UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported) April 21, 1998
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EG&G, Inc.
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(Exact name of registrant as specified in its charter)
Massachusetts 1-5075 04-2052042
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(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification No.)
incorporation)
45 William Street, Wellesley, Massachusetts 02181
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(Address of principal executive offices) (Zip Code)
(781) 237-5100
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(Registrant's telephone number, including area code)
<PAGE>
Item 5. Other Events
On April 21, 1998, the Company issued a press release reporting on its financial
results for the first quarter of 1998 (see attached press release).
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 hereunto duly authorized.
EG&G, Inc.
By /s/ John F. Alexander, II
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Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
Date: April 23, 1998
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EXHIBIT INDEX
Exhibit Number Exhibit Description
- -------------- -------------------
(99) Press Release dated April 21, 1998
<PAGE>
FOR IMMEDIATE RELEASE
21 April 1998
EG&G ANNOUNCES FIRST-QUARTER 1998 RESULTS
Earnings Per Share Increased 19% Over Previous Year
Wellesley, Massachusetts......EG&G, Inc. today announced first-quarter 1998
income, excluding gains and restructuring charges, of $11.3 million, or $0.25
basic earnings per share, compared with earnings from continuing operations of
$9.6 million, or $0.21 per share, for the comparable period in 1997. Including
the gains and restructuring charges, EG&G reported income of $34.5 million, or
$0.76 basic earnings per share, for the first quarter of 1998.
Chairman John M. Kucharski stated, "We are very pleased with our first-quarter
performance and the progress that President and Chief Operating Officer Gregory
L. Summe has made thus far. I expect Greg to initiate additional actions that
will lead to further improvements in operations and earnings."
Summe added, "Our goal first and foremost is to deliver consistent earnings
performance and demonstrable growth. We will continue to assess opportunities to
streamline our cost structure while focusing on growing the organization both
organically and through acquisitions."
First-quarter highlights include:
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First-quarter 1998 earnings included a $67.5 million pretax gain,
primarily from the sale of EG&G's Rotron division, which contributed $1.00
per share. Partially offsetting this gain was a $31.4 million pretax
restructuring charge, or $0.49 per share. Including these items,
first-quarter 1998 earnings were $34.5 million, or $0.76 per share.
Excluding the gains and restructuring charges, first-quarter 1998 earnings
were $11.3 million, or $0.25 per share. This compares to income from
continuing operations of $9.6 million, or $0.21 earnings per share,
reported for the same period last year.
Sales increased 3% to $355.9 million, compared to $347.0 million in the
first quarter of 1997. On a base operations basis (which excludes gains,
restructuring charges and results of operations divested in 1997 and the
first quarter of 1998), sales increased 9% in the first quarter of 1998.
The Instruments segment first-quarter sales increased 7% to $76.9 million.
Income from operations increased 14% before restructuring charges and 1997
gains. This increase is due to strong operating performance across the
segment. On a base operations basis, first-quarter 1998 sales in
Instruments increased 12% and income from operations increased 24% compared
with the same period last year.
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<PAGE>
EG&G REPORTS FIRST QUARTER RESULTS
21 April 1998
Page 2 of 5
Base operations of the Mechanical Components segment, Sealol Industrial
Seals and Aerospace and Engineered Products, reported a 12% increase in
sales and a 40% increase in income, compared to 1997 first-quarter levels.
Before restructuring charges and gains, first-quarter 1998 income from
operations decreased 15%, while 1998 sales in Mechanical Components
decreased 17% to $59.9 million compared with the same period in 1997. This
decrease is due to sales contribution from the divested Rotron and Birtcher
divisions, and was partially offset by increases at the aerospace business.
Sealol Industrial Seals was divested subsequent to the end of the quarter
and contributed $0.04 earnings per share.
For the first quarter, Optoelectronics sales grew 8% to $63.7 million.
Income from operations before restructuring charges was $2.3 million,
compared with $0.3 million in the same period in 1997. The sales increase
resulted from higher sales of thermopile components. Income benefited from
the higher sales level, operating improvements at Heimann Components, a
lower loss at IC Sensors, and the correction of contamination problems
which affected 1997 results. This segment is reported on a base operations
basis, since there were no divestitures in this segment.
The Technical Services segment posted a first-quarter sales increase of 8%
to $155.5 million compared with 1997 levels. Sales increases were achieved
in spite of the absence of a communications systems contract which
concluded last year. Higher grades at Defense Materials and increased sales
from Automotive, Services and the Defense Logistics Agency contract
contributed to a 46% increase in income before restructuring charges to
$12.2 million, compared to $8.3 million in 1997.
