Forecasts mid-teens adjusted EPS growth, excluding
the impact of the pending Champion acquisition
2012 adjusted EPS forecast range remains $2.96 to $3.00
ST. PAUL, Minn.--(BUSINESS WIRE)--
Ecolab Inc. announced today that it looks for strong sales and earnings
growth to continue in 2013.
Douglas M. Baker, Jr., Ecolab's Chairman and Chief Executive Officer,
said, "We expect another strong year in 2013. In spite of expected
continued soft economic and market trends in 2013, as well as
unfavorable pension expense due to lower interest rates, we plan on
again driving growth using new product introductions, superior sales and
service execution, new account wins, and better customer penetration. We
will also continue to focus on cost reductions, improved operating
efficiency, and merger synergies to leverage top line gains and yield
margin improvement.
"With our business focused on helping our customers deliver on
fundamental global needs including clean water, safe food, abundant
energy and healthy environments, we believe we are very well-positioned
to deliver steady, above-average growth for 2013 and beyond. We have
made and will continue to make the right investments in our business to
further build our product and service capabilities as well as our
business base so that we can better service our customers, and as a
result of these, generate superior returns for our shareholders. We
remain excited by our opportunities and by our terrific team."
Ecolab expects 2013 adjusted diluted earnings per share, excluding
special gains and charges and discrete tax items, to be in a $3.38 to
$3.48 range, including the approximately $0.03 per share dilutive impact
of the previously announced Vehicle Care Division sale and excluding the
accretive impact of the pending Champion acquisition. As previously
announced, the Champion transaction closing remains subject to clearance
by the U.S. Department of Justice under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 and certain other closing conditions. Ecolab
previously expected the Champion acquisition to close by year end 2012
and to be accretive to 2013 earnings by approximately $0.12 per share.
As previously disclosed, Ecolab remains confident the transaction will
close in early 2013; however, it remains possible that the transaction
will not be completed in such a time frame or at all. A delayed closing
is not expected to impact the full run-rate accretion of $0.50 per share
by 2016. However, 2013 expected accretion will be lower than previously
forecast and an updated accretion estimate will be provided when the
closing date is determined.
Consistent with its previous forecast, Ecolab expects to deliver full
year 2012 adjusted diluted earnings per share in the $2.96 to $3.00
range despite the delayed passage of the 2012 R&D tax credit in early
January 2013. As Ecolab previously announced, the credit was expected to
benefit the fourth quarter of 2012 by $0.01 per share. Due to the
delayed approval by Congress, the $0.01 per share R&D tax credit benefit
will now be recorded as a discrete tax item in the first quarter of 2013
and not included in our 2012 results. Special gains and charges for the
full year 2012 are expected to be a net charge of approximately $0.60
per share.
Ecolab's adjusted diluted earnings per share were $2.54 in 2011. Ecolab
expects to announce final 2012 results February 26, 2013.
About Ecolab
With 2011 pro forma sales of $11 billion and more than 40,000 employees,
Ecolab Inc. (NYSE: ECL) is the global leader in water, hygiene and
energy technologies and services that provide and protect clean water,
safe food, abundant energy and healthy environments. Ecolab delivers
comprehensive programs and services to the food, energy, healthcare,
industrial and hospitality markets in more than 160 countries. For more
Ecolab news and information, visit www.ecolab.com.
