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Previous: GENERAL ELECTRIC CAPITAL CORP, 424B3, 1995-08-02 |
Next: GUARDSMAN PRODUCTS INC, 10-Q, 1995-08-02 |
<PAGE>
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): July 27, 1995
-------------
W. R. GRACE & CO.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
New York 1-3720 13-3461988
- ----------------- ---------------- ------------------
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
One Town Center Road, Boca Raton, Florida 33486-1010
------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 407/362-2000
------------
<PAGE>
Item 5. OTHER EVENTS.
On July 27, 1995, the Company announced its consolidated results of
operations for the quarter ended June 30, 1995. The Company's July 27, 1995
press release and accompanying financial and statistical data are filed as an
exhibit hereto and are incorporated by reference herein.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
The Company's July 27, 1995 press release and accompanying financial
and statistical data are filed as an exhibit hereto.
- 2 -
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed by the undersigned
thereunto duly authorized.
W. R. GRACE & CO.
------------------------------
(Registrant)
By s/Richard N. Sukenik
-----------------------------
Richard N. Sukenik
Vice President and Controller
Dated: August 2, 1995
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<PAGE>
W. R. GRACE & CO.
Current Report on Form 8-K
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
99.1 Press Release dated July 27, 1995 and accompanying
financial and statistical data
<PAGE>
#2610
CONTACT: Chuck Suits, 407-362-2600 or
800-GRACE99
GRACE REPORTS 19 PERCENT INCREASE IN SECOND QUARTER
PER SHARE OPERATING EARNINGS
BOCA RATON, FLA., July 27, 1995 -- W. R. Grace & Co. (NYSE:GRA)
reported net operating earnings of 83 cents per share in the second quarter of
1995, an increase of 19 percent over the 70 cents per share earned from
operations in the 1994 quarter. Net income in the current quarter was $79
million, which included an after-tax increase of $4 million in incentive
compensation accruals versus a year ago caused by improved results. A net loss
of $134 million was recorded in the year ago quarter, which included a $200
million after-tax charge for asbestos litigation.
In the second quarter the Company classified its health care business,
National Medical Care, as a discontinued operation in anticipation of its spin-
off to shareholders in a tax-free transaction in the fourth quarter. The
classification did not change total corporate results.
Sales of specialty chemicals in the second quarter rose 19 percent to
$932 million, compared to $783 million a year ago. In discontinued operations,
sales for health care rose 15 percent to $524 million, compared to $454 million
in the year ago quarter.
Favorable results in the quarter continued to be driven by the
company's larger specialty chemicals businesses, packaging and catalysts and
silicas, and by its health
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<PAGE>
-2-
care unit.
"I am impressed with the underlying strengths of our businesses,
including their technology bases, their global market presence and their ability
to continuously bring new products to market," said Albert. J. Costello,
chairman, president and chief executive officer. "However, I realize that we
cannot achieve our full potential for profitable growth and shareholder value
without addressing the cost structure of the Company. With that objective in
mind, we initiated an aggressive corporate-wide cost management program to
achieve improved operating margins. The full study will be completed within
three months, and actions are being taken as we identify opportunities," he
said.
For the first six months of 1995, net operating earnings per share
were $1.46, a 33 percent increase over the $1.10 per share posted for the 1994
first half. Including special items in both periods, the 1995 first half showed
net income of $126 million, or $1.33 per share, compared with a net loss in the
1994 first half of $96 million, or $1.03 per share. Six month sales of
specialty chemicals rose 23 percent to $1.79 billion, while sales for health
care rose 19 percent to $1.02 billion.
Pretax operating income from specialty chemicals rose 23 percent to $97
million in the second quarter. Packaging was strongly ahead, reflecting volume
gains from all regions led by increasing demand for new products serving the
pork and cook-in markets. The catalysts and silica products businesses rose on
favorable results from hydroprocessing catalysts, silicas and polyolefin
catalysts. Fluid cracking catalysts rose modestly, as slowness in the U.S. was
more than offset by continued strength in international markets. Water
treatment and container were ahead of the year ago
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<PAGE>
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quarter mainly due to the absence of European restructuring charges incurred
last year. Construction products results declined from the year ago quarter
primarily resulting from a combination of higher raw material costs and a shift
in North American specialty roofing product sales to earlier in the year due to
the milder winter.
