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 16, 1996
Honeywell Inc.
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(Exact name of registrant as specified in its charter)
Delaware 1-971 41-0415010
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
Honeywell Plaza
Minneapolis, Minnesota 55408
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(Address of principal executive offices)
Registrant's telephone number, including area code: (612) 951-1000
Not Applicable
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(Former name or former address, if changed since last report)
Item 5. Other Events.
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On April 16, 1996, the Registrant issued a News Release reporting on the
results of its operations for the fiscal quarter ended March 31, 1996, a copy of
which is filed herewith as Exhibit 20 (a).
Item 7. Financial Statements and Exhibits.
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(c) Exhibits:
99(i) Honeywell Inc. News Release dated April 16, 1996.
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.
HONEYWELL INC.
By: /s/ Edward D. Grayson
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Edward D. Grayson
Vice President and
General Counsel
Date: April 17, 1996
INDEX TO EXHIBITS
Exhibit No.
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99(i) Honeywell Inc. News Release dated April 16, 1996.
EXHIBIT 99(I)
HONEYWELL REPORTS FIRST-QUARTER EARNINGS UP 19 PERCENT
$65.1 MILLION, OR 51 CENTS PER SHARE
MINNEAPOLIS, APRIL 16, 1996 _ Honeywell Inc. (NYSE: HON) today reported a
net income of $65.1 million, or 51 cents per share, up from $54.7 million, or 43
cents per share, in the first quarter of 1995. Earnings per share increased 19
percent over year-earlier results.
Sales in the first quarter were $1.62 billion, up 10 percent compared with
$1.48 billion a year earlier. Operating profit was $143.8 million, compared
with $124.4 million in the 1995 first quarter. Orders in the quarter were up 4
percent with strong growth in Home and Building Control and Industrial
Automation and Control. Space and Aviation Control orders were strong on the
commercial aviation side, but soft on the military side for the quarter.
`Our strong earnings quarter was driven by improved results in our Space
and Aviation business coupled with solid performance in our Home and Building
Control and Industrial Control businesses,' said Michael R. Bonsignore,
Honeywell chairman and chief executive officer. `Company-wide operating profit
margins improved 50 basis points to 8.9 percent from 8.4 percent as a result of
higher productivity and lower costs throughout the organization.
`We continued to aggressively implement strategies to enhance value for
shareholders,' said Bonsignore. `During the quarter, we completed two strategic
acquisitions which strengthen our core competencies and give us greater reach in
key markets. In March, we completed the $283 million acquisition of Duracraft,
a manufacturer of home comfort products that expand Honeywell's worldwide
consumer and products portfolio. The acquisition enhances Honeywell's global
retail strategy for an increased presence in every home.
`In Industrial Control, we completed the acquisition of the measurement and
control and sensor businesses of Leeds & Northrup that will enhance Honeywell's
position as a leading supplier of products and services for the process and
discrete manufacturing industries. The acquisition also expands our sensor
portfolio.'
Honeywell invested $321 million in strategic acquisitions, and repurchased
$73 million of stock, or 1.4 million shares.
At the end of the first quarter, debt-to-total capital was 32 percent.
As previously communicated, a Los Angeles jury returned a $234 million
verdict against Honeywell during the complex anti-trust litigation commenced by
Litton Systems in 1990. If judgment is entered on the jury verdict, the amount
will be trebled. During upcoming post verdict motions, Honeywell will continue
to vigorously defend its position that its market success was based on higher
reliability, lower costs and better customer support. The company believes its
actions were well within the bounds of fair competition.
FIRST-QUARTER BUSINESS UNIT RESULTS
HOME AND BUILDING CONTROL. Operating profit for the business was $53.8
million, up 8 percent from $49.9 million last year. Sales increased to $693
million from $643.1 million in the 1995 first quarter. Home and Building
Control orders were up 9 percent from year-earlier levels.
Overall results benefited from a strengthening in domestic Home Control
markets and continued strong international business.
In conjunction with the Duracraft acquisition, Home and Building Control
established the Consumer Products business, which will focus on major retailers
around the world. Bernard Chiu, formerly chairman and CEO of Duracraft, was
named president of the new unit.
In January, Honeywell announced the planned closing of its Arlington
Heights facility and the subsequent transfer of all higher-complexity
electronics products and systems to the Albuquerque, N.M., plant. The move is
part of an ongoing company-wide initiative to reduce product cost and enhance
the company's global competitive position.
