2000 FIRST QUARTER HIGHLIGHTS:
- Record diluted earnings per share +23% to $0.32, including a $0.01 per share gain from one-time events
- Record diluted earnings per share +19% to $0.31, excluding a net $0.01 per share gain from one-time events
- Record sales +8% to $526 million
- Strong profit growth from domestic, international and Henkel-Ecolab
- Twenty-first consecutive quarter of double-digit EPS growth
First Quarter Ended March 31
(Millions, except per share)
2000 1999 Increase
Net Sales $ 526.3 $ 489.3 8%
Operating Income $ 72.7 $ 62.3 17%
Pretax Income $ 67.3 $ 56.5 19%
Taxes 27.6 23.6 17
Henkel-Ecolab 2.9 2.1 35
Net Income $ 42.6 $ 35.0 22%
Diluted Net Income
Per Share $ 0.32 $ 0.26 23%
Shares Outstanding 133.3 134.6 (1)%
ST. PAUL, Minn., April 20, 2000: Continued good results from its major domestic businesses and improved results in its Latin American and European operations led Ecolab?s first quarter as diluted earnings per share increased 23% to a record $0.32 for the period ended March 31, 2000.
Ecolab's consolidated sales increased 8% to a record $526 million in 2000's first quarter. Net income rose 22% to a record $43 million, reflecting the higher sales volume and cost efficiencies. Results also included $3.8 million of income related to favorable settlements anticipated on environmental claims, which more than offset $1.7 million of bad debt expense related to a bankruptcy filing. Excluding these unusual items, net income rose 19% to $0.31 per share.
Commenting on the quarter, Allan L. Schuman, Ecolab?s Chairman, President and Chief Executive Officer said, ?This very strong first quarter shows the power of our strategy and company, as the solid profit performance by all of our business groups contributed to the gains. These results also demonstrate the strength and dedication of our associates and the balance within our company, as the mixture of new businesses and old, domestic and international, drove our growth.
?We are encouraged by this strong start to our year and continue to believe 2000 will be another year of record performance by Ecolab. We are aggressively pursuing new growth opportunities requested by our customers to expand Ecolab?s range of premium service solutions. With exciting developments in our markets and our products, and the performance oriented strength of our associates, we believe Ecolab will once again achieve above-average earnings gains in 2000. We believe the current momentum in our business means earnings per share in the $1.50 range will be achievable for 2000, and make it our eighth consecutive year of double-digit growth.?
First quarter sales for Ecolab's United States Cleaning & Sanitizing operations rose 7% over the first quarter of 1999 to $360 million, led by gains in the Institutional and Kay operations. Excluding acquisitions, sales rose 5%. Ecolab's United States Cleaning & Sanitizing operating income rose 6% to $54 million. Operating income reflected $1.7 million of bad debt expense related to AmeriServe?s January 31, 2000 bankruptcy filing. Excluding this unusual item, United States Cleaning & Sanitizing operating income rose 9% to $56 million, reflecting the higher sales, new products and close attention to costs. Acquisitions did not have a material effect on United States Cleaning & Sanitizing operating income.
United States Other Services sales increased 15% to $55 million in the first quarter. Operating income grew 19% to $5 million. Sales and profits benefited from good performances by Pest Elimination and GCS.
Sales of Ecolab's International Cleaning & Sanitizing operations rose 5% in the first quarter when measured at fixed currency rates. Excluding acquisitions, sales rose 4%. Latin American sales showed very strong growth, as Brazil?s improved economy bolstered strong results from Mexico and Central America. Asia Pacific sales were flat, as strong gains in East Asia and corporate accounts were offset by soft results elsewhere. Fixed currency operating income rose 33% to $11 million. The income improvement was due to pricing and cost controls and Latin America?s higher sales volumes. Acquisitions did not have a material effect on International operating income.
Corporate expense includes the recognition of $3.8 million of income related to net reductions in damages claimed in environmental matters.
Earnings of the Henkel-Ecolab joint venture are included in the financial statements using the equity method of accounting. First quarter Henkel-Ecolab sales reflected continued growth in new European products and systems, sales and service headcount investments, and improved sales programs. When measured in deutsche marks, Henkel-Ecolab sales increased 9%. When translated into U.S. dollars, Henkel-Ecolab sales decreased 5% to $212 million compared with $223 million in the first quarter of last year. Ecolab's equity in the earnings of Henkel-Ecolab increased 35% to $2.9 million compared with $2.1 million in the first quarter of last year due to the sales gain, new products and close attention to costs.
Ecolab is the leading global developer and marketer of premium cleaning, sanitizing, pest elimination, maintenance and repair products and services for the hospitality, institutional and industrial markets. For the year ended December 31, 1999, Ecolab reported sales of $2.1 billion; including European joint venture sales of $0.9 billion, Ecolab's global sales coverage was $3 billion. Ecolab shares are traded on the New York Stock Exchange and the Pacific Exchange under the symbol ECL.
Ecolab news releases and other investor information are available on the Internet at www.ecolab.com and by telephone at 1-800-FACT-ECL.
This news release contains various ?Forward-Looking Statements? within the meaning of the Private Securities Litigation Reform Act of 1995. These include statements concerning our 2000 financial and business prospects and earnings per share performance. These statements, which represent Ecolab?s expectations or beliefs concerning various future events, are based on current expectations that involve a number of risks and uncertainties that could cause actual results to differ materially from those of such Forward-Looking Statements. These include: restraints on pricing flexibility due to competitive factors and customer consolidations; cost increases due to higher oil prices or the unavailability of adequate and reasonably-priced raw materials; the affect of acquisitions; the costs and effects of compliance with environmental and other laws and regulations; changes in tax, fiscal, governmental and other regulatory policies; economic factors such as the worldwide economy, interest rates, currency movements, and the development of markets; the occurrence of (i) litigation or claims, (ii) natural or man-made disasters and (iii) severe weather conditions affecting the food service and hospitality industry; and other uncertainties or risks reported from time-to-time in the Company's reports to the Securities and Exchange Commission.