<PAGE> 1
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 25, 1999
--------------
EG&G, Inc.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C> <C>
Massachusetts 1-5075 04-2052042
- ------------------- ----------------------- -------------------
(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification No.)
incorporation)
</TABLE>
45 William Street, Wellesley, Massachusetts 02481
---------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(781) 237-5100
----------------------------------------------------
(Registrant's telephone number, including area code)
Not applicable
-----------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE> 2
Item 5. Other Events
On April 25, 1999, the Company issued a press release reporting on its financial
results for the first quarter of 1999 (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/ Murray Gross
----------------------------------
Senior Vice President,
General Counsel and Clerk
Date: May 6, 1999
EXHIBIT INDEX
Exhibit Number Exhibit Description
- -------------- --------------------
(99) Press Release dated April 25, 1999
<PAGE> 1
Exhibit 99
FOR IMMEDIATE RELEASE
25 April 1999
EG&G ANNOUNCES 24% INCREASE IN DILUTED EARNINGS PER SHARE
FOR THE FIRST QUARTER 1999
WELLESLEY, MASSACHUSETTS . . . EG&G, Inc. today announced first quarter diluted
earnings per share (EPS) of $.31, a 24% increase over 1998 first quarter EPS of
$.25 (before non-recurring items). Net income for the first quarter increased
24% to $14.1 million (M) from $11.3M for the first quarter of the prior year
(before non-recurring items).
Operating profit from continuing operations increased 37% to $25.8M, or
7.2% of sales, from $18.8M, or 5.3% of sales for the first quarter last year.
The increase in operating profit was due to improvements in the Company's cost
structure reflecting restructuring actions initiated in 1998, productivity and
quality initiatives, and a better mix of higher value-added products.
Gregory L. Summe, President and CEO said, "We were very pleased with
our first quarter, not only because of the excellent financial results, but
because we also took several strategic actions to sharpen our focus on becoming
a high growth technology company." During the quarter, the Company signed an
agreement to purchase the Perkin-Elmer Analytical Instruments business and
engaged Goldman Sachs to review strategic alternatives for the Company's
Technical Services segment. Summe continued, "We believe that our first quarter
results are a strong start toward achieving $1.60 EPS for 1999."
Excluding divestitures, sales for the first quarter of 1999 increased
7% to $357.5M versus $333.3M for the first quarter, 1998, more than overcoming
the loss of the Kennedy Space Center contract in the Technical Services segment
during 1998. Sales of ongoing operations (excluding Kennedy Space Center
contract and divestitures) were up 22%.
First quarter segment results were as follows:
LIFE SCIENCES increased sales 12% to $36.9M from $32.9M in the first
quarter of 1998. Operating profit of $4.0M represents an increase of 200% over
first quarter 1998 (before non-recurring).
<PAGE> 2
EG&G ANNOUNCES 24% INCREASE IN DILUTED EARNINGS PER SHARE
FOR THE FIRST QUARTER 1999
Page 2 of 5
Revenue growth reflected continued strong demand in both the
bioanalytical research (BAR) and diagnostic businesses. In the BAR market, the
Life Science segment is experiencing strong demand for its VICTOR(2)(TM)
microplate readers and Lance(TM) reagents due to the growth in drug discovery
and in molecular and cellular research. The Company's increased sales and
marketing efforts in the U.S. diagnostic market drove strong growth as the
Company continues to expand its worldwide, market leading position in neonatal
and pre-natal screening.
Operating margins expanded 680 basis points to 10.8% from 4.0% in first
quarter, 1998 (before non-recurring), due to increased volume, stronger sales of
higher margin services and reagents, and lower 1999 expense levels.
OPTOELECTRONICS' sales increased in the first quarter, 1999 by 58% to
$100.5M from $63.7M in first quarter, 1998 due to the acquisition of Lumen
Technologies, Inc. in December, 1998. Operating profit was up six fold to $7.8M,
or 7.8% of sales, from $1.3M, or 2.0%, in first quarter, 1998.
Revenue of this segment, excluding the acquisition of Lumen, was down
6% due to management's decision to exit both the automotive sensors business and
assembly of printed circuit boards. The strength of the medical, video
projection and entertainment markets drove Lumen revenues up low-double digits
over the first quarter, 1998, which was prior to acquisition by the Company. In
addition, custom systems business revenue growth exceeded 10% due to increased
demand in aerospace and defense markets.