In addition, Home and Building Control announced a 15-year, $45 million
contract with the Meadowlands Sports Complex to update its heating, cooling, and
lighting systems, and upgrade the existing building management systems. This
contract represents the largest contract ever won by Home and Building Control.
INDUSTRIAL CONTROL. Operating profit was $50.0 million compared with $48.0
million a year earlier. Sales in the first quarter were $501.9 million,
compared with $456.2 million last year. Industrial Control orders were up more
than 6 percent for the quarter with strong Industrial Automation and Control
orders, which more than offset industry-wide pressure experienced by Sensing and
Control.
Industrial Automation and Control performance was driven by strength in
international markets. Increased demand for systems to improve safety and
productivity in developing countries, such as China, India and Kuwait is
evidenced by three contracts totaling $21 million to supply automation controls.
Sensing and Control introduced an open and modular integrated PC control
system to control factory automation. The components of this control solution
are available from a single source - Honeywell.
SPACE AND AVIATION CONTROL. Operating profit was $39.1 million, compared
to $26.3 million in the first quarter of 1995. Sales were $398.3 million,
compared with $353.1 million a year earlier. Commercial Aviation experienced
double-digit order growth during the quarter. However, the growth in Commercial
Aviation orders was not enough to offset the decline in military and space
orders, when compared against a strong first-quarter 1995. Total orders
declined 5 percent.
During the quarter, Honeywell won a contract with Saudi Arabian Airlines
(Saudia) to supply advanced avionics for its entire new fleet of 777, 747-400,
MD-11 and MD-90 aircraft. The contract includes satellite communications systems
(SATCOM), Traffic Alert and Collision Avoidance Systems (TCAS), Mode S
transponders and Global Navigation Satellite Sensor Units (GNSSU).
In addition, the Philippine Department of Transportation and
Communications/Air Transportation Office selected Honeywell to launch Global
Positioning System (GPS) technology in the Asia Pacific region by installing the
Honeywell/Pelorus Satellite Landing System (SLS) at three national airports.
Installation of the first SLS-2000 ground station is expected this fall.
Honeywell is a global controls company focused on creating value through
technology that enhances comfort, improves productivity, saves energy, protects
the environment and increases safety. The company serves customers worldwide in
the homes and buildings, industrial, and aviation and space markets. Honeywell
employs 53,000 people in 95 countries and had 1995 sales of $6.7 billion.
HONEYWELL INC. AND SUBSIDIARIES
INCOME STATEMENT (Unaudited)
(Dollars in Millions Except Per Share Amounts)
<TABLE>
<CAPTION>
FIRST QUARTER
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1996 1995
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<S> <C> <C> <C>
SALES $1,619.5 $1,478.7 9.5%
COSTS AND EXPENSES
Cost of sales 1,109.0 1,013.2
Research and development 85.1 78.8
Selling, general and administrative 309.3 287.9
Interest - net 17.1 17.3
Equity (income) loss 0.3 (1.4)
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1,520.8 1,395.8
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INCOME BEFORE INCOME TAXES 98.7 82.9
PROVISION FOR INCOME TAXES 33.6 28.2
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NET INCOME $ 65.1 $ 54.7 19.0%
EARNINGS PER COMMON SHARE $ 0.51 $ 0.43 18.6%
AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 126,851,136 127,156,836
</TABLE>
HONEYWELL INC. AND SUBSIDIARIES
SALES AND OPERATING PROFIT BY SEGMENT (Unaudited)
(Dollars in Millions)
<TABLE>
<CAPTION>
FIRST QUARTER
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1996 1995
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<S> <C> <C>
SALES
Home and Building Control $ 693.0 $ 643.1
Industrial Control 501.9 456.2
Space and Aviation Control 398.3 353.1
Other 26.3 26.3
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$1,619.5 $1,478.7
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OPERATING PROFIT
Home and Building Control $ 53.8 $ 49.9
Industrial Control 50.0 48.0
Space and Aviation Control 39.1 26.3
Other 0.9 0.2
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Total operating profit 143.8 124.4
Interest expense (20.9) (20.8)
Equity income (loss) (0.3) 1.4
General corporate expense (23.9) (22.1)
