ST. PAUL, Minn.--(BUSINESS WIRE)--Feb. 14, 2001--Ecolab Inc. (NYSE:ECL): FOURTH QUARTER 2000 HIGHLIGHTS:
-- Record diluted earnings per share +13% to $0.36, excluding the
net $0.06 per share gain from unusual items
-- Record net sales +10% to $567 million
-- 24th consecutive quarter of double-digit EPS growth
FULL YEAR 2000 HIGHLIGHTS:
-- Record diluted earnings per share +15% to $1.50, excluding
unusual fourth quarter items
-- Record net sales +9% to $2.3 billion
-- Record cash flow from operations +7% to $315 million
-- Eighth consecutive year of double-digit EPS growth
December 31, 2000
----------------------------------------
(Millions, except per share) Fourth % Full %
Quarter Increase Year Increase
-------- -------- -------- --------
Net Sales $ 567 10% $2,264 9%
Operating Income $ 94 38% $ 343 18%
Pretax Income $ 87 39% $ 319 19%
Taxes (36) 38 (130) 18
Earnings from Henkel-Ecolab 6 5 19 7
Change in accounting - Revenue
Recognition (2) - (2) -
-------- -------- -------- --------
Net Income $ 55 29% $ 206 17%
======== ======== ======== ========
Diluted Net Income Per Share $ 0.42 31% $ 1.56 19%
Income Per Share Excluding
Unusual Items $ 0.36 13% $ 1.50 15%
Diluted Average Shares
Outstanding 130.3 (3)% 131.9 (2)%
Strong growth from its domestic and international operations led Ecolab results for the fourth quarter ended December 31, 2000, completing the eighth consecutive year of double-digit earnings per share growth for the company.
Ecolab's fourth quarter sales grew 10% to a $567 million. Earnings rose 29% to $55 million, or $0.42 per diluted share. Fourth quarter earnings included several unusual items that had the net effect of increasing earnings by $8.2 million net of tax, or $0.06 per share. Excluding these unusual items, earnings grew 10% to $47 million and diluted earnings per share increased 13% to $0.36 per share.
Sales for the full year 2000 rose 9% to nearly $2.3 billion, with earnings up 17% to $206 million. Earnings per share rose 19% to $1.56 per diluted share. Excluding the fourth quarter's unusual items, earnings per share increased 15% to $1.50.
Allan L. Schuman, Ecolab's Chairman and Chief Executive Officer, stated, "Earnings per share for 2000 were actually slightly better than our original forecast. Continued good results from our domestic Institutional, Kay and Pest Elimination businesses, along with strong profit gains from International, drove our results. Henkel-Ecolab also enjoyed good gains in local currencies, though the stronger dollar diluted their reported contribution.
"Most of our key businesses performed well in 2000 and we made important progress in many areas of our operations. We continued to lead the industry in growth, new accounts, new products and new services. Further, we made major progress in the development of our global businesses, including expansion of the GCS commercial kitchen equipment parts and repair business, strategic investments in new opportunities such as FreshLoc wireless remote monitoring and the Facilitec grease management business, and, most significantly, our agreement to purchase the remaining 50% of the Henkel-Ecolab joint venture. We are proud of our performance in 2000, as our associates worked hard to achieve the excellent results reported today.
"As we outlined in our recent press release discussing the 2001 earnings outlook, we are well-positioned for continued growth and expansion of our business. We believe we have the tools and people in place to achieve our goals in 2001, and expect another year of record performance. Many investors have concerns regarding the economy this year, and while there are signs of a slowdown in certain customer markets and unfavorable exchange rates, we are confident that the stable nature of our markets and their ongoing and fundamental needs for premium sanitation products and services will enable us to outperform our industry and produce attractive results for our shareholders once again in 2001. Because of this, we continue to project diluted earnings per share for 2001 in a $1.67-$1.71 range."
The company's fourth quarter results included several unusual items. The company previously announced the fourth quarter $26 million pretax gain on the sale of the non-core Jackson business, which was partially offset by a $7 million pretax restructuring charge related to office closures, terminations and other management actions focused on improving Ecolab's long-term efficiency and competitiveness. These two items are included in corporate operating income in both the fourth quarter and full year 2000 results. Ecolab also recorded a $2.4 million aftertax charge to recognize the cumulative effect of the change in accounting relating to the implementation of Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements."