Operating margin improvement of 580 basis points compared to first
quarter, 1998 (before non-recurring) was primarily due to restructuring of
manufacturing activities including the relocation of certain production to the
Far East, closing a wafer fabrication facility, as well as the inclusion of
higher value added Lumen products.
INSTRUMENTS' sales increased 2% to $64.7M in the first quarter of 1999
from $63.2M in the first quarter of 1998. Strong growth in the analytical
instruments business during the quarter and the inclusion of the Lumen
photolithography business in this segment offset continuing weakness in the
security and automotive businesses. The Lumen photolithography business is up
low double digits over the first quarter, 1998, which was prior to acquisition
by the Company, due to the introduction of several new products. The Company's
new product introductions in the analytical instrument business, including
E-Chem(R), a new Windows-based software package, drove revenue growth of 9%.
Operating profit decreased to $5.0M in the first quarter of 1999 from
$5.7M in the first quarter of 1998. Softness in security and automotive testing,
which was partially offset by operating margin improvements at analytical
instruments and the inclusion of Lumen photolithography resulted in reducing
operating margins for this segment by 130 basis points to 7.7%.
<PAGE> 3
EG&G ANNOUNCES 24% INCREASE IN DILUTED EARNINGS PER SHARE
FOR THE FIRST QUARTER 1999
Page 3 of 5
Sales in our ENGINEERED PRODUCTS segment increased 11% to $41.2M from
$37.2M for the first quarter of 1998. Excluding the impact of the Belfab
acquisition and the exiting of low-margin, sheet metal fabrication product
lines, revenue was flat. Revenue growth in brush and static seals for the power
generation business offset softness in the aerospace market. Operating margins
expanded to 9.8% in first quarter from 7.1% in first quarter, 1998 (before
non-recurring) as the benefits of ongoing Six Sigma quality and productivity
programs initiated last year are significantly reducing costs.
TECHNICAL SERVICES sales were down 16% in the first quarter of 1999 to
$114.3M from $136.3M in the previous year primarily due to the loss of the
Kennedy Space Center contract. Excluding the loss of the Kennedy Space Center
contract, sales were up 16%. The strong increase in revenue from ongoing
operations was attributable to recent contract wins for government services and
base privatization activities. Operating margin increased to 5.7% of sales in
the first quarter of 1999 from 4.8% in the first quarter of 1998 (before
non-recurring). This improvement resulted primarily from better contract
performance and higher operating margins associated with the recent service
contracts.
FORWARD-LOOKING INFORMATION AND FACTORS AFFECTING FUTURE PERFORMANCE
This press release contains "forward-looking" statements. For this
purpose, any statements contained in this press release that are not statements
of historical fact may be deemed to be forward-looking statements. Words such as
"believes," "anticipates," "plans," "expects," "will" and similar expressions
are intended to identify forward-looking statements. There are a number of
important factors that could cause the results of EG&G to differ materially from
those indicated by these forward-looking statements, including among others, the
factors set forth under "Forward-looking Information and Factors Affecting
Future Performance" in the Company's Annual Report on Form 10-K for the year
ended January 3, 1999 filed with the Securities and Exchange Commission, Exhibit
99.1 to our Current Report on Form 8-K filed with the Securities and Exchange
Commission on January 25, 1999 which factors are incorporated by reference in
this press release.
EG&G, Inc. is a global technology company based in Wellesley, Massachusetts that
provides products and systems to medical, telecom, aerospace, semiconductor,
photographic and other industries. It delivers skilled support services to
government and industrial customers.
For further information contact: Gregory D. Perry, EG&G, Inc.
