<PAGE> 1
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 26, 2000
THE B.F.GOODRICH COMPANY
(Exact Name of Registrant as Specified in Charter)
New York 1-892 34-0252680
(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
3 Coliseum Centre
2550 West Tyvola Road
Charlotte, North Carolina 28217
(Address of Principal Executive Offices)(Zip Code)
Registrant's telephone number, including area code: (704) 423-7000
<PAGE> 2
ITEM 5. OTHER EVENTS
On April 26, 2000, The B.F.Goodrich Company issued a press release
announcing its earnings for the three-month period ended March 31, 2000. A copy
of such press release, together with a supplement to the press release
containing additional financial information, is filed as Exhibit 99.1 hereto and
is incorporated by reference herein.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Businesses Acquired.
None.
(b) Pro Forma Financial Information
None.
(c) Exhibits
Exhibit 99.1 The B.F.Goodrich Company Press Release dated April
26, 2000 titled "BFGoodrich reports first quarter
results" and supplement to the press release.
2
<PAGE> 3
SIGNATURES
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.
THE B.F.GOODRICH COMPANY
(Registrant)
Date: April 26, 2000 By: /s/ Robert D. Koney, Jr.
-----------------------------
Robert D. Koney, Jr.
Vice President and Controller
3
<PAGE> 1
Exhibit 99.1
[BFGOODRICH LOGO] NEWS
- --------------------------------------------------------------------------------
THE BFGOODRICH COMPANY PROO-0028
3 Coliseum Centre MEDIA CONTACT: Kevin Ramundo
2550 West Tyvola Rd. PHONE: 704-423-7024
Charlotte, North Carolina 28217 FAX: 704-423-7127
www.bfgoodrich.com
- ------------------ Investor Contact: Paul Gifford
PHONE: 704-423-5517
FAX: 704-423-5518
BFGOODRICH REPORTS FIRST QUARTER RESULTS
- MARGINS INCREASE IN ALL THREE SEGMENTS
- AEROSPACE STRONG DESPITE COMMERCIAL TRANSPORT DELIVERY DECREASES
- INDUSTRIAL SEGMENT MARGINS REBOUND FROM FOURTH QUARTER
- PROFITS UP IN PERFORMANCE MATERIALS
CHARLOTTE, N.C., April 26, 2000 - The BFGoodrich Company (NYSE: GR) announced
today that first quarter net income, excluding special items, was $89.5 million,
or $.81 per share, compared to $92.8 million, or $.84 per share, in the year-ago
quarter. Net income in the current quarter equaled $86.1 million, or $.78 per
share, after a special after-tax charge of $3.4 million, or $.03 per share, for
consolidation activities. In the year-ago quarter, net income was $76.3 million,
or $.69 per share, after a special after-tax charge of $16.5 million, or $.15
per share, for restructuring activities in the Performance Materials segment.
Sales were approximately $1.4 billion in both quarters.
Commenting on the results, David L. Burner, BFGoodrich's chairman and chief
executive officer, said, "We are pleased with our first quarter performance and
the higher margins achieved in all of our segments compared to a year ago. Our
Aerospace segment was strong, even with the downturn in commercial transport
deliveries, due to our balanced portfolio including significant business in the
aftermarket and regional and business aircraft segments of the industry. Results
in Engineered Industrial Products rebounded from last year's fourth quarter as
operating margins reached an impressive 18.9%. And in Performance Materials,
operating profits increased over 15%. We are off to a very good start in 2000."
FIRST QUARTER SEGMENT REVIEW
- ----------------------------
In the Aerospace segment, operating income decreased 3% to $138.7 million, and
sales declined 4% to $893.0 million compared to a very strong first quarter last
year when production levels of commercial aircraft were substantially higher.