Cautionary Statements Regarding Forward-Looking Information
This communication contains certain statements relating to future events
and our intentions, beliefs, expectations and predictions for the future
which are forward-looking statements as that term is defined in the
Private Securities Litigation Reform Act of 1995. Words or phrases such
as "will likely result," "are expected to," "will continue," "is
anticipated," "we believe," "we expect," "estimate," "project," "may,"
"will," "intend," "plan," "believe," "target," "forecast" (including the
negative or variations thereof) or similar terminology used in
connection with any discussion of future plans, actions or events
generally identify forward-looking statements. These forward-looking
statements include, but are not limited to, statements regarding
economic and market trends; synergies from and potential accretion
associated with the Champion acquisition; the expected timing of
completion of the Champion acquisition; our financial and business
prospects, including forecasted 2012 and 2013 business results,
including sales growth, margin improvements, synergies, pension expense,
special gains and charges, including R&D tax credit benefits; dilution
associated with the Vehicle Care sale; adjusted diluted earnings per
share; and the longer-term outlook. These statements are based on the
current expectations of management of the company. There are a number of
risks and uncertainties that could cause actual results to differ
materially from the forward-looking statements included in this
communication. In particular, the ultimate results of any restructuring,
integration and business improvement actions, including cost synergies,
depend on a number of factors, including the development of final plans,
the impact of local regulatory requirements regarding employee
terminations, the time necessary to develop and implement the
restructuring and other business improvement initiatives and the level
of success achieved through such actions in improving competitiveness,
efficiency and effectiveness. In addition, as it relates to the Champion
acquisition, these risks and uncertainties include (i) the risk that the
regulatory approvals or clearances required for the acquisition may not
be obtained, or that required regulatory approvals may delay the
acquisition or result in the imposition of conditions that could have a
material adverse effect on the company or cause the company to abandon
the acquisition, (ii) the risk that the conditions to the closing of the
acquisition may not be satisfied, (iii) the risk that a material adverse
change, event or occurrence may affect the company or Champion prior to
the closing of the acquisition and may delay the acquisition or cause
the company to abandon the acquisition, (iv) problems that may arise in
successfully integrating the businesses of the company and Champion,
which may result in the combined business not operating as effectively
and efficiently as expected, (v) the possibility that the acquisition
may involve unexpected costs, unexpected liabilities or unexpected
delays, (vi) the risk that the businesses of the company or Champion may
suffer as a result of uncertainty surrounding the acquisition and (vii)
the risk that disruptions from the transaction will harm relationships
with customers, employees and suppliers.
Additional risks and uncertainties that may affect operating results and
business performance are set forth under Item 1A of our most recent Form
10-Q, our current report on Form 8-K filed October 12, 2012 and the
company's other public filings with the Securities and Exchange
Commission (the "SEC") and include our ability to integrate Nalco and
realize the anticipated benefits of the merger as well as to close and
integrate the proposed acquisition of Champion; our ability to attract
and retain high caliber management talent to lead our business;
difficulty in procuring raw materials or fluctuations in raw material
costs; our ability to execute key business initiatives; vitality of the
markets we serve; the impact of worldwide economic factors such as the
worldwide economy, credit markets, interest rates and foreign currency
risk; exposure to economic, political and legal risks related to our
international operations; the costs and effects of complying with laws
and regulations relating to the environment and to the manufacture,
storage, distribution, sale and use of our products; changes in laws,
regulations or accounting standards; our ability to develop competitive
advantages through innovation; our substantial indebtedness; information
technology systems failures; the ability to acquire complementary
businesses and to effectively integrate such businesses; restraints on
pricing flexibility due to contractual obligations; pressure on
operations from consolidation of customers, vendors or competitors;
public health epidemics; potential losses arising from the impairment of
goodwill or other assets; potential loss of deferred tax assets; the
occurrence of litigation or claims, including related to the Deepwater
Horizon oil spill; acts of war, terrorism, severe weather or natural or
man-made disasters; the loss or insolvency of a major customer, supplier
or distributor; and other uncertainties or risks reported from time to
time in our reports to the Securities and Exchange Commission. In light
of these risks, uncertainties, assumptions and factors, the
forward-looking events discussed in this communication may not occur. We
caution that undue reliance should not be placed on Forward-Looking
Statements, which speak only as of the date made. Ecolab does not
undertake, and expressly disclaims, any duty to update any
forward-looking statement whether as a result of new information, future
events or changes in expectations, except as required by law.
Non-Solicitation
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall there be any
sale of securities in any jurisdiction in which such offer, solicitation
or sale would be unlawful prior to registration or qualification under
the securities laws of any such jurisdiction.
Non-GAAP Financial Information
This news release includes financial measures that have not been
calculated in accordance with accounting principles generally accepted
in the U.S. (GAAP). These non-GAAP financial measures include adjusted
diluted earnings per share. We provide these measures as additional
information regarding our operating results. We use these non-GAAP
measures internally to evaluate our performance and in making financial
and operational decisions, including with respect to incentive
compensation. We believe that our presentation of these measures
provides investors with greater transparency with respect to our results
of operations and that these measures are useful for period-to-period
comparison of results.
We include in special gains and charges items that are unusual in
nature, significant in amount and important to an understanding of
underlying business performance. In order to better allow investors to
compare underlying business performance period-to-period, we provide
adjusted diluted earnings per share, which excludes special gains and
charges and discrete tax items.
These non-GAAP financial measures are not in accordance with, or an
alternative to, GAAP and may be different from non-GAAP measures used by
other companies.
(ECL-E)
Ecolab Inc.
Michael J. Monahan, 651.293.2809
Lisa L. Curran,
651.293.2185
Source: Ecolab Inc.
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