Tel. (781) 431-4306
- more -
<PAGE> 4
EG&G ANNOUNCES 24% INCREASE IN DILUTED EARNINGS PER SHARE
FOR THE FIRST QUARTER 1999
Page 4 of 5
EG&G, INC. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENT
<TABLE>
<CAPTION>
First Quarter
-------------------------
(In thousands except per share data) 1999 1998
- ------------------------------------ --------- ---------
<S> <C> <C>
Sales $ 357,487 $ 355,936
Cost of Sales 261,150 264,760
Research and Development Expenses 13,502 11,042
Selling, General and Administrative Expenses 57,017 61,315
Restructuring Charges -- 31,400
Gains on Dispositions -- (67,478)
--------- ---------
Operating Income From Continuing Operations 25,818 54,897
Other Income (Expense), Net (3,976) (1,202)
--------- ---------
Income From Continuing Operations Before Income Taxes 21,842 53,695
Provision for Income Taxes 7,755 19,212
--------- ---------
Income From Continuing Operations 14,087 34,483
Income From Discontinued Operations, Net of Income Taxes -- --
--------- ---------
Net Income $ 14,087 $ 34,483
========= =========
Basic Earnings Per Share:
Continuing Operations $ .31 $ .76
Discontinued Operations -- --
----- -----
Net Income $ .31 $ .76
===== =====
Diluted Earnings Per Share:
Continuing Operations $ .31 $ .75
Discontinued Operations -- --
----- -----
Net Income $ .31 $ .75
===== =====
Weighted Average Shares of Common Stock Outstanding:
Basic 44,910 45,262
Diluted 45,704 45,766
</TABLE>
Continuing Operations Excluding Nonrecurring Items:
<TABLE>
<CAPTION>
First Quarter
-------------------------
(In thousands except per share data) 1999 1998
- ------------------------------------ --------- ---------
<S> <C> <C>
Net Income $14,087 $11,275
Basic Earnings Per Share .31 .25
Diluted Earnings Per Share .31 .25
</TABLE>
Note: Nonrecurring items include gains on dispositions
and restructuring charges.
OTHER FINANCIAL INFORMATION
<TABLE>
<CAPTION>
First Quarter
------------------------
(In thousands) 1999 1998
- -------------- -------- --------
<S> <C> <C>
Purchases of Common Stock:
Number of shares -- 447
Cost of shares $ -- $ 11,446
Cash and Cash Equivalents $106,285 $102,895
Total Debt $300,755 $114,838
</TABLE>
All figures shown are subject to year-end audit.
<PAGE> 5
EG&G ANNOUNCES 24% INCREASE IN DILUTED EARNINGS PER SHARE
FOR THE FIRST QUARTER 1999
Page 5 of 5
Sales and Operating Profit by Operating Segment
<TABLE>
<CAPTION>
First Quarter
---------------------------------------
(In thousands) 1999 1998
- -------------- ---- ----
<S> <C> <C> <C>
Life Sciences Sales $ 36,855 $ 32,882
OP$ 3,979 624
OP% 10.8% 1.9%
---------------------------------------------------------------------------------------------
OP$ before nonrecurring items 3,979 1,324
OP% before nonrecurring items 10.8% 4.0%
---------------------------------------------------------------------------------------------
Optoelectronics Sales 100,476 63,665
OP$ 7,804 (7,321)
OP% 7.8% -11.5%
---------------------------------------------------------------------------------------------
OP$ before nonrecurring items 7,804 1,279
OP% before nonrecurring items 7.8% 2.0%
---------------------------------------------------------------------------------------------
Instruments Sales 64,692 63,240
OP$ 5,005 (3,988)
OP% 7.7% -6.3%
---------------------------------------------------------------------------------------------
OP$ before nonrecurring items 5,005 5,712
OP% before nonrecurring items 7.7% 9.0%
---------------------------------------------------------------------------------------------
Engineered Products Sales 41,194 37,189
OP$ 4,028 (5,858)
OP% 9.8% -15.8%
---------------------------------------------------------------------------------------------
OP$ before nonrecurring items 4,028 2,642
OP% before nonrecurring items 9.8% 7.1%
---------------------------------------------------------------------------------------------
Technical Services Sales 114,270 136,294
OP$ 6,564 5,710
OP% 5.7% 4.2%
---------------------------------------------------------------------------------------------
OP$ before nonrecurring items 6,564 6,610
OP% before nonrecurring items 5.7% 4.8%
---------------------------------------------------------------------------------------------
Divestitures and Other Sales -- 22,666
OP$ (1,562) 65,730
OP% -- 290.0%
---------------------------------------------------------------------------------------------
OP$ before nonrecurring items (1,562) 1,252
OP% before nonrecurring items -- 5.5%
---------------------------------------------------------------------------------------------
Total Sales $ 357,487 $ 355,936
========= =========
OP$ 25,818 54,897
========= =========
OP% 7.2% 15.4%
---------------------------------------------------------------------------------------------
OP$ before nonrecurring items 25,818 18,819
OP% before nonrecurring items 7.2% 5.3%
---------------------------------------------------------------------------------------------
</TABLE>
Note: Nonrecurring items include gains on dispositions and
restructuring charges.
All figures shown are subject to year-end audit.