Pretax operating income from health care rose 20 percent to $70 million.
Dialysis services continued strong in both the U.S. and in international
markets. Medical products rose sharply on improving volumes and lower costs
versus the year ago quarter. The homecare division gained on improved margins
due to decreased operating costs.
Interest and finance costs continued to run higher than the year ago
quarter due to higher interest rates.
Grace is the world's largest specialty chemicals company and holds a
leadership position in specialized health care.
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<PAGE>
W. R. Grace & Co.
Consolidated Statement of Income (a)
For Period Ended June 30
------------------------
( $ Millions Except Per Share)
<TABLE>
<CAPTION>
Second Quarter Year-To-Date
--------------------------- ---------------------------
1995 1994 1995 1994
------------ ------------ ------------ ------------
<S> <C> <C> <C>
Sales $ 932.3 $ 782.9 $ 1,785.7 $ 1,458.3
Other income 4.5 3.1 8.8 34.2
------------ ------------ ------------ ------------
Total $ 936.8 $ 786.0 $ 1,794.5 $ 1,492.5
------------ ------------ ------------ ------------
Cost of goods sold and operating expenses $ 550.7 $ 464.5 $ 1,051.6 $ 902.3
Selling, general and administrative expenses 219.7 180.5 450.5 358.9
Depreciation and amortization 40.2 38.4 78.4 75.6
Interest expense and related financing costs 18.7 11.3 34.5 21.9
Research and development expenses 31.1 27.0 61.6 54.1
Provision relating to asbestos-related
insurance coverage - 316.0 - 316.0
------------ ------------ ------------ ------------
Total $ 860.4 $ 1,037.7 $ 1,676.6 $ 1,728.8
------------ ------------ ------------ ------------
Income/(Loss) before income taxes $ 76.4 $ (251.7) $ 117.9 $ (236.3)
Provision/(Benefit) for income taxes 28.3 (90.3) 43.6 (93.0)
------------ ------------ ------------ ------------
Income/(Loss) from continuing operations $ 48.1 $ (161.4) $ 74.3 $ (143.3)
Income from discontinued operations (b) 30.6 27.1 51.9 47.2
------------ ------------ ------------ ------------
Net Income/(Loss) $ 78.7 $ (134.3) $ 126.2 $ (96.1)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Earnings/(Loss) Per Share
- -------------------------
Continuing Operations $ .51 $ (1.72)(c) $ .78 $ (1.53)(c)
Discontinued Operations .32 .29 .55 .50
------------ ------------ ------------ ------------
Total $ .83 $ (1.43)(c) $ 1.33 $ (1.03)(c)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Average Number of Shares (Millions) 95.1 93.9 94.6 93.8
<FN>
(a) 1994 results have been restated to reflect the classification of the Health Care segment as a discontinued operation
in the second quarter of 1995.
(b) Includes operating results from the Health Care segment plus an allocation of general corporate overhead expenses,
general corporate research expenses and certain other expenses that can be identified with the Health Care segment
along with an allocation of interest expense. Taxes have been allocated to both continuing and discontinued
operations based on Grace's consolidated effective tax rate. These bases of allocation may not be indicative of the
results of either the Health Care or Specialty Chemicals segments as they will be reported in the future on a
stand-alone basis.
(c) Includes $2.13 per share for the 2nd quarter 1994 provision relating to asbestos-related insurance coverage.