While the decline in
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PR00-0028 - BFGoodrich reports first quarter results
<PAGE> 2
[BFGOODRICH LOGO] NEWS
production adversely affected original equipment deliveries of the company's
aerostructures and landing gear, operating profit gains occurred in numerous
businesses, including wheels and brakes, evacuation systems, avionics, sensors
and engine components. The quarter's performance also reflects lower results in
airframe services due to the Boeing strike and an unexpected postponement of
aircraft servicing requirements by a major customer. The balance of the
aerospace service businesses achieved higher results.
In the Engineered Industrial Products segment, margins reached 18.9%, the
highest in the company, as the segment returned to historical profit levels
following the soft market conditions experienced during the last half of 1999.
Sales for the current quarter decreased 4% to $177.6 million, and operating
income was $33.6 million, versus $34.2 million in the year-ago quarter. The
compressor products business was particularly strong, and cost reduction
programs continued to be successful in the quarter.
In the Performance Materials segment, operating income increased 15% to $34.1
million and sales increased 3% to $307.6 million. The increase in operating
income was due primarily to higher sales volume across all groups, partially
offset by higher raw material costs. Continued success in productivity programs
also contributed to improved operating income.
FOCUSED ON SHAREHOLDER VALUE
- ----------------------------
During the quarter, BFGoodrich announced several major decisions intended to
drive shareholder value. Last week, BFGoodrich indicated that it intends to sell
Performance Materials and concentrate on its Aerospace and Engineered Industrial
Products segments. Earlier in the quarter, the company began implementing a $300
million share repurchase program, which to date has involved the repurchase of
2.9 million shares at a total cost of $73.7 million. The Board of Directors also
approved changes in the company's management incentive compensation programs to
link them to gains in shareholder value.
In commenting on the divestiture of Performance Materials, Mr. Burner said,
"From a strategic perspective, we will create a more focused company and
generate substantial proceeds which will be used to drive shareholder value.
With the divestiture and last year's successful Coltec acquisition, BFGoodrich
is solidly positioned to become a top-tier manufacturing company with global
reach and strong business franchises in aerospace and industrial markets. With
the recovery of margins in engineered industrial products, the
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PR00-0028 - BFGoodrich reports first quarter results
<PAGE> 3
[BFGOODRICH LOGO] NEWS
Coltec acquisition is exceeding our original expectations, including our belief
that annual cost savings will be more than the $60 million we estimated when the
merger was announced."
The BFGoodrich Company, headquartered in Charlotte, North Carolina, has leading
market positions in advanced aerospace systems, performance materials, and
engineered industrial products. The company has $5.5 billion in annual revenues
and 27,000 employees worldwide.
The tables that follow provide more detailed information about BFGoodrich
results for the first quarter.
[Part of this announcement contains forward-looking statements that involve
risks and uncertainties, and actual results could differ materially from those
projected in the forward-looking statements. The risks and uncertainties are
detailed from time to time in reports filed with the Securities and Exchange
Commission, including but not limited to the last section of the Management's
Discussion and Analysis entitled "Forward-Looking Information is Subject to Risk
and Uncertainty" contained in the company's Annual Report on Form 10-K, and in
other filings.]
###
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PR00-0028 - BFGoodrich reports first quarter results
<PAGE> 4
THE BFGOODRICH COMPANY
(Dollars in millions except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
March 31
-------------------------------------------
2000 2000 1999 1999
As Reported As Adjusted(A) As Reported As Adjusted(B)
<S> <C> <C> <C> <C>
Sales $ 1,378.2 $ 1,378.2 $ 1,411.8 $ 1,411.8
======== ========= ======== ==========
Income before Income Taxes
and Trust Distributions 142.8 148.2 125.7 151.9
Income Tax Expense (52.1) (54.1) (44.8) (54.5)
Distributions on Trust Preferred
Securities (4.6) (4.6) (4.6) (4.6)
-------- --------- -------- ----------
Net Income $ 86.1 $ 89.5 $ 76.3 $ 92.8
======== ========= ======== ==========
Income Per Share:
Basic $ 0.79 $ 0.82 $ 0.70 $ 0.85
======== ========= ======== ==========
Diluted $ 0.78 $ 0.81 $ 0.69 $ 0.84
======== ========= ======== ==========
Weighted - Average Number
of Shares Outstanding
(in millions):
Basic 109.5 109.5 109.7 109.7
======== ========= ======== ==========
Diluted 112.9 112.9 113.3 113.3
======== ========= ======== ==========
</TABLE>
(A) Results exclude the effect of a $5.4 million charge ($3.4 million
after-tax), or $0.03 a diluted share, primarily related to merger-related
and consolidation costs.
