UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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) October 21, 1999
0-16979
(Commission File Number)
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TYCO INTERNATIONAL LTD.
(Exact name of registrant as specified in its charter)]
Bermuda Not applicable
(Jurisdiction of Incorporation) (IRS Employer Identification Number)
The Gibbons Building, 10 Queen Street, Suite 301, Hamilton, HM11, Bermuda
(Address of registrant's principal executive office)
441-292-8674*
(Registrant's telephone number)
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*The executive offices of Registrant's principal United States subsidiary, Tyco
International (US) Inc., are located at One Tyco Park, Exeter, New Hampshire
03833. The telephone number there is (603) 778-9700.
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<PAGE>
ITEM 5. Other Events
Reference is made to the press release issued to the public by the
Registrant on October 21, 1999, the text of which is attached hereto as
Exhibit 99.1, for a description of the events reported pursuant to this Form
8-K.
ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits.
Exhibit Number Title
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99.1 Press Release dated October 21, 1999.
<PAGE>
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, thereunto duly authorized.
TYCO INTERNATIONAL LTD.
By: /s/ Mark H. Swartz
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Mark H. Swartz
Executive Vice President and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
Date: October 22, 1999
<PAGE>
Exhibit Index
Exhibit Number Title Page
- -------------- ----- ----
99.1 Press Release dated October 21, 1999. 6
Exhibit 99.1
FOR IMMEDIATE RELEASE CONTACT:
J. Brad McGee
Senior Vice President
Tyco International (US) Inc.
(603) 778-9700
TYCO INTERNATIONAL REPORTS RECORD
FOURTH QUARTER EARNINGS PER SHARE AND CASH FLOW
---------------------------------------------
STRONG RESULTS ACROSS ALL SEGMENTS
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TWO-FOR-ONE STOCK SPLIT PAYABLE TODAY
Hamilton, Bermuda, October 21, 1999 -- Tyco International Ltd. (NYSE-TYC,
LSE-TYI, BSX-TYC), a diversified manufacturing and service company, reported
today that diluted earnings per share before extraordinary item, for its fourth
quarter ended September 30, 1999 were 92 cents per share, compared to last
year's 25 cents per share. Income before extraordinary item rose to $782.7
million, compared to last year's $207.0 million. Sales for the quarter rose 22
percent to $6.22 billion compared with last year's $5.11 billion. Income before
acquisition and other non-recurring charges and an extraordinary item for fiscal
1999 rose to $2.56 billion, or $3.06 per diluted share, compared to last year's
diluted per share earnings of $1.74. Revenues for fiscal 1999 increased to $22.5
billion, 18 percent higher than last year's $19.1 billion. Inclusive of
acquisition and other non-recurring charges, income before extraordinary item
was $1.03 billion, or $1.24 per diluted share, for fiscal 1999 as compared to
$1.17 billion, or $1.45 per diluted share, for fiscal 1998. All per share
amounts are prior to the effect of the two-for-one stock split announced on July
20 and payable today.
Last year's results have been restated to reflect the mergers with AMP
Incorporated and U.S. Surgical, which were accounted for as poolings of
interests, and are before acquisition and other non-recurring charges and an
extraordinary item. Tyco's merger with AMP was completed on April 2, 1999. For
fiscal 1999, the results for the periods prior to the merger have been restated
to include the results of AMP. Tyco originally reported fiscal 1998 revenue of
$12.31 billion, earnings before extraordinary item of $1.18 billion and diluted
earnings per share of $2.02.
"Tyco has delivered another record quarter," said L. Dennis Kozlowski,
Tyco's Chairman and Chief Executive Officer. "Each of the four business segments
demonstrated solid earnings and corresponding cash flow. The Company had record
free cash flow (operating cash, which is after cash spent on restructuring
items, less capital expenditures and dividends) in excess of $900 million for
the quarter. We remain confident in the strong fundamentals which are driving
our core revenue, earnings and cash flow growth - explosive demand fueled by the
internet for undersea fiber optic cable installation and maintenance for our
telecommunications business; the increased use of electronics in all levels of
telecommunications, industrial and consumer products for our electronics group;
new customer accounts
<PAGE>
and recurring revenue in the fire and security industries; demographics and
long-term contracts in the healthcare area; and, the focus on the service
component of our flow control business.
"With backlog at record levels for the Company, we believe that this
level of growth is sustainable for Tyco in its upcoming fiscal year. We remain
committed to creating shareholder value through increased high quality earnings
and cash flow," he continued.
TELECOMMUNICATIONS AND ELECTRONICS
At Tyco's Telecommunications and Electronics group, quarterly earnings
reached $522.0 million, compared to the $225.9 million reported in the same
quarter last year. Sales rose to $2.28 billion compared with $1.87 billion a
year earlier. Tyco Electronics showed high single digit revenue growth at AMP
and included the results of Raychem, which was purchased in August 1999. Cost
savings have been achieved earlier than originally forecast and were greater
than initially estimated, which lead to higher margins. We expect this margin
expansion to continue in fiscal 2000 as manufacturing consolidations are
implemented. Tyco Telecommunications continued its strong performance this
quarter as demand for undersea telecommunications cable capacity remains robust,
and the Company received contracts for new systems, upgrades for existing
systems and for long-term maintenance agreements. Positive reaction to Tyco
Submarine Systems' new full-service, on-demand maintenance programs has resulted
in the awarding of several multi-year agreements.
Full year earnings in the Telecommunications and Electronics segment
were $1.43 billion, a 57% increase over last year's $913.0 million. Sales for
the year were $7.92 billion compared with $7.31 billion last year.