</TABLE>
-1-
<PAGE>
<TABLE>
<CAPTION>
W. R. Grace & Co.
Operating Results
Quarter Ended June 30
---------------------
($ Millions Except Per Share)
Percent
1995 1994 Change
------------ ----------- --------
<S> <C> <C> <C>
Sales - Specialty Chemicals $ 932.3 $ 782.9 19.1%
Operating Income - Specialty Chemicals $ 96.9 $ 78.5 23.4
Other Expenses:
Interest/Financing (a) $ 18.7 $ 11.3 (65.5)
Other 1.8 2.9 37.9
------------ -----------
Total Other Expenses $ 20.5 $ 14.2 (44.4)
Pretax Operating Earnings $ 76.4 $ 64.3 18.8
Provision for Income Taxes 28.3 25.7 (10.1)
------------ -----------
Net Operating Income - Specialty Chemicals $ 48.1 $ 38.6 24.6
Provision for Asbestos Insurance Reduction (after-tax) - (200.0) 100.0
------------ -----------
Net Income/(Loss) from Continuing Operations $ 48.1 $ (161.4) ND
Net Income from Discontinued Operations - Health Care (b) 30.6 27.1 12.9
------------ -----------
Net Income/(Loss) $ 78.7 $ (134.3) ND
------------ -----------
------------ -----------
- ---------------------------------------------------------------------------------------------------------------------------------
EARNINGS PER SHARE - OPERATING EARNINGS
From Operations - Specialty Chemicals $ .51 $ .41 24.4%
From Discontinued Operations - Health Care (b) .32 .29 10.3
------------ ------------
Operating Earnings $ .83 $ .70 18.6%
------------ -----------
------------ -----------
- ---------------------------------------------------------------------------------------------------------------------------------
EARNINGS/(LOSS) PER SHARE
From Continuing Operations $ .51 $ (1.72) ND
From Discontinued Operations .32 .29 10.3
------------ -----------
Net Income/(Loss) $ .83 $ (1.43) ND
------------ -----------
------------ -----------
Average Number of Shares (Millions) 95.1 93.9
<FN>
(a) After an allocation of interest/financing expenses to discontinued operations.
(b) DISCONTINUED OPERATIONS - HEALTH CARE
Sales $ 523.5 $ 454.0 15.3%
Operating Income $ 70.1 $ 58.3 20.2
Interest/Financing Expenses 21.6 13.3 (62.4)
------------ -----------
Pretax Operating Earnings 48.5 45.0 7.8
Provision for Income Taxes 17.9 17.9 -
------------ -----------
Net Income from Discontinued Operations $ 30.6 $ 27.1 12.9%
------------ -----------
------------ -----------
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
W. R. Grace & Co.
Operating Results
Six Months Ended June 30
------------------------
($ Millions Except Per Share)
Percent
1995 1994 Change
------------ ----------- --------
<S> <C> <C> <C>
Sales - Specialty Chemicals $ 1,785.7 $ 1,458.3 22.5%
Operating Income - Specialty Chemicals $ 175.4 $ 118.3 48.3
Other Expenses:
Interest/Financing (a) $ 34.5 $ 21.9 (57.5)
Other 3.0 3.7 18.9
------------ -----------
Total Other Expenses $ 37.5 $ 25.6 (46.5)
Pretax Operating Earnings Before Special Items $ 137.9 $ 92.7 48.8
SPECIAL ITEMS
Provision for Corporate Governance (20.0) - ND
Gain on Sale of Interest in REG - 27.0 (100.0)
Prov. for Environ. Costs/Staffing Reductions - (40.0) 100.0
------------ -----------
Pretax Operating Income $ 117.9 $ 79.7 47.9
Provision for Income Taxes 43.6 23.0 (89.6)
------------ -----------
Net Operating Income - Specialty Chemicals $ 74.3 $ 56.7 31.0
Provision for Asbestos Insurance Reduction (after-tax) - (200.0) 100.0
------------ -----------
Net Income/(Loss) from Continuing Operations $ 74.3 $ (143.3) ND
Net Income from Discontinued Operations - Health Care (b) 51.9 47.2 10.0
------------ -----------
Net Income/(Loss) $ 126.2 $ (96.1) ND
------------ -----------
------------ -----------
- ---------------------------------------------------------------------------------------------------------------------------------
EARNINGS PER SHARE - OPERATING EARNINGS
From Operations - Specialty Chemicals $ .91 $ .60 51.7%
From Discontinued Operations - Health Care (b) .55 .50 10.0
------------ -----------
Operating Earnings $ 1.46 $ 1.10 32.7%
------------ -----------
------------ -----------
- ---------------------------------------------------------------------------------------------------------------------------------
EARNINGS/(LOSS) PER SHARE
From Continuing Operations $ .78 $ (1.53) ND
From Discontinued Operations .55 .50 10.0
------------ -----------
Net Income/(Loss) $ 1.33 $ (1.03) ND
------------ -----------
------------ -----------
Average Number of Shares (Millions) 94.6 93.8
<FN>
(a) After an allocation of interest/financing expenses to discontinued operations.
