 1994 as if Kay was a
tax paying entity, first quarter 1995 net income of $18 million,
or $0.27 per share, increased 13 percent over pro forma net income
of $16 million or $0.24 per share for the first quarter of last
year. This improvement in first quarter net income reflected the
benefits of higher sales and reduced net interest expense. These
benefits were partially offset by lower equity in earnings of the
Henkel-Ecolab joint venture and the negative effects of the
devaluation of the Mexican Peso.
-13-<PAGE>
ECOLAB INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
For the first quarter of 1995, United States sales were $242
million and increased 12 percent over United States sales of $217
million for the first quarter of 1994. All of the Company's
United States divisions contributed to the sales improvement over
last year. United States sales continued to benefit from
increased product volumes, new product introductions, an increased
sales-and-service force and the general economic recovery in the
hospitality and lodging industries. Institutional sales for the
first quarter of 1995 increased 10 percent due to good warewashing
product sales and double-digit growth in warewashing equipment and
specialty product sales. The Pest Elimination Division continued
its pattern of reporting double-digit sales growth with a 13
percent increase in sales. The Textile Care Division reported
sales growth of 5 percent, with growth in sales to the commercial
laundry, healthcare, shirt laundry and hospitality markets. Sales
of the Janitorial Division improved 14 percent for the first
quarter, due to continued strong growth of its Signature Label
Program. Klenzade Division sales for the first quarter increased
15 percent over the comparable period of last year, with solid
growth in each of the major market areas it serves, including
double-digit growth in sales to the dairy plant market. Sales of
Kay's United States operations increased 12 percent, reflecting
growth in the large fast food chains which Kay serves and sales to
new customers.
Operating income of the Company's United States operations was $30
million for the first quarter ended March 31, 1995, an increase of
14 percent over operating income of $26 million for the first
quarter of last year. The increase in United States operating
income included a solid performance by the Institutional Division
and double-digit operating income growth by all of the Company's
other United States divisions. The operating income margin for
the Company's United States operations was 12.2 percent for the
first quarter of 1995, compared with 12.0 percent for the first
quarter of last year. First quarter 1995 operating income
reflected strong sales which were partially offset by higher raw
material costs, competitive pricing pressures and continued
investments in the sales-and-service force.
-14-<PAGE>
ECOLAB INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
For the first quarter of 1995, sales of the Company's
International Operations totaled $67 million, an increase of 16
percent over sales of $58 million in the first quarter of last
year. The effects of currency translation did not have a
significant impact on overall International sales growth. The
Asia Pacific region reported a sales increase of 15 percent for
the first quarter, with double-digit growth in Japan and East
Asia. Sales in China decreased due to difficult local economic
and business conditions. Sales in the Latin American region rose
30 percent over sales in the first quarter of last year. Latin
America's sales increase reflected double-digit growth in most
countries within the region including a continuation of
significantly improved results in Brazil due to management changes
and an improved economic environment. Sales in Mexico grew at
double-digit rates in local currency; however, this improvement
was more than offset by the negative effects of the devaluation of
the Mexican Peso. Sales growth of Canadian operations was 6
percent in local currency; however, due to the negative effects of
currency translation, reported sales for the first quarter of 1995
increased only one percent over last year. Sales of Kay's
international operations increased 6 percent for the first quarter
of 1995, as Kay continued to expand its service to the various
locations in which its existing customers operate.
Operating income of the Company's International operations was
$2.7 million for the first quarter of 1995 and decreased 13
percent from operating income of $3.1 million for the first
quarter of last year. The operating income margin of
International operations decreased to 4.0 percent in the first
quarter of 1995 from 5.3 percent in the first quarter of last
year. International operating results included significantly
improved results in Brazil. However, International operating
income was negatively affected by a $0.9 million pre-tax charge to
earnings related to the devaluation of the Mexican Peso and by
investments in management and the sales-and-service force in the
Asia Pacific region. Excluding the effects of the Peso
devaluation, International operating income increased 17 percent
for the first quarter of 1995.
-15-<PAGE>
ECOLAB INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
The Company reported $1.4 million of equity in earnings of the
Henkel-Ecolab joint venture for the first quarter of 1995 compared
to $1.9 million reported for the first quarter of last year.
These results reflect weak conditions in the European hospitality
industry, particularly in the joint venture's key market of Germany.
