Reported EPS
2012 adjusted EPS forecast range
2012 FIRST QUARTER HIGHLIGHTS:
First Quarter Ended |
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(unaudited) | ||||||||||||||||||||
Reported | Adjusted* | |||||||||||||||||||
First Quarter | % | First Quarter | % | |||||||||||||||||
(Millions, except per share) |
2012 |
2011 |
change |
2012 |
2011 |
change |
||||||||||||||
Net Sales | $ | 2,810.9 | $ | 1,518.3 | 85 | % | $ | 2,810.9 | $ | 1,518.3 | 85 | % | ||||||||
Operating Income | 165.8 | 151.7 | 9 | % | 283.2 | 167.1 | 69 | % | ||||||||||||
Net Income Attributable to |
$ | 49.7 | $ | 93.6 | -47 | % | $ | 150.3 | $ | 107.0 | 40 | % | ||||||||
Diluted Net Income Per Share | $ | 0.17 | $ | 0.40 | -58 | % | $ | 0.50 | $ | 0.45 | 11 | % | ||||||||
* These non-GAAP measures are adjusted for special gains and charges and discrete tax items. | ||||||||||||||||||||
In order to provide a meaningful comparison of the results of
operations, where applicable, results for the first quarter of 2012 are
compared against pro forma results for the first quarter of 2011. The
pro forma 2011 results are based on the historical consolidated
financial statements of
First Quarter Ended |
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(unaudited) | ||||||||||||||||||||
Reported | % | Adjusted | % | |||||||||||||||||
(Millions, except per share) | 2012 | 2011 | Change | 2012 | 2011 | Change | ||||||||||||||
Net Sales | $ | 2,810.9 | $ | 1,518.3 | 85 | % | $ | 2,810.9 |
$ |
2,585.6* |
9 | % | ||||||||
Operating Income | 165.8 | 151.7 | 9 | % | 283.2 |
236.4* |
20 | % | ||||||||||||
*Amounts represent the pro forma equivalent to the 2012 amounts presented. | ||||||||||||||||||||
First quarter 2012 reported operating income increased 9% to
First quarter 2012 reported net income attributable to
Both first quarter 2012 and 2011 results included special gains and
charges and discrete tax items. Excluding those items, Ecolab's first
quarter 2012 adjusted net income attributable to
Segment review
First quarter
2012 sales for U.S. Cleaning & Sanitizing operations rose 4% to
U.S. Other Services sales increased 4% to
Sales for International Cleaning, Sanitizing and Other Services
operations, when measured at fixed currency rates, grew 3% to
Global Water sales, when measured at fixed currency rates, were
Global Paper sales, when measured at fixed currency rates, grew 2% to
Global Energy sales, when measured at fixed currency rates, grew 29% to
The Corporate segment includes special gains and charges. As previously
announced, special gains and charges for the first quarter 2012 of
The reported income tax rate for the first quarter 2012 was 44.7% and compared with the reported rate of 32.1% in the first quarter 2011. Excluding the tax rate impact of special gains and charges and discrete tax items, the adjusted effective income tax rate in the first quarter 2012 was 30.7% compared with 30.2% for the same period last year.
CEO comment
Commenting on the
quarter,
"As a result, our top line momentum remains very strong. Sales grew in
every segment and in every region. Our new Global Energy business led
the way with a truly standout quarter, and we also saw solid results in
our Global Water, U.S. Institutional and worldwide Food & Beverage
businesses. Regionally, both
"Our focus going forward is more of the same: excellent marketplace execution and excellent integration progress. We are well positioned to deliver both. We have a great team and we have great opportunities. While the current mixed economies and cost headwinds present challenges, we believe we are well situated to overcome both and deliver a strong year."
