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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)
January 21, 1997
FMC CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 1-2376 94-0479804
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(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
200 East Randolph Drive, Chicago, Illinois 60601
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(address of principal executive offices) (Zip Code)
(312) 861-6000
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(Registrant's telephone number, including area code)
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Item 5. Other Events
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On January 21, 1997, FMC Corporation issued the following release:
FMC REPORTS FOURTH QUARTER, 1996 YEAR-END RESULTS
CHICAGO, January 21, 1997 -- FMC Corporation today reported fourth quarter sales
of $1.4 billion from continuing operations, an increase of 15 percent from $1.2
billion in the fourth quarter of 1995. After-tax income from continuing
operations of $45 million increased from $25 million in the fourth quarter of
1995. Earnings per share from continuing operations increased to $1.17 compared
with $.66 in the 1995 quarter.
In 1996, sales from continuing operations were $5 billion, up 12 percent
from $4.5 billion in 1995. After-tax income of $218 million from continuing
operations increased from $214 million before special income and expense items
in 1995. Earnings from continuing operations were $5.73 per share compared with
the prior year's earnings of $5.68 per share from continuing operations before
special income and expense items.
-more-
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PAGE 2/FMC REPORTS FOURTH QUARTER, YEAR-END RESULTS
According to FMC Chairman and Chief Executive Officer Robert N. Burt:
"We achieved record sales and income from continuing operations in 1996 despite
significant expenses in the start-up of our growth strategy investments. We
expect further growth in 1997, but it will be moderated by weakness in the soda
ash and hydrogen peroxide markets, and start-up expenses associated with our new
herbicide and lithium plants."
QUARTERLY REVIEW OF OPERATIONS
Industrial Chemicals sales of $273 million increased 5 percent from
$260 million in the fourth quarter of 1995. Earnings were $65 million (net of
minority interest), including a $24 million gain ($6.5 million after tax) from
the sale of the company's minority interest in a Japanese hydrogen peroxide
venture. Earnings in the 1995 period were $25 million, reflecting manufacturing
disruptions that negatively affected earnings. In the 1996 quarter, soda ash
prices and volumes were up from the 1995 period. North American hydrogen
peroxide prices and shipments were lower than in the fourth quarter of 1995 due
to continued weakness in the pulp and paper market. Phosphorus sales and
profits were ahead of 1995, reflecting higher prices. European chemical
operations maintained strong performance based on higher prices and continuing
cost improvements.
-more-
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Page 3/FMC Reports Fourth Quarter, Year-end Results
Performance Chemicals sales of $270 million increased 8 percent from $250
million in the 1995 period, and earnings of $12 million in 1996 increased from
$6 million in the 1995 fourth quarter. Sales of agricultural products continued
to increase; however, earnings were lower than the 1995 quarter due to spending
and start-up costs related to the planned introduction of Authority herbicide.
Continuing difficulties in the start-up process at our new herbicide plant will
result in a shortfall of quantities necessary to meet estimated market demand in
1997, although we still expect solid, year-over-year improvements in
agricultural products performance. Results from the specialty chemicals
businesses were stronger than in the prior-year quarter. Food and pharmaceutical
ingredient sales and profits improved on increased global demand and new
applications developments. Lithium sales and profits also rose with increased
use of lithium-based intermediates in the pharmaceutical industry. The initial
start-up of our new, low-cost lithium plant in Argentina will be underway during
the first half of 1997.
Machinery and Equipment sales of $556 million increased from $414 million
in the 1995 quarter, and profits of $22 million increased 24 percent from $17
million in the prior-year period. Sales of energy equipment were up on the basis
of strong subsea wellhead and marine loading arm deliveries. Airline equipment
sales improved significantly on the basis of market share gains in a strong
market.
-more-
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Page 4/FMC Reports Fourth Quarter, Year-end Results
Food machinery sales improved on the strength of acquisitions. Profit
improvement was driven by increases in sales and continuing margin improvement
in the wellhead business. At the end of 1996, the Machinery and Equipment
backlog was $923 million, up from $545 million at the beginning of the year,
reflecting acquisitions and increased energy equipment activity.
Defense Systems sales of $271 million increased 2 percent from $265 million
in the 1995 period. Profits of $25 million (net of minority interest) were
slightly ahead of the prior-year quarter. Results in 1996 benefited from the
ongoing Crusader development program and a gain from a legal judgment. Defense
backlog was $1.6 billion at the end of the quarter, up from $1.5 billion at the
end of 1995.
Net interest expense in the quarter increased to $22 million from $18
million in the 1995 fourth quarter, reflecting higher debt levels associated
with acquisitions, increased capital spending and higher working capital
associated with sales growth. Corporate expenses declined to $24 million from
$27 million due to continued savings from reduced staffing levels. Other income
was unfavorable by $5 million in the 1996 quarter compared with the prior-year
period due to a favorable legal outcome in 1995.