(B) Results exclude the effect of a $26.2 million charge ($16.5 million
after-tax), or $0.15 a diluted share, related to the realignment of the
Performance Materials segment headquarters, Advanced Technology Group and
certain of its operating locations.
<PAGE> 5
BFGOODRICH SEGMENT REPORTING
(Dollars in Millions)
<TABLE>
<CAPTION>
Three Months Ended
March 31(A)
------------------------
2000 1999
<S> <C> <C>
Sales:
Aerospace:
Landing Systems $ 260.1 $ 262.5
Engine & Safety Systems 147.8 143.5
Electronic Systems 127.5 132.7
Aerostructures & Aviation Services 357.6 387.5
--------- --------
893.0 926.2
--------- --------
Engineered Industrial Products 177.6 185.6
--------- --------
Performance Materials:
Textile and Coatings Solutions 133.7 131.5
Polymer Additives and Specialty Plastics 114.4 109.3
Consumer Specialties 59.5 59.2
--------- --------
307.6 300.0
--------- --------
Total Sales $ 1,378.2 $ 1,411.8
========= ========
Operating Income:
Aerospace:
Landing Systems $ 37.3 $ 36.8
Engine & Safety Systems 27.3 24.7
Electronic Systems 25.2 24.5
Aerostructures & Aviation Services 48.9 56.5
--------- --------
138.7 142.5
--------- --------
Engineered Industrial Products 33.6 34.2
--------- --------
Performance Materials:
Textile and Coatings Solutions 8.0 6.2
Polymer Additives and Specialty Plastics 19.3 18.3
Consumer Specialties 6.8 5.1
--------- --------
34.1 29.6
--------- --------
Total Segment Operating Income $ 206.4 $ 206.3
Corporate General and Administrative Costs (18.4) (18.7)
Merger-related and Consolidation Costs (5.4) (26.2)
--------- --------
Total Operating Income $ 182.6 $ 161.4
========= ========
</TABLE>
(A) These amounts reflect the recently announced Aerospace reorganization,
reclass of certain divisional results within Performance Materials, as well
as the reallocation of certain corporate research and development costs to
Performance Materials.
<PAGE> 6
ADDITIONAL COMMENTS FROM INVESTOR RELATIONS
SUPPLEMENT TO THE PRESS RELEASE
SEGMENT RESULTS
FIRST QUARTER 2000 VERSUS FOURTH QUARTER 1999
AEROSPACE SEGMENT
- -----------------
($ millions)
1Q00 4Q99
---- ----
Revenue $893.0 $870.1
Operating Income 138.7 140.4
In the Aerospace segment, sales increased almost 3% from the fourth quarter 1999
to the first quarter 2000. The sales increases are due primarily to higher OEM
sales to Airbus in the Aerostructures and Aviation Services group partially
offset by lower aftermarket sales. Operating income during the same period
decreased 1% to $138.7. The decrease between periods is primarily due to a gain
on the exchange of land recorded by Aerostructures in the 4th quarter, partially
offset by the increase in sales noted above and a favorable product mix in most
groups.