Business Outlook
2012
Special gains and charges for the full year 2012 are expected to
approximate a
2012 — Second Quarter
Our detailed outlook for the second quarter 2012, which includes the impact of the Nalco merger, is as follows:
Adjusted Gross Margins, excluding special gains and charges | approx. 46% | |||
SG&A % of Sales, including impact of purchase accounting | approx. 33% | |||
Interest expense, net |
|
|||
Adjusted effective tax rate | 30% - 31% | |||
Adjusted EPS, excluding special gains and charges |
|
|||
Diluted shares | approx. 297 million |
We expect second quarter 2012 special gains and charges, including
restructuring charges, to be a net charge of approximately
Reported second quarter 2011 legacy
About
With 2011 pro forma sales of
Cautionary Statements Regarding Forward-Looking Information
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 financial and business prospects,
including forecasted 2012 second quarter and full year business results,
including sales, adjusted gross margin, selling, general and
administrative expense, interest expense, effective tax rate, special
gains and charges, discrete tax items and adjusted diluted earnings per
share; raw material costs; economic trends; marketplace execution;
integration progress; earnings growth rate trends; and shares
outstanding. These statements, which represent
Additional risks and uncertainties that may affect operating results and
business performance are set forth under Item 1A of our most recent Form
10-K and include our ability to integrate Nalco and realize the
anticipated benefits of the merger; 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
Non-GAAP Financial Information
This news release and certain
of the accompanying tables include 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 fixed
currency sales, pro forma sales, pro forma fixed currency sales, fixed
currency operating income, pro forma fixed currency operating income,
adjusted operating income, pro forma operating income, adjusted pro
forma operating income, adjusted effective tax rate, adjusted net income
attributable to
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 gross margin, adjusted operating income, adjusted pro forma
operating income, adjusted net income attributable to
The adjusted effective tax rate measure promotes period-to-period comparability of the underlying effective tax rate because the amount excludes the tax rate impact of special gains and charges and discrete tax items which do not necessarily reflect costs associated with historical trends or expected future costs.
We evaluate the performance of our international operations based on fixed currency rates of foreign exchange. Fixed currency sales and fixed currency operating income measures (and the first quarter 2011 pro forma equivalent for each) eliminate the impact of exchange rate fluctuations on our international sales and operating income, respectively, and promote a better understanding of our sales and operating income trends from underlying business performance. Fixed currency amounts included in this release are based on translation into U.S. dollars at the fixed foreign currency exchange rates established by management at the beginning of 2012.
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. Investors should not rely on any single financial measure when evaluating our business. We recommend that investors view these measures in conjunction with the GAAP measures included in this news release. A reconciliation of reported diluted earnings per share to adjusted diluted earnings per share is provided in the table "Supplemental Diluted Earnings per Share Information" included in this news release.
In order to provide a meaningful comparison of our results of
operations, where applicable, we have supplemented our historical