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Income before income taxes $ 98.7 $ 82.9
</TABLE>
HONEYWELL INC. AND SUBSIDIARIES
STATEMENT OF FINANCIAL POSITION (Unaudited)
(Dollars in Millions)
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
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<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 124.2 $ 291.6
Short-term investments 8.8 9.0
Receivables (less allowance for doubtful
accounts: 1996, $33.8; 1995, $34.5) 1,450.2 1,477.3
Inventories (less progress billing on
uncompleted contracts:1996, $59.3; 1995, $56.4) 872.1 794.4
Deferred income taxes 197.3 194.6
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2,652.6 2,766.9
Investments and Advances 239.1 244.8
Property, Plant and Equipment
Property, plant and equipment 2,953.8 2,857.1
Less accumulated depreciation 1,832.5 1,758.2
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1,121.3 1,098.9
Other Assets
Long-term receivables (less allowance for doubtful
accounts: 1996, $0.7; 1995, $0.7) 42.6 46.8
Intangible assets 827.5 624.2
Deferred income taxes 71.5 71.8
Other 212.5 206.8
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Total Assets $5,167.1 $5,060.2
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Short-term debt $ 486.2 $ 312.4
Accounts payable 450.2 491.5
Customer advances 181.3 158.2
Accrued income taxes 272.7 274.8
Deferred income taxes 19.5 20.4
Other accrued liabilities 744.0 765.2
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2,153.9 2,022.5
Long-Term Debt 478.1 481.0
Deferred Income Taxes 49.1 39.2
Other Liabilities 475.5 477.4
Stockholders' Equity
Common stock - $1.50 par value
Authorized - 250,00,000 shares
Issued - 1996 - 188,035,247 shares 282.0
- 1995 - 188,126,704 shares 282.2
Additional paid-in-capital 489.8 481.3
Retained earnings 2,838.0 2,805.8
Treasury stock - 1996 - 61,367,743 shares (1,699.8)
- 1995 - 61,306,251 shares (1,650.2)
Accumulated foreign currency translation 120.0 140.9
Pension liability adjustment (19.5) (19.9)
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2,010.5 2,040.1
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Total Liabilities and Stockholders' Equity $5,167.1 $5,060.2
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</TABLE>
HONEYWELL INC. AND SUBSIDIARIES
STATEMENT OF CASH FLOWS (Unaudited)
(Dollars in Millions)
<TABLE>
<CAPTION>
Three Months
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1996 1995
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<S> <C> <C>
Cash Flows from Operating Activities
Net income $ 65.1 $ 54.7
Adjustments to reconcile net income to net cash
flows from operating activities:
Depreciation 54.2 57.8
Amortization of intangibles 11.0 13.5
Deferred income taxes 0.2 13.2
Equity (income) loss, net of dividends received 0.6 (1.4)
Loss on sale of assets 0.1 0.4
Contributions to employee stock plans 11.5 8.7
Decrease in receivables 65.2 19.0
Increase in inventories (36.2) (50.0)
Decrease in accounts payable (71.2) (56.6)
Increase in accrued income taxes and interest 3.7 14.0
Other changes in working capital, excluding
short-term investments and short-term debt (32.6) (20.0)
Other noncurrent items - net 3.5 (16.9)
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Net cash flows from operating activities 75.1 36.4
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Cash Flows from Investing Activities
Proceeds from sale of assets 29.9 2.5
Capital expenditures (65.0) (53.0)
Investment in acquisitions, net of cash acquired (298.3) (25.4)
(Increase) decrease in short-term investments 0.1 (7.1)
Other - net 0.9 3.4
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Net cash flows from investing activities (332.4) (79.6)
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Cash Flows from Financing Activities
Net increase in short-term debt 167.9 38.9
Repayment of long-term debt (0.3) (10.2)
Purchase of treasury stock (64.3) (25.0)
Proceeds from exercise of stock options 24.5 15.5
Dividends paid (33.1) (31.4)
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Net cash flows from financing activities 94.7 (12.2)
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Effect of Exchange Rate Changes on Cash (4.8) 10.8
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Decrease in Cash and Cash Equivalents (167.4) (44.6)
Cash and Cash Equivalents at Beginning of Year 291.6 267.4
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Cash and Cash Equivalents at End of Three Months $124.2 $222.8
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</TABLE>