PERFORMANCE MATERIALS SEGMENT
- -----------------------------
($ millions)
1Q00 4Q99
---- -----
Revenue $307.6 $300.4
Operating Income 34.1 32.0
Performance Materials' sales increased by about 2% to $307.6, while operating
income increased almost 7% to $34.1. The sales increases are due primarily to
very good results in Polymer Additives and Specialty Plastics as well as slight
increases in Textile and Coatings Solutions sales. The increases in operating
income are due in part to increased productivity, especially in Plastics, as
well as from incremental volume. While raw material costs continue to increase,
the segment is seeing increasing success in price increases to offset the rising
costs. In addition, within Performance Materials, the 4th quarter is cyclically
low, thus the 1st quarter increases are also due in part to the rebound from the
low quarter.
ENGINEERED INDUSTRIAL PRODUCTS SEGMENT
- --------------------------------------
($ millions)
1Q00 4Q99
---- ----
Revenue $177.6 $159.7
Operating Income 33.6 18.9
In Engineered Industrial Products, sales increased 11% returning to more normal
results for the segment. Operating income increased 78%. These increases are
primarily driven by increases in volume, a favorable sales mix and sustained
emphasis on cost reductions. The first quarter also saw the first engine sale
for the new LPD project which was a major R&D expense in the fourth quarter of
1999.
Page 1
<PAGE> 7
GROUP RESULTS
FIRST QUARTER 2000 VERSUS FIRST QUARTER 1999
BFGOODRICH AEROSPACE SEGMENT
----------------------------
AEROSTRUCTURES & AVIATION SERVICES GROUP
- ----------------------------------------
($ millions)
1Q00 1Q99
---- ----
Revenue $357.6 $387.5
Operating Income 48.9 56.5
Sales in the Aerostructures and Aviation Services Group decreased 8% compared to
first quarter 1999 while operating income decreased 13% to $48.9. Sales
decreases are primarily due to the decrease in Aerostructures OEM, as a result
of decreased levels of production for commercial aircraft, offset slightly by
increased aftermarket sales. Operating income decreases are due partly to
pressures in Aviation Services, which was affected by the Boeing engineering
strike and an unexpected postponement of aircraft servicing requirements by a
major customer. For the 1st quarter 2000, aircraft services recorded a loss of
approximately $0.3 on sales of $68.0.
LANDING SYSTEMS GROUP
- ---------------------
($ millions)
1Q00 1Q99
---- ----
Revenue $260.1 $262.5
Operating Income 37.3 36.8
Sales during the first quarter of 2000 decreased slightly to $260.1 while
operating income increased slightly to $37.3. Sales were down slightly in the
Landing Gear division due to decreased Commercial OEM production, partially
offset by increases in commercial and military spares sales, strong performance
in the Wheel and Brake division as well as landing gear and wheel & brake
component services. Operating income increased slightly due primarily to
strength in the Wheel and Brake division.
Page 2
<PAGE> 8
ENGINE & SAFETY SYSTEMS
- -----------------------
($ millions)
1Q00 1Q99
---- ----
Revenue $147.8 $143.5
Operating Income 27.3 24.7
Sales for the first quarter increased 3% to $147.8. Operating income for the
quarter increased 11% to $27.3. These increases are largely due to excellent
performance in engine products, especially power generation products, which more
than compensated for weakness in Commercial OEM production.
ELECTRONIC SYSTEMS GROUP
- ------------------------
($ millions)
1Q00 1Q99
---- ----
Revenue $127.5 $132.7
Operating Income 25.2 24.5
Sales during the first quarter of 2000 decreased 4% to $127.5 from $132.7 in the
first quarter of 1999. The decrease is due to weakness in the military market
for aircraft sensors and fuel and utility systems as some contracts have been
completed while new ones are awaited. Operating income for the quarter increased
3% to $25.2. The increase is primarily due to higher volume in space flight
systems, combined with favorable product mix in fuel and utility systems.