financial data with discussion and analysis that compares results for
the first quarter of 2012 against pro forma results for the first
quarter of 2011. The unaudited pro forma results are based on the
historical consolidated results of operations of both
(ECL-E)
|
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CONSOLIDATED STATEMENT OF INCOME | ||||||||||||
FIRST QUARTER ENDED |
||||||||||||
(unaudited) | ||||||||||||
First Quarter Ended | ||||||||||||
|
% | |||||||||||
(millions, except per share) | 2012 | 2011 | Change | |||||||||
Net sales | $ | 2,810.9 | $ | 1,518.3 | 85 | % | ||||||
Cost of sales (1) | 1,614.0 | 770.4 | 110 | % | ||||||||
Selling, general and administrative expenses | 989.7 | 581.6 | 70 | % | ||||||||
Special (gains) and charges (1) | 41.4 | 14.6 | ||||||||||
Operating income | 165.8 | 151.7 | 9 | % | ||||||||
Interest expense, net (1) | 86.1 | 13.5 | 538 | % | ||||||||
Income before income taxes | 79.7 | 138.2 | -42 | % | ||||||||
Provision for income taxes | 35.6 | 44.4 | -20 | % | ||||||||
Net income including noncontrolling interest | 44.1 | 93.8 | -53 | % | ||||||||
Less: Net income (loss) attributable to noncontrolling interest (1) | (5.6 | ) | 0.2 | |||||||||
Net income attributable to |
$ | 49.7 | $ | 93.6 | -47 | % | ||||||
Earnings attributable to |
||||||||||||
|
$ | 0.17 | $ | 0.40 | -58 | % | ||||||
Diluted | $ | 0.17 | $ | 0.40 | -58 | % | ||||||
Weighted-average common shares outstanding | ||||||||||||
|
291.5 | 232.0 | 26 | % | ||||||||
Diluted | 297.9 | 235.9 | 26 | % | ||||||||
(1) Special (gains) and charges in the Consolidated Statement of Income above include the following: | ||||||||||||
(millions) | 2012 | 2011 | ||||||||||
Cost of sales | ||||||||||||
Restructuring | $ | 2.1 | $ | 0.8 | ||||||||
Recognition of Nalco inventory fair value step-up | 73.9 | - | ||||||||||
Subtotal cost of sales | 76.0 | 0.8 | ||||||||||
Special (gains) and charges | ||||||||||||
Restructuring | 26.5 | 10.4 | ||||||||||
Business structure and optimization | - | 0.6 | ||||||||||
Nalco merger and integration costs | 14.9 | - | ||||||||||
Cleantec acquisition integration charges | - | 3.6 | ||||||||||
Subtotal special (gains) and charges | 41.4 | 14.6 | ||||||||||
Interest expense, net | ||||||||||||
Debt extinguishment costs | 18.2 | - | ||||||||||
Net income attributable to noncontrolling interest | ||||||||||||
Recognition of Nalco inventory fair value step-up | (4.5 | ) | - | |||||||||
Total | $ | 131.1 | $ | 15.4 | ||||||||
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OPERATING SEGMENT INFORMATION | ||||||||||||||||||
FIRST QUARTER ENDED |
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(unaudited) | ||||||||||||||||||
First Quarter Ended | ||||||||||||||||||
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Reported | Reported | Pro forma | % Change | |||||||||||||||
(millions) | 2012 | 2011 | 2011 | Reported | Pro forma | |||||||||||||
Net Sales | ||||||||||||||||||
U.S. Cleaning & Sanitizing | $ | 708.9 | $ | 681.5 | $ | 661.1 | 4 | % | 7 | % | ||||||||
U.S. Other Services | 111.4 | 107.2 | 107.2 | 4 | % | 4 | % | |||||||||||
Int'l Cleaning, Sanitizing & Other Services | 732.7 | 708.7 | 697.7 | 3 | % | 5 | % | |||||||||||
Global Water | 498.5 | - | 469.8 | 6 | % | |||||||||||||
Global Paper | 199.0 | - | 195.8 | 2 | % | |||||||||||||
Global Energy | 536.9 | - | 417.4 | 29 | % | |||||||||||||
Subtotal at fixed currency rates | 2,787.4 | 1,497.4 | 2,549.0 | 86 | % | 9 | % | |||||||||||
Effect of foreign currency translation | 23.5 | 20.9 | 36.6 | |||||||||||||||
Consolidated | $ | 2,810.9 | $ | 1,518.3 | $ | 2,585.6 | 85 | % | 9 | % | ||||||||
Operating Income | ||||||||||||||||||
U.S. Cleaning & Sanitizing | $ | 128.4 | $ | 111.9 | $ | 115.7 | 15 | % | 11 | % | ||||||||
U.S. Other Services | 13.8 | 14.7 | 14.7 | -6 | % | -6 | % | |||||||||||