Fourth quarter sales for Ecolab's United States Cleaning & Sanitizing operations rose 9% over the fourth quarter of 1999 to $376 million, led by the Institutional and Kay operations. Excluding acquisitions, United States Cleaning & Sanitizing sales rose 7%. Ecolab's United States Cleaning & Sanitizing operating income increased 13% to $59 million reflecting sales gains and cost controls.
United States Other Services sales increased 18% to $64 million in the fourth quarter. Excluding acquisitions and divestitures, sales rose 9%. Operating income declined 26% to $5 million. United States Other Services operating income excluding the results of the divested Jackson business fell 15% due to costs related to GCS.
Fourth quarter sales of Ecolab's International Cleaning & Sanitizing operations rose 13% to $135 million when measured at fixed currency exchange rates. Excluding acquisitions, sale rose 4%. In Asia Pacific, aggressive new account development and new product sales served to more than offset poor general economic conditions. Northern Latin American sales drove results in that region. International operating income measured in fixed currencies rose 21% to $14 million. The income improvement came from all regions as higher sales volumes and cost controls benefited margins.
Earnings of the Henkel-Ecolab joint venture are included in the financial statements using the equity method of accounting. Henkel-Ecolab sales showed good results across the board in the fourth quarter. When measured in fixed currencies, Henkel-Ecolab sales increased 6%. When translated into U.S. dollars, Henkel-Ecolab sales decreased 12% to $214 million compared with $245 million in the fourth quarter of last year. Ecolab's equity in the earnings of Henkel-Ecolab rose 5% to $6.1 million compared with $5.8 million in the fourth quarter of last year.
Ecolab reacquired 1,050,000 shares of its common stock during the fourth quarter and 4,781,500 shares of its common stock during 2000. In December 2000, the company announced authorization to repurchase up to 5 million additional shares of Ecolab stock.
Business Outlook
The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially. These statements do not include the potential impact of business acquisitions or other material corporate transactions, which may be completed after the date of this release. This Business Outlook section should be read in conjunction with the information on "Forward Looking Statements" at the end of this release.
Ecolab expects sales for both domestic and international operations to increase in the first quarter 2001 over the first quarter 2000. Gross margins are expected to be slightly below last year's 55.1%, and selling, general and administrative expenses are expected to be within the range of last year's 41.3% of sales. Net interest expense is likely to be approximately $7.5 million, reflecting the use of debt in association with share repurchase activity. The effective tax rate should be lower than last year's first quarter due to improved international profitability, and should be approximately 40.5%. Overall, currency exchange is expected to cost approximately one cent per share in the first quarter. The company expects diluted earnings per share for the first quarter to be approximately $0.34-$0.35 compared with $0.32 per share earned in last year's first quarter, which included a net $0.01 per share one-time gain. As previously stated, the company expects earnings per share for the full year 2001 to be in a $1.67-$1.71 range.
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 http://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 2001 first quarter and full year financial and business prospects. 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 risks and uncertainties include: restraints on pricing flexibility due to competitive factors and customer consolidations; cost increases due to higher oil prices or unavailability of adequate and reasonably priced raw materials; the occurrence of capacity constraints, or the loss of a key supplier, which in either case limit the production of certain products; the effect of future acquisitions or divestitures or other corporate transactions, as well as our ability to achieve plans for past acquisitions, including difficulties in rationalizing acquired businesses and in realizing related cost savings and other benefits; market or regulatory factors which could affect the Company's ability to reacquire shares; the costs and effects of complying with: (i) the significant environmental laws and regulations which apply to the Company's operations and facilities, (ii) government regulations relating to the manufacture, storage, distribution and labeling of the Company's products and (iii) changes in tax, fiscal, governmental and other regulatory policies; economic factors such as the worldwide economy, interest rates, currency movements, euro conversion and the development of markets; the occurrence of (i) litigation or claims, (ii) the loss or insolvency of a major customer or distributor, (iii) natural or manmade disasters and (iv) severe weather conditions affecting the food service and the hospitality industry; loss of, or changes in, executive management; the Company's ability to continue product introductions and technological innovations; and other uncertainties or risks reported from time to time in the Company's reports to the Securities and Exchange Commission. Ecolab undertakes no duty to update the Forward-Looking Statements.
ECOLAB INC.
