<PAGE>
FOR IMMEDIATE RELEASE
Michael J. Monahan (651) 293-2809 (Tel)
(651) 225-3123 (Fax)
ECOLAB REPORTS 15% EPS GAIN FROM ONGOING OPERATIONS,
RECORD RESULTS FOR THIRD QUARTER 2000
THIRD QUARTER 2000 HIGHLIGHTS:
- RECORD EARNINGS PER SHARE +15% TO $0.46 FROM ONGOING OPERATIONS,
EXCLUDING THE $0.01 PER SHARE ONE-TIME GAIN FROM LAST YEAR'S RESULTS
- RECORD EARNINGS PER SHARE +12%, INCLUDING THE ONE-TIME GAIN
- RECORD SALES +8% TO $601 MILLION
- TWENTY-THIRD CONSECUTIVE QUARTER OF DOUBLE-DIGIT EPS GROWTH
<TABLE>
2000
----------------------------------------------------
(Millions, except per share) Third % Nine %
Quarter Increase Months Increase
------- -------- --------- --------
<S> <C> <C> <C> <C>
Net Sales $ 601 8% $ 1,698 9%
Operating Income $ 98 11% $ 249 12%
Pretax Income $ 91 10% $ 232 13%
Taxes 36 8 94 12
Earnings from Henkel-Ecolab 5 (4) 13 7
------- --- ------- ---
Net Income $ 60 10% $ 151 13%
======= === ======= ===
Diluted Net Income Per Share $ 0.46 12% $ 1.14 15%
Diluted Average Shares
Outstanding 131.2 (2)% 132.5 (2)%
</TABLE>
<PAGE>
- 2 -
ST. PAUL, Minn., October 19, 2000: Continued gains from its domestic
and international businesses led Ecolab's third quarter ended September 30,
2000, as diluted earnings per share increased to a record $0.46.
Ecolab's consolidated sales increased 8% to a record $601 million in
the third quarter. Net income rose 10% to a record $60 million, reflecting the
sales improvement and cost efficiencies.
Earnings per share for the quarter were $0.46. During the third quarter
of 1999, Ecolab recognized a non-taxable gain of $1.5 million, or $0.01 per
diluted share, on the receipt of shares from an insurance company that
demutualized through a public offering. Excluding that one-time non-operating
gain from last year's results, diluted earnings per share increased 15% for the
third quarter of 2000.
Commenting on the quarter, Allan L. Schuman, Ecolab's Chairman,
President and Chief Executive Officer said, "The third quarter was our toughest
comparison of the year, and we are very pleased with these outstanding results
which yielded our 23rd consecutive quarter of double-digit earnings per share
growth. We are extremely proud of this accomplishment, which was realized
through the aggressive efforts of key businesses, including Institutional and
Kay, as well as our international operations, where our people really performed.
"We are on course to achieve yet another record year in 2000,
exceeding initial expectations and yielding our eighth consecutive year of
double-digit earnings growth. Our business development is on track, and we have
the people and plans in place to achieve our aggressive growth targets. We also
believe we have the right resources to address our challenges, which include
weak foreign currencies and some difficult markets. As shown throughout the
year, we also continue to be very active in pursuing new products and services
through both internal
<PAGE>
- 3 -
development and acquisitions. We are developing our management structure and
remain diligent regarding our costs. We believe Ecolab is well-positioned for
continued steady growth, and we are committed to delivering on our objectives
this year and in the future."
Third quarter sales for Ecolab's United States Cleaning & Sanitizing
operations rose 6% over the third quarter of 1999 to $408 million, benefiting
from new products and services, as well as aggressive sales efforts and
programs. Excluding acquisitions, sales rose 4%. Results were led by
double-digit gains in Ecolab's Kay operations, and a solid performance by
Institutional, which compared against a strong period last year. United States
Cleaning & Sanitizing operating income rose 8% to $76 million, as margins
improved and reflected the benefits of the higher volume.
United States Other Services sales increased 20% to $68 million in the
third quarter as Pest Elimination and GCS each recorded double-digit growth.
Excluding acquisitions, sales rose 11%. Operating income rose 1% to $8 million
reflecting continued investments to rapidly drive national coverage for GCS.
Sales of Ecolab's International Cleaning & Sanitizing operations rose
13% in the third quarter when measured at fixed currency rates. Excluding
acquisitions, International sales increased 7%. Latin America was very strong as
excellent results from Mexico and Central America led the increase, and Asia
Pacific achieved improved sales and profits. Fixed currency operating income
rose 38% to $15 million due to higher sales volumes and cost controls.