Int'l Cleaning, Sanitizing & Other Services | 48.1 | 44.0 | 43.0 | 10 | % | 12 | % | |||||||||||
Global Water | 43.0 | - | 38.6 | 11 | % | |||||||||||||
Global Paper | 18.3 | - | 20.1 | -9 | % | |||||||||||||
Global Energy | 84.4 | - | 55.1 | 53 | % | |||||||||||||
Corporate | (171.5 | ) | (20.6 | ) | 69.5 | |||||||||||||
Subtotal at fixed currency rates | 164.5 | 150.0 | 356.7 | 10 | % | -54 | % | |||||||||||
Effect of foreign currency translation | 1.3 | 1.7 | 2.0 | |||||||||||||||
Consolidated | $ | 165.8 | $ | 151.7 | $ | 358.7 | 9 | % | -54 | % |
Note: The Corporate segment includes special (gains) and charges reported on the Consolidated Statement of Income. The Corporate segment also includes amortization specifically related to Nalco merger intangible assets, merger integration costs and investments the company is making in business systems and structure. |
Pro forma amounts for 2011 reflect the impact of the Nalco merger as
if the transaction had been completed as of |
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CONSOLIDATED BALANCE SHEET | |||||||||||||||
(unaudited) | |||||||||||||||
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(millions) | 2012 | 2011 |
2011 |
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Assets | |||||||||||||||
Current assets | |||||||||||||||
Cash and cash equivalents | $ | 354.0 | $ | 1,843.6 | $ | 151.4 | |||||||||
Accounts receivable, net | 2,049.0 | 2,095.3 | 1,042.6 | ||||||||||||
Inventories | 1,087.4 | 1,069.6 | 480.2 | ||||||||||||
Deferred income taxes | 183.2 | 164.0 | 82.2 | ||||||||||||
Other current assets | 286.2 | 223.5 | 132.5 | ||||||||||||
Total current assets | 3,959.8 | 5,396.0 | 1,888.9 | ||||||||||||
Property, plant and equipment, net | 2,331.6 | 2,295.4 | 1,192.5 | ||||||||||||
Goodwill | 5,946.8 | 5,855.3 | 1,465.1 | ||||||||||||
Other intangible assets, net | 4,237.8 | 4,275.2 | 439.7 | ||||||||||||
Other assets | 385.7 | 418.9 | 276.1 | ||||||||||||
Total assets | $ | 16,861.7 | $ | 18,240.8 | $ | 5,262.3 | |||||||||
Liabilities and Equity | |||||||||||||||
Current liabilities | |||||||||||||||
Short-term debt | $ | 1,346.9 | $ | 1,023.0 | $ | 506.4 | |||||||||
Accounts payable | 805.1 | 815.7 | 359.7 | ||||||||||||
Compensation and benefits | 409.8 | 497.2 | 257.7 | ||||||||||||
Income taxes | 136.1 | 81.7 | 58.8 | ||||||||||||
Other current liabilities | 808.7 | 748.7 | 467.6 | ||||||||||||
Total current liabilities | 3,506.6 | 3,166.3 | 1,650.2 | ||||||||||||
Long-term debt | 4,911.0 | 6,613.2 | 683.7 | ||||||||||||
Postretirement health care and pension benefits | 1,164.7 | 1,173.4 | 488.3 | ||||||||||||
Other liabilities | 1,474.3 | 1,546.8 | 225.4 | ||||||||||||
Total liabilities | 11,056.6 | 12,499.7 | 3,047.6 | ||||||||||||
Equity | |||||||||||||||
Common stock | 337.5 | 336.1 | 333.7 | ||||||||||||
Additional paid-in capital | 4,049.5 | 3,980.8 | 1,341.5 | ||||||||||||
Retained earnings | 3,551.3 | 3,559.9 | 3,332.1 | ||||||||||||
Accumulated other comprehensive loss | (249.5 | ) | (344.9 | ) | (205.2 | ) | |||||||||
Treasury stock | (1,955.6 | ) | (1,865.2 | ) | (2,591.5 | ) | |||||||||
Total |
5,733.2 | 5,666.7 | 2,210.6 | ||||||||||||
Noncontrolling interest | 71.9 | 74.4 | 4.1 | ||||||||||||
Total equity | 5,805.1 | 5,741.1 | 2,214.7 | ||||||||||||
Total liabilities and equity | $ | 16,861.7 | $ | 18,240.8 | $ | 5,262.3 | |||||||||
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SUPPLEMENTAL DILUTED EARNINGS PER SHARE INFORMATION | ||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||
The table below provides a reconciliation of diluted earnings per share, as reported, to the non-GAAP measure of adjusted diluted earnings per share. |
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First | Second | Six | Third | Nine | Fourth | |||||||||||||||||||||
Quarter | Quarter | Months | Quarter | Months | Quarter | Year | ||||||||||||||||||||