CONSOLIDATED STATEMENT OF INCOME
FOURTH QUARTER AND YEAR ENDED DECEMBER 31, 2000
Fourth Quarter Year
------------------ ----------------------
(thousands, except 2000 1999 2000 1999
per share) -------- -------- ---------- ----------
(unaudited)
Net Sales $566,676 $515,781 $2,264,313 $2,080,012
Cost of Sales (Including
$1,948 of Restructuring
in 2000) 263,089 234,843 1,025,906 937,612
Selling, General and
Administrative Expenses 230,233 212,847 916,004 852,449
Gain on Sale of Jackson
Business (25,925) -- (25,925) --
Restructuring
Expenses - Other 5,189 -- 5,189 --
-------- -------- ---------- ----------
Operating Income 94,090 68,091 343,139 289,951
Interest Expense, Net 7,475 5,894 24,605 22,713
-------- -------- ---------- ----------
Income Before Income
Taxes and Equity in
Earnings of Henkel-Ecolab 86,615 62,197 318,534 267,238
Provision for Income Taxes 35,568 25,687 129,495 109,769
Equity in Earnings of
Henkel-Ecolab 6,149 5,833 19,516 18,317
-------- -------- ---------- ----------
Income Before Cumulative
Effect of Change in
Accounting 57,196 42,343 208,555 175,786
Cumulative Effect of Change
in Accounting for Revenue
Recognition 2,428 -- 2,428 --
-------- -------- ---------- ----------
Net Income $54,768 $42,343 $206,127 $175,786
======== ======== ========== ==========
Diluted Net Income Per
Common Share $0.42 $0.32 $1.56 $1.31
Diluted Weighted-Average
Common Share Outstanding 130,331 133,981 131,946 134,419
ECOLAB INC.
OPERATING SEGMENT INFORMATION
FOURTH QUARTER AND YEAR ENDED DECEMBER 31, 2000
Fourth Quarter Year
------------------ -----------------------
(thousands) 2000 1999 2000 1999
-------- -------- ---------- ----------
(unaudited)
Net Sales
United States
Cleaning & Sanitizing $375,682 $343,435 $1,532,033 $1,424,037
Other Services 64,399 54,454 248,317 211,562
-------- -------- ---------- ----------
Total 440,081 397,889 1,780,350 1,635,599
International Cleaning &
Sanitizing 135,298 119,327 500,322 452,892
Effect of Foreign
Currency Translation (8,703) (1,435) (16,359) (8,479)
-------- -------- ---------- ----------
Consolidated $566,676 $515,781 $2,264,313 $2,080,012
======== ======== ========== ==========
Operating Income
United States
Cleaning & Sanitizing $58,531 $51,620 $249,182 $230,520
Other Services 4,617 6,207 25,515 25,114
-------- -------- ---------- ----------
Total 63,148 57,827 274,697 255,634
International Cleaning &
Sanitizing 14,139 11,661 51,978 40,422
Corporate 17,866 (1,126) 18,491 (4,570)
Effect of Foreign
Currency Translation (1,063) (271) (2,027) (1,535)
-------- -------- ---------- ----------
Consolidated $94,090 $68,091 $343,139 $289,951
======== ======== ========== ==========
ECOLAB INC.
CONSOLIDATED BALANCE SHEET
December 31, 2000
December 31 December 31
(thousands) 2000 1999
----------- -----------
Assets
Current assets
Cash and cash equivalents $43,965 $47,748
Accounts receivable, net 326,937 299,751
Inventories 168,220 176,369
Deferred income taxes 50,709 41,701
Other current assets 10,737 11,752
---------- ----------
Total current assets 600,568 577,321
Property, plant and equipment, net 501,640 448,116
Investment in Henkel-Ecolab 199,642 219,003
Other assets 412,161 341,506
---------- ----------
Total assets $1,714,011 $1,585,946
========== ==========
Liabilities and Shareholders' Equity
Current liabilities
Short-term debt $136,592 $112,060
Accounts payable 146,428 122,701
Compensation and benefits 88,330 90,618
Income taxes -- 5,743
Other current liabilities 160,684 139,552
---------- ----------
Total current liabilities 532,034 470,674
Long-term debt 234,377 169,014
Postretirement health care
and pension benefits 117,790 97,527
Other liabilities 72,803 86,715
Shareholders' equity 757,007 762,016
---------- ----------
Total liabilities and
shareholders' equity $1,714,011 $1,585,946
========== ==========
| CONTACT: |
Ecolab Inc., St. Paul |
|
Michael J. Monahan |
|
(651) 293-2809 (Tel) |
|
(651) 225-3123 (Fax) |