Page 3
<PAGE> 9
BFGOODRICH PERFORMANCE MATERIALS SEGMENT
----------------------------------------
TEXTILE & COATINGS SOLUTIONS GROUP
- ----------------------------------
($ millions)
1Q00 1Q99
---- ----
Revenue $133.7 $131.5
Operating Income 8.0 6.2
Sales increased almost 2% to $133.7 in the first quarter of 2000. The increase
in sales is due to higher volumes and the impact of the Mydrin acquisition
(March 1999), partially offset by unfavorable pricing. Operating income
increased 29% due to higher volumes, manufacturing efficiencies and continued
productivity improvements.
POLYMER ADDITIVES & SPECIALTY PLASTICS GROUP
- --------------------------------------------
($ millions)
1Q00 1Q99
---- ----
Revenue $114.4 $109.3
Operating Income 19.3 18.3
Sales for the quarter increased by $5.1, or 5%, from $109.3 in the fourth
quarter of 1999 to $114.4 for the first quarter of 2000. The increase was caused
primarily by favorable volume, partially offset by unfavorable pricing and mix.
Operating income increased $1.0, or 5%, from $18.3 million $19.3. The increase
was primarily driven by higher volumes and cost reductions in SG&A.
Page 4
<PAGE> 10
CONSUMER SPECIALTIES GROUP
- --------------------------
($ millions)
1Q00 1Q99
---- ----
Revenue $59.5 $59.2
Operating Income 6.8 5.1
Sales remained relatively flat in the first quarter of 2000, increasing slightly
to $59.5. Higher volume of sales for Carbopol, particularly in Asia and Latin
America, was offset by lower volume and negative price related to phenol.
Despite flat sales, operating income increased 33%. This increase in operating
income was attributable to overall favorable volume, manufacturing efficiencies
and continued productivity improvements.
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<PAGE> 11
BFGOODRICH ENGINEERED INDUSTRIAL PRODUCTS SEGMENT
-------------------------------------------------
ENGINEERED INDUSTRIAL PRODUCTS
- ------------------------------
($ millions)
1Q00 1Q99
---- ----
Revenue $177.6 $185.6
Operating Income 33.6 34.2
Sales for the quarter were 4% lower than first quarter 1999, partially due to
the completion of a large engine project for the U.S. Navy in 1999 and the
initiation of a similar but lower revenue-producing project in 2000. The lower
sales in our primary industrial operations can be attributed mainly to foreign
operations, due in part to foreign currency changes, and partially offset by
strength in operations serving air products and the heavy-duty truck markets.
Despite the lower sales volume of 4%, operating income remained comparatively
strong, less by only 2%, due to sustained emphasis on cost reductions and strong
volume in air products.
NON-SEGMENT EXPENSES
--------------------
($ millions)
1Q00 1Q99
---- ----
Corporate G&A $18.4 $18.7
Net Interest Expense 35.3 33.3
Distribution on Trust
Preferred Securities 4.6 4.6
PRELIMINARY BALANCE SHEET AND CASH FLOW DATA
--------------------------------------------
($ millions)
QUARTER ENDED YEAR ENDED
3/31/2000 12/31/1999
Cash and Cash Equivalents $76.8 $66.4
Total Debt $1,942.0 $1,760.5
Debt to Capitalization 55.5% 52.8%
Capital Expenditures $42.1 $246.3
Acquisitions $34.3 $76.1
Depreciation and Amortization $66.9 $230.6
Dividends $30.3 $91.6
Effective Tax Rate 36.5% 36.5%
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<PAGE> 12
<TABLE>