Recent events included:
January 9: EG&G completed the sale of its Rotron division, which
manufactures fans, blowers and motors, to AMETEK, Inc. for approximately
$103 million. In 1997 Rotron contributed $70 million in sales.
January 13: Gregory L. Summe, formerly president of AlliedSignal's
Automotive Product Group, was appointed President and Chief Operating
Officer of EG&G and elected to the Company's Board of Directors.
January 21: EG&G reported sales from continuing operations of $386.8
million and earnings from continuing operations of $0.45 per share for the
fourth quarter of 1997. For the year, EG&G reported sales from continuing
operations of $1.5 billion. Before a non-cash impairment charge of $28.2
million, 1997 earnings from continuing operations were $1.18 per share.
February 26: EG&G Wallac acquired Ohio-based Isolab, Inc., which
specializes in instrument systems for clinical diagnostic screening. Isolab
reported sales of $8.0 million in 1997. Isolab joins EG&G Wallac as part of
EG&G's Life Science Research and Diagnostics Division.
March 11: EG&G Astrophysics announced that it received an order for 12
Z-Scan(R) automatic explosives and contraband detection systems that will
be installed at San Francisco International Airport.
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<PAGE>
EG&G REPORTS FIRST QUARTER RESULTS
21 April 1998
Page 3 of 5
April 1: EG&G completed its purchase of the Belfab Division of John Crane,
Inc., the Daytona Beach unit of the TI Group, London, UK, for $45 million
and the sale of the EG&G Sealol Industrial Seals Division to TI for $100
million. The Belfab purchase complements EG&G's existing seal technology
for the semiconductor market and positions EG&G as a major supplier to the
semiconductor manufacturing industry.
April 6: EG&G announced that it appointed Retired Air Force General
Hansford T. Johnson as President of EG&G's Technical Services business
segment and elected him a Vice President of the Corporation.
Forward-Looking Information
All statements contained herein that refer to a time after March 29, 1998,
including the words will, will be, estimated to be, could be, expect, believe,
will continue, expected to, and plan, or statements referring to goals, the
future or future actions, continuing actions, trends, strategies, initiatives,
challenges or opportunities, or which otherwise are not purely historical, are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 and involve risks and uncertainties. There are a
number of important factors that could cause actual results to differ materially
from those indicated by such forward-looking statements, including the factors
set forth below.
Factors Affecting Future Performance
In the Instruments, Mechanical Components and Optoelectronics industry segments,
future performance will be highly dependent on the technological success, market
acceptance, competitive position of our businesses, product performance and
ability to reach cost targets of new and continuing program initiatives.
Improved operational efficiency will be required to offset increasing price
pressure in many of the Company's product offerings. Other factors that may
impact future earnings performance include the ability to replace sales and
earnings lost through divestitures, potential issues related to economic and
financial difficulties arising in Asia, unanticipated issues associated with the
Year 2000 dating problem, and difficulty in attracting and retaining key
personnel in certain areas. The future results of the Optoelectronics segment
are also dependent on management's ability to restore IC Sensors to break-even
in the near term, the successful introduction of new products, improvement in
manufacturing yields and implementation of cost reductions, including the
successful transfer of assembly activities to lower-cost geographic locations.
In the Technical Services segment, the Company operates in a highly competitive
procurement environment in the automotive testing and government services
businesses. The income generated by many of our government contracts is
dependent on meeting certain performance criteria. In accordance with government
regulations, all of the Company's government contracts are subject to
termination for the convenience of the government. NASA and the Air Force have
decided to consolidate and recompete the base operations contracts at the
Kennedy Space Center, Cape Canaveral Air Station and certain functions at
Patrick Air Force Base in an effort to eliminate duplication and reduce costs.
It is anticipated that any resultant contract would be effective October 1,
1998. The Company is participating in the recompetition for the new contract.
Movements in foreign exchange rates could affect operating results. Effective
tax rates in the future could be affected by changes in the geographical
distribution of income, utilization of non-U.S. net operating loss
carry-forwards, repatriation costs, resolution of outstanding tax audit issues
and changes in the portfolio of businesses.
EG&G, Inc. is a global technology company that provides complete systems, as
well as components to automotive, medical, aerospace, photography and other
industries, and delivers skilled support services to government and industrial
customers. Based in Wellesley, Massachusetts, EG&G, Inc. has annual sales of
$1.5 billion and more than 13,000 employees.
For further information contact: Deborah S. Lorenz, EG&G, Inc.
