UNITED STATES 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 19, 1999
-------------------
AMERICAN STANDARD COMPANIES INC.
(Exact name of registrant as specified in its charter)
Delaware 1-11415 13-3465896
(State or other jurisdiction of (Commission File No.) (I.R.S. Employer
incorporation or organization) Identification No.)
One Centennial Avenue, P.O. Box 6820, Piscataway, NJ 08855-6820
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including area code: (732) 980-6000
<PAGE>
ITEM 5. OTHER EVENTS
(a) First Quarter 1999 Earnings.
On April 19, 1999, American Standard Companies Inc. (the "Company")
announced first quarter 1999 net income of $47 million compared to $36 million
in the first quarter of 1998, an increase of 31%. First quarter 1999 diluted per
share earnings were $0.65 per share, an increase of 33% over diluted per share
earnings of $0.49 in 1998.
Total sales for the first quarter of 1999 were $1.7 billion, up 12%
from the prior year period with little overall effect from foreign exchange.
Air Conditioning Product's sales increased 12% to $942 million.
Worldwide Applied Systems sales increased 16% due to strong performance in the
U.S. commercial equipment business and sales and service operations partly
offset by a small decline in the international applied business, primarily in
Asia. Worldwide Unitary Systems sales increased 8% with strength in both U.S.
residential and commercial operations.
Plumbing Product's sales increased 16% to $415 million, including $54
million from the Armitage Shanks and Dolomite businesses acquired on February 2,
1999, partly offset by a $16 million reduction of sales related to the
divestiture of Porcher distribution in the fourth quarter of 1998. Sales in the
Americas increased 11% due to strong growth in the U.S.
Automotive Product's sales increased 7% to $292 million, driven by
continued high levels of European commercial vehicle production, higher product
content per vehicle from new products introduced in 1998 and increased export
sales. This increase was partly offset by a sharp decline in Brazilian sales.
Sales of anti-lock braking systems ("ABS") by the Company's U.S. braking systems
joint venture rose 34%, reflecting the continued phase-in of regulations
requiring ABS on all new commercial vehicles, which increased equity income.
Medical System's sales were $26 million in the quarter, the same as
last year, reflecting increased sales of new diagnostic products offset by the
expected declines in sales of older radioimmunoassay products.
Total segment income in the first quarter of 1999 was $145 million, an
increase of 12% from $130 million in 1998 quarter, with little effect from
foreign exchange.
<PAGE>
Air Conditioning Product's segment income increased $3 million to $76
million. Worldwide Applied Systems benefited from improved volume in the U.S.,
which was offset by weakness in international markets. Worldwide Unitary Systems
posted strong growth in the U.S. from both volume and margin improvement despite
the effect of a three-week strike at the Company's Clarksville commercial
facility. International unitary results declined due to weakness in Latin
America and Middle East markets.
Plumbing Product's segment income increased $15 million to $34 million,
mainly due to significant improvement from the Company's European restructuring,
the Armitage Shanks-Dolomite acquisition and strong volume increases in the
Americas.
Automotive Product's segment income decreased $3 million to $39 million
compared to the prior year period due mainly to the weak Brazilian economy and
increased product development spending in Europe.
Medical System's segment loss of $4 million was at the same level as
the first quarter of 1998. Development costs of new diagnostic products has
continued at a high level while progress is being made to obtain U.S. and
European regulatory approvals of new diagnostic products and tests.
Equity in net income of unconsolidated joint ventures increased from $6
to $8 million, reflecting the continued strong growth of Automotive Products'
U.S. braking systems joint venture.
Interest expense of $46 million was $5 million lower than in the prior
year period, due to lower average interest rates achieved through debt
refinancing during 1998 which more than offset the effect of increased debt
arising principally from the Armitage Shanks-Dolomite acquisition.
Corporate and other expense of $27 million was $3 million higher than
in the prior year period, mainly due to increased minority interest in net
income of subsidiaries and corporate spending.
Income taxes reflect an effective rate of 41.5% compared to 40.5% for
the 1998 period.
<PAGE>
<TABLE>
AMERICAN STANDARD COMPANIES INC.
UNAUDITED SUMMARY STATEMENT OF OPERATIONS
(In millions, except per
share data)
<CAPTION>
Three Months Ended
March 31,
--------
<S> <C> <C>
1999 1998
Sales: ---- ----
Air Conditioning Products $ 942 $ 838
Plumbing Products 415 358
Automotive Products 292 272
Medical Systems 26 25
---- ----
Total sales $1,675 $1,493
====== ======
Segment income (loss):
Air Conditioning Products $ 76 $ 73(a)
Plumbing Products 34 19
Automotive Products 39 42
Medical Systems (4) (4
---- ----
Total segment income 145 130
Equity in net income of unconsolidated
joint ventures 8 6
---- ----
153 136
Interest expense (46) (51)
Corporate and other expenses (27) (24)(a)
---- ----
Income before income taxes 80 61
Income taxes (33) (25)
---- ----
Net income $ 47 $ 36
===== =====
Per common share:
Basic $ .67 $ .50
===== =====
Diluted $ .65 $ .49
===== =====
Average outstanding common shares:
Basic 70.2 72.1
Diluted 71.9 74.3
<FN>
(a) Financing fees of $5 million paid in 1998 by Air Conditioning
Products were reclassified to Corporate expenses upon adoption of
the new segment reporting standard as of December 31, 1998.
</FN>
</TABLE>
<PAGE>
Information Concerning Forward-Looking Statements. Certain of the
statements contained in this report (other than the historical financial data
and other statements of historical fact), including, without limitation,
statements as to management's expectations and belief are forward-looking
statements. Forward-looking statements are made based upon management's
expectations and belief concerning future developments and their potential
effect upon the Company. There can be no assurance that future developments will
be in accordance with management's expectations or that the effect of future
developments on the Company will be those anticipated by management. Many
important factors could cause actual results to differ materially from
management's expectations, including the level of new construction activity in
the Company's Air Conditioning Products' and Plumbing Products' markets; the
timing of completion and success in the start-up of new production facilities;
changes in U. S. or international economic conditions, such as inflation or
interest rate fluctuations or recessions in the Company's markets; pricing
changes to the Company's products or those of its competitors, and other
competitive pressures on pricing and sales; integration of acquired businesses;
risks generally relating to the Company's international operations, including
governmental, regulatory or political changes; and transactions or other events
affecting the need for, timing and extent of the Company's capital expenditures.
<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.
AMERICAN STANDARD COMPANIES INC.
By ____/s/ G. Ronald Simon____________
Name: G. Ronald Simon
Title: Vice President and Controller
DATE: April 30, 1999