-more-
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Page 5/FMC Reports Fourth Quarter, Year-end Results
Full Year 1996 Results
Industrial Chemicals sales of $1 billion increased 7 percent, and profits
(net of minority interest) of $182 million increased 19 percent from 1995,
primarily reflecting improved soda ash pricing and volumes, and a gain on a sale
of the company's minority interest in a Japanese hydrogen peroxide venture.
Earnings in 1996 reflect the full-year minority interest impact of the July 1995
sale of a 20 percent interest in FMC's soda ash business.
Performance Chemicals sales of $1.3 billion increased 6 percent, and
profits were down 3 percent to $159 million. Results were driven by higher raw
material costs in food ingredients and pharmaceuticals and higher costs related
to the pending launch of a new herbicide.
Machinery and Equipment sales of $1.7 billion increased 25 percent, and
profits of $76 million increased 54 percent. Increased sales resulted from
acquisitions and strengthening market conditions in the energy, food machinery
and airline equipment businesses. Those improved market conditions also led to
improved profitability.
Defense Systems sales of $1 billion increased 5 percent and profits (net of
minority interest) of $99 million decreased 6 percent from last year.
-more-
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Page 6/FMC Reports Fourth Quarter, Year-end Results
On July 31, 1996, FMC sold its 80 percent interest in FMC Gold Company. The
operating loss from the gold business, the gain from the sale of the gold
company, and increases in reserves from previously divested operations,
primarily related to general and product liability, resulted in a net loss from
discontinued operations of $7 million in 1996.
Corporate expenses declined $8 million, reflecting the benefits of the
company's restructuring program. Net interest expense of $93 million increased
25 percent, reflecting increased capital spending, acquisitions and higher
working capital requirements associated with sales growth.
FMC Corporation is one of the world's leading producers of chemicals and
machinery for industry, government and agriculture. The Chicago-based company
reported annual sales of $5 billion in 1996, with sales to more than 100
countries accounting for 48 percent of total annual revenues. FMC employs 22,000
people at 115 manufacturing facilities and mines in 24 countries. The company
divides its businesses into four major segments: Industrial Chemicals,
Performance Chemicals, Machinery and Equipment, and Defense Systems.
# # #
Safe Harbor Statement under the Private Securities Litigation Act of 1995:
Statements in this news release that are forward-looking statements are subject
to various risks and uncertainties including but not limited to economic
conditions, product demand and industry capacity, competitive products and
pricing, manufacturing efficiencies, new product development, availability and
price of raw materials and critical manufacturing equipment, new plant startups,
the regulatory and trade environment and other risks indicated in the
corporation's form 10-K and other SEC filings. Such information contained herein
represents management's best judgment as of the date hereof based on information
currently available. The corporation does not intend to update this information
and disclaims any legal liability to the contrary.
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FMC CORPORATION AND CONSOLIDATED SUBSIDIARIES
---------------------------------------------
CONSOLIDATED STATEMENTS OF INCOME
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EXCLUDES SPECIAL INCOME AND EXPENSE ITEMS
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(UNAUDITED AND IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Three Months Twelve Months
Ended December 31 Ended December 31
-------------------------- --------------------
1995 1996 1995 1996
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Sales $1,184.4 $1,362.8 $4,450.8 $4,969.4
Other revenue 17.1 44.8 56.9 111.2
-------- -------- -------- --------
Total revenue 1,201.5 1,407.6 4,507.7 5,080.6
Operating costs and expenses 1,132.4 1,296.0 4,070.9 4,608.1
-------- -------- -------- --------
69.1 111.6 436.8 472.5
Minority interests 16.2 8.9 58.7 56.9
Net interest expense 17.7 22.1 74.6 93.0
-------- -------- -------- --------
Income from continuing operations
before income taxes and special
income and expense items 35.2 80.6 303.5 322.6
Provision for income taxes 10.1 36.0 89.5 104.5
-------- -------- -------- --------
Income from continuing operations before
special income and expense items 25.1 44.6 214.0 218.1
-------- -------- -------- --------
Discontinued operations, net of taxes 3.3 - (1.9) (7.4)
-------- -------- -------- --------
After-tax income before special income
and expense items $ 28.4 $ 44.6 $ 212.1 $ 210.7
======== ======== ======== ========
Earnings (loss) per common share:
Continuing operations $ 0.66 $ 1.17 $ 5.68 $ 5.73
Discontinued operations 0.09 - (0.05) (0.19)
-------- -------- -------- --------
After-tax income before special income
and expense items $ 0.75 $ 1.17 $ 5.63 $ 5.54
======== ======== ======== ========
Average number of shares used in
earnings per share computations 37.9 38.1 37.7 38.1
======== ======== ======== ========
</TABLE>
Note 1: Prior period amounts have been reclassified to present the Precious
Metals segment as a discontinued operation.