Ended | Ended | Ended | Ended | Ended | Ended | Ended | ||||||||||||||||||||
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2011 | 2011 | 2011 | 2011 | 2011 | 2011 | 2011 | ||||||||||||||||||||
Diluted earnings per share, as reported (U.S. GAAP) |
$ | 0.40 | $ | 0.53 | $ | 0.93 | $ | 0.65 | $ | 1.58 | $ | 0.34 | $ | 1.91 | ||||||||||||
Adjustments: | ||||||||||||||||||||||||||
Special (gains) and charges (1) | 0.05 | 0.11 | 0.16 | 0.10 | 0.26 | 0.25 | 0.52 | |||||||||||||||||||
Tax expense (benefits) (2) | 0.00 | (0.01 | ) | (0.00 | ) | (0.00 | ) | (0.01 | ) | 0.03 | 0.03 | |||||||||||||||
Nalco merger impact (3) | 0.07 | 0.08 | ||||||||||||||||||||||||
|
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Adjusted diluted earnings per share (Non-GAAP) |
$ | 0.45 | $ | 0.64 | $ | 1.09 | $ | 0.75 | $ | 1.84 | $ | 0.70 | $ | 2.54 | ||||||||||||
First | Second | Six | Third | Nine | Fourth | |||||||||||||||||||||
Quarter | Quarter | Months | Quarter | Months | Quarter | Year | ||||||||||||||||||||
Ended | Ended | Ended | Ended | Ended | Ended | Ended | ||||||||||||||||||||
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2012 | 2012 | 2012 | 2012 | 2012 | 2012 | 2012 | ||||||||||||||||||||
Diluted earnings per share, as reported (U.S. GAAP) |
$ | 0.17 | ||||||||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||||
Special (gains) and charges (4) | 0.33 | |||||||||||||||||||||||||
Tax expense (benefits) (5) | 0.00 | |||||||||||||||||||||||||
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Adjusted diluted earnings per share (Non-GAAP) |
$ | 0.50 | ||||||||||||||||||||||||
Per share amounts do not necessarily sum due to changes in shares outstanding and rounding. | ||||||||||||||||||||||||||
(1) Special (gains) and charges for 2011 include restructuring
charges of |
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(2) First quarter 2011 discrete tax expense primarily includes the impact of a change in our blended U.S. state tax rate, partially offset by a discrete tax benefit related to a state refund claim. Second quarter 2011 discrete tax benefits primarily include discrete tax impacts of recognizing settlements and adjustments related to prior year tax returns. Third quarter 2011 discrete tax benefits primarily relate to net benefits from filing our 2010 U.S. federal and other International income tax returns and settlements and adjustments related to prior year tax returns. Fourth quarter discrete tax expense primarily includes a charge related to the realizability of foreign net operating loss carryforwards. |
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(3) The Nalco merger impact primarily relates to shares issued as consideration for the equity portion of the merger. | ||||||||||||||||||||||||||
(4) Special (gains) and charges for 2012 include restructuring
charges of |
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(5) First quarter 2012 tax expense includes various individually
insignificant items, which net to total discrete tax expense of |
651-293-2809
Source:
News Provided by Acquire Media
Jeff Webb
Director, Global Communications
Phone: +1-281-632-6794 or by email
MEXICO
Alejandro González d’Hyver de las Deses
Communications Manager, Latin America
Phone: +52 (55) 5001 2935 or by email
BRAZIL
Carolina Simonetti
Communications Manager, Brasil
Phone: +55 11 2134 2649 or by email
Valeria Prado
Communications Director, Latin America
Phone: +1 954 436 2668 or by email
Kate Askew
Director, Corporate Communications
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For non-media related inquiries,
call +41 44 877 2000
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call +41 44 877 2000
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call +86 21 6237 1000
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