Earnings of the Henkel-Ecolab joint venture are included in the
financial statements using the equity method of accounting. When measured in
fixed currencies, Henkel-Ecolab sales increased
<PAGE>
- 4 -
4% for the third quarter. When translated into U.S. dollars, Henkel-Ecolab sales
decreased 6% to $221 million. While Henkel-Ecolab earnings increased 7% in fixed
currencies, the weaker euro currency resulted in a 4% decline in Ecolab's equity
income to $5.4 million when translated into dollars.
Ecolab reacquired 1,471,200 shares of its common stock during the third
quarter and 3,731,500 shares of its common stock during the first nine months of
2000.
BUSINESS OUTLOOK
THE FOLLOWING STATEMENTS ARE BASED ON CURRENT EXPECTATIONS. THESE
STATEMENTS ARE FORWARD-LOOKING, AND ACTUAL RESULTS MAY DIFFER MATERIALLY. THESE
STATEMENTS DO NOT INCLUDE THE POTENTIAL IMPACT OF BUSINESS ACQUISITIONS OR OTHER
MATERIAL CORPORATE TRANSACTIONS WHICH MAY BE COMPLETED AFTER THE DATE OF THIS
RELEASE. THE BUSINESS OUTLOOK SECTION SHOULD BE READ IN CONJUNCTION WITH THE
INFORMATION ON "FORWARD LOOKING STATEMENTS" AT THE END OF THIS RELEASE.
Ecolab expects sales for both domestic and international operations to
increase in the fourth quarter 2000 over the fourth quarter 1999. Gross margins
are expected to be in a range around last year's 54.5%, and selling, general and
administrative expenses are also expected to be within the range of last year's
41.3% of sales. Interest expense is likely to be in the $7 million area,
reflecting the increased use of debt in association with share repurchase
activity. The effective tax rate should be lower than last year due to the
improved international profitability, and should be approximately 40.5%.
Henkel-Ecolab equity income will likely rise in fixed currencies but will be
hurt in translation by the soft euro currency, resulting in a
<PAGE>
- 5 -
modest decline from last year. The company still expects diluted earnings per
share for the full year 2000 to be approximately $1.50.
Ecolab also expects 2001 to show continued growth in sales and 10% to
15% growth in earnings per share, enabling the company to report its ninth
consecutive year of double-digit earnings growth.
Ecolab is the leading global developer and marketer of premium
cleaning, sanitizing, pest elimination, maintenance and repair products and
services for the hospitality, institutional and industrial markets. For the year
ended December 31, 1999, Ecolab reported sales of $2.1 billion; including the
Henkel-Ecolab European joint venture sales of $0.9 billion, Ecolab's global
sales coverage was $3 billion. Ecolab shares are traded on the New York Stock
Exchange and the Pacific Exchange under the symbol ECL.
Ecolab news releases and other investor information are available on
the Internet at http://www.ecolab.com; and by telephone at 1-800-FACT-ECL.
This news release contains various "Forward-Looking Statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. These
include statements concerning our 2000 and 2001 financial and business
prospects. These statements, which represent Ecolab's expectations or beliefs
concerning various future events, are based on current expectations that involve
a number of risks and uncertainties that could cause actual results to differ
materially from those of such Forward-Looking Statements. These include:
restraints on pricing flexibility due to competitive factors and customer
consolidations; cost increases due to higher oil prices or the unavailability of
adequate and reasonably-priced raw materials;
<PAGE>
- 6 -
the effect of future acquisitions or divestitures or other corporate
transactions, as well as our ability to achieve plans for past acquisitions; the
costs and effects of compliance with environmental and other laws and
regulations; changes in tax, fiscal, governmental and other regulatory policies;
market or regulatory factors which could affect our ability to reacquire shares;
economic factors such as the worldwide economy, interest rates, currency
movements, and the development of markets; the occurrence of (i) litigation or
claims, (ii) natural or man-made disasters and (iii) severe weather conditions
affecting the food service and hospitality industry; and other uncertainties or
risks reported from time-to-time in Ecolab's reports to the Securities and
Exchange Commission, including those under the heading "Forward Looking
Statements and Risk Factors" contained in the company's Form 10-Q for the
quarter ended June 30, 2000. Ecolab undertakes no duty to update the Forward
Looking Statements.
###
<PAGE>
IMMEDIATE RELEASE
M. J. Monahan
(651) 293-2809
<TABLE>
<CAPTION>
ECOLAB INC.