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FMC CORPORATION AND CONSOLIDATED SUBSIDIARIES
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INDUSTRY SEGMENT DATA
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(Unaudited and in millions)
<TABLE>
<CAPTION>
Three Months Twelve Months
Ended December 31 Ended December 31
-------------------- ------------------
1995 1996 1995 1996
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Sales
- -----
Industrial Chemicals $ 259.9 $ 272.5 $ 976.8 $1,041.3
Performance Chemicals 250.0 269.8 1,176.5 1,251.8
Machinery and Equipment 414.0 556.4 1,351.0 1,684.9
Defense Systems 265.3 270.9 968.2 1,018.8
Eliminations (4.8) (6.8) (21.7) (27.4)
-------- -------- -------- --------
$1,184.4 $1,362.8 $4,450.8 $4,969.4
======== ======== ======== ========
Income from continuing operations
- ---------------------------------
before income taxes
- -------------------
Industrial Chemicals $ 25.0 $ 65.4 $ 153.1 $ 181.8
Performance Chemicals 5.9 12.3 163.7 159.2
Machinery and Equipment 17.4 21.5 49.4 75.9
Defense Systems 23.7 24.7 104.7 98.7
-------- -------- -------- --------
Operating profit from continuing
operations 72.0 123.9 470.9 515.6
Restructuring and other charges (1) - - (150.0) -
Gain on sale of FMC Wyoming stock (2) - - 99.7 -
Corporate (26.9) (23.6) (99.0) (91.3)
Net interest expense (17.7) (22.1) (74.6) (93.0)
Other income and (expense), net 7.8 2.4 6.2 (8.7)
-------- -------- -------- --------
Income from continuing operations
before income taxes $ 35.2 $ 80.6 $ 253.2 $ 322.6
======== ======== ======== ========
</TABLE>
(1) Restructuring and other charges consist of increased environmental
reserves ($82.5), and other charges primarily related to reserves
covering the shift of lithium-based production to Argentina ($52.0) and
write-off of acquired in-process R&D related to Moorco International Inc.
acquisition ($15.5). Restructuring and other charges totaled $96.2 after
tax.
(2) Gain on sale of FMC Wyoming stock was a nontaxable transaction.
FMC has modified its presentation of segment results, effective first quarter
1996, to better align them with management's evaluation of segment performance.
Accordingly, business segment results are net of minority interest, reflecting
only FMC's share of earnings. The corporate line primarily reflects staff
expenses, and other income and expense reflects all other corporate items,
including certain relatively minor amounts previously allocated to business
segments. 1995 segment results have been reclassified to be consistent with
current presentations. The company's Precious Metals segment has been
reclassified as a discontinued operation.
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FMC CORPORATION AND CONSOLIDATED SUBSIDIARIES
---------------------------------------------
CONSOLIDATED STATEMENTS OF INCOME
---------------------------------
(UNAUDITED AND IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Three Months Twelve Months
Ended December 31 Ended December 31
------------------ --------------------
1995 1996 1995 1996
-------- -------- --------- ---------
<S> <C> <C> <C> <C>
Sales $1,184.4 $1,362.8 $4,450.8 $4,969.4
Other revenue 17.1 44.8 56.9 111.2
-------- -------- -------- --------
Total revenue 1,201.5 1,407.6 4,507.7 5,080.6
Operating costs and expenses 1,132.4 1,296.0 4,086.4 4,608.1
Restructuring and other charges - - 134.5 -
-------- -------- -------- --------
Total costs and expenses 1,132.4 1,296.0 4,220.9 4,608.1
-------- -------- -------- --------
69.1 111.6 286.8 472.5
Minority interests 16.2 8.9 58.7 56.9
Gain on sale of FMC Wyoming stock - - (99.7) -
Net interest expense 17.7 22.1 74.6 93.0
-------- -------- -------- --------
Income from continuing operations
before income taxes 35.2 80.6 253.2 322.6
Provision for income taxes 10.1 36.0 35.7 104.5
-------- -------- -------- --------
Income from continuing operations 25.1 44.6 217.5 218.1
-------- -------- -------- --------
Discontinued operations, net of taxes 3.3 - (1.9) (7.4)
-------- -------- -------- --------
Net income $ 28.4 $ 44.6 $ 215.6 $ 210.7
======== ======== ======== ========
Earnings (loss) per common share:
Continuing operations $ 0.66 $ 1.17 $ 5.77 $ 5.73
Discontinued operations 0.09 - (0.05) (0.19)
-------- -------- ------- --------
Net income $ 0.75 $ 1.17 $ 5.72 $ 5.54
======== ======== ======= =======
Average number of shares used in
earnings per share computations 37.9 38.1 37.7 38.1
======== ======== ======= =======
</TABLE>
Note 1: Prior period amounts have been reclassified to present the Precious
Metals segment as a discontinued operation.