THE BFGOODRICH COMPANY
<CAPTION>
-----------------------------------------------------------------------------------------------------
1999 2000
----------------------------------------------------------------------------------========-----------
Q1 Q2 Q2 YTD Q3 Q3YTD Q4 1999 Q1
----------------------------------------------------------------------------------========-----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
AEROSPACE
SALES Landing Systems Group 262.5 279.9 542.4 261.5 803.9 256.7 1,060.6 260.1
Engine & Safety Systems 143.5 137.8 281.3 136.4 417.7 147.9 565.6 147.8
Electronic Systems Group 132.7 127.0 259.7 124.9 384.6 129.7 514.3 127.5
Aerostructures & Aviation Services 387.5 421.2 808.7 332.4 1,141.1 335.8 1,476.9 357.6
Group
Total Trade Sales 926.2 965.9 1,892.1 855.2 2,747.3 870.1 3,617.4 893.0
OI Landing Systems Group 36.8 42.5 79.3 36.5 115.8 31.3 147.1 37.3
Engine & Safety Systems 24.7 25.2 49.9 24.5 74.4 24.8 99.2 27.3
Electronic Systems Group 24.5 21.8 46.3 25.1 71.4 24.2 95.6 25.2
Aerostructures & Aviation Services 56.5 55.4 111.9 44.8 156.7 60.1 216.8 48.9
Group
Total Operating Income 142.5 144.9 287.4 130.9 418.3 140.4 558.7 138.7
MARG Landing Systems Group 14.0% 15.2% 14.6% 14.0% 14.4% 12.2% 13.9% 14.3%
Engine & Safety Systems 17.2% 18.3% 17.7% 18.0% 17.8% 16.8% 17.5% 18.5%
Electronic Systems Group 18.5% 17.2% 17.8% 20.1% 18.6% 18.7% 18.6% 19.8%
Aerostructures & Aviation Services 14.6% 13.2% 13.8% 13.5% 13.7% 17.9% 14.7% 13.7%
Group
Total Operating Margin 15.4% 15.0% 15.2% 15.3% 15.2% 16.1% 15.4% 15.5%
--------------------------------------------------------------========-----------
PERFORMANCE MATERIALS
--------------------------------------------------------------========-----------
SALES Textile & Coatings Solutions 131.5 139.1 270.6 133.2 403.8 131.3 535.1 133.7
Polymers & Spec. Plastics 109.3 110.0 219.3 111.3 330.6 107.9 438.5 114.4
Consumer Specialties 59.2 61.9 121.1 61.8 182.9 61.2 244.1 59.5
Total Trade Sales 300.0 311.0 611.0 306.3 917.3 300.4 1,217.7 307.6
OI Textile & Coatings Solutions 6.2 10.9 17.1 10.4 27.5 7.9 35.4 8.0
Polymers & Spec. Plastics 18.3 16.7 35.0 20.5 55.5 16.7 72.2 19.3
Consumer Specialties 5.1 11.6 16.7 5.2 21.9 7.4 29.3 6.8
Total Operating Income 29.6 39.2 68.8 36.1 104.9 32.0 136.9 34.1
MARG Textile & Coatings Solutions 4.7% 7.8% 6.3% 7.8% 6.8% 6.0% 6.6% 6.0%
Polymers & Spec. Plastics 16.7% 15.2% 16.0% 18.4% 16.8% 15.5% 16.5% 16.9%
Consumer Specialties 8.6% 18.7% 13.8% 8.4% 12.0% 12.1% 12.0% 11.4%
Total Operating Income 9.9% 12.6% 11.3% 11.8% 11.4% 10.7% 11.2% 11.1%
--------------------------------------------------------------========-----------
ENGINEERED INDUSTRIAL PRODUCTS
--------------------------------------------------------------========-----------
SALES 185.6 186.5 372.1 170.6 542.7 159.7 702.4 177.6
OI 34.2 37.0 71.2 28.1 99.3 18.9 118.2 33.6
MARG 18.4% 19.8% 19.1% 16.5% 18.3% 11.8% 16.8% 18.9%
========
--------------------------------------------------------------========-----------
TOTAL SALES 1,411.8 1,463.4 2,875.2 1,332.1 4,207.3 1,330.2 5,537.5 1,378.2
SEGMENT OPERATING INCOME 206.3 221.1 427.4 195.1 622.5 191.3 813.8 206.4
MARGIN 14.6% 15.1% 14.9% 14.6% 14.8% 14.4% 14.7% 15.0%
--------------------------------------------------------------========-----------
</TABLE>
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