Corporate operating expense was $1 million for the first quarter
and represented overhead cost directly related to the joint
venture.
Net interest expense of $3 million for the first quarter ended
March 31, 1995 decreased 36 percent from last year's net interest
expense of $4 million. This decrease was principally due to
interest income earned on higher levels of cash and cash equivalents.
The provision for income taxes for the first quarter of 1995
reflected an estimated annual effective rate of 40.2 percent and
compared to 38.5 percent for the first quarter of last year. This
increase reflects the loss of Kay's Subchapter S status. On a pro
forma basis, including an adjustment to increase income tax
expense in 1994's first quarter as if Kay was a tax paying entity,
the estimated annual effective income tax rate was 39.9 percent,
and was essentially equivalent to the first quarter of 1995.
Financial Position and Liquidity
Total debt at March 31, 1995 was $148 million, essentially
unchanged from total debt levels at year-end 1994. The ratio of
total debt to capitalization at March 31, 1995 was 23 percent, a
slight decrease from the December 31, 1994 total debt to
capitalization ratio of 24 percent.
Cash provided by continuing operations was $28 million, a 9
percent increase over cash provided by continuing operations of
$26 million in the first quarter of last year. Strong earnings
growth was a significant factor in this cash flow improvement.
-16-<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) The following documents are filed as exhibits to
this report:
(15) Letter regarding unaudited interim financial
information.
(27) Financial Data Schedule.
(b) Reports on Form 8-K:
No Current Reports on Form 8-K were filed during the
quarter ended March 31, 1995.
SIGNATURE
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.
ECOLAB INC.
Date: May 9,1995 By:/s/Michael E. Shannon
Michael E. Shannon
Vice Chairman, Chief Financial
and Administrative Officer
(duly authorized officer and
Principal Financial Officer)
-17-<PAGE>
EXHIBIT (15)
Securities and Exchange Commission
450 Fifth Street N.W.
Washington, DC 10549
Re: Ecolab Inc. Registration Statements on Form S-8
(Registration Nos. 2-60010; 2-74944; 33-1664;
33-41828; 2-90702; 33-18202; 33-55986; 33-56101;
33-26241; 33-34000; 33-56151; 33-39228; 33-56125;
33-55984; 33-60266; and 33-65364) and Ecolab Inc.
Registration Statement on Form S-3 (Registration No.
33-57197)
We are aware that our report dated April 18, 1995, on our reviews
of interim financial information of Ecolab Inc. for the period
ended March 31, 1995, and included in the Company's quarterly
report on Form 10-Q for the quarter then ended, is incorporated
by reference in these registration statements. Pursuant to Rule
436(c) under the Securities Act of 1933, this report should not
be considered a part of the registration statements prepared or
certified by us within the meaning of Sections 7 and 11 of that
Act.
/s/Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Saint Paul, Minnesota
May 9, 1995<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AS OF MAR-31-1995 AND THE RELATED STATEMENTS
OF INCOME AND CASH FLOWS FOR THE THREE-MONTH PERIOD THEN ENDED AND IS
QUALIFIED IN ITS ENTIRETY TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000031462
<NAME> ECOLAB INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 91,492
<SECURITIES> 0
<RECEIVABLES> 183,460
<ALLOWANCES> 8,867
<INVENTORY> 102,015
<CURRENT-ASSETS> 405,134
<PP&E> 561,463
<DEPRECIATION> 310,267
<TOTAL-ASSETS> 1,049,843
<CURRENT-LIABILITIES> 257,857
<BONDS> 105,185
<COMMON> 69,834
0
0
<OTHER-SE> 411,859
<TOTAL-LIABILITY-AND-EQUITY> 1,049,843
<SALES> 309,560
<TOTAL-REVENUES> 309,560
<CGS> 138,619
<TOTAL-COSTS> 138,619
<OTHER-EXPENSES> 139,870
<LOSS-PROVISION> 0<F1>
<INTEREST-EXPENSE> 3,932
<INCOME-PRETAX> 28,498
<INCOME-TAX> 11,458
<INCOME-CONTINUING> 18,395
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 18,395
<EPS-PRIMARY> 0.27
<EPS-DILUTED> 0
<FN>
<F1>The amount of "LOSS-PROVISION" is not significant
and has been included in "OTHER-EXPENSES."
</FN>
</TABLE>