Tel. (781) 431-4306
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<TABLE>
CONSOLIDATED STATEMENT OF OPERATIONS
EG&G, Inc. and Subsidiaries
<CAPTION>
First Quarter Ended
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Mar. 29, Mar. 30,
(In thousands except per share data) 1998 1997
- ------------------------------------ ---- ----
<S> <C> <C>
Sales ....................................... $355,936 $347,006
Cost of Sales ............................... 264,760 259,639
Research and Development Expenses ........... 11,042 11,154
Selling, General and Administrative
Expenses.............................. 61,315 59,658
Restructuring Charges ....................... 31,400 --
Gains on Dispositions ....................... (67,478) --
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Operating Income From
Continuing Operations ................ 54,897 16,555
Other Income (Expense), Net ................. (1,202) (2,058)
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Income From Continuing
Operations Before Income Taxes ....... 53,695 14,497
Provision for Income Taxes .................. 19,212 4,929
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Income From Continuing Operations ........... 34,483 9,568
Income From Discontinued Operations,
Net of Income Taxes ................. -- 458
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Net Income .................................. $ 34,483 $ 10,026
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Basic Earnings Per Share:
Continuing Operations ....................... $ .76 $ .21
Discontinued Operations ..................... -- .01
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Net Income .................................. $ .76 $ .22
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Diluted Earnings Per Share:
Continuing Operations ....................... $ .75 $ .21
Discontinued Operations ..................... -- .01
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Net Income .................................. $ .75 $ .22
======== ========
Weighted Average Shares of
Common Stock Outstanding:
Basic ............................ 45,262 46,220
Diluted .......................... 45,766 46,437
</TABLE>
<TABLE>
OTHER FINANCIAL INFORMATION
EG&G, Inc. and Subsidiaries
<CAPTION>
First Quarter Ended
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Mar. 29, Mar. 30,
(In thousands) 1998 1997
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<S> <C> <C>
Purchases of Common Stock:
Number of shares ...................... 447 532
Cost of shares ........................ $ 11,446 $ 11,551
Cash and Cash Equivalents $102,895 $ 42,381
Total Debt .................................. $114,838 $156,570
</TABLE>
All figures shown are subject to year-end audit.
Page 4 of 5
<PAGE>
<TABLE>
SALES AND OPERATING INCOME FROM CONTINUING OPERATIONS
BY INDUSTRY SEGMENT
EG&G, Inc. and Subsidiaries
<CAPTION>
First Quarter 1997
First Quarter Ended ------------------
------------------- Results
Mar. 29, Mar. 30, of Divested Base
(In thousands) 1998 1997 Operations Operations(a)
- -------------- ---- ---- ---------- ----------
<S> <C> <C> <C> <C>
Instruments
Sales .................................... $ 76,882 $ 71,674 $ 2,898 $ 68,776
Operating Income Before Nonrecurring Items 5,822 5,111 409 4,702
7.6% 7.1% 14.1% 6.8%
Restructuring Charges .................... (7,100) --
1997 Gains, Net of Integration Costs ..... -- 1,024
Operating Income (Loss) .................. (1,278) 6,135
Mechanical Components
Sales .................................... $ 59,855 $ 71,734 $ 18,311 $ 53,423
Operating Income Before Nonrecurring Items 6,470 7,615 3,009 4,606
10.8% 10.6% 16.4% 8.6%
Restructuring Charges .................... (8,500) --
Gains on Dispositions .................... 67,478 --
Operating Income ......................... 65,448 7,615
Optoelectronics
Sales .................................... $ 63,665 $ 59,105
Operating Income Before Nonrecurring Items 2,307 291
3.6% 0.5%
Restructuring Charges .................... (8,600) --
Operating Income (Loss) ................. (6,293) 291
Technical Services
Sales .................................... $155,534 $144,493
Operating Income Before Nonrecurring Items 12,164 8,321
7.8% 5.8%
Restructuring Charges .................... (4,200) --
Operating Income ......................... 7,964 8,321
General Corporate Expenses
Before Nonrecurring Items ................ $ (7,944) $ (5,807)
Restructuring Charges .................... (3,000) --
General Corporate Expenses ............... (10,944) (5,807)
Continuing Operations
Sales .................................... $355,936 $347,006 $ 21,209 $325,797
Operating Income Before Nonrecurring Items 18,819 15,531 3,418 12,113
5.3% 4.5% 16.1% 3.7%
Restructuring Charges .................... (31,400) --
Gains on Dispositions .................... 67,478 --
1997 Gains, Net of Integration Costs ..... -- 1,024
Operating Income ......................... 54,897 16,555
</TABLE>
(a) Excludes gains and results of operations divested in 1997 and first quarter
1998.
All figures shown are subject to year-end audit.
Page 5 of 5