FIRE AND SECURITY SERVICES
At Tyco's Fire and Security Services group, earnings for the quarter
increased 34 percent to $258.6 million versus $193.2 million last year. Sales
reached $1.65 billion compared to $1.35 billion last year. Tyco's ADT security
division continues to add record levels of new accounts per month, which provide
high incremental margins. Revenues and earnings are strong across all geographic
regions of the business in both fire and security. Backlog has increased for
this segment over the prior year.
Earnings for the fiscal year were $940.4 million, 44 percent higher
than last year's $654.9 million. Sales increased to $6.04 billion compared to
$4.74 billion last year.
HEALTHCARE AND SPECIALTY PRODUCTS
Earnings for the fourth quarter at Tyco's Healthcare and Specialty
Products group grew to $355.9 million, compared to the loss of $141.5 million
reached a year earlier. Sales grew to $1.56 billion versus last year's $1.25
billion. Earnings increased as a result of increased volume and margins in each
area of this segment - Healthcare, Plastics and Specialty Products.
Plant consolidations, cost cutting programs and improvements in
productivity are ongoing in each of these areas.
Full year earnings in the Healthcare and Specialty Products segment
were $1.31 billion. Sales for the year were $5.74 billion compared with $4.67
billion last year.
FLOW CONTROL
Fourth quarter earnings at the Tyco Flow Control group increased 15
percent to $106.4 million
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from $92.3 million last year. Sales were $735.1 million compared to the prior
year's $638.7 million. Worldwide demand for our diverse offering of flow control
products is solid. Backlog continues to increase in our valve businesses across
the United States and Europe, and at our Earth Tech business where we have
entered into a number of contracts related to the design and operation of water
treatment facilities.
Earnings for the fiscal year were $403.9 million, 24% higher than last
year's $325.9 million. Sales for the year increased to $2.79 billion, compared
to $2.34 billion last year.
STOCK SPLIT
A two-for-one stock split on Tyco's common shares is payable today. The
split will be in the form of a 100 percent stock distribution.
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Tyco International Ltd., a diversified manufacturing and service
company, is the world's largest manufacturer and servicer of electrical and
electronic components and undersea telecommunications systems, the world's
largest manufacturer, installer, and provider of fire protection systems and
electronic security services, has strong leadership positions in disposable
medical products, plastics, and adhesives, and is the largest manufacturer of
flow control valves. The Company operates in more than 80 countries around the
world and has expected fiscal 2000 revenues in excess of $25 billion.
FORWARD LOOKING INFORMATION
Comments in this earnings release concerning expected fiscal 2000
revenues, revenue growth, earnings growth, cost savings and margin expansion are
forward-looking statements, which are based on management's good faith
expectations and belief concerning future developments. Actual results may
materially differ from these expectations as a result of many factors, relevant
examples of which are set forth in the "Management Discussion and Analysis"
section of the Company's 1998 Annual Report to Shareholders and the Company's
1998 Annual Report on Form 10-K.
table following
# # #
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102199 509
TYCO INTERNATIONAL LTD.
RESULTS OF OPERATIONS (1) (2)
(in millions except per share data)
Three Months Ended Twelve Months Ended
9/30/99 9/30/98 9/30/99 9/30/98
SALES
$6,224.5 $5,112.4 $22,496.5 $19,061.7
======== ======== ======== ========
Income before
income taxes $1,046.2 $266.1 $3,501.4 $2,025.4
Income taxes (263.5) (59.1) (942.3) (620.3)
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INCOME BEFORE
EXTRAORDINARY
ITEM $782.7 $207.0 $2,559.1 $1,405.1
======== ====== ======== ========
EARNINGS PER
SHARE: (3)
BASIC $0.94 $0.26 $3.12 $1.77
======== ======== ======== ========
DILUTED $0.92 $0.25 $3.06 $1.74
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COMMON EQUIVALENT
SHARES:
BASIC 836.0 808.7 820.6 791.7
======== ======= ======== ========
DILUTED 851.2 826.4 837.4 812.4
======== ======== ======== ========
(1) Three months and twelve months ended September 30, 1999 are before
extraordinary items of $0.3 million and $45.7 million, respectively, after-tax,
relating to the early extinguishment of debt. Twelve months ended September 30,
1999 are before acquisition related and other non-recurring charges of $1.10
billion, after tax, related to the AMP merger and $427.6 million, after-tax,
related to the U.S. Surgical merger, both of which were accounted for as
poolings of interests. Including these charges, diluted earnings per share
before extraordinary item is $1.24 for the twelve months ended September 30,
1999.
(2) Three months and twelve months ended September 30, 1998 are restated for
pooling of interests with AMP and U.S. Surgical. The three months and twelve
months ended September 30, 1998 are before non-recurring items of $227.6 million
and $236.5 million, respectively, after-tax. These charges relate to
restructuring actions taken by AMP and U.S. Surgical prior to their mergers with
Tyco. The three and twelve months ended September 30, 1998 are before
extraordinary item of $0.2 million and $2.4 million, respectively, after-tax,
relating to the early extinguishment of debt.
(3) Earnings per share based on diluted shares assumes conversion of LYONs
notes. Accordingly, net interest expense of $0.5 million and $3.9 million in the
three months and twelve months ended September 30, 1999, and $1.3 million and
$7.2 million in the three months and twelve months ended September 30, 1998,
must be added back to income before extraordinary item for computing diluted
earnings per share.