(b) DISCONTINUED OPERATIONS - HEALTH CARE
Sales $ 1,015.3 $ 855.4 18.7%
Operating Income $ 124.1 $ 102.4 21.2
Interest/Financing Expenses 41.7 23.8 (75.2)
------------ -----------
Pretax Operating Earnings 82.4 78.6 4.8
Provision for Income Taxes 30.5 31.4 2.9
------------ -----------
Net Income from Discontinued Operations $ 51.9 $ 47.2 10.0%
------------ -----------
------------ -----------
</TABLE>
-3-
<PAGE>
<TABLE>
<CAPTION>
W. R. Grace & Co.
Specialty Chemicals Supplemental Data
1995 Sales and Percent Change Versus Prior Period
-------------------------------------------------
(Dollars In Millions)
QUARTER ENDED JUNE 30
Amount of Inc/(Dec) Due to:
-----------------------------------------------------
Sales
------------------------ Price/
1995 1994 Vol. Mix Exch. Total
--------- --------- -------- ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Packaging $ 423.5 $ 331.0 13 % 10 % 5 % 28 %
Catalysts/Silicas 173.1 152.6 2 4 7 13
Construction 104.8 100.2 (3) 6 2 5
Container 94.8 82.5 4 2 9 15
Water Treatment 100.8 88.7 5 4 5 14
Other 35.3 27.9 5 19 3 27
--------- ---------
Total $ 932.3 $ 782.9 7 % 7 % 5 % 19 %
--------- ---------
--------- ---------
<CAPTION>
SIX MONTHS ENDED JUNE 30
Amount of Inc/(Dec) Due to:
-----------------------------------------------------
Sales
------------------------ Price/
1995(a) 1994 Vol. Mix Exch. Total
--------- --------- -------- ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Packaging $ 814.3 $ 630.0 17 % 7 % 5 % 29 %
Catalysts/Silicas 338.0 284.6 8 5 6 19
Construction 192.0 170.7 7 3 2 12
Container 182.3 152.3 12 - 8 20
Water Treatment 193.9 166.1 10 2 5 17
Other 65.2 54.6 4 13 2 19
--------- ---------
Total $ 1,785.7 $ 1,458.3 12 % 5 % 5 % 22 %
--------- ---------
--------- ---------
<FN>
(a) Specialty Chemicals' reporting calendar was adjusted to a month-end reporting basis in 1995.
This resulted in approximately four more selling days in the first quarter of 1995 as compared to 1994.
</TABLE>
-4-
<PAGE>
<TABLE>
<CAPTION>
W. R. Grace & Co.
Specialty Chemicals
Geographic Data
---------------
(Dollars In Millions)
QUARTER ENDED JUNE 30
Pretax
Sales Operating Income
-------------------------- --------------------------
1995 1994 1995 1994
------ ------ ------ ------
<S> <C> <C> <C> <C>
SPECIALTY CHEMICALS
North America $ 468 $ 416 $ 51 $ 50
Europe 289 228 23 9 (a)
Latin America 63 49 6 6
Asia Pacific 112 90 17 14
------- ------- ----- -----
Total Specialty Chemicals $ 932 $ 783 $ 97 $ 79
------- ------- ----- -----
------- ------- ----- -----
<CAPTION>
SIX MONTHS ENDED JUNE 30
Pretax
Sales Operating Income
-------------------------- --------------------------
1995 1994 1995 1994
------ ------ ------ ------
<S> <C> <C> <C> <C>
SPECIALTY CHEMICALS
North America $ 889 $ 771 $ 86 $ 73
Europe 560 433 47 17 (a)
Latin America 122 94 8 5
Asia Pacific 215 160 34 23
------- ------- ----- -----
Total Specialty Chemicals $ 1,786 $ 1,458 $ 175 $ 118
------- ------- ----- -----
------- ------- ----- -----
<FN>
(a) Includes costs of $6 million associated with streamlining certain European chemical operations.
</TABLE>
-5-
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