CONSOLIDATED STATEMENT OF INCOME
THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 2000
(unaudited)
THIRD QUARTER NINE MONTHS
---------------------------------- ------------------------------------
(thousands, except per share) 2000 1999 2000 1999
--------------- ---------------- ----------------- ----------------
<S> <C> <C> <C> <C>
Net Sales $ 600,666 $ 554,511 $ 1,697,637 $ 1,564,231
Cost of Sales 266,951 247,619 762,817 702,769
Selling, General and
Administrative Expenses 235,987 219,037 685,771 639,602
--------------- ---------------- ----------------- ----------------
Operating Income 97,728 87,855 249,049 221,860
Interest Expense, Net 6,528 4,860 17,130 16,819
--------------- ---------------- ----------------- ----------------
Income Before Income Taxes
and Equity in Earnings
of Henkel-Ecolab 91,200 82,995 231,919 205,041
Provision for Income Taxes 36,232 33,555 93,927 84,082
Equity in Earnings of
Henkel-Ecolab 5,370 5,581 13,367 12,484
--------------- ---------------- ----------------- ----------------
Net Income $ 60,338 $ 55,021 $ 151,359 $ 133,443
=============== ================ ================= ================
Net Income Per
Common Share
Basic $ 0.47 $ 0.42 $ 1.18 $ 1.03
Diluted $ 0.46 $ 0.41 $ 1.14 $ 0.99
Weighted-Average Common
Share Outstanding
Basic 127,112 129,546 128,134 129,560
Diluted 131,167 134,394 132,534 134,569
</TABLE>
<PAGE>
IMMEDIATE RELEASE
M. J. Monahan
(651) 293-2809
<TABLE>
<CAPTION>
ECOLAB INC.
OPERATING SEGMENT INFORMATION
THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 2000
(unaudited)
THIRD QUARTER NINE MONTHS
---------------------------------- ------------------------------------
(thousands) 2000 1999 2000 1999
--------------- ---------------- ----------------- ----------------
<S> <C> <C> <C> <C>
Net Sales
United States
Cleaning & Sanitizing $ 407,521 $ 385,508 $ 1,156,351 $ 1,080,602
Other Services 67,596 56,467 183,918 157,108
--------------- ---------------- ----------------- ----------------
Total 475,117 441,975 1,340,269 1,237,710
International Cleaning &
Sanitizing 130,117 115,463 365,024 333,565
Effect of Foreign
Currency Translation (4,568) (2,927) (7,656) (7,044)
--------------- ---------------- ----------------- ----------------
Consolidated $ 600,666 $ 554,511 $ 1,697,637 $ 1,564,231
=============== ================ ================= ================
Operating Income
Cleaning & Sanitizing $ 76,091 $ 70,479 $ 190,651 $ 178,900
United States
Other Services 8,317 8,207 20,898 18,907
--------------- ---------------- ----------------- ----------------
Total 84,408 78,686 211,549 197,807
International Cleaning &
Sanitizing 14,804 10,766 37,839 28,761
Corporate (786) (1,111) 625 (3,444)
Effect of Foreign
Currency Translation (698) (486) (964) (1,264)
--------------- ---------------- ----------------- ----------------
Consolidated $ 97,728 $ 87,855 $ 249,049 $ 221,860
=============== ================ ================= ================
</TABLE>
<PAGE>
IMMEDIATE RELEASE
M. J. Monahan
(651) 293-2809
<TABLE>
<CAPTION>
ECOLAB INC.
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2000
SEPTEMBER 30 December 31 September 30
(thousands) 2000 1999 1999
------------- ------------- -------------
(UNAUDITED) (unaudited)
<S> <C> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 45,075 $ 47,748 $ 26,477
Accounts receivable, net 358,100 299,751 336,400
Inventories 183,487 176,369 169,420
Deferred income taxes 43,717 41,701 35,683
Other current assets 14,229 11,752 16,543
------------- ------------- -------------
Total current assets 644,608 577,321 584,523
Property, plant and equipment, net 482,916 448,116 439,822
Investment in Henkel-Ecolab 198,359 219,003 224,218
Other assets 398,496 341,506 334,476
------------- ------------- -------------
Total assets $ 1,724,379 $ 1,585,946 $ 1,583,039
============= ============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Short-term debt $ 234,310 $ 112,060 $ 102,927
Accounts payable 139,434 122,701 136,073
Compensation and benefits 86,829 90,618 81,929
Income taxes - 5,743 6,812
Other current liabilities 174,164 139,552 151,952
------------- ------------- -------------
Total current liabilities 634,737 470,674 479,693
Long-term debt 161,717 169,014 184,327
Postretirement health care
and pension benefits 108,866 97,527 110,102
Other Liabilities 73,847 86,715 62,784
Shareholders' equity 745,212 762,016 746,133
------------- ------------- -------------
Total liabilities and
shareholders' equity $ 1,724,379 $ 1,585,946 $ 1,583,039
============= ============= =============
</TABLE>